FINANCIAL ACCOUNTING – Eleventh Edition
E 1-19A – Please go to this problem in your textbook to view the data sets.
Which company appears to have the strongest financial position? Explain your
reasoning.
Solution:
Assets
= Liabilities +
Stockholders’
Equity
Preston Drycleaners
First Street Bank
Pam’s Florals
Chapter 1: The Financial Statements
Page 1 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
E 1-26A – Please go to this problem in your textbook to view the data sets.
1. Prepare the income statement and the statement of retained earnings
of Carson Coffee Roasters Corp., for the month ended August 31, 2017.
Solution:
Carson Coffee Roasters Corp.
Income Statement
For the Month Ended August 31, 2017
Revenue:
Service revenue
Expenses:
Salary expense
Utilities expense
Rent expense
Total expenses
Net income
$
Carson Coffee Roasters Corp.
Statement of Retained Earnings
For the Month Ended August 31, 2017
Retained earnings, August 1, 2016
$
Add: Net income for the month
Subtotal
Less: Dividends declared
$
Retained earnings, August 31, 2017
Chapter 1: The Financial Statements
–
0
–
Page 2 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
E 1-27A – Please go to this problem in your textbook to view the data sets.
1. Prepare the balance sheet of Carson Coffee Roasters Corp., for August 31,
2017.
Solution:
Carson Coffee Roasters Corp.
Balance Sheet
August 31, 2017
Liabilities
Assets
Cash
Accounts payable
Office supplies
Equipment
Stockholders’ Equity
Common stock
Retained earnings
Total assets
$
–
Chapter 1: The Financial Statements
Total stockholders’ equity
Total liabilities and
stockholders’ equity
$
–
Page 3 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
E 1-28A – Please go to this problem in your textbook to view the data sets.
1. Prepare the statement of cash flows of Carson Coffee Roasters Corp.,
for the month ended August 31, 2017. Using Exhibit 1-11 as a model, show
with arrows the relationships among the income statement, statement of
retained earnings, balance sheet, and statement of cash flows.
Solution:
Carson Coffee Roasters Corp.
Statement of Cash Flows
For the Month Ended August 31, 2017
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net
cash provided by operating activities
Net cash provided by operating activities
Cash flows from investing activities:
Acquisition of equipment
Net cash used for investing activities
Cash flows from financing activities:
Issuance (sale) of stock to owners
Payment of dividends
Net cash provided by financing activities
Net increase in cash
Cash balance, August 1, 2017
Cash balance, August 31, 2017
Chapter 1: The Financial Statements
–
–
$
$
0
–
Page 4 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
E 1-29A – Please go to this problem in your textbook to view the data sets.
Complete the report giving him your opinion of net income, dividends, financial
position, and cash flows during his first month of operations.
Solution:
Chapter 1: The Financial Statements
Page 5 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
P 1-60A – Please go to this problem in your textbook to view the data sets.
1. Prepare the balance sheet of the real estate business of Caden Healey Realtor,
Inc., at December 31, 2017.
2. Does it appear that the realty business can pay its debts? How can you tell?
3. Identify the personal items given in the preceding facts that should not be
reported on the balance sheet of the business.
Solution:
Req. 1
Caden Healey, Realtor, Inc.
Balance Sheet
December 31, 2017
Liabilities
Assets
Cash
Accounts payable
Office supplies
Note payable
Land
Total liabilities
Furniture
Stockholders’ equity
Franchise
Common stock
Retained earnings*
Total stockholders’ equity
Total liabilities and
Total assets
$
– stockholders’ equity
$
–
–
Req. 2
Req. 3
Chapter 1: The Financial Statements
Page 6 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
P 1-61A – Please go to this problem in your textbook to view the data sets.
1. Prepare the income statement of Beckwith Garden Supply, Inc., for the year
ended December 31, 2016.
2. Prepare the company’s statement of retained earnings for the year.
3. Prepare the company’s balance sheet at December 31, 2016.
4. Analyze Beckwith Garden Supply, Inc., by answering these questions:
a. Was Beckwith Garden Supply profitable during 2016? By how much?
b. Did retained earnings increase or decrease? By how much?
c. Which is greater, total liabilities or total stockholders’ equity? Who owns more of
Beckwith Garden Supply’ assets, creditors of the company or the Beckwith Garden
Supply’ stockholders?
Solution:
Req. 1
Beckwith Garden Supply Inc.
