Problem 4 2a fundamental accounting principles

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Fundamental Accounting Principles

24th edition

John J. Wild University of Wisconsin at Madison

Ken W. Shaw University of Missouri at Columbia

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To my students and family, especially Kimberly, Jonathan, Stephanie, and Trevor. To my wife Linda and children Erin, Emily, and Jacob.

FUNDAMENTAL ACCOUNTING PRINCIPLES, TWENTY-FOURTH EDITION

Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright ©2019 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous editions ©2017, 2015, and 2013. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

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ISBN 978-1-259-91696-0 (combined bound edition) MHID 1-259-91696-0 (combined bound edition) ISBN 978-1-260-15855-7 (combined loose-leaf edition) MHID 1-260-15855-1 (combined loose-leaf edition) ISBN 978-1-260-15860-1 (principles bound edition, chapters 1-17) MHID 1-260-15860-8 (principles bound edition, chapters 1-17) ISBN 978-1-260-15861-8 (principles loose-leaf edition, chapters 1-17) MHID 1-260-15861-6 (principles loose-leaf edition, chapters 1-17)

Executive Portfolio Manager: Steve Schuetz Product Developers: Michael McCormick, Christina Sanders Marketing Manager: Michelle Williams Content Project Managers: Lori Koetters, Brian Nacik Buyer: Sandy Ludovissy Design: Debra Kubiak Content Licensing Specialist: Melissa Homer Cover Image: Bicyclist: ©Mezzotint/Shutterstock; Statistics icons: ©A-spring/Shutterstock; Background image: ©Vector work/Shutterstock

Compositor: Aptara®, Inc.

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All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.

Library of Congress Cataloging-in-Publication Data

Names: Wild, John J., author. | Shaw, Ken W., author. Title: Fundamental accounting principles / John J. Wild, University of  Wisconsin at Madison, Ken W. Shaw, University of Missouri at Columbia. Description: 24th edition. | Dubuque, IA : McGraw-Hill Education, [2018] |  Revised edition of Fundamental accounting principles, [2017] Identifiers: LCCN 2018016853 | ISBN 9781259916960 (alk. paper) | ISBN  1259916960 (alk. paper) | ISBN 9781260158601 (alk. paper) | ISBN  1260158608 (alk. paper) Subjects: LCSH: Accounting. Classification: LCC HF5636 .W675 2018 | DDC 657—dc23 LC record available at https://lccn.loc.gov/2018016853     The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.     mheducation.com/highered

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https://lccn.loc.gov/2018016853
http://mheducation.com/highered
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About the Authors

Courtesy of John J. Wild

JOHN J. WILD is a distinguished professor of accounting at the University of Wisconsin at Madison. He previously held appointments at Michigan State University and the University of Manchester in England. He received his BBA, MS, and PhD from the University of Wisconsin.

John teaches accounting courses at both the undergraduate and graduate levels. He has received numerous teaching honors, including the Mabel W. Chipman Excellence-in- Teaching Award and the departmental Excellence-in-Teaching Award, and he is a two-time recipient of the Teaching Excellence Award from business graduates at the University of Wisconsin. He also received the Beta Alpha Psi and Roland F. Salmonson Excellence-in- Teaching Award from Michigan State University. John has received several research honors, is a past KPMG Peat Marwick National Fellow, and is a recipient of fellowships from the American Accounting Association and the Ernst and Young Foundation.

John is an active member of the American Accounting Association and its sections. He has served on several committees of these organizations, including the Outstanding Accounting Educator Award, Wildman Award, National Program Advisory, Publications, and Research Committees. John is author of Financial Accounting, Managerial Accounting, Financial and Managerial Accounting, and College Accounting, all published by McGraw- Hill Education.

John’s research articles on accounting and analysis appear in The Accounting Review; Journal of Accounting Research; Journal of Accounting and Economics; Contemporary Accounting Research; Journal of Accounting, Auditing and Finance; Journal of Accounting and Public Policy; Accounting Horizons; and other journals. He is past associate editor of Contemporary Accounting Research and has served on several editorial boards including The Accounting Review and the Journal of Accounting and Public Policy.

In his leisure time, John enjoys hiking, sports, boating, travel, people, and spending time with family and friends.

