Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow (Chapter 11 Comprehensive Problem 3)

Chapter 11 Comprehensive Problem 3 Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow:

Jan. 2. Issued a check to establish a petty cash fund of $2,000.
Mar. 4. Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $789; miscellaneous selling expense, $256; miscellaneous administrative expense, $378.

AND SO ON

Click here for the solution: Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow (Chapter 11 Comprehensive Problem 3)

Listed Below are six technical accounting terms introduced or emphasized in this chapter

Problem 18.1 Listed Below are six technical accounting terms introduced or emphasized in this chapter.

Job order costing
Process Costing
Conversion Costs
Equivalent Units
Cost of Finished Goods Manufactured
Production Cost Report

Each of the following statements may (or may not) describe these technical terms. For each statement, indicate the term described, or answer "none" if the statement does not correctly describe any of the terms.

a. The type of cost accounting method likely to be used in a Coca-Cola bottling plant.
b. Direct Labor and overhead consumed in a production process
c. A measure of the quantity of production work done during a time period, including work on partially completed units.
d. Process cost information for the period, including physical flow and total cost to account for.
e. The type of cost accounting method likely to be used by a construction company.

Click here for the solution: Listed Below are six technical accounting terms introduced or emphasized in this chapter

Presented below is the assumptions, principles, and constraints discussed in this chapter

E7-3 Presented below is the assumptions, principles, and constraints discussed in this chapter.

1. Economic entity assumption 6. Matching principle
2. Going concern assumption 7. Full disclosure principle
3. Monetary unit assumption 8. Revenue recognition principle
4. Time period assumption 9. Materiality
5. Cost principle 10. Conservatism

Instructions: Identify by number the accounting assumption, principle, or constraint above that describes each situation below. Do not use a number more than once.
(a) Is the rationale for why plant assets are not reported at liquidation value. (Do not use historical cost principle.)
(b) Indicates that personal and business record-keeping should be separately maintained.
(c) Ensures that all relevant financial information is reported.
(d) Assumes that the dollar is the “measuring stick” used to report on financial performance.
(e) Requires that the operational guidelines be followed for all significant items.
(f) Separates financial information into time periods for reporting purpose.
(g) Requires recognition of expenses in the same period as related revenues.
(h) Indicates that market value changes subsequent to purchase are not recorded in the accounts.


Click here for the solution: Presented below is the assumptions, principles, and constraints discussed in this chapter

The chapter talks about Delphi Company reducing its other postretirement benefits by approximately $500 million because of a change in the law

14-43 The chapter talks about Delphi Company reducing its other postretirement benefits by approximately $500 million because of a change in the law. The federal government will reimburse companies for prescription drug benefits that they provide to their employees who are of Medicare age. The reimbursement is 28% of all prescription drug benefits in excess of $250 per person per year, up to a maximum of $1,300 per person.

Required
a. Identify the process the company would use to identify the liability for postretirement drug benefits. Assume this was done prior to the new federal law. Identify the data the company would need to make the estimate. Identify how the auditor might audit the data.
b. Explain how the auditor would verify the $500 million reduction in liability due to the new federal law.

Click here for the solution: The chapter talks about Delphi Company reducing its other postretirement benefits by approximately $500 million because of a change in the law

Presented below are the assumptions, principles, and constraints used in this chapter

E2-4 (Assumptions, Principles, and Constraints) Presented below are the assumptions, principles, and constraints used in this chapter.

1. Economic entity assumption
2. Going concern assumption
3. Monetary unit assumption
4. Periodicity assumption
5. Historical cost principle
6. Fair value principle
7. Expense recognition principle
8. Full disclosure principle
9. Cost-benefit relationship
10. Materiality
11. Industry practices
12. Conservatism

Instructions
Identify by number the accounting assumption, principle, or constraint that describes each situation on the next page. Do not use a number more than once.
(a) Allocates expenses to revenues in the proper period.
(b) Indicates that fair value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.)
(c) Ensures that all relevant financial information is reported.
(d) Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.)
(e) Anticipates all losses, but reports no gains.
(f) Indicates that personal and business record keeping should be separately maintained.
(g) Separates financial information into time periods for reporting purposes.
(h) Permits the use of fair value valuation in certain industries. (Do not use fair value principle.)
(i) Requires that information significant enough to affect the decision of reasonably informed users should be disclosed. (Do not use full disclosure principle.)
(j) Assumes that the dollar is the "measuring stick" used to report on financial performance.

Click here for the solution: Presented below are the assumptions, principles, and constraints used in this chapter

Recalling the definitions of risk premiums from Chapter 8 and using the Treasury bill return in Table 12.4 as an approximation to the nominal risk-free rate

P12-3 Recalling the definitions of risk premiums from Chapter 8 and using the Treasury bill return in Table 12.4 as an approximation to the nominal risk-free rate, what is the risk premium from investing in each of the other asset classes listed in Table 12.4?

Click here for the solution: Recalling the definitions of risk premiums from Chapter 8 and using the Treasury bill return in Table 12.4 as an approximation to the nominal risk-free rate

Exercise 2-4 (E2-4) (Assumptions, Principles, and Constraints) Presented below are the assumptions, principles, and constraints used in this chapter

ACC 421 Week Two (Week 2)

Exercise 2-4 (E2-4) (Assumptions, Principles, and Constraints) Presented below are the assumptions, principles, and constraints used in this chapter.
1. Economic entity assumption 5. Historical cost principle 9. Materiality
2. Going concern assumption 6. Matching principle 10. Industry practices
3. Monetary unit assumption 7. Full disclosure principle 11. Conservatism
4. Periodicity assumption 8. Cost-benefit relationship

Instructions
Identify by number the accounting assumption, principle, or constraint that describes each situation below. Do not use a letter more than once.
(a) Allocates expenses to revenues in the proper period.
(b) Indicates that market value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.)
(c) Ensures that all relevant financial information is reported.
(d) Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.)
(e) Anticipates all losses, but reports no gains.
(f) Indicates that personal and business record keeping should be separately maintained.
(g) Separates financial information into time periods for reporting purposes.
(h) Permits the use of market value valuation in certain specific situations.
(i) Requires that information significant enough to affect the decision of reasonably informed users should be disclosed. (Do not use full disclosure principle.)
(j) Assumes that the dollar is the “measuring stick” used to report on financial performance.

Click here for the solution: Exercise 2-4 (E2-4) (Assumptions, Principles, and Constraints) Presented below are the assumptions, principles, and constraints used in this chapter