Q 5 (This question is on page no. 51 of the e-book attached) – Why do you suppose financial statements are constructed on an accrual basis rather than a cash basis when cash accounting is so much easier to understand?
Q7 (This question is on page no. 51 of the e-book attached) – You are responsible for labor relations in your company. During heated labor negotiations, the General Secretary of your largest union exclaims, Look, this company has $15 billion in assets, $7.5 billion in equity, and made a profit last year of $300 milliondue largely, I might add, to the effort of union employees. So dont tell me you cant afford our wage demands. How would you reply?
Q11 (This question is on page no. 52 & 53 of the e-book attached) – Selected information for Blakes Restaurant Supply follows.
2010 2011 ($ in millions)
Net sales $694 (2010) $782 (2011)
Cost of goods sold 450 (2010) 502(2011)
Depreciation 51(2010) 61(2011)
Net income 130(2010) 142(2011)
Finished goods inventory 39(2010) 29 (2011)
Accounts receivable 57(2010) 87 (2011)
Accounts payable 39 (2010) 44 (2011)
Net fixed assets 404(2010) 482 (2011)
Year-end cash balance $ 86(2010) $135(2011)
