This document provides information about ACC 291, an online accounting course, and summarizes its contents. It includes the ACC 291 entire course and final exam guide, discussion questions, summaries of accounting principles and financial statements, and a sample final exam question. The document aims to help students learn accounting concepts and prepare for the ACC 291 final exam.
This SEC in Focus includes remarks from SEC Chairman Jay Clayton on cybersecurity disclosures in SEC filings, recent guidance on pay ratio disclosure requirements, regulatory relief for companies and individuals affected by recent hurricanes, staff clarifications about its nonpublic review program and recent trends in SEC staff comments on non-GAAP measures and other topics.
This SEC in Focus includes remarks from SEC Chairman Jay Clayton on cybersecurity disclosures in SEC filings, recent guidance on pay ratio disclosure requirements, regulatory relief for companies and individuals affected by recent hurricanes, staff clarifications about its nonpublic review program and recent trends in SEC staff comments on non-GAAP measures and other topics.
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Case Study 1 (Part A)Analyze the impact of business transactions on accounts; record (journalize and post) transactions in the books; construct and use a trial balance) During the first month of operation of Gordon Construction, Inc., completed the following transactions:June2Gordon received $55,000 cash and issued common stock to the stockholders. Current assets
Avoiding Costly Fines: A 2013 Guide to Compliance MandatesSage HRMS
For more than 30 years, Sage has been a leader in the development of Human Resource Management Systems (HRMS) software. Thousands of midsized businesses nationwide have implemented our popular Sage HRMS solutions. From those experiences, we’ve learned that compliance is one of the top challenges facing any human resources department. It can be difficult to stay on top of all of the state and federal workforce laws, regulations, and reporting requirements.
It’s up to HR to ensure that hiring, discipline, and termination practices are compliant with the law. Otherwise, you could put your company at risk of incurring fines, penalties, and employee lawsuits. And mistakes can be costly. More than one-third of private companies surveyed by Chubb Insurance had experienced an employment-law event (EEOC charge filed or employee lawsuit), at an average cost of $74,400 per incident.
Sage created this guide to help you stay informed about the latest workforce compliance laws and regulations that may affect your organization. Staying abreast of current mandates enables you to communicate with and train management and employees so that the company is not at risk of expensive employee lawsuits. As with all issues with legal circumstances, the use of this material is not a substitute for the advice of a lawyer and when in doubt or for advice with respect to any specific human resources mandate please contact your lawyer. Additionally, this material is provided for informational purposes only and not for the purpose of providing legal advice.
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Current assets
When it comes to a company's classified balance sheets you will find current assets sheet. Current assets is cash or cash equilivants that the company will use. What you will find on a current asset sheet is Cash and equilvants, Short term investments, Accounts receivables, and other assets.
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O Reputation Institute Brasil listou as 10 empresas com melhor reputação no país. De acordo com a pesquisa, as empresas que atingiram até 39 pontos, têm uma reputação considerada "pobre"; de 40 a 60 pontos, a reputação é "fraca"; de 60 a 70 é "mediana"; de 70 a 80 é "forte" e acima de 80 é considerada "excelente". Nenhuma das empresas atingiu os 80 pontos.
-----> A FDC é membro do Reputation Institute e a pesquisa foi lançada na última sexta-feira (17), no campus SP. Confira mais informações no site: https://www.reputationinstitute.com
ACCT 504 MART Perfect Education/acct504mart.comsarathkum12211
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Case Study 1 (Part A)Analyze the impact of business transactions on accounts; record (journalize and post) transactions in the books; construct and use a trial balance) During the first month of operation of Gordon Construction, Inc., completed the following transactions:June2Gordon received $55,000 cash and issued common stock to the stockholders. Current assets
Avoiding Costly Fines: A 2013 Guide to Compliance MandatesSage HRMS
For more than 30 years, Sage has been a leader in the development of Human Resource Management Systems (HRMS) software. Thousands of midsized businesses nationwide have implemented our popular Sage HRMS solutions. From those experiences, we’ve learned that compliance is one of the top challenges facing any human resources department. It can be difficult to stay on top of all of the state and federal workforce laws, regulations, and reporting requirements.
