SOLUTIONS MANUAL
FINANCIAL ACCOUNTING FOR MANAGERS
2024 RELEASE
CHAPTER NO. 01: A FRAMEWORK FOR FINANCIAL ACCOUNTING
REAL WORLD PERSPECTIVES
RWP1-1 EDGAR Nike (ticker: NKE)
Requirement 1
a. $40,321 million
b. $15,281 million
c. Total liabilities = Total assets – total shareholder’s equity
$40,321 – $15,281 = $25,040 million
Requirement 2
a. $46,710 million. Revenue increased from the previous year.
b. $6,046 million. Net income increased from the previous year.
Requirement 3
a. Operating cash flow = $5,188 million. Operating cash flow was less positive
than the previous year.
b. Investing cash flow = −$1,524 million. Investing cash flow was less negative
than those of the previous year.
c. Financing cash flow = −$4,836 million. Financing cash flow was more negative
than the previous year.
RWP1-2 EDGAR Netflix Inc (ticker: NFLX)
Requirement 1
a. Average paying membership increased by 6% and average monthly revenue per paying
membership increased by 1%.
b. $4,069,973 / $31,615,550 = 12.9%
c. $2,530,502 thousand, 8% of revenues
Requirement 2
a. $20,004,164 / $32,736,713 = 61.1%
b. $52,106 thousand
,Requirement 3
14,353 million. Long-term debt went down from the previous year.
Requirement 4
15%
Requirement 5
a. Ernst & Young LLP
b. Yes
RWP1-3 EDGAR General Mills Inc. (ticker: GIS)
Requirement 1
First Quarter.
Requirement 2
August 29, 2021. The same quarter of last year is used as the comparison quarter.
Requirement 3
The quarterly report includes 17 notes.
RWP1-4 EDGAR Nordstrom Inc. (ticker: JWN)
Requirement 1
The appointment of a new member of the board of directors.
Requirement 2
The new board member is an expert in cybersecurity and fraud prevention.
RWP1-5 Financial Analysis: American Eagle Outfitters, Inc.
($ in thousands)
Requirement 1
Total assets = $3,420,956
Total liabilities = $1,821,793
Stockholders’ equity = $1,599,163
Assets = Liabilities + Stockholders’ Equity
$
3,420,956 = $ 1,821,793 + $ 1,599,163
,Requirement 2
Consolidated Statements of Operations
Requirement 3
Net sales $ 4,989,833
Net income $ 125,136
Requirement 4
Inflows Outflows
Investing activities There are no investing inflows Capital expenditures for
reported property and equipment
Financing activities Net proceeds from stock Accelerated share repurchase
options exercised
Requirement 5
The company’s auditor is Ernst & Young LLP.
The auditor states:
“
We have audited the accompanying consolidated balance sheets of American Eagle Outfitters, Inc.
(the Company) as of January 28, 2023 and January 29, 2022, the related consolidated statements of
operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three
years in the period ended January 28, 2023, and the related notes (collectively referred to as the
“consolidated financial statements”). In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of the Company at January 28, 2023 and January
29, 2022, and the results of its operations and its cash flows for each of the three years in the period
ended January 28, 2023, in conformity with U.S. generally accepted accounting principles.”
RWP1-6 Financial Analysis Case: The Buckle, Inc.
($ in thousands)
Requirement 1
Total assets = $837,579
Total liabilities = $461,265
Stockholders’ equity = $376,314
Assets = Liabilities + Stockholders’ Equity
$
837,579 = $ 461,265 + $ 376,314
Requirement 2
Consolidated Statements of Income
, Requirement 3
Net sales $ 1,345,187
Net income $ 254,626
Requirement 4
Inflows Outflows
Investing activities Proceeds from sales/maturities Purchases of investments
of investments
Financing activities There are no financing inflows Payment of dividends
reported
Requirement 5
The company’s auditor is Deloitte & Touche LLP.
The auditor states:
“
We have audited the accompanying consolidated balance sheets of The Buckle, Inc. and subsidiary
(the "Company") as of January 28, 2023 and January 29, 2022, the related consolidated statements of
income, comprehensive income, stockholders' equity, and cash flows, for each of the three fiscal
years in the period ended January 28, 2023, and the related notes and the schedule listed in the Index
at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of January
28, 2023 and January 29 2022, and the results of its operations and its cash flows for each of the
three years in the period ended January 28, 2023, in conformity with accounting principles generally
accepted in the United States of America.”
RWP1-7 Comparative Analysis: American Eagle Outfitters, Inc. vs. The Buckle,
Inc.
Requirement 1
The total assets of American Eagle are higher than the total assets of The Buckle.
Requirement 2
The total liabilities of American Eagle are higher than the total liabilities of The Buckle.
A higher amount of liabilities does not necessarily mean a higher chance of bankruptcy. The
probability of bankruptcy relates to the ability of a company to repay its liabilities as they become due.
If sufficient resources are available, then high levels of debt can be paid.
