Question

1. Discuss internal and external users of accounting information.  What areas of accounting provide them with information?  Give an example of the type of report each type of user might use.'

2.Companies like Enron, HealthSouth, and Xerox Corporation have been caught in the midst of ethical lapses that led to fines, firings, and criminal and/or civil prosecution. List and briefly describe two factors that are responsible for what went wrong in these companies.

3. What is the major difference between the objective of financial accounting and the objective of managerial accounting?

4. On May 7, Carpet Barn Company offered to pay $83,000 for land that had a selling price of $105,000.  On May 15, Carpet Barn accepted a counteroffer of $95,000.  On June 5, the land was assessed at a value of $115,000 for property tax purposes.  On December 10, Carpet Barn Company was offered $135,000 for the land by another company.  At what value should the land be recorded in Carpet Barn Company’s records?

5. Bob Johnson is the sole owner of Johnson’s Carpet Cleaning Service.  Bob purchased a personal automobile for $10,000 cash plus he took out a loan for $20,000 in his name. Describe how this transaction is related to the business entity assumption.

6. Krammer Company has liabilities equal to one fourth of the total assets.  Krammer’s stockholders' equity is $45,000.  Using the accounting equation, what is the amount of liabilities for Krammer?

7. On July 1 of the current year, the assets and liabilities of John Wong, DVM, are as follows: Cash, $27,000; Accounts Receivable, $12,300; Supplies, $3,100; Land, $35,000; Accounts Payable, $13,900. What is the amount of stockholders' equity as of July 1 of the current year?

8. Indicate whether each of the following accounts represents an asset, liability, or stockholders' equity:

(a)	Accounts Payable
(b)	Wages Expense
(c)	Common Stock
(d)	Accounts Receivable
(e)	Dividends
(f)	Land

9.The accountant for Scott Industries prepared the following list of account balances from the company’s records for the year ended December 31. Use this information to answer the question that follows.

	Fees earned	$165,000		Cash	$30,000
	Accounts receivable	16,000		Selling expenses	44,000
	Equipment	64,000		Common stock	47,000
	Accounts payable	12,000		Interest revenue	3,000
	Salaries & wages expense	40,000		Income taxes expense	18,000
	Income taxes payable	5,000		Rent expense	20,000

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Determine the total assets at the end of the current year for Scott Industries.

10.Collins Landscape Company purchased various landscaping supplies on account to be used for landscape designs for its customers.  How will this business transaction affect the accounting equation?

11.Ramirez Company received its first electric bill in the amount of $60 which will be paid next month. How will this transaction affect the accounting equation?

Answer 1