cover & table of contents - accounting (9th edition).pdf

Charles T. HorngrenStanford University

Walter T. Harrison Jr.Baylor University

M. Suzanne OliverUniversity of West Florida

AccountingN I N T H E D I T I O N

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Library of Congress Cataloging-in-Publication DataHorngren, Charles T.

Financial & managerial accounting / Charles T. Horngren, Walter T. Harrison Jr., M. Suzanne Oliver.—3rd ed.p. cm.

Rev. ed. of: Financial and managerial accounting. 2nd ed. 2009.Includes index.ISBN 978-0-13-249799-2 (casebound)—ISBN 978-0-13-249794-7 (pbk.)—ISBN 978-0-13-249792-3 (pbk.) 1. Accounting. 2. Managerial accounting. I. Harrison, Walter T. II. Oliver, M. Suzanne. III. Title. IV. Title: Financialand managerial accounting.

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iii

Charles T. Horngren is the Edmund W. Littlefield professor of accounting, emeritus, atStanford University. A graduate of Marquette University, he received his MBA from HarvardUniversity and his PhD from the University of Chicago. He is also the recipient of honorary doctor-ates from Marquette University and DePaul University.

A CPA, Horngren served on the Accounting Principles Board for six years, the FinancialAccounting Standards Board (FASB) Advisory Council for five years, and the Council of the AICPA forthree years. For six years he served as a trustee of the Financial Accounting Foundation, which overseesthe FASB and the Government Accounting Standards Board.

Horngren is a member of the Accounting Hall of Fame.A member of the AAA, Horngren has been its president and its director of research. He

received its first annual Outstanding Accounting Educator Award.The California Certified Public Accountants Foundation gave Horngren its Faculty

Excellence Award and its Distinguished Professor Award. He is the first person to have receivedboth awards.

The AICPA presented its first Outstanding Educator Award to Horngren.Horngren was named Accountant of the Year, in Education, by the national professional

accounting fraternity, Beta Alpha Psi.Professor Horngren is also a member of the IMA, from whom he has received its

Distinguished Service Award. He was a member of the institute’s Board of Regents, which adminis-ters the CMA examinations.

Walter T. Harrison, Jr., is professor emeritus of accounting at the Hankamer School ofBusiness, Baylor University. He received his BBA degree from Baylor University, his MS fromOklahoma State University, and his PhD from Michigan State University.

Professor Harrison, recipient of numerous teaching awards from student groups as well asfrom university administrators, has also taught at Cleveland State Community College, MichiganState University, the University of Texas, and Stanford University.

A member of AAA and the AICPA, Professor Harrison has served as chairman of theFinancial Accounting Standards Committee of AAA, on the Teaching/Curriculum DevelopmentAward Committee, on the Program Advisory Committee for Accounting Education and Teaching,and on the Notable Contributions to Accounting Literature Committee.

Professor Harrison has lectured in several foreign countries and published articles in numer-ous journals, including Journal of Accounting Research, Journal of Accountancy, Journal ofAccounting and Public Policy, Economic Consequences of Financial Accounting Standards,Accounting Horizons, Issues in Accounting Education, and Journal of Law and Commerce.

Professor Harrison has received scholarships, fellowships, and research grants or awardsfrom PriceWaterhouse Coopers, Deloitte & Touche, the Ernst & Young Foundation, and theKPMG Foundation.

M. Suzanne Oliver is an accounting instructor at the University of West Florida inPensacola, Florida. She received her BA in accounting information systems and her MA in accoun-tancy from the University of West Florida.

Oliver began her career in the tax department of a regional accounting firm, specializing inbenefit plan administration. She has served as a software analyst for a national software develop-ment firm and as the Oracle fixed assets analyst for Spirit Energy, formerly part of Unocal. A CPA,Oliver is a member of the AAA, AICPA, FICPA, IAAER, IMA, TACTYC, and the FloridaAssociation of Accounting Educators.

Oliver has taught accounting courses of all levels for the University of West Florida, state col-leges, community colleges, and to practitioners since 1988. She has developed and instructed onlinecourses using MyAccountingLab, WebCT, D2L, and other proprietary software.

Oliver lives in Niceville, FL, with her husband, Greg, and son, CJ. She especially thanks herhusband, Greg, her son, CJ, and her uncle and aunt, Jimmy and Lida Lewis, for their unwaveringsupport and encouragement. Oliver donates a portion of royalties to www.raffieskids.org, a chari-table organization that assists children.

About the Authors

www.raffieskids.org

Brief ContentsCHAPTER 1 Accounting and the Business Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

CHAPTER 2 Recording Business Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

CHAPTER 3 The Adjusting Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

CHAPTER 4 Completing the Accounting Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198

CHAPTER 5 Merchandising Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255

CHAPTER 6 Merchandise Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311

CHAPTER 7 Internal Control and Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355

CHAPTER 8 Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404

CHAPTER 9 Plant Assets and Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452

CHAPTER 10 Current Liabilities and Payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 496

CHAPTER 11 Long-Term Liabilities, Bonds Payable, and Classification of Liabilities on the Balance Sheet . . . . . . . . . . . 529

CHAPTER 12 Corporations: Paid-In Capital and the Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581

CHAPTER 13 Corporations: Effects on Retained Earnings and the Income Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . 623

CHAPTER 14 The Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 661

CHAPTER 15 Financial Statement Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 722

CHAPTER 16 Introduction to Managerial Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 773

CHAPTER 17 Job Order and Process Costing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 813

CHAPTER 18 Activity-Based Costing and Other Cost Management Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 880

CHAPTER 19 Cost-Volume-Profit Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 924

CHAPTER 20 Short-Term Business Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 962

CHAPTER 21 Capital Investment Decisions and the Time Value of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1010

CHAPTER 22 The Master Budget and Responsibility Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1050

CHAPTER 23 Flexible Budgets and Standard Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1105

CHAPTER 24 Performance Evaluation and the Balanced Scorecard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1151

CHAPTER P Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P-1

APPENDIX A 2009 Amazon.com Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

APPENDIX B Present Value Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

Glindex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1

Company Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

ONLINE MATERIAL: located at pearsonhighered.com/horngren

APPENDIX C—Check Figures

SPECIAL JOURNALS

INVESTMENTS

iv

CHAPTER 1Accounting and the Business Environment 1Accounting Vocabulary: The Language of Business 2Decision Makers: The Users of Accounting Information 2

Individuals 2Businesses 3Investors 3Creditors 3Taxing Authorities 3

The Accounting Profession and the Organizations thatGovern It 4

Governing Organizations 4Ethics in Accounting and Business 5Standards of Professional Conduct 5

Types of Business Organizations 5Proprietorships 6Partnerships 6Corporations 6Limited-Liability Partnerships (LLPs) and Limited-Liability

Companies (LLCs) 6Not-for-Profits 6

Distinguishing Characteristics and Organization of aProprietorship 7

Separate Legal Entity 7No Continuous Life or Transferability of Ownership 8Unlimited Liability of Owner 8Unification of Ownership and Management 8Business Taxation 8Government Regulation 8Organization of a Corporation 9

