NOT IN USE - Custom Financial and Managerial Accounting I (45-700 Carnegie Mellon)

by Easton

ISBN: 0000000000 | Copyright 2022

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Financial Accounting for MBAs, 8e (pg. 1.2-1)
Module 2 Introducing Financial Statements (pg. 1.2-1)
Preview (pg. 1.2-1)
Balance Sheet (pg. 1.2-3)
Balance Sheet and the Flow of Costs (pg. 1.2-3)
Assets (pg. 1.2-4)
Liabilities and Equity (pg. 1.2-6)
Review 2-1 (pg. 1.2-13)
Income Statement (pg. 1.2-13)
Recognizing Revenues and Expenses (pg. 1.2-14)
Reporting of Transitory Items (pg. 1.2-15)
Analyzing the Income Statement (pg. 1.2-16)
Review 2-2 (pg. 1.2-17)
Statement of Stockholders’ Equity (pg. 1.2-17)
Review 2-3 (pg. 1.2-18)
Statement of Cash Flows (pg. 1.2-18)
Statement Format and Data Sources (pg. 1.2-18)
Review 2-4 (pg. 1.2-20)
Articulation of Financial Statements (pg. 1.2-20)
Retained Earnings Reconciliation (pg. 1.2-20)
Financial Statement Linkages (pg. 1.2-20)
Review 2-5 (pg. 1.2-22)
Additional Information Sources (pg. 1.2-22)
Form 10-K (pg. 1.2-22)
Form 20-F and Form 40-F (pg. 1.2-24)
Form 8-K (pg. 1.2-25)
Analyst Reports (pg. 1.2-25)
Credit Services (pg. 1.2-26)
Data Services (pg. 1.2-26)
Review 2-6 (pg. 1.2-26)
Global Accounting (pg. 1.2-26)
Balance Sheet (pg. 1.2-26)
Income Statement (pg. 1.2-26)
Guidance Answers (pg. 1.2-27)
Questions (pg. 1.2-27)
Mini Exercises (pg. 1.2-28)
Exercises (pg. 1.2-29)
Problems (pg. 1.2-34)
IFRS Applications (pg. 1.2-38)
Management Applications (pg. 1.2-38)
Ongoing Project (pg. 1.2-39)
Solutions to Review Problems (pg. 1.2-40)
Review 2-1-Solution (pg. 1.2-40)
Review 2-2-Solution (pg. 1.2-40)
Review 2-3-Solution (pg. 1.2-40)
Review 2-4-Solution (pg. 1.2-41)
Review 2-5-Solution (pg. 1.2-41)
Review 2-6-Solution (pg. 1.2-42)
Module 3 Transactions, Adjustments, and Financial Statements (pg. 1.3-1)
Preview (pg. 1.3-1)
Basics of Accounting (pg. 1.3-3)
Four-Step Accounting Cycle (pg. 1.3-3)
Financial Statement Effects Template (pg. 1.3-3)
Review 3-1 (pg. 1.3-5)
Accounting Cycle Step 1-Analyze Transactions and Prepare Entries (pg. 1.3-6)
Apple’s Transactions (pg. 1.3-6)
Applying the Financial Statement Effects Template (pg. 1.3-6)
Applying the Journal Entry and T-Account (pg. 1.3-6)
Bookmark 13 (pg. 1.3-8)
Accounting Cycle Step 2-Prepare Accounting Adjustments (pg. 1.3-9)
Four Types of Accounting Adjustments (pg. 1.3-9)
Prepaid Expenses (pg. 1.3-10)
Unearned Revenues (pg. 1.3-10)
Accrued Expenses (pg. 1.3-11)
Accrued Revenues (pg. 1.3-12)
Accounting Adjustments for Apple (pg. 1.3-12)
Review 3-3 (pg. 1.3-13)
Accounting Cycle Step 3-Prepare Financial Statements (pg. 1.3-13)
Income Statement (pg. 1.3-13)
Balance Sheet (pg. 1.3-14)
Statement of Stockholders’ Equity (pg. 1.3-15)
Review 3-4 (pg. 1.3-16)
Accounting Cycle Step 4-Close the Books (pg. 1.3-16)
Closing with the Template (pg. 1.3-16)
Closing with Journal Entries (pg. 1.3-16)
1. Close Revenue and Gain Accounts. (pg. 1.3-16)
