# Solution Manual for Fundamentals of Financial Accounting 6th Edition by Phillips

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Edition: 6th Edition

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## Solution Manual for Fundamentals of Financial Accounting 6th Edition by Phillips

Appendix C

Present and Future Value Concepts

1. The time value of money is the idea that a dollar received today is worth more than a dollar to be received at any later date because it can be invested today to earn interest over time.
2. Future value—The future value of a number of dollars is the amount that it will increase to in the future at i interest rate for n periods. The future value is the principal plus accumulated interest compounded each period.

Present value—The present value of a number of dollars, to be received at some specified date in the future, is that amount discounted to the present at i interest rate for n periods. It is the inverse of future value. In compound discounting, the interest is subtracted rather than added as in compounding.

1. \$10,000 x 2.59374 = \$25,937 (rounded to the nearest dollar).
2. \$8,000 x .38554 = \$3,084 (rounded to the nearest dollar).
3. An annuity is a term that refers to equal periodic cash payments or receipts of an equal amount each period for two or more periods. In contrast to a future value of \$1, or a present value of \$1 (which involves a single contribution or amount), an annuity involves a series of equal contributions for a series of equal periods. An annuity may refer to a future value or a present value.

 6. Table Values Concept i = 5% n =4 i = 10%; n =7 i = 14%; n = 10 FV of \$1 1.21551 1.94872 3.70722 PV of \$1 0.82270 0.51316 0.26974 FV of annuity of \$1 4.31013 9.48717 19.33730 PV of annuity of \$1 3.54595 4.86842 5.21612
1. \$1,000 x 14.48656 = \$14,487. (rounded to the nearest dollar)

Authors’ Recommended Solution Time

(Time in minutes)

 Mini-exercises Exercises Problems No. Time No. Time No. Time 1 2 1 10 CP1 20 2 2 2 15 CP2 20 3 6 3 15 CP3 20 4 6 4 15 CP4 15 5 6 7 8 9 10 11 12 3 3 3 3 3 3 3 3 5 6 7 5 10 8 PA1 PA2 PA3 PA4 PB1 PB2 PB3 PB4 20 20 20 15 20 20 20 15

MC–1

 \$500,000 ´ 0.46319 (Table C.2, n=10, i=8%) = \$231,595

MC–2

 \$15,000 ´   6.14457 (Table C.4, n=10, i=10%) = \$92,169

MC–3

 \$100,000 (no PV) = \$100,000 \$100,000 ´ 0.92593 (Table C.2, n=1, i=8%) = 92,593 \$ 30,000 ´ 9.81815 (Table C.4, n=20, i=8%) = 294,545 Total = \$487,138

MC–4

 \$25,000 ´ 15.93742 (Table C.3, n=10, i=10%) = \$398,436 \$15,000 ´ 57.27500 (Table C.3, n=20, i=10%) = \$859,125

It is much better to save \$15,000 for 20 years.

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## Solution Manual for Fundamentals of Financial Accounting 6th Edition by Phillips

Appendix C Present and Future Value Concepts ANSWERS TO QUESTIONS
1. The time value of money is the idea that a dollar received today is worth more than a dollar to be received at any later date because it can be invested today to earn interest over time.
2. Future value—The future value of a number of dollars is the amount that it will increase to in the future at i interest rate for n periods. The future value is the principal plus accumulated interest compounded each period.
Present value—The present value of a number of dollars, to be received at some specified date in the future, is that amount discounted to the present at i interest rate for n periods. It is the inverse of future value. In compound discounting, the interest is subtracted rather than added as in compounding.
1. \$10,000 x 2.59374 = \$25,937 (rounded to the nearest dollar).
2. \$8,000 x .38554 = \$3,084 (rounded to the nearest dollar).
3. An annuity is a term that refers to equal periodic cash payments or receipts of an equal amount each period for two or more periods. In contrast to a future value of \$1, or a present value of \$1 (which involves a single contribution or amount), an annuity involves a series of equal contributions for a series of equal periods. An annuity may refer to a future value or a present value.

 6. Table Values Concept i = 5% n =4 i = 10%; n =7 i = 14%; n = 10 FV of \$1 1.21551 1.94872 3.70722 PV of \$1 0.82270 0.51316 0.26974 FV of annuity of \$1 4.31013 9.48717 19.33730 PV of annuity of \$1 3.54595 4.86842 5.21612
1. \$1,000 x 14.48656 = \$14,487. (rounded to the nearest dollar)
Authors' Recommended Solution Time (Time in minutes)
 Mini-exercises Exercises Problems No. Time No. Time No. Time 1 2 1 10 CP1 20 2 2 2 15 CP2 20 3 6 3 15 CP3 20 4 6 4 15 CP4 15 5 6 7 8 9 10 11 12 3 3 3 3 3 3 3 3 5 6 7 5 10 8 PA1 PA2 PA3 PA4 PB1 PB2 PB3 PB4 20 20 20 15 20 20 20 15
 \$500,000 ´ 0.46319 (Table C.2, n=10, i=8%) = \$231,595
MC–2
 \$15,000 ´   6.14457 (Table C.4, n=10, i=10%) = \$92,169
MC–3
 \$100,000 (no PV) = \$100,000 \$100,000 ´ 0.92593 (Table C.2, n=1, i=8%) = 92,593 \$ 30,000 ´ 9.81815 (Table C.4, n=20, i=8%) = 294,545 Total = \$487,138
MC–4
 \$25,000 ´ 15.93742 (Table C.3, n=10, i=10%) = \$398,436 \$15,000 ´ 57.27500 (Table C.3, n=20, i=10%) = \$859,125
It is much better to save \$15,000 for 20 years.

