Instructions for the Microsoft Excel Templates by Rex A Schildhouse

Be advised, the template workbooks and worksheets are not protected. Overtyping any data may remove it.
Extensive detail and information is contained within the help function of Microsoft Excel and in the provided text. You should enter your name, date, instructor's name, and course into the cells at the top of the page. This information will be printed on the top of each page if the template requires more than one page. Each template is set to print with File Name, Page # of # Page(s), the print date, and the print time to assist in assembly of multiple pages. If more than one page is required by the template, manual page breaks have been set to provide consistent presentation. All of the cells have been correctly formatted for presentation and should not require any adjustment. For example, if the text requires one, two, or three significant digits in a presentation, the template has been set for that presentation in the appropriate cells. In general, the yellow highlighted cells are the cells which work and effort should be presented. These entries may include date(s), account title(s), values, memorandum appropriate to the entry, or text answers to questions. And information or data which may be required by the solution will be entered in cells with borders to help identify them. Where a yellow highlighted cell shows "Date" enter the appropriate date for that step of the challenge. This may be any date format that Microsoft Excel accepts. Some of these formats include "1/1/12", "01/01/12", and "01/01/2012." All of these will return January 01, 2012, in the format set in the template. Where a yellow highlighted cell shows "Acct Nbr" enter the appropriate account number, provided in the template and in the text for that step of the challenge. This is entry may be a "Look to" formula to another cell where that information has been provided or previously entered. Where a yellow highlighted cell shows "Account Title" enter the appropriate account title for that step of the challenge. This is a text entry and most of those cells are set for the proper indentation for that step. Frequently the chart of accounts appropriate to the challenge is provided and you can use the "look to" formula to reference the appropriate account title without typing it. Check with your instructor to see if abbreviated account titles are acceptable. For example "A/R" for Accounts Receivable, "A/P" for Accounts Payable. If your instructor is using a comparison process between workbooks for grading, these abbreviates may not be acceptable. Where a yellow highlighted cell shows titles such as "Values," "Amounts," or "Quantities" enter the appropriate numerical value for that step of the challenge. The cell is formatted for proper presentation of the entered information. If a dollar sign is appropriate, it should not be entered, Microsoft Excel will place it there through formatting. Commas and significant digits (decimals) are also set through formatting for common presentation. Since the formatting of the templates is not protected by any password, you may change any of the formatting found in the templates to meet your desires. Where a yellow highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference, "=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial text provided for Microsoft Excel.

Where a yellow highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference, "=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial text provided for Microsoft Excel. Where a yellow highlighted cell shows "Text" enter the appropriate text for that step of the challenge. This may be a memorandum entry for a journal entry or a lengthy text answer discussing the results of an analysis of a company's financials. These titles can simply be typed over. Where a yellow highlighted cell shows titles such as "Journal Number" or "Journ #" you should enter the appropriate number provided in the template and in the text for that step of the challenge. In general this will appear in instances such as "Record the following events in General Journal number six." The print area is defined to fit onto 8 1/2" 11" sheets in portrait or landscape mode as required. Margins are generally set to no less than 1/2" so most printers can print them without a problem. If you printer cannot accept margins less than 1" you may have to reformat the margins through Page Setup. The display may have "Freeze Pane" invoked so column titles remain visible during data entry. This can be removed by utilizing the View menu and selecting "Unfreeze Panes" under "Freeze Panes." When negative values are required, enter them by starting with a minus sign, "-". Negative values may be shown as ($400) or -$400. Negative values in formulas can be created by putting a minus sign in front of the cell reference - "=E10*-E11" will return a negative value if both cells E10 and E11 contain positive values. Microsoft Office and Microsoft Excel are products of, and copyrighted by, Microsoft Corporation, One Microsoft Way, Redmond, Washington 98052-6399

