Wharton Custom: Financial Accounting for Undergraduates, 3e
by Hanlon, Magee, Pfeiffer
ISBN: 978-1-61853-549-8 | Copyright 2022
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| About the Authors (pg. iii) | |
| Preface (pg. iv) | |
| Brief Contents (pg. xvi) | |
| Contents (pg. xvii) | |
| Chapter 1: Introducing Financial Accounting (pg. 1-1) | |
| Nike (pg. 1-2) | |
| Demand for Accounting Information (pg. 1-3) | |
| Who Uses Financial Accounting Information? (pg. 1-4) | |
| Costs and Benefits of Disclosure (pg. 1-6) | |
| Review 1-1 (pg. 1-6) | |
| Business Activities (pg. 1-7) | |
| Planning Activities (pg. 1-7) | |
| Investing Activities (pg. 1-8) | |
| Financing Activities (pg. 1-9) | |
| Operating Activities (pg. 1-10) | |
| Review 1-2 (pg. 1-10) | |
| Financial Statements (pg. 1-11) | |
| Balance Sheet (pg. 1-11) | |
| Income Statement (pg. 1-12) | |
| Statement of Stockholders’ Equity (pg. 1-13) | |
| Statement of Cash Flows (pg. 1-13) | |
| Financial Statement Linkages (pg. 1-14) | |
| Information Beyond Financial Statements (pg. 1-15) | |
| Review 1-3 (pg. 1-16) | |
| Financial Reporting Environment (pg. 1-16) | |
| Generally Accepted Accounting Principles (pg. 1-17) | |
| Regulation and Oversight (pg. 1-17) | |
| Role of the Auditor (pg. 1-19) | |
| A Global Perspective (pg. 1-19) | |
| Review 1-4 (pg. 1-20) | |
| Analyzing Financial Statements (pg. 1-21) | |
| Profitability Analysis (pg. 1-21) | |
| Analysis Objective (pg. 1-21) | |
| Credit Risk Analysis (pg. 1-23) | |
| Analysis Objective (pg. 1-23) | |
| Technology and Accounting (pg. 1-24) | |
| Organization of the Book (pg. 1-24) | |
| Review 1-5 (pg. 1-25) | |
| Appendix 1A: Conceptual Framework for Financial Reporting (pg. 1-25) | |
| Objective of Financial Reporting (pg. 1-25) | |
| Qualitative Characteristics of Useful Financial Information (pg. 1-26) | |
| Enhancing Qualitative Characteristics (pg. 1-27) | |
| The Cost Constraint (pg. 1-27) | |
| Additional Underlying Basic Assumptions (pg. 1-27) | |
| Review 1-6 (pg. 1-28) | |
| Summary (pg. 1-28) | |
| Guidance Answers . . . You Make the Call (pg. 1-29) | |
| Key Ratios (pg. 1-30) | |
| Multiple Choice (pg. 1-30) | |
| Questions (pg. 1-31) | |
| Data Analytics (pg. 1-32) | |
| Data Visualization (pg. 1-33) | |
| Mini Exercises (pg. 1-33) | |
| Exercises (pg. 1-34) | |
| Problems (pg. 1-35) | |
| Cases and Projects (pg. 1-37) | |
| Solutions to Review Problems (pg. 1-39) | |
| Chapter 2: Constructing Financial Statements (pg. 2-1) | |
| Walgreens (pg. 2-2) | |
| Reporting Financial Condition (pg. 2-3) | |
| Assets (pg. 2-3) | |
| Liabilities and Equity (pg. 2-6) | |
| Review 2-1 (pg. 2-8) | |
| Analyzing and Recording Transactions for the Balance Sheet (pg. 2-8) | |
| Review 2-2 (pg. 2-12) | |
| Reporting Financial Performance (pg. 2-12) | |
| Review 2-3 (pg. 2-13) | |
| Accrual Accounting for Revenues and Expenses (pg. 2-14) | |
| Retained Earnings (pg. 2-15) | |
| Analyzing and Recording Transactions for the Income Statement (pg. 2-16) | |
| Review 2-4 (pg. 2-19) | |
| Reporting on Equity (pg. 2-19) | |
| Analyzing and Recording Equity Transactions (pg. 2-19) | |
| Statement of Stockholders’ Equity (pg. 2-20) | |
| Review 2-5 (pg. 2-21) | |
| Journalizing and Posting Transactions (pg. 2-21) | |