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Using Learning Science and Data Analytics

Courtesy of Ken W. Shaw

KEN W. SHAW is an associate professor of accounting and the KPMG/Joseph A. Silvoso Distinguished Professor of Accounting at the University of Missouri. He previously was on the faculty at the University of Maryland at College Park. He has also taught in international programs at the University of Bergamo (Italy) and the University of Alicante (Spain). He received an accounting degree from Bradley University and an MBA and PhD from the University of Wisconsin. He is a Certified Public Accountant with work experience in public accounting.

Ken teaches accounting at the undergraduate and graduate levels. He has received numerous School of Accountancy, College of Business, and university-level teaching awards. He was voted the “Most Influential Professor” by four School of Accountancy graduating classes and is a two-time recipient of the O’Brien Excellence in Teaching Award. He is the advisor to his school’s chapter of the Association of Certified Fraud Examiners.

Ken is an active member of the American Accounting Association and its sections. He has served on many committees of these organizations and presented his research papers at national and regional meetings. Ken’s research appears in the Journal of Accounting Research; The Accounting Review; Contemporary Accounting Research; Journal of Financial and Quantitative Analysis; Journal of the American Taxation Association; Strategic Management Journal; Journal of Accounting, Auditing, and Finance; Journal of Financial Research; and other journals. He has served on the editorial boards of Issues in Accounting Education; Journal of Business Research; and Research in Accounting Regulation. Ken is co-author of Financial and Managerial Accounting, Managerial Accounting, and College Accounting, all published by McGraw-Hill Education.

In his leisure time, Ken enjoys tennis, cycling, music, and coaching his children’s sports teams.

Author Letter

We use data to make decisions and maximize performance. Like the mountain biker on the cover who uses data to track his progress, we used student performance data to identify content areas that can be made more direct, concise, and systematic.

Learning science reveals that students do not read large chunks of text, so we streamlined this edition to present it in a more focused, succinct, blocked format to improve student learning and retention. Our new edition delivers the same content in 115

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fewer pages. Visual aids and numerous videos offer additional learning aids. New summary Cheat Sheets conclude each chapter to visually reinforce key concepts and procedures.

Our new edition has over 1,500 videos to engage students and improve outcomes:

Concept Overview Videos—cover each chapter’s learning objectives with multimedia presentations that include Knowledge Checks to engage students and assess comprehension. Need-to-Know Demos—walk-through demonstrations of key procedures and analysis to ensure success with assignments and tests. Guided Examples (Hints)—step-by-step walk-through of assignments that mimic Quick Studies, Exercises, and General Ledger.

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Difference Makers in Teaching . . . Learning Science Learning analytics show that students learn better when material is broken into “blocks” of content. Each chapter opens with a visual preview. Learning objective numbers highlight the location of related content. Each “block” of content concludes with a Need- to-Know (NTK) to aid and reinforce student learning. Visual aids and concise, bullet-point discussions further help students learn.

New Revenue Recognition

Wild uses the popular gross method for merchandising transactions (net method is covered in an appendix). The gross method is widely used in practice and best for student success. Adjusting entries for new revenue recognition rules are included in an appendix. Assignments are clearly marked and separated. Wild is GAAP compliant.

Up-to-Date This book reflects changes in accounting for revenue recognition, investments, leases,

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and extraordinary items. It is important that students learn GAAP accounting.

Less Is More Wild has markedly fewer pages than competing books covering the same material.

The text is to the point and uses visuals to aid student learning. Bullet-point discussions and active writing aids learning. The 24th edition has 115 fewer pages than the 23rd edition—a 10% reduction!

Visual Learning

Learning analytics tell us today’s students do not read large blocks of text. Wild has adapted to student needs by having informative visual aids throughout. Many visuals and exhibits are new to this edition.

Videos

A growing number of students now learn accounting online. Wild offers over 1,500 videos designed to increase student engagement and improve outcomes. Hundreds of hint videos or Guided Examples provide a narrated, animated, step-by- step walk-through of select exercises similar to those assigned. These short presentations, which can be turned on or off by instructors, provide reinforcement when students need it most. (Exercise PowerPoints are available for instructors.) Concept Overview Videos cover each chapter’s learning objectives with narrated, animated presentations that frequently assess comprehension. Wild has concept overview presentations covering 228 Learning Objectives broken down into over 700 videos.

