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Accounting in Action
Brief A B
Learning Objectives Questions Exercises Do It! Exercises Problems Problems
1. Explain what 1, 2, 5 1 1
accounting is.
4. Explain accounting 6 2 4
standards and the
measurement principles.
6. State the accounting 11, 12, 13, 1, 2, 3, 3 5 1A, 2A, 1B, 2B,
equation, and define 14, 22 4, 5, 8, 9 4A 4B
its components.
8. Understand the five 17, 19, 20, 10, 11 5 8, 9, 10, 11, 2A, 3A, 2B, 3B,
financial statements 21 12, 13, 14, 4A, 5A 4B, 5B
and how they are 15, 16, 17
prepared.
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-1
ASSIGNMENT CHARACTERISTICS TABLE
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WEYGANDT FINANCIAL ACCOUNTING, IFRS Version, 3e
CHAPTER 1
ACCOUNTING IN ACTION
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ACCOUNTING IN ACTION (Continued)
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Correlation Chart between Blooms Taxonomy, Learning Objectives and End-of-Chapter Exercises and Problems
1. Yes, this is correct. Virtually every organization and person in our society uses accounting
information. Businesses, investors, creditors, government agencies, and not-for-profit organizations
must use accounting information to operate effectively.
2. Accounting is the process of identifying, recording, and communicating the economic events of
an organization to interested users of the information. The first step of the accounting process is
therefore to identify economic events that are relevant to a particular business. Once identified
and measured, the events are recorded to provide a history of the financial activities of the
organization. Recording consists of keeping a chronological diary of these measured events in an
orderly and systematic manner. The information is communicated through the preparation and
distribution of accounting reports, the most common of which are called financial statements.
A vital element in the communication process is the accountants ability and responsibility to
analyze and interpret the reported information.
3. (a) Internal users are those who plan, organize, and run the business and therefore are officers
and other decision makers.
(b) To assist management, accounting provides internal reports. Examples include financial
comparisons of operating alternatives, projections of income from new sales campaigns,
and forecasts of cash needs for the next year.
4. (a) Investors (owners) use accounting information to make decisions to buy, hold, or sell shares.
(b) Creditors use accounting information to evaluate the risks of granting credit or lending money.
5. No, this is incorrect. Bookkeeping usually involves only the recording of economic events and
therefore is just one part of the entire accounting process. Accounting, on the other hand, involves
the entire process of identifying, recording, and communicating economic events.
6. Jackie Remmers Travel Agency should report the land at 85,000 on its December 31, 2017
statement of financial position. This is true not only at the time the land is purchased, but also
over the time the land is held. In determining which measurement principle to use (cost or fair
value) companies weigh the factual nature of cost figures versus the relevance of fair value. In
general, companies use cost. Only in situations where assets are actively traded do companies
apply the fair value principle extensively. An important concept that accountants follow is the
historical cost principle.
7. The monetary unit assumption requires that only transaction data capable of being expressed in
terms of money be included in the accounting records. This assumption enables accounting to
quantify (measure) economic events.
8. The economic entity assumption requires that the activities of the entity be kept separate and
distinct from the activities of its owners and all other economic entities.
9. The three basic forms of business organizations are: (1) proprietorship, (2) partnership, and
(3) corporation.
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-6
Questions Chapter 1 (Continued)
10. One of the advantages Teresa Alvarez would enjoy is that ownership of a corporation is repre-
sented by transferable shares. This would allow Teresa to raise money easily by selling
a part of her ownership in the company. Another advantage is that because holders of the shares
(shareholders) enjoy limited liability, they are not personally liable for the debts of the corporate
entity. Also, because ownership can be transferred without dissolving the corporation, the corporation
enjoys an unlimited life.
12. (a) Assets are resources owned by a business. Liabilities are claims against assets. Put more
simply, liabilities are existing debts and obligations. Equity is the ownership claim on total
assets.
(b) Equity is affected by shareholders investments, dividends, revenues, and expenses.