| T-Account (pg. 2-21) | |
| Debit and Credit System (pg. 2-22) | |
| T-Account with Debits and Credits (pg. 2-23) | |
| The Journal Entry (pg. 2-23) | |
| Analyze, Journalize, and Post (pg. 2-24) | |
| Review 2-6 (pg. 2-29) | |
| Analyzing Financial Statements (pg. 2-30) | |
| Analysis Objective (pg. 2-30) | |
| Review 2-7 (pg. 2-32) | |
| Summary (pg. 2-33) | |
| Guidance Answers . . . You Make the Call (pg. 2-33) | |
| Key Ratios (pg. 2-34) | |
| Multiple Choice (pg. 2-34) | |
| Questions (pg. 2-34) | |
| Data Analytics (pg. 2-35) | |
| Data Visualization (pg. 2-36) | |
| Mini Exercises (pg. 2-36) | |
| Exercises (pg. 2-40) | |
| Problems (pg. 2-45) | |
| Cases and Projects (pg. 2-52) | |
| Solutions to Review Problems (pg. 2-53) | |
| Chapter 3: Adjusting Accounts for Financial Statements (pg. 3-1) | |
| Walgreens (pg. 3-2) | |
| Accounting Cycle (pg. 3-3) | |
| Analyzing, Recording, and Posting (pg. 3-4) | |
| Review of Accounting Procedures (pg. 3-4) | |
| Review of Recording Transactions (pg. 3-4) | |
| Review 3-1 (pg. 3-11) | |
| Adjusting the Accounts (pg. 3-11) | |
| Preparing an Unadjusted Trial Balance (pg. 3-11) | |
| Types of Adjustments (pg. 3-12) | |
| Ethics and Adjusting Entries (pg. 3-18) | |
| Review 3-2 (pg. 3-19) | |
| Constructing Financial Statements from Adjusted Accounts (pg. 3-19) | |
| Preparing an Adjusted Trial Balance (pg. 3-19) | |
| Preparing Financial Statements (pg. 3-21) | |
| Review 3-3 (pg. 3-23) | |
| Closing Temporary Accounts (pg. 3-24) | |
| Closing Process (pg. 3-24) | |
| Closing Steps Illustrated (pg. 3-25) | |
| Preparing a Post-Closing Trial Balance (pg. 3-26) | |
| Subsequent Events (pg. 3-26) | |
| Summarizing the Accounting Cycle (pg. 3-26) | |
| Review 3-4 (pg. 3-27) | |
| Financial Statement Analysis (pg. 3-27) | |
| Using Information on Levels and Flows (pg. 3-27) | |
| Review 3-5 (pg. 3-28) | |
| Summary (pg. 3-29) | |
| Guidance Answers . . . You Make the Call (pg. 3-29) | |
| Multiple Choice (pg. 3-29) | |
| Questions (pg. 3-30) | |
| Data Analytics (pg. 3-31) | |
| Data Visualization (pg. 3-32) | |
| Mini Exercises (pg. 3-32) | |
| Exercises (pg. 3-35) | |
| Problems (pg. 3-38) | |
| Cases and Projects (pg. 3-48) | |
| Solutions to Review Problems (pg. 3-50) | |
| Chapter 4: Reporting and Analyzing Cash Flows (pg. 4-1) | |
| CVS Health Corporation (pg. 4-2) | |
| Purpose of the Statement of Cash Flows (pg. 4-3) | |
| What Do We Mean by “CASH”? (pg. 4-3) | |
| What Does a Statement of Cash Flows Look Like? (pg. 4-4) | |
| Framework for the Statement of Cash Flows (pg. 4-4) | |
| Operating Activities (pg. 4-5) | |
| Investing Activities (pg. 4-5) | |
| Financing Activities (pg. 4-5) | |
| Usefulness of Classifications (pg. 4-6) | |
| Review 4-1 (pg. 4-7) | |
| Preparing the Statement of Cash Flows-Operating Activities (pg. 4-7) | |
| Converting Revenues and Expenses to Cash Flows from Operating Activities (pg. 4-10) | |
| Review 4-2 (pg. 4-16) | |
| Reconciling Net Income and Cash Flow from Operating Activities (pg. 4-17) | |
| Cash Flow from Operating Activities Using the Indirect Method (pg. 4-18) | |
| Review 4-3 (pg. 4-19) | |
| Preparing the Statement of Cash Flows-Investing and Financing Activities (pg. 4-19) | |
