SOLUTION MANUAL FOR Financial
Accounting 11th Edition by Robert Libby, All
Chapters 1 - 13
,TABLE OF CONTENTS
CHAPTER 1: Financial Statements and Business Decisions
Focus Company: Le-Nature’s Inc.
CHAPTER 2: Investing and Financing Decisions and the Accounting System
Focus Company: Chipotle Mexican Grill
CHAPTER 3: Operating Decisions and the Accounting System
Focus Company: Chipotle Mexican Grill
CHAPTER 4: Adjustments, Financial Statements, and the Closing Process
Focus Company: Chipotle Mexican Grill
CHAPTER 5: Communicating and Analyzing Accounting Information
Focus Company: Apple Inc.
CHAPTER 6: Reporting and Interpreting Sales Revenue, Receivables, and Cash
Focus Company: Skechers U.S.A.
CHAPTER 7: Reporting and Interpreting Cost of Goods Sold and Inventory
Focus Company: Harley-Davidson, Inc.
CHAPTER 8: Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources
Focus Company: FedEx Corporation
CHAPTER 9: Reporting and Interpreting Liabilities
Focus Company: Starbucks
CHAPTER 10: Reporting and Interpreting Bond Securities
Focus Company: Amazon
CHAPTER 11: Reporting and Interpreting Stockholders’ Equity
Focus Company: Microsoft
CHAPTER 12: Statement of Cash Flows
Focus Company: National Beverage Corporation
CHAPTER 13: Analyzing Financial Statements
Focus Company: The Home Depot
,Chapter 1
Financial Statements and Business Decisions
ANSWERS TO QUESTIONS
1. Accounting is a system that collects and processes (analyzes, measures, and records) financial
information about an organization and reports that information todecision makers.
2. Financial accounting involves preparation of the four basic financial statements andrelated
disclosures for external decision makers. Managerial accounting involves the preparation of
detailed plans, budgets, forecasts, and performance reports for internal decision makers.
3. Financial reports are used by both internal and external groups and individuals. Theinternal
groups are comprised of the various managers of the entity. The external groups include the
owners, investors, creditors, governmental agencies, other interested parties, and the public at
large.
4. Investors purchase all or part of a business and hope to gain by receiving part of what the
company earns and/or selling their ownership interest in the company in the future at a
higher price than they paid. Creditors lend money to a company fora specific length of time
and hope to gain by charging interest on the loan.
,5. In a society, each organization can be defined as a separate accounting entity. An accounting
entity is the organization for which financial data are to be collected. Typical accounting
entities are a business, a church, a governmental unit, a university and other nonprofit
organizations such as a hospital and a welfare organization. A business typically is defined and
treated as a separate entity because the owners, creditors, investors, and other interested parties
need to evaluate its performance and its potential separately from other entities and from its
owners.
6. Name of Statement Alternative Title
(a) Income Statement (a) Statement of Earnings; Statement of
Income; Statement of Operations
(b) Balance Sheet (b) Statement of Financial Position
(c) Cash Flow Statement (c) Statement of Cash Flows
7. The heading of each of the four required financial statements should include thefollowing:
(a) Name of the entity
(b) Name of the statement
(c) Date of the statement, or the period of time
(d) Unit of measure
8. (a) The purpose of the income statement is to present information about the revenues,
expenses, and the net income of an entity for a specified period oftime.
(b) The purpose of the balance sheet is to report the financial position of an entityat a given
date, that is, to report information about the assets, liabilities and stockholders’ equity of
the entity as of a specific date.
(c) The purpose of the statement of cash flows is to present information about theflow of
cash into the entity (sources), the flow of cash out of the entity (uses), and the net
increase or decrease in cash during the period.
(d) The statement of stockholders’ equity reports the changes in each of the company’s
stockholders’ equity accounts during the accounting period, including issue and
repurchase of stock and the way that net income and distribution of dividends affected
the retained earnings of the company duringthat period.
9. The income statement and the statement of cash flows are dated ―For the Year Ended
December 31‖ because they report the inflows and outflows of resources during a period of
time. In contrast, the balance sheet is dated ―At December 31‖because it represents the
resources, obligations, and stockholders’ equity at a specific date.
