Solution Manual for College Accounting 15th Edition by Price

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Edition: 15th Edition

Resource Type: Solution manual

Solution Manual for College Accounting 15th Edition by Price

Chapter 16 • Notes Payable and Notes Receivable

TEACHING OBJECTIVES

• Determine whether an instrument meets all the requirements of negotiability.
• Calculate the interest on a note.
• Determine the maturity date of a note.
• Record routine notes payable transactions.
• Record discounted notes payable transactions.
• Record routine notes receivable transactions.
• Compute the proceeds from a discounted note receivable, and record transactions related to discounting of notes receivable.
• Understand how to use bank drafts and trade acceptances and how to record transactions related to those instruments.
• Define the accounting terms new to the chapter.

SECTIONS

1. Accounting for Notes Payable
2. Accounting for Notes Receivable

______________________________________________________________________

CHAPTER OVERVIEW/ LEARNING OBJECTIVES

Learning Link:  Chapter 15 discussed accounts receivable and the accounting adjustments needed for bad debts.  In Chapter 16, students will learn how to account for notes receivable and notes payable, emphasizing the treatment of interest.

• This chapter describes how to determine whether an instrument meets all the requirements of negotiability. A negotiable instrument is a financial document that contains an order or promise to pay and meets all the requirements of the Uniform Commercial Code to be transferable to another party.

• The chapter explains how to calculate interest on a note using the formula: Interest = Principal x Interest Rate x Time.

• The chapter explains that the maturity date of a note is determined at the time the note is issued, excluding the issue date itself.

• The chapter explains the routing journal entries required regarding the issuance of a note payable to purchase an asset. The chapter also explains the journal entry required to record interest and pay off the note at maturity.

• The chapter describes the journal entries required when borrowing money from a bank using a note payable which has been discounted by the bank. The borrower discounting a note payable receives the difference between the discount (interest paid up front) and the principal.

• The second part of the chapter discusses journal entries required in notes receivable It explains how to record a note received for a sale of goods, how to record interest income on the note and how to deal with a defaulted note.

• The chapter explains the discounting of notes receivable. A firm with an immediate need for cash can discount a note receivable. Notes Receivable-Discounted represents a contingent liability.  If the note’s maker defaults on the note, the business must pay the bank.

• The chapter explains how to use bank drafts and trade acceptances and how to record transactions related to those instruments. Bank drafts, commercial drafts, and trade acceptances are negotiable instruments used in business.

At the beginning of the chapter, there are a few short paragraphs about Bank of America . . . Let’s read these together. . .

Ask students -“If a small business needs to borrow money, what considerations does it need to think about before it borrows the money?”

Answer: One of the most important tasks in starting a business is pulling together enough money to launch and grow. A lack of adequate funding can lead to business failure as expenses outpace profits. Funds to start a business can come from several resources, including banks and investors who will lend money on a variety of terms. Before obtaining a business loan several things should be considered:

• Can you afford the monthly payment?
• If an emergency occurred, and you had less money per month than you thought, would you still be able to pay your loan every month?
• How long will your loan last?
• Will the business be making payments for 3 months or 10 years, etc.?
• The interest being charged on the loan is an important factor as well. Business owners should try to keep the interest rate as low as possible. Will the loan be discounted by the issuer?

If so, then this will actually mean that the business is paying a higher interest rate. Keep in mind that businesses may deduct the interest paid on loans from their federal income tax return and this is advantageous for start-ups that need to reinvest all profits back into the business.  And lastly, a solid business credit profile is advantageous to start-ups because it builds credibility and the business’s ability to attract new creditors in the future. Borrowing money establishes business credit because the lender reports timely payments to credit bureaus that maintain a credit profile of the new business

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Solution Manual for College Accounting 15th Edition by Price

Chapter 16 • Notes Payable and Notes Receivable  TEACHING OBJECTIVES
• Determine whether an instrument meets all the requirements of negotiability.
• Calculate the interest on a note.
• Determine the maturity date of a note.
• Record routine notes payable transactions.
• Record discounted notes payable transactions.
• Record routine notes receivable transactions.
• Compute the proceeds from a discounted note receivable, and record transactions related to discounting of notes receivable.
• Understand how to use bank drafts and trade acceptances and how to record transactions related to those instruments.
• Define the accounting terms new to the chapter.