| Cash Flows from Investing Activities (pg. 4-20) | |
| Cash Flows from Financing Activities (pg. 4-20) | |
| Review 4-4 (pg. 4-22) | |
| Additional Detail in the Statement of Cash Flows (pg. 4-23) | |
| Case Illustration (pg. 4-23) | |
| Gains and Losses on Investing and Financing Activities (pg. 4-24) | |
| Noncash Investing and Financing Activities (pg. 4-25) | |
| The Effects of Foreign Currencies on the Statement of Cash Flows (pg. 4-27) | |
| Supplemental Disclosures (pg. 4-28) | |
| Review 4-5 (pg. 4-28) | |
| Analyzing Financial Statements (pg. 4-29) | |
| Interpreting Indirect Method Cash from Operations (pg. 4-29) | |
| Analysis Objective (pg. 4-29) | |
| Analysis Objective (pg. 4-31) | |
| Review 4-6 (pg. 4-32) | |
| Appendix 4A: A Spreadsheet Approach to Preparing the Statement of Cash Flows (pg. 4-33) | |
| Step 1: Classify the balance sheet accounts. (pg. 4-33) | |
| Step 2: Compute the changes in the balance sheet accounts. (pg. 4-33) | |
| Step 3: Handle the accounts that have single classifications. (pg. 4-34) | |
| Step 4: Enter the effect of investing/financing transactions that do not involve cash. (pg. 4-34) | |
| Step 5: Analyze the change in retained earnings. (pg. 4-34) | |
| Step 6: Analyze the change in plant assets. (pg. 4-34) | |
| Step 7: Total the columns. (pg. 4-35) | |
| Step 8: Prepare the statement of cash flows. (pg. 4-35) | |
| Review 4-7 (pg. 4-35) | |
| Summary (pg. 4-35) | |
| Guidance Answers . . . You Make the Call (pg. 4-36) | |
| Key Ratios (pg. 4-37) | |
| Multiple Choice (pg. 4-37) | |
| Questions (pg. 4-38) | |
| Data Analytics (pg. 4-39) | |
| Data Visualization (pg. 4-40) | |
| Mini Exercises (pg. 4-40) | |
| Exercises (pg. 4-44) | |
| Problems (pg. 4-49) | |
| Cases and Projects (pg. 4-56) | |
| Solutions to Review Problems (pg. 4-60) | |
| Chapter 5: Analyzing and Interpreting Financial Statements (pg. 5-1) | |
| Pepsico (pg. 5-2) | |
| Introduction (pg. 5-3) | |
| Assessing the Business Environment (pg. 5-3) | |
| Vertical and Horizontal Analysis (pg. 5-4) | |
| Review 5-1 (pg. 5-6) | |
| Return on Investment (pg. 5-8) | |
| Return on Equity (ROE) (pg. 5-8) | |
| Return on Assets (ROA) (pg. 5-8) | |
| Return on Financial Leverage (ROFL) (pg. 5-9) | |
| Review 5-2 (pg. 5-10) | |
| Disaggregating ROA (pg. 5-11) | |
| Review 5-3 (pg. 5-15) | |
| Appendix 5A: Analyzing and Interpreting Core Operating Activities (pg. 5-23) | |
| Reporting Operating Activities in the Income Statement (pg. 5-23) | |
| Reporting Operating Activities in the Balance Sheet (pg. 5-24) | |
| Disaggregating RNOA (pg. 5-24) | |
| Review 5-5 (pg. 5-25) | |
| Appendix 5B: Financial Statement Forecasts (pg. 5-25) | |
| Step 1. Forecast Sales Revenue (pg. 5-25) | |
| Step 2. Forecast Operating Expenses (pg. 5-26) | |
| Step 3. Forecast Operating Assets and Liabilities (pg. 5-26) | |
| Step 4. Forecast Nonoperating Assets, Liabilities, Revenues, and Expenses (pg. 5-27) | |
| Step 5. Forecast Net Income, Dividends, and Retained Earnings (pg. 5-27) | |
| Step 6. Forecast Cash (pg. 5-28) | |
| Step 7. Prepare the Statement of Cash Flows Forecast (pg. 5-29) | |
| Additional Considerations (pg. 5-29) | |
| Review 5-6 (pg. 5-30) | |
| Summary (pg. 5-30) | |
| Key Ratios (pg. 5-31) | |
