Financial Accounting, Student Value Edition (5th Edition)

5th Edition

ISBN: 9780134728520

Author: Robert Kemp, Jeffrey Waybright

Publisher: PEARSON

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Chapter 4, Problem 1CFSAP

Continuing Financial Statement Analysis Problem

Lei’s consider Dick's Sporting Goods (Dick's) again. Think about Dick's. Think about accountants reporting what Dick's has, where it got its money, and what it has been doing to create value. Is Dick's earning net income or loss? What resources did Dick's need to operate? Think about the business of Dick's.

Return to Dick's financial statements contained in its Annual Report (see the Continuing Financial Statement Analysis. Problem in Chapter 2 for instructions on how to access the Annual Report). Go to page 40, where you will find Dick's income statement for the year ending January 28, 2017 (called the Consolidated Statement of Income).

Now answer the following questions:

1. Look at Dick's income statement. What are Dick's sales for the past two years? Are sales increasing or decreasing compared with the previous year?
2. Look at Dick's income statement: Dick's had 797 stores at the end of 2016 (as of January 28, 20171 and 741 stores at the end of 2015 (as of January 30, 2016). What were Dick's sales per store in 2016 and 2015? (Divide total sales by the number of stores Dick's operated in that year.) Are sales per store increasing or decreasing?
3. Look at Dick's income statement. What is Dick's gross profit and gross profit percentage for the years ending January 28, 2017, and January 30, 2018? Is Dick's gross profit increasing or decreasing?
4. Look at note 1 accompanying the financial statements (pages 45 through 50 of annual report). How is Dick's accounting for sates (revenue) and costs?
5. What is Dicks net income percentage for the years ending January 28, 2017, and January 30, 2016? Is Dick's net income percentage increasing or decreasing?
6. Looking back over your answers to questions 1 through 5, how do you think Dick's is performing? What do you think is causing the changes in Dick's safes, costs, and margins?

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Chapter 4 Solutions

Financial Accounting, Student Value Edition (5th Edition)

Ch. 4 - Prob. 1DQ Ch. 4 - What are some reasons why a merchandiser might...Ch. 4 - Why do businesses use subsidiary ledgers?Ch. 4 - Prob. 4DQ Ch. 4 - How many accounts are involved in recording the...Ch. 4 - Prob. 6DQ Ch. 4 - Prob. 7DQ Ch. 4 - Prob. 8DQ Ch. 4 - What is the difference between a single-step and...Ch. 4 - Prob. 10DQ

Ch. 4 - Which account does a merchandiser use that a...Ch. 4 - The two main inventory accounting systems are the...Ch. 4 - Prob. 3SC Ch. 4 - Prob. 4SC Ch. 4 - Prob. 5SC Ch. 4 - Prob. 6SC Ch. 4 - Prob. 7SC Ch. 4 - Prob. 8SC Ch. 4 - Prob. 9SC Ch. 4 - Prob. 10SC Ch. 4 - Prob. 11SC Ch. 4 - Prob. 12SC Ch. 4 - Inventory methods (Learning Objective 2) 5-10 min....Ch. 4 - Prob. 2SE Ch. 4 - Prob. 3SE Ch. 4 - Prob. 4SE Ch. 4 - Prob. 5SE Ch. 4 - Prob. 6SE Ch. 4 - Prob. 7SE Ch. 4 - Journalizing sales and return transactions...Ch. 4 - Prob. 9SE Ch. 4 - Prob. 10SE Ch. 4 - Prob. 11SE Ch. 4 - Prob. 12SE Ch. 4 - Calculating gross profit percentage and net income...Ch. 4 - Prob. 14AE Ch. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 16AE Ch. 4 - Prob. 17AE Ch. 4 - Prob. 18AE Ch. 4 - Prob. 19AE Ch. 4 - Prob. 20AE Ch. 4 - Prob. 21AE Ch. 4 - Preparing a single-step income statement (Learning...Ch. 4 - Prob. 23AE Ch. 4 - Prob. 24AE Ch. 4 - Prob. 25AE Ch. 4 - Prob. 26BE Ch. 4 - Prob. 27BE Ch. 4 - Prob. 28BE Ch. 4 - Prob. 29BE Ch. 4 - Prob. 30BE Ch. 4 - Journalizing inventory sales, returns, and freight...Ch. 4 - Prob. 32BE Ch. 4 - Prob. 33BE Ch. 4 - Prob. 34BE Ch. 4 - Prob. 35BE Ch. 4 - Prob. 36BE Ch. 4 - Prob. 37BE Ch. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 39AP Ch. 4 - Prob. 40AP Ch. 4 - Prob. 41AP Ch. 4 - Prob. 42AP Ch. 4 - Prob. 43AP Ch. 4 - Prob. 44AP Ch. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 46BP Ch. 4 - Prob. 47BP Ch. 4 - Journalizing inventory purchases, sales, returns,...Ch. 4 - Prob. 49BP Ch. 4 - Prob. 50BP Ch. 4 - Prob. 51BP Ch. 4 - Prob. 1CE Ch. 4 - Continuing Problem In this problem, we continue...Ch. 4 - Continuing Financial Statement Analysis Problem...Ch. 4 - Prob. 1EIA Ch. 4 - Prob. 2EIA Ch. 4 - Prob. 1FA Ch. 4 - Prob. 1IA Ch. 4 - Prob. 1SBA Ch. 4 - Prob. 1WC

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Solution Summary: The author identifies Person D's sales for the last two years and checks whether it has been increased or decreased by comparing the previous year.

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