Instant Download Ebook PDF Fundamental Accounting Principles Volume 2 15th Canadian Edition PDF Scribd

(eBook PDF) Fundamental Accounting
Principles Volume 2 15th Canadian

Edition
Visit to download the full and correct content document:
https://ebooksecure.com/download/ebook-pdf-fundamental-accounting-principles-volu
me-2-15th-canadian-edition/
Brief Contents
Preface xii
CHAPTER 9 Property, Plant, and Equipment and Intangibles 588

CHAPTER 10 Current Liabilities 672
CHAPTER 11 Partnerships 725
CHAPTER 12 Organization and Operation of Corporations 772
CHAPTER 13 Corporate Reporting: Profit, Earnings Per Share, and
Retained Earnings 831
CHAPTER 14 Bonds and Long-Term Notes Payable 880
CHAPTER 15 Accounting for Debt and Share Investments 944
CHAPTER 16 Reporting and Analyzing Cash Flows 981
CHAPTER 17 Analyzing Financial Statements 1054
APPENDIX I Payroll Liabilities A-1
APPENDIX II Financial Statement Information A-2
APPENDIX III Chart of Accounts A-24
vii
Contents
Preface xii Glossary 635
Concept Review Questions 637
Quick Study 637
CHAPTER 9
Exercises 641
Property, Plant, and Equipment and Problems 651
Intangibles 588 Alternate Problems 660
Property, Plant and Equipment (PPE) 590 Analytical and Review Problem 669
Cost of PPE 592 Ethics Challenge 669
Subsequent Expenditures 592 Focus on Financial Statements 670
Critical Thinking Mini Case 671
PPE Subledger 594
Low-Cost Asset Purchases 594
Land 595 CHAPTER 10
Land Improvements 595 Current Liabilities 672
Buildings 595 Characteristics of Liabilities 674
Leasehold Improvements 596 Defining Liabilities 674
Machinery and Equipment 596 Classifying Liabilities as Current or Non-Current 675
Lump-Sum Asset Purchase 596 Current Liabilities 675
Depreciation 597 Non-Current Liabilities 675
Reporting Depreciation on Assets 598 Current Portion of Long-Term Debt 676
Factors in Calculating Depreciation 599 Balance Sheet Presentation of Current Liabilities 677
Depreciation Methods 601 Known (Determinable) Liabilities 678
Partial-Year Depreciation 608 Trade Accounts Payable 679
Revising Depreciation Rates 610 Payroll Liabilities 679
Impairment of PPE Assets 614 Provincial Sales Tax (PST), Federal Goods and
Mid-Chapter Demonstration Problem 615 Services Tax (GST) Payable, and
Solution 617 Harmonized Sales Tax (HST) 680
Disposals of PPE 618 Unearned Revenues 685
Discarding PPE 618 Mid-Chapter Demonstration Problem 686
Selling PPE 620 Solution 687
Exchanging PPE 621 Current Notes Payable 687
Intangible Assets 622 Estimated Liabilities (or Provisions) 690
Accounting for Intangible Assets 623 Customer Awards/Loyalty Programs 691
Patents 623 Warranty Liabilities 692
Copyrights 624 Income Tax Liabilities for Corporations 694
Mineral Resources 624 Contingent Liabilities 695
Trademarks and Trade Names 625 Summary 697
Leaseholds 625 Demonstration Problem 698
Goodwill 626 Solution 699
Summary 627 Glossary 701
Demonstration Problem 630 Concept Review Questions 702
Solution 631 Quick Study 703
Appendix 9A Revised Depreciation When There Is a Exercises 705
Subsequent Capital Expenditure That Creates Problems 712
Partial-Period Depreciation 633 Alternate Problems 716
Summary of Appendix 9A 635 Ethics Challenge 720
viii
CONTENTS
Focus on Financial Statements 720 Mid-Chapter Demonstration Problem 787

Critical Thinking Mini Case 722 Solution 788
Comprehensive Problem 722 Dividends 789
Cash Dividends 789
CHAPTER 11 Special Features of Preferred Shares 791
Partnerships 725 Dividend Preference 791
Other Features of Preferred Shares 794
Partnership Form of Organization 727 Closing Entries for Corporations 795
Characteristics of General Partnerships 727 Financial Statement Analysis 797
Limited Partnerships 729 Summary 799
Limited Liability Partnerships 729 Demonstration Problem 801
Basic Partnership Accounting 730 Solution 802
Organizing a Partnership 730 Glossary 804
Dividing Profit or Loss 731 Concept Review Questions 805
Partnership Financial Statements 737 Quick Study 805
Mid-Chapter Demonstration Problem 738 Exercises 810
Solution 739 Problems 816
Admission and Withdrawal of a Partner 741 Alternate Problems 822
Admission of a Partner 741 Analytical and Review Problems 827
Withdrawal of a Partner 744 Ethics Challenge 828
Focus on Financial Statements 828
Death of a Partner 745
Liquidation of a Partnership 745
No Capital Deficiency 746
Capital Deficiency 747 CHAPTER 13
Summary 749 Corporate Reporting: Profit, Earnings
Demonstration Problem 751 Per Share, and Retained Earnings 831
Solution 752
Glossary 753 Additional Share Transactions 834
Concept Review Questions 754 Share Dividends 834
Quick Study 754 Share Splits 836
Exercises 756 Repurchase of Shares 838
Problems 761 Mid-Chapter Demonstration Problem 840
Alternate Problems 765 Solution 841
Analytical and Review Problems 769 Financial Statement Presentation and Analysis 842
Ethics Challenge 770 Earnings Per Share (EPS) 842
Focus on Financial Statements 770 Dividend Payout Ratio 846
Critical Thinking Mini Case 771 Reporting Profit Information 847
Comprehensive Income 849
CHAPTER 12 Retained Earnings 851
Organization and Operation Restricted Retained Earnings 852
of Corporations 772 Accounting Changes 852
Summary 855
Corporate Form of Organization 774
Demonstration Problem 856
Characteristics of Corporations 774
Solution 857
Organizing a Corporation 776
Glossary 858
Corporate Financial Statements 778
Concept Review Questions 858
Income Statement 778 Quick Study 859
Statement of Changes in Equity 779 Exercises 861
Balance Sheet 779 Problems 868
Issuing Shares 781 Alternate Problems 873
Accounting for Shares 782 Analytical and Review Problem 877
Motivation for Preferred Shares 786 Ethics Challenge 878
ix
CONTENTS
Focus on Financial Statements 878 CHAPTER 15

Accounting for Debt and Share
Investments 944
CHAPTER 14 Purpose of Debt and Share Investments 946
Bonds and Long-Term Notes Classification of Investments 947
Payable 880 Accounting for Non-Strategic Investments 949
Accounting for Equity Investments (Non-Strategic) 949
Basics of Bonds 882
Accounting for Debt Investments 951
Advantages of Bonds 882
Mid-Chapter Demonstration Problem 955
Disadvantages of Bonds 884
Solution 956
Types of Bonds 885
Accounting for Investments in Associates 958
Bond Issuing Procedures 886
Accounting for Investment in Subsidiaries: Business
Bond Trading 887
Combinations 960
Accounting for Bonds 888
Summary 963
Issuing Basic Bonds—Par Value Bonds 888 Demonstration Problem 964
Issuing Bonds Between Interest Dates 889 Solution 965
Bond Pricing 890 Glossary 966
Present Value of a Discount Bond 890 Concept Review Questions 967
Present Value of a Premium Bond 891 Quick Study 968
Issuing Bonds at a Discount 892 Exercises 970
Amortizing a Bond Discount 893 Problems 973
Issuing Bonds at a Premium 896 Alternate Problems 976
Amortizing a Bond Premium 897 Analytical and Review Problem 978
Summary of Bond Discount and Premium Behaviour 898 Ethics Challenge 978
Accruing Bond Interest Expense 898 Focus on Financial Statements 979
Bond Retirements 900 Critical Thinking Mini Case 980
Bond Retirement at Maturity 900
Bond Retirement Before Maturity 901 CHAPTER 16
Bond Retirement by Conversion to Shares 901 Reporting and Analyzing Cash
Mid-Chapter Demonstration Problem 902 Flows 981
Solution 903
Basics of Cash Flow Reporting 983
Long-Term Notes Payable 906
Purpose of the Statement of Cash Flows 983
Interest-Bearing Notes 906
Importance of Cash Flows 984
Instalment Notes 907
Measuring Cash Flows 984
Mortgage Notes 910
Classifying Cash Flows 985
Lease Liabilities 911
Financial Statement Analysis 914 Non-Cash Investing and Financing Activities 987
Debt to Equity Ratio 914 Format of the Statement of Cash Flows 988
Summary 915 Preparing the Statement of Cash Flows 989
Demonstration Problem 917 1. Calculate the Net Increase or Decrease in Cash 991
Solution 918 2. Calculate and Report Net Cash Inflows (Outflows)
Appendix 14A PV Tables 920 From Operating Activities 991
Glossary 921 Indirect Method of Reporting Operating
Concept Review Questions 922 Cash Flows 992
Quick Study 923 Mid-Chapter Demonstration Problem 997
Exercises 926 Solution 998
Problems 933 3. Cash Flows From Investing Activities 998
Alternate Problems 937 4. Cash Flows From Financing Activities 1000
Ethics Challenge 941 5. Proving Cash Balances 1003
Focus on Financial Statements 941 Cash Flows From Operating Activities—Direct
Critical Thinking Mini Case 943 Method 1004
x
CONTENTS
Demonstration Problem—Direct Method 1009 Ratio Analysis 1070