It’s up to HR to ensure that hiring, discipline, and termination practices are compliant with the law. Otherwise, you could put your company at risk of incurring fines, penalties, and employee lawsuits. And mistakes can be costly. More than one-third of private companies surveyed by Chubb Insurance had experienced an employment-law event (EEOC charge filed or employee lawsuit), at an average cost of $74,400 per incident.
Sage created this guide to help you stay informed about the latest workforce compliance laws and regulations that may affect your organization. Staying abreast of current mandates enables you to communicate with and train management and employees so that the company is not at risk of expensive employee lawsuits. As with all issues with legal circumstances, the use of this material is not a substitute for the advice of a lawyer and when in doubt or for advice with respect to any specific human resources mandate please contact your lawyer. Additionally, this material is provided for informational purposes only and not for the purpose of providing legal advice.
FOR MORE CLASSES VISIT
www.acc291genius.com
ACC 291 is a online tutorial store we provides ACC 291 Entire Course And Final Guide You can find here.
Current assets
When it comes to a company's classified balance sheets you will find current assets sheet. Current assets is cash or cash equilivants that the company will use. What you will find on a current asset sheet is Cash and equilvants, Short term investments, Accounts receivables, and other assets.
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O Reputation Institute Brasil listou as 10 empresas com melhor reputação no país. De acordo com a pesquisa, as empresas que atingiram até 39 pontos, têm uma reputação considerada "pobre"; de 40 a 60 pontos, a reputação é "fraca"; de 60 a 70 é "mediana"; de 70 a 80 é "forte" e acima de 80 é considerada "excelente". Nenhuma das empresas atingiu os 80 pontos.
-----> A FDC é membro do Reputation Institute e a pesquisa foi lançada na última sexta-feira (17), no campus SP. Confira mais informações no site: https://www.reputationinstitute.com
U.X. Design pode ser uma história de amor entre as marcas e os seus consumidores: tudo depende de uma boa experiência. Este é o ponto de partida para um 1º encontro bem sucedido ;)
The mission of the Foundation ReBin for Sustainable Development ® is to promote, develop, support and accompany all ecological, socially responsible and economically viable projects. These three criteria are essential and inseparable from its action and can be described more simply by the fact of taking care of nature, human being and share resources wisely.
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Financial reporting and analysis involve the planning of various types of reports and the evaluation of financial information to determine a company's financial situation. Let us learn how an effective financial reporting service can benefit your business.
Financial accounting is a method by which a company records and reports revenue, expenses, and income for a specific period. We follow strict guidelines to ensure that our financial statements are accurate and comply with statutory, financial, legal and regulatory requirements. The data in these reports helps outsiders perform a comprehensive financial analysis of company operations and allocate resources more effectively to business owners, investors, and creditors.
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Case Study 1 (Part A)Analyze the impact of business transactions on accounts; record (journalize and post) transactions in the books; construct and use a trial balance) During the first month of operation of Gordon Construction, Inc., completed the following transactions: For this week's checkpoint we had to look up three job postings in the field of accounting. I'm glad that I got this opportunity because it actually opened my eyes and expanded my knowledge in the accounting field. The three job positions are listed below. The first job title was Senior Internal Auditor.
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For Discussion Question 1: Post your response to the following:
• When reviewing a financial report, why should information be reliable, relevant, consistent, and comparable?
• In other words, why are these accounting characteristics important?
• What kinds of problems could be created if a financial report is not reliable, relevant, consistent, or comparable?
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ACC 290 Finals Question 1 Jackson Company recorded the following cash transactions for the year: Paid $135,000 for salaries. Paid $60,000 to purchase office equipment. Paid $15,000 for utilities. Paid $6,000 in dividends.
