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
a. $23,717 million
b. $9,040 million
c. Total liabilities = Total assets – total shareholder’s equity
$23,717 – $9,040 = $14,677 million
Requirement 2
a. $39,117 million. Revenue increased from the previous year.
b. $4,029 million. Net income increased from the previous year.
Requirement 3
a. Operating cash flow = $5,903 million. Operating cash flow was more positive
than the previous year.
b. Investing cash flow = −$264 million. Investing cash flow went from positive to
negative from the previous year.
c. Financing cash flow = −$5,293 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 23% and average monthly revenue per
paying membership increased by 5%.
b. $2,795,434 / $20,156,447 = 13.9%
c. $2,652,462, 13% of revenues
Requirement 2
a. $9,801,215 / $24,504,567 = 40%
b. $33,141 million
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Solutions Manual, Chapter 5 5-1
, Requirement 3
a. $20,723,441. Long-term debt went up from the previous year.
b. $736,969
Requirement 4
9%
Requirement 5
a. Ernst & Young LLP
b. Yes
RWP1-3 EDGAR General Mills Inc. (ticker: GIS)
Requirement 1
First Quarter.
Requirement 2
August 26, 2018. The same quarter of last year is used as the comparison quarter.
Requirement 3
The quarterly report includes 15 notes.
RWP1-4 EDGAR Nordstrom Inc. (ticker: JWN)
Requirement 1
The COVID-19 pandemic.
Requirement 2
On March 23, 2020, the Company announced that it would be taking several steps in an abundance
of caution to proactively strengthen its financial flexibility and navigate through this unprecedented
situation. Specifically, the Company suspended its quarterly dividend beginning in the second
quarter of 2020, drew down $800 million on its Revolving Credit Facility, targeted further
reductions of more than $500 million in operating expenses, capital expenditures, and working
capital, and suspended share repurchases.
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5-2 Financial Accounting for Managers
,RWP1-5 Financial Analysis: American Eagle
($ in thousands)
Requirement 1
Total assets = $3,328,679
Total liabilities = $2,080,826
Stockholders’ equity = $1,247,853
Assets = Liabilities + Stockholders’ Equity
$3,328,679 = $2,080,826 + $1,247,853
Requirement 2
Consolidated Statements of Operations
Requirement 3
Net sales = $4,308,212
Net income = $191,257
Requirement 4
Inflows Outflows
Investing activities Sale of available-for-sale Capital expenditures for
investments property and equipment
Financing activities Net proceeds from stock Repurchase of common stock
options exercised
Requirement 5
The company’s auditor is Ernst & Young LLP.
The auditor ystates, y―We yhave yaudited ythe yaccompanying yconsolidated ybalance ysheets yof
yAmerican yEagle yOutfitters, yInc. y(the yCompany) yas yof yFebruary y1, y2020 yand yFebruary y2,
y2019, ythe yrelated yconsolidated ystatements yof yoperations, ycomprehensive yincome, ystockholders’
yequity yand ycash yflows yfor yeach yof ythe ythree yyears yin ythe yperiod yended yFebruary y1, y2020,
yand ythe yrelated ynotes y(collectively yreferred yto yas ythe y―consolidated yfinancial ystatements‖). y In
your yopinion, ythe yconsolidated yfinancial ystatements ypresent yfairly, yin yall ymaterial yrespects, ythe
yfinancial yposition yof ythe yCompany yat yFebruary y1, y2020 yand yFebruary y2, y2019, yand ythe
yresults yof yits yoperations yand yits ycash yflows yfor yeach yof ythe ythreeyyears yin ythe yperiod yended
yFebruary y1, y2020, yin yconformity ywith yU.S. ygenerally yaccepted yaccounting yprinciples.‖
©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
Solutions Manual, Chapter 5 5-3
, RWP1-6 y Financial yAnalysis yCase: yThe yBuckle, yInc.
