How does the drop in the price of eggs impact Kellogg’s® variances for its Eggo® Homestyle waffles?

In 2015, when the avian flu hit egg producers hard, there was a shortage of eggs. Egg prices increased dramatically. Over the years since 2015 however, egg production has ramped back up as egg producers have restocked their flocks of egg-laying chickens.  There is now a glut of eggs, putting causing the price of eggs […]

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Does Tesla sell its cars FOB destination or FOB shipping point?

The following quote is from a recent Tesla news release (“Tesla Q3 2017 Vehicle Deliveries and Production,” October 2, 2017): “In addition to Q3 deliveries, about 4,820 Model S and X vehicles were in transit to customers at the end of the quarter. These will be counted as deliveries in Q4 2017.” (Note: “Q3” refers […]

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Given that Toys “R” Us has declared bankruptcy, what are its current, quick, and debt ratios?

Toys “R” Us (see https://www.toysrusinc.com/investors) declared Chapter 11 bankruptcy protection in September 2017, for its US operations. The toy retailer is seeking to restructure or remove some of its debts. Toys “R” Us is also looking to take similar actions for its Canadian operations. Here are the two most recent Toys “R” Us balance sheets. […]

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How does John Deere account for the loans it makes to farmers for the purchase of tractors and crop supplies?

Deere & Company (NYSE: DE), otherwise known as John Deere, builds tractors and other farm equipment. For the past several years, it has been difficult for farmers to get bank loans for planting crops and for purchasing large, expensive farm equipment. Deere has stepped in to fill the gap in agricultural financing – Deere makes […]

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Would the costs related to the clothing vending machines that Uniqlo has installed in airports and shopping malls be expensed or capitalized?

Uniqlo, a Japanese clothing designer, manufacturer, and retailer, is installing vending machines in some airports and shopping malls in the U.S., including Oakland Airport (San Francisco), George Bush Intercontinental Airport (Houston), and Queens Center (New York.) Uniqlo’s thermal jackets and parkas, which are thin, warm, and easily packable, are going to be stocked in the […]

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What closing entries would McDonald’s have made in 2016 based on its trial balance?

McDonald’s Corporation (NYSE: MCD) is a publicly held corporation and issued its financial statements for 2016 in 2017. To follow is a condensed and adapted trial balance as of December 31, 2016, that was constructed from those financial statements.   Please note that the accounts have been adapted and condensed for educational use and should […]

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Why would Boeing outsource its electronics production and then brings its manufacture back in-house?

In the early 2000s, The Boeing Company (NYSE: BA) outsourced key portions of its aircraft manufacturing and design operations, including electronics and central computers. Beginning in 2007, Boeing’s 787 Dreamliner (a new model for Boeing) was assembled in the U.S., with global subcontractors assigned the work of assembling key sections of the 787. Subcontractors also […]

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What information can be calculated from McDonald’s 2016 trial balance?

McDonald’s Corporation (NYSE: MCD) is a publicly held corporation and issued its financial statements for 2016 in 2017. To follow is a condensed and adapted trial balance as of December 31, 2016, that was constructed from those financial statements. Please note that the accounts have been adapted and condensed for educational use and should not […]

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Why is internal control important for companies – and for students – to understand?

An article in Accounting Today from September 7, 2017, has the headline “Internal control weaknesses correlate with financial fraud.” Three accounting researchers* have found that “…the incidence of fraud disclosures at companies previously found by auditors to have material weaknesses in their internal controls is approximately 80 to 90 percent greater than companies on average, […]

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Register for Snapchat 101: Engaging Students in Accounting, an IMA Faculty Friday Webinar

On Friday, September 29, 2017, I will be the speaker for the Institute of Management Accountants (IMA) Faculty Friday Webinar entitled “Snapchat 101: Engaging Students in Accounting.” Snapchat can be a pretty neat tool for engaging with students, especially those in online classes or in large classes. I will be talking first about how to […]

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