8-27Injusttwoweeks,we’llcometogether,asanation,tomarkthe10thanniversaryoftheSeptember11thattacks.We’llremembertheinnocentliveswelost.We’llstandwiththefamilieswholovedthem.We’llhonortheheroicfirstresponderswhorushedtothesceneandsavedsomany.Andwe’llpaytributetoourtroopsandmilitaryfamilies,andallthosewhohaveservedoverthepasttenyears,tokeepussafeandstrong.We’llalsorecallhowtheworstterroristattackinAmericanhistorybroughtoutthebestintheAmericanpeople.HowAmericanslineduptogiveblood.Howvolunteersdroveacrossthecountrytolendahand.Howschoolchildrendonatedtheirsavings.Howcommunities,faithgroupsandbusinessescollectedfoodandclothing.Wewereunited,andtheoutpouringofgenerosityandcompassionremindedusthatintimesofchallenge,weAmericansmoveforwardtogether,asonepeople.ThisSeptember11th,MichelleandIwilljointhecommemorationsatGroundZero,inShanksville,andatthePentagon.Butevenifyoucan’tbeinNewYork,PennsylvaniaorVirginia,everyAmericancanbepartofthisanniversary.Onceagain,9/11willbeaNationalDayofServiceandRemembrance.Andinthedaysandweeksahead,folksacrossthecountry—inall50states—willcometogether,intheircommunitiesandneighborhoods,tohonorthevictimsof9/11andtoreaffirmthestrengthofournationwithactsofserviceandcharity.InMinneapolis,volunteerswillhelprestoreacommunitycenter.InWinston-Salem,NorthCarolina,they’llhammershinglesandlayfloorstogivefamiliesanewhome.InTallahassee,Florida,they’llassemblecarepackagesforourtroopsoverseasandtheirfamilieshereathome.InOrangeCounty,California,they’llrenovatehomesforourveterans.Andonceagain,MichelleandIlookforwardtojoiningalocalserviceprojectaswell.Therearesomanywaystogetinvolved,andeveryAmericancandosomething.Tolearnmoreabouttheopportunitieswhereyoulive,justgoonlineandvisitS.Eventhesmallestactofservice,thesimplestactofkindness,isawaytohonorthosewelost;awaytoreclaimthatspiritofunitythatfollowed9/11.Onthis10thanniversary,westillfacegreatchallengesasanation.We’reemergingfromtheworsteconomiccrisisinourlifetimes.We’retakingthefighttoalQaeda,endingthewarinIraqandstartingtobringourtroopshomefromAfghanistan.Andwe’reworkingtorebuildthefoundationofournationalstrengthhereathome.Noneofthiswillbeeasy.Anditcan’tbetheworkofgovernmentalone.Aswesawafter9/11,thestrengthofAmericahasalwaysbeenthecharacterandcompassionofourpeople.Soaswemarkthissolemnanniversary,let’ssummonthatspiritoncemore.Andlet’sshowthatthesenseofcommonpurposethatweneedinAmericadoesn’thavetobeafleetingmoment;itcanbealastingvirtue—notjustononeday,buteveryday.8-20HellofromtheCountryCornerFarminAlpha,Illinois!Forthepastfewdays,I’vebeentravelingtosmalltownsandfarmtownshereintheheartlandofthiscountry.IsatdownwithsmallbusinessownersinGutenberg,Iowa;andranchersandfarmersinPeosta.IhadlunchwithveteransinCannonFalls,Minnesota;andtalkedtoplantworkersataseeddistributorinAtkinson,Illinois.AndtothegirlsvolleyballteamatMaquoketaHighSchool,letmejustsayonething:GoCardinals.Now,I’mouthereforonereason:IthinkWashington,DCcanlearnsomethingfromthefolksinAtkinsonandPeostaandCannonFalls.IthinkourcountrywouldbeawholelotbetteroffifourelectedleadersshowedthesamekindofdisciplineandintegrityandresponsibilitythatmostAmericansdemonstrateintheirliveseverysingleday.Because,thefactis,we’regoingthroughatoughtimerightnow.We’recomingthroughaterriblerecession;alotoffolksarestilllookingforwork.Alotofpeoplearegettingbywithsmallerpaychecksorlessmoneyinthecashregister.SoweneedfolksinWashington-thepeoplewhosejobitistodealwiththecountry’sproblems,thepeoplewhoyouelectedtoserve—weneedthemtoputasidetheirdifferencestogetthingsdone.Therearethingswecandorightnowthatwillmeanmorecustomersforbusinessesandmorejobsacrossthecountry.Wecancutpayrolltaxesagain,sofamilieshaveanextra$1,000tospend.Wecanpassaroadconstructionbillsoconstructioncrews—nowsittingidle—canheadbacktotheworksite,rebuildingroads,bridges,andairports.We’vegotbrave,skilledAmericansreturningfromIraqandAfghanistan.Let’sconnectthemwithbusinessesthatcouldusetheirskills.Andlet’spasstradedealstoleveltheplayingfieldforourbusinesses.WehaveAmericansdrivingHyundaisandKias.Well,IwanttoseefolksinKoreadrivingFords,ChevysandChryslers.Iwantmoreproductssoldaroundtheglobestampedwiththreewords:MadeinAmerica.Thesearecommonsenseideas-ideasthathavebeensupportedbybothDemocratsandRepublicans.Theonlythingholdingthembackispolitics.TheonlythingpreventingusfrompassingthesebillsistherefusalbysomeinCongresstoputcountryaheadofparty.That’stheproblemwehaverightnow.That’swhat’sholdingthiscountryback.That’swhatwehavetochange.Because,foralltheknockswe’vetaken,despiteallthechallengesweface,thisisstillthegreatestcountryonearth.Westillhavethebestworkersandfarmers,entrepreneursandbusinesses,studentsandscientists.AndyoucanseethathereinAlpha.Youcanseeitalongthecountryroadsthatconnectthesesmalltownsandfarmlands.Thesepastfewdays,I’vebeenseeinglittlekidswithAmericanflagsandgrandparentsinlawnchairs.I’veshakenhandswithfolksoutsidemachineshopsandchurches,cornerstoresandfarms.ItremindsmewhyIgotintopublicserviceinthefirstplace.GettingoutofWashingtonandspendingtimewiththepeopleofthiscountry-seeinghowhardyou’reworking,howcreativeyouare,howresourcefulyouare,howdeterminedyouare-thatonlymakesmemoredeterminedtoserveyouasbestIcanasPresident.Anditonlymakesmemoreconfidentinourfuture.That’swhyit’ssoimportantthatfolksinWashingtonputcountrybeforeparty.That’swhyit’ssoimportantthatourelectedleadersgetpasttheirdifferencestohelpgrowtheeconomyandputthisnationbacktowork.BecausehereinAlphaitcouldn’tbemoreclear:ifwecancometogether,there’snostoppingtheUnitedStatesofAmerica.There’snodoubtthatourfutureisbright.Thanks,andhaveagreatweekend.TalkingaboutyogaMike:What'reyoudoingupsoearly,Amanda?Haveyoudecidedtotakeupjoggingintheparklikeme?Amanda:No,Mike.YouknowIreallycan'tstandjogging.I'vejoinedayogaclassatourlocalfitnesscenter.Ihearit'sagreatwaytostayfit.Wanttojoinme?Mike:Noway!Yogaisforgirls.I'dratherdosomeweightsorcardioatthegymthancontortmybodyintopainfulpostures.Amanda:Comeon,there'smoretoyogathanthat!It'sperfectforphysicalandspiritualwell-being.Italsohelpsyourbodybecomemoreflexible.Mike:Nothanks－Ithinkallofthisisjustamoneymakinggimmick.I'mtellingyouAmanda,don'tbuyintoit!Amanda:Mike,wejustlearnthreenewpostureseverydayanddosomemeditation.Myyogaguruisgoingtoteachusaboutbreathingtoday.Didyouknowthatwedon'tevenbreatheproperlyanymore?Mike:Countmeout!Idon'tneedanyonetotellmehowtobreathe!Justbecausecelebritiesaredoingyoga,everyone'sjumpingonthebandwagon.Amanda:That'snottrue!You'realwaysreluctanttotrysomethingnew.Giveitachance－youmightenjoyit.Mike:Okay,butonlyifyoupromiseI'llendupwithabodylikeMatthewMcConaughey!tocontort(v.)扭曲；曲解Peter'sfacecontortedwithragewhenhefoundouthissisterhadbrokenhislaptopcomputer.posture(n.)姿勢；姿態(tài)Hemaintainedagoodpostureeveninoldagebysittingstraightinsteadofslouching.flexible(adj.)可彎曲的；柔韌有彈性的Thedancerissoflexiblethatshecantouchherheadwithherfoot.guru(n.)