Solution manual for accounting 28th edition by
-- -- -- -- -- -- --
carl s warren christine jonick jennifer schneider
-- -- -- -- -- -- --
complete chapters verified A+ study tips -- -- -- -- --
CHAPTER 1 --
DISCUSSION--QUESTIONS
1. Some--users--of--accounting--information--include--managers,--employees,--investors,--creditors,--
customers,--and--the--government.
2. The--role--of--accounting--is--to--provide--information--for--managers--to--use--in--operating--the--
business.- - In--addition,--accounting--provides--information--to--others--to--use--in--assessing--the--
economic--performance--and--condition--of--the--business.
3. The- - corporate- - form- - allows- - the- - company- - to- - obtain- - large- - amounts- - of- - resources- - by- - issuing- -
stock.--For--this--reason,--most--companies--that--require--large--investments--in--property,--plant,--and--
equipment--are--organized--as--corporations.
4. No.--The--business--entity--concept--limits--the--recording--of--economic--data--to--transactions--directly-
-affecting--the--activities--of--the--business.--The--payment--of--the--interest--of--$4,500--is--a--personal--
transaction--of--Josh--Reilly--and--should--not--be--recorded--by--Dispatch--Delivery--Service.
5. The--land--should--be--recorded--at--its--cost--of--$167,500--to--Reliable--Repair--Service.--This--is--
consistent- - with--the--cost--concept.
6. a. No.--The--offer--of--$2,000,000--and--the--increase--in--the--assessed--value--should--not--be--
recognized- - in--the--accounting--records--because--land--is--recorded--on--the--cost--basis.
b. Cash--would--increase--by--$2,125,000,--land--would--decrease--by--$900,000,--and--owner’s--
equity--would--increase--by--$1,225,000.
7. An--account--receivable--is--a--claim--against--a--customer--for--goods--or--services--sold.--An--account--
payable--is--an--amount--owed--to--a--creditor--for--goods--or--services--purchased.--Therefore,--an--
account--receivable--in--the--records--of--the--seller--is--an--account--payable--in--the--records--of--the--
purchaser.
8. (b)- - The-- business-- realized--net-- income-- of-- $91,000-- ($679,000-- –-- $588,000).
9. (a)- - - - The--business-- incurred-- a-- net-- loss-- of-- $75,000-- ($640,000-- –-- $715,000).
10. (a)- - - - Net-- income--or-- net-- loss
(b) Owner’s-- equity-- at-- the--end--of-- the-- period
(c) Cash-- at-- the-- end-- of-- the--period
1-1
©-- 2021-- Cengage-- Learning,-- Inc.-- May-- not-- be-- scanned,-- copied-- or-- duplicated,-- or-- posted-- to-- a-- publicly-- accessible-- website,-- in--
whole-- or-- in-- part.
, CHAPTER--1 Introduction--to--Accounting--and--Business
PRACTICE- - EXERCISES
PE--1-1A
$597,000.--Under--the--cost--concept,--the--land--should--be--recorded--at--the--cost--to--Boulder--
Repair--Service.
PE--1-1B
$369,500.--Under--the--cost--concept,--the--land--should--be--recorded--at--the--cost--to--
Clementine--Repair--Service.
PE--1-2A
a. A = L- - +- - OE
$518,000 = $165,000--+--OE
OE = $353,000
b. A = L- - +- - OE
+$86,200 = +$25,000--+--OE
OE = +$61,200
OE--on--December--31,--20Y9 = $353,000--+--$61,200
= $414,200
PE--1-2B
a. A = L- - +- - OE
$382,000 = $94,000--+--OE
OE = $288,000
b. A = L- - +- - OE
– -- = +$35,000--+--OE--–
$63,000 = $98,000
OE = $288,000--–--$98,000
OE--on--December--31,--20Y9 = $190,000
PE--1-3A
(2) Asset--(Accounts--Receivable)--increases--by--$22,400;
Owner’s--Equity--(Delivery--Service--Fees)--increases--by--$22,400.
