Intermediate Accounting : Working Papers

by Donald E. Kieso; Jerry J. Weygandt; Terry D. Warfield

• ISBN13: 9780471072089
• ISBN10: 0471072087
• Edition: 11th
• Format: Hardcover
• Copyright: 2004-01-01
• Publisher: Wiley

Summary

This bestseller has powered the careers of countless professionals. This update to the 11th edition builds on the book's reputation for comprehensiveness, accuracy, and currency, incorporating all the recent changes to the accounting literature. It integrates numerous examples from real corporations throughout the chapters to help readers understand the application of accounting principles and techniques in practice. They'll also find problems that are modeled on the AICPA 'Simulations' _ a new question format designed for the computerized uniform CPA Exam. These problems prepare readers for the exam, testing their ability to read, digest, research and respond to both a numeric problem and a short answer essay.

Table of Contents

CHAPTER 1 Financial Accounting and Accounting Standards
Learning Objectives,	1	(1)
Vignette: The Size of the New York City Phone Book ...,	1	(1)
Preview of Chapter 1
FINANCIAL STATEMENTS AND FINANCIAL REPORTING,	2	(4)
Accounting and Capital Allocation,	3	(1)
The Challenges Facing Financial Accounting,	4	(1)
Objectives of Financial Reporting,	4	(1)
The Need to Develop Standards,	5	(1)
PARTIES INVOLVED IN STANDARDS SETTING,	6	(6)
Securities and Exchange Commission (SEC),	6	(1)
merican Institute of Certified Public Accountants, (AICPA),	7	(1)
Financial Accounting Standards Board (FASB),	8	(3)
Governmental Accounting Standards Board (GASB),	11	(1)
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES,	12	(2)
ISSUES IN FINANCIAL REPORTING,	14	(14)
Standards Setting in a Political Environment,	14	(1)
The Expectations Gap,	15	(1)
International Accounting Standards,	16	(1)
Ethics in the Environment of Financial Accounting,	16	(1)
Conclusion,	17	(1)
Summary of Learning Objectives, Key Terms,	18	(1)
Questions,	19	(1)
Conceptual Cases,	20	(4)
Using Your Judgment: Financial Reporting Problem,	24	(1)
International Reporting Case,	25	(1)
Professional Simulation,	26	(1)
CHAPTER 2 Conceptual Framework Underlying Financial Accounting	27	(34)
Learning Objectives,	27	(1)
Vignette: Show Me the Earnings!,	27	(1)
Preview of Chapter 2
CONCEPTUAL FRAMEWORK,	28	(2)
Need for Conceptual Framework,	28	(1)
Development of Conceptual Framework,	29	(1)
FIRST LEVEL: BASIC OBJECTIVES,	30	(1)
SECOND LEVEL FUNDAMENTAL CONCEPTS,	31	(4)
Qualitative Characteristics of Accounting Information,	31	(3)
Basic Elements,	34	(1)
THIRD LEVEL: RECOGNITION AND MEASUREMENT CONCEPTS,	35	(27)
Basic Assumptions,	36	(2)
Basic Principles of Accounting,	38	(5)
Constraints,	43	(3)
Summary of the Structure,	46	(1)
Summary of Learning Objectives, Key Terms,	47	(1)
Questions,	48	(1)
Brief Exercises,	49	(2)
Exercises,	51	(3)
Conceptual Cases,	54	(4)
Using Your Judgment: Financial Reporting Problem,	58	(1)
Financial Statement Analysis Case,	58	(1)
Comparative Analysis Case,	58	(1)
Research Cases,	58	(1)
International Reporting Case,	59	(1)
Professional Simulation,	60	(1)
CHAPTER 3 The Accounting Information System	61	(62)
Learning Objectives,	61	(1)
Vignette: Needed: A Reliable Information System,	61	(1)
Preview of Chapter 3
ACCOUNTING INFORMATION SYSTEM,	62	(6)
Basic Terminology,	63	(1)
Debits and Credits,	64	(1)
Basic Equation,	64	(2)
Financial Statements and Ownership Structure,	66	(2)
THE ACCOUNTING CYCLE,	68	(18)
Identifying and Recording Transactions and Other Events,	68	(1)
Journalizing,	69	(1)
Posting,	70	(1)
Trial Balance,	71	(1)
Adjusting Entries,	72	(10)
Adjusted Trial Balance,	82	(1)
Closing,	83	(2)
Post-Closing Trial Balance,	85	(1)
Reversing Entries,	85	(1)
The Accounting Cycle Summarized,	86	(1)
USING A WORK SHEET,	86	(6)
Adjustments Entered on the Work Sheet,	86	(2)
Work Sheet Columns,	88	(1)
Preparing Financial Statements from a Work Sheet,	89	(2)
Closing Entries,	91	(1)
Summary of Learning Objectives, Key Terms,	92	(1)
APPENDIX 3A Cash-Basis Accounting versus Accrual-Basic Accounting,	93	(5)
DIFFERENCES BETWEEN CASH AND ACCRUAL BASIS,	93	(2)
CONVERSION FROM CASH BASIS TO ACCRUAL BASIS,	95	(2)
Service Revenue Computation,	95	(1)
Operating Expense Computation,	96	(1)
THEORETICAL WEAKNESSES OF THE CASH BASIS,	97	(1)
Summary of Learning Objective for Appendix 3A, Key Terms,	97	(1)
APPENDIX 3B Using Reversing Entries,	98	(72)
ILLUSTRATION OF REVERSING ENTRIES-ACCRUALS,	98	(1)
ILLUSTRATION OF REVERSING ENTRIES-PREPAYMENTS,	99	(1)
SUMMARY OF REVERSING ENTRIES,	100	(1)
Summary of Learning Objective for Appendix 3B,	100	(1)
Questions,	100	(1)
Brief Exercises,	100	(3)
Exercises,	103	(8)
Problems,	111	(7)
Using Your Judgment: Financial Reporting Problem,	118	(1)
Financial Statement Analysis Case,	118	(1)
Comparative Analysis Case,	119	(1)
Research Case,	119	(1)
Professional Simulations,	120	(3)
CHAPTER 4 Income Statement and Related Information	123	(46)
Learning Objectives,	123	(1)
Vignette: Which Income Number?,	123	(1)
Preview of Chapter 4
INCOME STATEMENT,	124	(3)
Usefulness of the Income Statement,	124	(1)
Limitations of the Income Statement,	125	(1)
Quality of Earnings,	125	(2)
FORMAT OF THE INCOME STATEMENT,	127	(7)
Elements of the Income Statement,	127	(1)