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Need-to-Know Demos Need-to-Know demonstrations are located at key junctures in each chapter. These demonstrations pose questions about the material just presented—content that students “need to know” to learn accounting. Accompanying solutions walk students through key procedures and analysis necessary to be successful with homework and test materials. Need-to-Know demonstrations are supplemented with narrated, animated, step-by-step walk-through videos led by an instructor and available via Connect.

Comprehensive Need-to-Know Comprehensive Need-to-Knows are problems that draw on material from the entire chapter. They include a complete solution, allowing students to review the entire problem-solving process and achieve success.

Driving Decisions Whether we prepare, analyze, or apply accounting information, one skill remains essential: decision making. To help develop good decision-making habits and to show the relevance of accounting, we use a learning framework.

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Decision Insight provides context for business decisions. Decision Ethics and Decision Maker are role-playing scenarios that show the relevance of accounting. Decision Analysis provides key tools to assess company performance.

Accounting Analytics New to this edition, Accounting Analysis assignments have students evaluate the most current financial statements from Apple, Google, and Samsung. Students compute key metrics and compare performance between companies and industry. These assignments are auto-gradable in Connect and are included after Problem Set B in the text.

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Keep It Real Research shows that students learn best when using current data from real companies. Wild uses the most current data from real companies for assignments, examples, and analysis in the text. See Chapter 17 for use of real data.

Cheat Sheets New to this edition, Cheat Sheets are provided at the end of each chapter. Cheat Sheets are roughly one page in length and include key procedures, concepts, journal entries, and formulas.

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Doing What’s Right Companies increasingly issue sustainability reports, and accountants are being asked to prepare, analyze, and audit them. Wild includes brief sections in the managerial chapters. This material focuses on the importance of sustainability within the context of accounting, including standards from the Sustainability Accounting Standards Board (SASB). Sustainability assignments cover chapter material with a social responsibility twist.

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SUPERIOR ASSIGNMENTS Connect helps students learn more efficiently by providing feedback and practice material when they need it, where they need it. Connect grades homework automatically and gives immediate feedback.

Wild has auto-gradable and algorithmic assignments; most focus on one learning objective and are targeted at introductory students. 90% of Wild’s Quick Study, Exercise, and Problem Set A assignments are available in Connect with algorithmic options. Over 210 assignments new to this edition—all available in Connect with algorithmic options. Nearly all are Quick Studies (brief exercises) and Exercises.

NEW! Concept Overview Videos Concept Overview Videos teach each chapter’s learning objectives through an engaging multimedia presentation. These learning tools enhance the text through video, audio, and checkpoint questions that can be graded—ensuring students complete and comprehend the material. Concept Overview Videos harness the power of technology to appeal to all learning styles and are ideal in all class formats. The Concept Overview Videos replace the previous edition’s Interactive Presentations.

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General Ledger Problems General Ledger Problems offer students the ability to record financial transactions and see how these transactions flow into financial statements. Easy minimal-scroll navigation, instant “Check My Work” feedback, and fully integrated hyperlinking across tabs show how inputted data affects each stage of the accounting process. General Ledger Problems expose students to general ledger software similar to that in practice, without the expense and hassle of downloading additional software. Algorithmic versions are available. All are auto-gradable.

Applying Excel Applying Excel enables students to work select chapter problems or examples in Excel. These problems are assignable in Connect and give students instant feedback as they work through the problem in Excel. Accompanying Excel videos teach students how to use Excel and the primary functions needed to complete the assignment. Short assessments can be assigned to test student comprehension of key Excel skills.

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Excel Simulations Simulated Excel Questions, assignable within Connect, allow students to practice their Excel skills—such as basic formulas and formatting—within the context of accounting. These questions feature animated, narrated Help and Show Me tutorials (when enabled), as well as automatic feedback and grading for both students and professors. These questions differ from Applying Excel in that students work in a simulated version of Excel. Downloading the Excel application is not required to complete Simulated Excel Questions.

Guided Examples The Guided Examples (Hints) in Connect provide a narrated, animated, step-by-step walk- through of most Quick Studies, Exercises, and General Ledger Problems similar to those assigned. These short presentations can be turned on or off by instructors and provide reinforcement when students need it most.

Exercise Presentations Animated PowerPoints, created from text assignments, enable instructors to be fully prepared for in-class demonstrations. Instructors also can use these with Tegrity (in Connect) to record online lectures.

