怀尔德会计学原理答案Chapter-03

1、文档收集于互联网，已重新整理排版“ord版本可编辑欢迎下载支持. Chapter 3 Adjusting Accounts and Preparing Financial Statements QUESTIONS 1. The cash basis of accounting reports revenues when cash is received while the accrual basis reports revenues when they are earned. The cash basis reports expenses when cash is paid while the

2、 accrual basis reports expenses when they are incurred and matched with revenues they generated. 2. The accrual basis of accounting generally provides a better indication of company performance and financial condition than does the cash basis Also, the accrual basis increases the comparability of fi

3、nancial statements from one period to the next. Thus, business decision makers generally prefer the accrual basis. 3. Businesses that have major seasonal variations in sales are most likely to select the natural business year as the fiscal year. 4. A prepaid expense is an item paid for in advance of

4、 receiving its benefits. As such, it is reported as an asset on the balance sheet. 5. Long-term tangible plant assets such as equipment, buildings, and machinery lead to adjustments for depreciation Generally, land is the only long-term tangible plant asset that does not require depreciation. 6. The

5、 Accumulated Depreciation contra account is used for depreciation. It provides financial statement users with additional information about the relative age of the assets. Without the contra account information, the reader would not be able to tell whether the assets are new or in need of replacement

6、. 7. Unearned revenue refers to cash received in advance of providing products and services. Another name for unearned revenue is deferred revenue. It is reported as a liability on the balance sheet. 8. Accrued revenue is revenue that is earned but is not yet received in cash (and/or other assets) a

7、nd the customer has not been billed prior to the end of the period. Therefore, end-of-period adjustments are made to record accrued revenue. Examples are interest income that has been earned but not collected and revenues from services performed that are neither collected nor billed. 9. A If prepaid

8、 expenses are initially recorded with debits to expense accounts, then the prepaid expenses asset accounts are debited in the adjusting entries. 10. For Best Buy, all of the accounts under the category of Property and Equipment (except for Land), require adjusting entries. The expense related to the

9、 depreciation expense account would be understated on the income statement if Best Buy fails to adjust these asset accounts. If the adjusting entries are not made, net income would be overstated. Note: Students might also correctly identify accounts receivable, goodwill, and tradenames as needing ad

10、justment. Circuit City must make adjusting entries to Prepaid expenses and other current assets; Deferred income taxes; Accrued expenses and other current liabilities; Accrued income taxes; and possibly other assets and liabilities such as Receivables for bad debts. (It is also possible that Circuit

11、 City would need to adjust Goodwill and Other intangible assets.) 12. RadioShack would need to debit interest receivable and credit interest revenue. 13. The Accrued Wages Expense would be reported as part of “Accrued Expenses” on Apples balance sheet. QUICK STUDIES Quick Study 3-1 (15 minutes) Cash

12、 Accounting Revenues (cash receipts) $52,000 Expenses (cash payments: $37,500 $6,000 + $3,250) 34,750 Net income $17.250 Accrual Accounting Revenues (earned) $60,000 Experises (incurred) 37.500 Net income $22,500 Quick Study 3-2 (10 minutes) a. AE Accrued expenses b. PE Prepaid expenses c. UR Unearn

13、ed revenues d. PE Prepaid expenses (Depreciation) e. AR Accrued revenues Quick Study 3-3 (20 minutes) Accounts Debited and Credited Financial Statement a. Debit Credit Unearned Revenue Revenue Earned Balance Sheet Income Statement b. Debit Wages Expense Income Statement Credit Wages Payable Balance

14、Sheet c. Debit Accounts Receivable Balance Sheet Credit Revenue Earned Income Statement d. Debit Insurance Expense Income Statement Credit Prepaid Insurance Balance Sheet e. Debit Depreciation Expense Income Statement Credit Accumulated Depreciation Balance Sheet Quick Study 3-4 (15 minutes) a. Insu

15、rance Expense 3,000 Prepaid Insurance 3,000 To record 6-month insurance coverage expired. b. Supplies Expense 4,150 Supplies 4,150 To record supplies used during the year. ($900 + $4,000-? = $750) Quick Study 3-5 (15 minutes) a. Depreciation ExpenseEquipment 85400 Accumulated DepreciationEquipment8,

