SOLUTION MANUAL FOR
FINANCIAL ACCOUNTING FOR MANAGERS 1ST EDITION BY WAYNE THOMAS
AND DAVID SPICELAND AND MARK NELSON
CHAPTER 1
A FRAMEWORK FOR FINANCIAL ACCOUNTING
REAL WORLD PERSPECTIVES
RWP1-1ooEDGARooNikeoo(ticker:ooNKE)
Requirementoo1
a. $23,717oomillion
b. $9,040oomillion
c. Totalooliabilitiesoo=ooTotalooassetsoo–
oototalooshareholder’sooequity
$23,717oo–oo$9,040oo=oo$14,677oomillion
Requirementoo2
a. $39,117oomillion.ooRevenueooincreasedoofromootheoopreviousooy
ear.
b. $4,029oomillion.ooNetooincomeooincreasedoofromootheooprevious
ooyear.
Requirementoo3
a. Operatingoocashooflowoo=oo$5,903oomillion.ooOperatingoocashooflowoowasoomoreoo
positive
thanootheoopreviousooyear.
b. Investingoocashooflowoo=oo−$264oomillion.ooInvestingoocashooflowoowentoofromoop
ositiveootooonegativeoofromootheoopreviousoo year.
c. Financingoocashooflowoo=oo−$5,293oomillion.ooFinancingoocashooflowoowasoomoreo
onegative
thanootheoopreviousooyear.
RWP1-2ooEDGARooNetflixooIncoo(ticker:ooNFLX)
Requirementoo1
a. Averageoopayingoomembershipooincreasedoobyoo23%ooandooaverageoomonthlyooreve
nueooper
payingoomembershipooincreasedoobyoo5%.
b. $2,795,434oo/oo$20,156,447oo=oo13.9%
c. $2,652,462,oo13%ooofoorevenues
Requirementoo2
©McGrawooHillooLLC.ooAlloorightsooreserved.ooNoooreproductionoooroofurtheroodistributionoopermittedoowithoutootheooprioroowrittenoocon
sentooofooMcGrawooHillooLLC
Solutions ooManual,o o Chapt 5-1
eroo 5
, a. $9,801,215oo/oo$24,504,567oo=oo40
%
b. $33,141oomillion
©McGrawooHillooLLC.ooAlloorightsooreserved.ooNoooreproductionoooroofurtheroodistributionoopermittedoowithoutootheooprioroowrittenooc
onsentooofooMcGrawooHillooLLC
5-2 FinancialooAccountingooforooMana
gers
,©McGrawooHillooLLC.ooAlloorightsooreserved.ooNoooreproductionoooroofurtheroodistributionoopermittedoowithoutootheooprioroowrittenoocon
sentooofooMcGrawooHillooLLC
Solutions ooManual,o o Chapt 5-3
eroo 5
, Requirementoo3
a. $20,723,441.o o Long-
termoodebtoowentooupoofromootheoopreviousooyear.
b. $736,969
Requirementoo4
9%
Requirementoo5
a. Ernstoo&ooYoungooLL
P
b. Yes
RWP1-3ooEDGARooGeneralooMillsooInc.oo(ticker:ooGIS)
Requirementoo1
FirstooQuarter.
Requirementoo2
Augustoo26,oo2018.o o Theoosameooquarterooofoolastooyearooisoousedooasootheoocomparisonooquarter.
Requirementoo3
Theooquarterlyooreportooincludesoo15oonotes.
RWP1-4ooEDGARooNordstromooInc.oo(ticker:ooJWN)
Requirementoo1
TheooCOVID-19oopandemic.
Requirementoo2
OnooMarchoo23,oo2020,ootheooCompanyooannouncedoothatooitoowouldoobeootakingooseveraloostepsooino
oanooabundanceooofoocautionootoooproactivelyoostrengthenooitsoofinancialooflexibilityooandoonavigateooth
roughoothisoounprecedentedoosituation.ooSpecifically,ootheooCompanyoosuspendedooitsooquarterlyoodivi
dendoobeginningooinootheoosecondooquarterooofoo2020,oodrewoodownoo$800oomillionooonooitsooRevolv
ingooCreditooFacility,ootargetedoofurtherooreductionsooofoomoreoothanoo$500oomillionooinoooperatingoo
expenses,oocapitalooexpenditures,ooandooworkingoocapital,ooandoosuspendedooshareoorepurchases.