Solution 1010 Liquidity and Efficiency 1070
Summary of Reporting and Analyzing Solvency 1076
Cash Flows 1010 Profitability 1078
Summary 1012 Market 1081
Glossary 1021 Summary of Ratios 1083
Demonstration Problem—Part A: Summary 1085
Indirect Method 1014 Demonstration Problem 1086
Solution 1015 Solution 1087
Demonstration Problem—Part B: Direct Method 1018 Glossary 1088
Solution 1019 Concept Review Questions 1089
Concept Review Questions 1021 Quick Study 1090
Quick Study 1022 Exercises 1094
Exercises 1028 Problems 1100
Problems 1035 Alternate Problems 1106
Alternate Problems 1041 Analytical and Review Problems 1112
Analytical and Review Problems 1047 Ethics Challenge 1115
Ethics Challenge 1050 Focus on Financial Statements 1116
Focus on Financial Statements 1051 Critical Thinking Mini Case 1118
APPENDIX I
CHAPTER 17 Payroll Liabilities A-1
Analyzing Financial Statements 1054
Basics of Analysis 1056 APPENDIX II
Purpose of Analysis 1056 Financial Statement
Four Key Building Blocks of Financial Statement Information A-2
Analysis 1057
Information for Analysis 1057 Danier Leather A-3
Standards for Comparisons 1057 WestJet A-8
Tools of Analysis 1058
Indigo Books and Music Inc. A-14
Horizontal Analysis 1058
Trend Analysis 1062 Telus A-19
Vertical (or Common-Size) Analysis 1063
Common-Size Statements 1063 APPENDIX III
Common-Size Graphics 1065 Chart of Accounts A-24
Mid-Chapter Demonstration Problem 1066 Index IN-1
Solution 1068
xi
Preface
A Note About Our Cover
The cover of the Fifteenth Canadian Edition is the work of Rachel
Idzerda. Rachel’s playful illustration spotlights many of the companies,
entrepreneurs, and organizations featured in Fundamental Accounting
Principles’ 17 chapter opening vignettes. See if you can spot the images
representing Zane Caplansky’s food truck (Chapter 1), Frogbox’s green
moving supplies (Chapter 3), Kicking Horse Coffee (Chapter 11), or
ZooShare (Chapter 14). Rachel is a freelance illustrator specializing
in editorial illustration and portraiture. She combines clean, delicate
linework with bold colours and graphic elements to create a sense of
energy and mood in her work. Rachel received her BAA in Illustration
from Sheridan College in 2012, and currently lives and works in Montreal,
QC with her partner and their two pampered dogs.
Inside the Chapters

As educators, instructors strive to create an environment that fosters learning and provides students with
the tools they need to succeed. The Fifteenth Canadian Edition continues to meet and surpass the high
standards the market expects from Fundamental Accounting Principles. We continue to put learning
first, with student-centred pedagogy and critical thinking lessons throughout the text.
All the pedagogical tools are carefully designed for ease of use and understanding, helping the in-
structor teach and giving the students what they need to succeed.
Pedagogy
STUDENT SUCCESS CYCLE
Student Success Cycle
Student success at the post-secondary level is not measured by how
Read the material
much knowledge a student has acquired, but rather by how well a stu-
dent can use knowledge. The Student Success Cycle, illustrated by a
circular icon, reinforces decision-making skills by highlighting key Apply
Do the
your critical
exercises
steps toward understanding and critically evaluating the information thinking skills
the student has just read. Read–Do–Check–Apply reinforces active

learning rather than passive learning. This tool is integrated throughout
Check your answers
the text, including the chapter opening page, Checkpoint questions,
Lar87271_ch06_390-458.indd Page 392 10/8/15 4:35 PM user /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
Demonstration Problems, and end-of-chapter material.
CRITICAL THINKING CHALLENGE

An essential element of critical thinking is the abil-
Would Amazon have a merchandise turnover similar to Lululemon
ity to ask questions while reading (or listening or CRITICAL Athletica’s? Explain why or why not. What does “inventory demand
THINKING planning” refer to? What would the effect be of cost-saving strategies
speaking). These exercises are designed to help CHALLENGE on the weighted average cost of inventory?
students develop the skills related to questioning.

Suggested answers are posted on Connect.
xii
PREFACE
IFRS AND ASPE—THE DIFFERENCES IFRS AND ASPE—THE DIFFERENCES

International Financial Reporting Standards Accounting Standards for Private Enterprises
Difference (IFRS) (ASPE) This box appears at the end of every chapter to
Recording adjusting • IFRS require that financial statements be • Unlike IFRS, ASPE does not explicitly require
entries presented at least annually*; therefore,
adjustments would be prepared at least
that financial statements be presented at
least annually although it is implied given that
highlight any differences or important points
annually. However, for publicly listed financial statements must be presented in a
companies, Securities Commissions’ Law
requires publicly listed companies to present
timely manner** and items must be
presented consistently from period to
about reporting and terminology as they relate to
quarterly financial statements, which, in turn, period.*** Financial statements are prepared
would require that adjusting entries be at least annually for tax purposes and, for the financial accounting course. The chapter con-
prepared at least quarterly. example, to meet any banking requirements.
• Both public and private enterprises may prepare adjusting entries more frequently, such as tent is IFRS 2014 compliant for Volume I and IFRS
monthly, to enhance the accuracy of information required for decision making.
Depreciation vs. • IFRS uses the term depreciation**** (although • ASPE uses the term amortization.****** 2015 compliant throughout Volume 2; references
amortization it uses amortization for intangible assets).*****
*IFRS 2014, IAS 1 Para. 36.
**ASPE, Accounting Standards, Section 1000.17(b).
are provided where appropriate.
Lar87271_ch01_001-075.indd Page 5 9/3/15 9:52 PM f-479 /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
***ASPE, Accounting Standards, Section 1000.19–20.

****IFRS 2014, IAS 16 Para. 6.
*****IFRS 2014, IAS 38 Para. 8.
******ASPE, Accounting Standards, Section 3061.16.
REAL-WORLD FOCUS
The Fifteenth Canadian Edition has increased A business is an entity represented by one or more individuals selling products or services for profit.
Products sold include anything from athletic apparel (CCM, Bauer, Lululemon, NIKE, Reebok), to
the use of real business examples to reflect the electronic devices (Apple, Dell, Hewlett-Packard, Samsung), and clothing (Abercrombie and Fitch,
GAP, Zara). Service providers such as data communication providers (Bell, Rogers, and Telus), food
most current information available. This contin- services (McDonald’s, The Keg, Starbucks, Tim Hortons), and internet services (Google, Twitter,
Skype, Facebook, Instagram) make our lives more connected. A business can be as small as an in-home
ues the text’s strong ties to the real world of ac-
counting, be it through detailed interviews with businesspeople for the chapter opening vignettes,
examples of ethical standards and treatments, or annual reports for both in-chapter example disclosures
and end-of-chapter material. When an actual business is used, its name is highlighted in bold magenta
for emphasis. This integration with real-world companies helps engage students while they read.
Food Truck Frenzy

Across the country, major urban centres are experiencing an industry trend to go to the street to entice custom-
ers with a wide range of made-to-order food options. In Canada, the street Lar87271_ch08_527-588.indd Page
vendor industry is in the growth 551 10/27/15 3:13 PM f-500
phase /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
of its industry life cycle, according to IBISWorld, a global market research firm. IBISWorld estimates the market
for street vendors in Canada to be strong over the next five years with revenues expected to reach $281 million in
2018 and expected annual growth to cap out at 4.2% in 2015. The market is dominated by new market entrants—
in most cases individual owners operating as sole proprietors. The most successful street vendors will take advan-
tage of effective marketing and branding toward health-conscious consumers looking for unique dining options.
Thundering Thelma received her initial debut on CBC’s Dragons’ Den when owner Zane Caplansky decided NEW VIDEO LINKS
to expand his famous brick-and-mortar deli in downtown Toronto and enter the trendy urban food truck busi-
ness. After being labelled “insane Zane” by Kevin O’Leary, and the other Dragons balking at the 15% ownership
interest at a proposed cost of $350,000, Zane decided to continue his new business venture on his own. A year
This text features interactive digital links direct-
later, Caplansky returned to Dragons’ Den and boasted achieving profit margins between 30 and 40% and
Lar87271_ch08_527-588.indd
achieving $110,000 in sales in his first six months of operation. Caplansky’s Pagetwo
business continues to thrive with 527 10/27/15 3:13 PM f-500 ing students and instructors to helpful videos to
/202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
new locations opening at the Toronto Pearson Airport, one modelled after his brick-and-mortar restaurant and
the other modelled after his food truck. provide students with real world application of
Sources: http://clients1.ibisworld.ca/reports/ca/industry/industryoutlook.aspx?entid=1683, accessed April 15, 2014; http://www.torontolife.com/daily-dish/people-dish/2011/11/03/
zane-caplansky-on-dragons-den, accessed April 15, 2014; http://www.postcity.com/Eat-Shop-Do/Eat/November-2013/Weekly-Restaurant-Recap-Harvest-Kitchen/;CBC Dragon’s Den,
Season 7, Episode 11, aired January 7, 2013. the chapter content and enhance student exposure
Video Link: http://www.cbc.ca/dragonsden/episodes/season-7/episode-11-season-7
to valuable online resources.
NEW: A LOOK BACK, A LOOK AT

THIS CHAPTER, A LOOK AHEAD Receivables
In these brief paragraphs, students A Look Back
Chapter 7 provides an introduction to Internal Control and Cash with a detailed analysis of internal control guide-
are directed to reflect on their learn- lines, banking activities, accounting for petty cash funds, and reconciling the differences between cash reported in
the bank account and cash in the company’s accounting records.
ing from previous chapters; provided
with a high-level summary of the cur- A Look at This Chapter
Chapter 8 takes a look at accounting for customer accounts receivable and short-term notes receivable, specifically
rent chapter; and introduced to the investigating tools such as initial recognition of the receivables and subsequent measurement at the end of the ac-
counting period. Valuation is assessed through methods to estimate bad debts, including the benefits of an A/R aging
concepts covered in the following report, and using the accounts receivable turnover ratio and days’ sales uncollected ratios to evaluate financial
statements.
chapter. These helpful learning sum-
A Look Ahead
maries help students focus on how Chapter 9, the first chapter of Volume 2, investigates accounting issues for fixed assets under the following major
categories: property, plant and equipment, and intangible assets. The chapter focuses on identifying all items that
their learning ties into big-picture are included in their asset cost and analyzes options for matching their usage costs over their useful lives. Other
considerations such as how to handle asset disposals, exchanges, and sales are analyzed.
objectives.
xiii
PREFACE
LEARNING OBJECTIVES
Learning Objectives have long been a standard in this textbook. By giving students a head start on what the
following material encompasses, the text readies them for the work ahead.
CHECKPOINT
CHECKPOINT
This series of questions within
5. What is the difference between private and public accountants?
the chapter reinforces the mate- 6. What are the four broad fields of accounting?
7. What is the purpose of an audit?
rial presented immediately be- 8. Distinguish between managerial and financial accounting.
9. What is the difference between external and internal users of accounting information?
fore it. These questions allow 10. Why are internal controls important?
students to “Do” problem mate- Do Quick Study question: QS 1-5
rial by referencing what they
have just learned. Answers at the Lar87271_ch04_230-307.indd
end of each chapter will4:57then
Page 256 12/10/15 PM f-479allow them to “Check” their work, further
supporting the Student Success Cycle. Under each set of Checkpoints is a reference to the Quick Study ques-
tions (single-topic exercises) available at the end of each chapter. Students can go ahead and try them at this
point. Checkpoint solutions are at the end of the chapter. Quick Study solutions are available on Connect.
NEW: IMPORTANT TIPS

