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Instructions for the Microsoft Excel Templates by Rex A Schildhouse

Be advised, the template workbooks and worksheets are not protected. Overtyping any data may remove it.
Extensive detail and information is contained within the help function of Microsoft Excel and in the provided text. You should enter your name, date, instructor's name, and course into the cells at the top of the page. This information will be printed on the top of each page if the template requires more than one page. Each template is set to print with File Name, Page # of # Page(s), the print date, and the print time to assist in assembly of multiple pages. If more than one page is required by the template, manual page breaks have been set to provide consistent presentation. All of the cells have been correctly formatted for presentation and should not require any adjustment. For example, if the text requires one, two, or three significant digits in a presentation, the template has been set for that presentation in the appropriate cells. In general, the yellow highlighted cells are the cells which work and effort should be presented. These entries may include date(s), account title(s), values, memorandum appropriate to the entry, or text answers to questions. And information or data which may be required by the solution will be entered in cells with borders to help identify them. Where a yellow highlighted cell shows "Date" enter the appropriate date for that step of the challenge. This may be any date format that Microsoft Excel accepts. Some of these formats include "1/1/12", "01/01/12", and "01/01/2012." All of these will return January 01, 2012, in the format set in the template. Where a yellow highlighted cell shows "Acct Nbr" enter the appropriate account number, provided in the template and in the text for that step of the challenge. This is entry may be a "Look to" formula to another cell where that information has been provided or previously entered. Where a yellow highlighted cell shows "Account Title" enter the appropriate account title for that step of the challenge. This is a text entry and most of those cells are set for the proper indentation for that step. Frequently the chart of accounts appropriate to the challenge is provided and you can use the "look to" formula to reference the appropriate account title without typing it. Check with your instructor to see if abbreviated account titles are acceptable. For example "A/R" for Accounts Receivable, "A/P" for Accounts Payable. If your instructor is using a comparison process between workbooks for grading, these abbreviates may not be acceptable. Where a yellow highlighted cell shows titles such as "Values," "Amounts," or "Quantities" enter the appropriate numerical value for that step of the challenge. The cell is formatted for proper presentation of the entered information. If a dollar sign is appropriate, it should not be entered, Microsoft Excel will place it there through formatting. Commas and significant digits (decimals) are also set through formatting for common presentation. Since the formatting of the templates is not protected by any password, you may change any of the formatting found in the templates to meet your desires. Where a yellow highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference, "=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial text provided for Microsoft Excel.

Where a yellow highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference, "=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial text provided for Microsoft Excel. Where a yellow highlighted cell shows "Text" enter the appropriate text for that step of the challenge. This may be a memorandum entry for a journal entry or a lengthy text answer discussing the results of an analysis of a company's financials. These titles can simply be typed over. Where a yellow highlighted cell shows titles such as "Journal Number" or "Journ #" you should enter the appropriate number provided in the template and in the text for that step of the challenge. In general this will appear in instances such as "Record the following events in General Journal number six." The print area is defined to fit onto 8 1/2" 11" sheets in portrait or landscape mode as required. Margins are generally set to no less than 1/2" so most printers can print them without a problem. If you printer cannot accept margins less than 1" you may have to reformat the margins through Page Setup. The display may have "Freeze Pane" invoked so column titles remain visible during data entry. This can be removed by utilizing the View menu and selecting "Unfreeze Panes" under "Freeze Panes." When negative values are required, enter them by starting with a minus sign, "-". Negative values may be shown as ($400) or -$400. Negative values in formulas can be created by putting a minus sign in front of the cell reference - "=E10*-E11" will return a negative value if both cells E10 and E11 contain positive values. Microsoft Office and Microsoft Excel are products of, and copyrighted by, Microsoft Corporation, One Microsoft Way, Redmond, Washington 98052-6399

Solution Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E4-4 (Multiple-Step and Single-Step) Two accountants for the firm of Allen and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2012 information related to Webster Company ($000 omitted). Administrative expenses Officers' salaries Depreciation of office furniture and equipment Cost of goods sold Rent revenue Selling expenses Transportation-out Sales commissions Depreciation of sales equipment Sales Income tax Interest expense