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Content Revisions Enhance Learning Instructors and students guided this edition’s revisions. Revisions include

New Cheat Sheets at each chapter-end visually reinforce key chapter concepts. More concise text covering the same content. New 24th edition has 115 fewer pages than 23rd edition. Over 210 new assignments—all available in Connect with algorithmic options. Gross method is used for merchandising transactions, reflecting practice—adjusting entries for new revenue recognition rules are set in an appendix. Many new Need-to-Know (NTK) demos and accompanying videos to reinforce learning. Revised the Investments chapter for the new standard. New assignments that focus on financial statement preparation. Many new and revised General Ledger and Excel assignments. New Accounting Analysis assignments—all available in Connect— using real-world data from Apple, Google, and Samsung. Updated videos for each learning objective in new Concept Overview Video format.

Chapter 1 Updated opener—Apple and entrepreneurial assignment. Updated salary info for accountants. Revised business entity section along with adding LLC. Updated section on FASB objectives and accounting constraints. New layout for introducing the expanded accounting equation. New layout for introducing financial statements. Updated Apple numbers for NTK 1-5. New Cheat Sheet reinforces chapter content. Updated return on assets analysis using Nike and Under Armour. Added a new Exercise assignment and Quick Study assignment. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 2 NEW opener—Fitbit and entrepreneurial assignment. New visual for process to get from transactions to financial statements. New layout on four types of accounts that determine equity. Improved presentation of “Double-Entry System” section.

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Updated Apple data for NTK 2-4. Updated debt ratio analysis using Costco and Walmart. New Cheat Sheet reinforces chapter content. Added four new Quick Studies. Added three new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 3 NEW opener—Urban One and entrepreneurial assignment. Revised learning objectives and chapter preview—each type of adjusting entry is assigned its own learning objective. Updated “Recognizing Revenues and Expenses” section. New streamlined “Framework for Adjustments” section. Continued emphasis of 3-step adjusting process. Enhanced Exhibit 3.12 on summary of adjustments. Updated profit margin analysis using Visa and Mastercard. Improved layouts for Exhibits 3A.1 through 3A.5. New Cheat Sheet reinforces chapter content. Added three new Quick Studies. Added two new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 4 NEW opener—Snapchat and entrepreneurial assignment. New Decision Insight on women in accounting. Shortened discussion of closing entries. Exhibit 4.5 color-coded all adjustments. Enhanced Exhibit 4.7 on steps of accounting cycle with images. Streamlined section on classified balance sheet. Updated current ratio analysis using Costco and Walmart. New Cheat Sheet reinforces chapter content. Added two new Quick Studies. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 5 NEW opener—Build-A-Bear and entrepreneurial assignment. Updated introduction for servicers vs. merchandisers using Liberty Tax and Nordstrom. Revised NTK 5-1 covers basics of merchandising. Reorganized “Purchases” section to aid learning. New Decision Insight on growing number of returns for businesses.

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Enhanced entries on payment of purchases within discount period vs. after discount period. Improved discussion of entries for sales with discounts vs. sales without discounts. Color-coded Exhibit 5.12 highlights different merchandising transactions. Updated acid-test ratio and gross margin analysis using Nike and Under Armour. Appendix 5B explains adjusting entries for future sales discounts, returns, and allowances. Appendix 5C covers the net method. Appendix 5D moved to online only. New Cheat Sheet reinforces chapter content. Added three new Quick Studies. Added four new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 6 NEW opener—Shake Shack and entrepreneurial assignment. New Ethical Risk on the alleged fraud of Homex. Simplified introduction to inventory costing. Shortened explanation for specific identification. Enhanced layout to explain effects of inventory errors across years. Updated inventory turnover and days’ sales in inventory analysis using Costco and Walmart. Added colored arrow lines to Exhibits 6A.3 and 6A.4 to show cost flows from purchases to sales. New Cheat Sheet reinforces chapter content. Added one new Quick Study. Added two new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 7 Updated opener—Box and entrepreneurial assignment. Revised learning objectives and chapter preview—each type of journal is assigned its own learning objective. New Decision Insight on financial impact of Pokémon Go for Nintendo. Streamlined presentation of system principles and system components. Enhanced “Basics of Special Journals” and “Subsidiary Ledgers” sections to improve learning. New simplified designs for Exhibits 7.5, 7.7, 7.9, and 7.11 to improve student comprehension. Removed discussion of sales tax and postponed it to the current liabilities chapter. New section on Data Analytics and Data Visualization. New days’ payable outstanding analysis using Costco and Walmart. New Cheat Sheet reinforces chapter content. Added five new Quick Studies.