Single-Step Income Statements,	128	(1)
Multiple-Step Income Statements,	129	(1)
Condensed Income Statements,	130	(4)
REPORTING IRREGULAR ITEM Discontinued Operations,	134	(7)
Extraordinary Items,	135	(2)
Unusual Gains and Losses,	137	(2)
Changes in Accounting Principle,	139	(1)
Changes in Estimates,	140	(1)
Summary of Irregular Items,	140	(1)
SPECIAL REPORTING ISSUES,	141	(29)
Intraperiod Tax Allocation,	141	(2)
Earnings per Share,	143	(1)
Retained Earnings Statement,	144	(1)
Comprehensive Income,	145	(3)
Summary of Learning Objectives, Key Terms,	148	(1)
Questions,	149	(2)
Brief Exercises,	151	(1)
Exercises,	152	(4)
Problems,	156	(3)
Conceptual Cases,	159	(4)
Using Your Judgment: Financial Reporting Problem,	163	(1)
Financial Statement Analysis Cases,	164	(1)
Comparative Analysis Case,	165	(1)
Research Cases,	165	(1)
International Reporting Case,	166	(1)
Professional Simulation,	167	(2)
CHAPTER 5 Balance Sheet and Statement of Cash Flows	169	(82)
Learning Objectives,	169	(1)
Vignette: "There Ought to Be a Law,"	169	(1)
Preview of Chapter 5
SECTION 1 BALANCE SHEET,	170	(20)
USEFULNESS OF THE BALANCE SHEET,	170	(1)
LIMITATIONS OF THE BALANCE SHEET,	171	(1)
CLASSIFICATION IN THE BALANCE SHEET,	172	(1)
Current Assets,	173	(4)
Non-Current Assets,	177	(2)
Liabilities,	179	(3)
Owners' Equity,	182	(1)
Balance Sheet Format,	182	(3)
ADDITIONAL INFORMATION RPM EE Contingencies,	185	(1)
Accounting Policies,	185	(1)
Contractual Situations,	186	(1)
Fair Values,	186	(1)
Ant OF DISCLOS
Parenthetical Explanations,	187	(1)
Notes,	187	(1)
Cross References and Contra Items,	188	(1)
Supporting Schedules,	189	(1)
Terminology,	189	(1)
SECTION 2 STATEMENT OF CASH ROWS.	190	(10)
PURPOSE OF THE STATEMENT OF CASH CONTENT AND FORMAT OF THE STATEMENT OF CASH FLOWS,	191	(2)
PREPARATION OF THE STATEMENT OF CASH FLOWS,	193	(2)
USEFULNESS OF THE STATEMENT OF CASH FLOWS,	195	(1)
Financial Liquidity,	196	(1)
Financial Flexibility,	197	(1)
Free Cash Flow,	197	(1)
Summary of Learning Objectives, Key Terms,	198	(2)
APPENDIX 5A Ratio Analysis-A Reference,	200	(2)
USING RATIOS TO ANALYZE FINANCIAL PERFORMANCE,	200	(2)
Summary of Learning Objectives for Appendix 5A, Key Terms,	201	(1)
APPENDIX 5B Specimen Financial Statement: 3M Company,	202	(27)
Questions,	229	(1)
Brief Exercises,	230	(1)
Exercises,	231	(8)
Problems,	239	(4)
Conceptual Cases,	243	(3)
Using Your Judgment: Financial Reporting Problem,	246	(1)
Financial Statement Analysis Cases,	247	(1)
Comparative Analysis Case,	248	(1)
Research Case,	248	(1)
International Reporting Case,	249	(1)
Professional Simulation,	250	(1)
CHAPTER 6 Accounting and the Time Value of Money	251	(62)
Learning Objectives,	251	(1)
Vignette: The Magic of Interest,	251	(1)
Preview of Chapter 6
BASIC TIME VALUE CONCEPTS,	252	(7)
Applications of Time Value
Concepts,	252	(1)
The Nature of Interest,	253	(1)
Simple Interest,	254	(1)
Compound Interest,	254	(4)
Fundamental Variables,	258	(1)
SINGLE-SUM PROBLEMS,	259	(5)
Future Value of a Single Sum,	259	(2)
Present Value of a Single Sum,	261	(2)
Solving for Other Unknowns in Single-Sum Problems,	263	(1)
ANNUITIES,	264	(11)
Future Value of an Ordinary Annuity,	265	(2)
Future Value of an Annuity Due,	267	(1)
Illustrations of Future Value of Annuity
Problems,	268	(2)
Present Value of an Ordinary Annuity,	270	(2)
Present Value of an Annuity Due,	272	(1)
Illustrations of Present Value of Annuity Problems,	273	(2)
MORE COMPLEX SITUATIONS,	275	(4)
Deferred Annuities,	275	(2)
Valuation of Long-Term Bonds,	277	(1)
Effective Interest Method of Amortization of Bond Discount or Premium,	278	(1)
PRESENT VALUE MEASUREMENT,	279	(3)
Choosing an Appropriate Interest Rate,	280	(1)
Expected Cash Flow Illustration,	281	(1)
Summary of Learning Objectives, Key Terms,	282	(2)
APPENDIX 6A Using Financial Calculators,	284	(30)
FUTURE VALUE OF A SINGLE SUM,	284	(1)
Plus and Minus,	285	(1)
Compounding Periods,	285	(1)
Rounding,	285	(1)
PRESENT VALUE OF A SINGLE SUM,	285	(1)
FUTURE VALUE OF AN ORDINARY ANNUITY,	285	(1)
FUTURE VALUE OF AN ANNUITY DUE,	286	(1)
PRESENT VALUE OF AN ORDINARY ANNUITY,	286	(1)
USEFUL FEATURES OF THE FINANCIAL CALCULATOR,	287	(27)
Auto Loan,	287	(1)
Mortgage Loan Amount,	287	(1)
Individual Retirement Account (IRA),	288	(1)
Summary of Learning Objective for Appendix 6A,	288	(1)
Questions,	288	(1)
Brief Exercises,	289	(1)
Exercises,	290	(4)
Problems,	294	(5)
Using Your Judgment: Financial Reporting Problem,	299	(1)
Financial Statement Analysis Case,	300	(1)
Comparative Analysis Case,	300	(1)
Research Cases,	300	(1)
Professional Simulation,	301	(1)
TIME VALUE OF MONEY TABLES,	302	(11)
CHAPTER 7 Cash and Receivables	313	(54)
Learning Objectives,	313	(1)
Vignette: Ugly Duckling or Swan?,	313	(1)
Preview of Chapter 7
SECTION 1 CASH,	314	(4)
WHAT IS CASH?,	314	(1)
MANAGEMENT AND CONTROL OF CASH,	315	(1)
REPORTING CASH,	316	(1)
Restricted Cash,	316	(1)
Bank Overdrafts,	317	(1)
Cash Equivalents,	317	(1)
SUMMARY OF CASH-RELATED ITEMS,	318	(1)
SECTION 2 RECEIVABLES,	318	(22)
RECOGNITION OF ACCOUNTS RECEIVABLE,	320	(1)
Trade Discounts,	320	(1)
Cash Discounts (Sales Discounts),	320	(1)
Nonrecognition of Interest Element,	321	(1)
VALUATION OF ACCOUNTS RECEIVABLE,	322	(1)
Uncollectible Accounts Receivable,	322	(4)
RECOGNITION OF NOTES RECEIVABLE,	326	(1)
Note Issued at Face Value,	327	(1)