| Multiple Choice (pg. 5-31) | |
| Guidance Answers . . . You Make the Call (pg. 5-32) | |
| Questions (pg. 5-32) | |
| Data Analytics (pg. 5-33) | |
| Data Visualization (pg. 5-35) | |
| Mini Exercises (pg. 5-35) | |
| Exercises (pg. 5-38) | |
| Problems (pg. 5-42) | |
| Cases and Projects (pg. 5-48) | |
| Solutions to Review Problems (pg. 5-49) | |
| Chapter 6: Reporting and Analyzing Revenues, Receivables, and Operating Income (pg. 6-1) | |
| MICROSOFT CORPORATION (pg. 6-2) | |
| Reporting Operating Income (pg. 6-3) | |
| Revenue Recognition (pg. 6-5) | |
| Review 6-1 (pg. 6-8) | |
| Revenue Recognition Subsequent to Customer Purchase (pg. 6-8) | |
| Review 6-2 (pg. 6-11) | |
| Review 6-3 (pg. 6-14) | |
| Reporting Accounts Receivable (pg. 6-14) | |
| Determining the Allowance for Uncollectible Accounts (pg. 6-15) | |
| Reporting the Allowance for Uncollectible Accounts (pg. 6-16) | |
| Recording Write-Offs of Uncollectible Accounts (pg. 6-17) | |
| Disclosure Notes and Interpretations (pg. 6-19) | |
| Review 6-4 (pg. 6-21) | |
| Analyzing Financial Statements (pg. 6-22) | |
| Net Operating Profit After Taxes (NOPAT) (pg. 6-22) | |
| Analysis Objective (pg. 6-22) | |
| Analysis Objective (pg. 6-25) | |
| Review 6-5 (pg. 6-26) | |
| Earnings Management (pg. 6-27) | |
| Review 6-6 (pg. 6-28) | |
| Appendix 6A: Reporting Nonrecurring Items (pg. 6-29) | |
| Discontinued Operations (pg. 6-29) | |
| Exit or Disposal Costs (pg. 6-30) | |
| Review 6-7 (pg. 6-31) | |
| Summary (pg. 6-31) | |
| Guidance Answers . . . You Make the Call (pg. 6-32) | |
| Key Ratios (pg. 6-33) | |
| Multiple Choice (pg. 6-33) | |
| Questions (pg. 6-34) | |
| Data Analytics (pg. 6-34) | |
| Data Visualization (pg. 6-36) | |
| Mini Exercises (pg. 6-36) | |
| ExerciseS (pg. 6-39) | |
| Problems (pg. 6-46) | |
| Cases and Projects (pg. 6-49) | |
| Solutions to Review Problems (pg. 6-53) | |
| Chapter 7: Reporting and Analyzing Inventory (pg. 7-1) | |
| Home Depot (pg. 7-2) | |
| Reporting Operating Expenses (pg. 7-3) | |
| Expense Recognition Principles (pg. 7-3) | |
| Reporting Inventory Costs in the Financial Statements (pg. 7-4) | |
| Recording Inventory Costs in the Financial Statements (pg. 7-5) | |
| Inventory and the Cost of Acquisition (pg. 7-6) | |
| Inventory Reporting by Manufacturing Firms (pg. 7-6) | |
| Review 7-1 (pg. 7-7) | |
| Inventory Costing Methods (pg. 7-7) | |
| First-In, First-Out (FIFO) (pg. 7-8) | |
| Last-In, First-Out (LIFO) (pg. 7-9) | |
| Inventory Costing and Price Changes (pg. 7-11) | |
| Average Cost (AC) (pg. 7-11) | |
| Review 7-2 (pg. 7-12) | |
| Lower of Cost or Net Realizable Value (pg. 7-13) | |
| Review 7-3 (pg. 7-14) | |
| Financial Statement Effects and Disclosure (pg. 7-14) | |
| Financial Statement Effects of Inventory Costing (pg. 7-16) | |
| Review 7-4 (pg. 7-19) | |
| Analyzing Financial Statements (pg. 7-20) | |
| Analysis Objective (pg. 7-20) | |
| Analysis Objective (pg. 7-21) | |
| Review 7-5 (pg. 7-25) | |
| Appendix 7A: LIFO Liquidation (pg. 7-25) | |
| Analysis Implications (pg. 7-26) | |
| Review 7-6 (pg. 7-27) | |
| Summary (pg. 7-27) | |
| Guidance Answers . . . You Make the Call (pg. 7-28) | |
| Key Ratios (pg. 7-28) | |
| Multiple Choice (pg. 7-29) | |
| Questions (pg. 7-29) | |