Income Statement
Year Ended December 31, 2016
Revenue
Service revenue
Expenses:
Salary expense
Rent expense
Interest expense
Utilities expense
Property tax expense
Total expenses
Net income
$
–
Req. 2
Beckwith Garden Supply Inc.
Statement of Retained Earnings
Year Ended December 31, 2016
Retained earnings, December 31, 2015
Add: Net income
Subtotal
Less: Dividends declared
Retained earnings, December 31, 2016
Chapter 1: The Financial Statements
$
–
Page 7 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
Req. 3
ASSETS
Cash
Accounts receivable
Supplies
Land
Building
Equipment
Total assets
Beckwith Garden Supply Inc.
Balance Sheet
December 31, 2016
LIABILITIES
Accounts payable
Note payable
Interest payable
Total liabilities
$
STOCKHOLDERS’
EQUITY
Common stock
Retained earnings
Total stockholders’ equity
Total liabilities and
– stockholders’ equity
–
$
–
Req. 4
Chapter 1: The Financial Statements
Page 8 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
Chapter 1: The Financial Statements
Page 9 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
P 1-62A – Please go to this problem in your textbook to view the data sets.
1. Prepare a cash flow statement for the year ended March 31, 2017. Not all items
given appear on the cash flow statement.
2. What activities provided the largest source of cash? Is this a sign of financial
strength or weakness?
Solution:
Req. 1
Riley Company
Statement of Cash Flows
Year Ended March 31, 2017
Cash flows from operating activities:
Net income
Adjustments to reconcile net income
to net cash provided by operating activities
Net cash provided by operating activities
–
Cash flows from investing activities:
Purchases of property, plant, and equipment
Sales of property, plant, and equipment
Other investing cash payments
Net cash used for investing activities
–
Cash flows from financing activities:
Issuance of common stock
Payment of dividends
Net cash used for financing activities
–
Net increase in cash
Cash, beginning
Cash, ending
$
–
$
–
Req. 2
Chapter 1: The Financial Statements
Page 10 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
E2-19A – Please go to this problem in your textbook to view the data sets.
Requirements
1. Analyze the effects of these events on the accounting equation of the medical practice of
Dr. Kristine Cohen, P.C.
2. After completing the analysis, answer these questions about the business.
a. How much are total assets?
b. How much does the business expect to collect from patients?
c. How much does the business owe in total?
d. How much of the business’s assets does Cohen really own?
e. How much net income or net loss did the business experience during its first month of
operations?
Solution:
Req. 1
Analysis of Transactions
ASSETS = LIABILITIES + STOCKHOLDERS’ EQUITY
Date
Cash
Accounts
Medical
+ Receivable + Supplies +
Accounts
= payable +
Land
Note
Payable
+
Type of
Stockholders’
Common
Retained
Stock
+ Earnings Equity Transaction
July 6
9
12
15
15-31
15-31
31
31
31
Bal.
–
–
Chapter 2: Transaction Analysis
–
–
–
–
–
–
Page 11 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
Req. 2
a.
b.
c.
d.
e.
Chapter 2: Transaction Analysis
Page 12 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
E2-20A – Please go to this problem in your textbook to view the data sets.
Requirement
1. Record the transactions in the journal of Dr. Kristine Cohen, P.C. List the
transactions by date and give an explanation for each transaction.
Solution:
DATE
July 6
Journal
ACCOUNT TITLES AND EXPLANATION
DEBIT
CREDIT
9
12
15
15-31
15-31
31
31
31
Chapter 2: Transaction Analysis
Page 13 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
E2-21A – Please go to this problem in your textbook to view the data sets.
Requirements
1. After journalizing the transactions of Exercise 2-19A, post the entries to the ledger,
using T-accounts. Key transactions by date.
2. Prepare the trial balance of Dr. Kristine Cohen, P.C., at July 31, 2016.
3. From the trial balance, determine total assets, total liabilities, and total stockholders’
equity on July 31.
Solution:
July
6
15-31
31
31
Cash
July 9
15-31
31
Bal.
–
July
Bal.
Medical Supplies
July 31
–
July
12
Accounts Payable
31
July 12
Bal.
Common Stock
July 6
Bal.
Accounts Receivable
July 15-31
Bal.
Land
July
Bal.
9
–
–
–
Note Payable
July
Bal.
–
Service Revenue
July 15-31
Bal.
Salary Expense
July 15-31
Bal.
