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1 Introduction to Financial Statements 1-1
Knowing the Numbers: Columbia Sportswear Company 1-1
Business Organization and Accounting Information Uses 1-2
The Three Types of Business Activity 1-7
The Four Financial Statements 1-9
A Look at IFRS 1-42
2 A Further Look at Financial Statements 2-1
Just Fooling Around?: The Motley Fool 2-2
The Classified Balance Sheet 2-3
Analyzing the Financial Statements Using Ratios 2-8
Financial Reporting Concepts 2-15
A Look at IFRS 2-45
3 The Accounting Information System 3-1
Accidents Happen: MF Global Holdings Ltd 3-1
Using the Accounting Equation to Analyze Transactions 3-3
Accounts, Debits, and Credits 3-11
Using a Journal 3-17
The Ledger and Posting 3-20
The Trial Balance 3-30
A Look at IFRS 3-61
4 Accrual Accounting Concepts 4-1
Keeping Track of Groupons: Groupon 4-1
Accrual-Basis Accounting and Adjusting Entries 4-2
Adjusting Entries for Deferrals 4-7
Adjusting Entries for Accruals 4-14
The Adjusted Trial Balance and Closing Entries 4-21
Appendix 4A: Using a Worksheet 4-33
A Look at IFRS 4-65
5 Merchandising Operations and the Multiple-Step Income Statement 5-1
Buy Now, Vote Later: REI 5-1
Merchandising Operations and Inventory Systems 5-3
Recording Purchases Under a Perpetual System 5-6
Recording Sales Under a Perpetual System 5-11
Multiple-Step and Comprehensive Income Statements 5-15
Cost of Goods Sold Under a Periodic System 5-21
Gross Profit Rate and Profit Margin 5-22
Appendix 5A: Periodic Inventory System 5-26
Appendix 5B: Adjusting Entries for Credit Sales with Returns and Allowances 5-29
A Look at IFRS 5-54
6 Reporting and Analyzing Inventory 6-1
“Where Is That Spare Bulldozer Blade?”: Caterpillar 6-1
Classifying and Determining Inventory 6-2
Inventory Methods and Financial Eff ects 6-6
Inventory Presentation and Analysis 6-15
Appendix 6A: Inventory Cost Flow Methods in Perpetual Inventory Systems 6-21
Appendix 6B: Effects of Inventory Errors 6-23
A Look at IFRS 6-48
7 Fraud, Internal Control, and Cash 7-1
Minding the Money in Madison: Barriques 7-1
Fraud and Internal Control 7-3
Cash Controls 7-12
Control Features of a Bank Account 7-17
Reporting Cash and Cash Management 7-24
Appendix 7A: Operation of a Petty Cash Fund 7-30
A Look at IFRS 7-56
8 Reporting and Analyzing Receivables 8-1
What’s Cooking? Nike 8-1
Recognition of Accounts Receivable 8-3
Valuation and Disposition of Accounts Receivable 8-5
Notes Receivable 8-14
Receivables Presentation and Management 8-18
A Look at IFRS 8-47
9 Reporting and Analyzing Long-Lived Assets 9-1
A Tale of Two Airlines: American Airlines 9-1
Plant Asset Expenditures 9-3
Depreciation Methods 9-8
Plant Asset Disposals 9-15
Intangible Assets 9-18
Statement Presentation and Analysis 9-21
Appendix 9A: Other Depreciation Methods 9-27
A Look at IFRS 9-54
10 Reporting and Analyzing Liabilities 10-1
And Then There Were Two: Maxwell Car Company 10-1
Accounting for Current Liabilities 10-3
Major Characteristics of Bonds 10-8
Accounting for Bond Transactions 10-12
Presentation and Analysis 10-18
Appendix 10A: Straight-Line Amortization 10-24
Appendix 10B: Effective-Interest Amortization 10-27
Appendix 10C: Accounting for Long-Term Notes Payable 10-30
A Look at IFRS 10-58
11 Reporting and Analyzing Stockholders’ Equity 11-1
Oh Well, I Guess I’ll Get Rich: Facebook 11-1
Corporate Form of Organization 11-3
Accounting for Common, Preferred, and Treasury Stock 11-11
Cash Dividends, Stock Dividends, and Stock Splits 11-15
Presentation and Analysis 11-22
Appendix 11A: Entries for Stock Dividends 11-30
A Look at IFRS 11-54
12 Statement of Cash Flows 12-1
Got Cash?: Microsoft 12-1
Usefulness and Format of the Statement of Cash Flows 12-3
Preparing the Statement of Cash Flows—Indirect Method 12-6
Analyzing the Statement of Cash Flows 12-17
Appendix 12A: Statement of Cash Flows—Direct Method 12-22
Appendix 12B: Worksheet for the Indirect Method 12-29
Preparing the Worksheet 12-30
Appendix 12C: Statement of Cash Flows—T-Account Approach 12-34
A Look at IFRS 12-61
13 Financial Analysis: The Big Picture 13-1
It Pays to Be Patient: Warren Buffett 13-2
Sustainable Income and Quality of Earnings 13-3
Horizontal Analysis and Vertical Analysis 13-9
Ratio Analysis 13-14
A Look at IFRS 13-54
14 Managerial Accounting 14-1
Just Add Water … and Paddle: Current Designs 14-1
Managerial Accounting Basics 14-3
Managerial Cost Concepts 14-7
Manufacturing Costs in Financial Statements 14-10
Managerial Accounting Today 14-14
15 Job Order Costing 15-1
Profiting from the Silver Screen: Disney 15-1