Important tip boxes have been incorporated
Important Tip: Ensure you know the following rules as illustrated in Exhibit 2.7 before
reading Chapter 3. For a helpful learning tool, review the following video by Colin Dodds, an throughout the text to direct students’ attention
educational music video enthusiast.
Video Link: https://youtu.be/7EuxfW76BWU to critical concepts that students often miss in
their initial reading of the text.
DECISION INSIGHT
Social responsibility continues to be impor-
tant for students to learn early in their ac-
counting courses. Through the Decision DECISION INSIGHT
Loblaw’s Corporate Grocery Stores Go Perpetual
Insight feature, accounting’s role in ethics Loblaw Companies Limited, identifies its upgrade of its IT infrastructure as a positive move to en-
able the company to develop a more precise estimate through a “system-generated average
and social responsibility is described by cost.” The company estimates “the impact of this inventory measurement and other conversion
differences associated with implementation of a perpetual inventory system to be a $190 million
both reporting and assessing its impact. Re- decrease to the value of the inventory.”
lating theory to a real-life situation piques

interest and reinforces active learning.
DECISION MAKER Answer—End of chapter

DECISION MAKER
Inventory Manager—Ethical Dilemma This feature requires students to make accounting
You are the inventory manager for a trendy urban retail inventory merchandiser. Your compen-
sation includes a bonus plan based on the amount of gross profit reported in the financial state-
ments. Your supervisor comes to you and asks your opinion about changing the inventory costing
and business decisions by using role-playing to
method from moving weighted average to FIFO. Since costs have been rising and are expected to
continue to rise, your superior predicts the company will be more attractive to investors because
show the interaction of judgment and awareness,
of the reported higher profit using FIFO. You realize this proposed change will likely increase your
bonus as well. What do you recommend? as well as the impact of decisions made. Guidance
answers are available at the end of each chapter.
EXTEND YOUR KNOWLEDGE (EYK)

Supplementary material has been devel-
oped to explore some topics in more de- For further study on some topics of relevance to this chapter, please see the following Extend Your
Knowledge supplements:
tail than the textbook can allow. A list of EYK 4-1 Work Sheet Demonstration
EYK 4-2 Corporate Supplement
EYKs relevant to each chapter is pre- EYK 4-3 Summary of Business Activities
sented at the end of the chapter, alerting EYK 4-4 Examples of Classified Balance Sheets
students to visit Connect if they choose

to delve deeper into the material.
xiv
PREFACE
FINANCIAL STATEMENTS
Features and assignments that high-
light companies such as WestJet (a
company that provides services) and
Danier (a merchandiser) show ac-
counting in a modern and global con-
Executing on our strategies
text. Because students go directly to
WestJet Annual Report 2014 the financial statements of real com-
panies, they remain engaged in the ac-
tive learning process. The audited
ANNUAL REPORT 2014
annual financial statement section of
these annual reports (with notes to
! . . 5! , 2 % 0 / 24
& / 2 4 ( % 7 % % + 0 % 2 ) / $ % . $ % $ - ! 2# (
the financial statements), as well as
those of Indigo Books & Music, and
each Lar87271_ch02_076-149.indd Page 105 9/3/15 9:36 PM f-479
Telus (without the notes), are repro-

“We are what we

repeatedly do.
and duced at the end of Volume 1. In Vol-
ume 2, the annual audited financial
Excellence, then,
is not an act, every statements, excluding notes to the
financial statements, for WestJet,
but a habit.”
n !RISTOTLE day Danier, Indigo, and Telus are included.
2014 annual report
End-of-Chapter Material
Fundamental Accounting Principles sets the standard for quantity and quality of end-of-chapter material.
Summary
LO1 Explain the accounting cycle. The accounting Double-entry accounting means that every trans-
cycle includes the steps in preparing financial action affects at least two accounts. The total
SUMMARY statements for users that are repeated each re-
porting period.
amount debited must equal the total amount cred-
ited for each transaction. The system for record-
LO2 Describe an account, its use, and its relation- ing debits and credits follows from the accounting
Each chapter includes a Summary of the chapter ship to the ledger. An account is a detailed re- equation. The debit side is the normal balance for
assets, owner’s withdrawals, and expenses, and
cord of increases and decreases in a specific
by Learning Objective, to reinforce what students
Lar87271_ch02_076-149.indd Page 106 9/3/15 9:36 PM f-479
asset, liability, or equity item. Information is
taken from accounts, analyzed, summarized, and
the credit side is the normal balance for liabilities,
owner’s capital, and revenues.
presented in useful reports and financial state- LO4 Describe a chart of accounts and its relation-
have just learned. ments for users. ship to the ledger. A ledger is a record that con-
tains all accounts used by a company. This is what
LO3 Define debits and credits and explain their
role in double-entry accounting. Debit refers is referred to as the books. The chart of accounts is a
to left, and credit refers to right. The following listing of all accounts and usually includes an identi-
table summarizes debit and credit effects by ac- fication number that is assigned to each account.
count type: LO5 Analyze the impact of transactions on ac-
counts, record entries in a journal, and post
GUIDANCE ANSWERS TO DECISION MAKER

Guidance Answer to DECISION MAKER
Accounting Clerk
These discuss the Decision Maker boxes pre-
The business entity principle is being violated be-
cause it requires that the owner’s personal ex-
whole amount, liabilities will also be overstated.
At the end of the accounting period when the
sented earlier in the chapter, and reinforce the
penses be recorded separately from those of his amount of supplies used is recorded, Office Sup-
business. By debiting the entire amount to Office plies Expense will be overstated on the income need for decision making and critical thinking
Supplies, assets will be overstated on the balance statement, causing profit to be understated.
sheet. By crediting Accounts Payable for the When profit is too low, equity is also understated. skills. This feature fits into the Student Success
Cycle by reinforcing the “Apply” step.
xv
PREFACE
Guidance Answers to CHECKPOINT

GUIDANCE ANSWERS TO CHECKPOINT
1. Best Buy.
Merchandise Inventory ................... 2,000
The Checkpoint material throughout the chapter
2. Total cost is $12,180, calculated as: Cost of Goods Sold.................. 2,000
$11,400 + $130 + $150 + $100 + $400. $1,800 - $1,300 = $500/unit allows students to pause and check their prog-
original write-down; $500 × 4 =
3. The matching principle.
4. Businesses that sell unique, high dollar–
$2,000 maximum reversal
ress. This feature reinforces the “Do,” “Check,”
value merchandise in relatively low volume 7. The reported inventory amount is $540,
levels might choose specific identification. calculated as (20 × $5) + (40 × $8) + and “Apply” steps of the Student Success Cycle.
Car dealerships are a good example be- (10 × $12).
cause each car received as merchandise in- 8. Cost of goods sold is understated by
ventory is unique in terms of both features $10,000 in 2017 and overstated by
and identification number. Using specific $10,000 in 2018.
identification allows the business to accu-
9. The estimated ending inventory (at cost) is
rately tag each item coming in and going
$327,000 and is calculated as:
out.
Step 1: ($530,000 + $335,000) -
5. Moving weighted average gives a lower in-
$320,000 = $545,000
ventory figure on the balance sheet as com-
pared to FIFO. FIFO’s inventory amount will $324,000 + $195,000
Step 2: = 60%
approximate current replacement costs. $530,000 + $335,000
Moving weighted average costs increase but Step 3: $545,000 × 60% = $327,000
more slowly because of the effect of 10. Company B is more efficient at selling its in-
averaging. ventory because it has higher merchandise
6. Because these units are the same ones turnover.
that were originally written down, a reversal
is appropriate and would be recorded as:
Glossary
Consignee One who receives and holds goods owned Days’ sales in inventory A financial analysis tool used
by another party for the purpose of acting as an agent to estimate how many days it will take to convert the
GLOSSARY and selling the goods for the owner. The consignee
gets paid a fee from the consignor for finding a buyer.
inventory on hand into accounts receivable or cash;
calculated by dividing the ending inventory by cost
of goods sold and multiplying the result by 365.
All terms highlighted in the chapter are Consignor An owner of inventory goods who ships them
to another party who will then find a buyer and sell the Faithful representation The accounting principle that re-
Lar87271_ch02_076-149.indd Page 107 10/23/15 5:47 PM f-500 goods for the owner. The consignor retains title to the
/202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles quires information to be complete, neutral, unbiased,
included. goods while they are held offsite by the consignee. and free from error.
Consistency principle The accounting requirement that First-in, first-out (FIFO) The pricing of an inventory un-
a company use the same accounting policies period af- der the assumption that inventory items are sold in the
ter period so that the financial statements of succeed- order acquired; the first items received are the first
ing periods will be comparable. items sold.
DEMONSTRATION PROBLEM Problem Material

This Demonstration Problem is based on the same facts as the Demonstration Problem at the
end of Chapter 1 except for two additional items: (b) August 1 and (k) August 18. The fol- DEMONSTRATION PROBLEMS
lowing activities occurred during the first month of Joanne Cardinal’s new haircutting busi-
ness called The Cutlery: These problems reinforce the chapter material
a. On August 1, Cardinal put $16,000 cash into a chequing account in the name of The Cutlery.
She also invested $10,000 of equipment that she already owned. and further bolster the Student Success Cycle.
b. On August 1, Cardinal paid $2,400 for six months of insurance effective immediately.
c. On August 2, she paid $2,000 cash for furniture for the shop.
d. On August 3, she paid $3,200 cash to rent space in a strip mall for August.
e. On August 4, she furnished the shop by installing the old equipment and some new
Lar87271_ch02_076-149.indd
equipment that she bought on credit for $21,000. This amount is to be repaid in three equal Page 108 9/3/15 9:36 PM f-479 /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
payments at the end of August, September, and October.
ANALYSIS COMPONENT
An analysis component is included in each Mid- and End-
of-Chapter Demonstration Problem, as well as several Analysis Component:
Refer to The Cutlery’s August 31, 2017, financial statements. What do each of equity and
Exercises, Problems, and Focus on Financial Statements
liabilities represent?
questions. These promote critical thinking and give

students opportunities to practise their analytical skills.
Concept Review Questions CONCEPT REVIEW QUESTIONS

