Giáo trình Financial accounting 3rd global edition by kemp part 2

Giáo trình Financial accounting 3rd global edition by kemp part 2 Giáo trình Financial accounting 3rd global edition by kemp part 2 Giáo trình Financial accounting 3rd global edition by kemp part 2 Giáo trình Financial accounting 3rd global edition by kemp part 2 Giáo trình Financial accounting 3rd global edition by kemp part 2 Giáo trình Financial accounting 3rd global edition by kemp part 2

www.downloadslide.net 350 Chapter Report cash on the balance sheet Key Points Key Accounting Terms Most companies report cash and cash equivalents together on the balance sheet: Cash equivalents (p 334) Petty cash (p 334) • Cash consists of most things a bank will take as a deposit • Cash equivalents are very liquid, shortterm investments such as money market funds 3 Identify the different types of receivables and discuss related internal controls for accounts receivable Use the direct write-off and allowance methods to account for uncollectible accounts Report accounts receivable on the balance sheet Granting credit to customers can generate more sales, but it comes at a cost if customers don’t pay: • GAAP requires the use of the allowance method to account for uncollectible accounts Aging method (p 338) Allowance for Doubtful Accounts (p 337) Allowance for Uncollectible Accounts (p 337) Allowance method (p 337) Bad debt expense (p 335) • The direct write-off method is generally not allowed by GAAP because it violates the matching principle Balance sheet approach (p 340) • On the balance sheet, the allowance for uncollectible accounts is subtracted from the accounts receivable balance to report the “net realizable value” of Accounts Receivable Direct write-off method (p 335) Control account (p 337) Income statement approach (p 338) Net credit sales (p 337) Net realizable value (p 337) Percent of sales method (p 337) Uncollectible Accounts Expense (p 335) Write off (p 335) Account for notes receivable Notes receivable are generally longer in term than accounts receivable and are supported by a promissory note • Notes are recorded in the accounting records at face value, which is the principal amount of the note • The maturity value of a note equals the principal amount of the note plus the interest due on the note Creditor (p 343) Debtor (p 343) Due date (p 343) Interest (p 343) Interest rate (p 343) Maker of a note (p 343) Maturity date (p 343) Maturity value (p 343) Note term (p 343) Payee of a note (p 343) Principal (p 343) Promissory note (p 343) M07_KEMP9543_03_GE_C07.indd 350 03/04/14 5:22 PM www.downloadslide.net Cash and Receivables Calculate the current ratio, quick ratio, accounts receivable turnover, and receivable collection period Key Points Key Accounting Terms Ratios frequently used to help make decisions: Accounts receivable turnover (p 347) • The current ratio and quick ratio help a company determine its ability to pay ­current liabilities • The accounts receivable turnover and ­receivable collection period measure how quickly a business collects its ­accounts receivable 351 Acid-test ratio (p 347) Current assets (p 346) Current ratio (p 346) Liquidity management (p 346) Quick assets (p 347) Quick ratio (p 347) Receivable collection period (p 348) M07_KEMP9543_03_GE_C07.indd 351 03/04/14 5:22 PM www.downloadslide.net 352 Chapter Accounting Practice Discussion Questions Which duties should be segregated in the purchasing process? Why? That is, what could go wrong if two or more of those duties are not segregated? After preparing a bank reconciliation, which reconciling items will require journal entries? Why? What would be the surest way to eliminate the possibility of having any bad debts? Why don’t companies operate this way if it could help them eliminate this costly expense? Why does the allowance method of accounting for bad debts conform to GAAP while the direct write-off method does not? How is Allowance for Doubtful Accounts reported on the financial statements? Why is it important for companies to report net realizable value of Accounts Receivable on the balance sheet? Why is the percent of sales method called the “income statement approach” while the aging method is called the “balance sheet approach”? Under which method, percent of sales or aging, would the balance in Allowance for Doubtful Accounts, just before the adjusting entry, affect the amount of the adjusting entry? Why? How would the net realizable value of Accounts Receivable change when an account is written off under the allowance method? If a company with a 12/31 year-end lends money in the form of a six-month note on 11/1, which accounts will be credited when the note is paid off on 4/30? 