Accounting Concepts and Principles 9The Entity Concept 10The Faithful Representation Principle 10The Cost Principle 10The Going-Concern Concept 10The Stable Monetary Unit Concept 11

The Accounting Equation 11Assets and Liabilities 11Equity 12

Accounting for Business Transactions 13Transaction Analysis for Smart Touch Learning 14

Preparing the Financial Statements—The User Perspectiveof Accounting 18

The Financial Statements 20Headings 20

Using Financial Statements to Evaluate BusinessPerformance 23

� Decision Guidelines 1-1 25

� Summary Problem 1-1 26

� Chapter 1: Demo Doc: Transaction Analysis UsingAccounting Equation/Financial Statement Preparation 28

Review and Assignment Material 36

CHAPTER 2Recording Business Transactions 62The Account, the Journal, and the Ledger 63

Assets 63Liabilities 64Owner’s Equity 64Chart of Accounts 65

Debits, Credits, and Double-Entry Accounting 67The T-Account 67Increases and Decreases in the Accounts 68

List the Steps of the Transaction Recording Process 69Posting (Copying Information) from the Journal to the

Ledger 70Expanding the Rules of Debit and Credit: Revenues

and Expenses 71The Normal Balance of an Account 72Source Documents—The Origin of the Steps 73

Journalizing Transactions and Posting to the Ledger 73Practice Journalizing with Specific Examples 73The Ledger Accounts After Posting 79

Preparing the Trial Balance from the T-Accounts 80Correcting Trial Balance Errors 81Details of Journals and Ledgers 81The Four-Column Account: An Alternative to the

T-Account 82



� Chapter 2: Demo Doc: Debit/Credit Transaction Analysis 89


CHAPTER 3The Adjusting Process 130Accrual Accounting Versus Cash-Basis Accounting 131Other Accounting Principles 132

The Accounting Period Concept 132The Revenue Recognition Principle 133The Matching Principle 134The Time-Period Concept 134

Why We Adjust the Accounts 135Two Categories of Adjusting Entries 136

Prepaid Expenses 136Depreciation 138Accrued Expenses 140Accrued Revenues 142Unearned Revenues 143

The Adjusted Trial Balance 147The Financial Statements 149

Preparing the Statements 149Relationships Among the Financial Statements 149

Ethical Issues in Accrual Accounting 151� Decision Guidelines 3-1 152

Contents

v

vi Contents


� Chapter 3: Demo Doc: Preparation of Adjusting Entries,Adjusted Trial Balance, and Financial Statements 157


APPENDIX 3A: Alternative Treatment of Prepaid Expenses and Unearned Revenues online atpearsonhighered.com/horngren

CHAPTER 4Completing the Accounting Cycle 198The Worksheet 200

Net Income 202Net Loss 202


Completing the Accounting Cycle 204Preparing the Financial Statements from a Worksheet 204Recording the Adjusting Entries from a Worksheet 204

Closing the Accounts 207Closing Temporary Accounts 208

Post-Closing Trial Balance 210Classifying Assets and Liabilities 210

Assets 210Liabilities 211The Classified Balance Sheet 211Balance Sheet Forms 212

Accounting Ratios 213Current Ratio 214Debt Ratio 214



� Chapter 4: Demo Doc: Accounting Worksheets and ClosingEntries 220


COMPREHENSIVE PROBLEM FOR CHAPTERS 1–4:Journalizing, Posting, Worksheet, Adjusting, Closing theFinancial Statements 253

APPENDIX 4A: Reversing Entries: An Optional Steponline at pearsonhighered.com/horngren

CHAPTER 5Merchandising Operations 255What Are Merchandising Operations? 256

The Operating Cycle of a Merchandising Business 257Inventory Systems: Perpetual and Periodic 257

Accounting for Inventory in the Perpetual System 258Purchase of Inventory 258

Sale of Inventory 263� Summary Problem 5-1 267

Adjusting and Closing the Accounts of a Merchandiser 269Adjusting Inventory Based on a Physical Count 269Closing the Accounts of a Merchandiser 270

Preparing a Merchandiser’s Financial Statements 271Income Statement Formats: Multi-Step and Single-Step 273

Three Ratios for Decision Making 274The Gross Profit Percentage 274The Rate of Inventory Turnover 274Days in Inventory 275




APPENDIX 5A: Accounting for Merchandise in a Periodic Inventory System 303

COMPREHENSIVE PROBLEM FOR CHAPTERS 1–5: Completinga Merchandiser’s Accounting Cycle 309

APPENDIX 5B: Worksheet for a Merchandising Business—Perpetual online at pearsonhighered.com/horngren

CHAPTER 6Merchandise Inventory 311Accounting Principles and Inventories 313Inventory Costing Methods 314Inventory Accounting in a Perpetual System 316

First-In, First-Out (FIFO) Method 316Last-In, First-Out (LIFO) Method 318Average-Cost Method 319

Comparing FIFO, LIFO, and Average Cost 321� Summary Problem 6-1 322

Lower-of-Cost-or-Market Rule 324Effects of Inventory Errors 325

Estimating Ending Inventory 326Ethical Issues 327




APPENDIX 6A: Accounting for Inventory in a Periodic System 349

CHAPTER 7Internal Control and Cash 355Internal Control 356The Sarbanes-Oxley Act (SOX) 357The Components of Internal Control 357

Internal Control Procedures 358

Internal Controls for E-Commerce 360The Limitations of Internal Control—Costs and

Benefits 361

The Bank Account as a Control Device 362The Bank Reconciliation 364

Preparing the Bank Reconciliation 364Online Banking 368


Internal Control over Cash Receipts 371

Internal Control over Cash Payments 372Controls over Payment by Check 372Controlling Small Cash Payments 374

The Petty Cash Fund 374Ethics and Accounting 377

Corporate and Professional Codes of Ethics 377Ethical Issues in Accounting 377




CHAPTER 8Receivables 404Receivables: An Introduction 405

Types of Receivables 405Internal Control over Receivables 406

Accounting for Uncollectibles (Bad Debts) 407The Allowance Method 407

Estimating Uncollectibles 408Identifying and Writing Off Uncollectible Accounts 411Recovery of Accounts Previously Written Off—Allowance

Method 411

The Direct Write-Off Method 413Recovery of Accounts Previously Written Off—Direct

Write-Off Method 413

Credit-Card and Debit-Card Sales 414Credit-Card Sales 415Debit-Card Sales 415Credit-/Debit-Card Sales 415


Notes Receivable 418Identifying Maturity Date 419Computing Interest on a Note 419Accruing Interest Revenue 420Dishonored Notes Receivable 422Computers and Receivables 423

Using Accounting Information for Decision Making 423Acid-Test (or Quick) Ratio 424Days’ Sales in Receivables 424Accounts Receivable Turnover Ratio 425