1. What tasks are performed with the work sheet? 9. Refer to Danier’s income statement in Appendix III
These short-answer questions reinforce the chap-
2. What two purposes are accomplished by recording at the end of the book. What journal entry was re-
closing entries? corded as of June 28, 2014, to close the revenue
account?
ter content by Learning Objective.
3. What are the four closing entries?
10. What is a company’s operating cycle? Lar87271_ch06_390-458.indd Page 430 10/8/15 4:35 PM user /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
4. Daniel is having trouble determining whether with-
drawals, the owner’s capital, interest income and 11. Why is a classified balance sheet more useful to fi-
prepaid insurance are temporary or permanent ac- nancial statement users than a non-classified bal-
counts. Explain to him the difference between a ance sheet?
temporary and a permanent account in accounting 12. What classes of assets and liabilities are shown on
and classify the accounts into each category. a typical classified balance sheet?
QUICK STUDY Quick Study

These single-topic exercises give students a QS 6-1 Inventory ownership LO1
quick test of each key element in the chapter and 1. At year-end Carefree Company has shipped, FOB destination, $500 of merchandise that is still in tran-
sit to Stark Company. Which company should include the $500 as part of inventory at year-end?
are referenced to Learning Objectives. Answers 2. Carefree Company has shipped goods to Stark and has an arrangement that Stark will sell the
goods for Carefree. Identify the consignor and the consignee. Which company should include any
to these items are available on Connect. unsold goods as part of inventory?
xvi
PREFACE
Exercise 6-3 Specific identification cost flow assumption LO2 EXERCISES

CHECK FIGURES: COGS = $9,427; Gross profit = $15,073
Refer to the data in Exercise 6-2. Assume that Urban Glam Cosmetics uses the specific identification
Exercises provide students with an additional
method to cost inventory. The 700 units were specifically sold as follows:
opportunity to reinforce basic chapter concepts
Jan. 10:
Mar. 15:
70
3
units from beginning inventory
units from beginning inventory, and
by Learning Objective. Note: Selected end-of-
177 units from the March 14 purchase
Oct. 5: 50 units from the March 14 purchase, and chapter exercises and problems are marked with
400 units from the July 30 purchase
this icon: . These have Excel templates

Calculate cost of goods sold and the gross profit.
located on Connect.
PROBLEMS Problems
Problems typically incorporate two or more Problem 1-1A Identifying type of business organization LO2
Complete the chart below by placing a checkmark in the appropriate column.
concepts. As well, there are two groups of Prob-
Type of Business Organization
lems: A Problems and Alternate or B Problems. Characteristic Sole Proprietorship Partnership Corporation
Limited liability
B Problems mirror the A Problems to help im- Unlimited liability
prove understanding through repetition. Owners are shareholders
Owners are partners
Taxed as a separate legal entity
Ethics Challenge ETHICS CHALLENGE

EC 5-1 Each chapter includes at least one Ethics
Claire Phelps is a popular high school student who attends approximately four dances a year at her high
school. Each dance requires a new dress and accessories that necessitate a financial outlay of $100 to
Challenge to reinforce critical thinking skills
$200 per event. Claire’s parents inform her that she is on her own with respect to financing the dresses.
After incurring a major hit to her savings for the first dance in her second year, Claire developed a differ- for students and open up discussion about
ent approach. She buys the dress on credit the week before the dance, wears it to the dance, and returns
the dress the next week to the store for a full refund on her charge card. Lar87271_ch02_076-149.indd Page 146
various ethical topics.
9/3/15 9:36 PM f-479 /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
Required
1. Comment on the ethics exhibited by Claire and possible consequences of her actions.
2. How does the store account for the dresses that Claire returns?
FOCUS ON FINANCIAL STATEMENTS Focus on Financial Statements

Each chapter includes two technical and FFS 2-1
analytical questions that incorporate into Travis McAllister operates a surveying company. For the first few months of the company’s life (through
April), the accounting records were maintained by an outside bookkeeping service. According to those
the financial statements all major topics records, McAllister’s equity balance was $75,000 as of April 30. To save on expenses, McAllister decided
to keep the records himself. He managed to record May’s transactions properly, but was a bit rusty when
the time came to prepare the financial statements. His first versions of the balance sheet and income
covered up to that point. Additional ques- statement follow. McAllister is bothered that the company apparently operated at a loss during the
month, even though he was very busy.
tions are available online on Connect.
McAllister Surveying
Income Statement
For Month Ended May 31, 2017
Revenue:
Critical Thinking Mini Case Investments by owner ............................ $ 3,000
Unearned surveying fees ........................ 6,000
Prairie Insurance sells life insurance, disability insurance, vehicle insurance, crop insurance, and home- Total revenues .................................... $ 9,000
owners’ insurance. You are employed by Prairie Insurance and have been promoted to sales division
manager for the Western Canadian division. You will be supervising approximately 25 salespeople, along
with five administrative assistants at various locations. The salespeople travel extensively and submit
expense reports along with sales information monthly. A sample expense report for September shows:
CRITICAL THINKING MINI CASES

Prairie Insurance—Western Canadian Division
Sales Report: John Bishop
Month Ended September 30, 2017
These cases give students the opportunity to ap-
Sales revenue* .............................................
Expenses** ..................................................
$56,000
34,000
ply critical thinking skills to concepts learned in
*Sales invoices attached
**Receipts attached
the chapter, thus further reinforcing the “Apply”
step of the Student Success Cycle.
HELP ME SOLVE IT
New Help Me Solve It tutorials are available on Connect for Larson’s Fundamental Ac-
counting Principles. The tutorials guide students through one or two of the more chal- Help Me
lenging end-of-chapter problems per chapter, providing them with an engaging visual and SOLVE IT
audio walkthrough of the problem.
xvii
What’s New
The Accounting Standard
We listened! Through extensive reviewing and consultations with the market, we have heard the issues
and concerns instructors like you have about the materials you use to teach introductory financial ac-
counting. Here you will find a list of new changes to specific chapters that our author has made to
ensure the content of Fundamental Accounting Principles remains current and fresh. Whether you are
new to using Fundamental Accounting Principles or new to this edition, you can see that McGraw-Hill
Education and Larson/Jensen/Dieckmann are setting the accounting standard in Fundamental Ac-
counting Principles. We know you’ll like what you see.
General Updates engaging topics, and including inspiring sto-

