Questions from Financial Accounting

Q: Explain residual ROCE (return on common shareholders’ equity). What does

Explain residual ROCE (return on common shareholders’ equity). What does residual ROCE represent? What does residual ROCE measure?

Q: Describe how the statement of cash flows is linked to each of

Describe how the statement of cash flows is linked to each of the other financial statements (income statement and balance sheet). Also review how the other financial statements are linked with each o...

Q: A firm’s income tax return shows income taxes for 2009 of $

A firm’s income tax return shows income taxes for 2009 of $35,000. The firm reports deferred tax assets before any valuation allowance of $24,600 at the beginning of 2009 and $27,200 at the end of 200...

Q: A recent article in Fortune magazine listed the following firms among the

A recent article in Fortune magazine listed the following firms among the top ten most admired companies in the United States: Dell, Southwest Airlines, Microsoft, and Johnson & Johnson. Access the we...

Q: ‘‘Some asset valuations using historical costs are highly relevant and very

‘‘Some asset valuations using historical costs are highly relevant and very representationally faithful, whereas others may be representationally faithful but lack relevance. Some asset valuations bas...

Q: The chapter describes free cash flows for common equity shareholders. If

The chapter describes free cash flows for common equity shareholders. If the firm borrows cash by issuing debt, how does that transaction affect free cash flows for common equity shareholders in that...

Q: Exhibit 4.22 presents selected operating data for three retailers for

Exhibit 4.22 presents selected operating data for three retailers for a recent year. Macy’s operates several department store chains selling consumer products such as brand-name clot...

Q: ‘‘Asset valuation and recognition of net income closely relate.’’

‘‘Asset valuation and recognition of net income closely relate.’’ Explain, including conditions when they do not.

Q: Firms value inventory under a variety of assumptions, including two common

Firms value inventory under a variety of assumptions, including two common methods: last-in first out (LIFO) and first-in first-out (FIFO). Ignore taxes, assume that prices increase over time, and ass...

Q: The text states, ‘‘Over sufficiently long time periods, net

The text states, ‘‘Over sufficiently long time periods, net income equals cash inflows minus cash outflows, other than cash flows with owners.’’ Demonstrate the accuracy of this statement in the follo...