chapter4 môn Tài chính kế toán học bằng tiếng Anh (đặc biệt phù hợp với chương trình tiên tiến khoa quản trị kinh doanh FTU). Tất cả các chapter và tài liệu liên quan đều có ở trang cá nhân, các bạn cần thêm tài liệu tham khảo vào trang cá nhân của mình để đọc thêm và tìm thêm một số tài liệu có thể các bạn sẽ cần nhé
CHAPTER Completing the Accounting Cycle ASSIGNMENT CLASSIFICATION TABLE Brief Exercises Do It! Exercises A Problems B Problems 1, 2, 3, 4, 1, 2, 1, 2, 3, 5, 6, 17 1A, 2A, 3A, 4A, 5A 1B, 2B, 3B, 4B, 5B Explain the process of closing the books 6, 4, 5, 4, 7, 8, 11, 19 1A, 2A, 3A, 4A, 5A 1B, 2B, 3B, 4B, 5B *3 Describe the content and purpose of a post-closing trial balance 8, 4, 7, 2A, 3A, 4A, 5A 2B, 3B, 4B, 5B *4 State the required steps in the accounting cycle 10, 11, 12 10, 19 5A 5B *5 Explain the approaches to preparing correcting entries 13 12, 13 6A *6 Identify the sections of a classified statement of financial position 14, 15, 16, 17, 18, 19 10, 11 3, 9, 14, 15, 16, 17 1A, 2A, 3A, 4A, 5A *7 Prepare reversing entries 10, 20, 21 12 Learning Objectives Questions *1 Prepare a worksheet *2 1B, 2B, 3B, 4B, 5B 18, 19 *Note: All asterisked Questions, Exercises, and Problems relate to material contained in the appendix *to the chapter Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-1 ASSIGNMENT CHARACTERISTICS TABLE Problem Number Description Difficulty Level Time Allotted (min.) Simple 40–50 1A Prepare worksheet, financial statements, and adjusting and closing entries 2A Complete worksheet; prepare financial statements, closing entries, and post-closing trial balance Moderate 50–60 3A Prepare financial statements, closing entries, and postclosing trial balance Moderate 40–50 4A Complete worksheet; prepare classified statement of financial position, adjusting and closing entries, and post-closing trial balance Moderate 50–60 5A Complete all steps in accounting cycle Complex 70–90 6A Analyze errors and prepare correcting entries and trial balance Moderate 40–50 1B Prepare worksheet, financial statements, and adjusting and closing entries Simple 40–50 2B Complete worksheet; prepare financial statements, closing entries, and post-closing trial balance Moderate 50–60 3B Prepare financial statements, closing entries, and postclosing trial balance Moderate 40–50 4B Complete worksheet; prepare classified statement of financial position, adjusting and closing entries, and post-closing trial balance Moderate 50–60 5B Complete all steps in accounting cycle Complex 70–90 Comprehensive Problem: Chapters to Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-2 WEYGANDT FINANCIAL ACCOUNTING, IFRS Version, 3e CHAPTER COMPLETING THE ACCOUNTING CYCLE Number LO BT Difficulty Time (min.) BE1 K Simple 2–4 BE2 AN Moderate 6–8 BE3 C Simple 3–5 BE4 AP Simple 3–5 BE5 AP Simple 4–6 BE6 AP Simple 6–8 BE7 C Simple 2–4 BE8 K Simple 3–5 BE9 AN Moderate 4–6 BE10 AP Simple 4–6 BE11 C Simple 3–5 BE12 AN Moderate 4–6 DI1 C Simple 4–6 DI2 AP Simple 2–4 DI3 AP Simple 6–8 DI4 C Simple 4–6 EX1 AP Simple 12–15 EX2 AP Simple 10–12 EX3 1, AP Simple 12–15 EX4 2, AP Simple 12–15 EX5 AN Simple 10–12 EX6 AN Moderate 12–15 EX7 2, AP Simple 8–10 EX8 2, AP Simple 10–12 EX9 AP Simple 12–15 EX10 C Simple 3–5 EX11 AP Simple 6–8 EX12 AN Moderate 8–10 EX13 AN Moderate 4–6 EX14 AP Moderate 10–12 EX15 C Simple 5–8 EX16 AP Simple 8–10 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-3 COMPLETING THE ACCOUNTING CYCLE (Continued) Number LO BT Difficulty Time (min.) EX17 1, AP Simple 12–15 EX18 AN Moderate 5–7 EX19 2, 4, AN Moderate 10–12 P1A 1, 2, AN Simple 40–50 P2A 1-3, AP Moderate 50–60 P3A 1-3, AP Moderate 40–50 P4A 1-3, AN Moderate 50–60 P5A 1-4, AN Complex 70–90 P6A AN Moderate 40–50 P1B 1, 2, AN Simple 40–50 P2B 1-3, AP Moderate 50–60 P3B 1-3, AP Moderate 40–50 P4B 1-3, AN Moderate 50–60 P5B 1-4, AN Complex 70–90 BYP1 AN Simple 10–12 BYP2 AN Simple 8–10 BYP3 — E Simple 10–12 BYP4 AN Moderate 15–20 BYP5 C