導(dǎo)師；大師ManypeopleintheU.S.considerMarthaStewarttobealifestyleguru.reluctant(adj.)不情愿的；勉強的Sharonwasreluctanttoleavethechildrenalonewiththebabysitter,butshehadnootherchoice.spiritualwell-being心靈上的平靜；心靈上的喜悅Aren'tyougladwedecidedtotakeatriptotheHimalayasinsteadofNewYork?Yes,thepeacefulatmosphereandfreshairhavebeengoodformyspiritualwell-being.moneymakinggimmick賺錢的技倆；賺錢的花招Guesswhat?Thedepartmentstoreisofferingabuy-one-get-one-freedealonallclothesandjewelry!Comeon,that'sjustamoneymakinggimmicktoattractmorecustomers.toendupwith最后?…；結(jié)果…Whyareweheresoearly?Theconcertdoesn'tstartuntilanhourlater!Iwantedtofindgoodseats－IalwaysendupwithseatsinthebackrowwhenIarrivelateTalkingaboutpoetry談?wù)勗姼鐰manda:Hi,Mike.Whatareyoureading?Mike:Oh,thesearejustsomebooksIpickedupatalocalpoetryfestivalthattookplaceacoupleofweeksago.Eventhoughalotofwhatthefeaturedpoetsreadwasn'tinEnglish,itwasstillneattoseethattherearesomanypeoplewhoappreciatepoetryinTaiwan.Amanda:Ididn'tknowyouweresuchapoetrylover,Mike.Personally,I'vealwaysfoundthatstuffalittlebitboringandhardtounderstand.Allthatflowerylanguagegivesmeaheadache!I'dratherreadanicelongnovelanyday.Mike:I'lladmitthatpoetry'sanacquiredtaste.Butonceyoulearnmoreaboutit,you'llfindthatpoemsaren'tallfloweryandincomprehensible－theydon'tevenhavetorhyme!OneofmyfavoritepoetsisBillyCollins,whowritesreallyfunny,cleverpoemsinsimpleeverydayEnglish.Amanda:I'llhavetolookhimup.Say,haveyoueverwrittenanypoetryofyourown?Somelovesonnets,perhaps?Mike:Nolovesonnets,butIdidtrytowritesomepoemsalongtimeago.Theywereallreallybad.OnceIspentthreehourstryingtocomeupwithawordthatrhymeswith"panda"!Amanda:SillyMike!Howcouldyounotthinkof"Amanda"?poetry(n.)詩MostpeoplehaveheardofErnestHemingway'sshortstories,butdidyouknowthathewrotepoetryaswell?festival(n.)節(jié)慶Atthisyear'sinternationalfoodfestival,ItriedalotofdishesthatI'dneverhadbefore.headache(n.)頭痛Ididn'tgetmuchsleeplastnight,soI'vehadaheadachealldaylong.incomprehensible(adj.)難懂的；無法理解的Lisadidn'tknowanythingaboutthestockmarket,somostofwhatherfriendswerediscussingwasincomprehensibletoher.torhyme(v.)押韻SandiLandy'sfriendsoftenteasedherbecausehernamerhymed.flowerylanguage瑰麗的詞藻Howdidyoudoonyouressay?BetterthanIexpected.IwasafraidI'dusedtoomuchflowerylanguage,butmyteacherstillgavemeagoodgrade.lovesonnet十四行情詩CanyouthinkofagoodwaytoimpressthegirlIlike?Maybeyoushouldmemorizeafewlovesonnetsandrecitethemtoher.tocomeupwith想出…Thismathproblemissohard!Relax.I'msureifweworkonittogetherwe'llbeabletocomeupwiththecorrectanswerSchoolingandEducationItiscommonlybelievedinUnitedStatesthatschooliswherepeoplegotogetaneducation.Nevertheless,ithasbeensaidthattodaychildreninterrupttheireducationtogotoschool.Thedistinctionbetweenschoolingandeducationimpliedbythisremarkisimportant.Educationismuchmoreopen-endedandall-inclusivethanschooling.Educationknowsnobounds.Itcantakeplaceanywhere,whetherintheshowerorinthejob,whetherinakitchenoronatractor.Itincludesboththeformallearningthattakesplaceinschoolsandthewholeuniverseofinformallearning.Theagentsofeducationcanrangefromareveredgrandparenttothepeopledebatingpoliticsontheradio,fromachildtoadistinguishedscientist.Whereasschoolinghasacertainpredictability,educationquiteoftenproducessurprises.Achanceconversationwithastrangermayleadapersontodiscoverhowlittleisknownofotherreligions.Peopleareengagedineducationfrominfancyon.Education,then,isaverybroad,inclusiveterm.Itisalifelongprocess,aprocessthatstartslongbeforethestartofschool,andonethatshouldbeanintegralpartofone’sentirelife.Schooling,ontheotherhand,isaspecific,formalizedprocess,whosegeneralpatternvarieslittlefromonesettingtothenext.Throughoutacountry,childrenarriveatschoolatapproximatelythesametime,takeassignedseats,aretaughtbyanadult,usesimilartextbooks,dohomework,takeexams,andsoon.Theslicesofrealitythataretobelearned,whethertheyarethealphabetoranunderstandingoftheworkingofgovernment,haveusuallybeenlimitedbytheboundariesofthesubjectbeingtaught.Forexample,highschoolstudentsknowthattherenotlikelytofindoutintheirclassesthetruthaboutpoliticalproblemsintheircommunitiesorwhatthenewestfilmmakersareexperimentingwith.Therearedefiniteconditionssurroundingtheformalizedprocessofschooling.上學(xué)與受教育在美國，人們通常認為上學(xué)是為了受教育。而現(xiàn)在卻有人認為孩子們上學(xué)打斷了他們受教育的過程。這種觀念中的上學(xué)與受教育之間的區(qū)別非常重要。與上學(xué)相比，教育更具開放性，內(nèi)容更廣泛。教育不受任何限制。它可以在任何場合下進行，在淋浴時，在工作時，在廚房里或拖拉機上。它既包括在學(xué)校所受的正規(guī)教育，也包括一切非正規(guī)教育。傳授知識的人可以是德高望重的老者，可以是收音機里進行政治辯論的人們，可以是小孩子，也可以是知名的科學(xué)家。上學(xué)讀書多少有點可預(yù)見性，而教育往往能帶來意外的發(fā)現(xiàn)。與陌生人的一次隨意談話可能會使人認識到自己對其它宗教其實所知甚少。人們從幼時起就開始受教育。因此，教育是一個內(nèi)涵很豐富的詞，它自始至終伴隨人的一生，早在人們上學(xué)之前就開始了。教育應(yīng)成為人生命中不可缺少的一部分。然而，上學(xué)卻是一個特定的形式化了的過程。在不同場合下，它的基本形式大同小異。在全國各地，孩子們幾乎在同一時刻到達學(xué)校，坐在指定的座位上，由一位成年人傳授知識，使用大致相同的教材，做作業(yè)，考試等等。他們所學(xué)的現(xiàn)實生活中的一些片斷，如字母表或政府的運作，往往受到科目范圍的限制。例如，高中生們知道，在課堂上他們沒法弄清楚他們社區(qū)里政治問題的真情，也不會了解到最新潮的電影制片人在做哪些嘗試。學(xué)校教育這一形式化的過程是有特定的限制的。TheLanguageofMusicApainterhangshisorherfinishedpicturesonawall,andeveryonecanseeit.Acomposerwritesawork,butnoonecanhearituntilitisperformed.Professionalsingersandplayershavegreatresponsibilities,forthecomposerisutterlydependentonthem.Astudentofmusicneedsaslongandasarduousatrainingtobecomeaperformerasamedicalstudentneedstobecomeadoctor.Mosttrainingisconcernedwithtechnique,formusicianshavetohavethemuscularproficiencyofanathleteoraballetdancer.Singerspracticebreathingeveryday,astheirvocalchordswouldbeinadequatewithoutcontrolledmuscularsupport.Stringplayerspracticemovingthefingersofthelefthandupanddown,whiledrawingthebowtoandfrowiththerightarm—twoentirelydifferentmovements.Singersandinstrumentshavetobeabletogeteverynoteperfectlyintune.Pianistsaresparedthisparticularanxiety,forthenotesarealreadythere,waitingforthem,anditisthepianotuner’sresponsibilitytotunetheinstrumentforthem.Buttheyhavetheirowndifficulties;thehammersthathitthestringhavetobecoaxednottosoundlikepercussion,andeachoverlappingtonehastosoundclear.Thisproblemofgettingcleartextureisonethatconfrontsstudentconductors:theyhavetolearntoknoweverynoteofthemusicandhowitshouldsound,andtheyhavetoaimatcontrollingthesesoundwithfanaticalbutselflessauthority.Techniqueisofnouseunlessitiscombinedwithmusicalknowledgeandunderstanding.Greatartistsarethosewhoaresothoroughlyathomeinthelanguageofmusicthattheycanenjoyperformingworkswritteninanycentury.音樂的語言畫家將已完成的作品掛在墻上，每個人都可以觀賞到。作曲家寫完了一部作品，得由演奏者將其演奏出來，其他人才能得以欣賞。因為作曲家是如此完全地依賴于職業(yè)歌手和職業(yè)演奏者，所以職業(yè)歌手和職業(yè)演奏者肩上的擔(dān)子可謂不輕。一名學(xué)音樂的學(xué)生要想成為一名演奏者，需要經(jīng)受長期的、嚴格的訓(xùn)練，就象一名醫(yī)科的學(xué)生要成為一名醫(yī)生一樣。絕大多數(shù)的訓(xùn)練是技巧性的。音樂家們控制肌肉的熟練程度，必須達到與運動員或巴蕾舞演員相當?shù)乃?。歌手們每天都練?xí)吊嗓子，因為如果不能有效地控制肌肉的話，他們的聲帶將不能滿足演唱的要求。弦樂器的演奏者練習(xí)的則是在左手的手指上下滑動的同時，用右手前后拉動琴弓--兩個截然不同的動作。歌手和樂器演奏者必須使所有的音符完全相同協(xié)調(diào)。鋼琴家們則不用操這份心，因為每個音符都已在那里等待著他們了。給鋼琴調(diào)音是調(diào)音師的職責(zé)。但調(diào)音師們也有他們的難處：他們必須耐心地調(diào)理敲擊琴弦的音錘，不能讓音錘發(fā)出的聲音象是打擊樂器，而且每個交疊的音都必須要清晰。如何得到樂章清晰的紋理是學(xué)生指揮們所面臨的難題：他們必須學(xué)會了解音樂中的每一個音及其發(fā)音之道。