2. Close Expense and Loss Accounts. (pg. 1.3-17)
3. Close Dividend Account. (pg. 1.3-17)
Accounting Cycle Summarized (pg. 1.3-17)
Review 3-5 (pg. 1.3-18)
Global Accounting (pg. 1.3-18)
Appendix 3A: FASB’s Financial Statement Presentation Project (pg. 1.3-19)
Guidance Answers (pg. 1.3-19)
Questions (pg. 1.3-20)
Mini Exercises (pg. 1.3-20)
Exercises (pg. 1.3-23)
Problems (pg. 1.3-27)
IFRS Applications (pg. 1.3-32)
Management Applications (pg. 1.3-33)
Solutions to Review Problems (pg. 1.3-35)
Review 3-1-Solution (pg. 1.3-35)
Review 3-2-Solution (pg. 1.3-36)
Review 3-3-Solution (pg. 1.3-36)
Review 3-4-Solution (pg. 1.3-37)
Review 3-5-Solution (pg. 1.3-37)
Module 5 Revenues, Receivables, and Operating Expenses (pg. 1.5-1)
Preview (pg. 1.5-1)
Revenue (pg. 1.5-3)
Revenue Recognition Rules (pg. 1.5-4)
Complications of Revenue Recognition (pg. 1.5-5)
Performance Obligations Satisfied Over Time (pg. 1.5-7)
Review 5-1 (pg. 1.5-11)
Sales Allowances (pg. 1.5-11)
Accounting for Sales Allowances (pg. 1.5-11)
Reporting Sales Allowances (pg. 1.5-12)
Analysis of Sales Allowances (pg. 1.5-13)
Review 5-2 (pg. 1.5-13)
Unearned (Deferred) Revenue (pg. 1.5-14)
Review 5-3 (pg. 1.5-15)
Foreign Currency Effects on Revenue, Expenses, and Cash Flow (pg. 1.5-15)
Foreign Currency and Cash Flows (pg. 1.5-16)
Foreign Currency and Income (pg. 1.5-17)
Foreign Currency and Future Results (pg. 1.5-17)
Review 5-4 (pg. 1.5-18)
Accounts Receivable (pg. 1.5-19)
Aging Analysis of Receivables (pg. 1.5-19)
Accounting for Accounts Receivable (pg. 1.5-20)
Analysis of Accounts Receivable-Magnitude (pg. 1.5-21)
Analysis of Accounts Receivable-Quality (pg. 1.5-22)
Review 5-5 (pg. 1.5-24)
Expenses and Losses (pg. 1.5-25)
Deductions from Income (pg. 1.5-25)
Research and Development Expense (pg. 1.5-26)
Provision (Benefit) for Taxes on Income (pg. 1.5-28)
Discontinued Operations (pg. 1.5-28)
Review 5-6 (pg. 1.5-30)
Pro Forma Income Reporting (pg. 1.5-31)
Regulation G Reconciliation (pg. 1.5-31)
SEC Warnings about Pro Forma Numbers (pg. 1.5-32)
Disclosures and Market Assessments (pg. 1.5-32)
Review 5-7 (pg. 1.5-34)
Global Accounting (pg. 1.5-35)
Revenue Recognition (pg. 1.5-35)
Accounts Receivable (pg. 1.5-35)
Research and Development (pg. 1.5-35)
Guidance Answers (pg. 1.5-35)
Questions (pg. 1.5-35)
Mini Exercises (pg. 1.5-36)
Exercises (pg. 1.5-40)
Problems (pg. 1.5-47)
IFRS Applications (pg. 1.5-53)
Management Applications (pg. 1.5-54)
Ongoing Project (pg. 1.5-54)
Solutions to Review Problems (pg. 1.5-55)
Review 5-1-Solution (pg. 1.5-55)
Review 5-2-Solution (pg. 1.5-55)
Review 5-3-Solution (pg. 1.5-56)
Review 5-4-Solution (pg. 1.5-56)
Review 5-5-Solution (pg. 1.5-57)
Review 5-6-Solution (pg. 1.5-57)
Review 5-7-Solution (pg. 1.5-58)
Module 6 Inventories, Accounts Payable, and Long-Term Assets (pg. 1.6-1)
Preview (pg. 1.6-1)
Inventory-Costing Methods (pg. 1.6-3)
First-In, First-Out (FIFO) (pg. 1.6-4)
Last-In, First-Out (LIFO) (pg. 1.6-5)