Simple 15–20 BYP6 — E Moderate 10–15 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-4 Learning Objective Knowledge Comprehension *1 Prepare a worksheet BE4-1 Q4-1 Q4-2 Q4-3 Q4-4 Q4-5 *2 Explain the process of closing the books Q4-6 *3 Describe the content and purpose of a post-closing trial balance *4 State the required steps in the accounting cycle *5 Explain the approaches to preparing correcting entries *6 Identify the sections of a classified statement of financial position *7 Prepare reversing entries Broadening Your Perspective Q4-11 Q4-12 BE4-8 Q4-14 Q4-15 Q4-16 BE4-3 DI4-1 Application Analysis E4-1 E4-2 E4-3 E4-17 P4-2A P4-3A P4-2B P4-3B BE4-2 E4-5 E4-6 P4-1A P4-4A P4-5A P4-1B P4-4B P4-5B Q4-7 BE4-4 BE4-5 BE4-6 DI4-2 E4-4 E4-7 E4-8 E4-11 P4-2A P4-3A P4-2B P4-3B E4-19 P4-1A P4-4A P4-5A P4-1B P4-4B P4-5B Q4-8 Q4-9 BE4-7 E4-4 E4-7 E4-8 P4-2A P4-3A P4-2B P4-3B P4-4A P4-5A P4-4B P4-5B Q4-10 E4-10 Synthesis Evaluation E4-19 P4-5A P4-5B Q4-13 DI4-3 Q4-17 Q4-18 BE4-11 DI4-4 E4-15 Q4-19 BE4-10 E4-3 E4-9 E4-14 E4-16 BE4-9 E4-12 E4-13 P4-6A E4-17 P4-2A P4-3A P4-2B P4-3B P4-1A P4-4A P4-5A P4-1B P4-4B P4-5B Q4-10 Q4-20 Q4-21 BE4-12 E4-18 E4-19 Communication Financial Reporting Comparative Analysis Decision Making Across the Organization Real–World Focus Ethics Case BLOOM’S TAXONOMY TABLE Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End-of-Chapter Exercises and Problems ANSWERS TO QUESTIONS 1 No A worksheet is not a permanent accounting record The use of a worksheet is an optional step in the accounting cycle 2 The worksheet is merely a device used to make it easier to prepare adjusting entries and the financial statements 3 The amount shown in the adjusted trial balance column for an account equals the account balance in the ledger after adjusting entries have been journalized and posted 4 The net income of €12,000 will appear in the income statement debit column and the statement of financial position credit column A net loss will appear in the income statement credit column and the statement of financial position debit column 5 Formal financial statements are needed because the columnar data are not properly arranged and classified for statement purposes For example, the Dividends account is listed with assets 6 (1) (2) (3) (4) 7 Income Summary is a temporary account that is used in the closing process The account is debited for expenses and credited for revenues The difference, either net income or net loss, is then closed to the Retained Earnings account 8 The post-closing trial balance contains only statement of financial position accounts Its purpose is to prove the equality of the permanent account balances that are carried forward into the next accounting period 9 The accounts that will not appear in the post-closing trial balance are: Depreciation Expense; Dividends; and Service Revenue 10 A reversing entry is the exact opposite, both in amount and in account titles, of an adjusting entry and is made at the beginning of the new accounting period Reversing entries are an optional step in the accounting cycle 11 The steps that involve journalizing are: (1) journalize the transactions, (2) journalize the adjusting entries, and (3) journalize the closing entries 12 The three trial balances are the: (1) trial balance, (2) adjusted trial balance, and (3) post-closing trial balance 13 Correcting entries differ from adjusting entries because they: (1) are not a required part of the accounting cycle, (2) may be made whenever an error is discovered, and (3) may affect any combination of accounts (Dr) Individual revenue accounts and (Cr) Income Summary (Dr) Income Summary and (Cr) Individual expense accounts (Dr) Income Summary and (Cr) Retained Earnings (Dr) Retained Earnings and (Cr) Dividends Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-6 Questions Chapter (Continued) *14 The standard classifications used in a statement of financial position are: Assets Intangible