13. The liabilities are: (b) Accounts payable and (g) Salaries and wages payable.
14. Yes, a business can enter into a transaction in which only the left side of the accounting equation
is affected. An example would be a transaction where an increase in one asset is offset by
a decrease in another asset. An increase in the Equipment account which is offset by a decrease
in the Cash account is a specific example.
15. Business transactions are the economic events of the enterprise recorded by accountants
because they affect the basic equation.
(a) No, the death of the president of the company is not a business transaction as it does not
affect the basic equation.
(b) Yes, supplies purchased on account is a business transaction as it affects the basic equation.
(c) No, an employee being fired is not a business transaction as it does not affect the basic
equation.
18. No, this treatment is not proper. While the transaction does involve a receipt of cash, it does not
represent revenues. Revenues are the gross increase in equity resulting from business activities
entered into for the purpose of earning income. This transaction is simply an additional
investment made by one of the owners of the business.
19. Yes. Net income does appear on the income statementit is the result of subtracting expenses
from revenues. In addition, net income appears in the retained earnings statementit is shown
as an addition to the beginning-of-period retained earnings. Indirectly, the net income of a company
is also included in the statement of financial position. It is included in the Retained Earnings
account which appears in the equity section of the statement of financial position.
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-7
Questions Chapter 1 (Continued)
22. TSMCs accounting equation (in millions of New Taiwan dollars) at December 31, 2013 was
NT$1,263,055 = NT$415,280 + NT$847,775.
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-8
SOLUTIONS TO BRIEF EXERCISES
Equity
Share Retained Earnings
Assets = Liabilities + Capital + Revenues Expenses Dividends
Ordinary
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BRIEF EXERCISE 1-5
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BRIEF EXERCISE 1-10
GRANDE COMPANY
Statement of Financial Position
December 31, 2017
Assets
Accounts receivable....................................................................... 72,500
Cash................................................................................................. 44,000
Total assets............................................................................. 116,500
DO IT! 1-1
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DO IT! 1-2
1. True.
2. False. The standards of conduct by which actions are judged as right
or wrong, honest or dishonest, fair or not fair, are ethics.
3. False. The primary accounting standard-setting body in the United
States is the Financial Accounting Standards Board (FASB).
4. True.
5. True.
DO IT! 1-3
DO IT! 1-4
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DO IT! 1-5
(a) The total assets are R$51,500, comprised of Cash R$9,000, Accounts
Receivable R$13,500, and Equipment R$29,000.
Revenues
Service revenue.................................................. R$54,000
Expenses
Salaries and wages expense............................. R$16,500
Rent expense....................................................... 9,800
Advertising expense........................................... 6,000
Total expenses............................................ 32,300
Net income.................................................................. R$21,700
Note that it is not possible to determine the companys equity in any other
way, because the beginning balance for equity is not provided.