FINANCIAL ACCOUNTING FOR MANAGERS
2024 RELEASE
CHAPTER NO. 01: A FRAMEWORK FOR FINANCIAL ACCOUNTING
REAL WORLD PERSPECTIVES
RWP1-1 EDGAR Nike (ticker: NKE)
Requirement 1
a. $40,321 million
b. $15,281 million
c. Total liabilities = Total assets – total shareholder’s equity
$40,321 – $15,281 = $25,040 million
Requirement 2
a. $46,710 million. Revenue increased from the previous year.
b. $6,046 million. Net income increased from the previous year.
Requirement 3
a. Operating cash flow = $5,188 million. Operating cash flow was less positive
than the previous year.
b. Investing cash flow = −$1,524 million. Investing cash flow was less negative
than those of the previous year.
c. Financing cash flow = −$4,836 million. Financing cash flow was more negative
than the previous year.
RWP1-2 EDGAR Netflix Inc (ticker: NFLX)
Requirement 1
a. Average paying membership increased by 6% and average monthly revenue per paying
membership increased by 1%.
b. $4,069,973 / $31,615,550 = 12.9%
c. $2,530,502 thousand, 8% of revenues
Requirement 2
a. $20,004,164 / $32,736,713 = 61.1%
b. $52,106 thousand
,Requirement 3
14,353 million. Long-term debt went down from the previous year.
Requirement 4
15%
Requirement 5
a. Ernst & Young LLP
b. Yes
RWP1-3 EDGAR General Mills Inc. (ticker: GIS)
Requirement 1
First Quarter.
Requirement 2
August 29, 2021. The same quarter of last year is used as the comparison quarter.
Requirement 3
The quarterly report includes 17 notes.
RWP1-4 EDGAR Nordstrom Inc. (ticker: JWN)
Requirement 1
The appointment of a new member of the board of directors.
Requirement 2
The new board member is an expert in cybersecurity and fraud prevention.
RWP1-5 Financial Analysis: American Eagle Outfitters, Inc.
($ in thousands)
Requirement 1
Total assets = $3,420,956
Total liabilities = $1,821,793
Stockholders’ equity = $1,599,163
Assets = Liabilities + Stockholders’ Equity
$
3,420,956 = $ 1,821,793 + $ 1,599,163
,Requirement 2
Consolidated Statements of Operations
Requirement 3
Net sales $ 4,989,833
Net income $ 125,136
Requirement 4
Inflows Outflows
Investing activities There are no investing inflows Capital expenditures for
reported property and equipment
Financing activities Net proceeds from stock Accelerated share repurchase
options exercised
Requirement 5
The company’s auditor is Ernst & Young LLP.
The auditor states:
“
We have audited the accompanying consolidated balance sheets of American Eagle Outfitters, Inc.
(the Company) as of January 28, 2023 and January 29, 2022, the related consolidated statements of
operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three
years in the period ended January 28, 2023, and the related notes (collectively referred to as the
“consolidated financial statements”). In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of the Company at January 28, 2023 and January
29, 2022, and the results of its operations and its cash flows for each of the three years in the period
ended January 28, 2023, in conformity with U.S. generally accepted accounting principles.”
RWP1-6 Financial Analysis Case: The Buckle, Inc.
($ in thousands)
Requirement 1
Total assets = $837,579
Total liabilities = $461,265
Stockholders’ equity = $376,314
Assets = Liabilities + Stockholders’ Equity
$
837,579 = $ 461,265 + $ 376,314
Requirement 2
Consolidated Statements of Income
, Requirement 3
Net sales $ 1,345,187
Net income $ 254,626
Requirement 4
Inflows Outflows
Investing activities Proceeds from sales/maturities Purchases of investments
of investments
Financing activities There are no financing inflows Payment of dividends
reported
Requirement 5
The company’s auditor is Deloitte & Touche LLP.
The auditor states:
“
We have audited the accompanying consolidated balance sheets of The Buckle, Inc. and subsidiary
(the "Company") as of January 28, 2023 and January 29, 2022, the related consolidated statements of
income, comprehensive income, stockholders' equity, and cash flows, for each of the three fiscal
years in the period ended January 28, 2023, and the related notes and the schedule listed in the Index
at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of January
28, 2023 and January 29 2022, and the results of its operations and its cash flows for each of the
three years in the period ended January 28, 2023, in conformity with accounting principles generally
accepted in the United States of America.”
RWP1-7 Comparative Analysis: American Eagle Outfitters, Inc. vs. The Buckle,
Inc.
Requirement 1
The total assets of American Eagle are higher than the total assets of The Buckle.
Requirement 2
The total liabilities of American Eagle are higher than the total liabilities of The Buckle.
A higher amount of liabilities does not necessarily mean a higher chance of bankruptcy. The
probability of bankruptcy relates to the ability of a company to repay its liabilities as they become due.
If sufficient resources are available, then high levels of debt can be paid.
