Intermediate Accounting Chap 1,2,3 Hw

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Derek Greenfield
Intermediate Accounting I
3/2/2012

CA1-1.)
1. True
2. False, must comply with all standards and interpretations including disclosure requirements 3. True
4. False, FASB must operate in full view of public through a “due process” system that gives interested parties ample opportunity to make their views known CA1-3.)
1. D
2. A
3. D
4. B
5. A
6. B
7. A
8. B
E2-5.)
Assets- F
Liabilities- B
Equity- I
Investment by owners- C
Distribution to owners- D, K
Comprehensive Income- L, G, E, C
Revenue- J, H
Expenses- H
Gains- A
Losses- A

E2-7.)
a. Fair value changes are not recognized in the accounting records. HISTORICAL COST PRINCIPLE
b. Financial information is presented so that investors will not be misled. FULL DISCLOSURE PRINCIPLE
c. Intangible assets are capitalized and amortized over periods benefited. MATCHING PRINCIPLE
d. Repair tools are expensed when purchased.
MATERIALITY
e. Agricultural companies use market value for purposes of valuing crops. INDUSTRY PRACTICES
f. Each enterprise is kept as a unit distinct from its owner or owners. ECONOMIC ENTITY ASSUMPTION
g. All significant post-balance sheet events are reported. FULL DISCOSURE PRINCIPLE
h. Revenue is recorded at point of sale.
REVENUE RECOGNITION PRINCIPLE
i. All important aspects of bond indentures are presented in financial statements. FULL DISCLOSURE PRINCPLE
j. Rationale for accrual accounting.
MATCHING PRINCIPLE
k. The use of consolidated statements is justified.
ECONOMIC ENTITY ASSUMPTION
l. Reporting must be done at defined time intervals.
PERIODICITY ASSUMPTION
m. An allowance for doubtful accounts is established.
MATCHING PRINCIPLE
n. Goodwill is recorded only at time of purchase.
HISTORICAL COST PRINCIPLE
o. A company charges its sales commission costs to expense. MATCHING PRINCIPLE

E3-1
April 2 Cash 30,000
Equipment 14,000
Capital 44,000

2 Salaries and Wages Expense 1,160
Cash1,160

7 Supplies 700
Accounts Payable700

11 Accounts Receivable 1,100
Service Revenue1,100

12 Service Revenue 3,200
Accounts Receivable3,200

17 Cash 2,300
Service Revenue2,300

21 Insurance Expense 110
Cash100

30 Salaries and wages expense 1,160
Cash1,160

30 Depreciation 120
Supplies120

30 Equipment 5,100
Cash 5,100

E3-5

Depreciation Expense (250*3)$750
Accumulated Depreciation-Equipment750

Unearned Rent Revenue (6300*1/3)2,100
Rent Revenue2,100

Interest Expense500
Interest Payable500

Supplies Expense2,150
Supplies (2,800-650)2,150

Insurance Expense (300*3)900
Prepaid Insurance9010

P3-1 (a&b)

Cash Furniture and Equipment
Sept 1 20,000 Sept 4 680 Sept 2 17,280 8 1,690 5 942 20 980 10 430 Capital

18 3,600 Sept 19 3,000 Sept 1 20,000
19 1,800 30 6,007
30 1,800
30 85 30 Bal 23,007 30 Bal 12,133

Accounts Receivable Accounts Payable Sept 14 5,820 Sept 20 980 Sept 18 3,600 Sept 2 17,280 25 2,110...
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