Note Not Issued at Face Value,	328	(3)
Choice of Interest Rate,	331	(1)
VALUATION OF NOTES RECEIVABLE,	331	(1)
DISPOSITION OF ACCOUNTS AND NOTES RECEIVABLE,	332	(1)
Secured Borrowing,	333	(1)
Sales of Receivables,	334	(2)
Secured Borrowing versus Sale,	336	(1)
PRESENTATION AND ANALYSIS,	337	(1)
Presentation of Receivables,	337	(1)
Analysis of Receivables,	338	(1)
Summary of Learning Objectives, Key Terms,	339	(1)
APPENDIX 7A Cash Controls,	340	(82)
USING BANK ACCOUNTS,	340	(1)
THE IMPREST PETTY CASH SYSTEM,	341	(1)
PHYSICAL PROTECTION OF CASH BALANCES,	342	(1)
RECONCILIATION OF BANK BALANCES,	342	(3)
Summary of Learning Objective for Appendix 7A, Key Terms,	345	(1)
Questions,	346	(1)
Brief Exercises,	347	(1)
Exercises,	348	(6)
Problems,	354	(6)
Conceptual Cases,	360	(4)
Using Your Judgment: Financial Reporting Problem,	364	(1)
Financial Statement Analysis Case,	364	(1)
Comparative Analysis Case,	365	(1)
Research Cases,	365	(1)
Professional Simulation,	366	(1)
CHAPTER 8 Valuation of Inventories: A Cost Basis Approach	367	(54)
Learning Objectives,	367	(1)
Vignette: Inventories in the Crystal Ball,	367	(1)
Preview of Chapter 8
INVENTORY CLASSIFICATION AND CONTROL,	368	(4)
Classification,	368	(2)
Control,	370	(2)
BASIC ISSUES IN INVENTORY VALUATION,	372	(1)
PHYSICAL GOODS INCLUDED IN INVENTORY,	372	(5)
Goods in Transit,	373	(1)
Consigned Goods,	373	(1)
Special Sale Agreements,	374	(1)
Effect of Inventory Errors,	375	(2)
COSTS INCLUDED IN INVENTORY,	377	(2)
Product Costs,	377	(1)
Period Costs,	377	(1)
Treatment of Purchase Discounts,	378	(1)
WHAT COST FLOW ASSUMPTION SHOULD BE ADOPTED?,	379	(5)
Specific Identification,	380	(1)
Average Cost,	381	(1)
First-In, First-Out (FIFO),	382	(1)
Last-In, First-Out (LIFO),	383	(1)
SPECIAL ISSUES RELATED TO LIFO,	384	(10)
LIFO Reserve,	384	(1)
LIFO Liquidation,	385	(1)
Dollar-Value LIFO,	386	(5)
Comparison of LIFO Approaches,	391	(1)
Major Advantages of LIFO,	391	(1)
Major Disadvantages of LIFO,	392	(2)
BASIS FOR SELECTION OF INVENTORY METHOD,	394	(28)
Inventory Valuation Methods-Summary Analysis,	396	(1)
Summary of Learning Objectives, Key Terms,	397	(1)
Questions,	398	(1)
Brief Exercises,	399	(1)
Exercises,	400	(8)
Problems,	408	(5)
Conceptual Cases,	413	(3)
Using Your Judgment: Financial Statement Analysis Cases,	416	(2)
Research Cases,	418	(1)
Professional Simulation,	419	(2)
CHAPTER 9 Inventories: Additional Valuation Issues	421	(48)
Learning Objectives,	421	(1)
Vignette: What Do Inventory Changes Tell Us?,	421	(1)
Preview of Chapter 9
LOWER OF COST OR MARKET,	422	(7)
Lower of Cost or Market-Ceiling and Floor,	423	(1)
How Lower of Cost or Market Works,	424	(1)
Methods of Applying Lower of Cost or Market,	425	(1)
Recording "Market" Instead of Cost,	426	(2)
Evaluation of the Lower of Cost or Market Rule,	428	(1)
VALUATION BASES,	429	(3)
Valuation at Net Realizable Value,	429	(1)
Valuation Using Relative Sales Value,	429	(1)
Purchase Commitments-A Special Problem,	430	(2)
THE GROSS PROFIT METHOD OF ESTIMATING INVENTORY,	432	(3)
Computation of Gross Profit Percentage,	433	(2)
Evaluation of Gross Profit Method,	435	(1)
RETAIL INVENTORY METHOD,	435	(5)
Retail Method Terminology,	436	(1)
Retail Inventory Method with Markups and Markdowns-Conventional Method,	437	(2)
Special Items Relating to Retail Method,	439	(1)
Evaluation of Retail Inventory Method,	440	(1)
PRESENTATION AND ANALYSIS,	440	(4)
Presentation of Inventories,	440	(2)
Analysis of Inventories,	442	(1)
Summary of Learning Objectives, Key Terms,	443	(1)
APPENDIX 9A LIFO Retail Methods,	444	(76)
LIFO RETAIL METHODS,	444	(3)
Stable Prices-LIFO Retail Method Key Terms,	444	(1)
Fluctuating Prices-Dollar-Value LIFO Retail Method,	445	(1)
Subsequent Adjustments Under Dollar-Value LIFO Retail,	446	(1)
CHANGING FROM CONVENTIONAL RETAIL TO LIFO,	447	(2)
Questions,	449	(1)
Brief Exercises,	450	(1)
Exercises,	451	(6)
Problems,	457	(6)
Conceptual Cases,	463	(2)
Using Your Judgment: Financial Reporting Problem,	465	(1)
Financial Statement Analysis Cases,	465	(2)
Comparative Analysis Case,	467	(1)
Research Cases,	467	(1)
Professional Simulation,	468	(1)
CHAPTER 10 Acquisition and Disposition of Property, Plant, and Equipment	469	(50)
Learning Objectives,	469	(1)
Vignette: Where Have All the Assets Gone?,	469	(2)
Preview of Chapter 10
ACQUISITION OF PROPERTY, PLANT, AND EQUIPMENT,	471	(8)
Cost of Land,	471	(1)
Cost of Buildings,	472	(1)
Cost of Equipment,	472	(1)
Self-Constructed Assets,	472	(1)
Interest Costs During Construction,	473	(5)
Observations,	478	(1)
VALUATION,	479	(10)
Cash Discounts,	479	(1)
Deferred Payment Contracts,	479	(1)
Lump Sum Purchases,	480	(1)
Issuance of Stock,	481	(1)
Exchanges of Nonmonetary Assets,	482	(5)
Accounting for Contributions,	487	(1)
Other Asset Valuation Methods,	488	(1)
COSTS SUBSEQUENT TO ACQUISITION,	489	(4)
Additions,	490	(1)
Improvements and Replacements,	490	(1)
Rearrangement and Reinstallation,	491	(1)
Repairs,	491	(1)
Summary of Costs Subsequent to Acquisition,	492	(1)
DISPOSITIONS OF PLANT ASSETS,	493	(27)
Sale of Plant Assets,	493	(1)
Involuntary Conversion,	494	(1)
Miscellaneous Problems,	494	(1)
Summary of Learning Objectives, Key Terms,	495	(1)
Questions,	496	(1)
Brief Exercises,	497	(1)
Exercises,	498	(9)
Problems,	507	(6)
Conceptual Cases,	513	(2)