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Case Study 1 (Part A)Analyze the impact of business transactions on accounts; record (journalize and post) transactions in the books; construct and use a trial balance) For Discussion Question 1: Post your response to the following:
• When reviewing a financial report, why should information be reliable, relevant, consistent, and comparable?
• In other words, why are these accounting characteristics important?
• What kinds of problems could be created if a financial report is not reliable, relevant, consistent, or comparable?
Basics of finance and accounting written for owners of business including family business. Step by step learning by all professionals and self employed besides business owners. At the end of each chapter there are questions for revision & practice.
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Dive into the world of AI! Experts Jon Hill and Tareq Monaur will guide you through AI's role in enhancing nonprofit websites and basic marketing strategies, making it easy to understand and apply.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
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Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
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1. ACC 291 Entire Course and Final Guide
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2. Axia College Material
Appendix B
Cash ManagementMatrix
Directions: Using the matrix, list how each of the principles of internal control works, and give an
example for each. Next, list how each of the principles of cash management works, and give an
example for each.
Principles of Internal
Control
How it Works Example
Establishment of responsibility Happens when the company assigns
one person to be in control of a
specific job or have authority to
make decisions.
My job, Our Sales department is
the only one that can waive a
restocking fee. It allows the Sales
team to be in control of the
customers returns
Segregation of duties This is when the company has more
than one person to control a task or
job
A church- You have people who
count the offering and then you have
someone who writes down and logs
in what was received
Documentation procedures Evidence or proof of all company
transactions
My job we deliver ship shingles to
our customers, and we make the
driver sign prior to leaving and we
make the customer sign a “Proof Of
Delivery”form
Physical, mechanical, and
electronic controls
Allows the company to control assets
through physical or electronic based
systems or programs.
Our job has a system called Cisco and
this tracks the employees breaks and
lunches. Also, monitors how long the
CSR have been ready or working.
Physical control would be the
security guard, they require
identification prior to entry.
Independent internal
verification
Anyinformationthat canbe reviewed
, compare, andreconciliationbya
employee
My job has a way of tracking our
inventory and when someone says
that they were shorted on their
order we can go back and track the
inventory and compare the numbers
in the system and a physical count to
determine if the numbers were
incorrect
3. Other controls Bonding of employees, company
protects against abuse of assets.
Our company fired a girl just recently
because she had used the company
card business card for personal us
that was not work related.
Principles of Cash
Management
How it Works Example
Invest idle cash Occurs when any excess funds or
cash needs to be invested,
My father’s company makes wise
investments and it turns around in
his favor
Plan the timing of major
expenditures
A company wants to make sure that
there is money set aside for major
cash needs
During the recession profits dropped
lower than expected so some
companies pulled from these funds
Delay payment of liabilities When a company pays the bills at an
appropriate time not late and not
too soon.
Ok, when times are tough at home
and bills are due I organize the bills
by which bills needs to be paid the
soonest, because if I pay the bills too
early I will cut off my excess funds
that could be used for something
else
Keep inventory levels low Happens when a company keeps the
inventory low so that it will continue
to bring profit
See’s Chocolate factory has to make
sure that they are not over producing
or making too much or else the sit
and the company will lose money
Increase the speed of
collection on receivables
Money that is owe to the company
by other people or customers is
money that can not be counted
towards the companies funds
When a customer places a order for a
product and has not paid yet, the
company can not count the money as
their’s until it is received.
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ACC 291 Final Exam Guide (New)
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4. Discussion Question 1:
Based on what you know about accounting, what role do you see it
playing in business operations? How dependent do you think a
business is on its accounting department? Why?
Week 1 DQ 1
Due Tuesday, Day 2
Go to the U.S. Securities and Exchange Commission’s Web site
at http://www.sec.gov and the Financial Accounting Standards
Board’s Web site athttp://www.fasb.org. Identify the mission and
main activities of each organization. Then, analyze the similarities
and differences between the roles of each entity. Which entity has
more influence over financial statement reporting? Explain your
answer.