APPENDIX 8A: Discounting a Note Receivable 450

CHAPTER 9Plant Assets and Intangibles 452Measuring the Cost of a Plant Asset 454

Land and Land Improvements 454Buildings 455Machinery and Equipment 455Furniture and Fixtures 456A Lump-Sum (Basket) Purchase of Assets 456Capital Expenditures 457

Depreciation 458Causes of Depreciation 459Measuring Depreciation 459Depreciation Methods 459Comparing Depreciation Methods 463Other Issues in Accounting for Plant Assets 465


Disposing of a Plant Asset 468Accounting for Natural Resources 472Accounting for Intangible Assets 473

Specific Intangibles 473Accounting for Research and Development Costs 475

Ethical Issues 476� Decision Guidelines 9-1 477



CHAPTER 10Current Liabilities and Payroll 496Current Liabilities of Known Amount 497

Accounts Payable 497Short-Term Notes Payable 498Sales Tax Payable 498Current Portion of Long-Term Notes Payable 499Accrued Liabilities 499Unearned Revenues 500

Current Liabilities that Must Be Estimated 500Estimated Warranty Payable 500Contingent Liabilities 501



Accounting for Payroll 505Gross Pay and Net (Take-Home) Pay 505Payroll Withholding Deductions 506Employer Payroll Taxes 508

Journalizing Payroll Transactions 509Internal Control over Payroll 511




CHAPTER 11Long-Term Liabilities, Bonds Payable, andClassification of Liabilities on the BalanceSheet 529Long-Term Notes Payable and Mortgages Payable 530

Long-Term Notes Payable 530Mortgages Payable 532

Bonds: An Introduction 535Types of Bonds 536Bond Prices 537Present Value 538Bond Interest Rates 538

Contents vii

viii Contents

Accounting for Bonds Payable: Straight-Line Method 539Issuing Bonds Payable at Maturity (Par) Value 539Issuing Bonds Payable at a Discount 540


Issuing Bonds Payable at a Premium 544Adjusting Entries for Bonds Payable 545Issuing Bonds Payable Between Interest Dates 546

Reporting Liabilities on the Balance Sheet 546� Decision Guidelines 11-2 548



APPENDIX 11A: The Time Value of Money: Present Value of aBond and Effective-Interest Amortization 565

APPENDIX 11B: Retiring Bonds Payable 577

COMPREHENSIVE PROBLEM FOR CHAPTERS 7–11: ComparingTwo Businesses 579

CHAPTER 12Corporations: Paid-In Capital and theBalance Sheet 581Corporations: An Overview 582Stockholders’ Equity Basics 583

Stockholders’ Rights 584Classes of Stock 584

Issuing Stock 585Issuing Common Stock 585Issuing Preferred Stock 588Review of Accounting for Paid-In Capital 589



Retained Earnings 592Accounting for Cash Dividends 593

Dividend Dates 593Declaring and Paying Dividends 594Dividing Dividends Between Preferred and Common 595Dividends on Cumulative and Noncumulative Preferred 595

Different Values of Stock 596Market Value 596Liquidation Value 597Book Value 597

Evaluating Operations 598Rate of Return on Total Assets 598Rate of Return on Common Stockholders’ Equity 599

Accounting for Income Taxes by Corporations 600� Decision Guidelines 12-2 601



APPENDIX 12A: Compare Issuing Bonds to Issuing Stocksonline at pearsonhighered.com/horngren

CHAPTER 13Corporations: Effects on Retained Earningsand the Income Statement 623Stock Dividends 624Stock Splits 627

Stock Dividends and Stock Splits Compared 628

Treasury Stock 629Treasury Stock Basics 629Purchase of Treasury Stock 629Sale of Treasury Stock 630Retirement of Stock 631

Restrictions on Retained Earnings 632Variations in Reporting Stockholders’ Equity 633



The Corporate Income Statement 636Continuing Operations 637Special Items 637Earnings per Share 639Statement of Retained Earnings 640Combined Statement of Income and Retained Earnings 640Prior-Period Adjustments 640Reporting Comprehensive Income 641




CHAPTER 14The Statement of Cash Flows 661Introduction: The Statement of Cash Flows 662

Cash Equivalents 663

Operating, Investing, and Financing Activities 663Two Formats for Operating Activities 664

Preparing the Statement of Cash Flows by the Indirect Method 664

Cash Flows from Operating Activities 666Cash Flows from Investing Activities 669Cash Flows from Financing Activities 671Net Change in Cash and Cash Balances 674

Noncash Investing and Financing Activities 674Measuring Cash Adequacy: Free Cash Flow 676� Decision Guidelines 14-1 677



APPENDIX 14A: Preparing the Statement of Cash Flows bythe Direct Method 701

APPENDIX 14B: Preparing the Indirect Statement of CashFlows Using a Spreadsheet 717

CHAPTER 15Financial Statement Analysis 722Horizontal Analysis 723

Illustration: Smart Touch Learning, Inc. 724Horizontal Analysis of the Income Statement 726Horizontal Analysis of the Balance Sheet 726Trend Analysis 726

Vertical Analysis 727How Do We Compare One Company with Another? 728

Benchmarking 729


Using Ratios to Make Decisions 732Evaluating the Ability to Pay Current Liabilities 733Evaluating the Ability to Sell Inventory and Collect

Receivables 735Evaluating the Ability to Pay Long-Term Debt 737Evaluating Profitability 739Evaluating Stock Investments 741Red Flags in Financial Statement Analyses 744




COMPREHENSIVE PROBLEM FOR CHAPTER 15: Analyzing aCompany for Its Investment Potential 772

CHAPTER 16Introduction to Managerial Accounting 773Management Accountability: Financial vs. Managerial

Accounting 774Today’s Business Environment 776Ethical Standards 777Service Companies 779Merchandising Companies 780� Summary Problem 16-1 782

Manufacturing Companies 783Types of Costs 784




CHAPTER 17Job Order and Process Costing 813How Much Does It Cost to Make a Product? Two

Approaches 814Job Order Costing 814Process Costing 814

How Job Costs Flow Through the Accounts: AnOverview 815



Job Order Costing: Allocating Manufacturing Overhead 822

Accounting for Completion and Sale of Finished Goodsand Adjusting Manufacturing Overhead 825

Accounting for the Completion and Sale of Finished Goods 825

Adjusting Manufacturing Overhead at the End of the Period 826

Job Order Costing in a Service Company 828� Decision Guidelines 17-2 830



APPENDIX 17A: Process Costing—Weighted-AverageMethod 856

CHAPTER 18Activity-Based Costing and Other CostManagement Tools 880Refining Cost Systems 881

Sharpening the Focus: Assigning Costs Based on the ActivitiesThat Caused the Costs 881

Developing an Activity-Based Costing System 883Traditional Versus Activity-Based Costing Systems: Smart

Touch Learning 883

Activity-Based Management: Using ABC for DecisionMaking 886

Pricing and Product Mix Decisions 886Cutting Costs 887



Just-in-Time (JIT) Systems 893Just-in-Time Costing 895JIT Costing Illustrated: Smart Touch 895

