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Chapter One

Challenge Exercise 1 Expands on: E1-7 LO: 6, 7 Wunderkind Photography entered into the following transa tions during !e"ruary #$11% 1% &to kholders in'ested (),$$$ in the "usiness% #% *ought photography e+uip,ent for a ash pay,ent of (1,$$$% -% *ought ,ore photography e+uip,ent "y signing a ()$$ note paya"le% .% Perfor,ed photography ser'i es for (.$$ ash% )% Perfor,ed photograph ser'i es, and "illed the usto,er (/$$ on a ount% 6% 0olle ted (/$$ fro, the usto,er in ite, )% 7% Paid for !e"ruary de'eloping and printing, (1)$% 1% 2d'ertised the "usiness in the Platte'ille 3ournal% 4he (1$$ ost will "e "illed to Wunderkind% /% Paid the ad'ertising "ill fro, ite, 1% 1$% Paid (#$$ for photography supplies% 11% 5e ei'ed (-$$ ash ad'an e pay,ent fro, a usto,er for a photography 6o" to "e perfor,ed in 2pril% 1#% Paid (#)$ di'idend to the sto kholders% 1-% 7nstru tions: 2% 7ndi ate whether ea h transa tion in reases or de reases assets, lia"ilities, or sto kholders8 e+uity% 2s an exa,ple, ite, one would "e: in rease assets and in rease sto kholders8 e+uity% *% 7gnoring dollar a,ounts, explain what transa tions . and ) ha'e in o,,on, and how they differ% 0% 7gnoring dollar a,ounts, explain what transa tions 7 and 1 ha'e in o,,on, and how they differ% 9% 7gnoring dollar a,ounts, explain what transa tions . and 11 ha'e in o,,on, and how they differ%

Challenge Exercise 2 Expands on: E1-1$ LO: 6, 7


Copyright 2012 John Wiley & Sons, Inc. #For Instr ctor $se %nly&
Weygandt, Financial and Managerial Acco nting, Challenge !"ercises

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4he total assets and lia"ilities of 5o"ot 0o,pany at 3anuary 1 and 9e e,"er -1, #$1. are presented "elow% January 1 December 31 2ssets (76,$$$ (11#,$$$ Lia"ilities #6,$$$ #1,1$$ 7nstru tions: 1% 2ssu,e di'idends of (1$,1$$ were paid and no additional sto k was issued during the year% 5e'enues were (11$,$$$% 0o,pute :a; net in o,e, and :"; expenses% #% 2ssu,e additional sto k was issued for (.,1$$ and no di'idends were paid during the year% Expenses were (.#,$$$% 0o,pute :a; net in o,e, and :"; re'enues% -% 2ssu,e additional sto k was issued for (6#,$$$ and di'idends of (1),6$$ were paid during the year% 0o,pute net in o,e% .% 2ssu,e additional sto k was issued for (6,$$$, and net in o,e was ()1,$$$% 0o,pute di'idends paid%

Challenge Exercise 3 Expands on: E1-1#, E1-1. LO: 1 &eattle &er'i e had the following finan ial infor,ation at the end of #$1.% 1/1/14 2014 12/31/14 2 ounts Paya"le (1),$$$ 2 ounts 5e ei'a"le #$,$$$
Copyright 2012 John Wiley & Sons, Inc. #For Instr ctor $se %nly&
Weygandt, Financial and Managerial Acco nting, Challenge !"ercises

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2d'ertising Expense 0ash 0o,,on &to k 9i'idends E+uip,ent <otes Paya"le 5ent Expense 5etained Earnings &alaries and Wages Expense &er'i e 5e'enue =tilities Expense

( 1,$$$ 11,$$$ 1),$$$ /,$$$ --,$$$ #$,$$$ -,)$$ (6,$$$ 16,$$$ .$,$$$ #,)$$

7nstru tions: Prepare a #$1. in o,e state,ent, #$1. state,ent of retained earnings, and a 1#>-1>1. "alan e sheet for &eattle &er'i e%

Copyright 2012 John Wiley & Sons, Inc. #For Instr ctor $se %nly&

Weygandt, Financial and Managerial Acco nting, Challenge !"ercises

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