Instructions for the Microsoft Excel Templates

Be advised, the worksheet and workbooks are not protected.

Extensive detail and information is contained within the manual. Striking the "F1" key or following the path "Windows>Excel Help" will invoke the Office Assistant and bring up one of several help menus. You should enter your name, course ID, and date name into the cells at the top of the page. Each page contains a page footer with a Page # of Page ## as well as time and date to assist in assembly of multiple pages. Each worksheet contains the identification of the problem or exercise. All formatting should have been accomplished to provide satisfactory presentation. See the text for additional assistance in formatting. There should be no need to insert columns or rows into the workbooks. If more than one page is required by the problem, the page breaks are preset. In general, the yellow highlighted cells are the cells which work and effort should be presented. Place the proper account title in the cell where the word "Account title" appears on the template. Place the value in the cell where the word "Value" or "Amount" appears on the template. A formula may be placed in some of these cells. Write a formula into cells where the word "Formula" appears. In these cells, an amount calculated can be entered. An amount can be placed in these cells. Place the explanation for the entry in the cell where the word "Text Explanation" appears on the template. Insert the account number where "Acct Nbr" appears on the template during posting. Insert the journal reference where "JOURN #" appears on the template during posting. Insert the title in the cell where "TITLE" appears on the template. The print area is defined to fit onto 8 1/2" X 11" sheets in portrait or landscape mode as required. The gray filled cells define the perimeter of the problem and the print area. The problem is formatted for whole dollars with comma separations (no cents) except where required. The display may have "Freeze Pane" invoked so column titles remain visible during data entry. Negative values may be shown as ($400) or -$400.

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Consider using "Split" panes to assist in copy and paste of data. Much of the exercises and problems can have data entered by the "look to" or "=A34" type formula where cell A34 contains the data to be entered. This precludes typing and data entry errors.

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Name: Problem: P22-6, Accounting Change and Error Analysis Course: Date:
On December 31, 2010, before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three depreciable 1. Depreciable asset A was purchased January 2, 2007. 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 2010, 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, 2006. 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 2010, 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, 2006. The asset's original cost was $160,000 and this amount was entirely expensed in 2006. 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 2010 before depreciation expense amount to $400,000 2. Depreciation expense on assets other than A, B, and C totaled $55,000 in 2010. 3. Income in 2009 was reported at $370,000 4. Ignore all income tax effects. 5. 100,000 shares of common stock were outstanding in 2009 and 2010. Instructions: (a) Prepare all necessary entries in 2010 to record these determinations. (1) Depreciation Expense Accumulated Depreciation (Asset A) Computations: Cost of Asset A Less: Depreciation prior to 2010 Book value, January 1, 2010 Depreciation factor Depreciation for 2010 7/28 94,500 94,500 94,500

$540,000 162,000 $378,000

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Name: Problem: P22-6, Accounting Change and Error Analysis Course: Date:
(2) Depreciation Expense Accumulated Depreciation (Asset B) Computations: Original cost Less: Accumulated depreciation Book value, January 1, 2010 Estimated salvage value Remaining depreciable base Remaining useful life Depreciation expense 2010 (3) Asset C Accumulated Depreciation (Asset C) Retained Earnings Depreciation Expense Accumulated Depreciation (Asset C) 160,000 64,000 96,000 16,000 16,000 25,800 25,800 $180,000 48,000 132,000 3,000 $129,000 5 25,800

(b) Prepare comparative retained earnings statements for Madrasa Inc. for 2009 and 2010. The company had retained earnings of $200,000 at December 31, 2008. MADRASA INC. Comparative Retained Earnings Statements For the Years Ended 2010 2009 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 208,700 354,000 Retained earnings, December 31 $874,700 $666,000 Amount expensed incorrectly in 2006 Depreciation to be taken to January 1, 2009 Prior period adjustment for income Income before depreciation expense 2010 Depreciation for 2010 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 $370,000 16,000 $354,000 $160,000 48,000 112,000

191,300 $208,700

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