10 Recently the United States was in a recession What would be the expected effect of a recession on accounts receivable turnover ratios? Self Check The document that identifies and explains all differences between the company’s record of cash and the bank’s record of that cash is the a bank reconciliation b electronic fund transfer c bank collection d bank statement Which item(s) appears as a reconciling item(s) to the book balance in a bank reconciliation? a Outstanding checks b Deposits in transit c Both a and b d None of the above Which item(s) appears as a reconciling item(s) to the bank balance in a bank reconciliation? a Outstanding checks b Deposits in transit c Both a and b d None of the above On its books, Nile Valley Company’s Cash account shows an ending balance of $950 The bank statement for the current period shows a $22 service charge and an NSF check for $140 A $220 deposit is in transit, and outstanding checks total $380 What is Nile Valley’s adjusted book balance for Cash? a $626 b $788 c $818 d $1,168 M07_KEMP9543_03_GE_C07.indd 352 03/04/14 5:22 PM www.downloadslide.net Cash and Receivables 353 After performing a bank reconciliation, journal entries are required for a all items on the book side of the reconciliation b all items on the bank side of the reconciliation c all items on the reconciliation d no items from the reconciliation because the Cash account needs no adjustment Uncollectible accounts are the same as a notes receivable b bad debts c both a and b d none of the above Which method of estimating uncollectible receivables focuses on net credit sales? a Aging approach b Net realizable value approach c Percent-of-sales approach d All of the above Your business uses the allowance method to account for uncollectible receivables At the beginning of the year, Allowance for Uncollectible Accounts had a credit balance of $1,800 During the year you wrote off bad receivables of $2,000 and recorded Bad Debt Expense of $2,900 What is your year-end balance in Allowance for Uncollectible Accounts? a $2,700 b $3,800 c $4,700 d $3,300 Which of the following is true regarding the direct write-off method of accounting for uncollectibles? a The direct write-off method does not adhere to GAAP b The direct write-off method does not use an allowance for uncollectible accounts and, thus, overstates assets on the balance sheet c The direct write-off method does not match expenses against revenues very well d All of the above are true 10 On December 31, you have a $15,000 note receivable from a customer Interest of 5% has also accrued for eight months on the note What will your financial statements report for this situation? a The balance sheet will report the note receivable of $15,000 and interest receivable of $500 b The balance sheet will report the note receivable of $15,000 c Nothing will be reported because you haven’t received the cash yet d The income statement will report a note receivable of $15,000 11 In the Real World Accounting Video, Zachery Mack talks about the challenges of cash management He was able to survive a catastrophe due to Hurricane Sandy He was able to pay his bills and keep his business operating He attributed his survival to which trait: a being organized b being optimistic c being patient d being positive 12 According to the Real World Accounting Video, cash sales account for approximately _ of all sales at Alphabet City Beer a half, or 50% b a quarter, or 25% c none, or 0% d all, or 100% Answers are given after Written Communication M07_KEMP9543_03_GE_C07.indd 353 03/04/14 5:22 PM www.downloadslide.net 354 Chapter MyAccountingLab Short Exercises S7-1 Bank reconciliation adjustments (Learning Objective 1) 5–10 For each of the following, indicate whether the item is an adjustment to the bank balance or the book balance: _ Bank service charge _ Deposit in transit _ Bank collection of amount due from customer _ Interest revenue on bank balance _ Outstanding check S7-2 Bank reconciliation adjustments (Learning Objective 1) 10–15 Classify each of the following items as one of the following: Addition to the book balance (+ Book) Subtraction from the book balance (− Book) Addition to the bank balance (+ Bank) Subtraction from the bank balance (– Bank) _ Outstanding checks _ Deposits in transit _ NSF check _ Bank collection of our note receivable _ Interest earned on bank balance _ Bank service charge _ Book error: We credited Cash for $200 The correct amount of the