Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 1, Problem 1E
The following is a list of well-known companies:
- 1. Alcoa Inc.
- 2. Boeing
- 3. Caterpillar
- 4. Citigroup Inc.
- 5. CVS
- 6. Delta Air Lines
- 7. eBay Inc.
- 8. FedEx
- 9. Ford Motor Company
- 10. Gap Inc.
- 11. H&R Block
- 12. Hilton Hospitality, Inc.
- 13. Procter & Gamble
- 14. SunTrust
- 15. Wal-Mart Stores, Inc.
- a. Indicate whether each of these companies is primarily a service, merchandise, or manufacturing business. If you are unfamiliar with the company, use the Internet to locate the company’s home page or use the finance website of Yahoo (finance.yahoo.com).
- b. For which of the preceding companies is the
accounting equation relevant?
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Analyze and compare Amazon.com, Best Buy, and Wal-Mart
Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Best Buy Co., Inc. (BBY) is a leading retailer of consumer electronics and media products in the United States, while Wal-Mart Stores, Inc. (WMT) is the leading retailer in the United States. Amazon, Best Buy, and Wal-Mart compete in similar markets. Best Buy and Wal-Mart sell through both traditional retail stores and the Internet, while Amazon sells only through the internet. Sales and cash flow information from recent annual reports for all three companies is as follows (in millions):
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Compare Amazon.com to Best Buy
Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. We will use Amazon as a continuing company exercise to reinforce the various tools and
techniques for analyzing financial statements. We will begin with the ratio of liabilities to stockholders' equity.
Ratios can be used to compare companies in the same industry. For Amazon, there are a number of competitors that sell media, electronic, and other merchandise. Best
Buy, Inc. (BBY) is one such company. The following total liabilities and stockholders' equity information (in millions) is provided for Amazon and Best Buy for the end of
a recent year:
Total assets
Total liabilities
Total stockholders' equity
a. Compute the ratio of liabilities to stockholders' equity for each company. Round to two decimal places.
Amazon
Best Buy
$420,549 $19,067
282,304
14,480
138,245
4,587
Liabilities to stockholders' equity ratio
Amazon
Best Buy
b. Which of the following indicates the level of…
Identify the type of responsibility center (revenue center, cost center, profit center, or investment center) for each of the following situations.
the legal department for Avon Manufacturing. Cost center
the Macy’s store in Mansfield, Ohio Investment center
the food and beverage division of the Best Western
the marketing department of the Hershey Company
the Walmart #5030 on Central Avenue in Toledo, Ohio
Apple’s Braeburn Capital Inc., where most of Apple’s billions of dollars are invested
Zappo’s department store
the men’s clothing department in the Walmart #5030 in Toledo, Ohio
Chapter 1 Solutions
Financial Accounting
Ch. 1 - Prob. 1DQCh. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Josh Reilly is the owner of Dispatch Delivery...Ch. 1 - On July 12, Reliable Repair Service extended an...Ch. 1 - Prob. 6DQCh. 1 - Describe the difference between an account...Ch. 1 - A business had revenues of 679,000 and operating...Ch. 1 - A business had revenues of 640,000 and operating...Ch. 1 - The financial statements are interrelated. (a)...
Ch. 1 - On February 22, Kountry Repair Service extended an...Ch. 1 - On March 31, Higgins Repair Service extended an...Ch. 1 - Brock Hahn is the owner and operator of Dream-It...Ch. 1 - Fritz Evans is the owner and operator of...Ch. 1 - Arrowhead Delivery Service is owned and operated...Ch. 1 - Interstate Delivery Service is owned and operated...Ch. 1 - Prob. 4PEACh. 1 - The revenues and expenses of Sentinel Travel...Ch. 1 - Using the income statement for Ousel Travel...Ch. 1 - Using the income statement for Sentinel Travel...Ch. 1 - Using the following data for Ousel Travel Service...Ch. 1 - Using the following data for Sentinel Travel...Ch. 1 - A summary of cash flows for Ousel Travel Service...Ch. 1 - A summary of cash flows for Sentinel Travel...Ch. 1 - Prob. 8PEACh. 1 - Prob. 8PEBCh. 1 - The following is a list of well-known companies:...Ch. 1 - Prob. 2ECh. 1 - Ozark Sports sells hunting and fishing equipment...Ch. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Prob. 6ECh. 1 - Annie Rasmussen is the owner and operator of Go44,...Ch. 1 - Indicate whether each of the following is...Ch. 1 - Describe how the following business transactions...Ch. 1 - Prob. 10ECh. 1 - Indicate whether each of the following types of...Ch. 1 - The following selected transactions were completed...Ch. 1 - Teri West operates her own catering service....Ch. 1 - The income statement of a proprietorship for the...Ch. 1 - Four different proprietorships, Jupiter, Mars,...Ch. 1 - From the following list of selected items taken...Ch. 1 - Based on the data presented in Exercise 1-16,...Ch. 1 - Financial information related to Udder Products...Ch. 1 - Dairy Services was organized on August 1, 2016. A...Ch. 1 - One item is omitted in each of the following...Ch. 1 - Prob. 21ECh. 1 - Prob. 22ECh. 1 - Indicate whether each of the following activities...Ch. 1 - A summary of cash flows for Ethos Consulting Group...Ch. 1 - Prob. 25ECh. 1 - Prob. 26ECh. 1 - Lowes Companies Inc., a major competitor of The...Ch. 1 - On April 1 of the current year, Andrea Byrd...Ch. 1 - The amounts of the assets and liabilities of...Ch. 1 - Seth Feye established Reliance Financial Services...Ch. 1 - On July 1, 2016, Pat Glenn established Half Moon...Ch. 1 - DLite Dry Cleaners is owned and operated by Joel...Ch. 1 - The financial statements at the end of Wolverine...Ch. 1 - Amy Austin established an insurance agency on...Ch. 1 - The amounts of the assets and liabilities of...Ch. 1 - Jose Loder established Bronco Consulting on August...Ch. 1 - On April 1, 2016, Maria Adams established Custom...Ch. 1 - Bevs Dry Cleaners is owned and operated by Beverly...Ch. 1 - The financial statements at the end of Atlas...Ch. 1 - Prob. 1COPCh. 1 - Colleen Fernandez, president of Rhino Enterprises,...Ch. 1 - Prob. 2CPCh. 1 - Prob. 3CP
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