According to the SEC website their mission is to protect investors,
maintain fair, orderly, and efficient markets, and facilitate capital
formation. The SEC also requires public companies to disclose
meaningful financial and other information to the public. This
provides a common pool of knowledge for all investors to use to
judge for themselves whether to buy, sell, or hold a particular
security. The SEC is concerned primarily with promoting the
disclosure of important market-related information, maintaining fair
dealing, and protecting against fraud.
According to the FASB website the mission of the FASB is to establish
and improve standards of financial accounting and reporting that
foster financial reporting by nongovernmental entities that provides
5. decision-useful information to investors and other users of financial
reports. Since 1973, the Financial Accounting Standards Board (FASB)
has been the designated organization in the private sector for
establishing standards of financial accounting that govern the
preparation of financial reports by nongovernmental entities
The major difference in the SEC and the FASB is that the SEC deals
with reporting of financial statements for all industries while the
FASB deals mainly with the private nongovernmental entities. Both
are concerned with the fairness of financial reports and work in the
interest of the public. I believe that the SEC has more influence over
financial statement reporting because they can bring civil action
against companies and individuals for violations of securities laws.
Although according to the FASB website, “the Commission’s policy
has been to rely on the private sector for this function to the extent
that the private sector demonstrates ability to fulfill the responsibility
in the public interest.
Response 2
Go to the U.S. Securities and Exchange Commission’s Web site
at http://www.sec.gov and the Financial Accounting Standards
Board’s Web site athttp://www.fasb.org. Identify the mission and
main activities of each organization. Then, analyze the similarities
and differences between the roles of each entity. Which entity has
more influence over financial statement reporting? Explain your
answer.
U.S. Securities and Exchange Commission (SEC)
6. According to the SEC’s website “The mission of the U.S. Securities
and Exchange Commission is to protect investors, maintain fair,
orderly, and efficient markets, and facilitate capital formation”(U.S.
Securities and Exchange Commission, 2010, Para. 1).
The main activities of the SEC are to interpret federal securities
laws; issue new rules and amend existing rules; oversee the
inspection of securities firms, brokers, investment advisers, and
ratings agencies; oversee private regulatory organizations in the
securities, accounting, and auditing fields; and coordinate U.S.
securities regulation with federal, state, and foreign authorities. (U.S.
Securities and Exchange Commission, 2010)
Financial Accounting Standards Board (FASB)
According to the FASB’s website “The mission of the FASB is to
establish and improve standards of financial accounting and
reporting that foster financial reporting by nongovernmental entities
that provides decision-useful information to investors and other users
of financial reports. That mission is accomplished through a
comprehensive and independent process that encourages broad
participation, objectively considers all stakeholder views, and is
subject to oversight by the Financial Accounting Foundation’s Board
of Trustees” (Financial Accounting Standards Board, n.d., Para. 3).
The main activities of the FASB are to identify financial reporting
issues based on requests/recommendations from stakeholders or
through other means. The FASB Chairman decides whether to add a
project to the technical agenda, after consultation with FASB
Members and others as appropriate, and subject to oversight by the
Foundation's Board of Trustees. The Board deliberates at one or more
public meetings the various reporting issues identified and analyzed
by the staff. The Board issues an Exposure Draft to solicit broad
7. stakeholder input. (In some projects, the Board may issue a
Discussion Paper to obtain input in the early stages of a project) The
Board holds a public roundtable meeting on the Exposure Draft, if
necessary. The staff analyzes comment letters, public roundtable
discussion, and any other information obtained through due process
activities. The Board redeliberates the proposed provisions, carefully
considering the stakeholder input received, at one or more public
meetings. The Board issues an Accounting Standards Update
describing amendments to the Accounting Standards Codification
(Financial Accounting Standards Board, n.d.).
Both the SEC and the FASB have the same goals of fairness,
accuracy, and understandability of financial accounting and
reporting. Both agenecys accomplish these goals in the best interest
of the overall public.