check was $2,000 _ Bank error: The bank decreased our account for a check written by another customer S7-3 Prepare a bank reconciliation (Learning Objective 1) 5–10 The T-account for cash and the bank statement of Sinclair Food Services for the month of October 2014 follows: Cash M07_KEMP9543_03_GE_C07.indd 354 Oct Oct 10 deposit Oct 31 deposit 3,310 Check #704 925 Check #705 240 Check #706 Pre-adjusted Bal @ Oct 31 2,605 640 300 930 03/04/14 5:22 PM www.downloadslide.net Cash and Receivables Bank Statement: Bal, Oct Deposits: Deposits Bank collection Interest Checks: 355 $3,310 $925 630 No 704 705 Amount 640 300 Other Charges: Service charge Bal, Oct 31 1,560 (940) $ 40 (40) $3,890 Prepare Sinclair Food Services’ bank reconciliation at October 31 S7-4 Prepare bank reconciliation journal entries (Learning Objective 1) 5–10 Make the necessary journal entries arising from Greenacres Auto Center’s bank reconciliation presented next Date each entry May 31 and include an explanation with each entry Greenacres Auto Center Bank Reconciliation May 31 BOOKS BANK Bal, May 31 Add: Deposit in transit Less: Outstanding checks Adjusted bank balance $ 678 300 978 (345) $ 633 Bal, May 31 Add: Interest revenue Less: Service charge NSF Checks Adjusted book balance $ 785 790 (25) (132) $ 633 S7-5 Balance sheet presentation of cash (Learning Objective 2) 5–10 Prepare the current assets section of the balance sheet as of May 31, 2014, for Spices and More, Inc., using the following information: Accounts Receivable Petty Cash Cash in Bank Accounts Inventory M07_KEMP9543_03_GE_C07.indd 355 $54,200 300 21,400 85,800 03/04/14 5:22 PM www.downloadslide.net 356 Chapter S7-6 Receivable terms (Learning Objectives & 4) 5–10 Match the term with its definition by placing the corresponding letter in the space provided: a Creditor  c   E xample: Amounts owed to a business b Debtor by another business or individual c Receivables _ A  contra-account, related to accounts d Bad Debt Expense receivable, that holds the estimated e Allowance method amount of uncollectible receivables f.   Allowance for Uncollectible _ A  method of accounting for uncollectAccounts ible receivables in which the company g Percent of sales method waits until a specific customer’s ach Aging method count receivable is uncollectible before i    Direct write-off method recording bad debt expense _ A  method of recording receivable losses on the basis of estimates instead of waiting to see which customers the company will not collect from _ T he party to a credit transaction who sells goods or a service and obtains a receivable _ A  way to estimate uncollectible accounts by analyzing individual accounts receivable according to the length of time they have been receivable _ T he party to a credit transaction who makes a purchase and has a payable _ C  ost to the seller of credit sales; arises from the failure to collect from credit customers _ A  method of estimating uncollectible receivables that calculates bad debt ­expense based on net credit sales S7-7 Direct write-off method (Learning Objective 4) 5–10 Amy Macintosh, an attorney, uses the direct write-off method to account for uncollectible receivables On September 30, Macintosh’s accounts receivable were $16,500 During October, she earned service revenue of $21,000 on account and collected $19,000 from clients on account She also wrote off uncollectible receivables of $1,600 What is Macintosh’s balance of Accounts Receivable on October 31? Does she expect to collect this entire amount? Why or why not? S7-8 Percent of sales allowance method (Learning Objectives & 5) 5–10 During its first year of operations, World Wide Travel earned revenue of $620,000 on account Industry experience suggests that World Wide Travel’s uncollectible accounts will amount to 3% of revenues On December 31, 2014, accounts receivable totaled $177,400 The company uses the allowance method to account for uncollectibles Journalize World Wide Travel’s Bad Debt Expense using the percent-of-sales method Show how World Wide should report Accounts Receivable on its balance sheet on December 31, 2014 M07_KEMP9543_03_GE_C07.indd 356 03/04/14 5:22 PM www.downloadslide.net Cash and Receivables 357 S7-9 Percent of sales allowance method (Learning Objective 4) 5–10 Wilson’s Auto Repair ended 2013 with Accounts Receivable of $85,000 and a credit balance in Allowance for Uncollectible Accounts balance of $11,000 During 2014, Wilson’s Auto Repair had the following activity: a Service revenue earned on account, $545,000 b Collections on account, $575,000 c Write-offs of