Using Your Judgment: Financial Statement Analysis Case,	515	(1)
Research Case,	516	(1)
Professional Simulation,	517	(2)
CHAPTER 11 Depreciation, Impairments, and Depletion	519	(50)
Learning Objectives,	519	(1)
Vignette: Do They Matter?,	519	(1)
Preview of Chapter 11
DEPRECIATION-A METHOD OF COST ALLOCATION,	520	(12)
Factors Involved in the Depreciation Process,	521	(2)
Methods of Depreciation,	523	(3)
Special Depreciation Methods,	526	(2)
Special Depreciation Issues,	528	(4)
IMPAIRMENTS,	532	(4)
Recognizing Impairments,	533	(1)
Measuring Impairments,	533	(1)
Restoration of Impairment Loss,	534	(1)
Assets to Be Disposed Of,	535	(1)
DEPLETION,	536	(5)
Establishing a Depletion Base,	536	(1)
Write-Off of Resource Cost,	537	(1)
Continuing Controversy,	538	(2)
Special Problems in Depletion Accounting,	540	(1)
PRESENTATION AND ANALYSIS,	541	(3)
Presentation of Property, Plant, Equipment, and Natural Resources,	541	(1)
Analysis of Property, Plant, Equipment, and Natural Resources,	542	(2)
Summary of Learning Objectives, Key Terms,	544	(1)
APPENDIX 11A Income Tax Depreciation,	545	(25)
MODIFIED ACCELERATED COST RECOVERY SYSTEM,	545	(25)
Tax Lives (Recovery Periods),	545	(1)
Tax Depreciation Methods,	546	(1)
Illustration-MACRS System,	546	(2)
Optional Straight-Line Method,	548	(1)
Tax versus Book Depreciation,	548	(1)
Summary of Learning Objective for Appendix 11A, Key Terms,	548	(1)
Questions,	548	(2)
Brief Exercises,	550	(1)
Exercises,	550	(6)
Problems,	556	(6)
Conceptual Cases,	562	(2)
Using Your Judgment: Financial Reporting Problem,	564	(1)
Financial Statement Analysis Case,	564	(1)
Comparative Analysis Case,	565	(1)
Research Case,	566	(1)
International Reporting Case,	566	(1)
Professional Simulation,	567	(2)
CHAPTER 12 Intangible Assets	569	(46)
Learning Objectives,	569	(1)
Vignette: Untouchable,	569	(1)
Preview of Chapter 12
INTANGIBLE ASSET ISSUES,	570	(3)
Characteristics,	570	(1)
Valuation,	571	(1)
Amortization of Intangibles,	571	(2)
TYPES OF INTANGIBLE ASSETS,	573	(8)
Marketing-Related Intangible Assets,	573	(1)
Customer-Related Intangible Assets,	574	(1)
Artistic-Related Intangible Assets,	575	(1)
Contract-Related Intangible Assets,	575	(1)
Technology-Related Intangible Assets,	576	(2)
Goodwill,	578	(3)
IMPAIRMENT OF INTANGIBLE ASSETS,	581	(3)
Impairment of Limited-Life Intangibles,	581	(1)
Impairment of Indefinite-Life Intangibles Other Than Goodwill,	582	(1)
Impairment of Goodwill,	583	(1)
RESEARCH AND DEVELOPMENT COSTS,	584	(6)
Identifying R & D Activities,	585	(1)
Accounting for R & D Activities,	585	(2)
Other Costs Similar to R & D Costs,	587	(2)
Conceptual Questions,	589	(1)
PRESENTATION OF INTANGIBLES AND RELATED ITEMS,	590	(2)
Presentation of Intangible Assets,	590	(1)
Presentation of Research and Development Costs,	590	(2)
Summary of Learning Objectives, Key Terms,	592	(2)
APPENDIX 12A Accounting for Computer Software Costs,	594	(22)
DIVERSITY IN PRACTICE,	594	(1)
THE PROFESSION'S POSITION,	595	(1)
ACCOUNTING FOR CAPITALIZED SOFTWARE COSTS,	595	(1)
REPORTING SOFTWARE COSTS,	596	(1)
SETTING STANDARDS FOR SOFTWARE ACCOUNTING,	596	(1)
Summary of Learning Objective for Appendix l2A,	597	(1)
Questions,	598	(1)
Brief Exercises,	599	(1)
Exercises,	600	(6)
Problems,	606	(2)
Conceptual Cases	608	(2)
Using Your Judgment: Financial Reporting Problem,	610	(1)
Financial Statement Analysis Case,	611	(1)
Comparative Analysis Case,	611	(1)
Research Case,	611	(1)
International Reporting Case,	612	(1)
Professional Simulation,	613	(2)
CHAPTER 13 Current Liabilities and Contingencies	615	(54)
Learning Objectives,	615	(1)
Vignette: Microsoft's Liabilities-Good or Bad?,	615	(1)
Preview of Chapter 13
SECTION 1 CURRENT LIABILITIES,	616	(14)
WHAT IS A LIABILITY?,	616	(2)
WHAT IS A CURRENT LIABILITY?,	618	(1)
Accounts Payable,	618	(1)
Notes Payable,	619	(1)
Current Maturities of Long-Term Debt,	620	(1)
Short-Term Obligations Expected to Be Refinanced,	621	(1)
Dividends Payable,	622	(1)
Returnable Deposits,	623	(1)
Unearned Revenues,	623	(1)
Sales Taxes Payable,	624	(1)
Income Taxes Payable,	625	(1)
Employee-Related Liabilities,	625	(5)
SECTION 2 CONTINGENCIES,	630	(15)
GAIN CONTINGENCIES,	630	(1)
LOSS CONTINGENCIES,	631	(2)
Litigation, Claims, and Assessments,	633	(1)
Guarantee and Warranty Costs,	634	(2)
Premiums and Coupons,	636	(1)
Environmental Liabilities,	637	(1)
Asset Retirement Obligations,	638	(2)
Self-Insurance,	640	(1)
PRESENTATION AND ANALYSIS,	640	(1)
Presentation of Current Liabilities,	640	(2)
Presentation of Contingencies,	642	(1)
Analysis of Current Liabilities,	643	(1)
Summary of Learning Objectives, Key Terms,	644	(1)
APPENDIX 13A Computation of Employees' Bonuses,	645	(2)
Summary of Learning Objective for Appendix 13A,	647	(1)
Questions,	647	(1)
Brief Exercises,	648	(2)
Exercises,	650	(6)
Problems,	656	(5)
Conceptual Cases,	661	(3)
Using Your Judgment. Financial Reporting Problem,	664	(1)
Financial Statement Analysis Cases,	664	(1)
Comparative Analysis Case,	665	(1)
Research Cases,	665	(1)
International Reporting Case,	666	(1)
Profession Simulation,	667	(2)
CHAPTER 14 Long-Term Liabilities	669	(54)
Learning Objectives,	669	(1)
Vignette: Your Debt Is Killing My Stock,	669	(2)
Preview of Chapter 14
SECTION 1 BONDS PAYABLE, 670 ISSUING BONDS,	671	(12)
TYPES AND RATINGS OF BONDS,	671	(1)
