會計學(xué)：企業(yè)決策的基礎(chǔ)exercises-chapter4答案

1、會計學(xué)：企業(yè)決策的基礎(chǔ)exercises-chapter4答案Solutions to ExercisesEx 41a.Book valueb.Materialityc.Matching principled.Unrecorded revenuee.Adjusting entriesf.Unearned revenueg.Prepaid expensesh.None (This is an example of “depreciation expense.”)Ex. 42Income StatementBalance SheetAdjusting Entry RevenueExpenses=N

2、et IncomeAssets=Liabilities+OwnersEquityaNEIDDNEDbNEIDNEIDcINEIINEIdNEIDNEIDeNEIDDNEDfINEINEDIEx. 43a.Rent Expense 240,000Prepaid Rent 240,000To record rent expense for May ($1,200,000 5 months = $240,000 per month).b.Unearned Ticket Revenue 148,800Ticket Revenue 148,800To record earning portion of

3、season ticket revenue relating to May home games.Ex. 44a.(1)Interest Expense 375Interest Payable 375$50,000 x 9% annual rate x 1/12 = $375.(2)Accounts Receivable 10,000Consulting Fees Earned 10,000To record ten days of unbilled consulting fees at $1,000 per day.b.$2,250 ($50,000 x 9% x 6/12 = $2,250

4、)c.$15,000 ($25,000 - $10,000 earned in December, 2002)Ex. 45a.The balance of TWAs Advance Ticket Sales account represents unearned revenuethat is, amounts collected from customers prior to rendering the related services (air travel). As TWA has an obligation to render these services, the Advanced T

5、icket Sales account appears among the liabilities in TWAs balance sheet.b.TWA normally reduces the balance of this liability account by rendering services to customersthat is, by providing flights for which the customers have purchased tickets. On some occasions, however, TWA reduces the balance of

6、this liability by making cash refunds to customers.Ex. 46a. 1.Interest Expense 1,200Interest Payable 1,200To record interest accrued on bank loan during December.2.Depreciation Expense: Office Building 1,100Accumulated Depreciation: Office Building 1,100To record depreciation on office building ($33

7、0,000 25 years 112 = $1,100).3.Accounts Receivable 64,000Marketing Revenue Earned 64,000To record accrued Marketing revenue earned in December.4.Insurance Expense 150Prepaid Insurance 150To record insurance expense (1,800 12 months = $150).5.Unearned Revenue 3,500Marketing Revenue Earned 3,500To rec

8、ord portion of unearned revenue that had become earned in December.6.Salaries Expense 2,400Salaries Payable 2,400To record accrued salaries in December.b.$62,650 ($64,000 + $3,500 $1,200 $1,100 $150 $2,400).Ex. 47a.The total interest expense over the life of the note is $5,400 ($120,000 .09 612 = $5

9、,400).The monthly interest expense is $900 ($5,400 6 = $900).b.The liability to the bank at December 31, 2002, is $121,800 (Principal, $120,000 + $1,800 accrued interest).c.2002Oct.31Cash 120,000Notes Payable 120,000Obtain from bank six-month loan with interest at 9% a year.d.Dec.31Interest Expense

10、900Interest Payable 900To accrue interest expense for December on note payable ($120,000 9% 112).e.The liability to the bank at March 31, 2003, is $124,500, consisting of $120,000 principal plus $4,500 accrued interest for five months.Ex. 48a.May1Cash 300,000Notes Payable 300,000Obtained a three-mon

11、th loan from National Bank at 12% interest per year.May31Interest Expense 3,000Interest Payable 3,000To record interest expense for May on note payable to National Bank ($300,000 12% 112 = $3,000).b.May1Prepaid Rent 180,000Cash 180,000Paid rent for six months at $30,000 per month.May31Rent Expense 3

12、0,000Prepaid Rent 30,000To record rent expense for the month of May.c.May2Cash 910,000Unearned Admissions Revenue 910,000Sold season tickets to the 70-day racing season.May31Unearned Admissions Revenue 260,000Admissions Revenue 260,000To record admissions revenue from the 20 racing days in May ($910

13、,000 2070 = $260,000).d.May4No entry required.e.May6Prepaid Printing 12,000Cash 12,000Printed racing forms for first 30 racing days.May31Printing Expense 8,000Prepaid Printing 8,000To record printing expense for 20 racing days in May.f.May31Concessions Receivable 16,500Concessions Revenue 16,500Earn

14、ed 10% of refreshment sales of $165,000 during May.Something to Consider:Effects of omission of May 31 adjusting entry for rent expense on May 31 financial statements:RevenueNot affectedExpensesUnderstated (by Mays rent of $30,000)Net IncomeOverstated (because May rent expense was not recognized)Ass

15、etsOverstated (Prepaid Rent should be reduced by portion expired in May)LiabilitiesNot affectedOwners EquityOverstated (because net income is overstated)Ex. 49a.Materiality refers to the relative importance of an item. An item is material if knowledge of it might reasonably influence the decisions o

16、f users of financial statements. If an item is immaterial, by definition it is not relevant to decision makers. Accountants must account for material items in the manner required by generally accepted accounting principles. However, immaterial items may be accounted for in the most convenient and ec

17、onomical manner.b.Whether a specific dollar amount is “material” depends upon the (1) size of the amount and (2) nature of the item. In evaluating the size of a dollar amount, accountants consider the amount in relation to the size of the organization.Based solely upon dollar amount, $2,500 is not m