Assets Property, Plant, and Equipment Long-term Investments Current Assets Equity and Liabilities Equity Non-current Liabilities Current Liabilities *15 The operating cycle of a company is the average time that it takes to purchase inventory, sell it on account, and then collect cash from customers *16 Current assets are assets that a company expects to convert to cash or use up in one year Some companies use a period longer than one year to classify assets and liabilities as current because they have an operating cycle longer than one year Companies usually list current assets in the reverse order in which they expect to convert them into cash *17 Long-term investments are generally investments in shares and bonds of other companies that are normally held for many years and non-current assets such as land or buildings that a company is not using in its operating activities Property, plant, and equipment are assets with relatively long useful lives that a company is currently using in operating the business *18 The two equity accounts and the purpose of each are: (1) Share Capital—Ordinary is used to record investments of assets in the business by the owners (shareholders) through share transactions (2) Retained Earnings is used to record net income retained in the business *19 TSMC’s current liabilities at December 31, 2013 and December 31, 2012 were NT$189,777.9 million and NT$148,473.9 million respectively TSMC’s current liabilities were lower than its current assets in both years *20 After reversing entries have been made, the balances will be Interest Payable, zero balance; Interest Expense, a credit balance *21 (a) Jan 10 Salaries and Wages Expense Cash 9,200 9,200 Because of the January reversing entry that credited Salaries and Wages Expense for £3,500, Salaries and Wages Expense will have a debit balance of £5,700 which equals the expense for the current period (b) Jan 10 Salaries and Wages Payable Salaries and Wages Expense Cash 3,500 5,700 9,200 Note that Salaries and Wages Expense will again have a debit balance of £5,700 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-7 SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 4-1 The steps in using a worksheet are performed in the following sequence: (1) prepare a trial balance on the worksheet, (2) enter adjustment data, (3) enter adjusted balances, (4) extend adjusted balances to appropriate statement columns and (5) total the statement columns, compute net income (loss), and complete the worksheet Filling in the blanks, the answers are 1, 3, 4, 5, The solution to BRIEF EXERCISE 4-2 is on page 4-9 BRIEF EXERCISE 4-3 Account Accumulated Depreciation Depreciation Expense Share Capital—Ordinary Dividends Service Revenue Supplies Accounts Payable Income Statement Dr Cr Statement of Financial Position Dr Cr X X X X X X X BRIEF EXERCISE 4-4 Dec 31 Service Revenue Income Summary 47,000 31 Income Summary Salaries and Wages Expense Supplies Expense 32,000 31 Income Summary Retained Earnings 15,000 31 Retained Earnings Dividends 2,000 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 47,000 27,000 5,000 15,000 2,000 4-8 BRIEF EXERCISE 4-2 VAN HEIDEN COMPANY, NV Worksheet Account Titles Prepaid Insurance Service Revenue Salaries and Wages Expense Accounts Receivable Salaries and Wages Payable Insurance Expense Trial Balance Dr Cr 3,000 61,000 25,000 Adjustments Dr Cr (a) 1,300 (b) 1,100 (c) 800 (b) 1,100 (a) 1,300 Adjusted Trial Balance Dr Cr 1,700 62,100 25,800 1,100 (c) 800 1,300 Income Statement Dr Cr 62,100 25,800 800 1,300 Statement of Financial Position Dr Cr 1,700 1,100 800 BRIEF EXERCISE 4-5 Salaries and Wages Expense Bal 27,000 (2) 27,000 Supplies Expense Bal 5,000 (2) 5,000 Income Summary (2) 32,000 (1) 47,000 (3) 15,000 47,000 47,000 Service Revenue (1) 47,000 Bal 47,000 Retained Earnings (4) 2,000 Bal 30,000 (3) 15,000 Bal 43,000 Dividends Bal 2,000 (4) 2,000 BRIEF EXERCISE 4-6 July 31 31 Date 7/31 