VALUATION OF BONDS PAYABLE-DISCOUNT AND PREMIUM,	672	(3)
Bonds Issued at Par on Interest Date,	675	(1)
Bonds Issued at Discount or Premium on Interest Date,	675	(1)
Bonds Issued between Interest Dates,	676	(1)
EFFECTIVE INTEREST METHOD,	676	(1)
Bonds Issued at a Discount,	677	(1)
Bonds Issued at a Premium,	678	(1)
Accruing Interest,	679	(1)
Classification of Discount and Premium,	680	(1)
COSTS OF ISSUING BONDS,	680	(1)
TREASURY BONDS,	681	(1)
EXTINGUISHMENT OF DEBT,	681	(2)
SECTION 2 LONG-TERM NOTES PAYABLE,	683	(6)
NOTES ISSUED AT FACE VALUE,	684	(1)
NOTES NOT ISSUED AT FACE VALUE,	684	(1)
Zero-Interest-Bearing Notes,	684	(1)
Interest-Bearing Notes,	685	(1)
SPECIAL NOTES PAYABLE SITUATIONS,	686	(1)
Notes Issued for Property, Goods, and Services,	686	(2)
Choice of Interest Rate, 687 MORTGAGE NOTES PAYABLE,	688	(1)
SECTION 3 REPORTING AND ANALYSIS OF LONG-TERM DEBT,	689	(5)
OFF-BALANCE-SHEET FINANCING,	689	(1)
Different Forms,	690	(1)
Rationale,	690	(1)
PRESENTATION AND ANALYSIS OF LONG-TERM DEBT,	691	(1)
Presentation of Long-Term Debt,	691	(1)
Analysis of Long-Term Debt,	691	(2)
Summary of Learning Objectives, Key Terms,	693	(1)
APPENDIX 14A Accounting for Troubled Debt,	694	(30)
ACCOUNTING ISSUES,	695	(1)
IMPAIRMENTS,	696	(3)
Illustration of Loss on Impairment,	696	(3)
TROUBLED DEBT RESTRUCTURINGS,	699	(25)
Settlement of Debt,	699	(1)
Modification of Terms,	700	(4)
Summary of Learning Objective for Appendix 14A, Key Terms,	704	(1)
Questions,	705	(1)
Brief Exercises,	706	(1)
Exercises,	707	(5)
Problems,	712	(4)
Conceptual Cases,	716	(3)
Using Your Judgment: Financial Reporting Problem,	719	(1)
Financial Statement Analysis Cases,	719	(1)
Comparative Analysis Case,	720	(1)
Research Cases,	721	(1)
Professional Simulation,	722	(1)
CHAPTER 15 Stockholders' Equity	723	(50)
Learning Objectives,	723	(1)
Vignette: Stocking Up,	723	(1)
Preview of Chapter 15
THE CORPORATE FORM,	724	(3)
State Corporate Law,	724	(1)
Capital Stock or Share System,	725	(1)
Variety of Ownership Interests,	726	(1)
CORPORATE CAPITAL,	727	(9)
Issuance of Stock,	727	(5)
Reacquisition of Shares,	732	(4)
PREFERRED STOCK,	736	(2)
Features of Preferred Stock,	736	(1)
Accounting for and Reporting of Preferred Stock,	737	(1)
DIVIDEND POLICY,	738	(9)
Financial Condition and Dividend Distributions,	738	(1)
Types of Dividends,	739	(4)
Stock Splits,	743	(4)
Disclosure of Restrictions on Retained Earnings,	747	(1)
PRESENTATION AND ANALYSIS OF STOCKHOLDERS' EQUITY,	747	(4)
Presentation,	747	(2)
Analysis,	749	(2)
Summary of Learning Objectives, Key Terms,	751	(1)
APPENDIX 15A Dividend Preferences and Book Value per Share,	752	(22)
DIVIDEND PREFERENCES,	752	(2)
BOOK VALUE PER SHARE,	754	(1)
Summary of Learning Objective for Appendix 15A,	755	(1)
Questions,	755	(1)
Brief Exercises,	756	(1)
Exercises,	757	(7)
Problems,	764	(4)
Conceptual Cases,	768	(2)
Using Your Judgment: Financial Reporting Problem,	770	(1)
Financial Statement Analysis Cases,	770	(1)
Comparative Analysis Case,	771	(1)
Research Case,	772	(1)
Professional Simulation,	772	(1)
CHAPTER 16 Dilutive Securities and Earnings per Share	773	(62)
Learning Objectives,	773	(1)
Vignette: Just Like Candy Kisses,	773	(1)
Preview of Chapter 16
SECTION 1 DILUTIVE SECURITIES AND COMPENSATION PLANS,	774	(14)
ACCOUNTING FOR CONVERTIBLE DEBT,	774	(1)
At Time of Issuance,	775	(1)
At Time of Conversion,	775	(1)
Induced Conversions,	775	(1)
Retirement of Convertible Debt,	776	(1)
CONVERTIBLE PREFERRED STOCK,	776	(1)
STOCK WARRANTS,	777	(1)
Stock Warrants Issued with Other Securities,	778	(1)
Conceptual Questions,	779	(1)
Rights to Subscribe to Additional Shares,	780	(1)
STOCK COMPENSATION PLANS,	781	(1)
The Major Reporting Issue,	781	(1)
Accounting for Stock Compensation,	782	(3)
Types of Plans,	785	(1)
Noncompensatory Plans,	786	(1)
Disclosure of Compensation Plans,	786	(1)
Debate over Stock Option Accounting,	787	(1)
SECTION 2 COMPUTING EARNINGS PER SHARE,	788	(15)
EARNINGS PER SHARE-SIMPLE CAPITAL STRUCTURE,	789	(1)
Preferred Stock Dividends,	789	(1)
Weighted Average Number of Shares Outstanding,	790	(2)
Comprehensive Illustration,	792	(1)
EARNINGS PER SHARE-COMPLEX CAPITAL STRUCTURE,	793	(1)
Diluted EPS-Convertible Securities,	794	(2)
Diluted EPS-Options and Warrants,	796	(1)
Contingent Issue Agreement,	797	(1)
Antidilution Revisited,	798	(1)
EPS Presentation and Disclosure,	799	(2)
Summary,	801	(1)
Summary of Learning Objectives, Key terms,	802	(1)
APPENDIX 16A Stock Options-Additional Complications,	803	(6)
DETERMINING COMPENSATION EXPENSE,	803	(6)
Stock Option Plans,	804	(1)
Stock Appreciation Rights,	805	(2)
Performance-Type Plans,	807	(1)
Summary of Compensation Plans,	808	(1)
Summary of Learning Objective for Appendix 16A, Key Terms,	809	(1)
APPENDIX 16B Comprehensive Earnings per Share Illustration,	809	(28)
DILUTED EARNINGS PER SHARE,	810	(4)
Summary of Learning Objective for Appendix 16B, Key Terms,	814	(1)
Questions	814	(1)
Brief Exercises,	815	(1)
Exercises,	816	(6)
Problems	822	(4)
Conceptual Cases	826	(3)
Using Your Judgment: Financial Reporting Problem,	829	(1)
Financial Statement Analysis Case,	830	(1)
Comparative Analysis Case,	830	(1)
Research Cases,	830	(1)
International Reporting Case,	831	(2)
Professional Simulation,	833	(2)
CHAPTER 17 Investments	835	(66)