Average Cost (AC) (pg. 1.6-5)
Financial Statement Effects of Inventory Costing (pg. 1.6-7)
Review 6-1 (pg. 1.6-8)
Inventory-Reporting (pg. 1.6-8)
Lower of Cost or Market (LCM) (pg. 1.6-8)
LIFO Reserve Adjustments to Financial Statements (pg. 1.6-9)
LIFO Liquidations (pg. 1.6-11)
Review 6-2 (pg. 1.6-11)
Inventory-Analysis Tools (pg. 1.6-12)
Gross Profit Analysis (pg. 1.6-12)
Days Inventory Outstanding and Inventory Turnover (pg. 1.6-13)
Days Payable Outstanding (pg. 1.6-15)
Cash Conversion Cycle (pg. 1.6-16)
Review 6-3 (pg. 1.6-17)
PPE Assets-Capitalization and Depreciation (pg. 1.6-17)
Plant and Equipment (pg. 1.6-18)
PPE Assets-Sales, Impairments, and Restructuring (pg. 1.6-20)
Asset Sales (pg. 1.6-20)
Asset Impairments (pg. 1.6-21)
Restructuring Costs (pg. 1.6-22)
Review 6-5 (pg. 1.6-24)
PPE Assets-Analysis Tools (pg. 1.6-25)
PPE Turnover (pg. 1.6-25)
PPE Useful Life (pg. 1.6-26)
PPE Percent Used Up (pg. 1.6-27)
Review 6-6 (pg. 1.6-27)
Global Accounting (pg. 1.6-27)
Inventory (pg. 1.6-27)
Property, plant, and equipment (pg. 1.6-28)
Research and Development (pg. 1.6-28)
Restructuring (pg. 1.6-28)
Guidance Answers (pg. 1.6-28)
Questions (pg. 1.6-29)
Mini Exercises (pg. 1.6-30)
Exercises (pg. 1.6-32)
Problems (pg. 1.6-38)
IFRS Applications (pg. 1.6-40)
Management Applications (pg. 1.6-42)
Ongoing Project (pg. 1.6-42)
Solutions to Review Problems (pg. 1.6-43)
Review 6-1-Solution (pg. 1.6-43)
Review 6-2-Solution (pg. 1.6-43)
Review 6-3-Solution (pg. 1.6-44)
Review 6-4-Solution (pg. 1.6-44)
Review 6-5-Solution (pg. 1.6-44)
Review 6-6-Solution (pg. 1.6-44)
Module 7 Current and Long-Term Liabilities (pg. 1.7-1)
Preview (pg. 1.7-1)
Accrued Liabilities (pg. 1.7-3)
Accrued Liabilities Defined (pg. 1.7-3)
Accruals for Contractual Liabilities-Wages Payable Example (pg. 1.7-4)
Accruals for Contractual Liabilities-Deferred Revenue Example (pg. 1.7-4)
Accruals for Contingent Liabilities (pg. 1.7-5)
Accruals for Contingent Liabilities-Warranties Example (pg. 1.7-5)
Review 7-1 (pg. 1.7-7)
Short-Term Debt (pg. 1.7-7)
Accounting for Short-Term Debt (pg. 1.7-7)
Current Maturities of Long-Term Debt (pg. 1.7-8)
Review 7-2 (pg. 1.7-9)
Long-Term Debt-Pricing (pg. 1.7-9)
Pricing of Bonds Issued at Par (pg. 1.7-10)
Pricing of Bonds Issued at a Discount (pg. 1.7-10)
Pricing of Bonds Issued at a Premium (pg. 1.7-11)
Effective Cost of Debt (pg. 1.7-11)
Review 7-3 (pg. 1.7-13)
Long-Term Debt-Reporting (pg. 1.7-13)
Balance Sheet Reporting (pg. 1.7-13)
Income Statement Reporting (pg. 1.7-14)
Financial Statement Effects of Bond Repurchase (pg. 1.7-14)
Review 7-4 (pg. 1.7-16)
Quality of Debt (pg. 1.7-16)
Credit Analysis (pg. 1.7-16)
What Are Credit Ratings? (pg. 1.7-18)
What Determines Credit Ratings? (pg. 1.7-18)
Verizon Credit Rating Example (pg. 1.7-21)
Why Credit Ratings Matter (pg. 1.7-23)
Review 7-5 (pg. 1.7-24)
Global Accounting (pg. 1.7-24)
Appendix 7A: Time Value of Money (pg. 1.7-25)
