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By Charles T. Horngren, Walter T. Harrison Jr., M. Suzanne Oliver

With its tried-and-true framework and revered writer group, Horngren/Harrison/Oliver’s monetary & Managerial Accounting is the relied on selection for teachers and scholars of rules of Accounting.

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Chapter 1: Demo Doc Solution Requirement 1 Analyze the preceding transactions in terms of their effects on the accounting equation of DR Painting. Use Exhibit 1-6 as a guide, but show balances only after the last transaction. Part 1 Part 2 Part 3 Part 4 Demo Doc Complete a. DR Painting received $40,000 cash from David Richardson and issued common stock to David. The business is receiving cash from a stockholder, so this is a recordable transaction for DR Painting. The business’s Cash (an asset) is increased by $40,000 and Common stock (stockholders’ equity) is also increased by $40,000.

Suppose the business needs $200,000 to buy an office building. The banker will want to know how much in assets the e-learning company has and how much it already owes. The balance sheet answers this question by reporting the business’s assets and liabilities. The banker wants to know if the agency generates enough cash to pay its bills. The statement of cash flows answers this question by reporting cash receipts and cash payments and whether cash increased or decreased. Outside investors also use financial statements.

C. reports liabilities similarly. That is, the liability that must be paid first is listed first, usually Accounts payable. d. reports that total assets equal total liabilities plus total equity (the accounting equation). e. reports the ending retained earnings balance, taken directly from the statement of retained earnings (see arrow 2). 4. The statement of cash flows for the month ended April 30, 2013, a. reports cash flows from three types of business activities (operating, investing, and financing activities) during the month.

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