$4,900 3,960 63,570 17,230 2,690 7,980 6,480 96,500 7,580 1,860

Instructions: (a) Prepare an income statement for the year 2012 using the multiple-step form. Common shares outstanding for 2012 total 40,550 (000 omitted). WEBSTER COMPANY Multi-Step Income Statement For the Year Ended December 31, 2012 (In thousands, except earnings per share) Sales Cost of goods sold Gross profit Operating Expenses Selling expenses Sales commissions Depreciation of sales equipment Transportation-out Administrative expenses Officers' salaries Depreciation of office furniture and equipment Income from operations Other Revenues and Gains Rent revenue Other Expenses and Losses Interest expense $96,500 63,570 32,930

$7,980 6,480 2,690 4,900 3,960

$17,150

8,860

26,010 6,920

17,230 24,150 1,860

153010867.xlsx.ms_office, E4-4 Solution, Page 3 of 16, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: Income before taxes Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Income taxes Net income Earnings per share ($14,710 net income / 40,550 shares) (b) Prepare an income statement for the year 2012 using the single-step form. Common shares outstanding for 2012 total 40,550 (000 omitted). WEBSTER COMPANY Single-Step Income Statement For the Year Ended December 31, 2012 (In thousands, except earnings per share) Revenues Net sales Rental revenue Total revenues Expenses Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes Net income Earnings per share ($14,710 net income / 40,550 shares)

22,290 7,580 14,710 $0.36

$96,500 17,230 113,730

$63,570 17,150 8,860 1,860 $91,440 22,290 7,580 $14,710 $0.36

(c) Which one do you prefer? Discuss. Single-step: 1. Simplicity and conciseness. 2. Probably better understood by users. 3. Emphasis on total costs and expenses and net income. 4. Does not imply priority of one revenue or expense over another. Multiple-step: 1. Provides more information through segregation of operating and non-operating items. 2. Expenses are matched with related revenue.

Note to instructor: Students answers will vary due to the nature of the question; i.e., it asks for an opinion. However, the discussion supporting the answer should include the above points.

153010867.xlsx.ms_office, E4-4 Solution, Page 4 of 16, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E4-4 (Multiple-Step and Single-Step) Two accountants for the firm of Allen and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2012 information related to Webster Company ($000 omitted). Administrative expenses Officers' salaries Depreciation of office furniture and equipment Cost of goods sold Rent revenue Selling expenses Transportation-out Sales commissions Depreciation of sales equipment Sales Income tax Interest expense

$4,900 3,960 63,570 17,230 2,690 7,980 6,480 96,500 7,580 1,860

Instructions: (a) Prepare an income statement for the year 2012 using the multiple-step form. Common shares outstanding for 2012 total 40,550 (000 omitted). WEBSTER COMPANY Multi-Step Income Statement For the Year Ended December 31, 2012 (In thousands, except earnings per share) Title Title Title Operating Expenses Title Account Title Account Title Account Title Title Account Title Account Title Title Other Revenues and Gains Account Title Other Expenses and Losses Account Title Amount Amount Formula

Amount Amount Amount Amount Amount

Formula

Formula

Formula Formula

Amount Formula Amount

153010867.xlsx.ms_office, E4-4, Page 5 of 16, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Income before taxes Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
Account Title Net income Title (b) Prepare an income statement for the year 2012 using the single-step form. Common shares outstanding for 2012 total 40,550 (000 omitted). WEBSTER COMPANY Single-Step Income Statement For the Year Ended December 31, 2012 (In thousands, except earnings per share) Revenues Net sales Title Total revenues Expenses Title Title Title Title Total expenses Income before taxes Title Net income Title (c) Which one do you prefer? Discuss. Single-step:

Formula Amount Formula Formula

Amount Amount Formula

Amount Amount Amount Amount Formula Formula Amount Formula Formula

Multiple-step:

153010867.xlsx.ms_office, E4-4, Page 6 of 16, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E4-11 (Retained Earnings Statement) McEntire Corporation began operations on January 1, 2007. During its first 3 years of operations, McEntire reported net income and declared dividends as follows. Year 2009 2010 2011 Net income $40,000 125,000 160,000 Dividends declared $0 50,000 50,000