Present Value Concepts (pg. 1.7-25)
Present Value of a Single Amount (pg. 1.7-25)
Time Value of Money Tables (pg. 1.7-25)
Present Value of an Annuity (pg. 1.7-26)
Bond Valuation (pg. 1.7-27)
Time Value of Money Computations Using a Calculator (pg. 1.7-28)
Time Value of Money Computations Using Excel (pg. 1.7-28)
Future Value Concepts Future Value of a Single Amount (pg. 1.7-30)
Future Value of an Annuity (pg. 1.7-30)
Review 7-6 (pg. 1.7-30)
Appendix 7B: Amortization of Debt (pg. 1.7-31)
Amortization of Discount (pg. 1.7-31)
Amortization of Premium (pg. 1.7-32)
Guidance Answers (pg. 1.7-32)
Questions (pg. 1.7-32)
Mini Exercises (pg. 1.7-33)
Exercises (pg. 1.7-36)
Problems (pg. 1.7-41)
IFRS Applications (pg. 1.7-46)
Management Applications (pg. 1.7-48)
Solutions to Review Problems (pg. 1.7-48)
Review 7-1-Solution (pg. 1.7-48)
Review 7-2-Solution (pg. 1.7-49)
Review 7-3-Solution (pg. 1.7-49)
Review 7-4-Solution (pg. 1.7-49)
Review 7-5-Solution (pg. 1.7-51)
Review 7-6-Solution (pg. 1.7-51)
Module 8 Stock Transactions, Dividends, and EPS (pg. 1.8-1)
Preview (pg. 1.8-1)
Stockholders’ Equity and Classes of Stock (pg. 1.8-3)
Stockholders’ Equity Accounts (pg. 1.8-3)
Statement of Stockholders’ Equity (pg. 1.8-5)
Preferred Stock (pg. 1.8-6)
Common Stock (pg. 1.8-7)
Review 8-1 (pg. 1.8-8)
Stock Transactions (pg. 1.8-9)
Stock Issuance (pg. 1.8-9)
Stock Repurchase (Treasury Stock) (pg. 1.8-10)
Review 8-2 (pg. 1.8-12)
Stock-Based Compensation (pg. 1.8-13)
Characteristics of Stock-Based Compensation Plans (pg. 1.8-13)
Analysis of Stock-Based Compensation Plans (pg. 1.8-13)
Accounting for Stock-Based Compensation (pg. 1.8-14)
Footnote Disclosures for Stock-Based Compensation (pg. 1.8-15)
Review 8-3 (pg. 1.8-16)
Dividends and Stock Splits (pg. 1.8-16)
Cash Dividend Disclosures (pg. 1.8-17)
Dividend Payout and Yield (pg. 1.8-17)
Cash Dividends Financial Effects (pg. 1.8-17)
Stock Split (pg. 1.8-18)
Review 8-4 (pg. 1.8-19)
Accumulated Other Comprehensive Income (pg. 1.8-19)
AOCI Components (pg. 1.8-19)
AOCI Disclosures and Interpretation (pg. 1.8-20)
Review 8-5 (pg. 1.8-21)
Convertible Securities (pg. 1.8-22)
Convertible Securities Disclosures and Interpretation (pg. 1.8-22)
Convertible Securities Financial Effects (pg. 1.8-23)
Review 8-6 (pg. 1.8-23)
Earnings per Share (EPS) (pg. 1.8-23)
EPS Disclosures (pg. 1.8-24)
Review 8-7 (pg. 1.8-25)
Global Accounting (pg. 1.8-25)
Appendix 8A: Stock-Based Compensation: Reporting and Analyzing (pg. 1.8-26)
Employee Stock Purchase Plans (ESPP) (pg. 1.8-26)
Stock Awards (pg. 1.8-27)
Stock Options (pg. 1.8-27)
Stock Appreciation Rights (SAR) (pg. 1.8-28)
Summary of Share-Based Compensation (pg. 1.8-28)
Analysis Implications (pg. 1.8-28)
Guidance Answers (pg. 1.8-29)
Questions (pg. 1.8-30)
Mini Exercises (pg. 1.8-31)
Exercises (pg. 1.8-34)
Problems (pg. 1.8-39)
IFRS Applications (pg. 1.8-48)
Ongoing Project (pg. 1.8-50)
Solutions to Review Problems (pg. 1.8-51)