uncollectibles, $19,000 d Bad debt expense, estimated as 3% of service revenue Journalize Wilson’s Auto Repair’s activity for 2014 S7-10 Aging of accounts receivable allowance method (Learning Objective 4) 5–10 The following information relates to Hani Company’s 2014 operations Hani Company uses the allowance method for estimating uncollectible accounts Prepare journal ­entries to record Hani Company’s 2014 transactions a Sold merchandise to Nadim for $2,000, terms n/30 b Received $500 from Nadim on account c Wrote off as uncollectible the balance of the Nadim account when he declared bankruptcy d Unexpectedly received a check for $600 from Nadim S7-11 Aging of accounts receivable allowance method (Learning Objective 4) 5–10 Umbrella.com had the following balances on December 31, 2014, before the year-end adjustments: Accounts Receivable Bal Allowance for Uncollectible Accounts 105,600 Bal 2,000 The aging of receivables yields these data: Age of Accounts 1–30 Days 31–60 Days 61–90 Over 90 Total Days Days Receivables Accounts Receivable $66,000 $24,000 $12,000 $3,600 Estimate Percentage Uncollectible × 1% × 6% × 53% × 2% $105,600 Journalize Umbrella’s entry to adjust the allowance account to its correct balance on December 31, 2014 M07_KEMP9543_03_GE_C07.indd 357 03/04/14 5:22 PM www.downloadslide.net 358 Chapter S7-12 Internal controls—credit sales (Learning Objective 3) 10–15 Claire Billiot, the office manager of a local office supply company, is designing its internal control system Billiot proposes the following procedures for credit checks on new customers, sales on account, cash collections, and write-offs of uncollectible receivables: a The Credit Department runs a credit check on all customers who apply for credit When an account proves uncollectible, the Credit Department authorizes the writeoff of the account receivable b Cash receipts come into the Credit Department, which separates the cash received from the customer remittance slips The Credit Department lists all cash receipts by customer name and the amount of cash received c The cash goes to the treasurer for deposit in the bank The remittance slips go to the Accounting Department for recording of the collections d The controller compares the daily deposit slip to the total amount of the collections recorded Both amounts must agree For each of the four procedures, indicate whether the procedure includes an internal control weakness Explain how employee fraud could occur because of the weakness What can Claire to strengthen the internal control system? S7-13 Notes receivable terms (Learning Objective 6) 10–15 Match the term with its definition by placing the corresponding letter in the space provided: a Interest _1 A  written promise to pay a specified b Note term amount of money at a particular future c Interest rate date d Maker of the note _2 The date when final payment of the note is e Maturity date due; also called the due date f.   Maturity value _3 T he percentage rate of interest specified g Payee of the note by the note for one year h Principal _4 T he entity to whom the maker promises i    Promissory note future payment _5 T he period of time during which interest is earned _6 T he amount loaned out by the payee and borrowed by the maker of the note _7 T he sum of the principal plus interest due at maturity _8 T he entity that signs the note and promises to pay the required amount _9 T he revenue to the payee for loaning money; the expense to the debtor S7-14 Accounting for notes receivable (Learning Objective 6) 10–15 Compute the maturity value as indicated for each of the following notes receivable A $7,000, 5%, 6-month note dated June 22 Maturity value $ A $23,000, 6%, 60-day note dated February 15 Maturity value $ A $15,000, 4%, 30-day note dated October 17 Maturity value $ A $9,000, 7%, 6-month note dated December 15 Maturity value $ M07_KEMP9543_03_GE_C07.indd 358 03/04/14 5:22 PM www.downloadslide.net Cash and Receivables 359 S7-15 Accounting for notes receivable (Learning Objective 6) 10–15 Nisrine, Inc has the following transactions related to notes receivable during the last month of the year Journalize the transactions for Nisrine, Inc Dec Loaned $20,000 cash to Wael on a 1-year, 6% note 16 Sold goods to Loubna, receiving a $4,800, 60-day, 7% note 31 Accrued interest revenue on all notes receivable S7-16 Quick ratio (Learning Objective 7) 5–10 Calculate the quick assets and the quick ratio for each of the following companies: Cash Short-term Investments Net Receivables Current Liabilities Rhodes Peters $15,000 6,000 41,000 40,000 $ 23,000 