Cost Accounting Systems 15-3
Assigning Manufacturing Costs 15-7
Predetermined Overhead Rates 15-12
Entries for Jobs Completed and Sold 15-15
Applied Manufacturing Overhead 15-20
16 Process Costing 16-1
The Little Guy Who Could: Jones Soda 16-1
Overview of Process Cost Systems 16-3
Process Costing for Service Companies 16-4
Equivalent Units 16-9
The Production Cost Report 16-12
Appendix 16A: FIFO Method for Equivalent Units 16-19
17 Activity-Based Costing 17-1
Precor Is on Your Side: Precor 17-1
Traditional vs. Activity-Based Costing 17-3
ABC and Manufacturers 17-7
ABC Benefits and Limitations 17-12
ABC and Service Industries 17-17
Appendix 17A: Just-in-Time Processing 17-22
18 Cost-Volume-Profit 18-1
Don’t Worry—Just Get Big: Amazon.com 18-1
Cost Behavior Analysis 18-2
Mixed Costs 18-6
Cost-Volume-Profit Analysis 18-10
Break-Even Analysis 18-14
Target Net Income and Margin of Safety 18-18
Appendix 18A: Regression Analysis 18-22
19 Cost-Volume-Profit Analysis: Additional Issues 19-1
Not Even a Flood Could Stop It: Whole Foods Market 19-1
Basic CVP Concepts 19-3
Sales Mix and Break-Even Sales 19-8
Sales Mix with Limited Resources 19-12
Operating Leverage and Profitability 19-14
Appendix 19A: Absorption Costing vs. Variable Costing 19-19
20 Incremental Analysis 20-1
Keeping It Clean: Method Products 20-1
Decision-Making and Incremental Analysis 20-3
Special Orders 20-6
Make or Buy 20-8
21 Pricing 21-1
They’ve Got Your Size—and Color: Zappos.com 21-1
Target Costing 21-3
Cost-Plus and Variable-Cost Pricing 21-5
Time-and-Material Pricing 21-10
Transfer Prices 21-13
Appendix 21A: Absorption-Cost and Variable-Cost Pricing 21-21
Appendix 21B: Transfers Between Divisions in Different Countries 21-24
22 Budgetary Planning 22-1
What’s in Your Cupcake?: BabyCakes NYC 22-1
Effective Budgeting and the Master Budget 22-3
Sales, Production, and Direct Materials Budgets 22-8
Direct Labor, Manufacturing Overhead, and S&A Expense Budgets 22-13
Cash Budget and Budgeted Balance Sheet 22-17
Budgeting in Nonmanufacturing Companies 22-22
23 Budgetary Control and Responsibility Accounting 23-1
Pumpkin Madeleines and a Movie: Tribeca Grand 23-1
Budgetary Control and Static Budget Reports 23-3
Flexible Budget Reports 23-6
Responsibility Accounting and Responsibility Centers 23-13
Investment Centers 23-22
Appendix 23A: ROI vs. Residual Income 23-28
24 Standard Costs and Balanced Scorecard 24-1
80,000 Different Caffeinated Combinations: Starbucks 24-2
Overview of Standard Costs 24-3
Direct Materials Variances 24-7
Direct Labor and Manufacturing Overhead Variances 24-11
Variance Reports and Balanced Scorecards 24-16
Appendix 24A: Standard Cost Accounting System 24-21
Appendix 24B: Overhead Controllable and Volume Variances 24-24
25 Planning for Capital Investments 25-1
Floating Hotels: Holland America Line 25-2
Capital Budgeting and Cash Payback 25-3
Net Present Value Method 25-6
Capital Budgeting Challenges and Refinements 25-11
Internal Rate of Return 25-16
Annual Rate of Return 25-18
Appendix A Specimen Financial Statements: Apple Inc. A-1
Appendix B Specimen Financial Statements: Columbia Sportswear Company B-1
Appendix C Specimen Financial Statements: VF Corporation C-1
Appendix D Specimen Financial Statements: Amazon.com, Inc. D-1
Appendix E Specimen Financial Statements: Wal-Mart Stores, Inc. E-1
Appendix F Specimen Financial Statements: Louis Vuitton F-1
Appendix G Time Value of Money G-1
Interest and Future Values G-1
Present Values G-7
Capital Budgeting Situations G-14
Using Financial Calculators G-15
Appendix H Reporting and Analyzing Investments H-1
Accounting for Debt Investments H-1
Accounting for Stock Investments H-4
Reporting Investments in Financial Statements H-7
Appendix I Payroll Accounting I-1
Recording the Payroll I-1
Employer Payroll Taxes I-8
Internal Control for Payroll I-10
Appendix J Subsidiary Ledgers and Special Journals J-1
Subsidiary Ledgers J-1
Special Journals J-4
Appendix K Accounting for Partnerships K-1
Forming a Partnership K-1
Accounting for Partnership Net Income or Net Loss K-6
Accounting for Partnership Liquidation K-10
Admission and Withdrawal of Partners K-14
Appendix L Accounting for Sole Proprietorships L-1
Corporation versus Sole Proprietorship Equity Accounts L-1
Accounts that Change Owner’s Equity L-2
Retained Earnings Statement versus Owner’s Equity Statement L-3
Closing the Books for a Sole Proprietorship L-4
Cases for Managerial Decision-Making
(The full text of these cases is available in WileyPLUS.)
Company Index I-1
Subject Index I-3