| Data Analytics (pg. 7-30) | |
| Data Visualization (pg. 7-31) | |
| Mini Exercises (pg. 7-31) | |
| Exercises (pg. 7-34) | |
| Problems (pg. 7-37) | |
| Cases and Project (pg. 7-40) | |
| Solutions to Review Problems (pg. 7-42) | |
| Chapter 8: Reporting and Analyzing Long-Term Operating Assets (pg. 8-1) | |
| Procter & Gamble (pg. 8-2) | |
| Introduction (pg. 8-3) | |
| Property, Plant, and Equipment (PPE) (pg. 8-3) | |
| Determining Costs to Capitalize (pg. 8-4) | |
| Review 8-1 (pg. 8-5) | |
| Depreciation (pg. 8-5) | |
| Depreciation Methods (pg. 8-6) | |
| Changes in Accounting Estimates (pg. 8-9) | |
| Review 8-2 (pg. 8-10) | |
| Asset Sales and Impairments (pg. 8-10) | |
| Note Disclosure (pg. 8-12) | |
| Review 8-3 (pg. 8-13) | |
| Analyzing Financial Statements (pg. 8-13) | |
| Analysis Objective (pg. 8-13) | |
| Analysis Objective (pg. 8-14) | |
| Cash Flow Effects (pg. 8-16) | |
| Review 8-4 (pg. 8-17) | |
| Intangible Assets (pg. 8-17) | |
| Research and Development Costs (pg. 8-17) | |
| Patents (pg. 8-18) | |
| Copyrights (pg. 8-19) | |
| Trademarks (pg. 8-19) | |
| Franchise Rights (pg. 8-19) | |
| Amortization and Impairment of Identifiable Intangible Assets (pg. 8-19) | |
| Digital Assets (pg. 8-21) | |
| Goodwill (pg. 8-21) | |
| Note Disclosures (pg. 8-22) | |
| Review 8-5 (pg. 8-23) | |
| Analysis Implications (pg. 8-23) | |
| Review 8-6 (pg. 8-24) | |
| Summary (pg. 8-25) | |
| Guidance Answers . . . You Make the Call (pg. 8-25) | |
| Key Ratios (pg. 8-25) | |
| Multiple Choice (pg. 8-26) | |
| Questions (pg. 8-26) | |
| Data Analytics (pg. 8-27) | |
| Data Visualization (pg. 8-28) | |
| Mini Exercises (pg. 8-28) | |
| Exercises (pg. 8-30) | |
| Problems (pg. 8-34) | |
| Cases and Projects (pg. 8-37) | |
| Solutions to Review Problems (pg. 8-40) | |
| Chapter 9: Reporting and Analyzing Liabilities (pg. 9-1) | |
| Verizon (pg. 9-2) | |
| Introduction (pg. 9-3) | |
| Current Liabilities (pg. 9-4) | |
| Accounts Payable (pg. 9-4) | |
| Accrued Liabilities (pg. 9-6) | |
| Other Current Liabilities (pg. 9-10) | |
| Review 9-1 (pg. 9-10) | |
| Current Nonoperating (Financial) Liabilities (pg. 9-10) | |
| Review 9-2 (pg. 9-13) | |
| Long-Term Liabilities (pg. 9-13) | |
| Installment Loans (pg. 9-13) | |
| Bonds (pg. 9-15) | |
| Pricing of Bonds (pg. 9-15) | |
| Effective Cost of Debt (pg. 9-17) | |
| Review 9-3 (pg. 9-18) | |
| Reporting of Bond Financing (pg. 9-18) | |
| Effects of Discount and Premium Amortization (pg. 9-20) | |
| The Fair Value Option (pg. 9-22) | |
| Effects of Bond Repurchase (pg. 9-24) | |
| Financial Statement Disclosure Notes (pg. 9-24) | |
| Interest and the Statement of Cash Flows (pg. 9-26) | |
| Disclosure of Commitments and Contingencies (pg. 9-26) | |
| Review 9-4 (pg. 9-27) | |
| Analyzing Financial Statements (pg. 9-27) | |
| Analysis Objective (pg. 9-27) | |
| Debt Ratings and the Cost of Debt (pg. 9-29) | |
| Review 9-5 (pg. 9-31) | |
| Summary (pg. 9-32) | |
| Guidance Answers . . . You Make the Call (pg. 9-33) | |
| Key Ratios (pg. 9-33) | |
| Multiple Choice (pg. 9-33) | |
| Questions (pg. 9-34) | |
| Data Analytics (pg. 9-34) | |
| Data Visualization (pg. 9-36) | |
| Mini Exercises (pg. 9-36) | |
| Exercises (pg. 9-40) | |
| Problems (pg. 9-43) | |