13,000 51,000 108,750 S7-17 Accounts Receivable Turnover and Receivable Collection Period (Learning Objective 7) 5–10 Company Name Marina Oceana Panacea Net Credit Sales Beginning Ending Net Receivables Net Receivables $30,000 $42,000 $ 5,800 $ 5,000 $52,000 $ 5,400 $180,000 $400,000 $ 75,000 Which company is doing the best job of managing its accounts receivable? Why? Be sure to support your answer with computations MyAccountingLab Exercises (Group A) E7-18A Bank reconciliation adjustments (Learning Objective 1) 10–15 Calculate the answers for the missing data: BOOKS BANK Bal, Jan 31 Add: Deposit in transit Less: Outstanding checks Adjusted bank balance M07_KEMP9543_03_GE_C07.indd 359 $1,045 620 (a) (b) $1,310 Bal, Jan 31 Add: Bank collection Interest revenue Less: Service charge Adjusted book balance (c) 635 15 (d) (45) $1,310 03/04/14 5:22 PM www.downloadslide.net 754 Glindex Sales revenue The amount that a business earns from selling its inventory, 199 Sales tax payable, 442 Salvage value (1) The estimated value of a long-term asset at the end of its useful life (2) Expected cash value of an asset at the end of its useful life, 145, 394 Sarbanes-Oxley Act (SOX) A law passed in 2002 by the US Congress requiring a business’s management to accept responsibility for providing the information needed by stakeholders outside the business, 305 S-corporation A small corporation that has met the legal requirements to act as a corporation but elected to be taxed at individual rates, 42 Secured bonds Bonds that give bondholders the right to take specified assets of the issuer if the issuer fails to pay principal or interest, 447 Securities and Exchange Commission (SEC) The government agency in the United States that is responsible for regulating U.S financial markets that sell stocks, 292 Selling costs, 207 Selling expenses Expenses related to advertising and selling products including sales salaries, sales commissions, advertising, depreciation on items used in sales, and delivery expense, 207 Serial bonds Bonds from the same bond issuance that mature at different times, 447 Service business A business that sells a service to its customers, 41 Stated value An arbitrary amount that is similar to par value but is assigned after a corporation is organized, 490 Statement of cash flows (1) A financial statement that reports the sources and uses of cash for a given period of time (2) A financial statement that shows all of the sources and all of the uses of cash for an accounting period, 56, 540–541 business, creation of, 542–545 for business transactions, reporting of, 56 defined, 541 direct method for preparing, 557–561 indirect method for preparing, 546–556 logic of preparing, 543 Statement of financial position A financial statement that reports the assets, liabilities, and stockholders’ equity of a business at a specific point in time, 56 Statement of retained earnings A financial statement that reports the amount of accumulated net profits that a business has retained and not paid in dividends since inception The statement reports the beginning balance of retained earnings, plus net income or minus net loss in the given period, less the dividends during the given period, equaling ending retained earnings, 56, 211 Stock authorized, 487 capital, 487 Services A service is an activity that exists but cannot be touched and felt Services are intangible, 37 classes of, 489 Share The basic unit of stock, 487 cumulative preferred, 495 Shareholders, 494 issuance of, 490–492, 553 Shipping company, payment directly to, 204 outstanding, 488 Single-step income statement Income statement format that groups all revenues together and lists all expenses together, subtracting total expenses from total revenues and calculating net income or net loss without computing any subtotals, 208 preferred, 489, 492 Sole proprietorship A business entity that has one owner, where, for legal and tax purposes, the business and the owner are considered the same, 41 Specific-identification Inventory costing method in which a business uses the specific cost of each unit of inventory, 243–244, 247 Specific-unit-cost method Inventory costing method in which a business uses the specific cost of each unit of inventory, 243–244, 247 Stakeholder A stakeholder is a person or organization that is affected by a business, 38 Stated interest rate Interest rate that determines the amount of cash interest the borrower pays and the investor receives each year, 448 Z04_KEMP9543_03_GE_GIDX.indd 754 common, 48, 489, 491–492 treasury, 501–504 Stock certificates Certificates