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
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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 $500 million in operating expenses, capital expenditures, and working capital, and suspended shar
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e repurchases.
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Solutions Manual, Chapter RT R T RT 5-3
5
, RWP1-5 Financial Analysis: American Eagle RT RT RT RT
($ 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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5-4 Financial Accounting for Managers
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