| Cases and Projects (pg. 9-46) | |
| Solutions to Review Problems (pg. 9-48) | |
| Chapter 10: Reporting and Analyzing Leases, Pensions, Income Taxes, and Commitments and Contingencie (pg. 10-1) | |
| Deere & Company (pg. 10-2) | |
| Introduction (pg. 10-3) | |
| Leases (pg. 10-3) | |
| Lessee Reporting of Leases (pg. 10-5) | |
| Lease Disclosures (pg. 10-12) | |
| Review 10-1 (pg. 10-14) | |
| Pensions (pg. 10-15) | |
| Balance Sheet Effects of Defined Benefit Pension Plans (pg. 10-15) | |
| Income Statement Effects of Defined Benefit Pension Plans (pg. 10-18) | |
| Note Disclosures-Components of Plan Assets and PBO (pg. 10-18) | |
| Note Disclosures-Components of Pension Expense (pg. 10-20) | |
| Note Disclosures and Future Cash Flows (pg. 10-21) | |
| Other Post-Employment Benefits (pg. 10-23) | |
| Review 10-2 (pg. 10-24) | |
| Accounting For Income Taxes (pg. 10-25) | |
| Book-Tax Differences (pg. 10-25) | |
| Revaluation of Deferred Tax Assets and Liabilities Due to a Tax Rate Change (pg. 10-31) | |
| Income Tax Disclosures (pg. 10-32) | |
| Deferred Taxes in the Statement of Cash Flows (pg. 10-35) | |
| Computation and Analysis of Taxes (pg. 10-35) | |
| Review 10-3 (pg. 10-36) | |
| Commitments and Contengencies and Other Disclosures (pg. 10-36) | |
| Analyzing Financial Statements (pg. 10-38) | |
| Analysis Objective (pg. 10-38) | |
| Review 10-4 (pg. 10-39) | |
| Summary (pg. 10-39) | |
| Guidance Answers . . . You Make The Call (pg. 10-40) | |
| Key Ratios (pg. 10-41) | |
| Multiple Choice (pg. 10-41) | |
| Questions (pg. 10-41) | |
| Data Analytics (pg. 10-42) | |
| Data Visualization (pg. 10-44) | |
| Mini Exercises (pg. 10-44) | |
| Exercises (pg. 10-47) | |
| Problems (pg. 10-53) | |
| Cases and Projects (pg. 10-58) | |
| Solutions to Review Problems (pg. 10-64) | |
| Chapter 11: Reporting and Analyzing Stockholders’ Equity (pg. 11-1) | |
| Pfizer (pg. 11-2) | |
| Introduction (pg. 11-3) | |
| Contributed Capital (pg. 11-4) | |
| Classes of Stock (pg. 11-4) | |
| Accounting for Stock Transactions (pg. 11-7) | |
| Review 11-1 (pg. 11-11) | |
| Earned Capital (pg. 11-11) | |
| Cash Dividends (pg. 11-11) | |
| Stock Dividends and Splits (pg. 11-13) | |
| Stock Transactions and the Statement of Cash Flows (pg. 11-15) | |
| Review 11-2 (pg. 11-15) | |
| Comprehensive Income (pg. 11-16) | |
| Summary of Stockholders’ Equity (pg. 11-17) | |
| Analyzing Financial Statements (pg. 11-17) | |
| Analysis Objective (pg. 11-17) | |
| Review 11-3 (pg. 11-19) | |
| Earnings Per Share (pg. 11-19) | |
| Computation and Analysis of EPS (pg. 11-20) | |
| Review 11-4 (pg. 11-22) | |
| Appendix 11A: Dilutive Securities: Accounting for Convertible Securities, Stock Options, and Restr (pg. 11-22) | |
| Convertible Securities (pg. 11-22) | |
| Stock Rights (pg. 11-23) | |
| Employee Stock Options (pg. 11-24) | |
| Restricted Stock (pg. 11-25) | |
| Review 11-5 (pg. 11-27) | |
| Summary (pg. 11-28) | |
| Guidance Answers . . . You Make the Call (pg. 11-29) | |
| Key Ratios (pg. 11-29) | |
| Multiple Choice (pg. 11-29) | |
| Questions (pg. 11-30) | |
| Data Analytics (pg. 11-31) | |
| Data Visualization (pg. 11-32) | |
| Mini Exercises (pg. 11-32) | |
| Exercises (pg. 11-37) | |
| Problems (pg. 11-43) | |
| Cases and Projects (pg. 11-48) | |