18、aterial in relation to the financial statements of a large, publicly owned corporation. For a small business however, this amount could be material.In addition to considering the size of a dollar amount, accountants must also consider the nature of the item. The nature of an item may make the item “

19、material” to users of the financial statements regardless of its dollar amount. Examples might include bribes paid to government officials, or theft of company assets or other illegal acts committed by management.In summary, one cannot say whether $2,500 is a material amount. The answer depends upon

20、 the related circumstances.c.Two ways in which the concept of materiality may save time and effort for accountants are:1.Adjusting entries may be based upon estimated amounts if there is little or no possibility that the use of an estimate will result in material error. For example, an adjusting ent

21、ry to reflect the amount of supplies used may be based on an estimate of the cost of supplies remaining on hand.2.Adjusting entries need not be made to accrue immaterial amounts of unrecorded expenses or unrecorded revenue. For example, no adjusting entries normally are made to record utility expens

22、e payable at year-end.Ex. 410a.None (or Materiality). Accounting for immaterial items is not “wrong” or a “violation” of generally accepted accounting principles; it is merely a waste of time. The bookkeeper is failing to take advantage of the concept of materiality, which permits charging immateria

23、l costs directly to expense, thus eliminating the need to record depreciation in later periods.b.Matching.c.Realization.Ex. 411a.Accounts likely to have required an adjusting entry are:1.Investments2.Accounts Receivable3.Inventories4.Prepaid Expenses5.Deferred Income Taxes6.Buildings7.Machinery and

24、Equipment8.Intangible Assets9.Accounts Payable10.Accrued Liabilities11.Income Taxes Payable12.Deferred Compensation and Other LiabilitiesNote to the Instructor: The adjustments required for many of the accounts listed above are discussed in subsequent chapters. Some are beyond the scope of an introd

25、uctory course.solutions to problems20 Minutes, EasyProblem 41FLORIDA PALMS COUNTRY CLUBProblem 41FLORIDA PALMS COUNTRY CLUB (concluded)b.1.Accruing unpaid expenses.2.Accruing uncollected revenue.3.Converting liabilities to revenue.4.Converting assets to expenses.5.Accruing unpaid expenses.6.Converti

26、ng assets to expenses.7.No adjusting entry required.8.Accruing unpaid expenses.c.The clubhouse was built in 1925 and has been fully depreciated for financial accounting purposes. The net book value of an asset reported in the balance sheet does not reflect the assets fair market value. Likewise, dep

27、reciation expense reported in the income statement does not reflect a decline in fair market value, physical obsolescence, or wear-and-tear.40 Minutes, MediumProblem 42ENCHANTED FORESTProblem 42ENCHANTED FOREST (concluded)b.1.Accruing uncollected revenue.2.Accruing unpaid expenses.3.Converting asset

28、s to expenses.4.No adjusting entry required.5.Accruing unpaid expenses.6.Accruing uncollected revenue.7.Converting liabilities to revenue.8.Accruing unpaid expenses.9.Accruing unpaid expenses.c.Income StatementBalance SheetAdjustmentRevenueExpenses=Net IncomeAssets=Liabilities+OwnersEquity1.INEIINEI

29、2.NEIDNEID3.NEIDDNED4.NENENENENENE5.NEIDNEID6.INEIINEI7.INEINEDI8.NEIDNEID9.NEIDNEIDd.$340 ($12,000 x 0.85% x 4/12)e.Original cost of buildings$600,000Accumulated depreciation: buildings (prior to adjusting entry 3 in part a)$310,000December depreciation expense from part a2,000Accumulated depreciat

30、ion, buildings, 12/31(312,000)Net book value at December 31$288,00025 Minutes, StrongProblem 43SEA CATa.(1)Age of the catamaran in months = accumulated depreciation monthly depreciation. Useful life is given as 10 years, or 120 months.Cost $46,200 120 months = $385 monthly depreciation expense.Accum

31、ulated depreciation of $9,240 $385 monthly depreciation = 24 months.(2)Tickets used in June145Tickets outstanding on June 30 ($825 $15)55Tickets sold to resort hotel on June 1200(3)Prepaid rent of $6,000 5 months remaining = $1,200 monthly rental expense.(4)$1,400 x 12/8 = $2,100 original cost.Since

32、 4 months of the 12-month life of the policy have expired, the $1,400 of unexpired insurance applies to the remaining 8 months. This indicates a monthly cost of $175, computed as $1,400 8. Therefore, the 12-month policy originally cost $2,100, or 12 x $175.30 Minutes, MediumProblem 44CAMPUS THEATERP

33、roblem 44CAMPUS THEATER (concluded)b.(1)Eight months (bills received January through August). Utilities bills are recorded as monthly bills are received. As of August 31, eight monthly bills should have been received.(2)Seven months (January through July). Depreciation expense is recorded only in mo

34、nth-end adjusting entries. Thus, depreciation for August is not included in the August unadjusted trial balance.(3)Twenty months ($14,000 $700 per month).c.Corporations must pay their income taxes in several installment payments throughout the year. The balance in the Income Taxes Expense account re

35、presents the total amount of income taxes expense recognized since the beginning of the year. But Income Taxes Payable represents only the portion of this expense that has not yet been paid. In the example at hand, the $4,740 in income taxes payable probably represents only the income taxes expense accrued in July, as Pickwood should have paid taxes accrued in the first two quarters by June 15.50 Minutes, StrongProblem 45KEN HENSLEY ENTERPRISES, INC.Problem 45KEN HENSLEY ENTERPRISES, INC. (continued)c.Monthly rent expense