,10. Assets are important to creditors and investors because assets provide a basis for judging
whether sufficient resources are available to operate the company. Assetsare also important
because they could be sold for cash in the event the company goes out of business. Liabilities
are important to creditors and investors because the company must be able to generate
sufficient cash from operations or further borrowing to meet the payments required by debt
agreements. If a business does not pay its creditors, the law may give the creditors the right to
force the sale of assets sufficient to meet their claims.
11. Net income is the excess of total revenues over total expenses. Net loss is theexcess of
total expenses over total revenues.
12. The equation for the income statement is Revenues - Expenses = Net Income (orNet Loss
if the amount is negative). Thus, the three major items reported on the income statement are
(1) revenues, (2) expenses, and (3) net income.
13. The equation for the balance sheet (also known as the basic accounting equation) is: Assets =
Liabilities + Stockholders’ Equity. Assets are the probable (expected) future economic benefits
owned by the entity as a result of past transactions. Theyare the resources owned by the
business at a given point in time such as cash, receivables, inventory, machinery, buildings,
land, and patents. Liabilities are probable (expected) debts or obligations of the entity as a
result of past transactions that will be paid with assets or services in the future. They are the
obligations of the entity such as accounts payable, notes payable, and bonds payable.
Stockholders’ equity is financing provided by owners of the business and operations. It is the
claim of the owners to the assets of the business after the creditors’ claims have been satisfied.
It may be thought of as the residual interest because it represents assets minus liabilities.
14. The equation for the statement of cash flows is: Cash flows from operating activities
+ Cash flows from investing activities + Cash flows from financing activities = Change in
cash for the period. The net cash flows for the period represent the increase or decrease in
cash that occurred during the period. Cash flows from operating activities are cash flows
directly related to earning income (normal business activity including interest paid and
income taxes paid). Cash flows frominvesting activities include cash flows that are related to
the acquisition or sale ofproductive assets used by the company. Cash flows from financing
activities are directly related to the financing of the enterprise itself.
15. The retained earnings equation is: Beginning Retained Earnings + Net Income - Dividends
= Ending Retained Earnings. It begins with beginning-of-the-year Retained Earnings which
is the prior year’s ending retained earnings reported onthe balance sheet. The current year's
Net Income reported on the income statement is added and the current year's Dividends
are subtracted from this amount. The ending Retained Earnings amount is reported on the
end-of-period balance sheet.
,16. Marketing managers and credit managers use customers' financial statements to decide whether
to extend them credit for their purchases. Purchasing managers use potential suppliers'
financial statements to judge whether the suppliers have theresources necessary to meet current
and future demand. Human resource managers use financial statements as a basis for contract
negotiations, to determine what pay rates the company can afford. The net income figure even
serves as a basis to pay bonuses not only to management, but to other employees through
profit sharing plans.
17. The Securities and Exchange Commission (SEC) is the U.S. government agency which
determines the financial statements that public companies must provide to stockholders and
the measurement rules used in producing those statements. TheFinancial Accounting
Standards Board (FASB) is the private sector body given theprimary responsibility to work
out the detailed rules which become generally accepted accounting principles.
18. Management is responsible for preparing the financial statements and other information
contained in the annual report and for the maintenance of a system of internal accounting
policies, procedures and controls. These measures are intended to provide reasonable
assurance, at appropriate cost, that transactions areprocessed in accordance with company
authorization as well as properly recorded and reported in the financial statements, and that
assets are adequately safeguarded. Independent auditors examine the financial reports (prepared
by management) and the underlying records to assure that the reports represent what they
claim and conform with generally accepted accounting principles (GAAP).
19. A sole proprietorship is an unincorporated business owned by one individual. A partnership is
an unincorporated association of two or more individuals to carry on abusiness. A corporation
is a business that is organized under the laws of a particular state whereby a charter is granted
and the entity is authorized to issue shares of stock as evidence of ownership by the owners
(i.e., stockholders).
20. A CPA firm normally renders three services: auditing, management advisory services, and tax
services. Auditing involves examination of the records and financial reports to determine
whether they ―fairly present‖ the financial position andresults of operations of the entity.
Management advisory services involve management advice to individual business enterprises
and other entities, much likethose provided by a consulting firm. Tax services involve
providing tax planning advice to clients (both individuals and businesses) and preparation of
their tax returns.