Learning Objectives,	835	(1)
Vignette: Who's in Control Here?,	835	(2)
Preview of Chapter 17
SECTION 1 INVESTMENTS IN DEBT SECURITIES,	837	(8)
HELD-TO-MATURITY SECURITIES,	838	(2)
AVAILABLE-FOR-SALE SECURITIES,	840	(1)
Illustration: Single Security,	840	(1)
Illustration: Portfolio of Securities,	841	(1)
Sale of Available-for-Sale Securities,	842	(1)
Financial Statement Presentation,	843	(1)
TRADING SECURITIES,	844	(1)
SECTION 2 INVESTMENTS IN EQUITY SECURITIES,	845	(7)
HOLDINGS OF LESS THAN 20%,	846	(1)
Available-for-Sale Securities,	846	(2)
Trading Securities,	848	(1)
HOLDINGS BETWEEN 20% AND 50%,	848	(1)
Equity Method,	849	(2)
HOLDINGS OF MORE THAN 50%,	851	(1)
SECTION 3 OTHER REPORTING ISSUES,	852	(9)
FINANCIAL STATEMENT PRESENTATION OF INVESTMENTS,	852	(1)
Disclosures Required Under the Equity Method,	852	(1)
Reclassification Adjustments,	853	(2)
Comprehensive Illustration,	855	(1)
IMPAIRMENT OF VALUE,	856	(1)
TRANSFERS BETWEEN CATEGORIES,,	857	(1)
FAIR VALUE CONTROVERSY,	857	(1)
Measurement Based on Intent,	857	(1)
Gains Trading,	857	(1)
Liabilities Not Fairly Valued,	858	(1)
Subjectivity of Fair Values,	859	(1)
SUMMARY,	859	(1)
Summary of Learning Objectives, Key Terms,	859	(2)
APPENDIX 17A Accounting for Derivative Instruments,	861	(41)
UNDERSTANDING DERIVATIVES,	861	(2)
Who Uses Derivatives, and Why?,	862	(1)
BASIC PRINCIPLES IN ACCOUNTING FOR DERIVATIVES,	863	(3)
Illustration of Derivative Financial Instrument-Speculation,	864	(2)
Differences Between Traditional and Derivative Financial Instruments,	866	(1)
DERIVATIVES USED FOR HEDGING,	866	(7)
Fair Value Hedge,	868	(1)
Interest Rate Swap-A Fair Value Hedge,	868	(3)
Cash Flow Hedge,	871	(2)
OTHER REPORTING ISSUES,	873	(4)
Embedded Derivatives,	873	(1)
Qualifying Hedge Criteria,	874	(1)
Disclosure Provisions,	875	(2)
COMPREHENSIVE HEDGE ACCOUNTING EXAMPLE,	877	(2)
CONTROVERSY AND CONCLUDING REMARKS,	879	(1)
Summary of Learning Objectives for Appendix 17A, Key Terms,	880	(1)
Questions,	881	(1)
Brief Exercises,	882	(1)
Exercises,	882	(6)
Problems,	888	(7)
Conceptual Cases,	895	(2)
Using Your Judgment: Financial Reporting Problem,	897	(1)
Financial Statement Analysis Case,	897	(1)
Comparative Analysis Case,	898	(1)
Research Cases,	898	(1)
Professional Simulation,	899	(2)
CHAPTER 18 Revenue Recognition	901	(58)
Learning Objectives,	901	(1)
Vignette: Cyberspace Trading for Revenues,	901	(1)
Preview of Chapter 18
THE CURRENT ENVIRONMENT,	902	(3)
Guidelines for Revenue Recognition,	903	(2)
Departures from the Sale Basis,	905	(1)
REVENUE RECOGNITION AT POINT OF SALE (DELIVERY),	905	(3)
Sales with Buyback Agreements,	906	(1)
Sales When Right of Return Exists,	906	(1)
Trade Loading and Channel Stuffing,	907	(1)
REVENUE RECOGNITION BEFORE DELIVERY,	908	(11)
Percentage-of-Completion Method,	909	(4)
Completed-Contract Method,	913	(2)
Long-Term Contract Losses,	915	(2)
Disclosures in Financial Statements,	917	(1)
Completion-of-Production Basis,	918	(1)
REVENUE RECOGNITION AFTER DELIVERY,	919	(10)
Installment-Sales Accounting Method,	919	(8)
Cost-Recovery Method,	927	(1)
Deposit Method,	928	(1)
Summary of Product Revenue Recognition Bases,	929	(1)
CONCLUDING REMARKS,	929	(1)
Summary of Learning Objectives, Key Terms,	930	(1)
APPENDIX 18A Revenue Recognition for Special Sales Transactions,	931	(29)
FRANCHISES,	931	(3)
Initial Franchise Fees,	932	(1)
Continuing Franchise Fees,	933	(1)
Bargain Purchases,	934	(1)
Options to Purchase,	934	(1)
Franchisor's Costs,	934	(1)
Disclosures of Franchisors,	934	(1)
CONSIGNMENTS,	934	(2)
Summary of Learning Objective for Appendix 18A, Key Terms,	936	(1)
Questions,	936	(1)
Brief Exercises,	937	(1)
Exercises,	938	(5)
Problems,	943	(8)
Conceptual Cases,	951	(4)
Using Your Judgment: Financial Reporting Problem,	955	(1)
Financial Statement Analysis Case,	955	(1)
Comparative Analysis Case,	956	(1)
Research Cases,	956	(1)
Professional Simulation,	957	(2)
CHAPTER 19 Accounting for Income Taxes	959	(58)
Learning Objectives,	959	(1)
Vignette: Use It, But Don't Abuse It,	959	(1)
Preview of Chapter 19
FUNDAMENTALS OF ACCOUNTING FOR INCOME TAXES,	960	(14)
Future Taxable Amounts and Deferred Taxes,	962	(4)
Future Deductible Amounts and Deferred Taxes,	966	(3)
Income Statement Presentation,	969	(1)
Specific Differences,	970	(3)
Tax Rate Considerations,	973	(1)
ACCOUNTING FOR NET OPERATING LOSSES,	974	(6)
Loss Carryback,	974	(1)
Loss Carryforward,	975	(1)
Loss Carryback Illustrated,	975	(1)
Loss Carryforward Illustrated,	976	(4)
FINANCIAL STATEMENT PRESENTATION,	980	(4)
Balance Sheet Presentation,	980	(2)
Income Statement Presentation,	982	(2)
REVIEW OF THE ASSET-LIABILITY METHOD,	984	(3)
Summary of Learning Objectives, Key Terms,	987	(2)
APPENDIX 19A Comprehensive Illustration of Interperiod Tax Allocation,	989	(29)
FIRST YEAR-2003,	989	(4)
Taxable Income and Income Tax
Payable-2003,	990	(1)
Computing Deferred Income Taxes-End of 2003,	990	(1)
Deferred Tax Expense (Benefit) and the Journal Entry to Record Income Taxes-2003,	991	(1)
Financial Statement Presentation-2003,	992	(1)
SECOND YEAR-2004,	993	(25)
Taxable Income and Income Tax Payable-2004,	994	(1)
Computing Deferred Income Taxes-End of 2004,	994	(1)
Deferred Tax Expense (Benefit) and the Journal Entry to Record Income Taxes-2004,	995	(1)
Financial Statement Presentation-2004,	995	(1)
