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Solutions for Financial Accounting, 8th Canadian Edition by William Thomas
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Complete Solutions Manual for Financial Accounting, 8th Canadian Edition 8ce by C William Thomas, Wendy M. Tietz, Greg Berberich. Full Chapters Solution Manuals are included. The Financial Statements Recording Business Transactions Accrual Accounting and the Financial Statements Cash and Rece...

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  • July 28, 2023
  • 640
  • 2022/2023
  • Exam (elaborations)
  • Questions & answers

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Chapter 1

The Financial Statements

Short Exercises
(5 min.) S 1-1

1. Assets are resources controlled by the company as a result of past events and from which
the company expects to receive future economic benefits.

Shareholders’ equity represents the insider claims of a business, the claims to the assets
held by the owners of the business.

Assets and shareholders’ equity differ in that shareholders’ equity is a claim to assets.

Assets must be at least as large as shareholders’ equity. Equity can be smaller than assets.

2. Both liabilities and shareholders’ equity are claims to assets.

Liabilities are the outsider claims to the assets of a business. Shareholders’ equity
represents the insider claims to the assets of the business.



(5 min.) S 1-2
Total assets = Total liabilities + Shareholders’ equity
a) $300,000 = $150,000 + $150,000

b) 290,000 = 90,000 + 200,000

c) 220,000 = 100,000 + 120,000




1

, Financial Accounting Eighth Canadian Edition Complete Solutions Manual

(continued) S 1-2

A different presentation should be:
a) Total assets = Total liabilities + Shareholders’ equity
= $150,000 + $150,000 = $300,000
b) Shareholders’ equity = Total assets – Total liabilities
= $290,000 – $90,000 = $200,000
c) Total liabilities = Total assets – Shareholders’ equity
= $220,000 – $120,000 = $100,000



(5 min.) S 1-3

1. Shareholders’ Equity = Assets – Liabilities
It would not change in analyzing a household or a single Dairy Queen restaurant’s
information.

2. Liabilities = Assets – Shareholders’ Equity


(5-10 min.) S 1-4

a. Accounts payable L g. Accounts receivable A

b. Common shares E h. Long-term debt L

c. Cash A i. Merchandise inventories A

d. Retained earnings E j. Notes payable L

e. Land A k. Accrued expenses payable L

f. Prepaid expenses A l. Equipment A


(5 min.) S 1-5

1. Income and expenses

2. Net income, or net earnings (or net loss, if negative)

2

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