SOLUTION MANUAL for Financial Accounting 11th Edition by Robert Libby and Hodge All Chapters 1-13

SOLUTION MANUAL
Financial Accounting 11th Edition
by Robert Libby and Hodge All Chapters 1-13

,TABLE OF CONTENTS
I I I




CHAPTERI1:IFinancialIStatementsIandIBusinessIDecisions
FocusICompany:ILe-Nature’sIInc.
CHAPTERI2:IInvestingIandIFinancingIDecisionsIandItheIAccountingISystem
FocusICompany:IChipotleIMexicanIGrill
CHAPTERI3:IOperatingIDecisionsIandItheIAccountingISystem
FocusICompany:IChipotleIMexicanIGrill
CHAPTERI4:IAdjustments,IFinancialIStatements,IandItheIClosingIProcess
FocusICompany:IChipotleIMexicanIGrill
CHAPTERI5:ICommunicatingIandIAnalyzingIAccountingIInformation
FocusICompany:IAppleIInc.
CHAPTERI6:IReportingIandIInterpretingISalesIRevenue,IReceivables,IandICash
FocusICompany:ISkechersIU.S.A.
CHAPTERI7:IReportingIandIInterpretingICostIofIGoodsISoldIandIInventory
FocusICompany:IHarley-Davidson,IInc.
CHAPTERI8:IReportingIandIInterpretingIProperty,IPlant,IandIEquipment;IIntangibles;IandINaturalIResources
FocusICompany:IFedExICorporation
CHAPTERI9:IReportingIandIInterpretingILiabilities
FocusICompany:IStarbucks
CHAPTERI10:IReportingIandIInterpretingIBondISecurities
FocusICompany:IAmazon
CHAPTERI11:IReportingIandIInterpretingIStockholders’IEquity
FocusICompany:IMicrosoft
CHAPTERI12:IStatementIofICashIFlows
FocusICompany:INationalIBeverageICorporation
CHAPTERI13:IAnalyzingIFinancialIStatements
FocusICompany:ITheIHomeIDepot

,Chapter 1 I



Financial Statements and Business Decisions
I I I I




ANSWERSITOIQUESTIONS

1. AccountingIisIaIsystemIthatIcollectsIandIprocessesI(analyzes,Imeasures,IandIrecords)Ifinanc
ialIinformationIaboutIanIorganizationIandIreportsIthatIinformationItoIdecisionImakers.

2. FinancialIaccountingIinvolvesIpreparationIofItheIfourIbasicIfinancialIstatementsIandIrelatedIdi
sclosuresIforIexternalIdecisionImakers.IManagerialIaccountingIinvolvesItheIpreparationIofIdet
ailedIplans,Ibudgets,Iforecasts,IandIperformanceIreportsIforIinternalI decisionImakers.

3. FinancialIreportsIareIusedIbyIbothIinternalIandIexternalIgroupsIandIindividuals.ITheIinternalIgro
upsIareIcomprisedIofItheIvariousImanagersIofItheIentity.ITheIexternalIgroupsIincludeItheIowner
s,Iinvestors,Icreditors,IgovernmentalIagencies,IotherIinterestedIparties,IandItheIpublicIatIlarge.

4. InvestorsIpurchaseIallIorIpartIofIaIbusinessIandIhopeItoIgainIbyIreceivingIpartIofIwhatItheIcom
panyIearnsIand/orIsellingItheirIownershipIinterestIinItheIcompanyIinItheIfutureIatIaIhigherIpric
eIthanItheyIpaid.ICreditorsIlendImoneyItoIaIcompanyIforIaIspecificIlengthIofItimeIandIhopeItoIg
ainIbyIchargingIinterestIonItheIloan.

, 5. InIaIsociety,IeachIorganizationIcanIbeIdefinedIasIaIseparateIaccountingIentity.IAnIaccountingIe
ntityIisItheIorganizationIforIwhichIfinancialIdataIareItoIbeIcollected.ITypicalIaccountingIentitiesI
areIaIbusiness,IaIchurch,IaIgovernmentalIunit,IaIuniversityIandIotherInonprofitIorganizationsIsu
chIasIaIhospitalI andIaIwelfareIorganization.IAIbusinessItypicallyIisIdefinedIandItreatedIasIaIsep
arateIentityIbecauseItheIowners,Icreditors,Iinvestors,IandIotherIinterestedIpartiesIneedItoIeval
uateIitsIperformanceIandIitsIpotentialIseparatelyIfromIotherIentitiesIandIfromIitsIowners.

6. NameIofIStatement AlternativeITitle
(a) IncomeIStatement (a)I StatementIofIEarnings;IStatementIof
Income;IStatementIofIOperations
(b) BalanceISheet (b)IStatementIofIFinancialIPosition
(c) CashIFlowIStatement (c)I StatementIofICashIFlows

7. TheIheadingIofIeachIofItheIfourIrequiredIfinancialIstatementsIshouldIincludeItheIfollowing:
(a) NameIofItheIentity
(b) NameIofItheIstatement
(c) DateIofItheIstatement,IorItheIperiodIofItime
(d) UnitIofImeasure

8. (a)
TheIpurposeIofItheIincomeIstatementIisItoIpresentIinformationIaboutItheIrevenues,Iex
penses,IandItheI netIincomeIofIanIentityIforIaIspecifiedIperiodIofItime.
(b) TheIpurposeIofItheIbalanceIsheetIisItoIreportItheIfinancialIpositionIofIanIentityIatIaIgivenId
ate,IthatIis,ItoIreportIinformationIaboutItheIassets,I liabilitiesIandIstockholders’IequityIofIt
heIentityIasIofIaIspecificIdate.
(c) TheIpurposeIofItheIstatementIofIcashIflowsIisItoIpresentIinformationIaboutItheIflowIofIca
shIintoItheIentityI(sources),ItheIflowIofIcashIoutIofItheIentityI(uses),IandItheInetIincreaseI
orIdecreaseIinIcashIduringItheIperiod.
(d) TheIstatementIofIstockholders’IequityIreportsItheIchangesIinIeachIofItheIcompany’sIsto
ckholders’IequityIaccountsIduringI theIaccountingIperiod,IincludingIissueIandIrepurchas
eIofIstockIandItheIwayIthatInetIincomeIandIdistributionIofIdividendsIaffectedItheIretaine
dIearningsIofItheIcompanyIduringIthatIperiod.

9. TheIincomeIstatementIandItheIstatementIofIcashIflowsIareIdatedI―ForItheIYearIEndedIDec
emberI31‖IbecauseItheyIreportItheIinflowsIandIoutflowsIofIresourcesIduringIaIperiodIofItim
e.IInIcontrast,ItheIbalanceIsheetIisIdatedI―AtIDecemberI31‖IbecauseIitIrepresentsItheIreso
urces,Iobligations,IandIstockholders’IequityIatIaIspecificIdate.