that provide evidence of stock ownership, 487 Stock dividend A distribution by a corporation of its own stock to stockholders, 496–497 recording, 497–499 stock splits vs., 501 Stockholder An owner of part of a corporation, 41 business, investment in, 505–506 rights of, 489 Stockholders’ equity Money provided to the business by owners either through an initial investment or the retention of profits, 39, 48–53, 489–490 accounts for, 89–90 balance sheet, reporting of, 505 book value of, 306 03/04/14 2:53 PM www.downloadslide.net Glindex fundamental accounting equation for recording, 48–53 market value of, 306 Transaction An event that has a financial impact on a business entity, 92 See also Business transactions no-par stock and, 490 fundamental accounting equation for, 48 par value of, 490 general journal/ledger for keeping track of, 94–101 stated value of, 490 stock for, 489 stockholder’s rights and, 489 Stock split An increase in the number of authorized, issued, and outstanding shares of stock coupled with a proportionate reduction in the par value per share of the stock, 499–501 Straight-line (SL) depreciation method (1) A method of estimating depreciation (Cost of the Asset - Salvage Value)/ Useful Life of the Asset (2) Depreciation method in which an equal amount of depreciation expense is assigned to each year of asset use, 145, 394–395 Streamlined payment procedures, 327–328 Subsidiary ledger An accounting record that contains details, such as a list of customers and the accounts receivable due from each or a list of suppliers and the accounts payable due to each, 196 755 Treasurer The individual in an organization responsible for the custody of assets, such as cash, 327 Treasury stock A corporation’s own stock that it has issued and later reacquired, 501–504 basics of, 501 purchase of, 502, 554 sale of, 502–504, 554 Trend percentages A form of horizontal analysis in which percentages are computed by selecting a base year and then expressing amounts for following years as a percentage of the base year amount, 609 Trial balance A list of all the accounts of a business and their balances; its purpose is to verify that total debits equal total credits, 103–106 adjusted, 147–151 correcting errors in, 104 financial statements and, 105–106 Suppliers, payments to, 559–560 post-closing, 154 Supplies, 144–145 unadjusted, 140 T U T-account An informal account form used to summarize transactions, where the top of the T holds the account title and the base divides the debit and credit sides of the account, 90, 101–103 Unadjusted trial balance A trial balance that is prepared at the end of the accounting period prior to the adjusting entries being made, 140 Tangible assets Assets that are physical in form They can be seen, touched, or held, 388 Temporary accounts The revenue, expense, and dividend accounts; these accounts are closed at the end of the accounting period, 151–152 Term bonds Bonds that all mature at the same time, 447 Times interest earned ratio See Interest coverage ratio Time value of money The concept that states that a dollar today is worth more than a dollar received in the future, 723 Title Legally recognized rights to the possession and ownership of property, 203 Total asset turnover A measure of how a business utilizes its total assets to generate sales Total asset turnover is computed as sales divided by average total assets, 616 Trademarks Rights to use distinctive identifications of a product or service, 406 Uncollectible account An account receivable that is unable to be collected., 325, 335–342 allowance method for, 337 direct write-off method for, 335–336 estimating amount of, 337–340 Uncollectible accounts expense Selling expense caused by uncollectible accounts, 335 Underwriter A firm, such as Morgan Stanley Smith Barney, that usually agrees to buy all the stock a company wants to issue if the firm cannot sell the stock to its clients, 490 Unearned revenue A liability created when a business collects cash from customers in advance of providing goods or services, 139, 141–142, 442 United States, Generally Accepted Accounting Principles in, 292–293 Trade names Rights to use distinctive identifications of a product or service, 406 Units-of-production (UOP) depreciation method Depreciation method by which a fixed amount of depreciation is assigned to each unit of output produced by an asset, 395–396 Trading securities Equity or debt securities that are actively managed in order to maximize profit, 408 Unsecured bonds Bonds that are backed only by the general credit of the company issuing the bond, 