SECTIONS

1. Accounting for Notes Payable
2. Accounting for Notes Receivable
______________________________________________________________________     CHAPTER OVERVIEW/ LEARNING OBJECTIVES   Learning Link:  Chapter 15 discussed accounts receivable and the accounting adjustments needed for bad debts.  In Chapter 16, students will learn how to account for notes receivable and notes payable, emphasizing the treatment of interest.
• This chapter describes how to determine whether an instrument meets all the requirements of negotiability. A negotiable instrument is a financial document that contains an order or promise to pay and meets all the requirements of the Uniform Commercial Code to be transferable to another party.

• The chapter explains how to calculate interest on a note using the formula: Interest = Principal x Interest Rate x Time.

• The chapter explains that the maturity date of a note is determined at the time the note is issued, excluding the issue date itself.

• The chapter explains the routing journal entries required regarding the issuance of a note payable to purchase an asset. The chapter also explains the journal entry required to record interest and pay off the note at maturity.

• The chapter describes the journal entries required when borrowing money from a bank using a note payable which has been discounted by the bank. The borrower discounting a note payable receives the difference between the discount (interest paid up front) and the principal.

• The second part of the chapter discusses journal entries required in notes receivable It explains how to record a note received for a sale of goods, how to record interest income on the note and how to deal with a defaulted note.

• The chapter explains the discounting of notes receivable. A firm with an immediate need for cash can discount a note receivable. Notes Receivable-Discounted represents a contingent liability.  If the note’s maker defaults on the note, the business must pay the bank.

• The chapter explains how to use bank drafts and trade acceptances and how to record transactions related to those instruments. Bank drafts, commercial drafts, and trade acceptances are negotiable instruments used in business.
• Can you afford the monthly payment?
• If an emergency occurred, and you had less money per month than you thought, would you still be able to pay your loan every month?
• How long will your loan last?
• Will the business be making payments for 3 months or 10 years, etc.?
• The interest being charged on the loan is an important factor as well. Business owners should try to keep the interest rate as low as possible. Will the loan be discounted by the issuer?
If so, then this will actually mean that the business is paying a higher interest rate. Keep in mind that businesses may deduct the interest paid on loans from their federal income tax return and this is advantageous for start-ups that need to reinvest all profits back into the business.  And lastly, a solid business credit profile is advantageous to start-ups because it builds credibility and the business's ability to attract new creditors in the future. Borrowing money establishes business credit because the lender reports timely payments to credit bureaus that maintain a credit profile of the new business