| Solutions to Review Problems (pg. 11-51) | |
| Chapter 12: Reporting and Analyzing Financial Investments (pg. 12-1) | |
| Alphabet (pg. 12-2) | |
| Introduction (pg. 12-3) | |
| Review 12-1 (pg. 12-5) | |
| Fair Value: An Introduction (pg. 12-5) | |
| Review 12-2 (pg. 12-6) | |
| Passive Investments in Debt Securities (pg. 12-6) | |
| Acquisition of the Investment (pg. 12-6) | |
| Investments Reported at Cost (pg. 12-7) | |
| Investments Marked to Fair Value (pg. 12-8) | |
| Sale of the Investment (pg. 12-8) | |
| Debt Investments Marked to Fair Value (pg. 12-9) | |
| Passive Investments in Equity Securities (pg. 12-12) | |
| Financial Statement Disclosures (pg. 12-14) | |
| Potential for Earnings Management (pg. 12-16) | |
| Review 12-3 (pg. 12-17) | |
| Investments with Significant Influence (pg. 12-17) | |
| Accounting for Investments with Significant Influence (pg. 12-18) | |
| Equity Method Accounting and Effects on Ratios (pg. 12-20) | |
| Financial Statement Disclosures (pg. 12-20) | |
| Review 12-4 (pg. 12-21) | |
| Investments with Control (pg. 12-22) | |
| Accounting for Investments with Control (pg. 12-22) | |
| Reporting of Acquired Assets and Liabilities (pg. 12-24) | |
| Noncontrolling Interest (pg. 12-28) | |
| Financial Statement Analysis (pg. 12-30) | |
| Review 12-5 (pg. 12-31) | |
| Appendix 12A: Equity Method Mechanics (pg. 12-31) | |
| Review 12-6 (pg. 12-33) | |
| Appendix 12B: Consolidation Accounting Mechanics (pg. 12-33) | |
| Review 12-7 (pg. 12-34) | |
| Appendix 12C: Accounting for Investments in Derivatives (pg. 12-35) | |
| Review 12-8 (pg. 12-36) | |
| Summary (pg. 12-37) | |
| Guidance Answers . . . You Make the Call (pg. 12-39) | |
| Multiple Choice (pg. 12-39) | |
| Data Analytics (pg. 12-40) | |
| Data Visualization (pg. 12-40) | |
| Mini Exercises (pg. 12-41) | |
| Exercises (pg. 12-44) | |
| Problems (pg. 12-51) | |
| Cases and Projects (pg. 12-54) | |
| Solutions to Review Problems (pg. 12-57) | |
| Appendix A: Compound Interest and the TimeValue of Money (pg. A-1) | |
| Future Value Concepts (pg. A-2) | |
| Present Value Concepts (pg. A-3) | |
| Present Value of a Single Amount (pg. A-3) | |
| Present Value of an Annuity (pg. A-4) | |
| Installment Loans (pg. A-5) | |
| Bond Valuation (pg. A-5) | |
| Calculating Bond Yields (pg. A-6) | |
| Future Value of Annuities (pg. A-6) | |
| Using Excel to Compute Time-Value (pg. A-7) | |
| Future Value Calculations (pg. A-7) | |
| Present Value Calculations (pg. A-10) | |
| Exercises (pg. A-17) | |
| Appendix B: Data Analytics and Blockchain Technology (pg. B-1) | |
| Data Analytics (pg. B-2) | |
| Big Data (pg. B-2) | |
| Types of Data Analytics (pg. B-2) | |
| Data Analytics in the Accounting Profession (pg. B-3) | |
| The Analytics Mindset (pg. B-4) | |
| Data Analytic Tools (pg. B-5) | |
| Data Visualization (pg. B-6) | |
| Blockchain Technology (pg. B-10) | |
| Summary (pg. B-12) | |
| Video Resources For Tableau (pg. B-13) | |
| Multiple Choice (pg. B-13) | |
| Exercises (pg. B-14) | |
| Problems (pg. B-15) | |
| Index (pg. I-1) | |
Michelle L. Hanlon
Michelle L. Hanlon is the Howard W. Johnson Professor at the MIT Sloan School of Management. She earned her doctorate at the University of Washington.
