Solution Manual for Financial and Managerial Accounting 8th Edition By Wild
Chapter 1 Accounting in Business QUESTION
QUICK STUDIES Quick Study 1-1 (10 minutes)
- The purpose of accounting is to provide decision makers with relevant and reliable information to help them make better decisions. Examples include information for people making investments, loans, and business plans.
- Technology reduces the time, effort, and cost of recordkeeping. There is still a demand for people who can design accounting systems, supervise their operation, analyze complex transactions, and interpret reports. Demand also exists for people who can effectively use computers to prepare and analyze accounting reports. Technology will never substitute for qualified people with abilities to prepare, use, analyze, and interpret accounting information.
- External users and their uses of accounting information include: (a) lenders, to measure the risk and return of loans; (b) shareholders, to assess whether to buy, sell, or hold their shares; (c) directors, to oversee the organization; (d) employees and labor unions, to judge the fairness of wages and assess future employment opportunities; and (e) regulators, to determine whether the organization is complying with regulations. Other users are voters, legislators, governmentofficials, contributors to nonprofits, suppliers, and customers.
- Business owners and managers use accounting information to help answer questions such as: What resources does an organization own? What debts are owed? How much income is earned? Are expenses reasonable for the level of sales? Are customers’ accounts being promptly collected?
- Service businesses include: Standard and Poor’s, Dun & Bradstreet, Merrill Lynch, Southwest Airlines, CitiCorp, Humana, Charles Schwab, and Prudential. Businesses offering products include Nike, Reebok, Gap, Apple, Ford Motor Co., Philip Morris, Coca-Cola, Best Buy, and WalMart.
- The internal role of accounting is to serve the organization’s internal operating functions. It does this by providing useful information for internal users in completing their tasks more effectively and efficiently. By providing this information, accounting helps the organization reach its overall goals.
- Accounting professionals offer many services including auditing, management advice, tax planning, business valuation, and money management.
- Marketing managers are likely interested in information such as sales volume, advertising costs, promotion costs, salaries of sales personnel, and sales commissions.
- Accounting is described as a service activity because it serves decision makers by providing information to help them make better business decisions.
- Some accounting-related professions include consultant, financial analyst, underwriter, financial planner, appraiser, FBI investigator, market researcher, and system designer.
Quick Study 1-2 (10 minutes)
|3.||h Recordkeeping (bookkeeping)|
|a.||E External user||g.||E External user|
|b.||E External user||h.||E External user|
|c.||E External user||i.||I Internal user|
|d.||E External user||j.||E External user|
|e.||I Internal user||k.||E External user|
|f.||E External user||l.||E External user|
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?
Which Payroll Law?
- 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.
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
- 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.
- Large companies face issues with multiple departments, employee access to online personnel portals, employee data security, and timekeeping accuracy.
- 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 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.
______________________________________________________________________ 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.
- Accounting for Notes Payable
- Accounting for Notes Receivable
- 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.
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:
- 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.
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
- 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?
Solution Manual for Fundamentals of Financial Accounting 6th Edition by Phillips Appendix C Present and Future Value Concepts ANSWERS TO QUESTIONS
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.
- 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.
- 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.
- $10,000 x 2.59374 = $25,937 (rounded to the nearest dollar).
- $8,000 x .38554 = $3,084 (rounded to the nearest dollar).
- 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|
Authors' Recommended Solution Time (Time in minutes)
- $1,000 x 14.48656 = $14,487. (rounded to the nearest dollar)
ANSWERS TO MINI-EXERCISES MC–1
| Mini-exercises|| Exercises|| Problems|
|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|
| $15,000 ´ 6.14457 (Table C.4, n=10, i=10%)||=||$92,169|
| $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|
It is much better to save $15,000 for 20 years.
|$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|
Solution Manual for Managerial Accounting 11th CANADIAN Edition by Garrison Chapter 1 Managerial Accounting and the Business Environment Learning Objectives
Chapter Overview This chapter serves four main purposes:
- Describe the functions performed by managers.
- Identify the major differences and similarities between financial and managerial accounting.
- Explain the basic concepts of lean production and enterprise risk management.
- Explain the nature and importance of ethics for accountants and the role of corporate social responsibility.
- Explain how intrinsic motivation, extrinsic incentives, and cognitive biases affect employee behaviour.
Service-Related Examples Company Type of Business Text Reference Certified Professional Accountants Accounting Introduction Canadian Pacific Railway In Business CIBC Bank Ethics/Discussion Case Assignment Topic Grid Chapter 1
- It explains the nature of managerial accounting in providing internal accounting information to support the work of management—planning, directing and motivating, and controlling.
- It describes the nature of organizations and the role of management accountants in an organization.
- It explains how companies are responding to a changing business environment by improving business process with the following four approaches:
- Lean Production
- Enterprise Risk Management
- It discusses the importance of upholding ethical standards.
|Problem||Topic||LO1: Functions of managers||LO2: Financial vs. managerial accounting|| LO3: Lean production and enterprise risk management|| LO4: Nature and importance of ethics for accountants||LO5: Intrinsic motivation, extrinsic incentives, and cognitive biases||Service industry||Writing component||CPA adapted|
|E1-1||Functions Performed by Managers||ü||?|
|E1-2||Financial and Managerial Accounting||ü||?|
|E1-3||Enterprise Risk Management||ü||?|
|P1-5||Planning and Control Activities||ü||J||?|
|P1-6||Ethics in Business||ü||?|
|P1-7||Corporate Social Responsibility||ü||?|
|P1-8||Intrinsic Motivation and Extrinsic Incentives||ü||?|
|P1-9||Value Chain Analysis||ü|
Solution Manual for Fundamentals of Cost Accounting 6th Edition by Lanen Chapter 1 Cost Accounting: Information for DecisionMaking Learning Objectives
- Describe the way managers use accounting information to create value in organizations.
- Distinguish between the uses and users of cost accounting and financial accounting information.
- Explain how cost accounting information is used for decision making and performance evaluation in organizations.
- Identify current trends in cost accounting.
- Understand ethical issues faced by accountants and ways to deal with ethical problems that you face in your career.
- VALUE CREATION IN ORGANIZATIONS
- Why Start with Value Creation?
- Value Chain
- Supply Chain and Distribution Chain
- Using Cost Information to Increase Value
- Accounting and the Value Chain
- ACCOUNTING SYSTEMS
III. OUR FRAMEWORK FOR ASSESSING COST ACCOUNTING SYSTEMS
- Financial Accounting
- Cost Accounting
- Cost Accounting, GAAP, and IFRS
- Customers of Cost Accounting
- 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
- COST DATA FOR MANAGERIAL DECISIONS
- Costs for Decision Making
- Costs for Control and Evaluation
- Different Data for Different Decisions
- TRENDS IN COST ACCOUNTINGthroughout the value chain
- Cost Accounting in Research and Development (R&D)
- Cost Accounting in Design
- Cost Accounting in Purchasing
- 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
Chapter Overview, continued VII. CHOICES: ETHICAL ISSUES FOR ACCOUNTANTS
- KEY FINANCIAL PLAYERS IN THE ORGANIZATION
VIII. COST ACCOUNTING AND OTHER BUSINESS DISCIPLINES
- What Makes Ethics So Important?
- The Sarbanes-Oxley Act of 2002 and Ethics
- APPENDIX: INSTITUTE OF MANAGEMENT ACCOUNTANTS CODE OF ETHICS
Chapter Outline LO 1-1 Describe the way managers use accounting information to create value in organizations. VALUE CREATION IN ORGANIZATIONS
- Statements of Ethical Professional Practice
- Why Start with Value Creation?
- Goal of cost accounting is to assist manages in achieving the maximum value for their organizations.
- 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.