SOLUTION MANUAL FOR Financial Accounting 11th Edition by Robert Libby, All Chapters 1 - 13 

SOLUTION MANUAL FOR

Financial Accounting 11th Edition
by Robert Libby, All Chapters 1 - 13

,TABLE OF CONTENTS
l2 l2 l2




CHAPTERl21:l2Financiall2Statementsl2andl2Businessl2Decisions
Focusl2Company:l2Le-Nature’sl2Inc.
CHAPTERl22:l2Investingl2andl2Financingl2Decisionsl2andl2thel2Accountingl2System
Focusl2Company:l2Chipotlel2Mexicanl2Grill
CHAPTERl23:l2Operatingl2Decisionsl2andl2thel2Accountingl2System
Focusl2Company:l2Chipotlel2Mexicanl2Grill
CHAPTERl24:l2Adjustments,l2Financiall2Statements,l2andl2thel2Closingl2Process
Focusl2Company:l2Chipotlel2Mexicanl2Grill
CHAPTERl25:l2Communicatingl2andl2Analyzingl2Accountingl2Information
Focusl2Company:l2Applel2Inc.
CHAPTERl26:l2Reportingl2andl2Interpretingl2Salesl2Revenue,l2Receivables,l2andl2Cash
Focusl2Company:l2Skechersl2U.S.A.
CHAPTERl27:l2Reportingl2andl2Interpretingl2Costl2ofl2Goodsl2Soldl2andl2Inventory
Focusl2Company:l2Harley-Davidson,l2Inc.
CHAPTERl28:l2Reportingl2andl2Interpretingl2Property,l2Plant,l2andl2Equipment;l2Intangibles;l2andl2Natur
all2Resources
Focusl2Company:l2FedExl2Corporation
CHAPTERl29:l2Reportingl2andl2Interpretingl2Liabilities
Focusl2Company:l2Starbucks
CHAPTERl210:l2Reportingl2andl2Interpretingl2Bondl2Securities
Focusl2Company:l2Amazon
CHAPTERl211:l2Reportingl2andl2Interpretingl2Stockholders’l2Equity
Focusl2Company:l2Microsoft
CHAPTERl212:l2Statementl2ofl2Cashl2Flows
Focusl2Company:l2Nationall2Beveragel2Corporation
CHAPTERl213:l2Analyzingl2Financiall2Statements
Focusl2Company:l2Thel2Homel2Depot

,Chapter 1 l2



Financial Statements and Business Decisions
l2 l2 l2 l2




ANSWERSl2TOl2QUESTIONS

1. Accountingl2isl2al2systeml2thatl2collectsl2andl2processesl2(analyzes,l2measures,l2andl2r
ecords)l2financiall2informationl2aboutl2anl2organizationl2andl2reportsl2thatl2informationl
2to2
ldecisionl2makers.



2. Financiall2accountingl2involvesl2preparationl2ofl2thel2fourl2basicl2financiall2statementsl2
and2lrelatedl2disclosuresl2forl2externall2decisionl2makers.l2Manageriall2accountingl2invo
lvesl2thel2preparationl2ofl2detailedl2plans,l2budgets,l2forecasts,l2andl2performancel2repo
rtsl2forl2internall2 decisionl2makers.

3. Financiall2reportsl2arel2usedl2byl2bothl2internall2andl2externall2groupsl2andl2individuals.l2
The2linternall2groupsl2arel2comprisedl2ofl2thel2variousl2managersl2ofl2thel2entity.l2Thel2ext
ernall2groupsl2includel2thel2owners,l2investors,l2creditors,l2governmentall2agencies,l2ot
herl2interestedl2parties,l2andl2thel2publicl2atl2large.

4. Investorsl2purchasel2alll2orl2partl2ofl2al2businessl2andl2hopel2tol2gainl2byl2receivingl2partl
2ofl2whatl2thel2companyl2earnsl2and/orl2sellingl2 theirl2ownershipl2interestl2inl2thel2comp

anyl2inl2thel2futurel2atl2al2higherl2pricel2thanl2theyl2paid.l2Creditorsl2lendl2moneyl2tol2al2c
ompanyl2for2lal2specificl2lengthl2ofl2timel2andl2hopel2tol2gainl2byl2chargingl2interestl2onl2t
hel2loan.