Solution Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E22-9 (Error and Change in EstimateDepreciation) Tarkington Co. purchased a machine on January 1, 2009, for $440,000.00 At that time it was estimated that the machine would have a 10 -year life and no salvage value. On December 31, 2012, the firms accountant found that the entry for depreciation expense had been omitted in 2010. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2012. At present, the company uses the sum-of-the-years-digits method for depreciating equipment. Instructions: Prepare the general journal entries that should be made at December 31, 2012, to record these events. (Ignore tax effects.) Dec 31, 12 Retained Earnings [$440,000 (9/55)] Accumulated DepreciationMachinery To correct for the omission of depreciation expense in 2010 Cost of Machine Less: Depreciation prior to 2012 Sum-of-the-years-digits depreciation 2009 [$440,000 (10/55)] 2010 [$440,000 (9/55)] 2011 [$440,000 (8/55)] Book Value at January 1, 2012 Depreciation for 2012: Dec 31, 12 Depreciation Expense Accumulated DepreciationEquipment To record depreciation expense for 2012 32,000 32,000 72,000 72,000

$440,000

$80,000 72,000 64,000

216,000 $224,000 7 $32,000

153010966.xlsx.ms_office, Exercise 22-9 Solution, Page 3 of 14, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E22-9 (Error and Change in EstimateDepreciation) Tarkington Co. purchased a machine on January 1, 2009, for $440,000.00 At that time it was estimated that the machine would have a 10 -year life and no salvage value. On December 31, 2012, the firms accountant found that the entry for depreciation expense had been omitted in 2010. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2012. At present, the company uses the sum-of-the-years-digits method for depreciating equipment. Instructions: Prepare the general journal entries that should be made at December 31, 2012, to record these events. (Ignore tax effects.) Dec 31, 12 Account title Account title Text entry as appropriate Cost of Machine Less: Depreciation prior to 2012 Sum-of-the-years-digits depreciation 2009 Formula 2010 Formula 2011 Formula Book Value at January 1, 2012 Depreciation for 2012: Dec 31, 12 Account title Account title Text entry as appropriate Amount Amount Amount Amount

Amount

Formula Formula Formula

Formula Formula Number Formula

153010966.xlsx.ms_office, Exercise 22-9, Page 4 of 14, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E22-11 (Change in EstimateDepreciation) Thurber Co. purchased equipment for $710,000 which was estimated to have a useful life of 10 years with a salvage value of $10,000 at the end of that time. Depreciation has been entered for 7 years on a straight-line basis. In 2013, it is determined that the total estimated life should be 15 years with a salvage value of $4,000 at the end of that time. Instructions: (a) Prepare the entry (if any) to correct the prior years' depreciation. No entry necessary. Changes in estimates are treated prospectively. (b) Prepare the entry to record depreciation for 2013. Depreciation Expense Accumulated DepreciationEquipment 27,000 27,000 $710,000 (490,000) 220,000 (4,000) 216,000 8 $27,000

Worksheet - Original cost Accumulated depreciation [(($710,000 $10,000) 10 yrs) 7 yrs] Book value (1/1/13) Estimated salvage value Remaining depreciable basis Remaining useful life (15 years - 7 years) Depreciation expense2013

153010966.xlsx.ms_office, Exercise 22-11 Solution, Page 5 of 14, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E22-11 (Change in EstimateDepreciation) Thurber Co. purchased equipment for $710,000 which was estimated to have a useful life of 10 years with a salvage value of $10,000 at the end of that time. Depreciation has been entered for 7 years on a straight-line basis. In 2013, it is determined that the total estimated life should be 15 years with a salvage value of $4,000 at the end of that time. Instructions: (a) Prepare the entry (if any) to correct the prior years' depreciation. Account Title as appropriate Account Title as appropriate (b) Prepare the entry to record depreciation for 2013. Account Title Account Title Worksheet - Original cost Accumulated depreciation Title Estimated salvage value Title Remaining useful life Title Amount Amount Amount Amount Formula Amount Formula Number Formula Amount Amount

