1. Describe the inventory cost flow equation and how it applies to the three schedules shown in Figure 1.7 "Income Statement Schedules for Custom Furniture Company".
2. How does a merchandising company income statement differ from a manufacturing company income statement?
3. Accounting Information at Sportswear Company. Refer to the dialogue between the president and accountant at Sportswear Company presented at the beginning of the chapter. Why can't the president find information for each product line (hats and jerseys) in the financial statements? Who within the company typically provides this type of information?
4. Financial Versus Managerial Accounting. Maria is the loan officer at a local bank that lends money to Old Town Market, a small grocery store. She requests several quarterly financial reports on an ongoing basis to assess the store's ability to repay the loan. Provide one example of a financial accounting report and two examples of managerial accounting reports that Maria might request.
5. Planning and Control. Two college graduates recently started a Web page design firm. The first month was just completed, and the owners are in the process of comparing budgeted revenues and expenses with actual revenues and expenses for the month. Would this be considered part of the planning function or the control function? Explain.
6. Finance and Accounting Personnel. Determine whether the chief financial officer, controller, treasurer, internal auditor, managerial accountant, financial accountant, or tax accountant would perform the following tasks. (Hint: Some job titles may be used more than once, and others may not be used at all.)

a. Prepares annual reports for shareholders and creditors

b. Provides a quarterly summary of financial results to the CEO and board of directors

c. Provides profit and loss reports by product line

d. Calculates estimated quarterly tax payments

e. Oversees the treasurer and internal auditor

f. Obtains sources of financing and manages short-term investments

g. Verifies that annual report financial information is accurate