16、400 To record depreciation expense for the year. ($45,000 - $3,000) / 5 years = $8,400 b. No depreciation adjustments are made for land as it is expected to last indefinitely. 119文档来源为:从网络收隼整理word版本可编辑. Quick Study 3-6 (10 minutes) Salaries Expense 400 Salaries Payable 400 To record salaries incurre

17、d but not yet paid. One student earns $100 x 4 days, Monday through Thursday Quick Study 3-7 (15 minutes) a. Unearned Revenue 22,500 Legal Revenue 22,500 To recognize legal revenue earned (30,000 x 3/4). b. Unearned Subscript on Reve nue 1,200 Subscript on Revenue 1,200 To recognize subscription rev

18、enue earned. 100 x ($24 /12 months) x 6 months Quick Study 3-8 (15 minutes) Adjusting entryDebit Credit 1. Accrue salaries expenseeg 2. Adjust the Unearned Services Revenue accountaf to recognize earned revenue 3. Record the earning of services revenue for whichbf cash will be received the following

19、 period Quick Study 3-9 (10 minutes) The answer is a. Explanatio n The debit balance in Prepaid Insurance was reduced by $400, implying a $400 debit to In sura nee Expense. The credit balance in In terest Payable increased by $800, implying an $800 debit to Interest Expense. Quick Study 3-10 (15 min

20、utes) The answer is 2. Explanatio n Insurance premium error Understates expenses (and overstates assets) by$1,600 Accrued salaries error Understates expenses (and understates liabilities) by.1Q00 The collective effects from this companys errors follow: Understates expenses by $2.600 Overstates asset

21、s by $X600 Understates liabilities by $1,000 Quick Study 3-11 (10 minutes) Profit margin = $78,750 / $630,000 = 12.5% Interpretation: For each dollar that Miller Company records as revenue, it earns 12.5 cents in net income. Millers 12.5% is markedly lower than competitors, average profit margin of

22、15%it must improve performance. Quick Study 3-12A (5 minutes) The answer is c. EXERCISES Exercise 3-1 (10 minutes) 1. B4. A 2. F5. D 3. C6. E Exercise 3-2 (25 minutes) a. Depreciation ExpenseEquipment 16,000 Accumulated DepreciationEquipment 16,000 To record depreciation expense for the year. b. Ins

23、urance Expense 5,360 Prepaid Insurance* 5,360 To record insurance coverage that expired ($6,000 - $640). c. Office Supplies Expense 3,422 Office Supplies* 3,422 To record office supplies used ($325 + $3,480 $383). d. Unearned Fee Revenue 3,000 Fee Revenue 3,000 To record earned portion of fee receiv

24、ed in advance ($15,000 x1/5). e. Insurance Expense 6,160 Prepaid Insurance To record insurance coverage that expired. f. Wages Expense Wages Payable To record wages accrued but not yet paid. 2,700 6,160 2,700 Bal. Bal. 6,000 ? Used End. Bal. 640 epaid Insurance Beg. Bal. Purch. 325 3,480 ? Used End.

25、 Bal. 383 Office Supplies Notes: Exercise 3-3 (30 minutes) a. Unearned Fee Revenue 5,000 Fee Revenue 5,000 To record earned portion of fee received in advance ($15,000 x1/3). b. Wages Expense 7,500 Wages Payable 7,500 To record wages accrued but not yet paid. c. Depreciation ExpenseEquipment 17,251

26、Accumulated DepreciationEquipment 17,251 To record depreciation expense for the year. d. Office Supplies Expense 5,682 Office Supplies* 5,682 To record office supplies used ($240 + $6,102 $660). e. Insurance Expense 2,700 Prepaid Insurance1 2,700 To record insurance coverage expired ($4,000 - $1,300

27、). f. Interest Receivable 1,400 Interest Revenue 1,400 To record interest earned but not yet received. g. Interest Expense 2,000 Interest Payable 2,000 To record interest incurred but not yet paid. Prepaid Insurance1 Beg?Bal.4,000 Notes: Office Supplies Beg? Bal.240 ? Used? Used End. Bal. 1,300End.

