Financial Accounting 9th Canadian Edition
Tietz • Thomas • Berberich • Seguin
SOLUTIONS MANUAL
Includes All Chapters (1 to 10 + Appendix A)
Complete Chapter-by-Chapter Solutions
Full document includes detailed solutions for:
- Short Exercises (concept-based questions)
- End-of-Chapter Exercises
- Problem Sets (multi-step numerical problems)
- Financial Statement Preparation (Income Statement, Balance Sheet, Cash
Flows)
- Decision Cases and Real-World Scenarios
- Ethical Analysis Questions
Solutions Manual | Financial Accounting, 9th Canadian Edition – Tietz • Thomas • Berberich • Seguin
,Appendix
Investments and the Time Value of Money
Short Exercises
(10-15 min.) S A-1
1.
Journal
DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
20X1
Feb. 10 Long-Term Investment (300 × $25) ................................ 7,500
Cash ........................................................................... 7,500
Dec. 1 Cash (300 × $0.36) .......................................................... 108
Dividend Revenue ..................................................... 108
Dec. 31 Other comprehensive income .......................................... 500
Long-Term Investment ($7,500 − $7,000) ................ 500
2.
ASSETS
Total current assets............................................................................ $ XXX
Long-term investments, at fair value ................................................ 7,000
SHAREHOLDERS’ EQUITY
Common shares ................................................................................. $ XXX
Retained earnings .............................................................................. XXX
Accumulated other comprehensive income:
Unrealized (loss) on investments ................................................ (500)
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, Financial Accounting, Ninth Canadian Edition, Instructor’s Solutions Manual
(5-10 min.) S A-2
1.
Journal
DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
20X2
May 19 Cash (300 × $26) .................................................... 7,800
Long-Term Investment ..................................... 7,000
Other Comprehensive Income .......................... 800
2. The realized gain from the sale of investment is reported through Other Comprehensive
Income. The loss recorded at December 31, 20X1, was unrealized because it resulted from
a change in the investment’s fair value, not from the sale of the investment.
(10-15 min.) S A-3
1. The equity method is appropriate because the investor (General Motors) holds a 40%
investment in the investee company (ABC).
2.
Journal
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
(millions)
a. Long-Term Investment .............................................. 41
Cash ..................................................................... 41
To purchase equity-method investment.
b. Long-Term Investment ($6 × 0.40) ........................... 2.4
Equity-Method Investment Revenue ................... 2.4
To record investment revenue.
c. Cash ($2 × 0.40)......................................................... 0.8
Long-Term Investment ........................................ 0.8
To receive cash dividend on equity-method investment.
3.
Long-Term Investment
(Amounts in millions)
Purchase 41.0 Dividends received 0.8
Net income 2.4
Balance 42.6
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, Financial Accounting, Ninth Canadian Edition, Instructor’s Solutions Manual
(5 min.) S A-4
(millions)
Sale proceeds………………………………………. $ 14.0
– Carrying amount of the investment ($42.6/2)……… (21.3)
= (Loss) on sale of investment………………………… $ (7.3)
(10 min.) S A-5
1. A parent company is a corporation that owns a controlling (more than 50%) share and has the
ability to exercise control over another company. A subsidiary company is a company that is
controlled by another corporation.
2. Consolidated financial statements combine the balance sheets, income statements, and cash-
flow statements of a parent company with those of its subsidiaries as if the parent and its
subsidiaries were one company.
3. The parent company’s name appears on the consolidated financial statements. To consolidate,
the parent company must own more than 50% of the subsidiary’s shares, and exercise control
over the subsidiary.
(10 min.) S A-6
1. Goodwill is an intangible asset. Goodwill is the excess of the purchase price to acquire a
subsidiary company over the sum of the net realizable value of the subsidiary’s net assets
(assets minus liabilities). Only the parent company reports the goodwill. Goodwill appears as
an intangible asset on the consolidated balance sheet.
2. Non-controlling interest is the portion (less than 50%) of a subsidiary’s shares that are owned
by shareholders other than the parent company. The parent company should report Non-
controlling Interest on its consolidated balance sheet as part of shareholders’ equity.
