SOLUTIONS MANUAL for use with

Advanced Accounting
VOLUME 1
A PROCEDURAL APPROACH

REVISED EDITION 2006 EDITION

P.P. GUERRERO J.F. PERALTA

To the Instructor This Solutions Manual contains suggested solutions to all the Multiple Choice and Problems for the 2006 edition of Advanced Accounting A Procedural Approach. All solutions have been prepared by the authors to ensure accuracy and consistency with the discussion and illustration in the textbook. Multiple Choices The multiple choices are designed to cover a variety of conceptual situations included in each chapter. Solving these should reinforce the students knowledge of accounting and also test their understanding of the points covered. You may choose to assign selected multiple choices to supplement the problems assigned in each chapter. Most of the multiple choices require a limited amount of computations and are well suited for inclusion in quizzes or examinations. Problems Problems have been provided at the end of each chapter more than you can reasonably use in a single offering of the course. This abundance of problems allows you to vary problem assignments in different sections of the course, or from semester to semester, and to choose these problems that best fit the scope, level and emphasis of your course. Final Note The Solutions Manual intended to accompany the Revised 2003 edition of Advanced Accounting A Procedural Approach has been prepared carefully and reviewed thoroughly to ensure that the instructors who adopt this textbook are provided with all possible assistance in making their course effective. In the final analysis, however, any given course is shaped primarily by the person who teaches if, and the success of our efforts will be proved through extensive experience in the classroom. We will appreciate any comments for suggestions from you no matter how minor the point involved. Please address correspondence to Pedro P. Guerrero, CPAR Building, 837 F. Cayco St., Sampaloc, Metro Manila or you may email me at ppg@pldtdsl.net.

P. P. Guerrero J. F. Peralta

Contents

CHAPTER 1: CHAPTER 2: CHAPTER 3: CHAPTER 4: CHAPTER 5: CHAPTER 6: CHAPTER 7: CHAPTER 8: CHAPTER 9: CHAPTER 10: CHAPTER 11:

Partnership Basic Considerations and Formation Partnership Operations Partnership Dissolution Changes in Ownership Partnership Liquidation Partnership Liquidation by Installment Joint Venture Corporation in Financial Difficulty Liquidation Reorganization and Troubled Debt Restructuring Installment Sales Long-Term Construction Contracts Franchise Accounting