ries from company startups to success stories
• Appendix III for Volume 1 includes the complete
of well-known businesses and not-for-profit or-
annual audited financial statements, including
ganizations. Additionally, Chapter 7’s vignette
notes to the financial statements, for WestJet and
features an analysis titled “What Is Cash?”
Danier Leather, as well as the audited financial
outlining the vast array of Canadian payment
statements without the notes for Indigo Books &
options available today. Nearly all of the
Music and Telus. Appendix II for Volume 2 in-
vignettes now include relevant video links for
cludes the annual audited financial statements,
students to broaden their real-world exposure
excluding notes to the financial statements, for
to critical business decisions.
WestJet, Danier Leather, Indigo, and Telus.
• Actual businesses used as examples through-
• Throughout Volumes 1 and 2, the exercises and
out Volumes 1 and 2 are bolded and highlighted
problems have been refreshed in terms of num-
in magenta at first mention to emphasize inte-
bers and/or business name/owner with a focus
gration of accounting concepts with actual
on providing relevant company examples to
business practice.
connect with today’s students. Company sce-
narios have been expanded and updated to • IFRS and ASPE differences are identified at
provide students with more information and the end of each chapter.
updated examples to enhance student engage- • Important tip boxes have been incorporated
ment. Volume 1 end-of-chapter content was re- throughout the text to direct students’ atten-
vised by Praise Ma of Kwantlen Polytechnic tion to critical concepts that students often
University, and Volume 2 by Laura Dallas, also miss in their initial reading of the text.
of Kwantlen Polytechnic University. • Many new exhibits have been added, including
• Various end-of-chapter exercises/problems several new learning summaries to assist stu-
have been adjusted to incorporate instructor dents in tying together chapter concepts.
and reviewer suggestions. Many existing exhibits have been refreshed as
• The chapter content is IFRS 2014 compliant appropriate with updated information.
throughout Volume I and IFRS 2015 compliant • Several new excerpts have been added to
throughout Volume 2; IFRS 2014/2015 refer- direct students’ attention to real-company
ences are included where appropriate. example disclosures in their most recent
• The 15th edition includes 14 exciting new published annual financial statement
chapter opening vignettes, featuring a range of reports.
xviii
PREFACE
• The number of actual business examples has CHAPTER 10 (FORMER CHAPTER 11)
increased based on review requests; these • New chapter opening vignette spotlighting
have been bolded and highlighted in magenta Pebble Technology Corp. and its efforts to
at first mention for emphasis. raise capital through Kickstarter fundraising
• New presentation displays all formulas campaigns. Vignette includes video links to
students need to pay attention to in purple further student engagement.
boxes. • Updated excerpt of Second Cup Ltd.’s balance
sheet, featuring presentation of current
liabilities.
Chapter-by-Chapter Updates • New presentation of Exhibit 10.6 featuring
Sales Tax Rates, effective January 1, 2016.
CHAPTER 9 (FORMER CHAPTER 10)
• New chapter opening vignette featuring • New Exhibit 10.8: GST-Exempt and Zero-Rated
Vancouver International Airport, includes a Products, including an explanation of zero-
Video Link spotlighting YVR’s state-of-the-art rated goods and GST-exempt products.
Airside Operations Building. • New section illustrating collection, payment,
• Updated critical thinking challenge on the and final remittance of HST.
Airside Operations Building at YVR. • New section outlining accounting for customer
• New engaging chapter preview to help stu- awards/loyalty programs and gift cards.
dents understand capital investments in PPE. • Terminology updated from long-term liabilities
• Updated Decision Maker to enhance student to non-current.
engagement. • Updated chapter Demonstration Problem,
• New example of obsolescence, to aid in enhancing student engagement.
student understanding.
• Updated presentation of accounting for ac- CHAPTER 11 (FORMER CHAPTER 12)
quired buildings versus constructed buildings • New chapter opening vignette featuring
to enhance student comprehension. Canadian-born start-up Kicking Horse Coffee
includes video links featuring an interview on
• Updated mid-chapter and end-of-chapter
entrepreneurship and expansion into the United
Demonstration Problems.
States and an inside look at Kicking Horse Coffee.
• Updated financial statement excerpts, featur-
• New Critical Thinking challenge.
ing presentation of Indigo Books & Music Inc.’s
accounting policy and depreciation schedule • Updated terminology from partnership
for property, plant, and equipment and Microsoft’s income/loss to partnership profit/loss.
presentation and disclosure over intangible • Updated Exhibit 11.10.
assets.
• Updated coverage of Patents and Copyrights CHAPTER 12 (FORMER CHAPTER 13)
to reflect current Canadian laws over intellec- • Updated chapter opening vignette features
tual property rights. new video link to Dragon’s Den episode and
• New example of acquisition: Shoppers Drug CBC interview.
Mart by Loblaw Companies, Ltd. is provided • New Decision Insight features Cara Operations
with example note disclosure to help students and its decision to go public.
understand accounting for goodwill. • New excerpt from Telus Corporation’s finan-
• New Exhibit 9.23: World’s Most Valuable cial statements illustrates disclosure of
brands. declared dividends.
xix
PREFACE
• New Financial Statement Analysis section for • New Important Tip box on calculating bond
ROE and book value per share to provide more interest expense.
real world application context for the chapter • New financial statement note excerpt from
content. WestJet.
CHAPTER 13 (FORMER CHAPTER 14) • Content covering leases, previously in the ap-
• New chapter opening vignette highlights the pendix, has been moved into the main chapter
history of Apple Inc. from its origins as a tech with expanded examples to help students un-
start-up to the recent 7:1 stock split, including derstand the accounting differences for the
a Video Link highlighting what investors lessee and lessor based on the terms of the
should know about the impact of the Apple lease agreement.
Inc. stock split. • Added Financial Statement Analysis section
• Expanded discussion of stock splits incorpo- for debt to equity Ratio, to provide more real-
rates an analysis of the impact of the Apple world application context for the chapter
Inc. stock split to shareholders, enhancing stu- content.
dent engagement by demonstrating the impact
through investigating the event. CHAPTER 15 (FORMER CHAPTER 16)
• New chapter opening vignette features
• New Financial Statement Analysis section in-
Saskatchewan craft brewery start-up Farmery;
cludes the dividend payout ratio, featuring the
it includes video links to CBC Dragon’s Den ep-
dividend payout ratio for Telus Corporation
isode and a CBC interview.
and providing more real-world context for
chapter content. • New Exhibits 15.1 and 15.2, financial statement
disclosure excerpts for PMC-Sierra and Indigo,
• Removed appendix covering treasury shares
providing context to students and aiding com-
• New table featuring several examples of clas-
prehension of chapter topics.
sifying changes to accounting estimates and
accounting policy changes. • New Exhibit 15.3 highlights an example stock
quote for Spin Master Corp.
CHAPTER 14 (FORMER CHAPTER 15) • Updated Accounting for Investments section
• New chapter opening vignette features two ex- based on IFRS 9.
amples of real bond issuance by ZooShare with
• New Decision Insight box spotlights Bernie
different risk profiles; it includes video link help-
Madoff and Ponzi Schemes (repurposed from
ing students to understand the business model of
chapter opening vignette in 14th edition).
ZooShare’s renewable energy cooperative.
• Updated Investments section based on new
• New example bond issuance for Telus Corpo-
IFRS 9, effective January 1, 2018. Terminology
ration to enhance real-world application of the
is updated to reflect new standards.
bond issuance procedures.
• New Exhibit 15.7, Accounting for Investments
• New Decision Insight covering the over-the-
Summary Chart, outlines the key issues of
counter trading options for the sale of or deter-
accounting for strategic and non-strategic
mination of market pricing for corporate
investments and corresponding journal entries
bonds in Canada.
and financial statement presentation.
• New example of a bond issuance by Telus
Corp., with the current trading information. CHAPTER 16 (FORMER CHAPTER 17)
• Updated chapter demonstration example to • New chapter opening vignette features Butter
illustrate the present value of a premium bond Avenue patisserie and includes Video Link for
to enhance student engagement. students to learn more about the company.
xx
PREFACE
• New Decision Insight on top 10 cash flow man- student interest and demonstrate real world
agement tips for small businesses. applicability.
• Coverage of direct method of cash flow state- • New introductory section focussing on the
ments moved from appendix into main chapter basics of analysis encourages students to per-
with an emphasis on the key differences and form a more holistic approach to their analysis
similarities between the direct and indirect and provides a brief overview of tools such as
methods highlighted through Important Tip PESTLE, SWOT, and Porter’s Five Forces.
boxes to aid student comprehension. • New terminology: acid-test ratio is referred to
• New financial statement excerpt provides an as the quick ratio.
example cash flow statement for Brick • Formulas requiring memorization are high-
Brewing Company Ltd. to help students under- lighted in purple boxes and key rules of thumb
stand the real-world application of the material. and commentary on favourable versus unfa-
• New summary chart (Exhibit 16.14) provides vourable results have been added to help stu-
key information to students on preparing a dents in interpreting their results.
cash flow statement and highlighting key dif-
ferences between direct and indirect methods APPENDIX I
of statement of cash flow. • All rates (i.e., EI, CPP, Provincial Tax, Federal
Tax) are updated to 2015.
• Mid-Chapter Demonstration Problem and Dem-
onstration Problem now feature both direct APPENDIX II
and indirect methods.
• Includes annual audited financial statements
CHAPTER 17 (FORMER CHAPTER 18) (excluding notes to the financial statements)
• New chapter opening vignette features Lulule- for WestJet, Danier Leather, Telus Corporation,
mon Athletica Inc. and analyzes its growth and Indigo Books & Music. (See Volume 1 for
from inception to a $1.8 billion company, pro- WestJet and Danier audited financial state-
viding analysis of its profit and gross margins ments with notes.)
and analyzing its key success factors.
APPENDIX III
• Financial statement analysis is illustrated with • Sample chart of accounts updated to reflect
a more detailed and engaging example, in- textbook content.
cluding heightened company detail to capture
xxi
PREFACE
Market Leading Technology
Learn without Limits

McGraw-Hill Connect® is an award-winning digital teaching and learning platform that gives students
the means to better connect with their coursework, with their instructors, and with the important con-
cepts that they will need to know for success now and in the future. With Connect, instructors can take
advantage of McGraw-Hill’s trusted content to seamlessly deliver assignments, quizzes, and tests online.
McGraw-Hill Connect is the only learning platform that continually adapts to each student, delivering
precisely what they need, when they need it, so class time is more engaging and effective. Connect makes
teaching and learning personal, easy, and proven.
Connect Key Features:

SMARTBOOK®
As the first and only adaptive reading experience, SmartBook is changing the way students read and
learn. SmartBook creates a personalized reading experience by highlighting the most important con-
cepts a student needs to learn at that moment in time. As a student engages with SmartBook, the reading
experience continuously adapts by highlighting content based on what each student knows and doesn’t
know. This ensures that he or she is focused on the content needed to close specific knowledge gaps,
while it simultaneously promotes long-term learning.
CONNECT INSIGHT®
Connect Insight is Connect’s new one-of-a-kind visual analytics dashboard—now available for instructors—
that provides at-a-glance information regarding student performance, which is immediately actionable. By
presenting assignment, assessment, and topical performance results together with a time metric that is easily
visible for aggregate or individual results, Connect Insight gives the instructor the ability to take a just-in-time
approach to teaching and learning, which was never before available. Connect Insight presents data that and
helps instructors improve class performance in a way that is efficient and effective.
SIMPLE ASSIGNMENT MANAGEMENT

With Connect, creating assignments is easier than ever, so instructors can spend more time teaching and
less time managing.
• Assign SmartBook learning modules
• Instructors can edit existing questions and create their own questions
• Draw from a variety of text-specific questions, resources, and test bank material to assign online
• Streamline lesson planning, student progress reporting, and assignment grading to make classroom
management more efficient than ever
SMART GRADING
When it comes to studying, time is precious. Connect helps students learn more efficiently by providing
feedback and practice material when they need it, where they need it.
• Automatically score assignments, providing students immediate feedback on their work and compar-
isons with correct answers
• Access and review each response, manually change grades, or leave comments for students to review
xxii
PREFACE
• Track individual student performance—by question or assignment, or in relation to the class overall—
with detailed grade reports.
• Reinforce classroom concepts with practice tests and instant quizzes.
• Integrate grade reports easily with Learning Management Systems including Blackboard, D2L, and
Moodle.
INSTRUCTOR LIBRARY
The Connect Instructor Library is a repository for additional resources to improve student engagement in and
out of the class. It provides all the critical resources instructors need to build their course. Instructors can
• Access Instructor resources
• View assignments and resources created for past sections
• Post their own resources for students to use
Instructor Resources
Instructor supplements are available within Connect.
SOLUTIONS MANUAL
Fundamental Accounting Principles continues to set the standard for accuracy of its problem material.
The Solutions Manual has been revised by Praise Ma, Kwantlen Polytechnic University (Volume 1) and
Laura Dallas, Kwantlen Polytechnic University (Volume 2). Additional accuracy checking was provided
by Rhonda Heninger, SAIT Polytechnic, Elizabeth Hicks, Douglas College, and Michelle Young, CPA.
Available in both Microsoft Word and PDF format, solutions for all problem material are included.
COMPUTERIZED TEST BANK

