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    Homework Session 2

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    duyanhpbc

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    Homework Session 2

    Uploaded by

    duyanhpbc
    2 views4 pages

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    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    2 views4 pages

    Homework Session 2

    Uploaded by

    duyanhpbc

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    Execise for Lesson 2

    E1.1
    Genesis Company performed accounting tasks during the year.

    Accounting activities Classify


    1. Analyzing and interpreting information. Communicates
    2. Classifying economic events. Records
    3. Explaining uses, meaning, and limitations Communicates
    data.
    4. Keeping a systematic chronological diary Records
    of events.
    5. Measuring events in dollars and cents. Records
    6. Preparing accounting reports. Communicates
    7. Reporting information in a standard Communicates
    format.
    8. Selecting economic activities relevant to Identifies
    the company.
    9. Summarizing economic events. Records

    E1.2
    a, Classifying users of financial statements.

    Order Users of financial statements Classifying


    1 Customers External users

    2 Internal Revenue Service External users

    3 Labor Union External users

    4 Marketing manager Internal users


    5 Production supervisor Internal users

    6 Securities and Exchange Commission External users

    7 Store manager Internal users

    8 Supplies External users

    9 Vice president of finance Internal users


    b, Question asked by external users or internal users

    Order Questions Classifying


    Can we afford to give our employees a
    1 Internal users
    pay raise?
    Did the company earn a satisfactory
    2 External users
    income?
    Do we need to borrow in the near
    3 Internal users
    future?
    How does the company’s profitability
    4 External users
    compare to other companies?
    What does it cost us to manufacture
    5 Internal users
    each unit produced?
    6 Which product should we emphasize? Internal users
    Will the company be able to pay its
    7 External users
    short-term debts?

    E1.3
    The ethical situation involved for Jana Barth is that: according to the cost principle in accounting,
    accountants have to report asset at its cost not its value. But Angela Duffy- president of Duffy
    Company ordered Jana to report company’s land at its fair value of $170,000 instead of its cost of
    $100,000 to attract investors.

    In this situation, the person earn profit is Duffy Company because it will get more investment, and
    the people who be harmed are investors because of fake accounting statement and Jana cause she
    probably get penalties.

    The alternative is report truly about company’ land cost and try to attract investors by revenue,
    benefit,ect.

    E1.4
    1. The accounting method is incorrect because it breaks the Historical Cost Principles.

    2. The accounting method is correct because it follows the Monetary Unit Assumption.

    3. The accounting method is incorrect because the owner’s living cost is not count on accounting
    records of the company.
    E1.5
    Classifying balance sheet items.

    Order Balance Sheet Items Classifying


    1 Accounts payable Liability
    2 Cash Asset
    3 Equipments Asset
    4 Supplies Asset
    5 Accounts receivable Asset
    6 Notes payable Liability
    7 Salaries and wages payable Liability
    8 Owner’s capital Owner’s equity

    E1.14
    a, Saira Morrow’s net income from Buena Vista Park for 2020.

    Revenue
    Revenue during 2020- camping fees $140.000
    Revenue during 2020- general store 65,000
    Total revenue 205,000
    Expenses during 2020 160,000
    Net income $45,000

    b,

    Balance sheet for Buena Vista Park as of December 31, 2020.

    Buena Vista Park


    Balance Sheet
    December 31, 2020
    Asset Liabilies
    Cash on hand $23,000 Account payable $11,000
    Equipment 115,500 Notes payable 60,000
    Accounts receivable 17,500 Owner’s Equity
    Owner’s capital $40,000
    Net income 45,000
    Total asset $156,000 Total $156,000
    P1.1A
    a, Tabular analysis of the transactions of Spengel’s Travel Agency on April 1.

    Asset Liabitities Owner’s Equity


    Cash Accounts Supplies Equipment Accounts Owner’s Owner’s Revenues Expenses
    Receivable Payable Capital Drawing
    1 +$15,000 +$15,000
    2 -600 -$600
    3 -3,000 +$3,000
    4 +$700 +$700
    5 -900 900
    6 +3,000 +$7,000 $10,000
    7 -600 -$600
    8 -600 -600
    9 -2,500 -2,500
    10 +4,000 -4,000

    b, Net incom of Spencel’s Travel Agency on April 1 is worth 1,500 dollars.

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