Lesson%203%20Solutions

Lesson%203%20Solutions - Suggested Solutions for ACCT 351...

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Suggested Solutions for ACCT 351 Adapted from Beechy, T. H., & Conrod, J. E. D. (2005). Solutions manual to accompany intermediate accounting, volume 1 (3 rd Can. ed.). Toronto: McGraw-Hill Ryerson. Reproduced with permission. Page 1 of 13 Lesson 3, Chapter 4 Assignment 4-4 (text, pp. 173–174) No. Answer Justification Comment (not required) 1. A Cash. 2. B Usually invested to earn interest until needed. 3. C Used in operations. 4. G Salaries earned but not yet paid. 5. B A long-term investment in equity securities. 6. A Should be identified as damaged and valued at expected net realizable value. If not readily saleable—E. If not saleable at all, must be written off. 7. E Not used in operations; does not fit usual classifications. May also be B. 8. E If liquid, A. 9. H Shares are in substance a liability. 10. D An intangible; excess paid for a business above the value of its remaining assets. 11. C By definition; a tangible operational asset. 12. - A A credit balance; reduces accounts receivable to expected collections. 13. B Seldom held as a short-term investment. If short-term, would be A. 14. F A long-term prepaid expense. (Some companies prefer D, intangible assets.) 15. - H A contra liability account; bond sold below par causes a discount. May also be F. 16. G Obligation to provide future services; could be (partially) non-current. 17. G Interest owed but not yet payable. 18. - D Cumulative write-off of an intangible operational asset as time passes. 19. A Rent paid in advance of usage. 20. A Current asset by definition, as long as marketable. 21. G Rent revenue collected in advance; an obligation to provide future occupancy; could be (partially) non-current. 22. K By definition. 23. G By definition. 24. G By definition.
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Suggested Solutions for ACCT 351 Page 2 of 13 Assignment 4-4 continued 25. H&K Hybrid; value of option on common shares is equity. 26. E Debit balance; may also be F. 27. B Not current; not to be used for current operations. 28. G Debt & sinking fund both current. 29. B By definition. May also be C. 30. D Asset value due to right only; an intangible operational asset. 31. - C Contra account to the related asset. 32. F A long-term prepaid expense. May also be E. 33. D Asset value due to rights; an intangible operational asset. 34. A A (short-term) receivable. 35. H Added to carrying value of bond liability; issue price was in excess of maturity value. 36. J By definition. 37. A Clearly, a cash item. 38. - K A debit balance in retained earnings; reduces shareholders’ equity. 39. J By definition. 40. K Retained earnings. Assignment 4-9 (text, p. 177) 1. B (given) 2. B 3. D 4. A 5. G 6. C 7. E 8. E 9. A 10. G 11. F 12. C 13. H 14. C 15. B 16. E
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Suggested Solutions for ACCT 351 Page 3 of 13 Assignment 4-10 (text, p. 178) Requirement 1 Manitoba Manufacturing Company Balance Sheet 31 December 20X5 Assets Current assets: Cash. ................................................................................................ $39,000
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This note was uploaded on 09/22/2009 for the course ACCOUNTING ACCT-351 taught by Professor Charko during the Fall '09 term at Humber.

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Lesson%203%20Solutions - Suggested Solutions for ACCT 351...

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