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
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5-2 Financial Accounting for Managers
,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 $500 million in operating expenses, capital expenditures, and working
capital, and suspended share repurchases.
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Solutions Manual, Chapter 5 5-3
, RWP1-5 vFinancial vAnalysis: vAmerican vEagle
($ vin vthousands)
Requirement v1
Total vassets = v$3,328,679
Total vliabilities =
v$2,080,826vStockholders’ vequity
=
v$1,247,853
Assets = Liabilities + Stockholders’
vEquity
$3,328,679 = $2,080,826 + $1,247,853
Requirement v2
Consolidated vStatements vof vOperations
Requirement v3
Net vsales = v$4,308,212
Net vincome = v$191,257
Requirement v4
Inflows Outflows
Investing vactivities Sale vof vavailable-for- Capital vexpenditures vfor
sale property vand vequipment
investments
Financing vactivities Net vproceeds vfrom Repurchase vof vcommon
vstockvoptions vstock
vexercised
Requirement v5
The vcompany’s vauditor vis vErnst v& vYoung vLLP.
The vauditor vstates, v―We vhave vaudited vthe vaccompanying vconsolidated vbalance vsheets vof
vAmerican vEagle vOutfitters, vInc. v(the vCompany) vas vof vFebruary v1, v2020 vand vFebruary v2,
v2019, vthe vrelated vconsolidated vstatements vof voperations, vcomprehensive vincome, vstockholders’
vequity vand vcash vflows vfor veach vof vthe vthree vyears vin vthe vperiod vended vFebruary v1, v2020,
vand vthe vrelated vnotes v(collectively vreferred vto vas vthe v―consolidated vfinancial vstatements‖). vIn
vour vopinion, vthe vconsolidated v financial vstatements vpresent vfairly, vin vall vmaterial vrespects, vthe
vfinancial vposition vof vthe vCompany vat vFebruary v1, v2020 vand vFebruary v2, v2019, vand vthe
vresults vof vits voperations vand vits vcash vflows vfor veach vof vthe vthreevyears vin vthe vperiod vended
vFebruary v1, v2020, vin vconformity vwith vU.S. vgenerally vaccepted vaccounting vprinciples.‖
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5-4 Financial Accounting for Managers