Summary of Learning Objective for Appendix 19A,	996	(1)
Questions,	996	(1)
Brief Exercises,	997	(1)
Exercises,	998	(8)
Problems,	1006	(4)
Conceptual Cases,	1010	(2)
Using Your Judgment: Financial Reporting Problem,	1012	(1)
Financial Statement Analysis Case,	1012	(1)
Comparative Analysis Case,	1013	(1)
Research Cases,	1013	(1)
International Reporting Case,	1013	(2)
Professional Simulation,	1015	(2)
CHAPTER 20 Accounting for Pensions and Postretirement Benefits	1017	(68)
Learning Objectives,	1017	(1)
Vignette: Pension Fund a Likely Drain,	1017	(1)
Preview of Chapter 20
NATURE OF PENSION PLANS,	1018	(4)
Defined Contribution Plan,	1020	(1)
Defined Benefit Plan,	1021	(1)
The Role of Actuaries in Pension Accounting,	1021	(1)
ACCOUNTING FOR PENSIONS,	1022	(5)
Alternative Measures of the Liability,	1022	(1)
Capitalization versus Noncapitalization,	1023	(1)
Components of Pension Expense,	1024	(3)
USING A PENSION WORK SHEET,	1027	(11)
2003 Entries and Work Sheet,	1028	(1)
Amortization of Unrecognized Prior Service Cost (PSC),	1029	(2)
2004 Entries and Work Sheet,	1031	(1)
Gain or Loss,	1032	(4)
2005 Entries and Work Sheet,	1036	(2)
MINIMUM LIABILITY,	1038	(4)
Minimum Liability Computation,	1038	(1)
Financial Statement Presentation,	1039	(2)
Work Sheet Illustration,	1041	(1)
REPORTING PENSION PLANS IN FINANCIAL STATEMENTS	1042	(10)
Within the Financial Statements,	1042	(1)
Within the Notes to the Financial Statements,	1042	(1)
Illustration of Pension Note Disclosure,	1043	(3)
2006 Entries and Work Sheet-A Comprehensive Illustration,	1046	(3)
Special Issues,	1049	(3)
Summary of Learning Objectives, Key Terms	1052	(1)
APPENDIX 20A Accounting for Postretirement Benefits,	1053	(33)
ACCOUNTING GUIDANCE,	1053	(1)
DIFFERENCES BETWEEN PENSION BENEFITS AND HEALTH-CARE BENEFITS,	1054	(1)
POSTRETIREMENT BENEFITS ACCOUNTING PROVISIONS??	1055	(3)
Obligations under Postretirement Benefits,	1056	(1)
Postretirement Expense,	1057	(1)
The Transition Amount,	1057	(1)
ILLUSTRATIVE ACCOUNTING ENTRIES,	1058	(4)
2003 Entries and Work Sheet,	1059	(1)
Recognition of Gains and Losses,	1060	(1)
2004 Entries and Work Sheet,	1061	(1)
Amortization of Unrecognized Net Gain or Loss in 2005,	1062	(1)
DISCLOSURES IN NOTES TO THE FINANCIAL STATEMENTS,	1062	(1)
ACTUARIAL ASSUMPTIONS AND CONCEPTUAL ISSUES,	1063	(1)
Summary of Learning Objectives for Appendix 20A Key Terms,	1063	(1)
Questions,	1064	(1)
Brief Exercises,	1065	(1)
Exercises,	1066	(7)
Problems,	1073	(4)
Conceptual Cases,	1077	(4)
Using Your Judgment: Financial Reporting Problem,	1081	(1)
Financial Statement Analysis Case,	1081	(1)
Comparative Analysis Case,	1081	(1)
Research Cases,	1081	(1)
International Reporting Case,	1082	(1)
Professional Simulations,	1083	(2)
CHAPTER 21 Accounting for Leases	1085	(64)
Learning Objectives,	1085	(1)
Vignette: More Companies Ask, "Why Buy?",	1085	(1)
Preview of Chapter 21
BASICS OF LEASING,	1086	(3)
Advantages of Leasing,	1087	(1)
Conceptual Nature of a Lease,	1088	(1)
ACCOUNTING BY LESSEE;	1089	(9)
Capitalization Criteria,	1090	(3)
Asset and Liability Accounted for Differently,	1093	(1)
Capital Lease Method (Lessee),	1094	(2)
Operating Method (Lessee),	1096	(1)
Comparison of Capital Lease with Operating Lease,	1097	(1)
ACCOUNTING BY LESSOR,	1098	(6)
Economics of Leasing,	1099	(1)
Classification of Leases by the Lessor,	1099	(2)
Direct-Financing Method (Lessor),	1101	(2)
Operating Method (Lessor),	1103	(1)
SPECIAL ACCOUNTING PROBLEMS,	1104	(13)
Residual Values,	1104	(6)
Sales-Type Leases (Lessor),	1110	(2)
Bargain Purchase Option (Lessee),	1112	(1)
Initial Direct Costs (Lessor),	1112	(1)
Current versus Noncurrent,	1113	(1)
Disclosing Lease Data,	1114	(3)
LEASE ACCOUNTING-UNSOLVED PROBLEMS,	1117	(2)
Summary of Learning Objectives, Key Terms,	1119	(2)
APPENDIX 21A Illustrations of Different Lease Arrangements,	1121	(4)
HARMON, INC.,	1122	(1)
ARDEN'S OVEN CO.,	1122	(1)
MENDOTA TRUCK CO.,	1123	(1)
APPLELAND COMPUTER,	1123	(1)
Summary of Learning Objective for Appendix 21A,	1124	(1)
APPENDIX 21B Sale-Leasebacks,	1125	(25)
DETERMINING ASSET USE,	1125	(1)
Lessee,	1125	(1)
Lessor,	1126	(1)
SALE-LEASEBACK ILLUSTRATION,	1126	(1)
Summary of Learning Objective for Appendix 21B, Key Terms,	1127	(1)
Questions,	1128	(1)
Brief Exercises,	1129	(1)
Exercises,	1130	(4)
Problems,	1134	(6)
Conceptual Cases,	1140	(4)
Using Your Judgment: Financial Reporting Problem,	1144	(1)
Financial Statement Analysis Case,	1144	(1)
Comparative Analysis Case,	1144	(1)
Research Cases,	1145	(1)
International Reporting Case,	1145	(1)
Professional Simulations,	1146	(3)
CHAPTER 22 Accounting Changes and Error Analysis	1149	(54)
Learning Objectives,	1149	(1)
Vignette: Can I Get My Money Back?,	1149	(1)
Preview of Chapter 22
SECTION 1 ACCOUNTING CHANGES,	1150	(18)
CHANGES IN ACCOUNTING PRINCIPLE,	1151	(1)
Cumulative-Effect Accounting Change,	1152	(3)
Retroactive-Effect Accounting Change,	1155	(4)
Change to LIFO Method,	1159	(1)
CHANGES IN ACCOUNTING ESTIMATE,	1160	(2)
REPORTING A CHANGE IN ENTITY,	1162	(1)
REPORTING A CORRECTION OF AN ERROR,	1162	(1)
Illustration,	1163	(2)
SUMMARY OF ACCOUNTING CHANGES AND CORRECTIONS OF ERRORS,	1165	(1)
MOTIVATIONS FOR CHANGE,	1166	(2)
SECTION 2 ERROR ANALYSIS,	1168	(9)
BALANCE SHEET ERRORS,	1169	(1)
INCOME STATEMENT ERRORS,	1169	(1)