(3) Liability--(Accounts--Payable)--decreases--by--$4,100;--
Asset--(Cash)--decreases--by--$4,100.
(4) Asset--(Cash)--increases--by--$14,700;
Asset--(Accounts--Receivable)--decreases--by--$14,700.
(5) Asset--(Cash)--decreases--by--$1,600;
Owner’s--Equity--(Terry--Young,--Drawing)--decreases--by--$1,600.
1-2
©--2021--Cengage--Learning,--Inc.--May--not--be--scanned,--copied--or--duplicated,--or--posted--to--a--publicly--accessible--website,--in--whole--
or--in--part.
, CHAPTER--1 Introduction--to--Accounting--and--Business
PE--1-3B
(2) Owner’s--Equity--(Advertising--Expense,--increases)--decreases--by--$6,750;--
Asset--(Cash)--decreases--by--$6,750.
(3) Asset--(Supplies)--increases--by--$2,920;
Liability--(Accounts--Payable)--increases--by--$2,920.
(4) Asset--(Accounts--Receivable)--increases--by--$20,460;
Owner’s--Equity--(Delivery--Service--Fees)--increases--by--$20,460.
(5) Asset--(Cash)--increases--by--$11,410;
Asset--(Accounts--Receivable)--decreases--by--$11,410.
PE--1-4A
Up-in-the-Air--Travel--Service
Income--Statement
For--the--Year--Ended--April--30,--20Y7
Fees--earned $1,870,000
Expenses:
Wages--expense $1,115,000
Office--expense 343,000
Miscellaneous--expense 21,000
Total--expenses 1,479,000
Net--income $- - - - 391,000
PE--1-4B
Zenith--Travel--Service
Income--Statement
For--the--Year--Ended--August--31,--20Y4
Fees--earned $899,600
Expenses:
Wages--expense $539,800
Office--expense 353,800
Miscellaneous--expense 14,400
Total--expenses 908,000
Net--loss $- - (8,400)
1-3
©--2021--Cengage--Learning,--Inc.--May--not--be--scanned,--copied--or--duplicated,--or--posted--to--a--publicly--accessible--website,--in--whole--
or--in--part.
, CHAPTER--1 Introduction--to--Accounting--and--Business
PE--1-5A
Up-in-the-Air--Travel--Service
Statement--of--Owner’s--Equity--
For--the--Year--Ended--April--30,--20Y7
Jerome--Foley,--capital,--May--1,--20Y6 $- - - - 876,000
Additional--investment--by--owner--during--year $- - 52,000
Net--income--for--the--year 391,000
Withdrawals (34,000)
Increase--in--owner’s--equity 409,000
Jerome--Foley,--capital,--April--30,--20Y7 $1,285,000
PE--1-5B
Zenith--Travel--Service
Statement--of--Owner’s--Equity--
For--the--Year--Ended--August--31,--20Y4
Megan--Cox,--capital,--September--1,--20Y3 $456,000
Additional--investment--by--owner--during--year $-- 43,200
Net--loss--for--the--year (8,400)
Withdrawals (21,600)
Increase--in--owner’s--equity 13,200
Megan--Cox,--capital,--August--31,--20Y4 $469,200
PE--1-6A
Up-in-the-Air--Travel--Service
Balance--Sheet--
April--30,--20Y7
Assets
Cash $- - - - 170,000
Accounts--receivable 417,000
Supplies 16,000
Land 772,000
Total--assets $1,375,000
Liabilities
Accounts--payable $ 90,000
Owner’s--Equity
Jerome--Foley,--capital 1,285,000
Total--liabilities--and--owner’s--equity $1,375,000
1-4
©--2021--Cengage--Learning,--Inc.--May--not--be--scanned,--copied--or--duplicated,--or--posted--to--a--publicly--accessible--website,--in--whole--
or--in--part.