7/31 Date 7/31 7/31 Service Revenue Income Summary 19,200 Income Summary Salaries and Wages Expense Maintenance and Repairs Expense 11,300 Explanation Balance Closing entry Explanation Balance Closing entry Service Revenue Ref Debit 19,200 8,800 2,500 Credit 19,200 Balance 19,200 Credit Balance 8,800 19,200 Salaries and Wages Expense Ref Debit 8,800 8,800 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-10 MC4 MATCHA CREATIONS (a) MATCHA CREATIONS Income Statement For the Two Months Ended December 31, 2017 Revenues Service revenue NT$4,515 Expenses Supplies expense NT$1,025 Salaries and wages expense 1,006 Advertising expense 165 Utilities expense 125 Insurance expense 110 Depreciation expense 40 Interest expense 15 Total expenses 2,486 Net income NT$2,029 MATCHA CREATIONS Retained Earnings Statement For the Two Months Ended December 31, 2017 Retained earnings, November Add: Net income Less: Dividends Retained earnings, December 31 NT$ 2,029 2,029 500 NT$1,529 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-97 MC4 (Continued) (a) (Continued) MATCHA CREATIONS Statement of Financial Position December 31, 2017 Assets Property, plant, and equipment Equipment NT$1,200 Less: Accumulated depreciation—equipment 40 NT$1,160 Current assets Prepaid insurance 1,210 Supplies 350 Accounts receivable 875 Cash 1,180 Total current assets 3,615 Total assets NT$4,775 Equity and Liabilities Equity Share capital—ordinary Retained earnings Non-current liabilities Interest payable Notes payable Total non-current liabilities Current liabilities Accounts payable Salaries and wages payable Unearned service revenue Total current liabilities Total liabilities Total equity and liabilities NT$ 800 1,529 NT$2,329 NT$ 15 2,000 2,015 75 56 300 431 2,446 NT$4,775 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-98 MC4 (Continued) (b) Date GENERAL JOURNAL Account Titles 2017 Dec 31 Service Revenue Income Summary Debit J4 Credit 4,515 4,515 31 Income Summary Salaries and Wages Expense Utilities Expense Advertising Expense Supplies Expense Insurance Expense Depreciation Expense Interest Expense 2,486 31 Income Summary Retained Earnings 2,029 31 Retained Earnings Dividends 500 1,006 125 165 1,025 110 40 15 2,029 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 500 4-99 MC4 (Continued) (c) MATCHA CREATIONS Post-Closing Trial Balance December 31, 2017 Account Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation–Equipment Accounts Payable Salaries and Wages Payable Unearned Service Revenue Interest Payable Notes Payable Share Capital—Ordinary Retained Earnings Debit NT$1,180 875 350 1,210 1,200 Credit NT$ NT$4,815 40 75 56 300 15 2,000 800 1,529 NT$4,815 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-100 BYP 4-1 FINANCIAL REPORTING PROBLEM (a) Total current assets were NT$358,486.7 million at December 31, 2013, and NT$250,325.4 million at December 31, 2012 (b) No Current assets are normally listed in reverse order of liquidity TSMC’s current assets are listed in order of liquidity (c) The asset classifications are: (1) current assets, and non-current assets (d) Cash equivalents, for the purpose of meeting short-term cash commitments, consist of highly liquid time deposits and investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value (e) Total current liabilities were NT$189,777.9 million at December 31, 2013, and NT$148,473.9 million at December 31, 2012 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-101 BYP 4-2 COMPARATIVE ANALYSIS PROBLEM (a) Nestlé (in millions) Total current assets Net property, plant & equipment Total current liabilities Total equity CHF30,066 26,895 32,917 64,139 Petra Foods (in thousands) US$373,037 81,796 161,678 290,386 (b) Current assets are cash and other resources that are reasonably expected to be realized in cash or sold or consumed within one year or the company’s operating cycle, whichever is longer Current liabilities are obligations that