## 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.

## 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 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 Fundamentals of Cost Accounting 6th Edition by Lanen

Chapter 1 Cost Accounting: Information for DecisionMaking     Learning Objectives
1. Describe the way managers use accounting information to create value in organizations.

1. Distinguish between the uses and users of cost accounting and financial accounting information.

1. Explain how cost accounting information is used for decision making and performance evaluation in organizations.

1. Identify current trends in cost accounting.

1. Understand ethical issues faced by accountants and ways to deal with ethical problems that you face in your career.
Chapter Overview
1. VALUE CREATION IN ORGANIZATIONS
• Value Chain
• Supply Chain and Distribution Chain
• Using Cost Information to Increase Value
• Accounting and the Value Chain

1. ACCOUNTING SYSTEMS
• Financial Accounting
• Cost Accounting
• Cost Accounting, GAAP, and IFRS
• Customers of Cost Accounting
III.       OUR FRAMEWORK FOR ASSESSING COST ACCOUNTING SYSTEMS
• The Manager’s Job Is to Make Decisions
• Decision Making Requires Information
• Finding and Eliminating Activities That Don’t Add Value
• Identifying Strategic Opportunities Using Cost Analysis
• Owners Use Cost Information to Evaluate Managers

1. COST DATA FOR MANAGERIAL DECISIONS
• Costs for Decision Making
• Costs for Control and Evaluation
• Budgeting
• Different Data for Different Decisions

1. TRENDS IN COST ACCOUNTINGthroughout the value chain
• Cost Accounting in Research and Development (R&D)
• Cost Accounting in Design
• Cost Accounting in Production
• Cost Accounting in Marketing
• Cost Accounting in Distribution
• Cost Accounting in Customer Service
• Enterprise Resource Planning
• Creating Value in the Organization

1. KEY FINANCIAL PLAYERS IN THE ORGANIZATION
Chapter Overview, continued   VII.     CHOICES: ETHICAL ISSUES FOR ACCOUNTANTS
• What Makes Ethics So Important?
• Ethics
• The Sarbanes-Oxley Act of 2002 and Ethics
VIII.    COST ACCOUNTING AND OTHER BUSINESS DISCIPLINES
1. APPENDIX: INSTITUTE OF MANAGEMENT ACCOUNTANTS CODE OF ETHICS
• Statements of Ethical Professional Practice
• Principles
• Standards
• Resolving Ethical Issues
Chapter Outline   LO 1-1   Describe the way managers use accounting information to create value in organizations.   VALUE CREATION IN ORGANIZATIONS

• Goal of cost accounting is to assist manages in achieving the maximum value for their organizations.

• Value Chain

• The value chain is the set of activities that transforms raw resources into the goods and services end users purchase and consume.

• It includes the treatment or disposal of any waste generated by the end users.

• Value-added activities are those that customers perceive as adding utility to the goods or services they purchase.

• Exhibit 1.1 identifies the individual components of the value chain and providesexamples of the activities in each component, along with some of the costs associatedwith these activities.Although the list of value chain components suggests a sequential process, many of the components overlap.

• Research and development (R&D): The creation and development of ideas related to new products, services, or processes.

• Design: The detailed development and engineering of products, services, or processes.

• Purchasing: The acquisition of goods and services needed to produce a good or service.

• Production: The collection and assembly of resources to produce a product or deliver a service.

• Marketing and Sales: The process of informing potential customers about the attributes of products or services that leads to their sale.

• Distribution: The process for delivering products or services to customers.

• Customer service: The support activities provided to customers for a product or service.
• Before product ideas are formulated,no value exists. Once an idea is established, however, value is created.

• Whenresearch and development of the product begins, value increases.

• As the productreaches the design phase, value continues to increase.

• Each component adds value tothe product or service.

• Administrative functions, such as human resource management and accounting, are not included as part of the value chain; they are included instead in every business function of the value chain.

• Supply Chain and Distribution Chain

• The supply chainincludes the set of firms and individualsthat sells goods and servicesto the firm. (See Business Application box “Choosing Where to Produce in the Supply Chain.”)

• The distribution chainincludes the set of firms and individualsthat buys and distributesgoods and services fromthe firm.

• These suppliers and customers are on the firm’s boundaries. Thus, the supply chain and distribution chain are the parts of the value chain outside the firm.

• Using Cost Information to Increase Value

• The measurement and reporting of costs is avaluable activity.

• Cost information that is received too late to help managersmakedecisionswould not add value.

• Accounting and the Value Chain

• Cost accounting focuses on how the individual stages contribute to the value and how to work with other managers to improve performance.
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