Acct.mgr Wk1

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Colorado State University, Global Campus *

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5440

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Accounting

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Feb 20, 2024

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docx

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1. QS 1-4 (Algo) Identifying principles, assumptions, and constraints LO C2 Identify each of the following as an accounting Principle, Assumption, or Constraint 1. Full disclosure 2. Going concern 3. Measurement 4. Monetary unit 2. QS 1-7 (Algo) Applying the accounting equation LO A1 a. Total assets of Charter Company equal $900,000 and its equity is $520,000. What is the amount of its liabilities? b. Total assets of Martin Marine equal $700,000 and its liabilities and equity amounts are equal to each other. What is the amount of its liabilities? What is the amount of its equity?

3. Problem 1-2A (Algo) Computing missing information using accounting knowledge LO A1 The following financial statement information is from five separate companies. Company A Company B Company C Company D Company E Beginning of year Assets $ 30,000 $ 23,400 $ 19,200 $ 53,400 $ 81,900 Liabilities 24,600 16,379 10,368 36,846 ? End of year Assets 35,000 25,200 ? 63,700 96,600 Liabilities ? 17,136 11,490 30,576 76,314 Changes during the year Stock issuances 6,000 1,400 9,750 ? 6,500 Net income (loss) 7,850 ? 8,000 9,570 8,406 Cash dividends 3,500 2,000 5,875 0 11,000 Problem 1-2A (Algo) Part 1 Required: 1a. What is the amount of equity at the beginning of the year for Company A? 1b. What is the amount of equity at the end of the year for Company A? 1c. What is the amount of liabilities at the end of the year for Company A? What is the amount of equity at the beginning of the year for Company A? Assets = Liabilities + Equity = + 0 What is the amount of equity at the end of the year for Company A? Equity, beginning of year 0 Equity, end of year What is the amount of liabilities at the end of the year for Company A? Assets = Liabilities + Equity = 0 +

4. Required information Problem 1-2A (Algo) Computing missing information using accounting knowledge LO A1 The following financial statement information is from five separate companies. Company A Company B Company C Company D Company E Beginning of year Assets $ 30,000 $ 23,400 $ 19,200 $ 53,400 $ 81,900 Liabilities 24,600 16,379 10,368 36,846 ? End of year Assets 35,000 25,200 ? 63,700 96,600 Liabilities ? 17,136 11,490 30,576 76,314 Changes during the year Stock issuances 6,000 1,400 9,750 ? 6,500 Net income (loss) 7,850 ? 8,000 9,570 8,406 Cash dividends 3,500 2,000 5,875 0 11,000 Problem 1-2A (Algo) Part 2 2a. What is the amount of equity at the beginning of the year for Company B? 2b. What is the amount of equity at the end of the year for Company B? 2c. Compute the net income of the year for Company B. What is the amount of equity at the beginning of the year for Company B? Assets = Liabilities + Equity = + $0 What is the amount of equity at the end of the year for Company B? Assets = Liabilities + Equity = + $0 Assets = = Compute the net income of the year for Company B. Equity, beginning of year

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0 Equity, end of year 5 . Problem 1-2A (Algo) Computing missing information using accounting knowledge LO A1 Company A Company B Company C Company D Company E Beginning of year Assets $ 30,000 $ 23,400 $ 19,200 $ 53,400 $ 81,900 Liabilities 24,600 16,379 10,368 36,846 ? End of year Assets 35,000 25,200 ? 63,700 96,600 Liabilities ? 17,136 11,490 30,576 76,314 Changes during the year Stock issuances 6,000 1,400 9,750 ? 6,500 Net income (loss) 7,850 ? 8,000 9,570 8,406 Cash dividends 3,500 2,000 5,875 0 11,000 Problem 1-2A (Algo) Parts 3-5 3. Compute the amount of assets for Company C at the end of the year. 4. Compute the amount of stock issuances for Company D during the year. 5. Compute the amount of liabilities for Company E at the beginning of the year. Compute the amount of assets for Company C at the end of the year. [The following information applies to the questions displayed below.] The following financial statement information is from five separate companies. Beginning of Year Assets = Liabilities + Equity = + $0 Equity, beginning of year 0

Equity, end of year End of Year Assets = Liabilities + Equity $0 = + Compute the amount of stock issuances for Company D during the year. Beginning of Year Assets = Liabilities + Equity = + 0 End of Year Assets = Liabilities + Equity = + Equity, beginning of year 0 Less: Cash dividends 0 Equity, end of year Compute the amount of liabilities for Company E at the beginning of the year. End of Year Assets = Liabilities + Equity = + Equity, beginning of year Equity, end of year Beginning of Year Assets = Liabilities + Equity

= + 6. Use the following information for the Exercises below. (Algo) On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $83,850 in assets in exchange for its common stock to launch the business. On December 31, the company’s records show the following items and amounts. Cash $ 11,580 Cash dividends $ 1,890 Accounts receivable 13,860 Consulting revenue 13,86 0 Office supplies 3,140 Rent expense 3,390 Office equipment 17,820 Salaries expense 6,860 Land 46,000 Telephone expense 880 Accounts payable 8,400 Miscellaneous expenses 690 Common stock 83,850

