SOLUTION MANUAL FOR m m
FINANCIALmACCOUNTINGmFORmMANAGERSm1STmEDITIONmBYmWAYNEmTHOM
ASmANDmDAVIDmSPICELANDmANDmMARKmNELSON
CHAPTER 1 m
m A FRAMEWORK FOR FINANCIAL ACCOUNTING
m m m m
m REAL WORLD PERSPECTIVES
m m
RWP1-1 EDGAR Nike (ticker: NKE)
m m m m
Requirementm1
a. $23,717mmillion
b. $9,040mmillion
c. Totalmliabilitiesm=mTotalmassetsm–mtotalmshareholder’smequity
$23,717m–m$9,040m=m$14,677mmillion
Requirementm2
a. $39,117mmillion.mRevenuemincreasedmfrommthempreviousmyear.
b. $4,029mmillion.mNetmincomemincreasedmfrommthempreviousmyear.
Requirementm3
a. Operatingmcashmflowm=m$5,903mmillion.mOperatingmcashmflowmwasmmorempositive
thanmthempreviousmyear.
b. Investingmcashmflowm=m−$264mmillion.mInvestingmcashmflowmwentmfrommpositivemtom
negativemfrommthempreviousmyear.
c. Financingmcashmflowm=m−$5,293mmillion.mFinancingmcashmflowmwasmmoremnegative
thanmthempreviousmyear.
RWP1-2 EDGAR Netflix Inc (ticker: NFLX)
m m m m m
Requirementm1
a. Averagempayingmmembershipmincreasedmbym23%mandmaveragemmonthlymrevenuemper
payingmmembershipmincreasedmbym5%.
b. $2,795,434m/m$20,156,447m=m13.9%
c. $2,652,462,m13%mofmrevenues
Requirementm2
a. $9,801,215m/m$24,504,567m=m40%
b. $33,141mmillion
©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
,Requirementm3
a. $20,723,441.m Long-termmdebtmwentmupmfrommthempreviousmyear.
b. $736,969
Requirementm4
9%
Requirementm5
a. Ernstm&mYoungmLLP
b. Yes
RWP1-3 EDGAR General Mills Inc. (ticker: GIS)
m m m m m m
Requirementm1
FirstmQuarter.
Requirementm2
Augustm26,m2018.m Themsamemquartermofmlastmyearm ismusedmasmthemcomparisonmquarter.
Requirementm3
Themquarterlymreportmincludesm15mnotes.
RWP1-4 EDGAR Nordstrom Inc. (ticker: JWN)
m m m m m
Requirementm1
ThemCOVID-19mpandemic.
Requirementm2
OnmMarchm23,m2020,mthemCompanymannouncedmthatmitmwouldmbemtakingmseveralmstepsminmanmabundan
cemofmcautionmtomproactivelymstrengthenmitsmfinancialmflexibilitymandmnavigatemthroughmthismunprecede
ntedmsituation.mSpecifically,mthemCompanymsuspendedmitsmquarterlymdividendmbeginningminmthemsecon
dmquartermofm2020,mdrewmdownm$800mmillionmonmitsmRevolvingmCreditmFacility,mtargetedmfurthermredu
ctionsmofmmoremthanm$500mmillionminmoperatingmexpenses,mcapitalmexpenditures,mandmworkingmcapital
,mandmsuspendedmsharemrepurchases.
©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
Solutions Manual, Chapter 5 5-3
, RWP1-5 Financial Analysis: American Eagle
m m m m
($minmthousands)
Requirementm1
Totalmassets =m$3,328,679
Totalmliabilities
=m$2,080,82
6mStockholders’mequity =m$1,247,853
Assets = Liabilities + Stockholders’mEquity
$3,328,679 = $2,080,826 + $1,247,853
Requirementm2
ConsolidatedmStatementsmofmOperations
Requirementm3
Netmsales =m$4,308,212
Netmincome =m$191,257
Requirementm4
Inflows Outflows
Investingmactivities Salemofmavailable-for-sale Capitalmexpendituresmfor
investments propertymandmequipment
Financingmactivities Netmproceedsmfrommstoc Repurchasemofmcommonmstoc
kmoptionsmexercised k
Requirementm5
Themcompany’smauditormismErnstm&mYoungmLLP.
Themauditormstates,m―WemhavemauditedmthemaccompanyingmconsolidatedmbalancemsheetsmofmAmericanm
EaglemOutfitters,mInc.m(themCompany)masmofmFebruarym1,m2020mandmFebruarym2,m2019,mthemrelatedmcon
solidatedmstatementsmofmoperations,mcomprehensivemincome,mstockholders’mequitymandmcashmflowsmfor
meachmofmthemthreemyearsminmthemperiodmendedmFebruarym1,m2020,mandmthemrelatedmnotesm(collectivelymr
eferredmtomasmthem―consolidatedmfinancialmstatements‖).mInmourmopinion,mthemconsolidatedm financialmsta
tementsmpresentmfairly,minmallmmaterialmrespects,mthemfinancialmpositionmofmthemCompanymatmFebruarym
1,m2020mandmFebruarym2,m2019,mandmthemresultsmofmitsmoperationsmandmitsmcashmflowsmformeachmofmthemt
hreemyearsminmthemperiodmendedmFebruarym1,m2020,minmconformitymwithmU.S.mgenerallymacceptedmaccou
ntingmprinciples.‖
©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
FINANCIALmACCOUNTINGmFORmMANAGERSm1STmEDITIONmBYmWAYNEmTHOM
ASmANDmDAVIDmSPICELANDmANDmMARKmNELSON
CHAPTER 1 m
m A FRAMEWORK FOR FINANCIAL ACCOUNTING
m m m m
m REAL WORLD PERSPECTIVES
m m
RWP1-1 EDGAR Nike (ticker: NKE)
m m m m
Requirementm1
a. $23,717mmillion
b. $9,040mmillion
c. Totalmliabilitiesm=mTotalmassetsm–mtotalmshareholder’smequity
$23,717m–m$9,040m=m$14,677mmillion
Requirementm2
a. $39,117mmillion.mRevenuemincreasedmfrommthempreviousmyear.