The test bank has been revised and technically checked for accuracy to reflect the changes in the Fifteenth
Canadian Edition. Carol Tristani, Mohawk College, revised the test bank for this edition. Grouped accord-
ing to Learning Objective, difficulty level, and by level of Bloom’s Taxonomy, the questions in the comput-
erized test bank include true/false, multiple choice, matching, short essay, and problem material.
POWERPOINT® PRESENTATIONS
These presentation slides, revised by Betty Young, Red River College, are fully integrated with the text to
visually present chapter concepts.
INSTRUCTOR’S MANUAL
The Instructor’s Manual, revised by Denise Cook, Durham College (Volume 1) and Joe Pidutti, Durham
College (Volume 2), cross-references assignment materials by Learning Objective and also provides a
convenient chapter outline.
FOCUS ON FINANCIAL STATEMENTS

These include technical and analytical questions that incorporate major topics covered. These, and ac-
companying solutions in the Solutions Manual, have been revised by Stephanie Ibach, MacEwan Univer-
sity. Two additional Focus on Financial Statement exercises for each chapter are included on Connect.
EXTEND YOUR KNOWLEDGE

This supplemental material has been developed to delve into more detail for specific topics. These have
been revised by Stephanie Ibach, MacEwan University.
xxiii
PREFACE
EXCEL TEMPLATE SOLUTIONS

Solutions to the problems using Excel templates are available for instructors. These have been revised by
Ian Feltmate, Acadia University.
IMAGE BANK
All exhibits and tables displayed in the text are available for your use, whether for creating transparen-
cies or handouts, or customizing your own PowerPoint presentations.
Other Supplements for Students

WORKING PAPERS
Available for purchase by students, printed Working Papers for Volumes 1 and 2 match the end-of-chapter
material. They include papers that can be used to solve all of the Quick Study questions, Exercises, and A
and B Problem sets. The Working Papers for the Fifteenth Canadian Edition have been revised by Praise
Ma, Kwantlen Polytechnic University (Volume 1) and Laura Dallas, Kwantlen Polytechnic University
(Volume 2). Additional technical checking was completed by Michelle Young.
Superior Learning Solutions and Support

The McGraw-Hill Education team is ready to help instructors assess and integrate any of our products, tech-
nology, and services into your course for optimal teaching and learning performance. Whether it’s helping
your students improve their grades, or putting your entire course online, the McGraw-Hill Education team is
here to help you do it. Contact your Learning Solutions Consultant today to learn how to maximize all of
McGraw-Hill Education’s resources.
For more information, please visit us online: http://www.mheducation.ca/highereducation/
educators/digital-solutions
Developing a Market-Driven Text

The success of this text is the result of an exhaustive process, which has gone beyond the scope of a single
edition. Hundreds of instructors and educators across the country have been involved in giving their feedback
to help develop the most successful accounting fundamentals text in the country. We owe thanks to all of
those who took the time to evaluate this textbook and its supplemental products.
Fifteenth Canadian Edition Reviewers

Joan Baines Red River College Rod Delcourt Algonquin College
Les Barnhouse Grant MacEwan University Kevin deWolde University of the Fraser Valley
Maria Belanger Algonquin College Han Donker University of Northern British
Robert Briggs New Brunswick Community Columbia
College David Fleming George Brown College
Lewis Callahan Lethbridge College Brent Groen University of Fraser Valley
Barb Chapple St. Clair College Kerry Hendricks Fanshawe College
Shiraz Charania Langara College Rhonda Heninger Southern Alberta Institute of
Denise Cook Durham College Technology
Derek Cook Okanagan College Elizabeth Hicks Douglas College
Heather Cornish Northern Alberta Institute of Darcie Hillebrand Capilano University
Technology Gwen Hoyseth Grande Prairie Regional College
xxiv
Another random document with
no related content on Scribd:
Short of cowboys and lunatics, nobody could have imagined
such a feat of horsemanship. Of that pattern is frontier adventure—
daring gone mad; and yet it is very rarely that the frontiersman finds
the day’s work worth recording, or takes the trouble to set down on
paper the stark naked facts of an incident more exciting than a
shipwreck, more dangerous than a battle, and far transcending the
common experience of men.
Theodore Roosevelt
Traveling alone in the Rockies, Colonel Roosevelt came at
sundown to a little ridge whence he could look into the hollow
beyond—and there he saw a big grizzly walking thoughtfully home to
bed. At the first shot, “he uttered a loud moaning grunt and plunged
forward at a heavy gallop, while I raced obliquely down the hill to cut
him off. After going a few hundred feet he reached a laurel thicket ...
which he did not leave.... As I halted I heard a peculiar savage whine
from the heart of the brush. Accordingly I began to skirt the edge
standing on tiptoe, and gazing earnestly in to see if I could not get a
glimpse of his hide. When I was at the narrowest part of the thicket
he suddenly left it directly opposite, and then wheeled and stood
broadside to me on the hillside a little above. He turned his head
stiffly toward me, scarlet strings of froth hung from his lips, his eyes
burned like embers in the gloom. I held true, aiming behind the
shoulder, and my bullet shattered the point or lower end of his heart,
taking out a big nick. Instantly the great bear turned with a harsh roar
of fury and challenge, blowing the bloody foam from his mouth, so
that I saw the gleam of his white fangs; and then he charged straight
at me, crashing and bounding through the laurel bushes so that it
was hard to aim.
“I waited until he came to a fallen tree, raking him as he topped it
with a ball which entered his chest and went through the cavity of his
body, but he neither swerved nor flinched, and at the moment I did
not know that I had struck him. He came unsteadily on, and in
another moment was close upon me. I fired for his forehead, but my
bullet went low, entering his open mouth, smashing his lower jaw,
and going into the neck. I leaped to one side almost as I pulled
trigger, and through the hanging smoke the first thing I saw was his
paw as he made a vicious side blow at me. The rest of his charge
carried him past. As he struck he lurched forward, leaving a pool of
bright blood where his muzzle hit the ground; but he recovered
himself and made two or three jumps onward, while I hurriedly
jammed a couple of cartridges into the magazine, my rifle only
holding four, all of which I had fired. Then he tried to pull up, but as
he did so his muscles seemed to give way, his head drooped, and he
rolled over—each of my first three bullets had inflicted a mortal
wound.”
This man who had fought grizzly bears came rather as a surprise
among the politicians in silk hats who run the United States. He had
all the gentry at his back because he is the first man of unquestioned
birth and breeding who has entered the political bear-pit since the
country squires who followed George Washington. He had all the
army at his back because he had charged the heights at Santiago de
Cuba with conspicuous valor at the head of his own regiment of
cowboys. He had the navy at his back because as secretary for the
navy he had successfully governed the fleet. But he was no politician
when he came forward to claim the presidency of the United States.
Seeing that he could not be ignored the wire-puller set a trap for this
innocent and gave him the place of vice-president. The vice-
president has little to do, can only succeed to the throne in the event
of the president’s death, and is, after a brief term, barred for life from
any further progress. “Teddy” walked into the trap and sat down.
But when President McKinley was murdered the politicians found
that they had made a most surprising and gigantic blunder. By their
own act the cowboy bear fighter must succeed to the vacant seat as
chief magistrate of the republic. President Roosevelt happened to be
away at the time, hunting bears in the Adirondack wilderness, and
there began a frantic search of mountain peaks and forest solitudes
for the missing ruler of seventy million people. When he was found,
and had paid the last honors to his dead friend, William McKinley, he
was obliged to proceed to Washington, and there take the oaths. His
women folk had a terrible time before they could persuade him to
wear the silk hat and frock coat which there serve in lieu of
coronation robes, but he consented even to that for the sake of the
gorgeous time he was to have with the politicians afterward.
XXIX
A. D. 1905
THE NORTHWEST PASSAGE
ONCE upon a time the Foul Fiend wanted a death-trap that would
pick out all the bravest men and destroy them, so he invented the
Northwest Passage.
So when Europe needed a short route to China round the north
end of the Americas our seamen set out to find a channel, and even
when they knew that any route must lie through the high Arctic, still
they were not going to be beaten. Our white men rule the world
because we refuse to be beaten.
The seamen died of scurvy, and it was two hundred years before
they found out how to stay alive on salted food, by drinking lime juice.
Safe from scurvy, they reached the gate of the passage at Lancaster
Sound, but there the winter caught them, so that their ships were
squashed in driving ice, and the men died of cold and hunger. Then
the explorers got ships too strong to be crushed; they copied the dress
of the Eskimo to keep them warm; and they carried food enough to last
for years. Deeper and deeper they forced their way into the Arctic, but
now they neared the magnetic pole where the compass is useless, in
belts of drifting fog darker than midnight. Still they dared to go on, but
the inner channels of the Arctic were found to be frozen until the
autumn gales broke up the ice-fields, leaving barely six weeks for
navigation before the winter frosts. At that rate the three-thousand-mile
passage would take three years. Besides, the ship must carry a deck
load of sledge dogs with their food, so that the men might escape
overland in case they were cast away. Only a big ship could carry the
supplies, but once again the seamen dared to try. And now came the
last test to break men’s hearts—the sea lane proved to be so foul with
shoals and rocks that no large vessel could possibly squeeze through.
At last, after three hundred years, the British seamen had to own
defeat. Our explorers had mapped the entire route, but no ship could
make the passage because it was impossible to raise money for the
venture.
Why should we want to get through this useless channel? Because
it was the test for perfect manhood free from all care for money, utterly
unselfish, of the highest intellect, patience, endurance and the last
possible extremity of valor.
And where the English failed a Norseman, Nordenskjöld made the
Northeast passage round the coast of Asia. Still nobody dared to
broach the Northwest passage round America, until a young Norse
seaman solved the riddle. Where no ship could cross the shoals it
might be possible with a fishing boat drawing only six feet of water. But
she could not carry five years’ supplies for men and dogs. Science
came to the rescue with foods that would pack into a tenth part of their
proper bulk, and as to the dog food, one might risk a deck load big as
a haystack, to be thrown off if the weather got too heavy. Still, how
could a fishing boat carry twenty men for the different expert jobs?
Seven men might be discovered each an expert in three or four
different trades; the captain serving as the astronomer and doctor, the
cook as a naturalist and seaman. So Roald Amundsen got Doctor
Nansen’s help, and that great explorer was backed by the king. Help
came from all parts of Scandinavia, and a little from Great Britain.
The Gjöa was a forty-seven ton herring boat with a thirteen horse-
power motor for ship’s pet, loaded with five years’ stores for a crew of
seven men, who off duty were comrades as in a yachting cruise. In
1903 she sailed from Christiania and spent July climbing the north
current in full view of the Greenland coast, the Arctic wonderland. At
Godhaven she picked up stores, bidding farewell to civilization, passed
Upernivik the last village, and Tassinssak, the last house on earth, then
entered Melville Bay with its three-hundred-mile frontage of glacier, the
most dangerous place in the Arctic. Beyond, near Cape York, she
found a deck load of stores left for her by one of the Dundee whalers.
There the people met the last white men, three Danish explorers
whose leader, Mylius Erichsen, was making his way to death on the
north coast of Greenland. So, like a barge with a hayrick, the overload
Joy crossed from the Greenland coast to Lancaster Sound, the gate of
the Northwest passage, whose gatepost is Beechey Island, sacred to
the memory of Sir John Franklin, and the dead of the Franklin search.
The Joy found some sole leather better than her own, a heap of useful
coal and an anvil, among the litter of old expeditions; made the graves
tidy; left a message at Franklin’s monument, and went on. For three
hundred years the channels ahead were known to have been blocked;
only by a miracle of good fortune could they be free from ice; and this
miracle happened, for the way was clear.
* * * * *
“I was sitting,” writes Amundsen on August thirty-first, “entering the
day’s events in my journal, when I heard a shriek—a terrific shriek,
which thrilled me to the very marrow. It takes something to make a
Norseman shriek, but a mighty flame with thick suffocating smoke was
leaping up from the engine room skylight. There the tanks held two
thousand two hundred gallons of petroleum, and close beside them a
pile of soaked cotton waste had burst with a loud explosion. If the
tanks got heated the ship would be blown into chips, but after a hard
fight the fire was got under. All hands owed their lives to their fine
discipline.”
A few days later the Joy grounded in a labyrinth of shoals, and was
caught aground by a storm which lifted and bumped her until the false
keel was torn off. The whole of the deck load had to be thrown
overboard. The only hope was to sail over the rocks, and with all her
canvas set she charged, smashing from rock to rock until she reached
the farther edge of the reef which was nearly dry. “The spray and sleet
were washing over the vessel, the mast trembled, and the Gjöa
seemed to pull herself together for a last final leap. She was lifted up
and flung bodily on the bare rocks, bump, bump, with terrific force.... In
my distress I sent up (I honestly confess it) an ardent prayer to the
Almighty. Yet another bump worse than ever, then one more, and we
slid off.”
The shock had lifted the rudder so that it rested with the pintles on
the mountings, and she would not steer; then somehow the pins
dropped back into their sockets, the steersmen regained control and
the Joy was saved, after a journey across dry rocks which ought to
have smashed any ship afloat. She did not even leak.
Near the south end of King William’s Land a pocket harbor was
found, and named Joy Haven. There the stores were landed, cabins
were built, the ship turned into a winter house, and the crew became
men of science. For two years they were hard at work studying the
magnetism of the earth beside the Magnetic Pole. They collected
fossils and natural history specimens, surveyed the district, studied the
heavens and the weather, hunted reindeer for their meat and clothing,
fished, and made friends with the scented, brave and merry Eskimos.
During the first winter the thermometer dropped to seventy-nine
degrees below zero, which is pretty near the world record for cold, but
as long as one is well fed, with bowels in working order, and has
Eskimo clothes to wear, the temperature feels much the same after
forty below zero. Below that point the wind fails to a breathless calm,
the keen dry air is refreshing as champagne, and one can keep up a
dog-trot for miles without being winded. It is not the winter night that
people dread, but the summer day with its horrible torment of
mosquitoes. Then there is in spring and autumn, a hot misty glare
upon the snow-fields which causes blindness with a deal of pain. The
Arctic has its drawbacks, but one remembers afterward the fields of
flowers, the unearthly beauty of the northern lights, the teeming game,
and those long summer nights when the sun is low, filling the whole
sky with sunset colors.
The greatest event of the first year was the finding of an Eskimo
hunter to carry letters, who came back in the second summer, having
found in Hudson’s Bay an exploring vessel of the Royal Northwest
Mounted Police of Canada. Major Moody, also the captain of the
Arctic, and the Master of an American whaler, sent their greetings,
news of the outer world, some useful charts, and a present of husky
dogs.
The second summer was over. The weather had begun to turn cold
before a northerly gale smashed the ice, and sea lanes opened along
the Northwest passage. On August thirteenth the Joy left her
anchorage, under sail and steam, to pick her way without compass
through blinding fog, charging and butting through fields of ice,
dodging zigzag through shoals, or squeezing between ice-fields and
the shore. There was no sleep for anybody during the first three nights,
but racking anxiety and tearing overstrain until they reached known
waters, a channel charted by the old explorers. They met an American
whaler, and afterward had clear open water as far as the mouths of the
Mackenzie River. A few miles beyond that the ice closed in from the
north and piled up-shore so that the passage was blocked and once
more the Joy went into winter quarters. But not alone. Ladies must
have corsets ribbed with whalebone from the bowhead whale. Each
whale head is worth two thousand pounds, so a fleet of American
whalers goes hunting in the Arctic. Their only port of refuge is Herschel
Island off the Canadian coast, so there is an outpost of the Northwest
Mounted Police, a mission station and a village of Eskimos.
The Joy came to anchor thirty-six miles to the east of Herschel
Island, beside a stranded ship in charge of her Norse mate, and daily
came passengers to and fro on the Fort Macpherson trail. From that
post runs a dog-train service of mails connecting the forts of the
Hudson’s Bay Company all the way up the Mackenzie Valley to
Edmonton on the railway within two thousand miles. The crew of the
Joy had company news, letters from home, and Captain Amundsen
went by dog-train to the mining camps on the Yukon where at Eagle
City he sent telegrams.
At last in the summer of 1906 the Joy sailed on the final run of her
great voyage, but her crew of seven was now reduced to six, and at
parting she dipped her colors to the cross on a lone grave. The ice
barred her passage, but she charged, smashing her engines, and
charged again, losing her peak which left the mainsail useless. So she
won past Cape Prince of Wales, completing the Northwest passage,
and entering Bering Sea called at Cape Nome for repairs. There a
thousand American gold miners welcomed the sons of the vikings with
an uproarious triumph, and greeted Captain Amundsen with the Norse
national anthem.
XXX
A. D. 1588
JOHN HAWKINS
MASTER JOHN HAWKINS, mariner, was a trader’s son, familiar