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SOLUTIONS TO EXERCISES
EXERCISE 1-1
EXERCISE 1-2
External users
Customers
Labor unions
Securities regulator
Suppliers
Taxing agency
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EXERCISE 1-3
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EXERCISE 1-4
EXERCISE 1-5
EXERCISE 1-6
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EXERCISE 1-7
1. (c) 5. (d)
2. (d) 6. (b)
3. (a) 7. (e)
4. (b) 8. (f)
EXERCISE 1-8
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EXERCISE 1-9
Revenues
Service revenue.......................................................... 9,100
Expenses
Salaries and wages expense..................................... 3,900
Rent expense.............................................................. 650
Utilities expense......................................................... 500
Total expenses.................................................... 5,050
Net income.......................................................................... 4,050
Assets
Equipment......................................................................... 5,000
Supplies............................................................................. 750
Accounts receivable......................................................... 4,050
Cash................................................................................... 9,250
Total assets................................................................ 19,050
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Accounts payable..................................................... 2,000
Total equity and liabilities.................................. 19,050
EXERCISE 1-10
EXERCISE 1-11
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Add: Dividends............................................... 44,000) (16,000)
Additional investment..................................... 10,000
EXERCISE 1-11 (Continued)
EXERCISE 1-12
Revenues
Service revenue...................................................... 62,500
Expenses
Salaries and wages expense................................. 28,000
Rent expense.......................................................... 10,400
Utilities expense..................................................... 3,100
Advertising expense.............................................. 1,800
Total expenses................................................ 43,300
Net income..................................................................... 19,200
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EXERCISE 1-12 (Continued)
EXERCISE 1-13
Assets
Equipment......................................................................... 48,000
Supplies............................................................................. 8,000
Accounts receivable......................................................... 8,500
Cash................................................................................... 14,000
Total assets................................................................ 78,500
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EXERCISE 1-14
Assets
Equipment............................................................................... 105,500
Supplies................................................................................... 2,500
Cash......................................................................................... 20,000
Total assets...................................................................... 128,000
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EXERCISE 1-15
Revenues
Ticket revenue................................................... R$342,000
Expenses
Salaries and wages expense............................ R$144,000
Maintenance and repairs expense................... 97,000
Utilities expense................................................ 10,000
Advertising expense......................................... 3,500
Total expenses........................................... 254,500
Net income................................................................. R$ 87,500
EXERCISE 1-16
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(a) KINNEYS REPAIR LTD.
Equity
Accounts Accounts Share Retained Earnings
Cash + Receivable + Supplies + Equipment = Payable + CapitalRevenues
+ Expenses
Dividends
1. +10,000 +10,000 +
+10,000 = 0010,000
2. +5,000 +5,000 +000,
SOLUTIONS TO PROBLEMS
+5,000 + +5,000 = + 0010,000 +
3. + 400 +00,000 400 (a)
+4,600 + +5,000 = + 10,000 + 400
PROBLEM 1-1A
4. + 700 +700 +00,000 +
+3,900 + +700 + +5,000 = + 10,000000 + 400
5. +000,000 +0000 +00,000 +250 250 (b)
+3,900 + +700 + +5,000 = +250 +00010,00000 + 650
6. +4,700 +0000 +00,000 +0000 0 +4,700 (c)
+8,600 + +700 + +5,000 = +250 + + 4,700 650
7. 1,000 +0000 +00,000 +0000 00010,000 1,000 (d)
+7,600 + +700 + +5,000 = +250 + 0+ 4,700 650 1,000
8. +1,000 +0000 +00,000 +0000 10,000 1,000 (e)
+6,600 + +700 + +5,000 = +250 + + 4,700 1,650 1,000
9. + 160 +0000 +00,000 +0000 10,000 160 (f)
+6,440 + +700 + +5,000 = +0250 + + 4,700 1,810 1,000
10. +000,000 +980 +0000 +00,000 +0000 10,000 +980 (g)
+6,440 + +980 + +700 + +5,000 = +0250 + + 5,680 1,810 1,000
11. +120 +120 10,000
+6,560 + +860 + +700 + +5,000 = +250 + + 5,680 1,810 1,000
10,000
13,120 13,120
PROBLEM 1-1A (Continued)
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(a) DONAHUE VETERINARY CLINIC LTD.
PROBLEM 1-2A
4. +2,500 +4,800 0000 000,000 00,000 +7,300
9,100 + 5,200 + 600 + 8,100 = 2,000 + 13,000 + 700 7,300
5. 400 00,000 0000 000,000 00,000 400
8,700 + 5,200 + 600 + 8,100 = 2,000 + 13,000 + 700 7,300 400
1,700
900
6. 2,800 00,000 0000 000,000 00,000 200
5,900 + 5,200 + 600 + 8,100 = 2,000 + 13,000 + 700 7,300 2,800 400
7. 000,000 00,000 0000 000,000 +170 170
5,900 + 5,200 + 600 + 8,100 = 2,170 + 13,000 + 700 7,300 2,970 400
8. +10,000 +10,000
15,900 + 5,200 + 600 + 8,100 = +10,000 + 2,170 + 13,000 + 700 + 7,300 2,970 400
29,800 29,800
PROBLEM 1-2A (Continued)
Revenues
Service revenue.................................................. 7,300
Expenses
Salaries and wages expense............................. 1,700
Rent expense....................................................... 900
Advertising expense........................................... 200
Utilities expense.................................................. 170
Total expenses............................................. 2,970
Net income.................................................................. $4,330
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PROBLEM 1-2A (Continued)
Assets
Equipment.................................................................... 8,100
Supplies........................................................................ 600
Accounts receivable.................................................... 5,200
Cash.............................................................................. 15,900
Total assets........................................................... 29,800
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PROBLEM 1-3A
Revenues
Service revenue............................................ W6,800
Expenses
Gasoline expense......................................... W2,500
Rent expense................................................ 1,000
Advertising expense..................................... 500
Utilities expense........................................... 400
Maintenance and repairs expense.............. 400
Total expenses...................................... 4,800
Net income............................................................ W 2,000
Assets
Equipment................................................................................. W64,000
Accounts receivable................................................................. 7,420
Cash........................................................................................... 4,500
Total assets....................................................................... W 75,920
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PROBLEM 1-3A (Continued)
Revenues
Service revenue (W6,800 + W900)............... W7,700
Expenses
Gasoline expense (W2,500 + W1,500)......... W4,000
Rent expense................................................ 1,000
Advertising expense..................................... 500
Utilities expense........................................... 400
Maintenance and repairs expense.............. 400
Total expenses...................................... 6,300
Net income............................................................ W1,400
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Retained Earnings, May 31.................................. W 920
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(a) STINER DELIVERIES LTD.
Assets = Liabilities + Equity
Accounts Notes Accounts Share Retained Earnings
Date Cash + Receivable + Supplies + Equipment = Payable + Payable + Capital + Revenues Expenses Dividends
PROBLEM 1-4A
+7,500 + 4,800 + +0014,000 = 12,000 + 10,000 + 4,800 500
June 9 + 300 300 (c)
+ 4,800 + +050 + 14,000 = 12,000 + 10,000 + 4,800 500 300
June 12 7,2000 +150 +150
+ 4,800 + 150 + 14,000 = 12,000 + +150 + 10,000 + 4,800 500 300
June 15 7,200 1,250 +00
++1,250 + 3,550 + 150 + 14,000 = 12,000 + +150 + 10,000 + 4,800 500 300
June 17 8,450 +100 100 (d)
+ 3,550 + 150 + 14,000 = 12,000 + +250 + 10,000 + 4,800 600 300
June 20 + 8,450 + 1,500 (e)
++1,500 + 3,550 + 150 + +14,000 = 12,000 + +250 + 10,000 + 6,300 600 300
June 23 9,950 500
500 + 3,550 + 150 + 14,000 = 11,500 + +0250 + 10,000 + 6,300 600 300
June 26 + 9,450 +0 250 (f)
+ 250 + 3,550 + 150 + 14,000 = 11,500 + +0250 + 10,000 + 6,300 850 300
June 29 9,200 100
100 + 3,550 + 150 + 14,000 = 11,500 + 150 + 10,000 + 6,300 850 300
June 30 9,100 1,000 (g)
1,000 + 3,550 + 150 + 14,000 = 11,500 + 150 + 10,000 + 6,300 1,850 300
8,100
25,800 25,800
PROBLEM 1-4A (Continued)
Revenues
Service revenue (4,800 + 1,500)..................... 6,300
Expenses
Salaries and wages expense.............................. 1,000
Rent expense....................................................... 500
Utilities expense.................................................. 250
Gasoline expense................................................ 100
Total expenses............................................. 1,850
Net income................................................................... 4,450
Assets
Equipment.................................................................... 14,000
Supplies....................................................................... 150
Accounts receivable.................................................... 3,550
Cash.............................................................................. 8,100
Total assets.......................................................... 25,800
Equity and Liabilities
Equity
Share capitalordinary...................................... 10,000
Retained earnings (4,450 300)..................... 4,150
Total equity................................................... 14,150
Liabilities
Notes payable...................................................... 11,500
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Accounts payable................................................ 150
Total liabilities.............................................. 11,650
Total equity and liabilities........................................................ 25,800
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PROBLEM 1-5A
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(a) HOLIDAY TRAVEL AGENCY LTD.