b. $4,029mmillion.mNetmincomemincreasedmfrommthempreviousmyear.
Requirementm3
a. Operatingmcashmflowm=m$5,903mmillion.mOperatingmcashmflowmwasmmorempositive
thanmthempreviousmyear.
b. Investingmcashmflowm=m−$264mmillion.mInvestingmcashmflowmwentmfrommpositivemtom
negativemfrommthempreviousmyear.
c. Financingmcashmflowm=m−$5,293mmillion.mFinancingmcashmflowmwasmmoremnegative
thanmthempreviousmyear.
RWP1-2 EDGAR Netflix Inc (ticker: NFLX)
m m m m m
Requirementm1
a. Averagempayingmmembershipmincreasedmbym23%mandmaveragemmonthlymrevenuemper
payingmmembershipmincreasedmbym5%.
b. $2,795,434m/m$20,156,447m=m13.9%
c. $2,652,462,m13%mofmrevenues
Requirementm2
a. $9,801,215m/m$24,504,567m=m40%
b. $33,141mmillion
©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
,Requirementm3
a. $20,723,441.m Long-termmdebtmwentmupmfrommthempreviousmyear.
b. $736,969
Requirementm4
9%
Requirementm5
a. Ernstm&mYoungmLLP
b. Yes
RWP1-3 EDGAR General Mills Inc. (ticker: GIS)
m m m m m m
Requirementm1
FirstmQuarter.
Requirementm2
Augustm26,m2018.m Themsamemquartermofmlastmyearm ismusedmasmthemcomparisonmquarter.
Requirementm3
Themquarterlymreportmincludesm15mnotes.
RWP1-4 EDGAR Nordstrom Inc. (ticker: JWN)
m m m m m
Requirementm1
ThemCOVID-19mpandemic.
Requirementm2
OnmMarchm23,m2020,mthemCompanymannouncedmthatmitmwouldmbemtakingmseveralmstepsminmanmabundan
cemofmcautionmtomproactivelymstrengthenmitsmfinancialmflexibilitymandmnavigatemthroughmthismunprecede
ntedmsituation.mSpecifically,mthemCompanymsuspendedmitsmquarterlymdividendmbeginningminmthemsecon
dmquartermofm2020,mdrewmdownm$800mmillionmonmitsmRevolvingmCreditmFacility,mtargetedmfurthermredu
ctionsmofmmoremthanm$500mmillionminmoperatingmexpenses,mcapitalmexpenditures,mandmworkingmcapital
,mandmsuspendedmsharemrepurchases.
©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
Solutions Manual, Chapter 5 5-3
, RWP1-5 Financial Analysis: American Eagle
m m m m
($minmthousands)
Requirementm1
Totalmassets =m$3,328,679
Totalmliabilities
=m$2,080,82
6mStockholders’mequity =m$1,247,853
Assets = Liabilities + Stockholders’mEquity
$3,328,679 = $2,080,826 + $1,247,853
Requirementm2
ConsolidatedmStatementsmofmOperations
Requirementm3
Netmsales =m$4,308,212
Netmincome =m$191,257
Requirementm4
Inflows Outflows
Investingmactivities Salemofmavailable-for-sale Capitalmexpendituresmfor
investments propertymandmequipment
Financingmactivities Netmproceedsmfrommstoc Repurchasemofmcommonmstoc
kmoptionsmexercised k
Requirementm5
Themcompany’smauditormismErnstm&mYoungmLLP.
Themauditormstates,m―WemhavemauditedmthemaccompanyingmconsolidatedmbalancemsheetsmofmAmericanm
EaglemOutfitters,mInc.m(themCompany)masmofmFebruarym1,m2020mandmFebruarym2,m2019,mthemrelatedmcon
solidatedmstatementsmofmoperations,mcomprehensivemincome,mstockholders’mequitymandmcashmflowsmfor
meachmofmthemthreemyearsminmthemperiodmendedmFebruarym1,m2020,mandmthemrelatedmnotesm(collectivelymr
eferredmtomasmthem―consolidatedmfinancialmstatements‖).mInmourmopinion,mthemconsolidatedm financialmsta
tementsmpresentmfairly,minmallmmaterialmrespects,mthemfinancialmpositionmofmthemCompanymatmFebruarym
1,m2020mandmFebruarym2,m2019,mandmthemresultsmofmitsmoperationsmandmitsmcashmflowsmformeachmofmthemt
hreemyearsminmthemperiodmendedmFebruarym1,m2020,minmconformitymwithmU.S.mgenerallymacceptedmaccou
ntingmprinciples.‖
©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