他們還必須致力于以熱忱而又客觀的權(quán)威去控制這些音符。除非是和音樂方面的知識和悟性結(jié)合起來，單純的技巧沒有任何用處。藝術(shù)家之所以偉大在于他們對音樂語言駕輕就熟，以致于可以滿懷喜悅地演出寫于任何時代的作品。Chapter1TheMillRunGolf&CountryClubdetailsthefollowingaccountsinitsfinancialstatements.(a)(b)AccountspayableandaccruedliabilitiesAccountsreceivableProperty,plant,andequipmentFoodandbeverageoperationsrevenueGolfcourseoperationsrevenueInventoryLong-termdebtOfficeandgeneralexpenseProfessionalfeesexpenseWagesandbenefitsexpenseInstructions.Classifyeachoftheaboveaccountsasanasset(A),liability(L),stockholders’equity(SE),revenue(R),orexpense(E)item.Classifyeachoftheaboveaccountsasafinancingactivity(F),investingactivity(I),oroperatingactivity(O).Ifyoubelieveaparticularaccountdoesn’tfitinanyoftheseactivities,explainwhy.Thefollowinginformationwastakenfromthe2004financialstatementsofpharmaceuticalgiantMerckandCo.Alldollaramountsareinmillions.Retainedearnings,January1,2004$34,142.0Materialsandproductionexpense4,959.8Marketingandadministrativeexpense7,346.3Dividends3,329.1Salesrevenue22,938.6Researchanddevelopmentexpense4,010.2Taxexpense2.161.1Otherrevenue1,352.2Instructions.Afteranalyzingthedata,prepareanincomestatementandaretainedearningsstatementfortheyearendingDecember31,2004.SupposethatMerckdecidedtoreduceitsresearchanddevelopmentexpenseby50%.Whatwouldbetheshort-termimplications?Whatwouldbethelong-termimplications?Howdoyouthinkthestockmarketwouldreact?KelloggCompanyistheworld’sleadingproducerofready-to-eatcerealandaleadingproducerofgrain-basedconveniencefoodssuchasfrozenwafflesandcerealbars.Thefollowingitemsweretakenfromits2004incomestatementandbalancesheet.Alldollarsareinmillions._Retainedearnings$2,701.3Long-termdebt$3,892.6_Costofgoodssold5,298.7Inventories681.0_Sellingandadministrativeexpense2,634.1Netsales9,613.9_Cash417.4Accountspayable767.2_Notespayable709.7Commonstock103.8_Interestexpense308.6Incometaxexpense475.3Otherexpense6.6Instructions.Performeachofthefollowing.Ineachcaseidentifywhethertheitemisanasset(A),liability(L),stockholders’equity(SE),revenue(R),orexpense(E).PrepareanincomestatementforKelloggCompanyfortheyearendedDecember31,2004.4.ThefollowingitemsweretakenfromthebalancesheetofNike,Inc.(1)Cash$828.0(7)Inventories$1,633.6(2)Accountsreceivable2,120.2(8)Incometaxespayable118.2(3)Commonstock890.6(9)Property,plant,andequipment1,586.9(4)Notespayable146.0(10)Retainedearnings3,891.1(5)Otherassets1,722.9(11)Accountspayable763.8(6)Otherliabilities2,081.9Instructions.Performeachofthefollowing.Classifyeachoftheseitemsasanasset,liability,orstockholders’equity.(Alldollarsareinmillions.)DetermineNike’saccountingequationbycalculatingthevalueoftotalassets,totalliabilities,andtotalstockholders’equity.TowhatextentdoseNikerelyondebtversusequityfinancing?1TheseitemsaretakenfromthefinancialstatementsofDonovanCo.atDecember31.2007Building$105,800Accountsreceivable12,600Prepaidinsurance4,680

Cash16,840Equipment82,400Land61,200TOC\o"1-5"\h\zInsuranceexpense780Depreciationexpense5,300Interestexpense2,600Commonstock62,000Retainedearnings(January1,2007)40,000Accumulateddepreciation-building45,600Accountspayable9,500Mortgagepayable93,600Accumulateddepreciation-equipment18,720Interestpayable3,600Bowlingrevenues19,180Instructions.Prepareaclassifiedbalancesheet.Assumethat$13,600ofthemortgagepayablewillbepaidin2008.Thefollowingitemsweretakenfromthe2004financialstatementsofTexasInstruments,Inc.