($ yin ythousands)
Requirement y1
Total yassets = y$867,890
Total yliabilities =
y$478,742yStockholders’ yequity =
y$389,148
Assets = Liabilities + Stockholders’
yEquity
$867,890 = $478,742 + $389,148
Requirement y2
Consolidated yStatements yof yIncome
Requirement y3
Net ysales = y$900,254
Net yincome = y$104,429
Requirement y4
Inflows Outflows
Investing yactivities Proceeds yfrom Purchases yof
ysales/maturities yinvestments
of yinvestments
Financing yactivities There yare ynone Payment yof ydividends
Requirement y5
The ycompany’s yauditor yis yDeloitte y& yTouche yLLP.
The yauditor ystates, y―We yhave yaudited ythe yaccompanying yconsolidated ybalance ysheets yof yThe
yBuckle, yInc. yand ysubsidiary y(the y"Company") yas yof yFebruary y1, y2020 yand yFebruary y2, y2019,
ythe yrelated yconsolidated ystatements yof yincome, ycomprehensive yincome, ystockholders’ yequity,
yand ycash yflows, yforyeach yof ythe ythree yfiscal yyears yin ythe yperiod yended yFebruary y1, y2020, yand
ythe yrelated ynotes yand ythe yschedule ylisted yin ythe yIndex yat yItem y15 y(collectively yreferred yto yas
ythe y"financial ystatements"). yIn your yopinion, ythe yfinancial ystatements ypresent yfairly, yin yall
ymaterial yrespects, ythe yfinancial yposition yof ythe yCompany yas yof yFebruary y1, y2020 yand
yFebruary y2, y2019, yand ythe yresults yof yits yoperations yand yits ycash yflows yfor yeach yof ythe ythree
yfiscal yyears yin ythe yperiod yended yFebruary y1, y2020, yin yconformity ywith yaccounting yprinciples
ygenerally yaccepted yin ythe yUnited yStates yof yAmerica.‖
©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 EDGAR Nike (ticker: NKE)
Requirement 1
a. $23,717 million
b. $9,040 million
c. Total liabilities = Total assets – total shareholder’s equity
$23,717 – $9,040 = $14,677 million
Requirement 2
a. $39,117 million. Revenue increased from the previous year.
b. $4,029 million. Net income increased from the previous year.
Requirement 3
a. Operating cash flow = $5,903 million. Operating cash flow was more positive
than the previous year.
b. Investing cash flow = −$264 million. Investing cash flow went from positive to
negative from the previous year.
c. Financing cash flow = −$5,293 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 23% and average monthly revenue per
paying membership increased by 5%.
b. $2,795,434 / $20,156,447 = 13.9%
c. $2,652,462, 13% of revenues
Requirement 2
a. $9,801,215 / $24,504,567 = 40%
b. $33,141 million
©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
, Requirement 3
a. $20,723,441. Long-term debt went up from the previous year.
b. $736,969
Requirement 4
9%
Requirement 5
a. Ernst & Young LLP
b. Yes
RWP1-3 EDGAR General Mills Inc. (ticker: GIS)
Requirement 1
First Quarter.
Requirement 2
August 26, 2018. The same quarter of last year is used as the comparison quarter.
Requirement 3
The quarterly report includes 15 notes.
RWP1-4 EDGAR Nordstrom Inc. (ticker: JWN)
Requirement 1
The COVID-19 pandemic.
Requirement 2
On March 23, 2020, the Company announced that it would be taking several steps in an abundance
of caution to proactively strengthen its financial flexibility and navigate through this unprecedented
situation. Specifically, the Company suspended its quarterly dividend beginning in the second
quarter of 2020, drew down $800 million on its Revolving Credit Facility, targeted further
reductions of more than $500 million in operating expenses, capital expenditures, and working
capital, and suspended share repurchases.