Solution Manual for Financial Accounting 5th Edition By David Spiceland

Chapter 1 A Framework for Financial Accounting INSTRUCTOR’S MANUAL  Authors’ Perspectives Part A: Accounting as a Measurement/Communication Process LO1-1    Describe the two primary functions of financial accounting. LO1-2    Understand the business activities that financial accounting measures. LO1-3    Determine how financial accounting information is communicated through financial statements. LO1-4    Describe the role that financial accounting plays in the decision-making process. Eliminate the Misconception – It’s important on Day 1 to change any misconception students have about financial accounting. Most students think this is going to be another math class. Chapter 1 begins by explaining that this is not the case. Financial accounting is described as “the language companies use to tell their financial story.” The concept of storytelling has broad appeal across all business students. Companies tell their financial stories using financial statements and related disclosures.
• Illustration 1-2 (with video) presents a simple framework students can use to visualize financial accounting. This illustration looks more like a business class than a math class. We can simplify the course by explaining to students that they will need to learn two functions of accounting over the semester: (1) how to measure business activities and (2) how to communicate those measurements. To better understand why accountants measure and communicate the way they do, students will also see how financial accounting helps investors, creditors, and others in making decisions.
Start Simple – The financial accounting course can be intimidating to many students, most of whom have never had an accounting course. We can simplify the measurement-communication-decision making nature of financial accounting with the following illustrations:
• Illustration 1-4 provides a complete list of the measurement categories students will need to know. Students will see many account titles throughout the semester, and this may seem overwhelming to them at first. However, we can explain that all of these accounts fall into six easy-to-learn categories (Note: hold off on introducing gains and losses until later chapters). Seeing only these six measurement categories makes the measurement function seem more attainable.
• Illustration 1-9 (with video) provides the full set of financial statements students will need to know. More detailed financial statements are shown previously in Illustration 1-5 through 1-8. Seeing the full set of financial statements in a single illustration helps students realize that learning the communication role of financial accounting is manageable.
• Illustration 1-10 was created by the Pathways Commission of the American Accounting Association. Accounting serves an impor­tant role in a prosperous society by measuring economic activity and communicating useful information to help investors and creditors make good decisions. We can confidently tell our students that financial accounting matters and has relevance to the well-being of our society.
PART B: Financial Accounting Information LO1-5    Explain the term generally accepted accounting principles (GAAP) and describe the role of GAAP in financial accounting. Accounting is a Dynamic Social Science – Many students are surprised to learn that the formal rules of financial accounting are established by a private-sector body, the Financial Accounting Standards Board. Some are also surprised to find out that separate rules have been established outside of the United States by the International Accounting Standards Board. The differences in standards between the two boards reflect the fact that accounting is a social science, unlike the formal sciences (mathematics, physics, chemistry, etc.). The rules of the formal sciences do not differ across countries (for example, in all countries, 2 2 = 4, and water is made up of two atoms of hydrogen and one atom of oxygen). However, the rules of financial accounting do not exist on their own; they are developed by the society for which they exist. Differences in beliefs and economic conditions across countries can lead to differences in accounting standards and practices, as well as changes over time in the same country. Many students will find the dynamic nature of a social science like accounting far more exciting than mathematics. Intriguing Role of the Auditor – The description of financial accounting as “the language companies use to tell their financial story” was introduced in Part A. In Part B, students are introduced briefly to the role of an independent auditor in providing verification that companies are telling their story accurately. Students are highly interested in cases of financial statement fraud, and instructors can explain that topics covered throughout the book will demonstrate how fraud occurs. There are two types of auto-gradable assignments at the end of each chapter that can be assigned related to financial statement fraud:

Solution Manual for Managerial Accounting 7th Edition by Wild

The solutions manual holds the correct answers to all questions within your textbook, therefore, It could save you time and effort. Also, they will improve your performance and grades. Most noteworthy, we do not restrict access to educators and teachers, as a result, students are allowed to get those manuals.
• Noteworthy, both students and instructors can obtain this Solutions Manual.
• Complete Solutions Manual guranteed. All Chapters included.
• Instant delivery. Also, file format comversion available upon request.
• This is not the textbook, likewise, it is a supplementary manual for the textbook.

Title
Financial and Managerial Accounting
Edition
7th Edition
Authors
Wild, Shaw, Chiappetta
Resource
Solutions Manual
Publisher
McGraw Hill Education
ISBN
ISBN1259726703
SKU
C1259726703SM

Other Expressions for Solutions Manual

• WILD FINANCIAL AND MANAGERIAL ACCOUNTING 7/E SOLUTIONS MANUAL.
• FINANCIAL AND MANAGERIAL ACCOUNTING SOLUTIONS MANUAL PDF.

Solution Manual for Payroll Accounting 2019 5th Edition By Landin

SOLUTIONS MANUAL: CHAPTER 1 END OF CHAPTER ANSWERS ANSWERS TO STOP AND CHECK EXERCISES   Which Law?
1. K
2. H
3. B
4. F
5. I
6. J
7. A
8. D
9. G
10. C
11. E
Which Payroll Law?
1. D
2. A
3. F
4. C
5. G
6. J
7. B
8. I
9. H
10. E
What’s Ethical?
1. Answers will vary. Some concerns include data privacy and integrity in the software switchover, tax and employee pay integrity on the new software, and employee pay methods.