Copyright © 2027 613
Tietz • Thomas • Berberich • Seguin
SOLUTIONS MANUAL
Includes All Chapters (1 to 10 + Appendix A)
Complete Chapter-by-Chapter Solutions
Full document includes detailed solutions for:
- Short Exercises (concept-based questions)
- End-of-Chapter Exercises
- Problem Sets (multi-step numerical problems)
- Financial Statement Preparation (Income Statement, Balance Sheet, Cash
Flows)
- Decision Cases and Real-World Scenarios
- Ethical Analysis Questions
Solutions Manual | Financial Accounting, 9th Canadian Edition – Tietz • Thomas • Berberich • Seguin
,Appendix
Investments and the Time Value of Money
Short Exercises
(10-15 min.) S A-1
1.
Journal
DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
20X1
Feb. 10 Long-Term Investment (300 × $25) ................................ 7,500
Cash ........................................................................... 7,500
Dec. 1 Cash (300 × $0.36) .......................................................... 108
Dividend Revenue ..................................................... 108
Dec. 31 Other comprehensive income .......................................... 500
Long-Term Investment ($7,500 − $7,000) ................ 500
2.
ASSETS
Total current assets............................................................................ $ XXX
Long-term investments, at fair value ................................................ 7,000
SHAREHOLDERS’ EQUITY
Common shares ................................................................................. $ XXX
Retained earnings .............................................................................. XXX
Accumulated other comprehensive income:
Unrealized (loss) on investments ................................................ (500)
Copyright © 2027 611
, Financial Accounting, Ninth Canadian Edition, Instructor’s Solutions Manual
(5-10 min.) S A-2
1.
Journal
DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
20X2
May 19 Cash (300 × $26) .................................................... 7,800
Long-Term Investment ..................................... 7,000
Other Comprehensive Income .......................... 800
2. The realized gain from the sale of investment is reported through Other Comprehensive
Income. The loss recorded at December 31, 20X1, was unrealized because it resulted from
a change in the investment’s fair value, not from the sale of the investment.
(10-15 min.) S A-3
1. The equity method is appropriate because the investor (General Motors) holds a 40%
investment in the investee company (ABC).
2.
Journal
ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
(millions)
a. Long-Term Investment .............................................. 41
Cash ..................................................................... 41
To purchase equity-method investment.
b. Long-Term Investment ($6 × 0.40) ........................... 2.4
Equity-Method Investment Revenue ................... 2.4
To record investment revenue.
c. Cash ($2 × 0.40)......................................................... 0.8
Long-Term Investment ........................................ 0.8
To receive cash dividend on equity-method investment.
3.
Long-Term Investment
(Amounts in millions)
Purchase 41.0 Dividends received 0.8
Net income 2.4
Balance 42.6
612 Copyright © 2027
, Financial Accounting, Ninth Canadian Edition, Instructor’s Solutions Manual
(5 min.) S A-4
(millions)
Sale proceeds………………………………………. $ 14.0
– Carrying amount of the investment ($42.6/2)……… (21.3)
= (Loss) on sale of investment………………………… $ (7.3)
(10 min.) S A-5
1. A parent company is a corporation that owns a controlling (more than 50%) share and has the
ability to exercise control over another company. A subsidiary company is a company that is
controlled by another corporation.
2. Consolidated financial statements combine the balance sheets, income statements, and cash-
flow statements of a parent company with those of its subsidiaries as if the parent and its
subsidiaries were one company.
3. The parent company’s name appears on the consolidated financial statements. To consolidate,
the parent company must own more than 50% of the subsidiary’s shares, and exercise control
over the subsidiary.
(10 min.) S A-6
1. Goodwill is an intangible asset. Goodwill is the excess of the purchase price to acquire a
subsidiary company over the sum of the net realizable value of the subsidiary’s net assets
(assets minus liabilities). Only the parent company reports the goodwill. Goodwill appears as
an intangible asset on the consolidated balance sheet.
2. Non-controlling interest is the portion (less than 50%) of a subsidiary’s shares that are owned
by shareholders other than the parent company. The parent company should report Non-
controlling Interest on its consolidated balance sheet as part of shareholders’ equity.
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