ANSWERS TO MULTIPLE CHOICE
1. b) 2. d) 3. d) 4. c) 5. a)
6. d) 7. a) 8. a) 9. c) 10. b)
, Authors' Recommended Solution Time
(Time in minutes)
Alternate Cases and
Mini-exercises Exercises Problems Problems Projects
No. Time No. Time No. Time No. Time No. Time
1 5 1 12 1 45 1 45 1 20
2 5 2 12 2 45 2 45 2 30
3 5 3 12 3 45 3 45 3 30
4 20 4 45
5 25 5 60
6 20 6 30
7 15 7 20
8 25 Continuing 8 *
9 25 Problem
10 25 1 45
11 30
12 30
13 15
14 35
15 12
* Due to the nature of these cases and projects, it is very difficult to estimate the amount of time
students will need to complete the assignment. As with any open-ended project, it is possible for
students to devote a large amount of time to these assignments. While students often benefit from
the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can
reduce student frustration and anxiety by making your expectations clear. For example, when our
goal is to sharpen research skills, we devote class time to discussing research strategies. When we
want the students to focus on a real accounting issue, we offer suggestions about possible
companies or industries.
,MINI-EXERCISES
M1–1.
Element Financial Statement
B (1) Expenses A. Balance sheet
D (2) Cash flow from investing activities B. Income statement
A (3) Assets C. Statement of stockholders’ equity
C* (4) Dividends D. Statement of cash flows
B (5) Revenues
D (6) Cash flow from operating activities
A (7) Liabilities
D (8) Cash flow from financing activities
*Dividends paid in cash are also subtracted in the Financing section of the Statement ofCash Flows
M1–2.
SE (1) Retained earnings
A (2) Accounts receivable
R (3) Sales revenue
A (4) Property, plant, and equipment
E (5) Cost of goods sold expense
A (6) Inventories
E (7) Interest expense
L (8) Accounts payable
A (9) Land
M1–3.
Abbreviation Full Designation
(1) CPA Certified Public Accountant
(2) GAAP Generally Accepted Accounting Principles
(3) SEC Securities and Exchange Commission
(4) FASB Financial Accounting Standards Board
,EXERCISES
E1–1.
Term or Abbreviation Definition
J (1) SEC A. A system that collects and processes financial
F (2) Audit information about an organization and reports that
H (3) Sole proprietorship information to decision makers.
E (4) Corporation B. Information that helps evaluate the company’s past
A (5) Accounting behavior and predict its future.
D (6) Accounting entity C. An unincorporated business owned by two or more
I (7) Audit report Publicly persons.
L (8) traded Partnership D. The organization for which financial data are to be
C (9) FASB collected (separate and distinct from its owners).
K (10) CPA E. An incorporated entity that issues shares of stock as
G (11) Relevant evidence of ownership.
B (12) information F. An examination of the financial reports to ensure thatthey
M (13) GAAP represent what they claim and conform with generally
accepted accounting principles.
G. Certified Public Accountant.
H. An unincorporated business owned by one person.
I. A report that describes the auditor’s opinion of the fairness
of the financial statement presentations andthe evidence
gathered to support that opinion.
J. Securities and Exchange Commission.
K. Financial Accounting Standards Board.
L. A company with stock that can be bought and sold by
investors on established stock exchanges.
M. Generally accepted accounting principles.
, E1–2.
A (1) Accounts receivable
A (2) Cash and cash equivalents
R (3) Net sales
L (4) Debt due within one year
L (5) Taxes payable
SE (6) Retained earnings
E (7) Cost of products sold
E (8) Selling, general, and administrative expense
E (9) Income taxes
L (10) Accounts payable
A (11) Trademarks and other intangible assets
A (12) Property, plant, and equipment
L (13) Long-term debt
A (14) Inventories
E (15) Interest expense
E1–3.
L (1) Bank loans A (10) Machinery and equipment
E (2) Selling, marketing, and R (11) Net product sales
administrative expenses
L (3) Accounts payable A (12) Inventories
L (4) Dividends payable A (13) Trademarks
SE (5) Retained earnings A (14) Buildings
A (6) Cash and cash equivalents A (15) Land
A (7) Accounts receivable L (16) Income taxes payable
E (8) Provision for income taxes* E (17) Rental and royalty costs
E (9) Product cost of goods sold A (18) Investments (in other companies)
*Note that ―Provision for income taxes‖ is a common synonym for ―Income tax expense.‖
Accounting 11th Edition by Robert Libby, All
Chapters 1 - 13
,TABLE OF CONTENTS
CHAPTER 1: Financial Statements and Business Decisions
Focus Company: Le-Nature’s Inc.
