Prin. of Managerial Accounting , Class assignment

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Types of Businesses

Indicate whether each of the following companies is primarily a service, merchandising, or manufacturing business. If you are unfamiliar with the company, you may use the Internet to locate the company’s home page or use the finance Web site of Yahoo.com.

1. AFLAC (AFL)

Manufacturing Merchandising Service

2. Best Buy (BBY)

Manufacturing Merchandising Service

3. Boeing (BA)

Manufacturing Merchandising Service

4. Caterpillar (CAT)

Manufacturing Merchandising Service

5. Citigroup (C)

Manufacturing Merchandising Service

6. CVS Health Corp. (CVS)

Manufacturing Merchandising Service

7. DowDuPont Inc. (DWDP)

Manufacturing Merchandising Service

8. Exxon Mobil (XOM)

Manufacturing Merchandising Service

9. Facebook (FB)

Manufacturing Merchandising Service

10. Ford Motor (F)

Manufacturing Merchandising Service

11. General Electric (GE)

Manufacturing Merchandising Service

12. Hilton Hotels

Manufacturing Merchandising Service

13. H&R Block Inc. (HRD)

Manufacturing Merchandising Service

14. Oracle (ORCL)

Manufacturing Merchandising Service

15. Target (TGT)

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Business Emphasis

Identify the primary business emphasis of each of the following companies as (a) a low-cost emphasis or (b) a premium-price emphasis. If you are unfamiliar with the company, you may use the Internet to locate the company’s home page or use the finance Web site of Yahoo.com.

1. Allegiant Travel Services (ALGT)

low-cost premium-price

2. Best Buy (BBY)

low-cost premium-price

3. BMW

low-cost premium-price

4. Dollar Tree (DLTR)

low-cost premium-price

5. E*TRADE (ETFC)

low-cost premium-price

6. Goldman Sachs Group (GS)

low-cost premium-price

7. Lowe’s (LOW)

low-cost premium-price

8. Nike (NKE)

low-cost premium-price

9. Pepsi Co, Inc. (PEP)

low-cost premium-price

10. Staples

low-cost premium-price

11. Sub-Zero

low-cost premium-price

12. Mercedes-Benz low-cost premium-price

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Accounting Equation

The total assets and total liabilities for a recent year of Best Buy (BBY) and Gamestop (GME) are shown below.

Best Buy (in millions) Gamestop (in millions) Assets $13,856 $4,976 Liabilities 9,147 2,722

Determine the stockholders’ equity of each company.

Best Buy $fill in the blank 1 million Gamestop $fill in the blank 2 million

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Accounting Equation

Determine the missing amount for each of the following:

Assets = Liabilities + Stockholders’ Equity a. $fill in the blank 1 = $262,500 + $450,000 b. $1,320,000 = $fill in the blank 2 + $787,500 c. $3,150,000 = $900,000 + $fill in the blank 3

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Accounting Equation and Income Statement

Staples, Inc. (SPLS) is a leading office products distributor, with retail stores in the United States, Canada, Asia, Europe, and South America. The following financial statement data were adapted from recent financial statements of Staples:

Year 2
(in millions) Year 1
(in millions) Total assets $8,271 $10,172 Total liabilities (1) 4,788 Total stockholders’ equity 3,696 (2) Sales 18,247 Cost of goods sold 13,489 Operating expenses 4,967 Other expense (net) 143 Income tax expense 107

Enter all amounts as positive numbers.

a. Determine the missing data indicated for (1) and (2).

Total liabilities for Year 2 $fill in the blank 1millions Total stockholders’ equity for Year 1 $fill in the blank 2millions

b. Using the income statement data for Year 2, determine the amount of net income or net loss.

Net income Net loss

$fill in the blank 4millions

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Income Statement

JLM Services was organized on August 1, 20Y5. A summary of the revenue and expense transactions for August follows:

Fees earned $2,550,000 Wages expense 1,612,500 Miscellaneous expense 41,250 Rent expense 240,000 Supplies expense 22,500

Prepare an income statement for the month ended August 31.

