Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 1, Problem 1.1E
Accrual accounting
• LO1–2
Listed below are several transactions that took place during the first two years of operations for the law firm of Pete, Pete, and Roy.
| Year 1 | Year 2 | |
| Amounts billed to clients for services rendered | $170,000 | $220,000 |
| Cash collected from clients | 160,000 | 190,000 |
| Cash disbursements | ||
| Salaries paid to employees for services rendered during the year | 90,000 | 100,000 |
| Utilities | 30,000 | 40,000 |
| Purchase of insurance policy | 60,000 | –0– |
In addition, you learn that the firm incurred utility costs of $35,000 in year 1, that there were no liabilities at the end of year 2, no anticipated
Required:
1. Calculate the net operating
2. Prepare an income statement for each year similar to Illustration 1–4 according to the accrual accounting model.
3. Determine the amount of receivables from clients that the firm would show in its year 1 and year 2
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QUESTION 18.
A,B,C were three partners sharing profit and losses in the ratio of 3:2:1
Statement of financial position as at 31st December 2011
TZS “000"
TZS "000"
Bank balance
2,700 | Creditors
17,300
Stock
8,400 Bills payable
3,400
Debtors
7,000 Reserve fund
6,300
Provision for bad debt (350)
6,650 | Capitals
Bills receivable
2,400 | A
8,000
Motor vehicle
6250 B
5,000
Land and buildings
17,300 | C
3.000
16,000
Patents
4,300 A'S Loan
5,000
Total
48,000 Total
48,000
It was decided to admit “ D" as partner for one sixth share in the future profit on
the condition that he brings TZS 6,000,000 by way of capital and TZS 10,000,000
by the way of loan at 5 percent interest for a period of 5 years.
Before admission the following adjustments are to be made;-
1. Goodwill to be credited to the old partners on the basic of their share of profits
by raising goodwill account equal to twice the average of the profits of the
three years which were TZS 10,200,000 TZS 12,300,0000 TZS 14,400,000…
37
41
Problem No. 1
AACA Corporation was incorporated on Dec. 1, 2021, and began operations one week later. Before closing the books for the fiscal year ended Nov. 30, 2022, the controller prepared the following financial statements:
AACA Corporation Statement of Financial Position November 30, 2022
Assets
Current assets
Cash
P150,000
Marketable securities, at cost
60,000
Accounts receivable
450,000
Allowance for doubtful accounts
( 59,000)
Inventories
430,000
Prepaid insurance
15,000
Total current assets
1,046,000
Property, plant and equipment
426,000
Less accumulated depreciation
( 40,000)
Property, plant and equipment, net
386,000
Research and development costs
120,000
Total assets
P1,552,000
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued…
Chapter 1 Solutions
Intermediate Accounting
Ch. 1 - Prob. 1.1QCh. 1 - What is meant by the phrase efficient allocation...Ch. 1 - Identify two important variables to be considered...Ch. 1 - What must a company do in the long run to be able...Ch. 1 - Prob. 1.5QCh. 1 - Prob. 1.6QCh. 1 - Prob. 1.7QCh. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - Prob. 1.10Q
Ch. 1 - Prob. 1.11QCh. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Prob. 1.15QCh. 1 - Explain what is meant by: The benefits of...Ch. 1 - Prob. 1.17QCh. 1 - Briefly define the financial accounting elements:...Ch. 1 - Prob. 1.19QCh. 1 - What is the going concern assumption?Ch. 1 - Prob. 1.21QCh. 1 - Prob. 1.22QCh. 1 - What are two advantages to basing the valuation of...Ch. 1 - Describe how revenue recognition relates to...Ch. 1 - What are the four different approaches to...Ch. 1 - In addition to the financial statement elements...Ch. 1 - Briefly describe the inputs that companies should...Ch. 1 - Prob. 1.28QCh. 1 - Prob. 1.29QCh. 1 - Prob. 1.30QCh. 1 - Prob. 1.31QCh. 1 - Prob. 1.32QCh. 1 - Accrual accounting LO12 Cash flows during the...Ch. 1 - Financial statement elements LO17 For each of the...Ch. 1 - Prob. 1.3BECh. 1 - Basic assumptions and principles LO17 through...Ch. 1 - Prob. 1.5BECh. 1 - Prob. 1.6BECh. 1 - Accrual accounting LO12 Listed below are several...Ch. 1 - Accrual accounting LO12 Listed below are several...Ch. 1 - Prob. 1.3ECh. 1 - Prob. 1.4ECh. 1 - Prob. 1.5ECh. 1 - Financial statement elements LO17 For each of the...Ch. 1 - Concepts; terminology; conceptual framework LO17...Ch. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Basic assumptions and principles LO18, LO19...Ch. 1 - Prob. 1.12ECh. 1 - Prob. 1.13ECh. 1 - Prob. 1.14ECh. 1 - Prob. 1.15ECh. 1 - Prob. 1.1BYPCh. 1 - Research Case 12 Accessing SEC information through...Ch. 1 - Prob. 1.3BYPCh. 1 - Prob. 1.4BYPCh. 1 - Ethics Case 18 The auditors responsibility LO14...Ch. 1 - Prob. 1.9BYPCh. 1 - Judgment Case 110 GAAP, comparability, and the...Ch. 1 - Prob. 1.11BYPCh. 1 - Prob. 1.12BYPCh. 1 - Analysis Case 113 Expense recognition LO19...Ch. 1 - Prob. 1.14BYPCh. 1 - Real World Case 115 Elements; disclosures; The...Ch. 1 - Prob. 1.16BYPCh. 1 - Target Case LO19 Target Corporation prepares its...
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