153010966.xlsx.ms_office, Exercise 22-11, Page 6 of 14, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P22-1 (Change in Estimate and Error Correction) Holtzman Company is in the process of preparing its financial statements for 2012. Assume that no entries for depreciation have been recorded in 2012. The following information related to depreciation of fixed assets is provided to you. 1. Holtzman purchased equipment on Jan 2, 2009, for $85,000 At the time, the equipment had an estimated useful life of 10 years with a $5,000 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2012, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $3,000 salvage value. During 2012, Holtzman changed from the double-declining balance method for its building to the straight-line method. The building originally cost $300,000 It had a useful life of 10 years and a salvage value of $30,000 The following computations present depreciation on both bases for 2010 and 2011. 2011 2010 Straight-line $27,000 $27,000 Declining balance $48,000 $60,000 3. Holtzman purchased a machine on July 1, 2010, at a cost of $120,000 The machine has a salvage value of and a useful life of years. $16,000 8 Holtzmans bookkeeper recorded straight-line depreciation in 2010 and 2011 but failed to consider the salvage value. Instructions: (a) Prepare the journal entries to record depreciation expense for 2012 and correct any errors made to date related to the information provided. (1) Cost of equipment Less: Salvage value Depreciable cost Depreciation to 2012 2009 $80,000 2010 80,000 2011 80,000 $85,000 5,000 $80,000

10 10 10

$8,000 8,000 8,000 $24,000

Depreciation in 2012 Cost of equipment Less: Depreciation to 2012 Book value, January 1, 2012 Less: Salvage value Depreciable cost Remaining years Depreciation in 2012 Depreciation expense Accumulated Depreciation - Equipment

$85,000 24,000 61,000 3,000 $58,000 4 $14,500 14,500 14,500

153010966.xlsx.ms_office, Problem 22-1 Solution, Page 7 of 14, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: th Cost of building $300,000 (2) Intermediate Accounting , 14 Edition by Kieso, Weygandt, and Warfield
Less: Depreciation to 2012 2010 2011 Book value, January 1, 2012 Less: Salvage value Depreciable cost Remaining years Depreciation in 2012 Depreciation expense Accumulated Depreciation - Buildings (3) Depreciation expense [($120,000 - $16,000) / 8] Accumulated Depreciation - Machinery Accumulated Depreciation - Machinery Retained Earnings Depreciation recorded in 2010: [$120,000 8 (1/2)] Depreciation that should be recorded in 2010: [($120,000 $16,000) 8 (1/2)] Depreciation recorded in 2011: ($120,000 / 8) Depreciation that should be recorded in 2011: [($120,000 $16,000) 8] Depreciation that should be taken $6,500 13,000 $19,500 60,000 48,000 $192,000 30,000 $162,000 8 $20,250 20,250 20,250 13,000 13,000 3,000 3,000 $7,500 6,500 15,000 13,000

2010 2011

Depreciation taken $7,500 15,000 $22,500

Differences $1,000 2,000 $3,000

(b) Show comparative net income for 2011 and 2012. Income before depreciation expense was $300,000 in 2012, and was $310,000 in 2011. Ignore taxes. HOLTZMAN COMPANY Comparative Income Statements For the Years 2012 and 2011 Income before depreciation expense Depreciation Expense Net income 2012 $300,000 47,750 $252,250 2011 $310,000 69,000 $241,000

Depreciation Expense Equipment Building Machine

2012 $14,500 20,250 13,000 $47,750

2011 $8,000 48,000 13,000 $69,000

153010966.xlsx.ms_office, Problem 22-1 Solution, Page 8 of 14, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P22-1 (Change in Estimate and Error Correction) Holtzman Company is in the process of preparing its financial statements for 2012. Assume that no entries for depreciation have been recorded in 2012. The following information related to depreciation of fixed assets is provided to you. 1. Holtzman purchased equipment on Jan 2, 2009, for $85,000 At the time, the equipment had an estimated useful life of 10 years with a $5,000 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2012, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $3,000 salvage value. During 2012, Holtzman changed from the double-declining balance method for its building to the straight-line method. The building originally cost $300,000 It had a useful life of 10 years and a salvage value of $30,000 The following computations present depreciation on both bases for 2010 and 2011. 2011 2010 Straight-line $27,000 $27,000 Declining balance $48,000 $60,000 3. Holtzman purchased a machine on July 1, 2010, at a cost of $120,000 The machine has a salvage value of and a useful life of years. $16,000 8 Holtzmans bookkeeper recorded straight-line depreciation in 2010 and 2011 but failed to consider the salvage value. Instructions: (a) Prepare the journal entries to record depreciation expense for 2012 and correct any errors made to date related to the information provided. (1) Cost of equipment Less: Salvage value Depreciable cost Depreciation to 2012 2009 Amount 2010 Amount 2011 Amount Amount Amount Formula

