Chapter 1: Q5PSA. (page 39)
Use the information in Problem 1-3A to prepare a year-end balance sheet for Armani Company.
Assets are the resources that will generate revenue in the future and a balance sheet is prepared.
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Question: What are at least three questions business owners and managers might be able to answer by looking at accounting information?
Gabi Gram started The Gram Co., a new business that began operations on May 1. The Gram Co. completed the following transactions during its first month of operations.
May 1 G. Gram invested \(40,000 cash in the company in exchange for its common stock.
1 The company rented a furnished office and paid \)2,200 cash for May’s rent.
3 The company purchased \(1,890 of office equipment on credit.
5 The company paid \)750 cash for this month’s cleaning services.
8 The company provided consulting services for a client and immediately collected \(5,400 cash.
12 The company provided \)2,500 of consulting services for a client on credit.
15 The company paid \(750 cash for an assistant’s salary for the first half of this month.
20 The company received \)2,500 cash payment for the services provided on May 12.
22 The company provided \(3,200 of consulting services on credit.
25 The company received \)3,200 cash payment for the services provided on May 22.
26 The company paid \(1,890 cash for the office equipment purchased on May 3.
27 The company purchased \)80 of advertising in this month’s (May) local paper on credit; cash payment is due June 1.
28 The company paid \(750 cash for an assistant’s salary for the second half of this month.
30 The company paid \)300 cash for this month’s telephone bill.
30 The company paid \(280 cash for this month’s utilities.
31 The company paid \)1,400 cash in dividends to the owner (sole shareholder).
Required 3. Prepare the statement of cash flows for the month of May
Question: What are some accounting-related professions?
BMW Group, one of Europe’s largest manufacturers, reports the following income statement accounts for the year ended December 31, 2015 (euros in millions).
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . € 92,175
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,043
Selling and administrative costs . . . . . . . . . . . . 8,633
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . 3,103
Use this information to prepare BMW’s income statement for the year ended December 31, 2015.
Question: Many accounting professionals work in one of the following three areas.
A. Financial accounting B. Managerial accounting C. Tax accounting
Identify the area of accounting that is most involved in each of the following responsibilities.
1.Internal auditing 2. External auditing 3. Cost accounting 4. Budgeting 5. Investigating violations of tax laws 6. Planning transactions to minimize taxes 7. Preparing external financial statements 8. Reviewing reports for SEC compliance
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