(Alldollarsareinmillions.)Long-termdebt$368Cash$2,668Commonstock2,488Accumulateddepreciation5,655Prepaidexpense326Accountspayable1,444Property,plant,andequipment9,573Othernoncurrentassets1,927Othercurrentassets554Othernoncurrentliabilities943Othercurrentliabilities470Retainedearnings10,575Long-terminvestments264Accountsreceivable1,696Short-terminvestments3,690Inventories1,256Loanspayablein200511Instructions.PrepareaclassifiedbalancesheetingoodformasofDecember31,2004.ThesefinancialstatementitemsareforSnyderCorporationatyear-end,July31,2007.$2,08051,700$2,08051,70022,60018,5004,10061,1008,5001,800SalariesexpenseUtilitiesexpenseEquipmentAccountspayableCommissionrevenueRentrevenueLong-termnotepayableCommonstock16,000Cash24,200TOC\o"1-5"\h\zAccountsreceivable9,780Accumulateddepreciation6,000Dividends4,000Depreciationexpense4,000Retainedearnings(beginningoftheyear)35,200Instructions.Prepareanincomestatementandaretainedearningsstatementfortheyear.SnyderCorporationdidnotissueanynewstockduringtheyear.PrepareaclassifiedbalancesheetatJuly31.Computethecurrentratioanddebttototalassetsratio.SupposethatyouarethepresidentofAlliedEquipment.Yoursalesmanagerhasapproachedyouwithaproposaltosell$20,000ofequipmenttoSnyder.HewouldliketoprovidealoantoSnyderintheformofa10%,5-yearnotepayable.EvaluatehowthisloanwouldchangeSnyder'scurrentratioanddebttototalassetsratio,anddiscusswhetheryouwouldmakethesale.Thechieffinancialofficer(CFO)ofSuperCleanCorporationrequestedthattheaccountingdepartmentprepareapreliminarybalancesheetonDecember30,007,sothattheCFOcouldgetanideaofhowthecompanystood.Heknowsthatcertaindebtagreementswithitscreditorsrequirethecompanytomaintainacurrentratioofatleast2:1.Thepreliminarybalancesheetisasfollows.SUPERCLEANCORP.BalanceSheetDecember30,2007CurrentassetsCurrentliabilitiesCash$30,000Accountspayable$25,000Accountsreceivable20,000Prepaidinsurance10,000$60,000Property,plant,andequipment(net)200,000Totalassets$260000Salariespayable15,000$40,000Long-termliabilitiesNotespayable80,000Totalliabilities120,000Stockholders'equityCommonstock100,000Retainedearnings40,000140,000Totalliabilitiesandstockholdersequity$260000Instructions.Calculatethecurrentratioandworkingcapitalbasedonthepreliminarybalancesheet.Basedontheresultsin(a),theCFOrequestedthat$25,000ofcashbeusedtopayoffthebalanceoftheaccountspayableaccountonDecember31,2007.Calculatethenewcurrentratioandworkingcapitalafterthecompanytakestheseactions.Discusstheprosandconsofthecurrentratioandworkingcapitalasmeasuresofliquidity.WasitunethicalfortheCFOtotakethesesteps?Thefollowingdataweretakenfromthe2004and2003financialstatementsofAmericanEagleOutfitters.(Alldollarsareinthousands.)20042003Currentassets$525,623$427,878Totalassets865,071741,339Currentliabilities189,035141,586Totalliabilities221,401163,857Totalstockholders'equity643,670577,482Cashprovidedbyoperatingactivities189,469104,548Capitalexpenditures64,17361,407Dividendspaid-0--0-Instructions.Performeachofthefollowing.Calculatethedebttototalassetsratioforeachyear.Calculatethefreecashflowforeachyear.DiscussAmericanEagle'ssolvencyin2004versus2003.DiscussAmericanEagle'sabilitytofinanceitsinvestmentactivitieswithcashprovidedbyoperatingactivities,andhowanydeficiencywouldbemet.During2007,itsfirstyearofoperationsasadeliveryservice,ChengCorp.enteredintothefollowingtransactions.Issuedsharesofcommonstocktoinvestorsinexchangefor$110,000incash.Borrowed$45,000byissuingbonds.Purchaseddeliverytrucksfor$60,000cash.Received$16,000fromcustomersforservicesprovided.Purchasedsuppliesfor$4,200onaccount.Paidrentof$5,600.Performedservicesonaccountfor$8,000.Paidsalariesof$28,000.Paidadividendof$11,000toshareholders.InstructionsUsingthefollowingtabularanalysis,showtheeffectofeachtransactionontheaccountingequation.PutexplanationsforchangestoStockholderEquityintheright-handmargin.Assets=Liabilities+Stockholders'