-- -- -- -- -- -- --
carl s warren christine jonick jennifer schneider
-- -- -- -- -- -- --
complete chapters verified A+ study tips -- -- -- -- --
CHAPTER 1 --
DISCUSSION--QUESTIONS
1. Some--users--of--accounting--information--include--managers,--employees,--investors,--creditors,--
customers,--and--the--government.
2. The--role--of--accounting--is--to--provide--information--for--managers--to--use--in--operating--the--
business.- - In--addition,--accounting--provides--information--to--others--to--use--in--assessing--the--
economic--performance--and--condition--of--the--business.
3. The- - corporate- - form- - allows- - the- - company- - to- - obtain- - large- - amounts- - of- - resources- - by- - issuing- -
stock.--For--this--reason,--most--companies--that--require--large--investments--in--property,--plant,--and--
equipment--are--organized--as--corporations.
4. No.--The--business--entity--concept--limits--the--recording--of--economic--data--to--transactions--directly-
-affecting--the--activities--of--the--business.--The--payment--of--the--interest--of--$4,500--is--a--personal--
transaction--of--Josh--Reilly--and--should--not--be--recorded--by--Dispatch--Delivery--Service.
5. The--land--should--be--recorded--at--its--cost--of--$167,500--to--Reliable--Repair--Service.--This--is--
consistent- - with--the--cost--concept.
6. a. No.--The--offer--of--$2,000,000--and--the--increase--in--the--assessed--value--should--not--be--
recognized- - in--the--accounting--records--because--land--is--recorded--on--the--cost--basis.
b. Cash--would--increase--by--$2,125,000,--land--would--decrease--by--$900,000,--and--owner’s--
equity--would--increase--by--$1,225,000.
7. An--account--receivable--is--a--claim--against--a--customer--for--goods--or--services--sold.--An--account--
payable--is--an--amount--owed--to--a--creditor--for--goods--or--services--purchased.--Therefore,--an--
account--receivable--in--the--records--of--the--seller--is--an--account--payable--in--the--records--of--the--
purchaser.
8. (b)- - The-- business-- realized--net-- income-- of-- $91,000-- ($679,000-- –-- $588,000).
9. (a)- - - - The--business-- incurred-- a-- net-- loss-- of-- $75,000-- ($640,000-- –-- $715,000).
10. (a)- - - - Net-- income--or-- net-- loss
(b) Owner’s-- equity-- at-- the--end--of-- the-- period
(c) Cash-- at-- the-- end-- of-- the--period
1-1
©-- 2021-- Cengage-- Learning,-- Inc.-- May-- not-- be-- scanned,-- copied-- or-- duplicated,-- or-- posted-- to-- a-- publicly-- accessible-- website,-- in--
whole-- or-- in-- part.
, CHAPTER--1 Introduction--to--Accounting--and--Business
PRACTICE- - EXERCISES
PE--1-1A
$597,000.--Under--the--cost--concept,--the--land--should--be--recorded--at--the--cost--to--Boulder--
Repair--Service.
PE--1-1B
$369,500.--Under--the--cost--concept,--the--land--should--be--recorded--at--the--cost--to--
Clementine--Repair--Service.
PE--1-2A
a. A = L- - +- - OE
$518,000 = $165,000--+--OE
OE = $353,000
b. A = L- - +- - OE
+$86,200 = +$25,000--+--OE
OE = +$61,200
OE--on--December--31,--20Y9 = $353,000--+--$61,200
= $414,200
PE--1-2B
a. A = L- - +- - OE
$382,000 = $94,000--+--OE
OE = $288,000
b. A = L- - +- - OE
– -- = +$35,000--+--OE--–
$63,000 = $98,000
OE = $288,000--–--$98,000
OE--on--December--31,--20Y9 = $190,000
PE--1-3A
(2) Asset--(Accounts--Receivable)--increases--by--$22,400;
Owner’s--Equity--(Delivery--Service--Fees)--increases--by--$22,400.
