Ch 1 - CHAPTER 1 Suggested Problems Introduction to...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: CHAPTER 1 Suggested Problems Introduction to Financial Statements SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 1-1 (a) P Shared control, tax advantages, increased skills and resources. (b) SP Simple to set up and maintains control with founder. (c) C Easier to transfer ownership and raise funds, no personal liability. BRIEF EXERCISE 1-4 E (a) Advertising expense R (b) Service revenue E (c) Insurance expense E (d) Salaries expense D (e) Dividends R (f) Rent revenue E (g) Utilities expense NSE (h) Paid cash to purchase equipment C (i) Received cash from investors in exchange for common stock. BRIEF EXERCISE 1-7 I (a) Revenue during the period. B (b) Supplies on hand at the end of the year. C (c) Cash received from issuing new bonds during the period. B (d) Total debts outstanding at the end of the period. BRIEF EXERCISE 1-8 (a) $90,000 + $230,000 = $320,000 (Total assets) (b) $170,000 $90,000 = $80,000 (Total liabilities) (c) $700,000 0.5($700,000) = $350,000 (Stockholders equity) BRIEF EXERCISE 1-10 A (a) Accounts receivable L (b) Salaries payable A (c) Equipment A (d) Office supplies SE (e) Common stock L (f) Notes payable SOLUTIONS TO EXERCISES EXERCISE 1-1 (a) 8. Auditors opinion (b) 1. Corporation (c) 6. Common stock (d) 7. Accounts payable (e) 3. Accounts receivable (f) 2. Creditor (g) 5. Stockholder (h) 4. Partnership EXERCISE 1-3 (a) (b) Accounts payable and accrued liabilities L O Accounts receivable A O Property, plant, and equipment A I Food and beverage operations revenue R O Golf course operations revenue R O Inventory A O Long-term debt L F Office and general expense E O Professional fees expense E O Wages and benefits expense E O EXERCISE 1-4 CONNOR CO. Income Statement For the Year Ended December 31, 2007 Revenues Service revenue........................................................ $58,000 Expenses Salaries expense...................................................... $30,000 Rent expense............................................................ 10,400 Utilities expense....................................................... 2,400 Advertising expense................................................Advertising expense....
View Full Document

Page1 / 8

Ch 1 - CHAPTER 1 Suggested Problems Introduction to...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online