SOLUTION MANUAL FOR Fundamentals Of Cost Accounting 7th Edition William Lanen All Chapters A+ Guide Complete Newest Version

INSTRUCTOR’S SOLUTIONS MANUAL P P




for



FinancialAccounting T p p




heory
Seventh Edition p




William R. Scott p p


University of Waterloo
p p




Toronto

Copyrightp©p2015pPearsonpCanadapInc.,pToronto,pOntario.pAllprightspreserved.pThispworkpispprotectedpbypCanadianpcopyr
ightplawspandpispprovidedpsolelypforpthepusepofpinstructorspinpteachingptheirpcoursespandpassessingpstudentplearning.pDisse
minationporpsalepofpanyppartpofpthispworkp(includingponpthepInternet)pwillpdestroypthepintegritypofpthepworkpandpispnotpper
mitted.pThepcopyrightpholderpgrantsppermissionptopinstructorspwhophavepadoptedpFinancialpAccountingpTheory,pSeventhpE
dition,pbypWilliampR.pScottptoppostpthispmaterialponlineponlypifpthepusepofpthepwebsitepisprestrictedpbypaccesspcodesptopstud
entspinpthepinstructor’spclasspthatpispusingptheptextbookpandpprovidedpthepreproducedpmaterialpbearspthispcopyrightpnotice.

, Contents


Chapterp1 Introduction .................................................................................................. 1

Chapterp2 AccountingpUnderpIdealpConditions ........................................................... 7

Chapterp3 ThepDecisionpUsefulnesspApproachptopFinancialpReporting ....................... 68

Chapterp4 EfficientpSecuritiespMarkets ....................................................................... 129

Chapterp5 ThepValuepRelevancepofpAccountingpInformation ...................................... 153

Chapterp6 ThepMeasurementpApproachptopDecisionpUsefulness ................................. 194

Chapterp7 MeasurementpApplications ......................................................................... 237

Chapterp8 ThepEfficientpContractingpApproachptopDecisionpUsefulness ..................... 285

Chapterp9 AnpAnalysispofpConflict ............................................................................ 321

Chapterp10p ExecutivepCompensation .......................................................................... 371

Chapterp11p EarningspManagement .............................................................................. 425

Chapterp12p StandardpSetting:pEconomicpIssues ........................................................... 487

Chapterp13p StandardpSetting:pPoliticalpIssues .............................................................. 527




Copyrightp©p2015pPearsonpCanadapInc.

,Scott,pFinancialpAccountingpTheory,p7thpEdition Instructor’spSolutionspManualpChapterp1



CHAPTER 1 INTROD
P P




UCTION

1.1 ThepObjectivepofpThispBook

1.2 Somep HistoricalpPerspective

1.3 Thep2007-2008pMarketpMeltdowns

1.4 EfficientpContracting

1.5 ApNoteponpEthicalpBehaviour

1.6 Rules-Basedp v.p Principles-Basedp Accountingp Standards

1.7 ThepComplexitypofpInformationpinpFinancialpAccountingpandpReporting

1.8 ThepRolepofpAccountingpResearch

1.9 ThepImportancepofpInformationpAsymmetry

1.10 ThepFundamentalpProblempofpFinancialpAccountingpTheory

1.11 RegulationpaspapReactionptopthepFundamentalpProblem

1.12 ThepOrganizationpofpThispBook

1.12.1 IdealpConditions

1.12.2 Adversep Selection

1.12.3 MoralpHazard

1.12.4 StandardpSetting

1.12.5 ThepProcesspofp StandardpSetting

1.13 RelevancepofpFinancialpAccountingpTheoryptopAccountingpPractice




1
Copyrightp©p2015pPearsonpCanadapInc.

, Scott,pFinancialpAccountingpTheory,p7thpEdition Instructor’spSolutionspManualpChapterp1


LEARNING OBJECTIVES AND SUGGESTED TEACHING APPROACHES
P P P P P




1. ThepBroadpOutlinepofpthepBook

IpusepFigurep1.1paspaptemplateptopdescribepthepbroadpoutlinepofpthepbook.pSincepthep
studentsptypicallyphavepnotphadpapchanceptopreadpChapterp1pinpthepfirstpcoursepsession
,pIpstickpfairlypcloselyptopthepchapterpmaterial.

ThepmajorppointspIpdiscusspare:

• Accountingpinpanpidealpsetting.pHere,ppresent-value-
basedpaccountingpispnatural.pIpgopoverpthepidealpconditionspneededpforp
suchpapbasispofpaccountingptopbepfeasible,pbutpdopnotpgopintopmuchpde
tailpbecausepthisptopicpispcoveredpinpgreaterpdepthpinpChapterp2.

• Anpintroductionptopthepconceptpofpinformationpasymmetrypandpresulti
ngpproblemspofpadversepselectionpandpmoralphazard.pThesepproblem
sparepbasicptopthepbookpandpIpfeelpitpispdesirablepforpthepstudentsptopha
vepap“firstpgo”patpthempatpthisppoint.pIpconcentrateponpthepintuitionpund
erlyingptheptwopproblems.pForpexample,padversepselectionpcanpbepillu
stratedpbypaskingpwhopwouldpbepfirstpinplineptoppurchaseplifepinsuranc
epifptherepwaspnopmedicalpexamination,porpwhatpqualitypofpusedpcarsp
areplikelyptopbepbroughtptopmarket.pForpmoralphazardpIptryptoppinpthemp
downponphowphardptheypwouldpworkpinpthispcoursepifptherepwerepnopexa
ms.

• Thepenvironmentpinpwhichpfinancialpaccountingpandpreportingpoperat
es.pMypmainpgoalpatpthisppointpispthatpthepstudentspdopnotptakepthispenvi
ronmentpforpgranted.pIpdiscusspthepprocedurespofpstandardpsettingpbr
ieflypandppointpoutpthatpthispispreallypapprocesspofpregulation.pInpthepp
ast,ptherephavepbeenpwell-
knownpcasespofpderegulation,psuchpaspairlines,ptrucking,pfinancialpinsti
tutions,ppowerpgeneration.pHowever,pweparepenteringpwhatpisplikelypt
opbepapperiodpofpincreasingpregulation,patpleastpforpfinancialpinstitutions

2
Copyrightp©p2015pPearsonpCanadapInc.