The following information relates to 2012: Income before income taxes Prior period adjustment: Understatement of 2010 depreciation expense. (Before taxes) Cumulative decrease in income from change in inventory methods (before taxes) Dividends declared Of the dividends declared to date, the amount that will be paid on Jan 15, 2013 is: Effective tax rate Instructions: (a) Prepare a 2012 retained earnings statement for McEntire Corporation. McENTIRE CORPORATION Retained Earnings Statement For the Year Ended December 31, 2012 Balance, January 1, as reported ($40,000 + $125,000 + $160,000 - $50,000 - $50,000) Correction for depreciation error (net of $25,000, - 40% tax rate or $10,000 tax) Cumulative decrease in income from change in inventory methods (net of $45,000 - 40% tax or $18,000 tax) Balance, January 1, as adjusted Add: Net income [$220,000 - ($220,000 * 40%)] Deduct dividends declared Balance, December 31

$220,000 $25,000 $45,000 $100,000 $25,000 40%

$225,000 (15,000) (27,000) 183,000 132,000 315,000 100,000 $215,000

(b) Assume McEntire Corp. restricted retained earnings in the amount of $70,000 on December 31, 2012. After this action, what would McEntire report as total retained earnings in its December 31, 2012, balance sheet? Total retained earnings would still be reported as $215,000. A restriction does not affect total retained earnings; it merely labels part of the retained earnings as being unavailable for dividend distribution. Retained earnings would be reported as follows: Retained earnings Appropriated Unappropriated Total

$70,000 145,000 $215,000

153010867.xlsx.ms_office, E4-11 Solution, Page 7 of 16, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E4-11 (Retained Earnings Statement) McEntire Corporation began operations on January 1, 2007. During its first 3 years of operations, McEntire reported net income and declared dividends as follows. Year 2009 2010 2011 Net income $40,000 125,000 160,000 Dividends declared $0 50,000 50,000

The following information relates to 2012: Income before income taxes Prior period adjustment: Understatement of 2010 depreciation expense. (Before taxes) Cumulative decrease in income from change in inventory methods (before taxes) Dividends declared Of the dividends declared to date, the amount that will be paid on Jan 15, 2013 is: Effective tax rate Instructions: (a) Prepare a 2012 retained earnings statement for McEntire Corporation. McENTIRE CORPORATION Retained Earnings Statement For the Year Ended December 31, 2012 Balance, January 1, as reported Title Title Title Add: Net income Title Title

$220,000 $25,000 $45,000 $100,000 $25,000 40%

Amount Amount Amount Formula Amount Formula Amount Formula

(b) Assume McEntire Corp. restricted retained earnings in the amount of $70,000 on December 31, 2012. After this action, what would McEntire report as total retained earnings in its December 31, 2012, balance sheet? Enter text answer here.

Retained earnings Appropriated Unappropriated Total

Amount Amount Amount

153010867.xlsx.ms_office, E4-11, Page 8 of 16, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P4-2 (Single-Step Income, Retained Earnings, Periodic Inventory) Presented below is the trial balance of Thompson Corporation at December 31, 2012. THOMPSON CORPORATION Trial Balance December 31, 2012 Debits Purchase Discounts Cash Accounts Receivable Rent Revenue Retained Earnings Salaries and Wages Payable Sales Notes Receivable Accounts Payable Accumulated Depreciation-Equipment Sales Discounts Sales Returns Notes Payable Selling Expenses Administrative Expenses Common Stock Income Tax Expense Cash Dividends Allowance for Doubtful Accounts Supplies Freight-in Land Equipment Bonds Payable Gain on Sale of Land Accumulated Depreciation-Building Inventory Building Purchases Totals $189,700 105,000 18,000 160,000 18,000 1,100,000 110,000 49,000 28,000 14,500 17,500 70,000 232,000 99,000 300,000 53,900 45,000 5,000 14,000 20,000 70,000 140,000 100,000 30,000 19,600 89,000 98,000 610,000 $1,907,600

Credits $10,000

$1,907,600 $64,000

A physical count of inventory on December 31 resulted in an inventory amount of thus, cost of goods sold for 2012 is $645,000

153010867.xlsx.ms_office, Problem 4-2 Solution, Page 9 of 16, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: th Instructions: Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield
Prepare a single-step income statement and a retained earnings statement. Assume that the only changes in retained earnings during the current year were from net income and dividends. 30,000 shares of common stock are outstanding the entire year. THOMPSON CORPORATION Income Statement For the Year Ended December 31, 2012 Revenues Net sales ($1,100,000 - $14,500 - $17,500) Gain on sale of land Rent revenues Total revenues Expenses Cost of goods sold Selling Expenses Administrative Expenses Total expenses Income before income taxes Income Tax Expense Net income Earnings per share ($86,100 / 30,000 shares) Computation of cost of goods sold: Inventory, Jan. 1 Purchases Less: Purchase discounts Net purchases Add: Freight-in Inventory available for sale Less: Inventory, Dec. 31 Cost of goods sold