Equity
Accounts Accounts Share Retained Earnings
Cash + Receivable + Supplies + Equipment = Payable + Capital + Revenues Expenses Dividends
1. +12,000 +12,000
+12,000 = 12,000
2. + 400 400 (a)
+11,600 = 12,000 400
3. +5,500 +5,500 +
+6,100 + +5,500 = 12,000 400
PROBLEM 1-1B
4. +000,000 +00,000 +300 300 (b)
+6,100 + +5,500 = +300 + 700
5. + 600 +600 +00,000 +0000 +000,000
+5,500 + +600 + +5,500 = +300 + 12,000 700
6. +2,000 +6,500 +0000 +00,000 +0000 + 8,500 (c)
+7,500 + +6,500 + +600 + +5,500 = +300 + 12,000 + +8,500 700
7. + 200 +0,000 +0000 +00,000 +0000 200 (d)
+7,300 + +6,500 + +600 + +5,500 = +300 + 12,000 + +8,500 700 200
8. + 300 +0,000 +0000 +00,000 +300 +000,000
+7,000 + +6,500 + +600 + +5,500 = +0 + 12,000 + +8,500 700 200
9. +2,200 +0,000 +0000 +00,000 +0000 2,200 (e)
+4,800 + +6,500 + +600 + +5,500 = 12,000 + +8,500 2,900 200
10. +5,700 5,700 + + +
+10,500 + + 800 + +600 + +5,500 = + 0 + 12,000 + +8,500 2,900 200
17,400 17,400
PROBLEM 1-1B (Continued)
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(a) MANDY ARNOLD, ATTORNEY AT LAW LTD.
PROBLEM 1-2B
3. +3,000 +4,900 0000 00,000 00,000 +7,900
5,700 + 5,000 + 500 + 5,000 = 1,500 + 6,000 + 800 + 7,900
4. 400 00,000 0000 +1,000 +600 000,000
5,300 + 5,000 + 500 + 6,000 = 2,100 + 6,000 + 800 + 7,900
5. 4,250 3,000
900
00,000 0000 00,000 00,000 350
1,050 + 5,000 + 500 + 6,000 = 2,100 + 6,000 + 800 + 7,900 4,250
6. 450 00,000 0000 00,000 00,000 450
600 + 5,000 + 500 + 6,000 = 2,100 + 6,000 + 800 + 7,900 4,250 450
7. +2,000 00,000 0000 00,000 +2,000 00,000 000,000
2,600 + 5,000 + 500 + 6,000 = +2,000 + 2,100 + 6,000 + 800 + 7,900 4,250 450
8. +210 + 210
2,600 + 5,000 + 500 + 6,000 = +2,000 + 2,310 6,000 + 800 + 7,900 4.460 450
14,100 14,100
Revenues
Service revenue.............................................. 7,900
Expenses
Salaries and wages expense......................... 3,000
Rent expense.................................................. 900
Advertising expense...................................... 350
Utilities expense............................................. 210
Total expenses........................................ 4,460
Net income.............................................................. 3,440
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PROBLEM 1-2B (Continued)
Assets
Equipment................................................................... 6,000
Supplies...................................................................... 500
Accounts receivable.................................................. 5,000
Cash............................................................................ 2,600
Total assets......................................................... 14,100
Liabilities
Notes payable..................................................... 2,000
Accounts payable............................................... 2,310
Total liabilities............................................. 4,310
Total equity and liabilities........................................... 14,100
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PROBLEM 1-3B
Revenues
Service revenue............................................ 5,500
Expenses
Rent expense................................................ 1,800
Gasoline expense......................................... 600
Advertising expense..................................... 500
Utilities expense........................................... 400
Total expenses...................................... 3,300
Net income............................................................ 2,200
Assets
Equipment................................................................................. 25,000
Supplies..................................................................................... 2,000
Accounts receivable................................................................. 4,000
Cash........................................................................................... 10,000
Total assets....................................................................... 41,000
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PROBLEM 1-3B (Continued)
Revenues
Service revenue (5,500 + 800).................. 6,300
Expenses
Rent expense................................................ 1,800
Gasoline expense (600 + 100).................. 700
Advertising expense..................................... 500
Utilities expense........................................... 400
Total expenses...................................... 3,400
Net income............................................................ 2,900
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Less: Dividends................................................... 900
Retained earnings, June 30................................. 2,000
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(a) PAULIS CONSULTING LTD.
