Introducing Financial Accounting - CCSN Computer Graphics Program
Introducing Financial Accounting - CCSN Computer Graphics Program
Introducing Financial Accounting - CCSN Computer Graphics Program
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wiL27041_ch01_002-047.indd Page 36 10/4/10 7:13:01 PM user-f499 /Volumes/204/MHBR211/wiL27041_disk1of1/0073527041/wiL27041_pagefiles<br />
36 Chapter 1 <strong>Introducing</strong> <strong>Financial</strong> <strong>Accounting</strong><br />
Exercise 1-20 B<br />
Identifying business activities<br />
C5<br />
Exercise 1-21<br />
Preparing an income statement<br />
for a global company<br />
P2<br />
PROBLEM SET A<br />
Problem 1-1A<br />
Identifying effects of<br />
transactions on financial<br />
statements<br />
A1 P1<br />
Match each transaction or event to one of the following activities of an organization: financing activities<br />
(F), investing activities (I), or operating activities (O).<br />
1. An owner contributes resources to the business in exchange for stock.<br />
2. An organization purchases equipment.<br />
3. An organization advertises a new product.<br />
4. The organization borrows money from a bank.<br />
5. An organization sells some of its land.<br />
Nintendo Company reports the following income statement accounts for the year ended March 31, 2009.<br />
(Japanese yen in millions.)<br />
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,838,622<br />
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,044,981<br />
Selling, general and administrative expenses . . . . . . . . . 238,378<br />
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276,174<br />
Use this information to prepare Nintendo’s income statement for the year ended March 31, 2009.<br />
Problem Set B located at the end of Problem Set A is provided for each problem to<br />
reinforce the learning process.<br />
Identify how each of the following separate transactions affects financial statements. For the balance<br />
sheet, identify how each transaction affects total assets, total liabilities, and total equity. For the income<br />
statement, identify how each transaction affects net income. For the statement of cash flows, identify how<br />
each transaction affects cash flows from operating activities, cash flows from financing activities, and<br />
cash flows from investing activities. For increases, place a “1” in the column or columns. For decreases,<br />
place a “2” in the column or columns. If both an increase and a decrease occur, place a “1y2” in the<br />
column or columns. The first transaction is completed as an example.<br />
Income<br />
Balance Sheet Statement Statement of Cash Flows<br />
Total Total Total Net Operating Financing Investing<br />
Transaction Assets Liab. Equity Income Activities Activities Activities<br />
1 Owner invests cash for stock 1 1 1<br />
2 Incurs legal costs on credit<br />
3 Pays cash for employee wages<br />
4 Borrows cash by signing long-term<br />
note payable<br />
5 Receives cash for services provided<br />
6 Buys land by signing note payable<br />
7 Buys office equipment for cash<br />
8 Provides services on credit<br />
9 Collects cash on receivable from (8)<br />
10 Pays cash dividend