©McGrawooHillooLLC.ooAlloorightsooreserved.ooNoooreproductionoooroofurtheroodistributionoopermittedoowithoutootheooprioroowrittenooc
onsentooofooMcGrawooHillooLLC
5-4 FinancialooAccountingooforooMana
gers
FINANCIAL ACCOUNTING FOR MANAGERS 1ST EDITION BY WAYNE THOMAS
AND DAVID SPICELAND AND MARK NELSON
CHAPTER 1
A FRAMEWORK FOR FINANCIAL ACCOUNTING
REAL WORLD PERSPECTIVES
RWP1-1ooEDGARooNikeoo(ticker:ooNKE)
Requirementoo1
a. $23,717oomillion
b. $9,040oomillion
c. Totalooliabilitiesoo=ooTotalooassetsoo–
oototalooshareholder’sooequity
$23,717oo–oo$9,040oo=oo$14,677oomillion
Requirementoo2
a. $39,117oomillion.ooRevenueooincreasedoofromootheoopreviousooy
ear.
b. $4,029oomillion.ooNetooincomeooincreasedoofromootheooprevious
ooyear.
Requirementoo3
a. Operatingoocashooflowoo=oo$5,903oomillion.ooOperatingoocashooflowoowasoomoreoo
positive
thanootheoopreviousooyear.
b. Investingoocashooflowoo=oo−$264oomillion.ooInvestingoocashooflowoowentoofromoop
ositiveootooonegativeoofromootheoopreviousoo year.
c. Financingoocashooflowoo=oo−$5,293oomillion.ooFinancingoocashooflowoowasoomoreo
onegative
thanootheoopreviousooyear.
RWP1-2ooEDGARooNetflixooIncoo(ticker:ooNFLX)
Requirementoo1
a. Averageoopayingoomembershipooincreasedoobyoo23%ooandooaverageoomonthlyooreve
nueooper
payingoomembershipooincreasedoobyoo5%.
b. $2,795,434oo/oo$20,156,447oo=oo13.9%
c. $2,652,462,oo13%ooofoorevenues
Requirementoo2
©McGrawooHillooLLC.ooAlloorightsooreserved.ooNoooreproductionoooroofurtheroodistributionoopermittedoowithoutootheooprioroowrittenoocon
sentooofooMcGrawooHillooLLC
Solutions ooManual,o o Chapt 5-1
eroo 5
, a. $9,801,215oo/oo$24,504,567oo=oo40
%
b. $33,141oomillion
©McGrawooHillooLLC.ooAlloorightsooreserved.ooNoooreproductionoooroofurtheroodistributionoopermittedoowithoutootheooprioroowrittenooc
onsentooofooMcGrawooHillooLLC
5-2 FinancialooAccountingooforooMana
gers
,©McGrawooHillooLLC.ooAlloorightsooreserved.ooNoooreproductionoooroofurtheroodistributionoopermittedoowithoutootheooprioroowrittenoocon
sentooofooMcGrawooHillooLLC
Solutions ooManual,o o Chapt 5-3
eroo 5
, Requirementoo3
a. $20,723,441.o o Long-
termoodebtoowentooupoofromootheoopreviousooyear.
b. $736,969
Requirementoo4
9%
Requirementoo5
a. Ernstoo&ooYoungooLL
P
b. Yes
RWP1-3ooEDGARooGeneralooMillsooInc.oo(ticker:ooGIS)
Requirementoo1
FirstooQuarter.
Requirementoo2
Augustoo26,oo2018.o o Theoosameooquarterooofoolastooyearooisoousedooasootheoocomparisonooquarter.
Requirementoo3
Theooquarterlyooreportooincludesoo15oonotes.
RWP1-4ooEDGARooNordstromooInc.oo(ticker:ooJWN)
Requirementoo1
TheooCOVID-19oopandemic.
Requirementoo2
OnooMarchoo23,oo2020,ootheooCompanyooannouncedoothatooitoowouldoobeootakingooseveraloostepsooino
oanooabundanceooofoocautionootoooproactivelyoostrengthenooitsoofinancialooflexibilityooandoonavigateooth
roughoothisoounprecedentedoosituation.ooSpecifically,ootheooCompanyoosuspendedooitsooquarterlyoodivi
dendoobeginningooinootheoosecondooquarterooofoo2020,oodrewoodownoo$800oomillionooonooitsooRevolv
ingooCreditooFacility,ootargetedoofurtherooreductionsooofoomoreoothanoo$500oomillionooinoooperatingoo
expenses,oocapitalooexpenditures,ooandooworkingoocapital,ooandoosuspendedooshareoorepurchases.
©McGrawooHillooLLC.ooAlloorightsooreserved.ooNoooreproductionoooroofurtheroodistributionoopermittedoowithoutootheooprioroowrittenooc
onsentooofooMcGrawooHillooLLC
5-4 FinancialooAccountingooforooMana
gers