28、Bal.660 Purch.6,102 Exercise 3-4 (15 minutes) a. Adjusting entry 2009 Dec. 31 Wages Expense 825 Wages Payable 825 To record accrued wages for one day. (5 workers x $165) b. Payday entry 2010 Jan. 4 Wages Expense 2,475 Wages Payable 825 Cash 3,300 To record accrued and current wages. Wages expense =

29、5 workers x 3 days x $165 Cash = 5 workers x 4 days x $165 Exercise 3-5 (15 minutes) a. $ 2,000 b. $ 6,607 c. $11,987 d. $ 1,375 Proof: (a) (b) (c) (d) Supplies available - prior year-end .$ 350 $1,855 $ 1,576 $1,375 Supplies purchased in current year 2,450 6,307 11,987 6,907 Total supplies availabl

30、e 2,800 8,162 13,563 8,282 Supplies available - current year-end. . (800) (6,607) (2,056) (800) Supplies expense for current year $2,000 $1,555 $11,507 $7,482 Exercise 3-6 (25 minutes) a. Apr. 30 Legal Fees Expense Legal Fees Payable To record accrued legal fees. 4,500 4,500 May 12 Legal Fees Payabl

31、e Cash To pay accrued legal fees. 4,500 4,500 b. Apr. 30 Interest Expense Interest Payable To record accrued interest expense ($5,700 x 10/30). 1,900 1,900 May 20 Interest Payable Interest Expense Cash To record payment of accrued and current interest expense ($5,700 x 20/30). 1,900 3,800 5,700 V. A

32、pr. 30 Salaries Expense Salaries Payable To record accrued salaries ($12,000 x 2/5 week). 4,800 4,800 May 3 Salaries Payable Salaries Expense Cash To record payment of accrued and current salaries ($12,000 x 3/5 week). 4,800 7,200 12,000 Exercise 37 (20 minutes) Insurance Expense using Balance Sheet

33、 Prepaid Insurance Asset using Accrual Basis* Cash Basis Accrual Basis Cash Basis Dec. 31,2007. $14,450 $0 2007 $ 850 $15,300 Dec. 31,2008. 9,350 0 2008 5,100 0 Dec. 31, 2009. 4,250 0 2009 5,100 0 Dec. 31,2010. 0 0 2010. .4,250 0 Total. .$15,300 $15.300 Explanations: Accrual asset balance equals mon

34、ths left in the policy x $425 per month (monthly cost is computed as $15,300 / 36 months). Months LeftBalance 12/31/2007. 34 $14,450 12/31/2008. 22 9,350 12/31/2009. 10 4,250 12/31/2010. 0 0 Accrual insurance expense equals months covered in the year x $425 per month. Months Covered Expense 2007. 2

35、$ 850 2008. 12 5,100 2009 12 5,100 2010 10 4,250 Exercise 3-8 (25 minutes) Dec. 31 Accounts Receivable 1,980 Fees Earned 1,980 To record earned but unbilled fees (30% x $6,600). 31 Unearned Fees 4,620 Fees Earned 4,620 To record earned fees collected in advance (70% x $6,600). 31 Depreciation Expens

36、eComputers 1,650 Accumulated Depreciation-Computers1,650 To record depreciation on computers. 31 Depreciation ExpenseOffice Furniture 1,925 Accumulated DepreciationOffice Furniture .1,925 To record depreciation on office furniture. 31 Salaries Expense 2,695 Salaries Payable 2,695 To record accrued s

37、alaries. 31 Insurance Expense 1,430 Prepaid Insurance 1,430 To record expired prepaid insurance. 31 Rent Expense 700 Rent Payable 700 To record accrued rent expense. 31 Office Supplies Expense 528 Office Supplies 528 To record use of office supplies. 31 Advertising Expense 500 Advertising Payable 50

38、0 To record accrued advertising expense. 31 Utilities Expense 77 Utilities Payable 77 To record incurred and unpaid utility costs. Exercise 3-9 (10 minutes) a. $ 6,039 /$52,970=11.4% b. $100,890/ $ 471,430=21.4% c. $106,880/$301,920= 35.4% d. $67,140/$1,721,520= 3.9% e. $84,780/$513,800=16.5% Analys