Review 8-1-Solution (pg. 1.8-51)
Review 8-2-Solution (pg. 1.8-51)
Review 8-3-Solution (pg. 1.8-52)
Review 8-4-Solution (pg. 1.8-52)
Review 8-5-Solution (pg. 1.8-52)
Review 8-6-Solution (pg. 1.8-53)
Review 8-7-Solution (pg. 1.8-53)
Module 11 Cash Flows (pg. 1.11-1)
Preview (pg. 1.11-2)
Framework for Statement of Cash Flows (pg. 1.11-3)
Relation Among Financial Statements (pg. 1.11-3)
Statement of Cash Flows Structure (pg. 1.11-4)
Operating Activities Preview (pg. 1.11-5)
Investing Activities Preview (pg. 1.11-8)
Financing Activities Preview (pg. 1.11-8)
Review 11-1 (pg. 1.11-8)
Cash Flow from Operating Activities (pg. 1.11-9)
Steps to Compute Net Cash Flow from Operating Activities (pg. 1.11-10)
Java House Case Illustration (pg. 1.11-11)
Review 11-2 (pg. 1.11-15)
Computing Cash Flows from Investing Activities (pg. 1.11-16)
Analyze Remaining Noncash Assets (pg. 1.11-16)
Java House Case Illustration (pg. 1.11-16)
Review 11-3 (pg. 1.11-18)
Cash Flows from Financing Activities (pg. 1.11-18)
Analyze Remaining Liabilities and Equity (pg. 1.11-18)
Java House Case Illustration (pg. 1.11-18)
Review 11-4A (pg. 1.11-19)
Computing Cash Flows from Balance Sheet Accounts (pg. 1.11-19)
Supplemental Disclosures for the Indirect Method (pg. 1.11-20)
Review 11-4B (pg. 1.11-21)
Analysis of Cash Flow Information (pg. 1.11-21)
Cash Flow Components (pg. 1.11-21)
Cash Flow Patterns (pg. 1.11-23)
Usefulness of the Statement of Cash Flows (pg. 1.11-25)
Review 11-5 (pg. 1.11-27)
Ratio Analyses of Cash Flows (pg. 1.11-27)
Free Cash Flow (pg. 1.11-28)
Review 11-6 (pg. 1.11-29)
Appendix 11A: Direct Method Reporting for Statement of Cash Flows (pg. 1.11-29)
Cash Flows from Operating Activities (pg. 1.11-29)
Converting Revenues and Expenses to Cash Flows (pg. 1.11-29)
Java House Case Illustration (pg. 1.11-29)
Convert Sales to Cash Received from Customers (pg. 1.11-30)
Convert Cost of Goods Sold to Cash Paid for Merchandise Purchased (pg. 1.11-30)
Convert Wages Expense to Cash Paid to Employees (pg. 1.11-31)
Convert Insurance Expense to Cash Paid for Insurance (pg. 1.11-31)
Eliminate Depreciation Expense and Other Noncash Operating Expenses (pg. 1.11-31)
Convert Income Tax Expense to Cash Paid for Income Taxes (pg. 1.11-31)
Omit Gains and Losses Related to Investing and Financing Activities (pg. 1.11-31)
Cash Flows from Investing and Financing (pg. 1.11-32)
Supplemental Disclosures (pg. 1.11-32)
Review 11-7 (pg. 1.11-32)
Guidance Answers (pg. 1.11-32)
Questions (pg. 1.11-33)
Mini Exercises (pg. 1.11-34)
Exercises (pg. 1.11-37)
Problems (pg. 1.11-43)
IFRS Applications (pg. 1.11-55)
Solutions to Review Problems (pg. 1.11-56)
Review 11-1-Solution (pg. 1.11-56)
Review 11-2-Solution (pg. 1.11-56)
Review 11-3-Solution (pg. 1.11-57)
Review 11-4A-Solution (pg. 1.11-57)
Review 11-4B-Solution (pg. 1.11-57)
Review 11-5-Solution (pg. 1.11-57)
Review 11-6-Solution (pg. 1.11-58)
Review 11-7-Solution (pg. 1.11-58)
Peter D. Easton

