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How does Apple’s issuance of bonds and buyback of its own stock impact its accounting equation?

In May 2017, Apple Inc., filed a prospectus with the SEC, indicating that it would be issuing another $7 billion in bonds during 2017. (Apple issued $10 billion in bonds in February 2017 in the US and $1 billion in Taiwan.) With the bond proceeds, Apple will be buying back its own stock. Apple has […]

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How should Ford treat the contingency resulting from the Ford Mustang Shelby GT350 owners’ class action lawsuit?

Ford Motor Company produces and sells the Ford Mustang Shelby GT350, which Ford markets as a track-ready car built to reach and sustain high speeds. Three of the 2016 Ford Mustang Shelby GT350 owners have filed a class action suit against Ford, alleging that these cars are not track-ready. These owners claim that the car […]

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How is Tesla’s balance sheet impacted by its issuance of common stock and convertible five-year notes?

Tesla, Inc. (NASDAQ: TSLA) is ramping up to begin production of the Tesla Model 3. The Model 3 is an all-electric four-door compact luxury sedan that will have a range of at least 215 miles. It will be the most affordable of the Tesla models, starting at $35,000 for the base model. As of mid-March […]

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Introductory financial accounting Jeopardy game for end-of-semester review

At the end of the semester, I thought it might be useful to have a review game before the final exam. I have created a Jeopardy-style game that covers basic topics within an introductory financial accounting course. This PowerPoint file contains a Jeopardy-style game suitable for use in an introductory financial accounting class. There are […]

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How would Apple’s financial statements be impacted by its iPhone one-year warranty and related iPhone 6s battery replacement program?

Every new iPhone comes with a basic one-year warranty. If defects in materials or workmanship are discovered in one year from the date of retail purchase, Apple will repair or replace the iPhone at no cost to the customer. Recently, a batch of iPhone 6s devices was discovered to have a defect that causes them […]

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How will Walgreen’s leases impact its financial position under the new FASB lease standard?

Under the current accounting treatment for leases, if a lease meets certain characteristics, it is classified as an operating lease and only the lease payments are shown in the financial statements in the income statement; there is no liability recognized for the lease obligation. In February 2016, the Financial Accounting Standards Board (FASB) issued ASU […]

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How are Adele’s financial statements impacted when tickets to her North American tour sell out within a few minutes?

Adele released her third album, 25, in late 2015, quickly shattering several records. The album 25 was the first album to sell more than three million copies in a week and also racked up the most records sold in a week with 3.38 million records sold that first week. Her single Hello from 25 was […]

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What is the impact of Toshiba’s credit line on its financial statements?

In 2015, Toshiba Corp. (TOSBF) announced that it had overstated profits by nearly $2 billion over a six year period. It has since announced that it could lay off up to 10,000 workers. In addition, Toshiba is selling its television manufacturing plant in Indonesia to raise cash. These events have all been part of the […]

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Which contingent liabilities resulting from the Volkswagen (VW) emissions cheating scandal would be recognized or disclosed in Volkswagen Group’s financial statements?

Volkswagen manufactures the iconic Beetle in addition to other models including the Passat, the Jetta, and others.  Volkswagen Group (VW) has been embroiled in an emissions cheating scandal discovered in 2015. Essentially, what happened is that VW’s engineers developed and inserted software in VW car engines to cheat on the emissions testing process, making its […]

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How does Square account for the amounts it loans to small businesses?

Square, the mobile payments company, allows small businesses to take credit cards by swiping customer credit cards using a small square device attached to the audio jack found on mobile devices. Since its founding in 2009 and the launch of its first app in 2010, Square has found its way into many small businesses – […]

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