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Added three new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 8 NEW opener—Care.com and entrepreneurial assignment. New COSO framework to guide internal control, including COSO cube. New discussion of internal control failure at Amazon that cost customers $150 million. Simplified bank statement for learning. Revised “Bank Reconciliation” section to separate bank balance adjustments and book balance adjustments. New summary image on adjustments for bank balance and for book balance. Removed collection expenses and NSF fees—most are immaterial and covered in advanced courses. Updated days’ sales uncollected analysis using Starbucks and Jack in the Box. New Cheat Sheet reinforces chapter content. Added three new Quick Studies. Added eight new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 9 NEW opener—Facebook and entrepreneurial assignment. Updated company data in Exhibit 9.1. Streamlined direct write-off method. Enhanced Exhibit 9.6 showing allowances set aside for future bad debts along with journal entries. New calendar graphic added as learning aid with Exhibit 9.12. New Excel demo to compute maturity dates. Updated accounts receivable analysis using Visa and Mastercard. New Cheat Sheet reinforces chapter content. Added five new Quick Studies. Added one new Exercise. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 10 NEW opener—New Glarus Brewery and entrepreneurial assignment. Updated company data in Exhibit 10.1. Added entry with Exhibit 10.3 and Exhibit 10.4. Simplified “Partial-Year Depreciation” section. Added margin table to Exhibit 10.14 as a learning aid. New Decision Insight box on extraordinary repairs to SpaceX’s reusable orbital rocket. New simple introduction to finance leases and operating leases for the new standard.

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Updated asset turnover analysis using Starbucks and Jack in the Box. Simplified Appendix 10A by postponing exchanges without commercial substance to advanced courses. New Cheat Sheet reinforces chapter content. Added two new Quick Studies. Added one new Exercise. Added two new Problems. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 11 NEW opener—Pandora and entrepreneurial assignment. Updated data in Exhibit 11.2. Streamlined “Short-Term Notes Payable” section. Simplified explanation of FICA taxes. Updated payroll tax rates and explanations. Revised NTK 11-4. New W-4 form added to Appendix 11A. New Cheat Sheet reinforces chapter content. Added two new Quick Studies. Added four new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 12 Updated opener—Scholly and entrepreneurial assignment. Streamlined partnership characteristics and types of organizations. Simplified graphic on business entity characteristics. Enhanced partnership formation example to emphasize partner investments are recorded at market value. Revised NTK 12-1. Shortened “Partner Withdrawal” section. New Cheat Sheet reinforces chapter content. Added one new Quick Study. Added four new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 13 NEW opener—Yelp and entrepreneurial assignment. New Decision Insight on bots investing in stocks based on erroneous news. New AT&T stock quote explanation. New graphic visually depicting cash dividend dates.

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New table summarizing differences between small stock dividends, large stock dividends, and stock splits. Updated Apple statement of equity in Exhibit 13.10. Updated PE ratio and dividend yield using Amazon, Altria, Visa, and Mastercard. Simplified book value per share explanation and computations. New Cheat Sheet reinforces chapter content. Added six new Quick Studies. Added four new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 14 NEW opener—e.l.f. Cosmetics and entrepreneurial assignment. Updated IBM bond quote data. Simplified numbers in Exhibit 14.7. Simplified Exhibit 14.10 on premium bonds. Simplified numbers in Exhibit 14.11. Bond pricing moved to Appendix 14A. Simplified Exhibit 14.12 for teaching the note amortization schedule. Updated debt-to-equity analysis using Nike and Under Armour. New Excel computations for bond pricing in Appendix 14A. Simplified numbers in Exhibits 14B.1 and 14B.2. Revised Appendix 14C for new standard on finance leases and operating leases. New Cheat Sheet reinforces chapter content. Added five new Quick Studies. Added four new Exercises. Added four new Problems. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 15 Updated opener—Echoing Green and entrepreneurial assignment. New learning objective P4 for new category of stock investments. Revised and simplified Exhibit 15.2 for new standard on investments. Reorganized text to first explain debt securities and then stock securities. Revised trading and available-for-sale securities to cover only debt securities given the new standard. New section on stock investments with insignificant influence. New Exhibit 15.6 to describe accounting for equity securities by ownership level. Updated component-returns analysis using Costco and Walmart. Investments in international operations set online as Appendix 15A. New Cheat Sheet reinforces chapter content. Added three new Quick Studies.