448 Z04_KEMP9543_03_GE_GIDX.indd 755 03/04/14 2:53 PM www.downloadslide.net 756 Glindex Useful life The expected life of an asset during which it is anticipated to generate revenues May be expressed in years or units of output, 393–394, 399–400 V salvage, 145, 394 stated, 490 Vertical analysis Analysis of a financial statement that reveals the relationship of each statement item to a specified base amount, which is the 100% figure, 606 Value The price someone is willing to pay for an item, 37 book, 146, 306 W of business, 37–38, 306, 623 Warranty A guarantee that a product or service is free from defect, 443–444 carrying, 146 future, 723–725 of inventory, 254–256, 258–260 market, 306 maturity, 343, 448 net, 146 net realizable, 337 no-par stock with stated, 492 par, 448, 490 present, 726–728 residual, 394 Z04_KEMP9543_03_GE_GIDX.indd 756 Whistleblower A person who reports illegal or unethical behavior, 304 Wholesale business A business that sells products to other businesses for resale, 41 Wholesalers Businesses that buy goods from manufacturers and resell them to retailers, 194–195 Work in process Inventory of partially completed goods, 243 Write off Removing a customer’s receivable from the accounting records because it is considered ­uncollectible, 335 03/04/14 2:53 PM www.downloadslide.net Photo Credits Frontmatter: Page 7, top: Courtesy of Robert Kemp; ­bottom: Courtesy of Jeffrey Waybright Chapter 7: Page 322: © Andrew Clark/Alamy; Page 330: © FreezeFrameStudio/iStockphoto Chapter 1: Page 35: © Rick Wilking/Reuters/Corbis; Page 45: © Sergey Turanov/iStockphoto Chapter 8: Page 387: © World Photo Collection/Alamy; Page 388 left: © Comstock/JupiterImages; center: © DPA Picture Alliance/Alamy; right: © ImagineGolf/­ iStockphoto; Page 391: left: © Haoliang/Shutterstock; center: © Photos.com/Jupiter Images; right: © Lcholakov/ Dreamstime; Page 393: Thinkstock/Jupiter Unlimited Chapter 2: Page 87: © Philip Scalia/Alamy; Page 91 top: © Diego_cervo/iStockphoto; bottom left: © BananaStock/ JupiterImages; bottom center: © Steve Collender/­ Shutterstock; bottom right: © Comstock/JupiterImages Chapter 3: Page 136: © Katja Kreder/Imagebroker/Alamy; Page 143: © Godfried Edelman/iStockphoto Chapter 4: Page 193: © Patti McConville/Alamy; Page 204: © Photos.com/Jupiter Images Chapter 5: Page 242: © Jeff Greenberg/Alamy; Page 244: © Photos.com/Jupiter Images Chapter 6: Page 290: © Bikeriderlondon/Shutterstock; Page 297: © Photos.com/Jupiter Images Chapter 9: Page 438: © B Christopher/Alamy; Page 446: © Scott Rothstein/Shutterstock Chapter 10: Page 486: © Sergey Nivens/Fotolia; Page 500: © ITStock Free/JupiterImages Chapter 11: Page 539: © Gunnar Kullenberg/Purestock/ Alamy; Page 541: © Razvan/iStockphoto Chapter 12: Page 599: Newphotoservice/Shutterstock; Page 602: Maxkateusa/Dreamstime 757 Z05_KEMP9543_03_GE_CRED.indd 757 03/04/14 2:54 PM www.downloadslide.net MyAccountingLab ® For Instructors EASE OF USE AND FLEXIBLE CONTENT DELIVERY Homework assignments, quizzes, and tests directly correlate to the textbook ■ Learning aids are available on demand to help students ­understand key concepts ■ Assess your students your way with multiple assignment options and maximum flexibility with a wide range of questions tied to end-of-chapter content including: ■ Choose between book/static and algorithmic versions ● Open response questions are available for journal entry and financial statement problems to better prepare students for the paper exam by requiring that students type account names rather than select from a drop-down menu or use type ahead ● NEW! Excel—Select end-of-chapter automatically graded ­algorithmic questions in a simulated Excel environment provide students with practice opportunities on a tool they’ll use in the real world Remediation and learning aids will be available within each question to help guide students through both Accounting and Excel concepts ● NEW! General Ledger—Students can launch General Ledger software in MyAccountingLab, where they will be able to record transactions and adjust entries, post to the ledger, close periods, and see the effects in the ledger ­accounts Their work will be auto-graded, and grades will then ­automatically flow to the MyAccountingLab Gradebook NEW! Real World Accounting Video Series—features real, emerging companies that demonstrate financial and managerial accounting concepts Students can see how the course topics are applied in recent start-ups or companies that started small and are now a success These engaging videos, tied to in-text examples presented at the start of each