CHAPTER 2: Investing and Financing Decisions and the Accounting System
Focus Company: Chipotle Mexican Grill
CHAPTER 3: Operating Decisions and the Accounting System
Focus Company: Chipotle Mexican Grill
CHAPTER 4: Adjustments, Financial Statements, and the Closing Process
Focus Company: Chipotle Mexican Grill
CHAPTER 5: Communicating and Analyzing Accounting Information
Focus Company: Apple Inc.
CHAPTER 6: Reporting and Interpreting Sales Revenue, Receivables, and Cash
Focus Company: Skechers U.S.A.
CHAPTER 7: Reporting and Interpreting Cost of Goods Sold and Inventory
Focus Company: Harley-Davidson, Inc.
CHAPTER 8: Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources
Focus Company: FedEx Corporation
CHAPTER 9: Reporting and Interpreting Liabilities
Focus Company: Starbucks
CHAPTER 10: Reporting and Interpreting Bond Securities
Focus Company: Amazon
CHAPTER 11: Reporting and Interpreting Stockholders’ Equity
Focus Company: Microsoft
CHAPTER 12: Statement of Cash Flows
Focus Company: National Beverage Corporation
CHAPTER 13: Analyzing Financial Statements
Focus Company: The Home Depot
,Chapter 1
Financial Statements and Business Decisions
ANSWERS TO QUESTIONS
1. Accounting is a system that collects and processes (analyzes, measures, and records) financial
information about an organization and reports that information todecision makers.
2. Financial accounting involves preparation of the four basic financial statements andrelated
disclosures for external decision makers. Managerial accounting involves the preparation of
detailed plans, budgets, forecasts, and performance reports for internal decision makers.
3. Financial reports are used by both internal and external groups and individuals. Theinternal
groups are comprised of the various managers of the entity. The external groups include the
owners, investors, creditors, governmental agencies, other interested parties, and the public at
large.
4. Investors purchase all or part of a business and hope to gain by receiving part of what the
company earns and/or selling their ownership interest in the company in the future at a
higher price than they paid. Creditors lend money to a company fora specific length of time
and hope to gain by charging interest on the loan.
,5. In a society, each organization can be defined as a separate accounting entity. An accounting
entity is the organization for which financial data are to be collected. Typical accounting
entities are a business, a church, a governmental unit, a university and other nonprofit
organizations such as a hospital and a welfare organization. A business typically is defined and
treated as a separate entity because the owners, creditors, investors, and other interested parties
need to evaluate its performance and its potential separately from other entities and from its
owners.
6. Name of Statement Alternative Title
(a) Income Statement (a) Statement of Earnings; Statement of
Income; Statement of Operations
(b) Balance Sheet (b) Statement of Financial Position
(c) Cash Flow Statement (c) Statement of Cash Flows
7. The heading of each of the four required financial statements should include thefollowing:
(a) Name of the entity
(b) Name of the statement
(c) Date of the statement, or the period of time
(d) Unit of measure
8. (a) The purpose of the income statement is to present information about the revenues,
expenses, and the net income of an entity for a specified period oftime.
(b) The purpose of the balance sheet is to report the financial position of an entityat a given
date, that is, to report information about the assets, liabilities and stockholders’ equity of
the entity as of a specific date.
(c) The purpose of the statement of cash flows is to present information about theflow of
cash into the entity (sources), the flow of cash out of the entity (uses), and the net
increase or decrease in cash during the period.
(d) The statement of stockholders’ equity reports the changes in each of the company’s
stockholders’ equity accounts during the accounting period, including issue and
repurchase of stock and the way that net income and distribution of dividends affected
the retained earnings of the company duringthat period.
9. The income statement and the statement of cash flows are dated ―For the Year Ended
December 31‖ because they report the inflows and outflows of resources during a period of
time. In contrast, the balance sheet is dated ―At December 31‖because it represents the
resources, obligations, and stockholders’ equity at a specific date.