Number Number Number

Formula Formula Formula Formula

Depreciation in 2012 Cost of equipment Less: Depreciation to 2012 Book value, January 1, 2012 Less: Salvage value Depreciable cost Remaining years Depreciation in 2012 Account title Account title

Amount Amount Formula Amount Formula Number Formula Amount Amount

153010966.xlsx.ms_office, Problem 22-1, Page 9 of 14, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: th Cost of building (2) Intermediate Accounting , 14 Edition by Kieso, Weygandt, Amount and Warfield
Less: Depreciation to 2012 2010 2011 Book value, January 1, 2012 Less: Salvage value Depreciable cost Remaining years Depreciation in 2012 Account title Account title (3) Account title Account title Account title Account title Depreciation recorded in 2010: [$120,000 8 * (1/2)] Depreciation that should be recorded in 2010: [($120,000 $16,000) 8 * (1/2)] Depreciation recorded in 2011: ($120,000 / 8) Depreciation that should be recorded in 2011: [($120,000 $16,000) 8] Depreciation Depreciation that should taken be taken Differences Amount Amount Formula Amount Amount Formula Formula Formula Formula Amount Amount Formula Amount Formula Number Formula Amount Amount Amount Amount Amount Amount Amount Amount Amount Amount

2010 2011

(b) Show comparative net income for 2011 and 2012. Income before depreciation expense was $300,000 in 2012, and was $310,000 in 2011. Ignore taxes. HOLTZMAN COMPANY Comparative Income Statements For the Years 2012 and 2011 Income before depreciation expense Depreciation Expense Net income 2012 Amount Amount Formula 2011 Amount Amount Formula

Depreciation Expense Equipment Building Machine

2012 Amount Amount Amount Formula

2011 Amount Amount Amount Formula

153010966.xlsx.ms_office, Problem 22-1, Page 10 of 14, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P22-6 (Accounting Change and Error Analysis) On December 31, 2012, before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three depreciable assets. 1. Depreciable asset A was purchased January 2, 2009. It originally cost $540,000 and, for depreciation purposes, the straight-line method was originally chosen. The asset was originally expected to be useful for 10 years and have a zero salvage value. In 2012, the decision was made to change the depreciation method from straight-line to sum-of-years'-digits, and the estimates relating to useful life and salvage value remained unchanged. 2. Depreciable asset B was purchased January 3, 2008. It originally cost $180,000 and, for depreciation purposes, the straight-line method was chosen. The asset was originally expected to be useful for 15 years and have a zero salvage value. In 2012, the decision was made to shorten the total life of this asset to 9 years and to estimate the salvage value at $3,000 3. Depreciable asset C was purchased January 5, 2008. The asset's original cost was $160,000 and this amount was entirely expensed in 2008. This particular asset has a 10-year useful life and no salvage value. The straight-line method was chosen for depreciation purposes. Additional data: 1. Income in 2012 before depreciation expense amount to $400,000 2. Depreciation expense on assets other than A, B, and C totaled $55,000 in 2012. 3. Income in 2011 was reported at $370,000 4. Ignore all income tax effects. 5. 100,000 shares of common stock were outstanding in 2011 and 2012. Instructions: (a) Prepare all necessary entries in 2012 to record these determinations. (1) Depreciation Expense [$378,000 (7/28)] Accumulated DepreciationAsset A Computations: Cost of Asset A Less: Depreciation prior to 2012 Book value, January 1, 2012 Depreciation factor Depreciation for 2012 (2) Depreciation Expense Accumulated DepreciationEquipment Computations: Original cost Less: Accumulated depreciation ($12,000 4 years) Book value, January 1, 2012 Estimated salvage value Remaining depreciable base 25,800 25,800 $180,000 (48,000) 132,000 (3,000) $129,000 94,500 94,500

$540,000 162,000 $378,000 7/28 $94,500

153010966.xlsx.ms_office, Problem 22-6 Solution, Page 11 of 14, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: Remaining useful Intermediate Accounting , 14th life Edition by Kieso, Weygandt, and Warfield
Depreciation expense 2012 (3) Asset C Accumulated DepreciationAsset C ($16,000 4) Retained Earnings Depreciation Expense Accumulated DepreciationAsset C 160,000