JLM Services Income Statement
For the Month Ended August 31, 20Y5

Cash Fees earned Operating expenses

$- Select – Operating expenses:

Accounts payable Accounts receivable Cash Sales expense Wages expense

$- Select –

Accounts payable Accounts receivable Cash Prepaid rent Rent expense

– Select –

Accounts payable Accounts receivable Cash Supplies Supplies expense

– Select –

Accounts payable Accounts receivable Cash Miscellaneous expense Petty cash

– Select – Total operating expenses fill in the blank 11

Net income Net loss

$- Select –

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Return on assets

Pfizer Inc. (PFE) discovers, produces, and distributes medicines, including Celebrex and Lipitor. Ford Motor Co. (F) develops, markets, and produces automobiles and trucks. Microsoft Corporation (MSFT) develops, produces, and distributes a variety of computer software and hardware products including Windows, Office, Excel, and the Xbox.

1. The following data (in millions) were taken from recent financial statements of each company:

Pfizer Ford Microsoft Net income $21,308 $7,628 $21,204 Total assets at the beginning of the year 171,615 237,951 193,468 Total assets at the end of the year 171,797 257,808 241,086

Compute the return on assets for each company using the preceding data, and rank the companies’ return on assets from highest to lowest. Round the return on assets to one decimal place.

Return on assets Rank Pfizer fill in the blank 1 %

Rank 1 Rank 2 Rank 3

Ford fill in the blank 3 %

Rank 1 Rank 2 Rank 3

Microsoft fill in the blank 5 %

Rank 1 Rank 2 Rank 3

2. All of the following statements regarding the rate of return on asset rankings for Microsoft, Pfizer, and Ford are true except:

1. Microsoft has the highest return on assets.
2. Ford has the lowest return on assets.
3. Microsoft has been challenged by competitors such as Alphabet (Google).
4. Pfizer has the highest return on assets.

Choose the correct answer:

1 2 3 4

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Return on assets

ExxonMobil Corporation (XOM) explores, produces, and distributes oil and natural gas. The Coca-Cola Company (KO) produces and distributes soft drink beverages, including Coke. WalMart Stores, Inc. (WMT) operates retail stores and supermarkets.

1. The following data (in millions) were taken from recent financial statements of each company:

ExxonMobil Coca-Cola WalMart Net income $19,710 $1,248 $10,523 Total assets at the beginning of the year 330,314 87,270 198,825 Total assets at the end of the year 348,691 87,896 204,572

Compute the return on assets for each company using the preceding data, and rank the companies’ return on assets from highest to lowest. Round the return on assets to one decimal place.

Return on Assets Rank ExxonMobil fill in the blank 1 %

Rank 1 Rank 2 Rank 3

Coca-Cola fill in the blank 3 %

Rank 1 Rank 2 Rank 3

WalMart fill in the blank 5 %

Rank 1 Rank 2 Rank 3

2. All of the following statements regarding the rate of return on assets rankings for ExxonMobil, WalMart, and Coca-Cola are true except:

1. ExxonMobil has the highest rate of return on assets due to the high demand for petroleum-based products.
2. WalMart and Coca-Cola have approximately the same rates of return on assets primarily.
3. Coca-Cola has the lowest rate of return since it’s operating in a highly competitive market, as well as the increased demand by consumers for healthy beverage alternatives.
4. ExxonMobil’s operations have the most risks.

Choose the correct answer:

a b c d

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Return on assets

Tiffany & Co. (TIF) designs and sells jewelry including rings, watches, and necklaces throughout the world. The following data (in millions) were taken from recent financial statements of Tiffany:

Net income $ 370 Total assets at the beginning of the year 5,098 Total assets at the end of the year 5,468

1. Compute the return on assets for Tiffany using the preceding data. Round to one decimal place.

fill in the blank 1%

2. Assume WalMart’s return on assets is 5.2%. Complete the statements below regarding the comparison of the return on assets for WalMart to that of Tiffany.

Tiffany’s return on assets is

higher than lower than the same as

Walmart’s return on assets. This reflects Tiffany’s

premium-price strategy low-cost strategy

that allows it to sells its products at

higher lower

prices and markups. In contrast, WalMart operates in a highly competitive market with a

premium-price strategy low-cost strategy