Financial and Managerial

Financial and Managerial Accoun�ng 10e Belverd Needles, Marian Powers, Susan Crosson (Solu�ons Manual All Chapters, 100% Original Verified, A+ Grade) All Chapters/Supplement files download link at the end of this file. 1 / 4

DQ1.DQ2.DQ3.DQ4.DQ5.DQ6.DQ7.DQ8.tation) company. CVS buys and leases retail stores, whereas Southwest buys and

USES OF ACCOUNTING INFORMATION AND

THE FINANCIAL STATEMENTS

Discussion Questions information they need to make intelligent decisions. It is a valuable discipline because (separate entity) for which financial performance must be measured and reported.No. Not all economic events involve exchanges of value between the business and another party. For example, when a customer buys a product from a competitor, it The primary purpose of accounting is to provide decision makers with the financial Accounting treats sole proprietorships, partnerships, and corporations as entities separate and apart from their owners because each form represents a business of the usefulness of the information it generates.Like managers of profit-seeking businesses, managers of government and not-for- profit organizations must report to those who fund them, and they must operate their Expenses and dividends are the same in that they both reduce the retained earnings component of stockholders' equity. They are different in that expenses are also a component of net income, whereas dividends are a distribution of assets to the is an economic event, but no exchange of value has taken place with our company and thus our company records no transaction.GAAP differs from the laws of mathematics in that they are not unchanging but rather are constantly evolving. They may change as business conditions change or as im- proved methods of accounting are introduced.CHAPTER 1—Solutions leases aircraft.CVS and Southwest are comparable in that like all companies they have two main goals: profitability and liquidity. How companies such as CVS and Southwest achieve organizations in a financially prudent way.these goals may make them incomparable in certain ways. For instance, CVS is a retail (pharmacy and related) company, whereas Southwest is a service (air transpor- stockholders.financial reporting is the unethical preparation of financial statements that misrepre- sent a company's financial situation or contain false information.Unethical ways of accounting include recording and reporting business transactions that did not occur or being dishonest in recording those that did occur. Fraudulent 1-1 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part. 2 / 4

1.

2.

3.

1.

2.

3.

• =
• =
• =

1. = +

=+ –= =

2. = +

Assets – 0.2 Assets = 0.8 Assets = =/ = =×= Assets Liabilities 0.2 Assets Assets

$50,000

$50,000

0.8

$40,000

$40,000

Assets SE4. The Accounting Equation

$150,000

Assets

$90,000

Stockholders' Equity

$240,000

$240,000

Stockholders' Equity

$90,000

$40,000

Stockholders' Equity

$150,000

$10,000

Liabilities

$40,000

0.2 SE2. Forms of Business Organization a Liabilities b

$200,000

c bb c 4.

• a

a c Short Exercises SE1. Accounting Concepts 4.

5.

6.a c SE3. The Accounting Equation Assets Stockholders' Equity

$240,000

$144,000

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1.+ + + 2.+ + + = =+ =+ =+

$ 1,400

$ 1,400

$48,000

9,400

57,400

$58,800

$ 75,000

$100,000

$196,000

$100,000

Liabilities

$ 40,000

$ 40,000

+ 5,000

During year:

$400,000

108,000

$ 45,000

$ 90,000 $50,000

Stockholders' Equity

+ 40,000

$236,000

–30,000

$ 70,000

$166,000

End:

$50,000

Stockholders' Equity = = =

+ 30,000

$120,000

Change:

$ 90,000

Liabilities

Beginning:

$196,000

Assets

Beginning: Assets

$96,000

Stockholders' Equity Stockholders' Equity = = SE6. The Accounting Equation and Net Income

$280,000

Beginning of year:

Liabilities

$120,000

Assets

End:

$108,000

$96,000

Change:

Net income Stockholders' Equity SE7. Preparation and Completion of a Balance Sheet

End of year:

$140,000

48,000

$260,000

*($260,000 – $160,000) – $40,000 + $48,000 = $108,000

$160,000

$ 40,000

Dividends Net Income* SE5. The Accounting Equation = = = = = Investment Accounts receivable Manteno Company Balance Sheet June 30, 2014 Assets Liabilities Total liabilities

$58,800

44,000

$11,600

3,200 Common stock Retained earnings Total liabilities and stockholders' equity Wages payable Building Stockholders' Equity Cash Total assets Total stockholders' equity

*$58,800 – $3,200 – $44,000 = $11,600

* 1-3 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.

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