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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