Determining Financial Statement Effects of Various Transactions Wolverine World Wide, Inc., manufactures military, work, sport, and casual footwear-and leather accessories under a variety of brand names, such as Hush Puppies, Wolverine, and Bates, to a global market. The following transactions occurred during a recent year. Dollars are in thousands.

a. Issued common stock to investors for $13,752 cash (example).

b. Purchased $723,261 of additional inventory on account.

c. Borrowed $61,685 on long-term notes.

d. Sold $1,141,887 of products to customers on account; cost of the products sold was $700,349.

e. Paid cash dividends of $16,079.

f. Purchased for cash $ 17,067 in additional property, plant, and equipment.

g. Incurred $318,240 in selling expenses, paying three-fourths in cash and owing the rest on account.

h. Earned $3,170 interest on investments, receiving 90 percent in cash.

i. Incurred $2,973 in interest expense to be paid at the beginning of next year.

Required:

For each of the transactions, complete the tabulation, indicating the effect (+ for increase and − for decrease) of each transaction. (Remember that A = L + SE, R − E = NI, and NI affects SE through Retained Earnings.) Write NE if there is no effect. The first transaction is provided as an example.

BALANCE SHEET

INCOME STATEMENT

Transaction

Assets

Liabilities

Stockholders’ Equity

Revenues

Expenses

Net Income

(a) (example)

+ 13,752

NE

+ 13,752

NE

NE

NE

Onsider the following subscription behavior information from genie, a web site that provides tools for constructing a family tree (ancestor search). subscriptions cost $9.99 per month, but you are charged for the entire year at the time of purchase. there is a one-year minimum term when you sign up for the service. once purchased, subscriptions are set to renew automatically unless the subscriber cancels them. when a membership renews, it renews for a one-year term and again you are charged for the entire year. there are no variable costs associated with providing this service to an individual customer, but genie does engage in customer relationship activities that they believe will increase customer retention. these customer relationship activities cost genie about $10 per year per customer. based on a sample of 1000 customers that joined genie five years ago, near the time when the company was founded, they were able to determine how many of those customers remained subscribers in the second year, third year etc. based on this information, genie calculated the average annual retention rate to be 20%. genie uses an annual discount rate of 8%. a. last year, genie spent $10,000 placing advertisements on google. genie management believes that these advertisements were responsible for about 300 new subscribers. would you recommend to genie management that they purchase more google ads? b. suppose a newly-introduced loyalty program increases the number of customers that remained to 30%. does this new data change your answer to 9.a? c. do you have any hesitations or concerns about making recommendations to management based on your above estimate of customer lifetime value?

Lucy is catering an important luncheon and wants to make sure her bisque has the perfect consistency. for her bisque to turn out right, it should have the consistency of a. cold heavy cream. b. warm milk. c. foie gras. d. thick oatmeal.

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