,10. Assets are important to creditors and investors because assets provide a basis for judging
whether sufficient resources are available to operate the company. Assetsare also important
because they could be sold for cash in the event the company goes out of business. Liabilities
are important to creditors and investors because the company must be able to generate
sufficient cash from operations or further borrowing to meet the payments required by debt
agreements. If a business does not pay its creditors, the law may give the creditors the right to
force the sale of assets sufficient to meet their claims.
11. Net income is the excess of total revenues over total expenses. Net loss is theexcess of
total expenses over total revenues.
12. The equation for the income statement is Revenues - Expenses = Net Income (orNet Loss
if the amount is negative). Thus, the three major items reported on the income statement are
(1) revenues, (2) expenses, and (3) net income.
13. The equation for the balance sheet (also known as the basic accounting equation) is: Assets =
Liabilities + Stockholders’ Equity. Assets are the probable (expected) future economic benefits
owned by the entity as a result of past transactions. Theyare the resources owned by the
business at a given point in time such as cash, receivables, inventory, machinery, buildings,
land, and patents. Liabilities are probable (expected) debts or obligations of the entity as a
result of past transactions that will be paid with assets or services in the future. They are the
obligations of the entity such as accounts payable, notes payable, and bonds payable.
Stockholders’ equity is financing provided by owners of the business and operations. It is the
claim of the owners to the assets of the business after the creditors’ claims have been satisfied.
It may be thought of as the residual interest because it represents assets minus liabilities.
14. The equation for the statement of cash flows is: Cash flows from operating activities
+ Cash flows from investing activities + Cash flows from financing activities = Change in
cash for the period. The net cash flows for the period represent the increase or decrease in
cash that occurred during the period. Cash flows from operating activities are cash flows
directly related to earning income (normal business activity including interest paid and
income taxes paid). Cash flows frominvesting activities include cash flows that are related to
the acquisition or sale ofproductive assets used by the company. Cash flows from financing
activities are directly related to the financing of the enterprise itself.
15. The retained earnings equation is: Beginning Retained Earnings + Net Income - Dividends
= Ending Retained Earnings. It begins with beginning-of-the-year Retained Earnings which
is the prior year’s ending retained earnings reported onthe balance sheet. The current year's
Net Income reported on the income statement is added and the current year's Dividends
are subtracted from this amount. The ending Retained Earnings amount is reported on the
end-of-period balance sheet.
,16. Marketing managers and credit managers use customers' financial statements to decide whether
to extend them credit for their purchases. Purchasing managers use potential suppliers'
financial statements to judge whether the suppliers have theresources necessary to meet current
and future demand. Human resource managers use financial statements as a basis for contract
negotiations, to determine what pay rates the company can afford. The net income figure even
serves as a basis to pay bonuses not only to management, but to other employees through
profit sharing plans.
17. The Securities and Exchange Commission (SEC) is the U.S. government agency which
determines the financial statements that public companies must provide to stockholders and
the measurement rules used in producing those statements. TheFinancial Accounting
Standards Board (FASB) is the private sector body given theprimary responsibility to work
out the detailed rules which become generally accepted accounting principles.
18. Management is responsible for preparing the financial statements and other information
contained in the annual report and for the maintenance of a system of internal accounting
policies, procedures and controls. These measures are intended to provide reasonable
assurance, at appropriate cost, that transactions areprocessed in accordance with company
authorization as well as properly recorded and reported in the financial statements, and that
assets are adequately safeguarded. Independent auditors examine the financial reports (prepared
by management) and the underlying records to assure that the reports represent what they
claim and conform with generally accepted accounting principles (GAAP).
19. A sole proprietorship is an unincorporated business owned by one individual. A partnership is
an unincorporated association of two or more individuals to carry on abusiness. A corporation
is a business that is organized under the laws of a particular state whereby a charter is granted
and the entity is authorized to issue shares of stock as evidence of ownership by the owners
(i.e., stockholders).
20. A CPA firm normally renders three services: auditing, management advisory services, and tax
services. Auditing involves examination of the records and financial reports to determine
whether they ―fairly present‖ the financial position andresults of operations of the entity.
Management advisory services involve management advice to individual business enterprises
and other entities, much likethose provided by a consulting firm. Tax services involve
providing tax planning advice to clients (both individuals and businesses) and preparation of
their tax returns.