are reasonably expected to be paid from existing current assets or through the creation of other current liabilities Nestlé’s current liabilities were 9.5% greater than its current assets, while Petra Food’s current assets were 130.7% greater than its current liabilities From this information, it appears that Petra Foods is in a much better liquidity position than Nestlé Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-102 BYP 4-3 REAL–WORLD FOCUS The solution is dependent upon the companies chosen by the student Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-103 BYP 4-4 (a) DECISION–MAKING ACROSS THE ORGANIZATION EVERCLEAN JANITORIAL SERVICE, LTD Statement of Financial Position December 31, 2017 Assets Property, plant, and equipment Equipment (£22,000 + £4,000) Less: Accum depreciation— equipment (£4,000 + £2,000) Delivery trucks (£34,000 + £5,000) Less: Accum depreciation— delivery trucks (£5,000 + £5,000) Current assets Prepaid insurance (£4,800 X 2/3) Supplies (£5,200 – £3,100) Accounts receivable (£9,000 + £3,900) Cash Total assets £26,000 6,000 39,000 £20,000 10,000 29,000 £49,000 3,200 2,100 12,900 5,500 23,700 £72,700 Equity and Liabilities Equity Share capital—ordinary £30,000 Retained earnings 14,330* £44,330 Non-current liabilities Notes payable, due July 1, 2019 15,000 Current liabilities Notes payable due within one year 10,000 Accounts payable (£1,500 + £620) 2,120 Interest payable (£25,000 X 10% X 6/12) 1,250 13,370 Total equity and liabilities £72,700 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-104 BYP 4-4 (Continued) EVERCLEAN JANITORIAL SERVICE, LTD Statement of Financial Position (Continued) December 31, 2017 *Retained earnings balance as reported Add: Earned but unbilled fees Less: Janitorial supplies used Insurance expired (£4,800 X 1/3) Depreciation (£2,000 + £5,000) Expenses incurred but unpaid Interest accrued Total Retained earnings balance as adjusted £24,000 3,900 27,900 £3,100 1,600 7,000 620 1,250 13,570 £14,330 (b) Everclean Janitorial Service met the terms of the bank loan because current assets exceed current liabilities by £10,330 (£23,700 – £13,370) at December 31, 2017 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-105 BYP 4-5 COMMUNICATION ACTIVITY MEMO To: Accounting Instructor From: Student Re: Accounting Cycle The required steps in the accounting cycle, in the order in which they should be completed, are: Analyze business transactions Journalize the transactions Post to ledger accounts Prepare a trial balance Journalize and post adjusting entries Prepare an adjusted trial balance Prepare financial statements Journalize and post closing entries Prepare a post-closing trial balance The optional steps in the accounting cycle include preparing a worksheet and preparing reversing entries If a worksheet is prepared, it is done after step above, and it includes steps and The worksheet is a form used to make it easier to prepare adjusting entries and financial statements If reversing entries are prepared, they are journalized and posted after step 9, at the beginning of the next accounting period A reversing entry is the exact opposite of a previously recorded adjusting entry and simplifies the recording of subsequent transactions Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-106 BYP 4-6 ETHICS CASE (a) The stakeholders in this case are: You, as controller Fabien LaRue, president Users of the company’s financial statements (b) The ethical issue is the continued circulation of significantly misstated financial statements As controller, you have just issued misleading financial statements You have acted ethically by telling the company’s president The president has reacted unethically by allowing the misleading financial statements to continue to circulate (c) As controller, you should impress upon the president the consequences of having those misleading financial statements be detected by some user or securities