Continuous Improvement and the Management ofQuality 897

The Four Types of Quality Costs 898Deciding Whether to Adopt a New Quality Program 899




CHAPTER 19Cost-Volume-Profit Analysis 924Cost Behavior 925

Variable Costs 925Fixed Costs 926Mixed Costs 927High-Low Method to Separate Fixed Costs from Variable

Costs 927Relevant Range 929

Basic CVP Analysis: What Must We Sell to Break Even? 929

Assumptions 930How Much Must Greg Sell to Break Even? Three

Approaches 930

Contents ix

x Contents

Using CVP to Plan Profits 933How Much Must Greg’s Sell to Earn a Profit? 933Graphing Cost-Volume-Profit Relations 934


Using CVP for Sensitivity Analysis 937Changing the Selling Price 937Changing Variable Costs 938Changing Fixed Costs 938Margin of Safety 939

Effect of Sales Mix on CVP Analysis 940� Decision Guidelines 19-1 942



APPENDIX 19A: Variable Costing and Absorption Costing online at pearsonhighered.com/horngren

CHAPTER 20Short-Term Business Decisions 962How Managers Make Decisions 963

Relevant Information 963Relevant Nonfinancial Information 964Keys to Making Short-Term Special Decisions 965

Special Sales Order and Regular Pricing Decisions 966When to Accept a Special Sales Order 966How to Set Regular Prices 969



When to Drop Products, Departments, or Territories 977Dropping Products Under Various Assumptions 978Product Mix: Which Product to Emphasize? 980

Outsourcing and Sell as Is or Process Further Decisions 982

When to Outsource 982Sell As Is or Process Further? 985




CHAPTER 21Capital Investment Decisions and the TimeValue of Money 1010Capital Budgeting 1011

Four Methods of Capital Budgeting Analysis 1011Focus on Cash Flows 1012Capital Budgeting Process 1012

Using Payback Period and Rate of Return to MakeCapital Investment Decisions 1013

Payback Period 1013Rate of Return (ROR) 1016



A Review of the Time Value of Money 1021Factors Affecting the Time Value of Money 1021

Future Values and Present Values: Points Along the Time Line 1022

Future Value and Present Value Factors 1023Calculating Future Values of Single Sums and Annuities Using

FV Factors 1023Calculating Present Values of Single Sums and Annuities Using

PV Factors 1024

Using Discounted Cash Flow Models to Make CapitalInvestment Decisions 1026

Net Present Value (NPV) 1026Internal Rate of Return (IRR) 1031

Comparing Capital Budgeting Methods 1033� Decision Guidelines 21-2 1035



CHAPTER 22The Master Budget and ResponsibilityAccounting 1050Why Managers Use Budgets 1051

Using Budgets to Plan and Control 1052Benefits of Budgeting 1053

Understanding the Components of the Master Budget 1055

Components of the Master Budget 1055Data for Greg’s Tunes 1056

Preparing the Operating Budget 1058The Sales Budget 1058The Inventory, Purchases, and Cost of Goods Sold Budget 1058The Operating Expenses Budget 1059The Budgeted Income Statement 1060


Preparing the Financial Budget 1063Preparing the Cash Budget 1063The Budgeted Balance Sheet 1067The Budgeted Statement of Cash Flows 1067Getting Employees to Accept the Budget 1068


Using Information Technology for Sensitivity Analysisand Rolling Up Unit Budgets 1072

Sensitivity Analysis 1072Rolling Up Individual Unit Budgets into the Companywide

Budget 1073

Responsibility Accounting 1074Four Types of Responsibility Centers 1074Responsibility Accounting Performance Reports 1075

Learn about Service Departments 1076� Decision Guidelines 22-1 1081



CHAPTER 23Flexible Budgets and Standard Costs 1105How Managers Use Flexible Budgets 1106

What Is a Flexible Budget? 1106

Using the Flexible Budget: Why Do Actual Results Differfrom the Static Budget? 1108



Standard Costing 1113Price Standards 1113Application 1114Quantity Standards 1114Why Do Companies Use Standard Costs? 1115Variance Analysis 1115

How Smart Touch Uses Standard Costing: Analyzing theFlexible Budget Variance 1117

Direct Materials Variances 1117Direct Labor Variances 1120

Manufacturing Overhead Variances 1121Allocating Overhead in a Standard Cost System 1121Variable Overhead Variances 1122Fixed Overhead Variances 1123Summary of Overhead Variances 1125

Standard Cost Accounting Systems 1125Journal Entries 1125Standard Cost Income Statement for Management 1128




CHAPTER 24Performance Evaluation and the BalancedScorecard 1151Decentralized Operations 1152

Advantages of Decentralization 1152Disadvantages of Decentralization 1153Responsibility Centers 1153

Performance Measurement 1154Goals of Performance Evaluation Systems 1154Limitations of Financial Performance Measurement 1155

The Balanced Scorecard 1155The Four Perspectives of the Balanced Scorecard 1156



Measuring the Financial Performance of Cost, Revenue,and Profit Centers 1162

Measuring the Financial Performance of InvestmentCenters 1164

Return on Investment (ROI) 1166Residual Income (RI) 1168Limitations of Financial Performance Measures 1171




CHAPTER PPartnerships P-1Characteristics and Types of Partnerships P-2

Partnership Characteristics P-2Types of Partnerships P-4

The Start-Up of a Partnership P-6Sharing Profits and Losses, and Partner Drawings P-7

Sharing Based on a Stated Fraction P-8Sharing Based on Capital Balances and on Service P-8Partner Drawings of Cash and Other Assets P-10

Admission of a Partner P-11Admission by Purchasing an Existing Partner’s Interest P-11Admission by Investing in the Partnership P-12

Withdrawal of a Partner P-14Revaluation of Assets P-14Withdrawal at Book Value P-16Withdrawal at Less Than Book Value P-16Withdrawal at More Than Book Value P-16

Liquidation of a Partnership P-17Sale of Assets at a Gain P-18Sale of Assets at a Loss P-19

Partnership Financial Statements P-20� Decision Guidelines P-1 P-21

� Summary Problem P-1 P-22

Review and Assignment Material P-25

APPENDIX A: 2009 Amazon.com Annual Report A-1

APPENDIX B: PRESENT VALUE TABLES B-1

GLINDEX G-1

COMPANY INDEX I-1

ONLINE MATERIAL: located at pearsonhighered.com/horngren

APPENDIX C—CHECK FIGURESSPECIAL JOURNALSINVESTMENTS

Contents xi

Changes to This Edition

Students and Instructors will both benefit from a variety of new content and features in theninth edition of Accounting:

ADDED impairment coverage to Chapter 9, Plant Assets and Intangibles.

IMPROVED Liabilities Coverage: Now Split into Two Chapters. Based on reviewer demand, we splitChapter 10 into two chapters:

• Chapter 10: Current Liabilities and Payroll• New Chapter 11: Long-Term Liabilities, Bonds Payable, and

Classification of Liabilities on the Balance Sheet

We also added long-term notes payable, mortgages payable, and allocation of payments betweenprincipal and interest coverage to new Chapter 11.