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7. Use the following information for the Exercises below. (Algo) On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $83,850 in assets in exchange for its common stock to launch the business. On December 31, the company’s records show the following items and amounts. Cash $ 11,580 Cash dividends $ 1,890 Accounts receivable 13,860 Consulting revenue 13,86 0 Office supplies 3,140 Rent expense 3,390 Office equipment 17,820 Salaries expense 6,860 Land 46,000 Telephone expense 880 Accounts payable 8,400 Miscellaneous expenses 690 Common stock 83,850 Using the above information prepare a December statement of retained earnings for Ernst Consulting. Hint: Retained Earnings on December 1 was $0. 8. Exercise 1-25 (Algo) Analyzing return on assets LO A2 Swiss Group reports net income of $32,000 for the year. At the beginning of the year, Swiss Group had $133,000 in assets. By the end of the year, assets had grown to $183,000. What is Swiss Group’s return on assets for the current year? Did Swiss Group

perform better or worse than its competitors if competitors average an 15% return on assets? What is Swiss Group’s return on assets for the current year? Numerator: Denominator: / = Return on assets / = Did Swiss Group perform better or worse than its competitors if competitors average an 15% return on assets? Did Swiss Group perform better or worse than its competitors if competitors average an 15% return on assets? 9. Problem 1-7A (Algo) Analyzing transactions and preparing financial statements LO P1, P2 Gabi Gram started The Gram Company, a new business that began operations on May 1. The Gram Company completed the following transactions during its first month of operations. May 1 Gram invested $42,000 cash in the company in exchange for its common stock. May 1 The company rented a furnished office and paid $2,500 cash for May’s rent. May 3 The company purchased $1,920 of equipment on credit. May 5 The company paid $750 cash for this month’s cleaning services. May 8 The company provided consulting services for a client and immediately collected $5,300 cash. May 12 The company provided $2,500 of consulting services for a client on credit. May 15 The company paid $760 cash for an assistant’s salary for the first half of this month. May 20 The company received $2,500 cash payment for the services provided on May 12. May 22 The company provided $3,900 of consulting services on credit. May 25 The company received $3,900 cash payment for the services provided on May 22. May 26 The company paid $1,920 cash for the equipment purchased on May 3. May 27 The company purchased $90 of equipment on credit. May 28 The company paid $760 cash for an assistant’s salary for the second half of this month.

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May 30 The company paid $350 cash for this month’s telephone bill. May 30 The company paid $290 cash for this month’s utilities. May 31 The company paid $1,800 cash in dividends to the owner (sole shareholder). 1. Enter the amount of each transaction on individual items of the accounting equation. (Enter the transactions in the given order. Enter reductions to account balances with a minus sign. Select "NA" for account titles if the transaction does not include an expense.) 10. Problem 1-7A (Algo) Analyzing transactions and preparing financial statements LO P1, P2 Gabi Gram started The Gram Company, a new business that began operations on May 1. The Gram Company completed the following transactions during its first month of operations. May 1 G. Gram invested $42,000 cash in the company in exchange for its common stock. May 1 The company rented a furnished office and paid $2,500 cash for May’s rent. May The company purchased $1,920 of equipment on credit.

3 May 5 The company paid $750 cash for this month’s cleaning services. May 8 The company provided consulting services for a client and immediately collected $5,300 cash. May 12 The company provided $2,500 of consulting services for a client on credit. May 15 The company paid $760 cash for an assistant’s salary for the first half of this month. May 20 The company received $2,500 cash payment for the services provided on May 12. May 22 The company provided $3,900 of consulting services on credit. May 25 The company received $3,900 cash payment for the services provided on May 22. May 26 The company paid $1,920 cash for the equipment purchased on May 3. May 27 The company purchased $90 of equipment on credit. May 28 The company paid $760 cash for an assistant’s salary for the second half of this month. May 30 The company paid $350 cash for this month’s telephone bill. May 30 The company paid $290 cash for this month’s utilities. May 31 The company paid $1,800 cash in dividends to the owner (sole shareholder). Prepare the income statement for May. THE GRAM COMPANY Income Statement For Month Ended May 31 Revenues: Expenses Total expenses 0 Prepare the statement of retained earnings for May. THE GRAM COMPANY

Statement of Retained Earnings For Month Ended May 31 Retained earnings, May 1 $0 0 Retained earnings, May 31 $0 Prepare the balance sheet for May 31. THE GRAM COMPANY Balance Sheet May 31 Assets Liabilities Total liabilities 0 Equity Total equity 0 Total assets $0 Total liabilities and equity $0 Prepare the statement of cash flows for May. (Cash outflows should be indicated with a minus sign .) THE GRAM COMPANY Statement of Cash Flows For Month Ended May 31 Cash flows from operating activities

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$ 0 Cash flows from investing activities 0 Cash flows from financing activities 0 $ 0 Cash balance, May 1 0 Cash balance, May 31 $ 0 11. Key financial figures for Apple’s two most recent fiscal years follow. $ millions Current Year Prior Year Liabilities + Equity $ 338,516 $ 365,725 Net income 55,256 59,531 Revenues 260,174 265,595 Required: 1. What is the total amount of assets invested in Apple in the current year? 2. What is Apple's return on assets for the current year? 3. How much are total expenses for Apple for the current year? 4. Is Apple's current-year return on assets better or worse than competitors' average of 10% return? Required 1: What is the total amount of assets invested in Apple in the current year? (Enter your answer in millions of dollars.) Total amount of assets (in $ millions) Required 2: What is Apple's return on assets for the current year? (Round your percentage answer to 1 decimal place.)

Return on assets % Required 3: How much are total expenses for Apple for the current year? (Enter your answer in millions of dollars.) Total expenses (in $ millions) Required 4: Is Apple's current-year return on assets better or worse than competitors' average of 10% return? Apple's current-year return on assets