ANSWERS TO MULTIPLE CHOICE
1. b) 2. d) 3. d) 4. c) 5. a)
6. d) 7. a) 8. a) 9. c) 10. b)
, Authors' Recommended Solution Time
(Time in minutes)
Alternate Cases and
Mini-exercises Exercises Problems Problems Projects
No. Time No. Time No. Time No. Time No. Time
1 5 1 12 1 45 1 45 1 20
2 5 2 12 2 45 2 45 2 30
3 5 3 12 3 45 3 45 3 30
4 20 4 45
5 25 5 60
6 20 6 30
7 15 7 20
8 25 Continuing 8 *
9 25 Problem
10 25 1 45
11 30
12 30
13 15
14 35
15 12
* Due to the nature of these cases and projects, it is very difficult to estimate the amount of time
students will need to complete the assignment. As with any open-ended project, it is possible for
students to devote a large amount of time to these assignments. While students often benefit from
the extra effort, we find that some become frustrated by the perceived difficulty of the task. You can
reduce student frustration and anxiety by making your expectations clear. For example, when our
goal is to sharpen research skills, we devote class time to discussing research strategies. When we
want the students to focus on a real accounting issue, we offer suggestions about possible
companies or industries.
,MINI-EXERCISES
M1–1.
Element Financial Statement
B (1) Expenses A. Balance sheet
D (2) Cash flow from investing activities B. Income statement
A (3) Assets C. Statement of stockholders’ equity
C* (4) Dividends D. Statement of cash flows
B (5) Revenues
D (6) Cash flow from operating activities
A (7) Liabilities
D (8) Cash flow from financing activities
*Dividends paid in cash are also subtracted in the Financing section of the Statement ofCash Flows
M1–2.
SE (1) Retained earnings
A (2) Accounts receivable
R (3) Sales revenue
A (4) Property, plant, and equipment
E (5) Cost of goods sold expense
A (6) Inventories
E (7) Interest expense
L (8) Accounts payable
A (9) Land
M1–3.
Abbreviation Full Designation
(1) CPA Certified Public Accountant
(2) GAAP Generally Accepted Accounting Principles
(3) SEC Securities and Exchange Commission
(4) FASB Financial Accounting Standards Board
,EXERCISES
E1–1.
Term or Abbreviation Definition
J (1) SEC A. A system that collects and processes financial
F (2) Audit information about an organization and reports that
H (3) Sole proprietorship information to decision makers.
E (4) Corporation B. Information that helps evaluate the company’s past
A (5) Accounting behavior and predict its future.
D (6) Accounting entity C. An unincorporated business owned by two or more
I (7) Audit report Publicly persons.
L (8) traded Partnership D. The organization for which financial data are to be
C (9) FASB collected (separate and distinct from its owners).
K (10) CPA E. An incorporated entity that issues shares of stock as
G (11) Relevant evidence of ownership.
B (12) information F. An examination of the financial reports to ensure thatthey
M (13) GAAP represent what they claim and conform with generally
accepted accounting principles.
G. Certified Public Accountant.
H. An unincorporated business owned by one person.
I. A report that describes the auditor’s opinion of the fairness
of the financial statement presentations andthe evidence
gathered to support that opinion.
J. Securities and Exchange Commission.
K. Financial Accounting Standards Board.
L. A company with stock that can be bought and sold by
investors on established stock exchanges.
M. Generally accepted accounting principles.
, E1–2.
A (1) Accounts receivable
A (2) Cash and cash equivalents
R (3) Net sales
L (4) Debt due within one year
L (5) Taxes payable
SE (6) Retained earnings
E (7) Cost of products sold
E (8) Selling, general, and administrative expense
E (9) Income taxes
L (10) Accounts payable
A (11) Trademarks and other intangible assets
A (12) Property, plant, and equipment
L (13) Long-term debt
A (14) Inventories
E (15) Interest expense
E1–3.
L (1) Bank loans A (10) Machinery and equipment
E (2) Selling, marketing, and R (11) Net product sales
administrative expenses
L (3) Accounts payable A (12) Inventories
L (4) Dividends payable A (13) Trademarks
SE (5) Retained earnings A (14) Buildings
A (6) Cash and cash equivalents A (15) Land
A (7) Accounts receivable L (16) Income taxes payable
E (8) Provision for income taxes* E (17) Rental and royalty costs
E (9) Product cost of goods sold A (18) Investments (in other companies)
*Note that ―Provision for income taxes‖ is a common synonym for ―Income tax expense.‖
