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
57 57 57



CHAPTER571:57Financial57Statements57and57Business57Decisions
Focus57Company:57Le-Nature’s57Inc.
CHAPTER572:57Investing57and57Financing57Decisions57and57the57Accounting57System
Focus57Company:57Chipotle57Mexican57Grill
CHAPTER573:57Operating57Decisions57and57the57Accounting57System
Focus57Company:57Chipotle57Mexican57Grill
CHAPTER574:57Adjustments,57Financial57Statements,57and57the57Closing57Process
Focus57Company:57Chipotle57Mexican57Grill
CHAPTER575:57Communicating57and57Analyzing57Accounting57Information
Focus57Company:57Apple57Inc.
CHAPTER576:57Reporting57and57Interpreting57Sales57Revenue,57Receivables,57and57Cash
Focus57Company:57Skechers57U.S.A.
CHAPTER577:57Reporting57and57Interpreting57Cost57of57Goods57Sold57and57Inventory
Focus57Company:57Harley-Davidson,57Inc.
CHAPTER578:57Reporting57and57Interpreting57Property,57Plant,57and57Equipment;57Intangibles;57an
d57Natural57Resources
Focus57Company:57FedEx57Corporation
CHAPTER579:57Reporting57and57Interpreting57Liabilities
Focus57Company:57Starbucks
CHAPTER5710:57Reporting57and57Interpreting57Bond57Securities
Focus57Company:57Amazon
CHAPTER5711:57Reporting57and57Interpreting57Stockholders’57Equity
Focus57Company:57Microsoft
CHAPTER5712:57Statement57of57Cash57Flows
Focus57Company:57National57Beverage57Corporation
CHAPTER5713:57Analyzing57Financial57Statements
Focus57Company:57The57Home57Depot

,Chapter 1 57


Financial Statements and Business Decisions
57 57 57 57




ANSWERS57TO57QUESTIONS

1. Accounting57is57a57system57that57collects57and57processes57(analyzes,57measures
,57and57records)57financial57information57about57an57organization57and57reports57t
hat57information57to57decision57makers.

2. Financial57accounting57involves57preparation57of57the57four57basic57financial57state
ments57and57related57disclosures57for57external57decision57makers.57Managerial57ac
counting57involves57the57preparation57of57detailed57plans,57budgets,57forecasts,57a
nd57performance57reports57for57internal57decision57makers.

3. Financial57reports57are57used57by57both57internal57and57external57groups57and57indi
viduals.57The57internal57groups57are57comprised57of57the57various57managers57of57th
e57entity.57The57external57groups57include57the57owners,57investors,57creditors,57go
vernmental57agencies,57other57interested57parties,57and57the57public57at57large.

4. Investors57purchase57all57or57part57of57a57business57and57hope57to57gain57by57rec
eiving57part57of57what57the57company57earns57and/or57selling57their57ownership57i
nterest57in57the57company57in57the57future57at57a57higher57price57than57they57paid.
57Creditors57lend57money57to57a57company57for57a57specific57length57of57time57and5
7hope57to57gain57by57charging57interest57on57the57loan.

, 5. In57a57society,57each57organization57can57be57defined57as57a57separate57accountin
g57entity.57An57accounting57entity57is57the57organization57for57which57financial57data
57are57to57be57collected.57Typical57accounting57entities57are57a57business,57a57chur
ch,57a57governmental57unit,57a57university57and57other57nonprofit57organizations57s
uch57as57a57hospital57and57a57welfare57organization.57A57business57typically57is57de
fined57and57treated57as57a57separate57entity57because57the57owners,57creditors,57in
vestors,57and57other57interested57parties57need57to57evaluate57its57performance57an
d57its57potential57separately57from57other57entities57and57from57its57owners.

6. Name57of57Statement Alternative57Title
(a) Income57Statement (a)57Statement57of57Earnings;57Statement57of
Income;57Statement57of57Operations
(b) Balance57Sheet (b)57Statement57of57Financial57Position
(c) Cash57Flow57Statement (c)5 7 Statement57of57Cash57Flows

7. The57heading57of57each57of57the57four57required57financial57statements57should5
7include57the57following:
(a) Name57of57the57entity
(b) Name57of57the57statement
(c) Date57of57the57statement,57or57the57period57of57time
(d) Unit57of57measure

8. (a)
The57purpose57of57the57income57statement57is57to57present57information57a
bout57the57revenues,57expenses,57and57the57net57income57of57an57entity57for
57a57specified57period57of57time.
(b) The57purpose57of57the57balance57sheet57is57to57report57the57financial57position
57of57an57entity57at57a57given57date,57that57is,57to57report57information57about57t
he57assets,57liabilities57and57stockholders’57equity57of57the57entity57as57of57a57
specific57date.
(c) The57purpose57of57the57statement57of57cash57flows57is57to57present57informati
on57about57the57flow57of57cash57into57the57entity57(sources),57the57flow57of57cas
h57out57of57the57entity57(uses),57and57the57net57increase57or57decrease57in57ca
sh57during57the57period.
(d) The57statement57of57stockholders’57equity57reports57the57changes57in57each5
7of57the57company’s57stockholders’57equity57accounts57during57 the57accounti
ng57period,57including57issue57and57repurchase57of57stock57and57the57way57t
hat57net57income57and57distribution57of57dividends57affected57the57retained57
earnings57of57the57company57during57that57period.

9. The57income57statement57and57the57statement57of57cash57flows57are57dated57―F
or57the57Year57Ended57December5731‖57because57they57report57the57inflows57an
d57outflows57of57resources57during57a57period57of57time.57In57contrast,57the57bala
nce57sheet57is57dated57―At57December5731‖57because57it57represents57the57resour
ces,57obligations,57and57stockholders’57equity57at57a57specific57date.