SOLUTION MANUAL FOR FINANCIAL ACCOUNTING FOR MANAGERS 1ST EDITION BY WAYNE THOMAS AND DAVID SPICELAND AND MARK NELSON

SOLUTION MANUAL FOR
FINANCIAL ACCOUNTING FOR MANAGERS 1ST
EDITION BY WAYNE THOMAS AND DAVID
SPICELAND AND MARK NELSON
CHAPTER 1 GF




GF A FRAMEWORK FOR FINANCIAL ACCOUNTING
GF GF GF GF




REAL WORLD PERSPECTIVES GF GF GF




RWP1-1 EDGAR Nike (ticker: NKE)
GF GF GF GF




Requirement 1 GF




a. $23,717 million GF




b. $9,040 million GF




c. Total liabilities = Total assets – total shareholder’s equity
GF GF GF GF GF GF GF GF




$23,717 – $9,040 = $14,677 million
GF GF GF GF GF




Requirement 2 GF




a. $39,117 million. Revenue increased from the previous year.
GF GF GF GF GF GF GF




b. $4,029 million. Net income increased from the previous year.
GF GF GF GF GF GF GF GF




Requirement 3 GF




a. Operating cash flow = $5,903 million. Operating cash flow was more positive
GF GF GF GF GF GF GF GF GF GF GF




than the previous year.
GF GF GF




b. Investing cash flow = −$264 million. Investing cash flow went from positive toneg
GF GF GF GF GF GF GF GF GF GF GF GF F
G




ative from the previous year.
GF GF GF GF




c. Financing cash flow = −$5,293 million. Financing cash flow was more negative
GF GF GF GF GF GF GF GF GF GF GF




than the previous year.
GF GF GF




RWP1-2 EDGAR Netflix Inc (ticker: NFLX)
GF GF GF GF GF




Requirement 1 GF




a. Average paying membership increased by 23% and average monthly revenue per
GF GF GF GF GF GF GF GF GF GF




paying membership increased by 5%.
GF GF GF GF




b. $2,795,434 / $20,156,447 = 13.9% GF GF GF GF




c. $2,652,462, 13% of revenues GF GF GF




Requirement 2 GF




a. $9,801,215 / $24,504,567 = 40% GF GF GF GF




b. $33,141 million GF




©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
Solutions Manual, Chapter 5 5-1

,©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
5-2 Financial Accounting for Managers

,Requirement 3 GF




a. $20,723,441. Long-term debt went up from the previous year. G F GF GF GF GF GF GF GF




b. $736,969

Requirement 4 GF




9%

Requirement 5 GF




a. Ernst & Young LLP GF GF GF




b. Yes



RWP1-3 EDGAR General Mills Inc. (ticker: GIS) GF GF GF GF GF GF




Requirement 1 GF




First Quarter. GF




Requirement 2 GF




August 26, 2018. The same quarter of last year is used as the comparison quarter.
GF GF G F GF GF GF GF GF GF GF GF GF GF GF




Requirement 3 GF




The quarterly report includes 15 notes.
GF GF GF GF GF




RWP1-4 EDGAR Nordstrom Inc. (ticker: JWN) GF GF GF GF GF




Requirement 1 GF




The COVID-19 pandemic.
GF GF




Requirement 2 GF




On March 23, 2020, the Company announced that it would be taking several steps in an abundanceof
GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF G
F GF




caution to proactively strengthen its financial flexibility and navigate through this unprecedentedsitua
GF GF GF GF GF GF GF GF GF GF GF G
F




tion. Specifically, the Company suspended its quarterly dividend beginning in the second quarter of 2
GF GF GF GF GF GF GF GF GF GF GF GF GF GF




020, drew down $800 million on its Revolving Credit Facility, targeted further reductions of more th
GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF




an $500 million in operating expenses, capital expenditures, and working capital, and suspended shar
GF GF GF GF GF GF GF GF GF GF GF GF GF




e repurchases.
GF




©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
Solutions Manual, Chapter 5 5-3

, RWP1-5 Financial Analysis: American Eagle GF GF GF GF




($ in thousands)
GF GF




Requirement 1 GF




Total assets GF = $3,328,679 GF




Total liabilities GF




= $2,080,826 GF G
F




Stockholders’ equity GF = $1,247,853 GF




Assets = Liabilities + Stockholders’ Equity GF




$3,328,679 = $2,080,826 + $1,247,853

Requirement 2 GF




Consolidated Statements of Operations GF GF GF




Requirement 3 GF




Net sales GF = $4,308,212 GF




Net income GF = $191,257 GF




Requirement 4 GF




Inflows Outflows
Investing activities GF Sale of available-for-sale
GF GF Capital expenditures for GF GF




investments property and equipment GF GF




Financing activities GF Net proceeds from stock
GF GF GF G
F Repurchase of common stock GF GF GF




options exercised GF




Requirement 5 GF




The company’s auditor is Ernst & Young LLP.
GF GF GF GF GF GF GF




The auditor states, ―We have audited the accompanying consolidated balance sheets of American Eagl
GF GF GF GF GF GF GF GF GF GF GF GF GF




e Outfitters, Inc. (the Company) as of February 1, 2020 and February 2, 2019, the related consolidated
GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF




statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the
GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF




three years in the period ended February 1, 2020, and the related notes (collectively referred to as the ―
GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF




consolidated financial statements‖). In our opinion, the consolidated financial statements present fairl
GF GF GF GF GF GF GF GF GF GF GF




y, in all material respects, the financial position of the Company at February 1, 2020 and February 2, 2
GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF




019, and the results of its operations and its cash flows for each of the threeyears in the period ended F
GF GF GF GF GF GF GF GF GF GF GF GF GF GF GF G
F GF GF GF GF GF




ebruary 1, 2020, in conformity with U.S. generally accepted accounting principles.‖
GF GF GF GF GF GF GF GF GF GF




©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
5-4 Financial Accounting for Managers