BALANCE SHEET AND INCOME STATEMENT EFFECTS,	1169	(1)
Counterbalancing Errors,	1170	(1)
Noncounterbalancing Errors,	1171	(1)
COMPREHENSIVE ILLUSTRATION: NUMEROUS ERRORS,	1172	(2)
PREPARATION OF FINANCIAL STATEMENTS WITH ERROR CORRECTIONS,	1174	(2)
Summary of Learning Objectives, Key Terms,	1176	(1)
APPENDIX 22A Changing from and to the Equity Method,	1177	(95)
CHANGE FROM THE EQUITY METHOD,	1177	(1)
Dividends in Excess of Earnings,	1177	(1)
CHANGE TO THE EQUITY METHOD,	1178	(2)
Summary of Learning Objective for Appendix 22A,	1180	(1)
Questions,	1181	(1)
Brief Exercises,	1182	(1)
Exercises,	1183	(6)
Problems,	1189	(8)
Conceptual Cases,	1197	(3)
Using Your Judgment: Financial Reporting Problem,	1200	(1)
Comparative Analysis Case,	1201	(1)
Research Cases,	1201	(1)
Professional Simulation,	1202	(1)
CHAPTER 23 Statement of Cash Flows	1203
Learning Objectives,	1203	(1)
Vignette: Don't Take Cash Flow for Granted,	1203	(1)
Preview of Chapter 23
SECTION 1 PREPARATION OF THE STATEMENT OF CASH FLOWS,	1204	(29)
USEFULNESS OF THE STATEMENT OF CASH
FLOWS,	1204	(1)
CLASSIFICATION OF CASH FLOWS,	1205	(2)
FORMAT OF THE STATEMENT OF CASH
FLOWS,	1207	(1)
STEPS IN PREPARATION,	1207	(2)
FIRST ILLUSTRATION-2003,	1209	(1)
Step 1: Determine the Change in Cash,	1209	(1)
Step 2: Determine Net Cash Flow from Operating Activities,	1209	(3)
Step 3: Determine Net Cash Flows From Investing and Financing Activities,	1212	(1)
Statement of Cash Flows-2003,	1212	(1)
SECOND ILLUSTRATION-2004,	1213	(1)
Step 1: Determine the Change in Cash,	1213	(1)
Step 2: Determine Net Cash Flow from Operating Activities-Indirect Method,	1214	(1)
Step 3: Determine Net Cash Flows from Investing and Financing Activities,	1214	(1)
Statement of Cash Flows-2004,	1215	(1)
THIRD ILLUSTRATION-2005,	1216	(1)
Step 1: Determine the Change in Cash,	1217	(1)
Step 2: Determine Net Cash Flow from Operating Activities-Indirect Method,	1217	(1)
Step 3: Determine Cash Flows from Investing and Financing Activities,	1218	(1)
Statement of Cash Flows-2005,	1219	(1)
SOURCES OF INFORMATION FOR THE STTEMENT OF CASH FLOWS,	1219	(1)
NET CASH FLOW FROM OPERATING ACTIVITIES-INDIRECT VERSUS DIRECT METHOD,	1220	(1)
Indirect Method,	1220	(1)
Direct Method-An Illustration,	1220	(5)
Direct Versus Indirect Controversy,	1225	(2)
SPECIAL PROBLEMS IN STATEMENT PREPARATION,	1227	(1)
Adjustments Similar to Depreciation,	1227	(1)
Accounts Receivable (Net),	1228	(1)
Other Working Capital Changes,	1229	(1)
Net Losses,	1230	(1)
Gains,	1230	(1)
Stock Options,	1231	(1)
Postretirement Benefit Costs,	1231	(1)
Extraordinary Items,	1231	(1)
Significant Noncash Transactions,	1232	(1)
SECTION 2 USE OF A WORK SHEET,	1233	(39)
PREPARATION OF THE WORK SHEET,	1234	(3)
ANALYSIS OF TRANSACTIONS,	1237	(1)
Change in Retained Earnings,	1237	(1)
Accounts Receivable (Net),	1237	(1)
Inventories,	1237	(1)
Prepaid Expense,	1237	(1)
Investment in Stock,	1238	(1)
Land,	1238	(1)
Equipment and Accumulated Depreciation,	1238	(1)
Building Depreciation and Amortization of Goodwill,	1239	(1)
Other Noncash Charges or Credits,	1239	(1)
Common Stock and Related Accounts,	1239	(1)
Final Reconciling Entry,	1240	(2)
PREPARATION OF FINAL STATEMENT	1242	(1)
Summary of Learning Objectives, Key Terms	1242	(2)
Questions,	1244	(1)
Brief Exercises,	1245	(2)
Exercises,	1247	(8)
Problems,	1255	(8)
Conceptual Cases,	1263	(3)
Using Your Judgment: Financial Reporting Problems	1266	(1)
Financial Statement Analysis Case,	1267	(1)
Comparatiave Analysis Case	1267	(1)
Research Case,	1268	(1)
International Reporting Case,	1268	(2)
Professional Simulation,	1270
Chapter 24 Full Disclosure in Fiancial Reporting	271
Learning Objectives,	1271	(1)
Vignette: High-Quality Financial Reporting-It's a Necessity,	1271	(1)
Preview of Chapter 24
FULL DISCLOSURE PRINCIPLE,	1272	(2)
Increase in Reporting Requirements,	1273	(1)
Differential Disclosure,	1274	(1)
NOTES TO THE FINANCIAL STATEMENTS	1274	(4)
Accounting Policies,	1275	(2)
Common Notes,	1277	(1)
DISCLOSURE ISSUES,	1278	(15)
Disclosure of Special Transactions or Events,	1278	(2)
Post-Balance-Sheet Events (Subsequent Events),	1280	(2)
Reporting for Diversified (Conglomerate) Companies,	1282	(5)
Interim Reports,	1287	(6)
AUDITOR'S AND MANAGEMENT'S REPORTS,	1293	(5)
Auditor's Report,	1293	(3)
Management's Reports,	1296	(2)
CURRENT REPORTING ISSUES,	1298	(5)
Reporting on Financial Forecasts and Projections,	1298	(3)
Internet Financial Reporting,	1301	(1)
Fraudulent Financial Reporting,	1301	(2)
Criteria for Making Accounting and Reporting Choices,	1303	(1)
Summary of Learning Objectives, Key Terms,	1303	(2)
APPENDIX 24A Basic Financial Statement Analysis,	1305	(6)
PERSPECTIVE ON FINANCIAL STATEMENT ANALYSIS,	1305	(1)
RATIO ANALYSIS,	1306	(3)
Limitations of Ratio Analysis,	1308	(1)
COMPARATIVE ANALYSIS,	1309	(1)
PERCENTAGE (COMMON-SIZE) ANALYSIS,	1310	(1)
Summary of Learning Objectives for Appendix 24A, Key Terms	1311	(1)
Questions,	1312	(1)
Brief Exercises,	1313	(1)
Exercises,	1314	(3)
Problems,	1317	(3)
Conceptual Cases,	1320	(7)
Using Your Judgment: Financial Reporting Problems	1327	(1)
Financial Statement Analysis Case,	1327	(2)
Comparatiave Analysis Case	1329	(1)
Research Cases,	1330	(1)
Professional Simulation,	1331
LOGO CREDITS,	LC-1
INDEX,	I-1
OFFICIAL ACCOUNTING PRONOUNCEMENTS,	P-1