The differences between the SEC and the FASB is that the FASB
regulates financial reporting in the private sector of businesses (but
are subject to the rules and regulations of the SEC) and the SEC deals
with regulating the financial reporting of publicly held corporations.
I believe that the SEC has the greatest influence over financial
statements reporting because they have the final approval on all
changes of the rules and regulations. The Sec can also bring civil or
administrative enforcement actions against individuals and
companies in violation of the securities laws.
References
Financial Accounting Standards Board. (n.d.). Facts about FASB.
Retrieved July 15, 2010, from Financial Accounting Standards
Board:http://www.fasb.org/facts/index.shtml#mission
8. U.S. Securities and Exchange Commission. (2010, May 3). The
Investors Advocate: How the SEC Protects Investors, Maintains
Market Integrity, and Facilitates Capital Formation. Retrieved July 15,
2010, from U.S. Securities and Exchange
Commission: http://www.sec.gov/about/whatwedo.shtml
Week 1 DQ 2
Due Thursday, Day 4
Search the Internet or the Online Library for information about the
Sarbanes-Oxley Act. A useful guide to some of these provisions is
located at http://www.soxlaw.com. Summarize at least two provisions
of the law, and discuss your interpretation of these provisions with
your classmates. Do you think this law will make financial statements
more reliable? Also, discuss how Sarbanes-Oxley establishes
boundaries to ensure ethical practices. What does the law allow or
prohibit, and why?
The Sarbanes-Oxley act has many provisions to give companies
guidelines for responsible, and ethical financial reporting. One of
those provisions is listed in Section 302 of the act. The provision is
9. that periodic statutory financial reports be certified that signing
officers have reviewed the reports, the report does not contain any
untrue, or misleading information. The financial statements fairly
present the financial condition. The signing officers are responsible
for internal controls. A list of all deficiencies in internal controls, and
a list of fraud involving employees, and anything that could
negatively affect the internal controls.
Another provision pertains to the "management assessment of
internal controls". This provision ensures that information is
published in annual reports regarding the adequacy of internal
controls, structure and procedures.
The Sarbanes-Oxley act is designed to help companies promote
ethical accounting procedures. The act gives guidelines as to how
financial statements are reported. The act requires verification that
officers within the company have checked the information in the
reports for accuracy and true. The act also requires that the
companies have internal controls in place to ensure ethical reporting
practices. The main thing that the Sarbanes-Oxley promotes is
transparency in reporting.
Response 2
Section 802 of the Sarbanes-Oxley Law defines the penalties that may
be assessed against individuals who failed to comply with the Act. An
individual could be subject to 20 years in jail for altering, destroying,
mutilating, concealing, falsifying records, documents or tangible
objects. Guilt is define by the intent to impede a legal investigation.
This part of the law gets to the heart of how Arthur Anderson reacted
10. by destroying documents important to Worldcom. The law further
defines that any accountant who knowingly violates their ethics by
wilfully violates the requirements of maintenance of all audit or
review papers. These papers are subject to review up to five years.
The second Section that I reviewed was the Section 302. This actually
is my favorite part of the law because it directly holds the officers and
directors accountable for the accuracy of reporting in their financial
statements. It defines that the management must review and
understand the financial statements and sign that they are true and
accurate. It also holds the management accountable for the internal
controls, requiring any deficiencies to be reported. In the past
directors of companies relied heavily on the internal officers,
management, to report the company performance without
questioning the accuracy or taking their role on oversight committees
seriously. They could hide behind a veil of trust of the key leaders.
This Section clearly puts the responsibility for the Board to remain
independent of the executives and function more effectively on the
respective oversight committees they serve. The example I would
share is what happened in WorldCom. The company leaders shared
what they wanted to with the Board, who trusted implicitly the top
leaders. Had they questioned their legal representation or auditors,
they potentially could have uncovered the fraud that was committed
by the creation of shell companies, with WorldCom employees as
stockholders.