chapter, help students further understand the course material and also demonstrate how Accounting will apply to their future careers regardless of their major ■ ● NEW! Worked Out Solutions—provide step-by-step explanations on how to solve select problems using the exact numbers and data that were presented in the problem Instructors will have access to the Worked Out Solutions in preview and review mode when calculating scores, and the ability to omit results of individual assignments AACSB and Student Learning Outcomes mapping allow instructors to track accreditation information and print reports on assessment in a few clicks ■ ● NEW! Algorithmic Test Bank—New to this edition, ­instructors have the ability to create multiple versions of a test for extra practice for students DEPARTMENT-WIDE SOLUTIONS Coordinator Courses allow one point of control for multiple sections, simplifying departmental implementation ■ ● Instructor and student single sign on are available through NEW Blackboard integration ■ COURSE MANAGEMENT TOOLS AND GRADEBOOK Automatic grading tracks students’ results on tests, homework, and tutorials ■ Flexible Gradebook features numerous student data views, weighted assignments, choice on which attempts to include ■ Z06_KEMP9543_03_GE_END.indd 758 03/04/14 6:54 PM www.downloadslide.net For Students MEANINGFUL HELP and FEEDBACK Personalized interactive learning aids are available for point-of-use help and immediate feedback These learning aids include: ■ Help Me Solve This walks students through solving an algorithmic version of the questions they are working, with additional detailed tutorial reminders These informational cues assist the students and help them understand concepts and mechanics ● Demo Docs are entire problems worked through step by step from start to finish, replicating the in-class experience for students anytime, anywhere ● Accounting Simplified videos give students a 3- to 5-minute lesson on concepts Our new videos are engaging whiteboard animations that help illustrate concepts for students ● NEW! Accounting Cycle Tutorial provides students with an interactive and simulated exercise to reinforce the concepts critical to success in Accounting ● eText links students directly to the concept covered in the problem they are completing ● Homework and practice exercises with additional algorithmically generated problems are available for further practice and mastery ● NEW! Worked Out Solutions—now available to students when they are reviewing their submitted and graded homework The Worked Out Solutions provide step-by-step explanations on how to solve select problems using the exact numbers and data that were presented to the student in the problem ● NEW! Dynamic Study Modules—Using a highly personalized, algorithmically driven process, Dynamic Study Modules continuously assess students’ performance and provide additional practice in the areas where they struggle the most ■ PERSONALIZED AND ADAPTIVE STUDY PATH Assist students in monitoring their own progress by offering them a customized study plan powered by Knewton, based on Homework, Quiz, and Test results ■ Regenerated exercises offer unlimited practice and the opportunity to prove mastery through Quizzes on recommended learning objectives ■ Z06_KEMP9543_03_GE_END.indd 759 03/04/14 6:54 PM www.downloadslide.net Z06_KEMP9543_03_GE_END.indd 760 03/04/14 6:54 PM www.downloadslide.net Z06_KEMP9543_03_GE_END.indd 761 03/04/14 6:54 PM www.downloadslide.net Z06_KEMP9543_03_GE_END.indd 762 03/04/14 6:54 PM www.downloadslide.net Z06_KEMP9543_03_GE_END.indd 763 03/04/14 6:54 PM www.downloadslide.net Z06_KEMP9543_03_GE_END.indd 764 03/04/14 6:54 PM www.downloadslide.net Z06_KEMP9543_03_GE_END.indd 765 03/04/14 6:54 PM www.downloadslide.net Z06_KEMP9543_03_GE_END.indd 766 03/04/14 6:54 PM www.downloadslide.net Z06_KEMP9543_03_GE_END.indd 767 03/04/14 6:54 PM www.downloadslide.net Z06_KEMP9543_03_GE_END.indd 768 03/04/14 6:54 PM ... Thousands) 20 13 $ 67 23 2 20 12 $ 41 21 8 25 9 422 22 865 24 1 397 29 966 21 9 313 44 835 $ 598 $ 626 $ 608 $5,141 2, 728 $5 ,21 1 2, 6 12 $4 ,25 3 2, 476 Requirements Compute these ratios for 20 14 and 20 13: a. ... M07 _KEMP9 543_03_GE_C07.indd 376 (In Thousands) 20 13 20 12 $ 55 21 0 $ 190 118 $ 106 120 25 0 440 25 1, 023 29 0 450 40 1,006 310 300 35 910 $ 650 $ 675 $ 620 $5,184 2, 760 $5,050 2, 590 $4,860 2, 480... Pre-adjusted Bal @ Jul 31 M07 _KEMP9 543_03_GE_C07.indd 360 2, 106 Check #21 0 1,430 Check #21 1 Check #21 2 Check #21 3 Check #21 4 28 500 63 27 0 145 2, 530 03/04/14 5 :22 PM www.downloadslide.net Cash