39、is and Interpretation: Company c has the highest profitability according to the profit margin ratio. Company c earns 35.4 cents in net income for every one dollar of net sales earned. Exercise 3-10A (30 minutes) a. Dec. 1 Supplies Expense 2,000 Cash 2,000 Purchased supplies. b. Dec. 2 Insuranee Expe

40、nse 1,540 Cash 1,540 Paid insurance premiums. c. Dec. 15 Cash 13,000 Remodeling Fees Earned 13,000 Received fees for work to be done. d. Dec. 28 Cash 3,700 Remodeling Fees Earned 3,700 Received fees for work to be done. e. Dec. 31 Supplies 1,840 Supplies Expense 1,840 Adjust expenses for unused supp

41、lies. f. Dec. 31 Prepaid Insurance 1,200 Insurance Expense 1,200 Adjust expenses for unexpired coverage ($1,540 - $340). g- Dec. 31 Remodeling Fees Earned 11,130 Unearned Remodeling Fees 11,130 Adjusted revenues for unfinished projects ($13,000+ 3,700-$5,570). Exercise 3-11A (25 minutes) a. Initial

42、credit recorded in the Unearned Fees account July 1 Cash 2,800 Unearned Fees 2,800 Received fees for work to be done for Solana 6 Cash 8,100 Unearned Fees 8,100 Received fees for work to be done for Haru. 12 Unearned Fees 2,800 Fees Earned 2,800 Completed work for Solana. 18 Cash 7,300 Unearned Fees

43、 7,300 Received fees for work to be done for Jordan. 27 Unearned Fees 8,100 Fees Earned 8,100 Completed work for customer Haru. 31 No adjusting entries required. b. Initial credit recorded in the Fees Earned account July 1 Cash 2,800 Fees Earned 2,800 Received fees for work to be done for Solana 6 C

44、ash 8,100 Fees Earned 8,100 Received fees for work to be done for Haru. 12 No entry required. 18 Cash 7,300 Fees Earned 7,300 Received fees for work to be done for Jordan. 27 No entry required. 31 Fees Earned 7,300 Unearned Fees 7,300 Adjusted to reflect unearned fees for unfinished job for Jordan.

45、Exercise 3-11A -concluded c. Under the first method (and using entries from a) Unearned Fees = $2,800 + $8,100 $2,800 + $7,300 $8,100 = $7,300 Fees Earned = $2,800 + $8,100 = $l66oo Under the second method (and using entries from b) Unearned Fees = $7.300 Fees Earned = $2,800 + $8,100 + $7,300 $7,30

46、0 = $10.900 Notg: Both procedures yield identical results in the financial statements. PROBLEM SET A Problem 3-1A (10 minutes) 1.I5.G9.H 2-D6.C10.E 3. F7-I11.H 4. B8.A12.B Problem 3-2A (35 minutes) Part 1 Adjustment (a) Dec. 31 Office Supplies Expense 12,325 Office Supplies 12,325 To record cost of

47、supplies used ($2,900 + $11,977 - $2,552). Adjustment (b) 31 Insura nee Expense 12,280 Prepaid Insurance 12,280 3,660 3,660 To record annual insurance coverage cost. Policy Cost per Month Months Active in 2009 2009 Cost A $485 ($11,640/24 mo.) 12 $ 5,820 B 290 ($10,440/36 mo.) 9 2,610 C 770 ($ 9,240

48、 /12mo.) 5 3,850 Total $12.280 Adjustment (c) 31 Salaries Expense Salaries Payable To record accrued but unpaid wages (2 days x $1,830). Problem 3-2A -concluded Adjustment (d) Dec. 31 Depreciation ExpenseBuilding 18,875 Accumulated DepreciationBuilding .18,875 To record annual depreciation expense (

49、$800,000 -$45,000)/40 years = $18,875 Adjustment (e) 31 Rent Receivable 3,000 Rent Earned 3,000 To record earned but unpaid Dec. rent Adjustment (f) 31 Unearned Rent 5,436 Rent Earned 5,436 To record the amount of rent earned for November and December (2 x $2,718). Part 2 Cash Payment for (c) Jan 6