I would love to think this law would protect the investing community.
Financial reporting has improved to some extent. Unfortunately the
scams still continue. Example would be Barney Madoff or what
happened in the financial mortgage industry. These unethical
practices were conducted after Sarbanes Oxley was implemented.
11. Madoff was able to provide false financial information to investors.
Financial industry was allowed to get to aggressive in underwriting
and product suite. Fines and penalties are deterrents. Ethics still
must be inherent in an individual and company. Laws and
requirements are a guide. There will never be enough auditors,
inspectors or oversight boards to catch all of the fraud in the
corporate community.
The law prohibits falsifying information, failing to notify of material
changes, and destruction of records.
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Financial Statements
Income statement is a financial statement that shows how much
money is coming from product sales and services prior to any
expenses being taken out. Both internal and external users such as
managers and investors are able to access this. For example, if a
12. investor wanted to see if the company made money or lost money they
would use this financial statement report.
Balance sheet shows what condition the company is currently in.
whereas the other financial statements only came monthly or
annually. For example, what if the management planning team
wanted to see the company's current assets, ownership equity and
liabilities? All they have to do is run the balance sheet report.
CVP income statement or Cost Volume statement reports or monitors
the effects of the changes in cost and volume when it comes to the
company profits. For example, I work at a manufacturing plant for
roofing shingles. The CVP analyst studies the cost which includes but
not limited too, manufacturing, material, labor cost. This financial
statement report would help the management team budget the cost of
manufacturing goods.
Statement of cash flow tracks the movement of cash coming in or out
of the business. This financial statement will show if the company
made cash or not, or if the net income increased or decreased. For
example, the owner or the management department will use this to
determine if the company has earned enough money to be able to for
any expenses.
Retained earnings statements is a percentage that is kept by the
company to be reinvested or to be used to pay debts. For example, if a
company was looking to expand their business by purchasing top of
the line equipment they can use this statement to see how much money
the company has put away.
References:
http://www.investopedia.com/terms/r/retainedearnings.asphttp://finan
cial- Retrieved 2/18/2010
statements.suite101.com/article.cfm/financial_statements_the_p_l.
Retrieved 2/18/2010
--------------------------------------------------------------
ACC 291 Final Exam Guide
14. ACC 291 Final Exam Study Guide
Question 207
On January 1, a machine with a useful life of five years and a residual
value of $40,000 was purchased for $120,000. What is the
depreciation expense for year 2 under the double-declining-balance
method of depreciation? Discussion Question 1: Post your
response to the following:
How would you describe the difference between financial
and managerial accounting? What are the distinguishing
features of managerial accounting?
There are many differences between financial and managerial
accounting. The financial accounting statements are available
to external users such as employees, stockholders, creditors,
investors, etc. This is available to them so that they can
monitor the company's performances quarterly or annually.
Managerial accounting provides financial information for
managers and other internal people or department.
Managerial accounting is confidential so it is only observed by
internal users such as management, owner, and will provided
to external users such as the public. Management uses this for
budgeting purposes or to monitor profit loss/gain within the
company. Managerial accounting can be available to them as
often as needed. Managerial accounting statements is a great
way for management to make decisions based on what has
been reported.
Another response
15. The differences between managerial accounting and financial
accounting are distinct. Managerial accounting reports are for
those in managerial and decision making positions. The
managers use the financial report to answer questions, which
would advance the company and its employees. The manager
would want to know if certain investments should be made
and should the company advance an employee's salary. The
manager needs the report to decide if a factory is built or if a
certain stock is brought. The financial accountant has the job
of showing the external users such as creditors and
stockholders a picture of the company's stability.
The manager's purpose is to manage by making stable plans,
delegate duties, motivate the workers, and control the
atmosphere. Distinguishing features of managerial accounting
are the fact no cpa will audit the report, and there is no specific
frequency of the report. The reports are done in a need to know
basis and for a specific reason, which is for business purposes.
