Financial Accounting: An Integrated Approach, 5th Edition Solution Manual

Preview (13 of 42 Pages)

100%

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 1 preview image

Loading page ...

Chapter 1Introduction to financialaccountingPractice ProblemsPractice Problem A1AccountClassificationCash at bankAssetInventoryAssetSalesRevenueWagesExpenseCost of goods soldExpenseShare capitalEquityAccounts payableLiability2Income StatementFor the year ending30 June 2012$Sales210,000Cost of goods sold(70,000)Gross profit140,000Wages(40,000)Net Profit100,0003Balance SheetAs at 30 June 2012AssetsLiabilities and shareholders’ equity$$Cash at bank210,000Accounts payable30,000Inventory60,000Share capital140,000Retained profits100,000 *270,000270,000*Opening retained profit + profit –dividend = closing balance retained profit (0 + 100,000 – 0 = 100,000)

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 2 preview image

Loading page ...

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 3 preview image

Loading page ...

Trotman: Financial Accounting 5e – Practice Problem Solutions2Practice Problem B1Accrual profit= total sales – total expenses= $750,000 + 260,000 – 580,000 – 240,000= $190,0002Sales revenue= 2,000 x $8= $16,000Cost of goods sold= 2,000 x $5= $10,000Practice Problem CShareholders’ equity= Assets – Liabilities= (Property, Plant and Equipment $1,500,000 + Accounts Receivable$400,000 + Cash $100,000 + Inventory $500,000)– (Bank loan $250,000 + Wages Payable $90,000)= $2,500,000 – 340,000= $2,160,000

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 4 preview image

Loading page ...

Chapter 2Measuring and evaluatingfinancial position and financialperformancePractice ProblemsPractice Problem A$Sales (300,000 + 100,000)400,000COGS(70,000)Other operating expenses (80,000 + 30,000)(110,000)Net profit before tax220,000Practice Problem BPSM LimitedBalance sheetas at 30 June 2012$000CurrentassetsCash11,636Accounts receivable47,515Inventory66,479Prepayments3,958Investments3,371132,959Non-current assetsOther receivable361Investments2,087Property, plant and equipment67,760Other long term assets42,742112,950Total assets245,909Current liabilitiesAccounts payable43,091Provisions for employee entitlements30,91974,010Non-current liabilitiesLong-term borrowings30,866Provisions for employee entitlements3,96934,835Total liabilities108,845Net assets137,064Shareholders’ equityShare capital108,518Retained profits28,546Total shareholders’ equity137,064

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 5 preview image

Loading page ...

Trotman: Financial Accounting 5e – Practice Problem Solutions2Practice Problem C1NE2+Revenue, +Net Profit3+Expense, –Net Profit4NE5NE6NE7NE8+Revenue, +Expense, +Net Profit9+Expense, –Net Profit10NE11+Expense, –Net Profit12NEPractice Problem DIncome Statementfor the Month of September 2011$$Sales30,000Expenses:Wages7,000Cleaning1,000Rent2,00010,000Net Profit20,000Balance Sheetas at 30 September 2011$$Cash1102,000Accounts Payable1,000Accounts Receivable219,0001,000Shareholders’ equityShare capital100,000Retained profits320,000120,000121,000121,0001100,000 – 2,000 + 11,000 – 7,000 = 102,000230,000 – 11,000 = 19,0003As there is no opening retained profits and no dividends, it is profit figure from the income statement

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 6 preview image

Loading page ...

Chapter 3The double-entry systemPractice ProblemsPractice Problem A1ASSETS= LIABILITIES+ SHAREHOLDERS’ EQUITYCashAccountsreceivableInventoryAccountspayableRentpayableTaxpayableRetainedprofitsRevenueExpenses$$$$$$$$$1+10,000+10,0002+9,600-9,6003+6,100+6,1004-6,300-6,3005-6,400-6,40062,400-2,4007-2,900-2,9008350-3509-450-450Total-50400-300-200-500350-45010,000-9,15050=50NB. Increases in expenses have been entered as minus figures.2Flashy Fashions LtdIncome statementFor the year ended 30 September 2012$Sales10,000LessCost of goods sold6,400Gross profit3,600LessOperating ExpensesRent2,400Profit before tax1,200Lesstax expense350Net Profit850Flashy Fashions LtdBalance sheetas at 30 September 2012Current Assets$Current Liabilities$Cash750Accounts Payable400Accounts Receivable800Tax Payable350Inventory600Prepaid rent200Shareholders’ equityShare Capital500Retained Profits1,1002,3502,350

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 7 preview image

Loading page ...

Trotman: Financial Accounting 5e – Practice Problem Solutions2Practice Problem B1$160,000.2$105,000.3$180,000.4$140,000.

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 8 preview image

Loading page ...

Trotman: Financial Accounting 5e – Practice Problem Solutions3Practice Problem C1Assets=Liabilities + Shareholders’ equityCashA/RInventoryPre-paymentsEquipAccum. DepA/PLoanShare CapitalOpeningRetainedProfitsRevenuesExpensesDividends90,000106,000118,00045,000400,000–125,000110,000240,000200,00084,0001+23,000–23,0002+80,000+80,0003+76,000–32,000+76,000–32,0004–4,000–4,0005–60,000–60,0006–7,000–7,0007–9,000–9,0008–13,000–13,0009–28,000+28,00010–6,000–6,00011–36,000–36,00043,000159,000114,00036,000400,000–129,00074,000180,000280,00084,00076,000–65,000–6,000

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 9 preview image

Loading page ...