50、Salaries Payable 3,660 Salaries Expense* 5,490 Cash 9,150 To record payment of accrued and current salaries. days x $1,830) Cash Payment for (e) 15 Cash 6,000 Rent Receivable 3,000 Rent Earned 3,000 To record past due rent for two months. Problem 3-3A (90 minutes) Parts 1 and 2 Problem 3-3A (Continu

51、ed) 文档收集于互联网，已重新整理排版“ord版本可编辑欢迎下载支持. Problem 3-3A (Continued) Part 4 Adjustment (a) Dec. 31 Insura nee Expense 3,000 Prepaid Insurance 3,000 To record the insurance expired. Adjustment (b) 31 Teaching Supplies Expense 9,000 Teaching Supplies 9,000 To record supplies used ($11,000 - $2,000). Adjustme

52、nt (c) 31 Depreciation ExpenseEquipment 10,000 Accumulated DepreciationEquipment10,000 To record equipment depreciation. Adjustment (d) 31 Depreciation ExpenseProfess. Library5,000 Accumul. DepreciationProfess. Library 5,000 To record professional library depreciation. Adjustment (e) 31 Unearned Tra

53、ining Fees 5,000 Training Fees Earned 5,000 To record 2 months9 training fees earned that were collected in advance. Adjustment 31 Accounts Receivable 4,000 Tuition Fees Earned 4,000 To record tuition earned ($1,600 x2 1/2 months). Adjustment (q) 31 Salaries Expense 480 Salaries Payable 480 To recor

54、d accrued salaries (2 days x $120 x 2 employees). Adjustment (h) 31 Rent Expense 2,178 Prepaid Rent 2,178 To record expiration of prepaid rent. WELLS TEACHING INSTITUTE Adjusted Trial Balance December 31, 2009 Debit Credit Cash $28,064 Accounts receivable 4,000 Teaching supplies 2,000 Prepaid insura

55、nce 13,000 Prepaid rent 0 Professional library 33,000 Accumulated depreciationProfessional library.$ 15,000 Equipme nt 75,800 Accumulated depreciationEquipment 25,000 Accounts payable 39,500 Salaries payable 480 Unearned training fees 7,500 T. Wells, Capital 71,000 T. Wells, Withdrawals 44,000 Tuiti

56、on fees earned 115,000 Training fees earned 46,000 Depreciation expenseProfessional library5,000 Depreciation expenseEquipment 10,000 Salaries expense 52,480 Insurance expense 3,000 Rent expense 26,136 Teaching supplies expense 9,000 Advertising expense 8,000 Utilities expense 6,000 Totals $319480$3

57、19480 WELLS TEACHING INSTITUTE Income Statement For Year Ended December 31, 2009 Revenues Tuition fees earned Training fees earned Total revenues Expe rises Depreciation expenseProfessional library Depreciation expenseEquipment Salaries expense Insurance expense Rent expense Teaching supplies expens

58、e Advertising expense Utilities expense Total expenses Net income TUTE Statement of Owners Equity For Year Ended December 31, 2009 $115,000 46,000 $161,000 5,000 10,000 52,480 3,000 26,136 9,000 8,000 6,000 119,616 $ 4X384 T. Wells, Capital, December 31, 2008 $71,000 Plus: Net income 41,384 112,384

59、Less: Withdrawals by owner 44,000 T. Wells, Capital, December 31,2009 $68,384 119文档来源为:从网络收隼整理word版本可编辑. 文档收集于互联网，已重新整理排版“ord版本可编辑欢迎下载支持. Problem 33A (Concluded) WELLS TEACHING INSTITUTE Balance Sheet December 31, 2009 Assets Cash $ 28,064 Accounts receivable 4,000 Teaching supplies 2,000 Prepaid in

60、surance 13,000 Professional library $33,000 Accumulated depreciationProfessional library (15,000)18,000 Equipment 75,800 Accumulated depreciationEquipment (25,000)50800 Total assets $115.864 Liabilities Accounts payable $ 39,500 Salaries payable 480 Unearned training fees 7,500 Total liabilities 47,