The reports are detailed and pertain to specific business
decisions. The financial accountant need only be concerned
with the company's finances.
DQ2
Discussion Question 2: Post your response to the following:
16. Select a management function (planning, directing and
motivating, or controlling) and explain how that function
relates to business as a whole. Next, select a different function
listed by a classmate. Discuss with your classmate how the
functions you each selected complement each other.
The management functions that I choose was controlling.
Controlling job is to make sure that the each
department/person is keeping the company's activities or
plans on track and in order to achieve that they must work
closely with Management planning function. Controlling
continually compares the company's performance to
make sure that the planned standards are being met. In my
opinion this is known as the "dirty work". Controlling
operations have to know what to look for and how to keep
track of all the company's activities. They have to take actions
and quickly correct any errors and make sure that the
company goals are being achieved in a timely matter or the
time that it was planned. If there are errors it is job of the
controlling operations to take quick action. The controlling
operations not only correct errors after it happens but they
also are in charge of foreseeing any potential errors and act
quickly to get that resolved.
Another response
17. I chose Controlling as part of the management function. The
controlling function relates to business as a whole because it
helps monitoring the firm’s performance to make sure the
planned goals are being met. Managers need to pay attention
to costs versus performance of the organization. let say, if the
company has a goal of increasing sales by 10% over the next
two months, the manager may check the progress toward the
goal at the end of month one. If they are not reaching the goal
the manager must decide what changes are needed to get back
on track.
--------------------------------------------------------------
ACC 291 Week 1 Assignment Comparative Analysis
Problem
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Purpose of Assignment The purpose of this assignment is to help you
understand the basics of financial statement analysis using financial
ratios on the assets section of the balance sheet, data interpretation,
and how ratios are used to gain insight about the management of
receivable. Assignment Steps Resources: Financial Accounting: Cost,
Volume, and Profit Formulas
By
18. Kamilah Crooms
Due February 28, 2010
Explain the components of cost-volume-profit analysis.
The components of cost volume-profit analysis consist of Level or
volume of activity, Unit Selling Price, Variable Cost per unit, total
fixed costs, and Sales mix.
What does each of the components mean?
Level or volume of activity is the activity that causes change or
behavior when it comes to the cost. Unit selling Price is the cost for
the product basically how much each unit is selling for. The Variable
Cost per unit is something that can change depending on the activity.
The total fixed cost does stay the same as activities change but differ
per unit. The Sales mix is basically what the name says. It’s a mixture
of sale items when more than one product sold the sales will remain
the consistent.
19. Based on the formulas you have reviewed, what happens to
contribution margin per unit when unit selling prices increase?
Contribution margin is the amount of revenue left over after
subtracting the variable cost. So basically Unit sales price subtracting
or minus variable cost.
Illustrate your explanation with an example from a fictitious
company of how an increase in unit selling prices might affect
contribution margin.
Kelly’s Sweetheart Flowers
The owner of Kelly’s Sweetheart Flowers is selling their bouquet of
flowers for $10 per unit. The Variable Cost per unit is $4.00. The
contribution margin will be ($10-$4) = $6. If the sells price increases
to say $15, then the contribution margin will be ($15-$6) = $9 per
unit.
When fixed costs decrease, what does this do for sales? Illustrate
your explanation with an example from a fictitious company.
Kelly’s Sweetheart Flowers
20. When the fixed cost decreases, the contribution margin ratio the net
income and sales will increase.
For example,
The flowers are $10 per unit. The variable cost per unit is $4.00. The
contribution margin will be ($10-$4) = $6. The fixed cost is $3. We
subtract Contribution margin – Fixed Cost= Net income. The net
income is $3.00.
Define contribution ratios
The contribution margin ratio is the contribution margin per unit
margin divided by the unit selling price.
What happens to contribution ratios as one of the components
changes?
Shown in the example above, if one or more of the components
changes is will cause the net income to increase or decrease.
