SOLUTION MANUAL FOR
FINANCIAL ACCOUNTING FOR MANAGERS 1ST EDITION BY WAYNE THOMAS
AND DAVID SPICELAND AND MARK NELSON
CHAPTER 1
A FRAMEWORK FOR FINANCIAL ACCOUNTING
REAL WORLD PERSPECTIVES
RWP1-1 uEDGAR uNike u(ticker: uNKE)
Requirement u1
a. $23,717 umillion
b. $9,040 umillion
c. Total uliabilities u= uTotal uassets u– utotal ushareholder’s
uequity
$23,717 u– u$9,040 u= u$14,677 umillion
Requirement u2
a. $39,117 umillion. uRevenue uincreased ufrom uthe uprevious
uyear.
b. $4,029 umillion. uNet uincome uincreased ufrom uthe uprevious
uyear.
Requirement u3
a. Operating ucash uflow u= u$5,903 umillion. uOperating ucash uflow uwas umore
upositive
than uthe uprevious uyear.
b. Investing ucash uflow u= u−$264 umillion. uInvesting ucash uflow uwent ufrom
upositive utounegative ufrom uthe uprevious u year.
c. Financing ucash uflow u= u−$5,293 umillion. uFinancing ucash uflow uwas umore
unegative
than uthe uprevious uyear.
RWP1-2 uEDGAR uNetflix uInc u(ticker: uNFLX)
Requirement u1
a. Average upaying umembership uincreased uby u23% uand uaverage umonthly urevenue
uper
paying umembership uincreased uby u5%.
b. $2,795,434 u/ u$20,156,447 u= u13.9%
c. $2,652,462, u13% uof urevenues
Requirement
©McGraw Hill LLC. u2 rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
All
Solutions Manual, Chapter 5 5-1
, a. $9,801,215 u/ u$24,504,567 u=
u40%
b. $33,141 umillion
©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 u3
a. $20,723,441. u Long-term udebt uwent uup ufrom uthe uprevious
uyear.
b. $736,969
Requirement u4
9%
Requirement u5
a. Ernst u& uYoung uLLP
b. Yes
RWP1-3 uEDGAR uGeneral uMills uInc. u(ticker: uGIS)
Requirement u1
First uQuarter.
Requirement u2
August u26, u2018. u The usame uquarter uof ulast uyear u is uused uas uthe ucomparison uquarter.
Requirement u3
The uquarterly ureport uincludes u15 unotes.
RWP1-4 uEDGAR uNordstrom uInc. u(ticker: uJWN)
Requirement u1
The uCOVID-19 upandemic.
Requirement u2
On uMarch u23, u2020, uthe uCompany uannounced uthat uit uwould ube utaking useveral usteps uin uan
uabundanceuof ucaution uto uproactively ustrengthen uits ufinancial uflexibility uand u navigate uthrough
uthis uunprecedentedusituation. uSpecifically, uthe uCompany ususpended uits uquarterly udividend
ubeginning uin uthe usecond uquarter uof u2020, udrew udown u$800 umillion uon uits uRevolving uCredit
uFacility, utargeted ufurther ureductions uof umore uthan u$500 umillion uin uoperating uexpenses,
ucapital uexpenditures, uand uworking ucapital, uand ususpended ushare urepurchases.
©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
Solutions Manual, Chapter 5 5-3
, RWP1-5 uFinancial uAnalysis: uAmerican uEagle
($ uin uthousands)
Requirement u1
Total uassets = u$3,328,679
Total uliabilities =
u$2,080,826uStockholders’ uequity
=
u$1,247,853
Assets = Liabilities + Stockholders’
uEquity
$3,328,679 = $2,080,826 + $1,247,853
Requirement u2
Consolidated uStatements uof uOperations
Requirement u3
Net usales = u$4,308,212
Net uincome = u$191,257
Requirement u4
Inflows Outflows
Investing uactivities Sale uof uavailable-for- Capital uexpenditures ufor
sale property uand uequipment
investments
Financing uactivities Net uproceeds ufrom Repurchase uof ucommon
ustockuoptions ustock
uexercised
Requirement u5
The ucompany’s uauditor uis uErnst u& uYoung uLLP.
The uauditor ustates, u―We uhave uaudited uthe uaccompanying uconsolidated ubalance usheets uof
uAmerican uEagle uOutfitters, uInc. u(the uCompany) uas uof uFebruary u1, u2020 uand uFebruary u2,
u2019, uthe urelated uconsolidated ustatements uof uoperations, ucomprehensive uincome, ustockholders’
uequity uand ucash uflows ufor ueach uof uthe uthree uyears uin uthe uperiod uended uFebruary u1, u2020,
uand uthe urelated unotes u(collectively ureferred uto uas uthe u―consolidated ufinancial ustatements‖). u In
uour uopinion, u the uconsolidated u financial ustatements upresent ufairly, uin uall umaterial urespects, uthe
ufinancial uposition uof uthe uCompany uat uFebruary u1, u2020 uand uFebruary u2, u2019, uand uthe
uresults uof uits uoperations uand uits ucash uflows ufor ueach uof uthe uthreeuyears uin uthe uperiod uended
uFebruary u1, u2020, uin uconformity uwith uU.S. ugenerally uaccepted uaccounting uprinciples.‖
©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
FINANCIAL ACCOUNTING FOR MANAGERS 1ST EDITION BY WAYNE THOMAS
AND DAVID SPICELAND AND MARK NELSON
CHAPTER 1
A FRAMEWORK FOR FINANCIAL ACCOUNTING
REAL WORLD PERSPECTIVES
RWP1-1 uEDGAR uNike u(ticker: uNKE)
Requirement u1
a. $23,717 umillion
b. $9,040 umillion
c. Total uliabilities u= uTotal uassets u– utotal ushareholder’s
uequity
$23,717 u– u$9,040 u= u$14,677 umillion
Requirement u2
a. $39,117 umillion. uRevenue uincreased ufrom uthe uprevious
uyear.
