SOLUTION MANUAL FOR FINANCIAL ACCOUNTING FOR MANAGERS 1ST EDITION BY WAYNE THOMAS AND DAVID SPICELAND AND MARK NELSON

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 EDGAR Nike (ticker: NKE)
Requirement 1 RT




a. $23,717 million RT




b. $9,040 million RT




c. Total liabilities = Total assets – total shareholder’s equity
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$23,717 – $9,040 = $14,677 million
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Requirement 2 RT




a. $39,117 million. Revenue increased from the previous year.
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b. $4,029 million. Net income increased from the previous year.
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Requirement 3 RT




a. Operating cash flow = $5,903 million. Operating cash flow was more positive
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than the previous year.
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b. Investing cash flow = −$264 million. Investing cash flow went from positive toneg
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ative from the previous year.
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c. Financing cash flow = −$5,293 million. Financing cash flow was more negative
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than the previous year.
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RWP1-2 EDGAR Netflix Inc (ticker: NFLX)
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Requirement 1 RT




a. Average paying membership increased by 23% and average monthly revenue per
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paying membership increased by 5%.
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b. $2,795,434 / $20,156,447 = 13.9% RT RT RT RT




c. $2,652,462, 13% of revenues RT RT RT




Requirement 2 RT




a. $9,801,215 / $24,504,567 = 40% RT RT RT RT




b. $33,141 million RT




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Solutions Manual, Chapter
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5

,©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
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5-2 Financial Accounting for Managers
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,Requirement 3 RT




a. $20,723,441. Long-term debt went up from the previous year. R T RT RT RT RT RT RT RT




b. $736,969

Requirement 4 RT




9%

Requirement 5 RT




a. Ernst & Young LLP RT RT RT




b. Yes



RWP1-3 EDGAR General Mills Inc. (ticker: GIS) RT RT RT RT RT RT




Requirement 1 RT




First Quarter. RT




Requirement 2 RT




August 26, 2018. The same quarter of last year is used as the comparison quarter.
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Requirement 3 RT




The quarterly report includes 15 notes.
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RWP1-4 EDGAR Nordstrom Inc. (ticker: JWN) RT RT RT RT RT




Requirement 1 RT




The COVID-19 pandemic.
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Requirement 2 RT




On March 23, 2020, the Company announced that it would be taking several steps in an abundanceof
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caution to proactively strengthen its financial flexibility and navigate through this unprecedentedsitua
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tion. Specifically, the Company suspended its quarterly dividend beginning in the second quarter of 2
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020, drew down $800 million on its Revolving Credit Facility, targeted further reductions of more th
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an $500 million in operating expenses, capital expenditures, and working capital, and suspended shar
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e repurchases.
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©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
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Solutions Manual, Chapter RT R T RT 5-3
5

, RWP1-5 Financial Analysis: American Eagle RT RT RT RT




($ in thousands)
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Requirement 1 RT




Total assets RT = $3,328,679 RT




Total liabilities RT




= $2,080,826 RT R
T




Stockholders’ equity RT = $1,247,853 RT




Assets = Liabilities + Stockholders’ Equity RT




$3,328,679 = $2,080,826 + $1,247,853

Requirement 2 RT




Consolidated Statements of Operations RT RT RT




Requirement 3 RT




Net sales RT = $4,308,212 RT




Net income RT = $191,257 RT




Requirement 4 RT




Inflows Outflows
Investing activities RT Sale of available-for-sale RT RT Capital expenditures for RT RT




investments property and equipment RT RT




Financing activities RT Net proceeds from stock RT RT RT R
T Repurchase of common stock RT RT RT




options exercised RT




Requirement 5 RT




The company’s auditor is Ernst & Young LLP.
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The auditor states, ―We have audited the accompanying consolidated balance sheets of American Eagl
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e Outfitters, Inc. (the Company) as of February 1, 2020 and February 2, 2019, the related consolidated
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statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the
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three years in the period ended February 1, 2020, and the related notes (collectively referred to as the ―
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consolidated financial statements‖). In our opinion, the consolidated financial statements present fairl
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y, in all material respects, the financial position of the Company at February 1, 2020 and February 2, 2
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019, and the results of its operations and its cash flows for each of the threeyears in the period ended F
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ebruary 1, 2020, in conformity with U.S. generally accepted accounting principles.‖
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©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
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5-4 Financial Accounting for Managers
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