ADDED Ratio Coverage. Based on reviewer demand, we added more ratio coverage to the FinancialStatement Analysis, Chapter 15, and additional individual chapters.

ADDED Excel Formulas in Chapter 21, Capital Budgeting, to complement the blue/green formula boxes.

REVISED Budget Coverage. Chapter 22: The Master Budget and Responsibility Accounting was rewritten to use the variable costing approach. Also, added coverage on traceable and untraceable costs.

ADDED more detailed coverage of overhead variances in Chapter 23. Flexible Budgets andStandard Costs.

UPDATED Full MyAccountingLab Coverage: Special Purpose Journals, Investments, andPartnerships. The three online chapters have been posted in MyAccountingLab. The special purposejournals chapter covers the streamlined journalizing process using the continuing company, SmartTouch. The investments chapter covers classification and treatment of stock investments, also usingSmart Touch.

The streamlined partnership chapter covers all the basics, including partnership creation, adding apartner/removing a partner, allocating P&L, and liquidation. New examples were also written to retainconsistency and match the rest of the text (Sheena Bright of Smart Touch creates a partnership).

These three chapters contain full MyAccountingLab coverage and supplements for instructors whowish to have it. These decisions have been widely supported by reviewers.

NEW and IMPROVED Chapter Openers. All of the chapter openers have been redesigned andrewritten. The financial chapter openers include a visual of a balance sheet, highlighting the specificsection of the balance sheet that will be covered within the chapter. The managerial chapter openersinclude a visual of a smartphone device, complete with decision-making tools as apps. As studentsprogress through these chapters, the decision being discussed is highlighted on the first page of thechapter. These visuals help set the stage while providing students with direction as they navigatethrough the material.

FOCUSED on Student Success. We’ve made it easy for students to identify what their focal pointshould be in every chapter:

• NEW Key Takeaway Feature. At the end of each main topic throughout the book, we’veincluded a brief takeaway feature. This marginal feature hones in on the key point of thatsection so students will know exactly what they should have understood before moving on.

• NEW Translation Guides. We’ve included “translation guides” throughout the text, set offby a different font style/treatment, in which accounting terminology is translated into a lan-guage students can easily understand. In doing so, we aim to make accounting moreapproachable (for example: Assets are resources that provide future economic benefits to acompany. An asset is something you own that has value, like your iPod.).

• NEW Connect To Boxes. We’ve included a marginal “Connect To” box in each chapter thatfocuses on topics such as IFRS, Ethics, Technology, and Accounting Information Systems.Each contains a subtitle so instructors can easily see what each box features.

• IMPROVED Stop & Think Boxes. We’ve refined many of the existing Stop & Think boxes,making them less technical.

EXTENSIVE REVISION of the End-of-Chapter Materials:• NEW End-of-Chapter Student Success Section. We’ve added a new half-page, end-of-

chapter “Student Success” section that does the following:- Lists hints on some common trouble spots/mistakes students make when taking a test on

the chapter.- Tells students exactly where to go in the chapter and MyAccountingLab to get help related

to a particular topic covered within that chapter.• IMPROVED End-of-Chapter Material. We’ve improved the end-of-chapter exercises, while

retaining the exercises often used in MyAccountingLab.• NEW End-of-Chapter Fraud Activity. We’ve added a short end-of-chapter activity that asks

students to look at a fraud issue related to the chapter.• NEW End-of-Chapter Communication Activity. We’ve added a short end-of-chapter activity

that asks students to restate key chapter content in their own words, encouraging them tolearn and use chapter vocabulary.

ACCURACY. To ensure the level of accuracy instructors expect and require, accuracy checkers verifiedthe in-chapter content, figures, and illustrations while additional accuracy checkers worked through theend-of-chapter material.

pearsonhighered.com/horngren

Students will have more “I Get It!” moments

Students understand (or “get it”) right after the instructor does a problem in class. Oncethey leave the classroom, however, students often struggle to complete the homeworkon their own. This frustration can cause them to give up on the material altogether andfall behind in the course, resulting in an entire class falling behind as the instructor attemptsto keep everyone on the same page.

Replicating the Classroom Experiencewith Demo Doc Examples The Demo Doc Examples, available in chap-ters 1 through 4 of the text, consist of entireproblems, worked through step-by-stepand narrated with the kind of commentsthat instructors would say in class. DemoDocs will aid students when they are tryingto solve exercises and problems on theirown, duplicating the classroom experienceoutside of class.

With the Accounting, Ninth Edition StudentLearning System, all the features of the stu-dent textbook, study resources, and onlinehomework system are designed to worktogether to provide students with the consis-tency and repetition that will keep both theinstructor and students on track by providingmore “I Get It!” moments inside and outsidethe classroom.

Gear art © ArtyFree | iStockphoto.com

Text

StudyResources

MyLab

Consistency and Repetition Throughout the Learning Process The concepts, materials, and practice problems are presented with clarity and consistency across all mediums—textbook, study resources, and online homework system. No matter which platform students use, they will continually experience the same look, feel, and language, minimizing confusionand ensuring clarity.

Experiencing the Power of Practice with MyAccountingLab: myaccountinglab.comMyAccountingLab is an online homework system that gives students more “I Get It!” momentsthrough the power of practice. With MyAccountingLab students can:

with Accounting and MyAccountingLab!

• work on the exact end-of-chapter material and/or similar problems assigned by the instructor.

• use the Study Plan for self-assessmentand customized study outlines.

• use the Help Me Solve This tool for astep-by-step tutorial.

• watch a video to see additional information pertaining to the lecture.

• open the etext to the exact section ofthe book that will provide help on thespecific problems.

Accounting...

NEW Off to the right start:Chapter Openers

Redesigned and rewritten, the chapter openersin this edition are focused on preparing studentsfor the reading. The financial chapter openersinclude a visual of a balance sheet that highlightswhat will be covered within the chapter. Themanagerial chapter openers include a visual of a smartphone—complete with decision-makingtools as apps—that visually displays the concepts and decision-making tools students will encounter.

With its tried-and-true framework and respected author team, Horngren/Harrison/Oliver’s Accounting is the trusted choice for instructors and students of Introductory Accounting.

The ninth edition preserves the classic, solid foundation of the previous editions, while also including a modern and fresh teaching approach that helps students understand thecomplexities of accounting and achieve more “I Get It” moments.

NEW Interpret the terms with ease:Translation Guides

Translation guides, found throughout thechapters, translate accounting terminology ina way students can understand. For example,Current assets are items that will be used up ina year, like your notebook paper for this class orthe change in your pocket.

The trusted choice for “I Get It” moments!

IMPROVED Put the concepts in context: Stop & Think Boxes

Improved Stop & Think boxes relate accounting concepts to students’ everyday lives by presenting them with relevant examples of the topic in practice.