–
31
–
–
Rent Expense
July 15-31
Bal.
–
Utilities Expense
July 15-31
Bal.
–
Chapter 2: Transaction Analysis
Page 14 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
Dr. Kristine Cohen, P.C.
Trial Balance
July 31, 2016
ACCOUNT
DEBIT
Cash
Accounts receivable
Medical supplies
Land
Accounts payable
Note payable
Common stock
Service revenue
Salary expense
Rent expense
Utilities expense
Total
$
–
$
–
CREDIT
$
–
Req. 3
Chapter 2: Transaction Analysis
Page 15 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
E2-24A – Please go to this problem in your textbook to view the data sets.
Requirement
1. Prepare the correct trial balance at September 30, 2016, complete with a
heading. Journal entries are not required.
Solution:
Harper, Inc.
Trial Balance
September 30, 2016
ACCOUNT
Cash
Accounts receivable
Inventory
Supplies
Land
Accounts payable
Common stock
Sales revenue
Insurance expense
Salary expense
Utilities expense
Rent expense
Total
Chapter 2: Transaction Analysis
DEBIT
$
–
CREDIT
$
–
Page 16 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
E2-25A – Please go to this problem in your textbook to view the data sets.
Record the following transactions directly in the T-accounts without using a
journal. Use the letters to identify the transactions.
Solution:
Cash
(a)
Bal.
Accounts Receivable
(b)
(d)
(e)
(g)
(f)
Bal.
Office Supplies
(c)
Bal.
(e)
Office Furniture
(a)
Bal.
Accounts Payable
(c)
Bal.
–
Dividends
(g)
Bal.
Rent Expense
(b)
Bal.
–
–
Chapter 2: Transaction Analysis
Common Stock
(a)
Bal.
–
Service Revenue
(f)
Bal.
–
Salary Expense
(d)
Bal.
–
Page 17 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
P2-60A – Please go to this problem in your textbook to view the data sets.
Requirement
1. Write a short note to answer Vicki’s questions. In your note, state the
amounts of Amusement Specialties’ total assets, total liabilities, and net
income or net loss for the year. Also show how you computed each amount.
Solution:
Chapter 2: Transaction Analysis
Page 18 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
P2-61A – Please go to this problem in your textbook to view the data sets.
Requirements
1. Analyze the effects of the preceding transactions on the accounting equation of Rodriguez Computing, Inc.
2. Prepare the income statement of Rodriguez Computing, Inc., for the month ended October 31, 2016. List expenses in
decreasing order by amount.
3. Prepare the entity’s statement of retained earnings for the month ended October 31, 2016.
4. Prepare the balance sheet of Rodriguez Computing, Inc., at October 31, 2016.
Solution:
Req. 1
Analysis of Transactions
ASSETS = LIABILITIES + STOCKHOLDERS’ EQUITY
Accounts
+ Receivable +
Cash
Supplies
+
Equipment
Accounts
+
= payable
Common
Retained
Type of Stockholders’
Stock
+ Earnings + Equity Transaction
Bal.
a)
b)
c)
d)
e)
f)
g)
h)
Bal.
Issued stock
Service revenue
Service revenue
Rent expense
Advertising expense
Dividends
–
–
Chapter 2: Transaction Analysis
–
–
–
–
–
–
Page 19 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
Req. 2
Rodriguez Computing, Inc.
Income Statement
Month Ended October 31, 2016
Revenues:
Service revenue ($6,300 + $4,200)
$
–
$
–
Expenses:
Rent expense
Advertising expense
Total expenses
Net income
Req. 3
Rodriguez Computing, Inc.
Statement of Retained Earnings
Month Ended October 31, 2016
Retained earnings, October 1, 2016
Add: Net income
Subtotal
Less: Dividends declared
Retained earnings, October 31, 2016
Chapter 2: Transaction Analysis
$
–
Page 20 of 21
FINANCIAL ACCOUNTING – Eleventh Edition
Req. 4
Rodriguez Computing, Inc.
Balance Sheet
October 31, 2016
ASSETS
LIABILITIES
Cash
Accounts payable
Accounts receivable
Supplies
STOCKHOLDERS’ EQUITY
Equipment
Common stock
Retained earnings
Total stockholders’ equity
Total liabilities and
Total assets
$
stockholders’ equity
$
Chapter 2: Transaction Analysis
–
Page 21 of 21

Purchase answer to see full
attachment