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Added four new Exercises. Added two new Problems. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 16 NEW opener—Vera Bradley and entrepreneurial assignment. New box on Tesla’s cash outflows and growing market value. Slightly revised infographics on cash flows from operating, investing, and financing. Streamlined sections on analyzing the cash account and noncash accounts. New presentation to aid learning of indirect adjustments to income. Simplified T-accounts to reconstruct cash flows. Simplified reconstruction entries to help compute cash flows. Updated cash flow on total assets analysis using Nike and Under Armour. New Cheat Sheet reinforces chapter content. Added ten new Quick Studies. Added four new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 17 Updated opener—Morgan Stanley and entrepreneurial assignment. Updated data for all analyses of Apple using horizontal, vertical, and ratio analysis. Updated comparative analysis using Google and Samsung. Streamlined section on ratio analysis. Streamlined the “Analysis Reporting” section. Shortened Appendix 17A. New Cheat Sheet reinforces chapter content. Added eight new Quick Studies. Added two new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 18 NEW opener—MoringaConnect and entrepreneurial assignment. Added discussion on role of managerial accounting for nonaccounting and nonbusiness majors. Added equation boxes for total manufacturing costs and cost of goods manufactured. New margin exhibit showing product and period cost flows. Added lists of common selling and administrative expenses. Updated and edited several exhibits for clarity. New Cheat Sheet reinforces chapter content. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global

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Analysis.

Chapter 19 NEW opener—HoopSwagg and entrepreneurial assignment. Revised discussions of manufacturing costs and link between job cost sheets and general ledger. Added graphic linking job cost sheets and general ledger accounts. Enhanced exhibit of 4-step overhead process. Added formula for computing applied overhead. New short discussion of cost-plus pricing. Added margin T-accounts and calculations for clarity. New Cheat Sheet reinforces chapter content. Added one new Quick Study. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 20 NEW opener—Azucar Ice Cream and entrepreneurial assignment. Revised discussion comparing process and job order costing systems. Added cost flow graphic. New margin graphic illustrating EUP. Revised discussion of weighted-average versus FIFO method of process costing. Revised discussion of using the process cost summary. New graphic on FIFO goods flow. Added margin T-accounts and calculations for clarity. New Cheat Sheet reinforces chapter content. Added one new Exercise. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 21 NEW opener—Ellis Island Tropical Tea and entrepreneurial assignment. Added margin graphs of fixed, variable, and mixed costs. New Excel steps to create a line chart. Moved details of creating scatter plot to Appendix 21A, with Excel steps. Revised discussion of scatter plots. Moved details of creating a CVP chart to Appendix 21C, with Excel steps. New Cheat Sheet reinforces chapter content. Added one new Exercise. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 22 NEW opener—Misfit Juicery and entrepreneurial assignment.

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Added T-accounts and steps to exhibit margins. Added numbered steps to several exhibits. Expanded discussion of cost of goods sold budgeting. New exhibit for calculation of cash paid for interest. Expanded discussion with bulleted list on use of a master budget. New Cheat Sheet reinforces chapter content. Added one new Quick Study. Added one new Exercise. New assignment on CMA exam budgeting coverage. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 23 NEW opener—Away and entrepreneurial assignment. Added graph to flexible budget exhibit. Revised discussion of flexible budget. New exhibit and discussion of computing total cost variance. Edited discussion of direct materials cost variance. Edited discussion of evaluating labor variances. Edited discussion of overhead variance reports. New exhibit for summary of variances. New Cheat Sheet reinforces chapter content. Added two new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.

Chapter 24 NEW opener—Jibu and entrepreneurial assignment. Updated Walt Disney ROI example. New Decision Analysis on cash conversion cycle. New Cheat Sheet reinforces chapter content. Added two new Quick Studies. Added two new Exercises. Added new analysis assignments: Company Analysis, Comparative Analysis, and Global Analysis.