$1,068,000 30,000 18,000 $1,116,000

645,000 232,000 99,000 976,000 140,000 53,900 $86,100 $2.87

$89,000 $610,000 10,000 600,000 20,000

620,000 709,000 64,000 $645,000

THOMPSON CORPORATION Statement of Retained Earnings For the Year Ended December 31, 2012 Retained earnings, January 1, Plus: Net income Less: Cash dividends Retained earnings, December 31, $160,000 86,100 246,100 45,000 $201,100

153010867.xlsx.ms_office, Problem 4-2 Solution, Page 10 of 16, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P4-2 (Single-Step Income, Retained Earnings, Periodic Inventory) Presented below is the trial balance of Thompson Corporation at December 31, 2012. THOMPSON CORPORATION Trial Balance December 31, 2012 Debits Purchase Discounts Cash Accounts Receivable Rent Revenue Retained Earnings Salaries and Wages Payable Sales Notes Receivable Accounts Payable Accumulated Depreciation-Equipment Sales Discounts Sales Returns Notes Payable Selling Expenses Administrative Expenses Common Stock Income Tax Expense Cash Dividends Allowance for Doubtful Accounts Supplies Freight-in Land Equipment Bonds Payable Gain on Sale of Land Accumulated Depreciation-Building Inventory Building Purchases Totals $189,700 105,000 18,000 160,000 18,000 1,100,000 110,000 49,000 28,000 14,500 17,500 70,000 232,000 99,000 300,000 53,900 45,000 5,000 14,000 20,000 70,000 140,000 100,000 30,000 19,600 89,000 98,000 610,000 $1,907,600

Credits $10,000

$1,907,600 $64,000

A physical count of inventory on December 31 resulted in an inventory amount of thus, cost of goods sold for 2012 is $645,000

153010867.xlsx.ms_office, Problem 4-2, Page 11 of 16, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: th Instructions: Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield
Prepare a single-step income statement and a retained earnings statement. Assume that the only changes in retained earnings during the current year were from net income and dividends. 30,000 shares of common stock are outstanding the entire year. THOMPSON CORPORATION Income Statement For the Year Ended December 31, 2012 Revenues Net sales Title Title Total revenues Expenses Title Title Title Total expenses Income before income taxes Title Title Earnings per share Computation of cost of goods sold: Merchandise inventory, Jan. 1 Account Title Account Title Title Account Title Title Less merchandise inventory, Dec. 31 Cost of goods sold Amount Amount Amount Formula

Amount Amount Amount Formula Formula Amount Formula Formula

Amount Amount Amount Formula Amount

Formula Amount Amount Formula

THOMPSON CORPORATION Statement of Retained Earnings For the Year Ended December 31, 2012 Retained earnings January 1, Plus net income Less cash dividends declared and paid Retained earnings, December 31, Amount Amount Formula Amount Formula

153010867.xlsx.ms_office, Problem 4-2, Page 12 of 16, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P4-3 (Irregular Items) Maher Inc. reported income from continuing operations before taxes during 2012 of $790,000 Additional transactions occurring in 2012 but not considered in the $790,000 are as follows. 1. The corporation experienced an uninsured flood loss (extraordinary) in the amount of during the year. The tax rate on this item is $90,000 46% 2. At the beginning of 2010, the corporation purchased a machine for $54,000 (salvage ) that had a useful life of years. The bookkeeper used value of $9,000 6 straight-line depreciation for 2010, 2011, and 2012 but failed to deduct the salvage value in computing the depreciation base. 3. Sale of securities held as a part of its portfolio resulted in a loss of $57,000 (pretax). 4. When its president died, the corporation realized $150,000 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount (the gain is nontaxable). of $46,000 5. The corporation disposed of its recreational division at a loss of $115,000 before taxes. Assume that this transaction meets the criteria for discontinued operations. 6. The corporation decided to change its method of inventory pricing from average cost to the FIFO method. The effect of this change on prior years is to increase 2010 income by $60,000 and decrease 2011 income by before taxes. The FIFO method has been $20,000 used for 2012. The tax rate on these items is 40% Instructions: Prepare an income statement for the year 2012 starting with income from continuing operations before taxes. Compute earnings per share as it should be shown on the face of the income statement. Common shares outstanding for the year are 120,000 shares. (Assume a tax rate on all items, unless indicated otherwise.) of 30% MAHER INC. Income Statement (Partial) For the Year Ended December 31, 2012 Income from continuing operations before income tax (a) Income tax (b) Income from continuing operations Discontinued operations Loss from disposal of recreational division $115,000 Less: Applicable income tax reduction 34,500 Income before extraordinary item Extraordinary item: Major casualty loss 90,000 Less: Applicable income tax reduction 41,400 Net income Per share of common stock: Income from continuing operations ($618,150 / 120,000 shares) (Rounded) Discontinued operations, net of tax ($80,500 / 120,000 shares) (Rounded) Income before extraordinary items Extraordinary item, net of tax ($48,600 / 120,000 shares) Net income ($489,050 120,000 shares)

