Solutions Manual For Accounting 8th Edition By Horngren

Comprehensive Problem, Chapters 7-10

(30-45 min.) Comprehensive Problem

Req. 1

GOLD RUSH RESORTS
AS ORIGINALLY MOUNTAIN
REPORTED REVISED HIDEAWAY
Net income $500,000 $356,000* $400,000


*Gold Rush Resorts net income
as originally reported $500,000
Revisions:
Additional uncollectible-account expense (2,000)
Additional cost of goods sold due to LIFO (7,000)
Additional depreciation expense for the:
Buildings—DDB
$1,200,000 × 2/30 = $ 80,000
SL (as originally reported) 20,000
Excess of DDB depr. over SL depr. (60,000)
Furniture and fixtures—DDB
$750,000 × 2/10 = $150,000
SL (as originally reported) 75,000
Excess of DDB depr. over SL depr. (75,000)
Gold Rush Resorts net income, as revised $356,000

Req. 2

Before the conversion, Gold Rush Resorts had higher net
income. After converting the income statement amounts,
however, Mountain Hideaway has higher net income. Based
on the net income comparison, Mountain Hideaway looks
like the better business.


16 Accounting 8/e

,Comprehensive Problem, Chapters 1-5
(180 min.) Comprehensive Problem

Reqs. 1 and 5 (ledger accounts and posting)

ACCOUNT CASH ACCOUNT NO.
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 31 Bal. 16,430


ACCOUNT ACCOUNTS RECEIVABLE ACCOUNT NO.
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 31 Bal. 19,090


ACCOUNT INVENTORY ACCOUNT NO.
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 31 Bal. 65,400
31 Adj. 1,680 63,720


ACCOUNT SUPPLIES ACCOUNT NO.
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 1 Bal. 2,700
31 Adj. 1,500 1,200




Accounting 8/e Solutions Manual 222

, (continued) Comprehensive Problem
Reqs. 1 and 5

ACCOUNT BUILDING ACCOUNT NO.
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 1 Bal. 188,170

ACCOUNT ACCUMULATED ACCOUNT NO.
DEPRECIATION – BUILDING
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 1 Bal. 36,000
31 Adj. 4,000 40,000

ACCOUNT FURNITURE ACCOUNT NO.
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 1 Bal. 45,600

ACCOUNT ACCUMULATED ACCOUNT NO.
DEPRECIATION – FURNITURE
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 1 Bal. 5,800
31 Adj. 4,800 10,600

ACCOUNT ACCOUNTS PAYABLE ACCOUNT NO.
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 31 Bal. 28,300


223 Accounting 8/e Solutions Manual

, (continued) Comprehensive Problem

Reqs. 1 and 5

ACCOUNT SALARY PAYABLE ACCOUNT NO.
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 31 Adj. 1,150 1,150


ACCOUNT UNEARNED SALES ACCOUNT NO.
REVENUE
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 1 Bal. 6,560
31 Adj. 4,580 1,980


ACCOUNT NOTE PAYABLE, LONG- ACCOUNT NO.
TERM
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
2011
Jan. 31 Bal. 87,000




Comprehensive Problem, Chapters 1-5 224