1. Answers will vary. Liza could choose to ignore her sorority sister’s request, claiming professional responsibility. She could also discontinue active participation in the sorority. In any case, Liza must not consent to her sorority sister’s request for confidential information.
Confidential Records As a payroll clerk, your task is to protect the privacy and confidentiality of the information you maintain for the company. If a student group—or any personnel aside from the company’s payroll employees and officers—wishes to review confidential records, you should deny their request. If needed, you should refer the group to your department’s manager to discuss the matter in more depth. The laws that apply to this situation are the Privacy Act of 1974, the Freedom of Information Act, and potentially HIPAA.   Large vs.Small
1. Large companies face issues with multiple departments, employee access to online personnel portals, employee data security, and timekeeping accuracy.
2. For small companies, the cost of outsourcing the payroll function needs to be considered. On one hand, a small company may not have personnel who are proficient with payroll regulations and tax reporting requirements, which leaves a company vulnerable to legal actions and stringent fines. However, engaging a payroll service company may be cost prohibitive. The decision to outsource the payroll for a small company should take into accountthe number of personnel, locations, and types of operations in which the company engages.

Solution Manual for Managerial Accounting for Managers 5th Edition by Noreen

Chapter 1 Managerial Accounting and Cost Concepts Questions   1-1       The three major types of product costs in a manufacturing company are direct materials, direct labor, and manufacturing overhead. 1-2
1. Direct materials are an integral part of a finished product and their costs can be conveniently traced to it.
2. Indirect materials are generally small items of material such as glue and nails. They may be an integral part of a finished product but their costs can be traced to the product only at great cost or inconvenience.
3. Direct labor consists of labor costs that can be easily traced to particular products. Direct labor is also called “touch labor.”
4. Indirect labor consists of the labor costs of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced to particular products. These labor costs are incurred to support production, but the workers involved do not directly work on the product.
5. Manufacturing overhead includes all manufacturing costs except direct materials and direct labor. Consequently, manufacturing overhead includes indirect materials and indirect labor as well as other manufacturing costs.
1-3       A product cost is any cost involved in purchasing or manufacturing goods. In the case of manufactured goods, these costs consist of direct materials, direct labor, and manufacturing overhead. A period cost is a cost that is taken directly to the income statement as an expense in the period in which it is incurred.   1-4
1. Variable cost: The variable cost per unit is constant, but total variable cost changes in direct proportion to changes in volume.
2. Fixed cost: The total fixed cost is constant within the relevant range. The average fixed cost per unit varies inversely with changes in volume.
3. Mixed cost: A mixed cost contains both variable and fixed cost elements.
1-5
1. Unit fixed costs decrease as the activity level increases.
2. Unit variable costs remain constant as the activity level increases.
3. Total fixed costs remain constant as the activity level increases.
4. Total variable costs increase as the activity level increases.
1-6
1. Cost behavior: Cost behavior refers to the way in which costs change in response to changes in a measure of activity such as sales volume, production volume, or orders processed.
2. Relevant range: The relevant range is the range of activity within which assumptions about variable and fixed cost behavior are valid.
1-7       An activity base is a measure of whatever causes the incurrence of a variable cost. Examples of activity bases include units produced, units sold, letters typed, beds in a hospital, meals served in a cafe, service calls made, etc. 1-8       The linear assumption is reasonably valid providing that the cost formula is used only within the relevant range. 1-9       A discretionary fixed cost has a fairly short planning horizon—usually a year. Such costs arise from annual decisions by management to spend on certain fixed cost items, such as advertising, research, and management development. A committed fixed cost has a long planning horizon—generally many years. Such costs relate to a company’s investment in facilities, equipment, and basic organization. Once such costs have been incurred, they are “locked in” for many years. 1-10     Yes. As the anticipated level of activity changes, the level of fixed costs needed to support operations may also change. Most fixed costs are adjusted upward and downward in large steps, rather than being absolutely fixed at one level for all ranges of activity. 1-11     The traditional approach organizes costs by function, such as production, selling, and administration. Within a functional area, fixed and variable costs are intermingled. The contribution approach income statement organizes costs by behavior, first deducting variable expenses to obtain contribution margin, and then deducting fixed expenses to obtain net operating income. 1-12     The contribution margin is total sales revenue less total variable expenses. 1-13     A differential cost is a cost that differs between alternatives in a decision. An opportunity cost is the potential benefit that is given up when one alternative is selected over another. A sunk cost is a cost that has already been incurred and cannot be altered by any decision taken now or in the future. 1-14     No, differential costs can be either variable or fixed. For example, the alternatives might consist of purchasing one machine rather than another to make a product. The difference between the fixed costs of purchasing the two machines is a differential cost.
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