$838,500 220,350 618,150

80,500 537,650

48,600 $489,050

$5.15 (0.67) 4.48 (0.41) $4.08

153010867.xlsx.ms_office, Problem 4-3 Solution, Page 13 of 16, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: (a) Intermediate Accounting , 14th Edition by Kieso, Weygandt, Computation of income from continued operations before taxes: and Warfield
As previously stated Loss on sale of securities Gain on proceeds of life insurance policy ($150,000 $46,000) Error in computation of depreciation As computed ($54,000 6) Corrected (($54,000 $9,000) 6) As restated
(b)

$790,000 (57,000) 104,000 9,000 7,500

1,500 $838,500

Computation of income tax: Income from continuing operations before taxes Nontaxable income (gain on life insurance) Taxable income Tax rate Income tax expense

$838,500 (104,000) 734,500 30% $220,350

Note: No adjustment is needed for the inventory method change, since the new method is reported in 2012 income. The cumulative effect on prior years of retroactive application of the new inventory method will be recorded in retained earnings.

153010867.xlsx.ms_office, Problem 4-3 Solution, Page 14 of 16, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P4-3 (Irregular Items) Maher Inc. reported income from continuing operations before taxes during 2012 of $790,000 Additional transactions occurring in 2012 but not considered in the $790,000 are as follows. 1. The corporation experienced an uninsured flood loss (extraordinary) in the amount of during the year. The tax rate on this item is $90,000 46% 2. At the beginning of 2010, the corporation purchased a machine for $54,000 (salvage ) that had a useful life of years. The bookkeeper used value of $9,000 6 straight-line depreciation for 2010, 2011, and 2012 but failed to deduct the salvage value in computing the depreciation base. 3. Sale of securities held as a part of its portfolio resulted in a loss of $57,000 (pretax). 4. When its president died, the corporation realized $150,000 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount (the gain is nontaxable). of $46,000 5. The corporation disposed of its recreational division at a loss of $115,000 before taxes. Assume that this transaction meets the criteria for discontinued operations. 6. The corporation decided to change its method of inventory pricing from average cost to the FIFO method. The effect of this change on prior years is to increase 2010 income by $60,000 and decrease 2011 income by before taxes. The FIFO method has been $20,000 used for 2012. The tax rate on these items is 40% Instructions: Prepare an income statement for the year 2012 starting with income from continuing operations before taxes. Compute earnings per share as it should be shown on the face of the income statement. Common shares outstanding for the year are 120,000 shares. (Assume a tax rate on all items, unless indicated otherwise.) of 30% MAHER INC. Income Statement (Partial) For the Year Ended December 31, 2012 Title Title Income from continuing operations Title Title Title Title Title Title Title Formula Formula Formula Amount Formula

Formula Formula

Amount Formula Net income

Formula Formula

Per share of common stock: Title Title Title Title Title

Formula Formula Formula Formula Formula

153010867.xlsx.ms_office, Problem 4-3, Page 15 of 16, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: (a) Intermediate Accounting , 14th Edition by Kieso, Weygandt, Computation of income from continued operations before taxes: and Warfield
As previously stated Title Title Title Title Title Title
(b)

Amount Amount Formula Formula Formula

Formula Formula

Computation of income tax: Title Title Title Title Title

Formula Formula Formula Percentage Formula

Text as desired.

153010867.xlsx.ms_office, Problem 4-3, Page 16 of 16, 6/20/2013, 6:59 AM