b. $4,029 umillion. uNet uincome uincreased ufrom uthe uprevious
uyear.
Requirement u3
a. Operating ucash uflow u= u$5,903 umillion. uOperating ucash uflow uwas umore
upositive
than uthe uprevious uyear.
b. Investing ucash uflow u= u−$264 umillion. uInvesting ucash uflow uwent ufrom
upositive utounegative ufrom uthe uprevious u year.
c. Financing ucash uflow u= u−$5,293 umillion. uFinancing ucash uflow uwas umore
unegative
than uthe uprevious uyear.
RWP1-2 uEDGAR uNetflix uInc u(ticker: uNFLX)
Requirement u1
a. Average upaying umembership uincreased uby u23% uand uaverage umonthly urevenue
uper
paying umembership uincreased uby u5%.
b. $2,795,434 u/ u$20,156,447 u= u13.9%
c. $2,652,462, u13% uof urevenues
Requirement
©McGraw Hill LLC. u2 rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
All
Solutions Manual, Chapter 5 5-1
, a. $9,801,215 u/ u$24,504,567 u=
u40%
b. $33,141 umillion
©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 u3
a. $20,723,441. u Long-term udebt uwent uup ufrom uthe uprevious
uyear.
b. $736,969
Requirement u4
9%
Requirement u5
a. Ernst u& uYoung uLLP
b. Yes
RWP1-3 uEDGAR uGeneral uMills uInc. u(ticker: uGIS)
Requirement u1
First uQuarter.
Requirement u2
August u26, u2018. u The usame uquarter uof ulast uyear u is uused uas uthe ucomparison uquarter.
Requirement u3
The uquarterly ureport uincludes u15 unotes.
RWP1-4 uEDGAR uNordstrom uInc. u(ticker: uJWN)
Requirement u1
The uCOVID-19 upandemic.
Requirement u2
On uMarch u23, u2020, uthe uCompany uannounced uthat uit uwould ube utaking useveral usteps uin uan
uabundanceuof ucaution uto uproactively ustrengthen uits ufinancial uflexibility uand u navigate uthrough
uthis uunprecedentedusituation. uSpecifically, uthe uCompany ususpended uits uquarterly udividend
ubeginning uin uthe usecond uquarter uof u2020, udrew udown u$800 umillion uon uits uRevolving uCredit
uFacility, utargeted ufurther ureductions uof umore uthan u$500 umillion uin uoperating uexpenses,
ucapital uexpenditures, uand uworking ucapital, uand ususpended ushare urepurchases.
©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
Solutions Manual, Chapter 5 5-3
, RWP1-5 uFinancial uAnalysis: uAmerican uEagle
($ uin uthousands)
Requirement u1
Total uassets = u$3,328,679
Total uliabilities =
u$2,080,826uStockholders’ uequity
=
u$1,247,853
Assets = Liabilities + Stockholders’
uEquity
$3,328,679 = $2,080,826 + $1,247,853
Requirement u2
Consolidated uStatements uof uOperations
Requirement u3
Net usales = u$4,308,212
Net uincome = u$191,257
Requirement u4
Inflows Outflows
Investing uactivities Sale uof uavailable-for- Capital uexpenditures ufor
sale property uand uequipment
investments
Financing uactivities Net uproceeds ufrom Repurchase uof ucommon
ustockuoptions ustock
uexercised
Requirement u5
The ucompany’s uauditor uis uErnst u& uYoung uLLP.
The uauditor ustates, u―We uhave uaudited uthe uaccompanying uconsolidated ubalance usheets uof
uAmerican uEagle uOutfitters, uInc. u(the uCompany) uas uof uFebruary u1, u2020 uand uFebruary u2,
u2019, uthe urelated uconsolidated ustatements uof uoperations, ucomprehensive uincome, ustockholders’
uequity uand ucash uflows ufor ueach uof uthe uthree uyears uin uthe uperiod uended uFebruary u1, u2020,
uand uthe urelated unotes u(collectively ureferred uto uas uthe u―consolidated ufinancial ustatements‖). u In
uour uopinion, u the uconsolidated u financial ustatements upresent ufairly, uin uall umaterial urespects, uthe
ufinancial uposition uof uthe uCompany uat uFebruary u1, u2020 uand uFebruary u2, u2019, uand uthe
uresults uof uits uoperations uand uits ucash uflows ufor ueach uof uthe uthreeuyears uin uthe uperiod uended
uFebruary u1, u2020, uin uconformity uwith uU.S. ugenerally uaccepted uaccounting uprinciples.‖
©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