EquityCash+Accounts+Supplies+Property,Plant,"Accounts+Bonds+Common+RetainedReceivableandEquipmentPayablePayableStockEarningsSelectedtransactionsforWelcomeHome,aninteriordecoratorcorporation,initsfirstmonthofbusiness,areasfollows.Issuedstocktoinvestorsfor$12,000incash.Purchasedusedcarfor$8,000cashforuseinbusiness.Purchasedsuppliesonaccountfor$300.Billedcustomers$2,600forservicesperformed.Paid$200cashforadvertisingstartofthebusiness.Received$1,100cashfromcustomersbilledintransaction(4).Paidcreditor$300cashonaccount.Paiddividendsof$400cashtostockholders.Instructions(a)Foreachtransactionindicate(a)thebasictypeofaccountdebitedandcredited(asset,liability,stockholders'equity);(b)thespecificaccountdebitedandcredited(Cash,RentExpense,ServiceRevenue,etc.);(c)whetherthespecificaccountisincreasedordecreased;and(d)thenormalbalanceofthespecificaccount.Usethefollowingformat,inwhichtransaction1isgivenasanexample.(a)(b)(c)(d)Trans-BasicSpecificNormalactionTypeAccountEffectBalance1AssetCashIncreaseDebitAccountDebitedAccountDebited(b)(c)(d)BasicSpecificNormalTypeAccountEffectBalanceStock-CommonIncreaseCreditholders'stockequityJournalizethetransaction.Donotprovideexplanations.ThisinformationrelatestoMatthewsRealEstateAgencyCorporation.Oct.(1)Stockholdersinvested$25,000inexchangeforcommonstockofthecorporation.Hiresanadministrativeassistantatanannualsalaryof$42,000.Buysofficefurniturefor$3,600,onassount.SellsahouseandlotforM.E.Mills;commissionsduefromMills,$10,800(notpaidbyMillsatthistime).Receivescashof$140ascommissionforactingasrentalagentrentinganapartment.Pays$700onaccountfortheofficefurniturepurchasedonOctober3.Paystheadministrativeassistant$3,500insalaryforOctober.InstructionsPreparethedebit-creditanalysisforeachtransactionasillustratedonpages119-124.TransactiondataforMatthewsRealEstateAgencyarepresentedin3.InstructionsJournalizethetransaction.Donotprovideexplanations.SelectedtransactionsforP.F.QuickCorporationduringitsfirstmonthinbusinessarepresentedbelow.Sept.(1)Issuedcommonstockinexchangefor$15,000cashreceivedfrominvestors.Purchasedequipmentfor$12,000,paying$2,000incashandthebalanceonaccount.Paid$5,000cashonbalanceowedforequipment.Paid$500cashdividend.P.F.Quick’schartofaccountsshows:Cash,Equipment,AccountsPayable,CommonStock,andDividends.InstructionsPrepareatabularanalysisoftheSeptembertransaction.Thecolumnheadingsshouldbe:Cash+Equipment=AccountsPayable+Stockholder’sEquity.Fortransactionsaffectingstockholders’equity,provideexplanationsintherightmargin,asshownonpage107.Journalizethetransaction.Donotprovideexplanations.PostthetransactionstoTaccounts.Chapter4．Thefollowingindependentsituationsrequireprofessionaljudgementfordeterminingwhentorecognizerevenuefromthetransaction.SouthwestAirlinessellsyouanadvance-purchaseairlineticketinSeptemberforyourflighthomeatChristmas.UltimateElectronicssellyouahometheatreona“nomonkeydown,nointerest,andnopaymentsforoneyea”rpromotionaldeal.TheTorontoBlueJayssellsseasonticketsonlinetogamesintheSkydome.Fanscanpurchasetheticketsatanytime,althoughtheseasondoesn’tofficiallybeginuntilApril.ThemajorleaguebaseballseasonrunsfromAprilthroughOctober.InAugust,youorderasweaterfromSearsusingitsonlinecatalog.ThesweaterarrivesinSeptemberinfullinNovember.InAugust,youorderasweaterfromSearsusingitsonlinecatalog.ThesweaterarrivesinSeptember,andyouchargeittoyourSearscreditcard.YoureceiveandpaytheSearsbillinOctober.InstructionIdentifywhenrevenueshouldberecognizedineachoftheabovesituations.Yourexaminationoftherecordsofacompanythatfollowsthecashbasisof