(3) Liability--(Accounts--Payable)--decreases--by--$4,100;--
Asset--(Cash)--decreases--by--$4,100.
(4) Asset--(Cash)--increases--by--$14,700;
Asset--(Accounts--Receivable)--decreases--by--$14,700.
(5) Asset--(Cash)--decreases--by--$1,600;
Owner’s--Equity--(Terry--Young,--Drawing)--decreases--by--$1,600.
1-2
©--2021--Cengage--Learning,--Inc.--May--not--be--scanned,--copied--or--duplicated,--or--posted--to--a--publicly--accessible--website,--in--whole--
or--in--part.
, CHAPTER--1 Introduction--to--Accounting--and--Business
PE--1-3B
(2) Owner’s--Equity--(Advertising--Expense,--increases)--decreases--by--$6,750;--
Asset--(Cash)--decreases--by--$6,750.
(3) Asset--(Supplies)--increases--by--$2,920;
Liability--(Accounts--Payable)--increases--by--$2,920.
(4) Asset--(Accounts--Receivable)--increases--by--$20,460;
Owner’s--Equity--(Delivery--Service--Fees)--increases--by--$20,460.
(5) Asset--(Cash)--increases--by--$11,410;
Asset--(Accounts--Receivable)--decreases--by--$11,410.
PE--1-4A
Up-in-the-Air--Travel--Service
Income--Statement
For--the--Year--Ended--April--30,--20Y7
Fees--earned $1,870,000
Expenses:
Wages--expense $1,115,000
Office--expense 343,000
Miscellaneous--expense 21,000
Total--expenses 1,479,000
Net--income $- - - - 391,000
PE--1-4B
Zenith--Travel--Service
Income--Statement
For--the--Year--Ended--August--31,--20Y4
Fees--earned $899,600
Expenses:
Wages--expense $539,800
Office--expense 353,800
Miscellaneous--expense 14,400
Total--expenses 908,000
Net--loss $- - (8,400)
1-3
©--2021--Cengage--Learning,--Inc.--May--not--be--scanned,--copied--or--duplicated,--or--posted--to--a--publicly--accessible--website,--in--whole--
or--in--part.
, CHAPTER--1 Introduction--to--Accounting--and--Business
PE--1-5A
Up-in-the-Air--Travel--Service
Statement--of--Owner’s--Equity--
For--the--Year--Ended--April--30,--20Y7
Jerome--Foley,--capital,--May--1,--20Y6 $- - - - 876,000
Additional--investment--by--owner--during--year $- - 52,000
Net--income--for--the--year 391,000
Withdrawals (34,000)
Increase--in--owner’s--equity 409,000
Jerome--Foley,--capital,--April--30,--20Y7 $1,285,000
PE--1-5B
Zenith--Travel--Service
Statement--of--Owner’s--Equity--
For--the--Year--Ended--August--31,--20Y4
Megan--Cox,--capital,--September--1,--20Y3 $456,000
Additional--investment--by--owner--during--year $-- 43,200
Net--loss--for--the--year (8,400)
Withdrawals (21,600)
Increase--in--owner’s--equity 13,200
Megan--Cox,--capital,--August--31,--20Y4 $469,200
PE--1-6A
Up-in-the-Air--Travel--Service
Balance--Sheet--
April--30,--20Y7
Assets
Cash $- - - - 170,000
Accounts--receivable 417,000
Supplies 16,000
Land 772,000
Total--assets $1,375,000
Liabilities
Accounts--payable $ 90,000
Owner’s--Equity
Jerome--Foley,--capital 1,285,000
Total--liabilities--and--owner’s--equity $1,375,000
1-4
©--2021--Cengage--Learning,--Inc.--May--not--be--scanned,--copied--or--duplicated,--or--posted--to--a--publicly--accessible--website,--in--whole--
or--in--part.