5 $25,800

64,000 96,000 16,000 16,000

(b) Prepare comparative retained earnings statements for Madrasa Inc. for 2011 and 2012. The company had retained earnings of $200,000 at December 31, 2010. MADRASA INC. Comparative Retained Earnings Statements For the Years Ended 2012 2011 Balance, January 1, as previously reported $200,000 Add: Error in recording Asset C 112,000 Retained earnings, January 1, as adjusted 666,000 312,000 Add: Net income (See Cell G86 and Cell G89) 208,700 354,000 Retained earnings, December 31 $874,700 $666,000 Amount expensed incorrectly in 2008 Depreciation to be taken to January 1, 2011 Prior period adjustment for income Income before depreciation expense 2012 Depreciation for 2012 Asset A Asset B Asset C Other Income after depreciation expense Net income as reported Depreciation - Asset C Net income as adjusted 400,000 $94,500 25,800 16,000 55,000 $160,000 (48,000) 112,000

(191,300) $208,700 $370,000 (16,000) $354,000

153010966.xlsx.ms_office, Problem 22-6 Solution, Page 12 of 14, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P22-6 (Accounting Change and Error Analysis) On December 31, 2012, before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three depreciable assets. 1. Depreciable asset A was purchased January 2, 2009. It originally cost $540,000 and, for depreciation purposes, the straight-line method was originally chosen. The asset was originally expected to be useful for 10 years and have a zero salvage value. In 2012, the decision was made to change the depreciation method from straight-line to sum-of-years'-digits, and the estimates relating to useful life and salvage value remained unchanged. 2. Depreciable asset B was purchased January 3, 2008. It originally cost $180,000 and, for depreciation purposes, the straight-line method was chosen. The asset was originally expected to be useful for 15 years and have a zero salvage value. In 2012, the decision was made to shorten the total life of this asset to 9 years and to estimate the salvage value at $3,000 3. Depreciable asset C was purchased January 5, 2008. The asset's original cost was $160,000 and this amount was entirely expensed in 2008. This particular asset has a 10-year useful life and no salvage value. The straight-line method was chosen for depreciation purposes. Additional data: 1. Income in 2012 before depreciation expense amount to $400,000 2. Depreciation expense on assets other than A, B, and C totaled $55,000 in 2012. 3. Income in 2011 was reported at $370,000 4. Ignore all income tax effects. 5. 100,000 shares of common stock were outstanding in 2011 and 2012. Instructions: (a) Prepare all necessary entries in 2012 to record these determinations. (1) Account title Account title Computations: Cost of Asset A Less: Depreciation prior to 2012 Book value, January 1, 2012 Depreciation factor Depreciation for 2012 (2) Account title Account title Computations: Original cost Less: Accumulated depreciation Book value, January 1, 2012 Estimated salvage value Remaining depreciable base Amount Amount Amount Amount Formula Amount Formula Amount Amount

Amount Formula Formula Number Formula

153010966.xlsx.ms_office, Problem 22-6, Page 13 of 14, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Remaining useful Intermediate Accounting , 14th life Edition by Kieso, Weygandt, and Warfield
Depreciation expense 2012 (3) Account title Account title Account title Account title Account title Amount

Number Formula

Amount Amount Amount Amount

(b) Prepare comparative retained earnings statements for Madrasa Inc. for 2011 and 2012. The company had retained earnings of $200,000 at December 31, 2010. MADRASA INC. Comparative Retained Earnings Statements For the Years Ended 2012 2011 Balance, January 1, as previously reported Amount Add: Error in recording Asset C Amount Retained earnings, January 1, as adjusted Amount Formula Add: Net income Amount Amount Retained earnings, December 31 Formula Formula Amount expensed incorrectly in 2008 Depreciation to be taken to January 1, 2011 Prior period adjustment for income Income before depreciation expense 2012 Depreciation for 2012 Asset A Asset B Asset C Other Income after depreciation expense Net income as reported Depreciation - Asset C Net income as adjusted Amount Amount Amount Amount Amount Amount Amount Formula

Formula Formula Amount Amount Formula

153010966.xlsx.ms_office, Problem 22-6, Page 14 of 14, 6/20/2013, 6:59 AM