from childhood with the Guinea coast of Africa. Worshipful
merchants of London trusted him with three ridiculously small ships,
the size of our fishing smacks, but manned by a hundred men. With
these, in 1562—the “spacious times” of great Elizabeth—he
swooped down on the West African coast, and horribly scared were
his people when they saw the crocodiles. The nature of this animal
“is ever when he would have his prey, to sob and cry like a Christian
bodie, to provoke them to come to him, and then he snatcheth at
them.” In spite of the reptiles, Master Hawkins “got into his
possession, partly by the sword, and partly by other means,” three
hundred wretched negroes.
The king of Spain had a law that no Protestant heretic might
trade with his Spanish colonies of the West Indies, so Master
Hawkins, by way of spitting in his majesty’s eye, went straight to
Hispaniola, where he exchanged his slaves with the settlers for a
shipload of hides, ginger, sugar and pearls.
On his second voyage Master Hawkins attempted to enslave a
whole city, hard by Sierra Leone, but the Almighty, “who worketh all
things for the best, would not have it so, and by Him we escaped
without danger, His name be praised for it.” Hawkins had nearly
been captured by the negroes, and was compelled to make his pious
raids elsewhere. Moreover, when he came with a fleet loaded with
slaves to Venezuela, the Spanish merchants were scared to trade
with him. Of course, for the sake of his negroes, he had to get them
landed somehow, so he went ashore, “having in his greate boate two
falcons of brasse, and in the other boates double bases in their
noses.” Such artillery backed by a hundred men in plate armor,
convinced the Spaniards that it would be wise to trade.
On his third voyage, Master Hawkins found the Spaniards his
friends along the Spanish main, but the weather, a deadly enemy,
drove him for refuge and repair to San Juan d’Ullua, the port of
Mexico. Here was an islet, the only shelter on that coast from the
northerly gales. He sent a letter to the capital for leave to hold that
islet with man and guns while he bought provisions and repaired his
ships. But as it happened, a new viceroy came with a fleet of thirteen
great ships to claim that narrow anchorage, and Hawkins must let
them in or fight. “On the faith of a viceroy” Don Martin de Henriquez
pledged his honor before Hawkins let him in, then set his ships close
aboard those of England, trained guns to bear upon them, secretly
filled them with troops hid below hatches, and when his treason was
found out, sounded a trumpet, the signal for attack. The Englishmen
on the isle were massacred except three, the queen’s ship Jesus, of
Lubeck, was so sorely hurt that she had to be abandoned, and only
two small barks, the Minion and the Judith, escaped to sea. The
Spaniards lost four galleons in that battle.
Sir John Hawkins
As to the English, they were in great peril, and parted by a storm.
The Judith fared best, commanded by a man from before the mast,
one Francis Drake, who brought the news to England that Hawkins
had more than two hundred people crowded upon the Minion without
food or water. “With many sorrowful hearts,” says Hawkins, “we
wandered in an unknown sea by the span of fourteen dayes, till
hunger forced us to seeke the lande, for birdes were thought very
goode meate, rattes, cattes, mise and dogges.”
It was then that one hundred fourteen men volunteered to go
ashore and the ship continued a very painful voyage.
These men were landed on the coast of Mexico, unarmed, to be
stripped naked presently by red Indians, and by the Spaniards
marched as slaves to the city of Mexico, where after long
imprisonment those left alive were sold. The Spanish gentlemen, the
clergy and the monks were kind to these servants, who earned
positions of trust on mines and ranches, some of them becoming in
time very wealthy men though still rated as slaves. Then came the
“Holy Hellish Inquisition” to inquire into the safety of their souls. All
were imprisoned, nearly all were tortured on the rack, and flogged in
public with five hundred lashes. Even the ten gentlemen landed by
Hawkins as hostages for his good faith shared the fate of the
shipwrecked mariners who, some in Mexico and some in Spain,
were in the end condemned to the galleys. And those who kept the
faith were burned alive. From that time onward, whatever treaties
there might be in Europe, there was never a moment’s peace for the
Spanish Indies. All honest Englishmen were at war with Spain until
the Inquisition was stamped out, and the British liberators had
helped to drive the Spaniards from the last acre of their American
empire.
When Hawkins returned to England, Mary, Queen of Scots, was
there a prisoner. The sailor went to Elizabeth’s minister, Lord
Burleigh, and proposed a plot. By this plot he entered into a treaty
with the queen of Scots to set her on the throne. He was to join the
Duke of Alva for the invasion and overthrow of England. So pleased
was the Spanish king that he paid compensation to Hawkins for his
losses at San Juan d’Ullua and restored to freedom such of the
English prisoners as could be discovered. Then Hawkins turned loyal
again, and Queen Elizabeth knighted him for fooling her enemies.
XXXI
A. D. 1573
FRANCIS DRAKE
THE Judith had escaped from San Juan d’Ullua and her master,
Francis Drake, of Devon, was now a bitter vengeful adversary, from
that time onward living to be the scourge of Spain. Four years he
raided, plundered, burned along the Spanish main, until the name
Drake was changed to Dragon in the language of the dons.
Then in 1573 he sailed from Plymouth with five little ships to
carry fire and sword into the South Seas, where the flag of England
had never been before. When he had captured some ships near the
Cape de Verde Islands, he was fifty-four days in unknown waters
before he sighted the Brazils, then after a long time came to
Magellan’s Straits, where he put in to refresh his men. One of the
captains had been unfaithful and was now tried by a court-martial,
which found him guilty of mutiny and treason against the admiral.
Drake offered him a ship to return to England and throw himself on
the queen’s mercy, or he might land and take his chance among the
savages, or he could have his death, and carry his case to the
Almighty. The prisoner would not rob the expedition of a ship, nor
would he consort with the degraded tribes of that wild Land of Fire,
but asked that he might die at the hands of his countrymen because
of the wrong he had done them. So the date was set for his
execution, when all the officers received the holy communion, the
prisoner kneeling beside the admiral. After that they dined together
for the last time, and when they had risen from table, shook hands at
parting, the one to his death, the others to their voyage. May
England ever breed such gentlemen!
The squadron had barely got clear of the straits and gained the
Pacific Ocean, when bad weather scattered all the ships. Drake went
on alone, and on the coast of Chili, met with an Indian in a canoe,
who had news of a galleon at Santiago, laden with gold from Peru.
The Spaniards were not at all prepared for birds of Drake’s feather
on the South Seas, so that when he dropped in at Santiago they
were equally surprised and annoyed.
The galleon’s crew were ashore save for six Spaniards and three
negroes, so bored with themselves that they welcomed the visitors
by beating a drum and setting out Chilian wine. But when Master
Moon arrived on board with a boat’s crew, he laid about him
outrageously with a large sword, saying, “Down, dog!” to each
discomfited Spaniard, until they fled for the hold. Only one leaped
overboard, who warned the town, whereat the people escaped to the
bush, leaving the visitors to enjoy themselves. The cargo of gold and
wine must have been worth about fifty thousand pounds, while
Santiago yielded a deal of good cheer besides, Master Fletcher, the
parson, getting for his “spoyle” a silver chalice, two cruets and an
altar cloth.
Sir Francis Drake
Greatly refreshed, the English went on northward, carefully