accountingtellsyouthatthecompanysreportedcashbasisearningsin2007are$33,640.Ifthisfirmhadfollowedaccrualbasisaccountingpractices,itwouldhavereportedthefollowingyear-endbalances.20072006Accountsreceivable$3,400$2,300Suppliesonhand1,3001,160Unpaidwagesowed1,5002,400Otherunpaidamounts1,4001,600InstructionDeterminethecompanysnetearningonanaccrualbasisfor2007.Showallyourcalculationsinanorderlyfashion.InitsfirstyearofoperationsBereCompanyearned$28,000inservicerevenue,$6,000ofwhichwasonaccountandstilloutstandingatyear-end.Theremaining$22,000wasreceivedincashfromcustomers.Thecompanyincurredoperatingexpensesof$14,500.Oftheseexpenses$13,000werepaidincash;$1,500wasstillowedonaccountatyear-end.Inaddition,Bereprepaid$3,600forinsurancecoveragethatwouldnotbeuseduntilthesecondyearofoperations.InstructionsCalculatethefirstyearsnetearningsunderthecashbasisofaccounting,andcalculatethefirstyearsnetearningundertheaccrualbasisofaccounting.Whichbasisofaccounting(cashoraccrual)providesmoreusefulinformationfordecisionmakers?TheRadicalEdge,askituningandrepairshop,openedinNovember2006.Thecompanycarefullykepttrackofallitscashreceiptsandcashpayments.Thefollowinginformationisavailableattheendoftheskiseason,April30,2007.PaymentsIssueofcommonsharesPaymentPaymentsIssueofcommonsharesPaymentforrepairequipmentRentpaymentsNewspaperadvertisingpaymentUtilitybillspaymentsPart-timehelperswagespaymentsIncometaxpaymentCashreceiptsfromskiandsnowboardrepairservicesSubtotalsCashbalanceTotalsCashReceipts$20,00032,15052,150$52150Cash$9,2001,2253759702,60010,00024,37027,780

$52150Youlearnthatrepairequipmenthasanestimatedusefullifeof5years.Thecompanyrentsspaceatacostof$175permonthonaone-yearlease.Theleasecontractrequirespaymentofthefirstandlastmonths'rentinadvance,whichwasdone.Thepart-timerhelperisowed$220atApril30,2007,forunpaidwages.AtApril30,2007,customersoweTheRadicalEdge$650forservicestheyhavereceivedbuthavenotyetpaidfor.Instructions(a)Prepareanaccrual-basisincomestatementforthe6monthsendedApril30,2007.(b)PreparetheApril30,2007,classifiedbalancesheet.MaxPlay,amakerofelectronicgamesforkids,hasjustcompleteditsfirstyearofoperations.Thecompanyssalesgrowthwasexplosive.ToencouragelargenationalstorestocarryitsproductsMaxPlayoffered180-dayfinancing-meaningitslargestcustomersdonotpayfornearly6months.BecauseMaxPlayisanewcompany,itscomponentssuppliersinsistonbeingpaidcashondelivery.Also,ithadtopayupfrontfor2yearsofinsurance.AttheendoftheyearMaxPlayowedemployeesforonefullmonthofsalaries,butduetoacashshortfall,itpromisedtopaythemthefirstweekofnextyear.InstructionsExplainhowcashandaccrualaccountingwoulddifferforeachoftheeventslistedaboveanddescribetheproperaccrualaccounting.AssumethatattheendoftheyearMaxPlayreportedafavorablenetincome,yetthecompany"managementisconcernedbecausethecompanyisveryshortofcash.ExplainhowMaxPlaycouldhavepositivenetincomeandyetrunoutofcash.TheledgerofReliableRentalAgencyonMarch31ofthecurrentyearincludestheseselectedaccountsbefore