Keep it consistent: Consistent ExamplesRather than learn about a new company each time an example is presented, this text provides two sets of company data that are carried through all of the in-chapter examples. As a result, students gain a sense of familiarity with the context of these examples and can focus their energy on learning the accounting principles in question.

Illustrate the concepts: Decision GuidelinesDecision Guidelines explain why the accounting concepts addressed in the chapter are important in abusiness setting. The left-hand side of the Decision Guidelines table explains the decision or actionasked of the student in simple terms, while the right-hand side shows the accounting topics that willhelp facilitate those decisions.


NEW Highlight what matters:Key Takeaway

At the end of each learning objective, the authorsadded a new marginal feature that emphasizes the keypoints covered within the section so students can seewhat they need to understand before reading further.

NEW Link today’s topics to the fundamentals: Connect To

The Connect To marginal boxes in each chapter highlight hot topics such as IFRS, Ethics, andAccounting Information Systems as they pertain tothe material being presented.

Putting “I Get It” moments into practice!

NEW Help where it’s needed: Destination Student Success The new Destination Student Success sections at the end of each chapter list hints on somecommon mistakes in order to prevent students from falling into the same traps. These sectionsalso show students exactly where to go within the chapter and in MyAccountingLab to get helprelated to a particular topic or learning objective.

NEW Examine the potential for fraud: End-of-Chapter Fraud CaseThis edition now includes a new end-of-chapter activity that asks students to look at a fraud issuerelated to the material. This activity helps students make the connection between the conceptsand this popular accounting topic.

NEW Speak accounting fluently: End-of-Chapter Communication Activity To help students increase their confidence, understanding, and communication of accounting terms,the end-of-chapter Communication Activity asks students to restate, in their own words, what they’velearned within the chapter.

Master the material: Extensive Practice Opportunities

Five Book-Match Sets of Problems and Exercises (A, B, C, D, E):EXERCISES: Students will have access to exercise set A within the text. Exercise set A along with alternative static exercise sets B, C, D, and E can be assigned by the instructor and completed by students in MyAccountingLab.

PROBLEMS: Students will have access to A and B problems within the text. Problem set A and B alongwith alternative static problem sets C, D, and E can be assigned by the instructor and completed bystudents in MyAccountingLab.

Continuing Exercise:The unique Continuing Exercise takes a single company and adds transactions or questions in eachchapter to the existing fact pattern. As students move through the text, they complete additional stepsin this comprehensive exercise. Students are able to see the big picture and learn how the accountingtopics build off one another. The Continuing Exercise is also available in MyAccountingLab.

Continuing Problem: For more detailed and in-depth practice, a Continuing Problem is also available. Like the ContinuingExercise, the Continuing Problem takes a single company and adds transactions or questions in eachchapter to the existing fact pattern. As students move through the text, they complete additionalsteps in this comprehensive problem. The Continuing Problem is also available in MyAccountingLab.

Unique Practice Set Within Chapters 1–8:An in-text Practice Set is built into Chapters 1-8 of the student text. Students do not have to purchaseany additional material for their practice sets, and instructors no longer have to create their own.Since the same authors of the textbook created the Practice Set, students will once again have consistency. The Practice Set is also available in MyAccountingLab.

End-of-Chapter Material Integrated withMyAccountingLabmyaccountinglab.comStudents need practice and repetition in order to successfully learn the fundamentals. All of the end-of-chapter problems and exercises in Accounting can beassigned and graded through MyAccountingLab. Andlearning goes one step further with MyAccountingLab’salgorithmic versions of the questions that provide students with unlimited practice.


Student and Instructor Resources

For Students

myaccountinglab.com Online Homework and Assessment Manager MyAccountingLab is Web-based tutorial and assessment software for accounting that gives studentsmore “I Get It!” moments. MyAccountingLab provides students with a personalized interactive learn-ing environment where they can complete their course assignments with immediate tutorial assistance,learn at their own pace, and measure their progress.

In addition to completing assignments and reviewing tutorial help, students have access to the following resources in MyAccountingLab:

• Pearson eText • Audio and Student PowerPoint® Presentations• Data Files • Working Papers in Both Excel and PDF• Videos • MP3 Files with Chapter Objectives and Summaries• Demo Docs • Flash Cards

Student Resource Web site: pearsonhighered.com/horngrenThe book’s Web site contains the following:

• Data Files: Select end-of-chapter problems have been set up in different softwareapplications, including Peachtree 2010, QuickBooks 2010, and Excel

• Excel Working Papers• Online Chapter Materials (Special Purpose Journals, Investments, and Partnerships)

For Instructors

myaccountinglab.com Online Homework and Assessment Manager

Instructor Resource Center: pearsonhighered.com/accounting For the instructor’s convenience, the instructor resources are available on CD or can be downloadedfrom the textbook’s catalog page (pearsonhighered.com/horngren) and MyAccountingLab. Availableresources include the following:

• Online Instructor’s Manual: Includes chapter summaries, teaching tips provided by reviewers,pitfalls for new students, and “best of” practices from instructors across the country. And, to

effectively implement the array of resources available, a Resource Roadmap is provided, giving a description and location of each resource, along with recommendations for classroom applica-tions. Additional resources offered in the instructor’s manual include the following:

• Introduction to the Instructor’s Manual with a list of resources and a roadmap to help navigatewhat’s available in MyAccountingLab.

• Instructor tips for teaching courses in multiple formats—traditional, hybrid, or online. • “First Day of Class” student handout that includes tips for success in the course, as well as an

additional document that shows students how to register and log on to MyAccountingLab. • Sample syllabi for 10- and 16-week courses. • Chapter overview and teaching outline that includes a brief synopsis and overview of

each chapter. • Key topics that walk instructors through what material to cover and what examples to use

when addressing certain items within the chapter. • Student chapter summary handout.• Assignment grid that outlines all end-of-chapter exercises and problems, the topic being

covered in that particular exercise or problem, estimated completion time, level of difficulty,and availability in Excel templates.

• Ten-minute quizzes that quickly assess students’ understanding of the chapter material.

• Instructor’s Solutions Manual: Contains solutions to all end-of-chapter questions, including quick check multiple-choice questions, short exercises, exercises, and problems.

• TestBank: Includes more than 3,000 questions and is formatted for use with WebCT, Blackboard, and CourseCompassTM. Both objective-based questions and computational problems are available.

• PowerPoint Presentations: These presentations help facilitate classroom discussion by demon-strating where the numbers come from and what they mean to the concept at hand.- Instructor PowerPoint Presentations—complete with lecture notes- Student PowerPoint Presentations- Audio Narrated PowerPoint Presentations- Clicker Response System (CRS) PowerPoint Presentations

• Working Papers and Solutions in Excel and PDF Format• Image Library• Data and Solution Files: Select end-of-chapter problems have been set up in different software

applications, including Peachtree 2010, QuickBooks 2010, and Excel. Corresponding solutionfiles are also provided.