, 5. Inl2al2society,l2eachl2organizationl2canl2bel2definedl2asl2al2separatel2accountingl2entity.l2
Anl2accountingl2entityl2isl2thel2organizationl2forl2whichl2financiall2datal2arel2tol2bel2collect
ed.l2Typicall2accountingl2entitiesl2arel2al2business,l2al2church,l2al2governmentall2unit,l2al
2universityl2andl2otherl2nonprofitl2organizationsl2suchl2asl2al2hospitall2 andl2al2welfarel2or

ganization.l2Al2businessl2typicallyl2isl2definedl2andl2treatedl2asl2al2separatel2entityl2beca
usel2thel2owners,l2creditors,l2investors,l2andl2otherl2interestedl2partiesl2needl2tol2evalua
tel2itsl2performancel2andl2itsl2potentiall2separatelyl2froml2otherl2entitiesl2andl2froml2its2low
ners.

6. Namel2ofl2Statement Alternativel2Title
(a) Incomel2Statement (a)l2 Statementl2ofl2Earnings;l2Statementl2of
Income;l2Statementl2ofl2Operations
(b) Balancel2Sheet (b)l2Statementl2ofl2Financiall2Position
(c) Cashl2Flowl2Statement (c)l 2 Statementl2ofl2Cashl2Flows

7. Thel2headingl2ofl2eachl2ofl2thel2fourl2requiredl2financiall2statementsl2shouldl2includel
2the2
lfollowing:

(a) Namel2ofl2thel2entity
(b) Namel2ofl2thel2statement
(c) Datel2ofl2thel2statement,l2orl2thel2periodl2ofl2time
(d) Unitl2ofl2measure

8. (a)
Thel2purposel2ofl2thel2incomel2statementl2isl2tol2presentl2informationl2aboutl2the
revenues,l2expenses,l2andl2thel2netl2incomel2ofl2anl2entityl2forl2al2specifiedl2peri
l2

odl2of2ltime.
(b) Thel2purposel2ofl2thel2balancel2sheetl2isl2tol2reportl2thel2financiall2positionl2ofl2anl2e
ntity2latl2al2givenl2date,l2thatl2is,l2tol2reportl2informationl2aboutl2thel2assets,l2 liabilitie
sl2andl2stockholders’l2equityl2ofl2thel2entityl2asl2ofl2al2specificl2date.
(c) Thel2purposel2ofl2thel2statementl2ofl2cashl2flowsl2isl2tol2presentl2informationl2aboutl
2the2lflowl2ofl2cashl2intol2thel2entityl2(sources),l2thel2flowl2ofl2cashl2outl2ofl2thel2entityl2

(uses),l2andl2thel2netl2increasel2orl2decreasel2inl2cashl2duringl2thel2period.
(d) Thel2statementl2ofl2stockholders’l2equityl2reportsl2thel2changesl2inl2eachl2ofl2thel2
company’sl2stockholders’l2equityl2accountsl2duringl2 thel2accountingl2period,l2incl
udingl2issuel2andl2repurchasel2ofl2stockl2andl2thel2wayl2thatl2netl2incomel2andl2dis
tributionl2ofl2dividendsl2affectedl2thel2retainedl2earningsl2ofl2thel2companyl2during2l
thatl2period.

9. Thel2incomel2statementl2andl2thel2statementl2ofl2cashl2flowsl2arel2datedl2―Forl2thel2Y
earl2Endedl2Decemberl231‖l2becausel2theyl2reportl2thel2inflowsl2andl2outflowsl2ofl2res
ourcesl2duringl2al2periodl2ofl2time.l2Inl2contrast,l2thel2balancel2sheetl2isl2datedl2―Atl2De
cemberl231‖2lbecausel2itl2representsl2thel2resources,l2obligations,l2andl2stockholders’
l2equityl2atl2al2specificl2date.