Trotman: Financial Accounting 5e – Practice Problem SolutionsPractice Problem C (cont’d)2Newcombe LtdIncome Statement for the month ended 30 June 2012$$Sales76,000Cost of goods sold(32,000)Gross profit44,000Operating expensesWages13,000Prepaid expenses9,000Administrative7,000Depreciation4,000(33,000)Net profit11,000Newcombe LtdStatement of retained profits for the month ended 30 June 2012$Opening retained profits84,000Add net profit for the month11,00095,000Less dividends declared(6,000)Closing retained profits89,000Newcombe LtdBalance Sheet as at 30 June 2012Current assets$Current liabilities$Cash43,000Accounts payable74,000Accounts receivable159,000Inventory114,000Noncurrent liabilitiesPrepayments36,000Long-term loan180,000352,000254,000Noncurrent assetsShareholders’ equityEquipment400,000Share capital*280,000Accumulated depreciation(129,000)Retained profits89,000271,000369,000Total assets623,000Total liabilities and equity623,0003Net ProfitTotal AssetsTotal LiabilitiesShareholders’ Equity1No effectNo effectNo effectNoeffect2No effectIncreaseNo effectIncrease3IncreaseIncreaseNo EffectIncrease4DecreaseDecreaseNo EffectDecrease5No EffectDecreaseDecreaseNo Effect6DecreaseDecreaseNo EffectDecrease7DecreaseDecreaseNo EffectDecrease8DecreaseDecreaseNo EffectDecrease9No EffectNo EffectNo EffectNo Effect10No EffectDecreaseNo EffectDecrease11No EffectDecreaseDecreaseNo EffectNB: If Net Profit increases it increases to Retained Profits and therefore Shareholders’ Equity increases.

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 10 preview image

Loading page ...

Trotman: Financial Accounting 5e – Practice Problem Solutions541DRCash$23,000CRAccounts receivable$23,0002DRCash80,000CRShare capital80,0003DRCost of Goods Sold32,000CRInventory32,000DR Accounts receivable76,000CRSales revenue76,0004DR Depreciation expense4,000CR Accumulated depreciation4,0005DR Long-term loan60,000CR Cash60,0006DR Administrative expense7,000CR Cash7,0007DR Prepayments9,000CRExpense9,0008DR Wages13,000CR Cash13,0009DR Inventory28,000CR Cash28,00010DR Retained profits6,000CR Cash6,00011DR Accounts payable36,000CR Cash36,000

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 11 preview image

Loading page ...

Chapter 4Record-keepingPractice ProblemsPractice Problem A1No transaction since no exchange yet.2Yes, an exchange of money for advice.3No transaction for Bartlett as the exchanges that changed share price were betweeninvestors, not involving Bartlett.4Yes, an exchange of advertising received for a promise to pay, so a credit transaction.5Yes, for same reason as 4 – work received in exchange for a promise to pay for it.6Yes, an exchange of a sort. The teenager received cash and the company got some benefit(e.g. avoided a later lawsuit or other problem).7Yes, goods received in exchange for a combination of cash and promise to pay.8Yes, an exchange of cash for a removal of the promise to pay.9Yes, an exchange of cash for political benefit. The illegality doesn’t change the fact that atransaction happened.10Yes, an exchange of cash for a promise to repay it.Practice Problem B1Journal entries:Hoad LtdGeneral journalNoDescriptionPost refDebitsCredits$$1Cash1200,000Share capital21200,0002Inventory320,000Cash120,0003Rent expense314,000Cash14,0004Inventory330,000Accounts payable1130,0005Advertising expense321,000Expenses payable121,0006Accounts receivable290,000Sales2690,000Cost of goods sold3040,000Inventory340,0007Accounts payable (current)1125,000Cash125,000

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 12 preview image

Loading page ...

Trotman: Financial Accounting 5e – Practice Problem Solutions28Cash130,000Accounts receivable230,0009Wages expense3315,000Cash115,00010Sales commission34900Cash190011Office equipment66,000Cash13,000Accounts payable (noncurrent)163,00012Wages expense332,000Expenses payable122,0002General ledger postings:Hoad LtdGeneral LedgerCash11Share capital200,0002Inventory20,0008Accounts receivable30,0003Rent4,0007Accounts payable25,0009Wages15,00010 Sales commission90011 Office equipment3,000Balance c/d162,100230,000230,000Balance b/d162,100Accounts Receivable26Sales90,0008 Cash30,000Balance c/d60,00090,00090,000Balance b/d60,000

Financial Accounting: An Integrated Approach, 5th Edition Solution Manual - Page 13 preview image

Loading page ...

Trotman: Financial Accounting 5e – Practice Problem Solutions3Inventory32Cash20,0006 Cost of goods sold40,0004Accounts payable30,000Balance c/d10,00050,00050,000Balance b/d10,000Office Equipment611Cash3,000Accounts payable(noncurrent)3,0006,000Accounts Payable—Current117Cash25,0004 Inventory30,000Balance c/d5,00030,00030,000Balance b/d5,000Expenses Payable125Advertising1,00012Wages2,0003,000Accounts Payable—Noncurrent1611Office equipment3,000Share Capital211Cash200,000

Preview Mode

This document has 42 pages. Sign in to access the full document!

Report

Study Now!

Document Details

Related Documents

Solution Manual for Financial Accounting: An Integrated Approach, 6th Edition

Accounting Principles II – Traditional Cost Systems

Accounting Principles II – Statement of Cash Flows

Accounting Principles II – Partnerships

Accounting Principles II – Managerial and Cost Accounting Concepts

Accounting Principles II – Long-Term Liabilities

Accounting Principles II – Investments

Accounting Principles II – Incremental Analysis

Accounting Principles II – Flexible Budgets and Standard Costs

Accounting Principles II – Financial Statement Analysis

Company

Explore

Study Tools