The authors and editorial team thank Jodi McPherson for her visionand unwavering support over the past five years. Go SOX!

We would also like to extend a special thank you to the followingindividuals who were very helpful in the revision of this book:

Marcye Hampton, University of Central FloridaBrenda Mattison, Tri-County Technical CollegeCraig Reeder, Florida Agricultural and Mechanical University

Contributors:

Nabanita Bhattacharya, Northwest Florida State CollegeRon Burris, GEX Publishing ServicesDavid Doyon, GEX Publishing ServicesAnita Hope, Tarrant County CollegePeg Johnson, Metropolitan Community College

Accuracy Checkers:

Dorinda Lynn, Pensacola State CollegeCynthia Miller, University of KentuckyNoriko Tilley, Northwest Florida State CollegeGreg Yost, University of West Florida

Dave Alldredge, Salt Lake Community CollegeLee Daniel, Troy UniversityHeidi Hansel, Kirkwood Community CollegePaige Paulson, Salt Lake Community CollegeMichelle Powell-Dancy, Holmes Community College–Ridgeland

Reviewers:

Joan Ryan, Clackamas Community CollegeBeverly Strachan, Troy University Rick Turpin, Troy University Susan Wright, Dekalb Technical College

Natalie Allen, Texas A&M UniversityHelen Brubeck, San Jose State University Colleen Chung, Miami Dade CollegeWanda Edwards, Troy State UniversityShirley Glass, Macomb Community CollegeRob Hochschild, Ivy Tech Community CollegeJamie McCracken, Saint Mary-of-the-Woods CollegeBrit McKay, Georgia Southern UniversityJennie Mitchell, Saint Mary-of-the-Woods College

Supplements Authors and Reviewers:Cathy Nash, Dekalb Technical CollegeCraig Reeder, Florida Agricultural and Mechanical UniversityRick Street, Spokane Community CollegeAllan Sheets, International Business CollegeJohn Stancil, Florida Southern University CollegeNoriko Tilley, Northwest Florida State CollegeRobin Turner, Rowan-Cabarrus Community CollegeSusan Wright, Dekalb Technical CollegeGreg Yost, University of West Florida

AcknowledgmentsAcknowledgments for This Edition

Lisa Banks, Mott Community CollegeBetty Christopher, Mission CollegeTracy Corr, Southeast Community CollegeAnthony J. Dellarte, Luzerne County Community CollegeRobert Fahnestock, University of West FloridaCharles Fazzi, Saint Vincent CollegeJaclyn Felder-Strauss, Kaplan UniversityAnita Feller, University of Illinois at Urbana–ChampaignMarina Grau, Houston Community CollegeGeoffrey Gurka, Mesa State College of ColoradoGeoffrey Heriot, Greenville Technical CollegePatty Holmes, Des Moines Area Community CollegeEmil Koren, Saint Leo UniversitySuzanne Lay, Mesa State College of ColoradoMaria Leach, Auburn University–Montgomery

Advisory Panel:

Dorinda Lynn, Pensacola State CollegeBrenda Mattison, Tri-County Technical CollegeCheryl McKay, Monroe County Community CollegeAudrey Morrison, Pensacola State CollegeTim Murphy, Diablo Valley CollegeEd Napravnik, Metropolitan Community CollegeTracie Nobles, Austin Community CollegeJamie Payton, Gadsden State Community CollegeCraig Reeder, Florida Agricultural and Mechanical UniversityCarla Rich, Pensacola State CollegeRandy Rinke, Mercyhurst CollegeDennis Roth, West Virginia Northern Community CollegeLinda Tarrago, Hillsborough Community CollegeMelanie Torborg, Minnesota School of BusinessAndy Williams, Edmonds Community College

Acknowledgments for Previous Editions

Contributors:

Reviewers:

David Baglia, Grove City CollegeJoan Cezair, Fayetteville State UniversityMargaret Costello Lambert, Oakland Community CollegeKathy Crusto-Way, Tarrant County CollegeJim Ellis, Bay State College–BostonAnita Ellzey, Harford Community College

Advisory panel:Al Fagan, University of RichmondTodd Jackson, Northeastern State UniversityDonnie Kristof-Nelson, Edmonds Community CollegeCheryl McKay, Monroe County Community CollegeMary Ann Swindlehurst, Carroll Community CollegeAndy Williams, Edmonds Community College

Helen Brubeck, San Jose State UniversityFlorence McGovern, Bergen Community CollegeSherry Mills, New Mexico State University

Joseph Adamo, Cazenovia CollegeAudrey Agnello, Niagara County

Community CollegeWilliam Alexander, Indian Hills

Community College–OttumwaAsokan Anandarajan, New Jersey Institute

of TechnologySusan Anders, St. Bonaventure UniversityJoe Aubert, Bemidji State UniversityMelody Ashenfelter, Southwestern

Oklahoma State University

Charles Baird, University of Wisconsin–StoutDan Bayak, Northampton Community

CollegeRichard Bedwell, Jones County Junior

CollegeJudy Beebe, Western Oregon UniversityIrene Bembenista, Davenport UniversityMargaret Berezewski, Robert Morris CollegeLecia Berven, Iowa Lakes Community

CollegeCharles Betts, Delaware Technical and

Community CollegeGreg Bischoff, Houston Community CollegeMargaret Black, San Jacinto CollegeWilliam Black, Raritan Valley Community

CollegeDavid Bland, Cape Fear Community CollegeAllen Blay, University of California–RiversideSusan Blizzard, San Antonio CollegeMichael Blue, Bloomsburg UniversityDale Bolduc, Intercoast CollegeLinda Bolduc, Mount Wachusett

Community CollegeDonald Bond, Houston Community CollegeJohn Boyd, Oklahoma City Community

CollegeSuzanne Bradford, Angelina CollegeThomas Branton, Alvin Community CollegeJerold Braun, Daytona Beach Community

CollegeNat Briscoe, Northwestern State UniversityJulie Browning, California Baptist UniversityCarroll Buck, San Jose State University

Jane Calvert, University of CentralOklahoma

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David Candelaria, Mount San JacintoCollege

Lee Cannell, El Paso Community CollegeMichelle Cannon, Ivy Tech Community

CollegeGreg Carlton, Davidson County

Community CollegeKay Carnes, Gonzaga University–SpokaneBrian Carpenter, University of ScrantonThomas Carr, International College of

NaplesLloyd Carroll, Borough Manhattan

Community CollegeStanley Carroll, New York City College of

Technology of CUNYRoy Carson, Anne Arundel Community

CollegeAl Case, Southern Oregon UniversityGerald Caton, Yavapai CollegeBea Chiang, The College of New JerseyCatherine Chiang, North Carolina Central

UniversityStephen Christian, Jackson Community

CollegeShifei Chung, Rowan University of

New JerseyToni Clegg, Palm Beach Atlantic UniversityLynn Clements, Florida Southern CollegeDoug Clouse, Lakeland Community CollegeCynthia Coleman, Sandhills Community