Prior to joining MIT, she was a faculty member at the University of Michigan. Professor Hanlon has taught financial accounting to undergraduates, MBA students, executive MBA students, and Masters of Finance students. Professor Hanlon also teaches Taxes and Business Strategy to MBA students. She is the winner of the 2013 Jamieson Prize for Excellence in Teaching at MIT Sloan.
Professor Hanlon’s research focuses primarily on the intersection of taxation and financial accounting. Her recent work examines the capital market effects of the accounting for income tax, the reputational effects of corporate tax avoidance, and the economic consequences of U.S. international tax policies for multinational corporations. She has published research studies in the Journal of Accounting and Economics, the Journal of Accounting Research, The Accounting Review, the Review of Accounting Studies, the Journal of Finance, the Journal of Financial Economics, the Journal of Public Economics, and others. She has won several awards for her research and has presented her work at numerous universities and conferences. Professor Hanlon has served on several editorial boards and currently serves as an editor at the Journal of Accounting and Economics.
Professor Hanlon has testified in front of the U.S. Senate Committee on Finance and the U.S. House of Representatives Committee on Ways and Means about the interaction of financial accounting and tax policy. She served as a U.S. delegate to the American-Swiss Young Leaders Conference in 2010 and worked as an Academic Fellow at the U.S. House Ways and Means Committee in 2015.
Robert P. Magee
Robert P. Magee is Keith I. DeLashmutt Professor of Accounting Information and Management at the Kellogg School of Management at Northwestern University.
He received his A.B., M.S. and Ph.D. from Cornell University. Prior to joining the Kellogg faculty in 1976, he was a faculty member at the University of Chicago's Graduate School of Business. For academic year 1980-81, he was a visiting faculty member at IMEDE (now IMD) in Lausanne, Switzerland.
Professor Magee's research focuses on the use of accounting information to facilitate decision-making and control within organizations. He has published articles in The Accounting Review, the Journal of Accounting Research, the Journal of Accounting and Economics, and a variety of other journals. He is the author of Advanced Managerial Accounting and co-author (with Thomas R. Dyckman and David H. Downes) of Efficient Capital Markets and Accounting: A Critical Analysis. The latter book received the Notable Contribution to the Accounting Literature Award from the AICPA in 1978. Professor Magee has served on the editorial boards of The Accounting Review, the Journal of Accounting Research, the Journal of Accounting and Economics and the Journal of Accounting, Auditing and Finance. From 1994-96, he served as Editor of The Accounting Review, the quarterly research journal of the American Accounting Association. He received the American Accounting Association's Outstanding Accounting Educator Award in 1999 and the Illinois CPA Society Outstanding Educator Award in 2000.
Professor Magee teaches financial accounting to MBA and Executive MBA students. He has received several teaching awards at the Kellogg School, including the Alumni Choice Outstanding Professor Award in 2003.
Glenn M. Pfeiffer
Glenn M. Pfeiffer is Professor of Accounting at the George L. Argyros School of Business and Economics at Chapman University.
He received his M.S. and Ph.D. from Cornell University after he earned a bachelor's degree from Hope College. Prior to joining the faculty at the Argyros School, he held appointments at the University of Washington, Cornell University, the University of Chicago, the University of Arizona, and San Diego State University.
Professor Pfeiffer’s research focuses on financial reporting and capital markets. He has investigated issues relating to lease accounting, LIFO inventory liquidation, earnings per share, employee stock options, corporate reorganization, and technology investments. He has published articles in The Accounting Review, the Financial Analysts Journal, the International Journal of Accounting Information Systems, the Journal of Applied Business Research, the Journal of High Technology Management Research, the Journal of Accounting Education, and several other academic journals. In addition, he has published numerous case studies in financial accounting and reporting.
Professor Pfeiffer teaches financial accounting and financial analysis to undergraduate, MBA, and Executive students. He has also taught managerial accounting for MBAs. He has won several teaching awards at both the undergraduate and graduate levels.
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