regulator Also stress upon him that you have a professional obligation to correct the statements or to resign Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-107 GAAP EXERCISES GAAP 4-1 The statement of financial position required under IFRS and the balance sheet prepared under GAAP usually present the same information regarding a company’s assets, liabilities, and equity at a point in time IFRS does not dictate a specific order but most companies list non-current items before current Differences in ordering are: IFRS GAAP Statement of Financial Position presentation Non-current assets Current assets Equity Non-current liabilities Current liabilities Balance Sheet presentation Current assets Non-current assets Current liabilities Non-current liabilities Stockholders’ equity Under GAAP, current assets are usually listed in the order of liquidity GAAP 4-2 GAAP uses the term balance sheet rather than statement of financial position GAAP 4-3 DIAZ COMPANY Partial Balance Sheet Current assets Cash Short-term investments Accounts receivable Supplies Prepaid insurance Total $ 15,400 6,700 12,500 5,200 3,600 $43,400 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-108 GAAP 4-4 ZURICH COMPANY Partial Balance Sheet December 31, 2017 Current assets Cash Short-term investments Accounts receivable Inventories Long-term investments Investments in stock Property, plant and equipment Equipment Less: Accumulated depreciation— equipment Total assets $ 13,100 120 4,300 2,700 $20,220 6,500 21,700 5,700 $42,720 16,000 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-109 GAAP 4-5 (a) REGO BOWLING ALLEY Balance Sheet December 31, 2017 Assets Current assets Cash Accounts receivable Prepaid insurance Property, plant, and equipment Land Buildings $128,000 Less: Acc depr.—buildings 42,600 Equipment 62,400 Less: Acc depr.—equipment 18,720 Total assets $18,040 7,540 ,680 $30,260 67,000 85,400 43,680 196,080 $226,340 Liabilities and Stockholders’ Equity Current liabilities Current portion of notes payable $ 13,900 Accounts payable 12,300 Interest payable 2,600 $28,800 Long-term liabilities Notes payable 81,100 Total liabilities $109,900 Stockholders’ equity Common stock 90,000 Retained earnings ($22,000 + $4,440*) 26,440 116,440 Total liabilities and stockholders’ equity $226,340 *Net income = $15,180 – $780 – $7,360 – $2,600 = $4,440 GAAP 4-6 It is possible to compare liquidity and solvency for companies using different currencies The ratios that are used to so, such as the current ratio and debt to total assets, indicate relative amounts of assets and liabilities rather than absolute monetary values Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-110 GAAP FINANCIAL REPORTING PROBLEM GAAP 4-7 (a) Total current assets were $73,286 million at September 28, 2013, and $57,653 million at September 29, 2012 (b) Current assets are properly listed in the order of liquidity As you will learn in the next chapter, inventory is considered to be less liquid than accounts receivable Thus, it is listed below accounts receivable and before prepaid expenses and other current assets (c) The asset classifications are similar to the text: (1) current assets, (2) investments, (3) property, plant, and equipment, and (4) intangible assets (d) Total current liabilities were $43,658 million at September 28, 2013, and $38,542 million at September 29, 2012 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-111 ... Complete all steps in accounting cycle Complex 70–90 Comprehensive Problem: Chapters to Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor... 8–10 Copyright © 2016 John Wiley & Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-3 COMPLETING THE ACCOUNTING CYCLE (Continued) Number LO BT Difficulty... Sons, Inc Weygandt Financial Accounting IFRS 3e Solutions Manual (For Instructor Use Only) 4-6 Questions Chapter (Continued) *14 The standard classifications used in a statement of financial position