inspecting the coast. At one place a sleeping Spaniard was found on
the beach with thirteen bars of silver. “We took the silver and left the
man.” Another place yielded a pack-train of llamas, the local beast of
burden, with leather wallets containing eight hundred pounds’ weight
of silver. Three small barks were searched next, one of them being
laden with silver; then twelve ships at anchor, which were cut adrift;
and a bark with eighty pounds’ weight of gold, and a golden crucifix
set with emeralds. But best of all was the galleon Cacafuego,
overtaken at sea, and disabled at the third shot, which brought down
her mizzenmast. Her cargo consisted of “great riches, as jewels and
precious stones, thirteen chests full of royals of plate, four score
pounds weight of golde, and six and twentie tunne of silver.” The
pilot being the possessor of two nice silver cups, had to give one to
Master Drake, and the other to the steward, “because hee could not
otherwise chuse.”
Every town, every ship was rifled along that coast. There was
neither fighting nor killing, but much politeness, until at last the ship
had a full cargo of silver, gold and gems, with which she reached
England, having made a voyage round the world. When Queen
Elizabeth dined in state on board Drake’s ship at Greenwich, she
struck him with a sword and dubbed him knight. Of course he must
have armorial bearings now, but when he adopted the three wiverns
—black fowl of sorts—of the Drake family, there were angry protests
against his insolence. So the queen made him a coat-of-arms, a
terrestrial globe, and a ship thereon led with a string by a hand that
reached out of a cloud, and in the rigging of the said ship, a wivern
hanged by the neck.
It was Parson Fletcher who wrote the story of that illustrious
voyage, but he does not say how he himself fell afterward from
grace, being solemnly consigned by Drake to the “devil and all his
angells,” threatened with a hanging at the yard-arm, and made to
bear a posy on his breast with these frank words, “Francis Fletcher,
ye falsest knave that liveth.”
Drake always kept his chaplain, and dined “alone with musick,”
did all his public actions with large piety and gallant courtesy, while
he led English fleets on insolent piracies against the Spaniards.
From his next voyage he returned leaving the Indies in flames,
loaded with plunder, and smoking the new herb tobacco to the
amazement of his countrymen.
Philip II was preparing a vast armada against England, when
Drake appeared with thirty sail on the Spanish coast, destroyed a
hundred ships, swept like a hurricane from port to port, took a
galleon laden with treasure off the western islands, and returned to
Plymouth with his enormous plunder.
Next year Drake was vice-admiral to Lord Howard in the
destruction of the Spanish armada.
In 1589 he led a fleet to deliver Portugal from the Spaniards,
wherein he failed.
Then came his last voyage in company with his first commander,
Sir John Hawkins. Once more the West Indies felt the awful weight
of his arm, but now there were varying fortunes of defeat, of
reprisals, and at the end, pestilence, which struck the fleet at
Nombre de Dios, and felled this mighty seaman. His body was
committed to the sea, his memory to the hearts of all brave men.
Queen Elizabeth
XXXII
A. D. 1587
THE FOUR ARMADAS
HERE let us call a halt. We have come to the climax of the great
century, the age of the Renaissance, when Europe was born again; of
the Reformation, when the Protestants of the Baltic fought the
Catholics of the Mediterranean for the right to worship in freedom; and
of the sea kings who laid the foundations of our modern world.
Islam had reached her fullest flood of glory with the fleets of
Barbarossa, the armies of the Sultan Suleiman, and all the splendors
of Akbar the Magnificent, before her ebb set downward into ruin.
Portugal and Spain, under one crown, shared the plunder of the
Indies and the mastery of the sea.
Then, as the century waned, a third-class power, the island state of
England, claimed the command of the sea, and planted the seeds of
an empire destined to overshadow the ruins of Spain, as well as the
wreck of Islam.
Here opened broad fields of adventure. There were German and
English envoys at the court of Russia; English merchants seeking
trade in India, Dutch gunners in the service of eastern princes, French
fishermen finding the way into Canada, seamen of all these nations as
slaves in Turkish galleys or in Spanish mines; everywhere sea fights,
shipwrecks, trails of lost men wandering in unknown lands, matters of
desert islands, and wrecked treasures with all the usual routine of
plague, pestilence and famine, of battle, of murder and of sudden
death.
In all this tangle we must take one thread, with most to learn, I
think, from a Hollander, Mynheer, J. H. van Linschoten, who was clerk

Instant Download Ebook PDF Fundamental Accounting Principles Volume 2 15th Canadian Edition PDF Scribd

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Instant Download Ebook PDF Fundamental Accounting Principles Volume 2 15th Canadian Edition PDF Scribd

Uploaded by

Copyright:

Available Formats

(eBook PDF) Fundamental Accounting

Principles Volume 2 15th Canadian

CHAPTER 9 Property, Plant, and Equipment and Intangibles 588

Focus on Financial Statements 720 Mid-Chapter Demonstration Problem 787

Focus on Financial Statements 878 CHAPTER 15

Demonstration Problem—Direct Method 1009 Ratio Analysis 1070

Inside the Chapters

the student has just read. Read–Do–Check–Apply reinforces active

Demonstration Problems, and end-of-chapter material.

CRITICAL THINKING CHALLENGE

students develop the skills related to questioning.

IFRS AND ASPE—THE DIFFERENCES IFRS AND ASPE—THE DIFFERENCES

***ASPE, Accounting Standards, Section 1000.19–20.

Food Truck Frenzy

NEW: A LOOK BACK, A LOOK AT

NEW: IMPORTANT TIPS

lating theory to a real-life situation piques

DECISION MAKER Answer—End of chapter

EXTEND YOUR KNOWLEDGE (EYK)

students to visit Connect if they choose

Telus (without the notes), are repro-

“We are what we

2014 annual report

GUIDANCE ANSWERS TO DECISION MAKER

Guidance Answers to CHECKPOINT

DEMONSTRATION PROBLEM Problem Material

payments at the end of August, September, and October.

questions. These promote critical thinking and give

Concept Review Questions CONCEPT REVIEW QUESTIONS

QUICK STUDY Quick Study

Lar87271_ch06_390-458.indd Page 435 12/10/15 5:05 PM f-479 /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles

Exercise 6-3 Specific identification cost flow assumption LO2 EXERCISES

this icon: . These have Excel templates

Owners are partners

Taxed as a separate legal entity

Ethics Challenge ETHICS CHALLENGE

FOCUS ON FINANCIAL STATEMENTS Focus on Financial Statements

CRITICAL THINKING MINI CASES

General Updates engaging topics, and including inspiring sto-

Market Leading Technology

Learn without Limits

Connect Key Features:

SIMPLE ASSIGNMENT MANAGEMENT

COMPUTERIZED TEST BANK

FOCUS ON FINANCIAL STATEMENTS

EXTEND YOUR KNOWLEDGE

EXCEL TEMPLATE SOLUTIONS

Other Supplements for Students

Superior Learning Solutions and Support

Developing a Market-Driven Text

Fifteenth Canadian Edition Reviewers

MASTER JOHN HAWKINS, mariner, was a trader’s son, familiar

Greatly refreshed, the English went on northward, carefully

You might also like