Assets = Liabilities + Equity
Accounts Notes Accounts Share Retained Earnings
Date Cash + Receivable + Supplies + Equipment = Payable + Payable + Capital + Revenues Expenses Dividends
PROBLEM 1-4B
+7,150 + 500 = 500 + 8,000 850
May 9 +3,000 +050 + +3,000 (c)
10,150 + 500 = 500 + 8,000 + 3,000 850
May 12 700 700 (d)
9,450 + 500 = 500 + 8,000 + 3,000 850 700
May 15 +3,300 +3,300 (e)
9,450 + 3,300 + 500 = 500 + 8,000 + 6,300 850 700
May 17 2,100 2,100 (f)
7,350 + 3,300 + 500 = 500 + 8,000 + 6,300 2,950 700
May 20 500 + 500
6,850 + 3,300 + 500 = 0 + 8,000 + 6,300 2,950 700
May 23 +2,000 2,000 +
+ 8,850 + 1,300 + 500 = + 0 + 8,000 + 6,300 2,950 700
May 26 +5,000 +5,000
13,850 + 1,300 + 500 = 5,000 0 + 8,000 + 6,300 2,950 700
May 29 +2,300 +2,300
13,850 + 1,300 + 500 + 2,300 = 5,000 2,300 + 8,000 + 6,300 2,950 700
May 30 150 150 (g)
13,700 + 1,300 + 500 + 2,300 = 5,000 + 2,300 + 8,000 + 6,300 3,100 700
17,800 17,800
PROBLEM 1-4B (Continued)
Key to Retained Earnings Column
(a) Rent Expense (e) Service Revenue
(b) Advertising Expense (f) Salaries and Wages Expense
(c) Service Revenue (g) Utilities Expense
(d) Dividends
Revenues
Service revenue (3,000 + 3,300)................ 6,300
Expenses
Salaries and wages expense......................... 2,100
Rent expense.................................................. 800
Utilities expense............................................. 150
Advertising expense...................................... 50
Total expenses........................................ 3,100
Net income.............................................................. 3,200
Assets
Equipment.................................................................... 2,300
Supplies........................................................................ 500
Accounts receivable.................................................... 1,300
Cash.............................................................................. 13,700
Total assets.......................................................... 17,800
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PROBLEM 1-5B
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MC1 MATCHA CREATIONS
(b) Yes, Mei-ling will need accounting information to help her operate her
business. She will need information on her cash balance on a daily or
weekly basis to help her determine if she can pay her bills. She will
need to know the cost of her services so she can establish her prices.
She will need to know revenue and expenses so she can report her net
income for personal income tax purposes, on an annual basis. If she
borrows money, she will need financial statements so lenders can
assess the liquidity, solvency, and profitability of the business. Mei-
ling would also find financial statements useful to better understand
her business and identify any financial issues as early as possible.
Monthly financial statements would be best because they are more
timely, but they are also more work to prepare.