CollegeChristie Comunale, Long Island UniversitySally Cook, Texas Lutheran UniversitySue Counte, St. Louis Community CollegeChris Crosby, York Technical CollegeTed Crosby, Montgomery County

Community CollegeBarbara Crouteau, Santa Rosa Junior CollegeChris Cusatis, Gwynedd-Mercy College

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DeeDee Daughtry, Johnston CommunityCollege

Judy Daulton, Piedmont Technical CollegeDavid L. Davis, Tallahassee Community

CollegeElaine Dessouki, Virginia Wesleyan CollegeKen Duffe, Brookdale Community College

John Eagan, Erie Community CollegeGene Elrod, University of Texas–ArlingtonBeth Engle, Montgomery County

Community College

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Charles Fazzi, Saint Vincent CollegeCalvin Fink, Bethune Cookman CollegePhil Fink, University of ToledoCarolyn Fitzmorris, Hutchinson

Community CollegeRebecca Floor, Greenville Technical CollegeJoseph Foley, Assumption CollegeJeannie Folk, College of DuPageDavid Forsyth, Palomar College

Shelly Gardner, Augustana CollegeHarold Gellis, York College of CUNYRenee Goffinet, Spokane Community

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Community CollegeJanet Grange, Chicago State UniversityMarina Grau, Houston Community CollegeJohn Graves, PCDIGloria Grayless, Sam Houston State

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and Technical CollegeGeoffrey Heriot, Greenville Technical

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College

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CollegeJames Hurat, National College of Business

and TechnologyLarry Huus, University of MinnesotaConstance Hylton, George Mason University

Verne Ingram, Red Rocks CommunityCollege

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Southern NevadaChristine Jonick, Gainesville State CollegePaul Juriga, Richland Community College

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Southern NevadaJames Kelly, Ft. Lauderdale City CollegeAshraf Khallaf, University of Southern

IndianaRandy Kidd, Longview Community CollegeChula King, University of West FloridaCody King, Georgia Southwestern State

UniversitySusan Koepke, Illinois Valley Community

CollegeKen Koerber, Bucks County Community

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Allegheny County–Allegheny

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UniversityPamela Legner, College of DuPageMaria Lehoczky, American

Intercontinental UniversityBruce Leung, City College of San FranciscoJudy Lewis, Angelo State UniversityBruce Lindsey, Genesee Community CollegeElizabeth Lynn Locke, Northern Virginia

Community College

Michelle Maggio, Westfield State CollegeBridgette Mahan, Harold Washington

CollegeLori Major, Luzerne County Community

CollegeJames Makofske, Fresno City CollegeKen Mark, Kansas City Kansas

Community CollegeAriel Markelevich, Long Island UniversityHector Martinez, San Antonio CollegeJohn May, Southwestern Oklahoma State

UniversityNora McCarthy, Wharton County Junior

CollegeBruce McMurrey, Community College of

Denver

Patrick McNabb, Ferris State UniversityPam Meyer, University of LouisianaJohn Miller, Metropolitan Community

CollegeBarry Mishra, University of

California–RiversideNorma Montague, Central Carolina

Community CollegeTim Murphy, Diablo Valley College

Lisa Nash, Vincennes UniversityLanny Nelms, Gwinnet Technical CollegeJennifer Niece, Assumption CollegeDeborah Niemer, Oakland Community

CollegeTom Nohl, Community College of

Southern NevadaPat Novak, Southeast Community College

Ron O’Brien, Fayetteville TechnicalCommunity College

Kathleen O’Donnell, OnondagaCommunity College

John Olsavsky, SUNY at FredoniaLiz Ott, Casper CollegeGlenn Owen, Marymount College

Carol Pace, Grayson County CollegeSusan Pallas, Southeast Community CollegeJeffrey Patterson, Grove City CollegeKathy Pellegrino, Westfield State CollegeSusan Pope, University of AkronRobert Porter, Cape Fear Community

CollegeMichelle Powell, Holmes Community

CollegeCheryl Prachyl, University of Texas–El PasoDebra Prendergast, Northwestern Business

CollegeDarlene Pulliam, West Texas A&M

University–CanyonKarl Putnam, University of Texas–El Paso

Margaret Quarles, Sam Houston StateUniversity

Behnaz Quigley, Marymount College

Jim Racic, Lakeland Community CollegePaulette Ratliff-Miller, Arkansas State

UniversityCarla Rich, Pensacola State CollegeDenver Riffe, National College of Business

and TechnologyMichael Robinson, Baylor UniversityStephen Rockwell, University of TulsaPatrick Rogan, Cosumnes River CollegeDennis Roth, West Virginia Northern

Community CollegeKaren Russom, North Harris CollegeJ.T. Ryan, Onondaga Community College

Martin Sabo, Community College ofDenver

Phillipe Sammour, Eastern MichiganUniversity

Richard Savich, California StateUniversity–San Bernardino

Nancy Schendel, Iowa Lakes CommunityCollege

Sandra Scheuermann, University ofLouisiana

Bunney Schmidt, Keiser CollegeDebbie Schmidt, Cerritos CollegeRobert Schoener, New Mexico State

UniversityTony Scott, Norwalk Community CollegeLinda Serres Sweeny, Sam Houston State

UniversityBrandi Shay, Southwestern Community

CollegeAlice Sineath, Forsyth Technical

Community CollegeLois Slutsky, Broward Community College

SouthKimberly Smith, County College of MorrisChuck Smith, Iowa Western Community

CollegeKen Snow, Kaplan Education CentersJohn Stancil, Florida Southern CollegeLawrence Steiner, College of MarinSally Stokes, Wilmington CollegeThomas Stolberg, Alfred State UniversityJoan Stone, University of Central OklahomaJohn Stone, Potomac State CollegeThomas Szczurek, Delaware County

Community College

Kathy Terrell, University of CentralOklahoma

Cynthia Thompson, Carl SandburgCollege–Carthage

Shafi Ullah, Broward Community CollegeSouth

Peter Van Brunt, SUNY College ofTechnology at Delhi

Kathi Villani, Queensborough CommunityCollege

Audrey Voyles, San Diego Miramar College

Patricia Walczak, Lansing CommunityCollege

Kay Walker-Hauser, Beaufort CountyCommunity College–Washington

Scott Wallace, Blue Mountain CollegeDouglas Ward, Southwestern Community

CollegeJeffrey Waybright, Spokane Community

CollegeRoberta Wheeler, Northwest Florida State

CollegeBill Whitley, Athens State UniversityRandall Whitmore, San Jacinto CollegeVicki White, Ivy Tech Community CollegeIdalene Williams, Metropolitan

Community CollegeBetsy Willis, Baylor UniversityTom Wilson, University of LouisianaJoe Woods, University of ArkansasPatty Worsham, Riverside Community

CollegeGloria Worthy, Southwest Tennessee

Community College

Shi-Mu (Simon) Yang, Adelphi UniversityLynnette Yerbuy, Salt Lake Community

CollegeLaura Young, University of Central

Arkansas

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