Peter D. Easton

Peter D. Easton is an expert in accounting and valuation and holds the Notre Dame Alumni Chair in Accountancy in the Mendoza College of Business.

Professor Easton’s expertise is widely recognized by the academic research community and by the legal community. Professor Easton frequently serves as a consultant on accounting and valuation issues in federal and state courts.

Professor Easton holds undergraduate degrees from the University of Adelaide and the University of South Australia. He holds a graduate degree from the University of New England and a PhD in Business Administration (majoring in accounting and finance) from the University of California, Berkeley.

Professor Easton’s research on corporate valuation has been published in the Journal of Accounting and Economics, Journal of Accounting Research, The Accounting Review, Contemporary Accounting Research, Review of Accounting Studies, and Journal of Business Finance and Accounting.

Professor Easton has served as an associate editor for 11 leading accounting journals and he is currently an associate editor for the Journal of Accounting Research, Journal of Business Finance and Accounting, and Journal of Accounting, Auditing, and Finance. He is an editor of the Review of Accounting Studies.

Professor Easton has held appointments at the University of Chicago, the University of California at Berkeley, Ohio State University, Macquarie University, the Australian Graduate School of Management, the University of Melbourne, Tilburg University, National University of Singapore, Seoul National University, and Nyenrode University. He is the recipient of numerous awards for excellence in teaching and in research. Professor Easton regularly teaches accounting analysis and security valuation to MBAs. In addition, Professor Easton has taught managerial accounting at the graduate level.


Financial Accounting for MBAs, 8e (Easton, Wild, Halsey, McAnally)
Errata
Last Updated: Oct 30 2023

Corrections to identified errors in the first printing of the text.

Appendix C
Last Updated: Jun 11 2020

Appendix C:  Comprehensive Case / Harley-Davidson

Excel Templates - Students
Last Updated: Sep 16 2020

Excel templates for use with Module Reviews.