©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
5-2 Financial Accounting for Managers
,RWP1-5 Financial Analysis: American Eagle
($ in thousands)
Requirement 1
Total assets = $3,328,679
Total liabilities = $2,080,826
Stockholders’ equity = $1,247,853
Assets = Liabilities + Stockholders’ Equity
$3,328,679 = $2,080,826 + $1,247,853
Requirement 2
Consolidated Statements of Operations
Requirement 3
Net sales = $4,308,212
Net income = $191,257
Requirement 4
Inflows Outflows
Investing activities Sale of available-for-sale Capital expenditures for
investments property and equipment
Financing activities Net proceeds from stock Repurchase of common stock
options exercised
Requirement 5
The company’s auditor is Ernst & Young LLP.
The auditor ystates, y―We yhave yaudited ythe yaccompanying yconsolidated ybalance ysheets yof
yAmerican yEagle yOutfitters, yInc. y(the yCompany) yas yof yFebruary y1, y2020 yand yFebruary y2,
y2019, ythe yrelated yconsolidated ystatements yof yoperations, ycomprehensive yincome, ystockholders’
yequity yand ycash yflows yfor yeach yof ythe ythree yyears yin ythe yperiod yended yFebruary y1, y2020,
yand ythe yrelated ynotes y(collectively yreferred yto yas ythe y―consolidated yfinancial ystatements‖). y In
your yopinion, ythe yconsolidated yfinancial ystatements ypresent yfairly, yin yall ymaterial yrespects, ythe
yfinancial yposition yof ythe yCompany yat yFebruary y1, y2020 yand yFebruary y2, y2019, yand ythe
yresults yof yits yoperations yand yits ycash yflows yfor yeach yof ythe ythreeyyears yin ythe yperiod yended
yFebruary y1, y2020, yin yconformity ywith yU.S. ygenerally yaccepted yaccounting yprinciples.‖
©McGraw Hill LLC. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill LLC
Solutions Manual, Chapter 5 5-3
, RWP1-6 y Financial yAnalysis yCase: yThe yBuckle, yInc.
($ yin ythousands)
Requirement y1
Total yassets = y$867,890
Total yliabilities =
y$478,742yStockholders’ yequity =
y$389,148
Assets = Liabilities + Stockholders’
yEquity
$867,890 = $478,742 + $389,148
Requirement y2
Consolidated yStatements yof yIncome
Requirement y3
Net ysales = y$900,254
Net yincome = y$104,429
Requirement y4
Inflows Outflows
Investing yactivities Proceeds yfrom Purchases yof
ysales/maturities yinvestments
of yinvestments
Financing yactivities There yare ynone Payment yof ydividends
Requirement y5
The ycompany’s yauditor yis yDeloitte y& yTouche yLLP.
The yauditor ystates, y―We yhave yaudited ythe yaccompanying yconsolidated ybalance ysheets yof yThe
yBuckle, yInc. yand ysubsidiary y(the y"Company") yas yof yFebruary y1, y2020 yand yFebruary y2, y2019,
ythe yrelated yconsolidated ystatements yof yincome, ycomprehensive yincome, ystockholders’ yequity,
yand ycash yflows, yforyeach yof ythe ythree yfiscal yyears yin ythe yperiod yended yFebruary y1, y2020, yand
ythe yrelated ynotes yand ythe yschedule ylisted yin ythe yIndex yat yItem y15 y(collectively yreferred yto yas
ythe y"financial ystatements"). yIn your yopinion, ythe yfinancial ystatements ypresent yfairly, yin yall
ymaterial yrespects, ythe yfinancial yposition yof ythe yCompany yas yof yFebruary y1, y2020 yand
yFebruary y2, y2019, yand ythe yresults yof yits yoperations yand yits ycash yflows yfor yeach yof ythe ythree
yfiscal yyears yin ythe yperiod yended yFebruary y1, y2020, yin yconformity ywith yaccounting yprinciples
ygenerally yaccepted yin ythe yUnited yStates yof yAmerica.‖
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5-4 Financial Accounting for Managers