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-49
MC1 (Continued)
(d) Mei-ling should have a separate bank account. This will make it easier
to prepare financial statements for her business. The business is a
separate entity from Mei-ling and must be accounted for separately.
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-50
BYP 1-1 FINANCIAL REPORTING PROBLEM
(a) TSMCs total assets at December 31, 2013 were NT$ 1,263,054.9 million
and at December 31, 2012 were NT$ 961,354.5 million.
(b) TSMC had NT$ 242,695.4 million of cash and cash equivalents at
December 31, 2013.
(c) TSMC had accounts payable totaling NT$ 14,670.3 million on December
31, 2013 and NT$ 14,490.4 million on December 31, 2012.
(d) TSMC reports revenues for 2012 of NT$ 506,745.2 million and for 2013
of NT$ 597,024.2 million.
(e) From 2012 to 2013, TSMCs net income increased NT$ 21,895.1 million
from NT$ 166,123.8 million to NT$ 188,018.9 million.
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-51
BYP 1-2 COMPARATIVE ANALYSIS PROBLEM
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BYP 1-3 REALWORLD FOCUS
(a) The field is normally divided into three broad areas: auditing, financial/
tax, and management accounting.
Financial Management
Auditing and Tax Accounting
People skills Medium Medium Medium
Sales skills Medium Medium Low
Communication skills Medium Medium High
Analytical skills High Very High High
Ability to synthesize Medium Low High
Creative ability Low Medium Medium
Initiative Medium Medium Medium
Computer skills High High Very High
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-53
BYP 1-3 (Continued)
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-54
BYP 1-4 DECISIONMAKING ACROSS THE ORGANIZATION
(a) The estimate of the 4,900 loss was based on the difference between
the 20,000 invested in the driving range and the bank balance of
15,100 at March 31. This is not a valid basis for determining income
because it only shows the change in cash between two points in time.
Assets
Building........................................................................ 6,000
Equipment.................................................................... 800
Cash.............................................................................. 15,100
Total assets.......................................................... 21,900
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-55
BYP 1-4 (Continued)
(c) Actual net income for March can be determined by adding dividends
to the change in equity during the month as shown below:
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-56
BYP 1-5 COMMUNICATION ACTIVITY
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BYP 1-5 (Continued)
Assets
Equipment................................................................ 22,500
Supplies.................................................................... 2,000
Accounts receivable................................................ 6,000
Cash.......................................................................... 9,000
Total assets........................................................ 39,500
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-58
BYP 1-6 ETHICS CASE
(a) The students should identify all of the stakeholders in the case; that is,
all the parties that are affected, either beneficially or negatively, by the
action or decision described in the case. The list of stakeholders in this
case are:
(b) The students should identify the ethical issues, dilemmas, or other con-
siderations pertinent to the situation described in the case. In this case
the ethical issues are:
Is it proper that Jeff charged both firms for the total travel costs
rather than split the actual amount of $296 between the two firms?
(c) Each student must answer the question for himself/herself. Would you
want to start your first job having deceived your employer before your
first day of work? Would you be embarrassed if either firm found out
that you double-charged? Would your school be embarrassed if your
act was uncovered? Would you be proud to tell your professor that
you collected your expenses twice?
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-59
GAAP EXERCISES
GAAP 1-1
GAAP 1-2
GAAP 1-3
GAAP 1-4
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GAAP 1-5 GAAP FINANCIAL REPORTING PROBLEM
(a) Apples total assets at September 28, 2013 were $207,000 million and
at September 29, 2012 were $176,064 million.
(b) Apple had $14,259 million of cash and cash equivalents at September 28,
2013.
(c) Apple had accounts payable totaling $22,367 million on September 28,
2013 and $21,175 million on September 29, 2012.
(d) Apple reports net sales for three consecutive years as follows:
(e) From 2012 to 2013, Apples net income decreased $4,696 million from
$41,733 million to $37,037 million.
Copyright 2016 John Wiley & Sons, Inc. Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 1-61