Reference
21. statements.suite101.com/article.cfm/cost_volume_profits*the_p_l.
Retrieved 2/28/2010
//http:yourdictionary.com /CVP.org Retrieved 2/26/2010
Thomas, Y. 2005-08-27 “Accounting 101 pg. 52 Statements
--------------------------------------------------------------
ACC 291 Week 1 Discussion Question 1
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How would you describe the entries to record the disposition of
accounts receivables?
7 How should mixed costs be classified in CVP analysis? What
approach is used to effect the appropriate classification?
According to our class materials all mixed cost must be classified into
their fixed and variable and variable elements. The method that can
be used to determine is called the high/low method. To determine the
variable cost the analysis takes the total cost and divide it with the
low activity level. To get the fixed cost then the company would have
to subtract the total variable with either the high or low activity level.
9. Cost volume profit CVP analysis is based entirely on unit costs. Do
you agree? Explain.
In my opinion when it comes to making financial decisions for the
company, often times more than one method is used. Cost volume
profit is also based on Volume or level activities, unit selling prices,
variable cost per unit, total fixed and sales mix.
14. You can find the break point in dollars by drawing a horizontal
22. line to the vertical axis. I you want to find the break even point in
units it will be a vertical line from the break even point to the
horizontal axis.
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ACC 291 Week 1 Discussion Question 2
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23. How are bad debts accounted for under the direct write-off
method?
Axia College Material
Appendix C
Budgets Matrix
Directions: Using the matrix, define each of the budgets listed and briefly describe its uses.
Budget Definition Describe its uses
Sales budget Estimate of the expected sales for
the period. All of the other
budgets depend on the sales
budget. This is where all the
other budgets will start from
The sales budget shows dollars
and units. This will allow
management to see how many
units will be produced for the
period
Production budget A production of units needed to
be produced in order to meet the
projected sales
Shows management how many
units will be produced during
each budget period and what
amount is needed to fulfill
inventory demands
Direct materialsbudget Is the estimated quantity or cost
of the raw materials that is
needed in order to produce the
units required to fulfill inventory
Shows management how much
raw materials that is already on
hand and or that needs to be
ordered to meet inventory
demands.
Direct labor budget A estimate of cost and quantity of
direct labor needed in order to
meet production
Shows how many hours, how
many laborers needed to produce
the units for that budget period.
Management will decide what
will be the right amount of
laborers needed and if the
company will be able to meet the
budget
Manufacturing overhead
budget
An estimated expected amount of
manufacturing cost for the
budget period
This list all overhead cost
involving cash disbursement in a
quarter
24. Selling and administrative
expense budget
Anticipated selling and
administrative expenses in the
budget period
Shows area of budget expenses
that are not listed other than
manufacturing. Expenses such as
marketing, promotion cost etc for
the budget period
Budgeted income statement Estimate of expected profitability
of operations in a budget period
Is a very important tool because it
shows the company estimated
profit for the budget period.
Cash budget A projection of expected cash
flows in and out of the business.
Cash budget helps management
keep a tally or total of all cash
balances.
--------------------------------------------------------------
ACC 291 Week 1 Wileyplus Assignment E8-4, E8-11,
BYP8-1, and BYP8-2 (New)
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Wiley Plus Assignment Week 1
·E8-4, E8-11, BYP8-1, and BYP8-2 in MS Excel
Discussion Question 1: Post your response to the following:
You know how important it is to create budgets for your
household. How does budgeting help management make good
business decisions?
Budgeting is a very important skill that can be applied to
everyday life and also when it comes to making good business
decisions. I really like the way our class resources says about
Budgeting. Budgeting is used as a planning tool used
by management to make good decision for the company. If a
25. company is successful than more than likely that means that
the management team is very good at managing the company
finances. Budgeting helps management plan ahead, defines
what is most important, shows warning signs, reach a company
target without over or under budgeting and etc.
Another response
In a business, a budget helps a business make good decisions
because they are used by the company to plan for future events
and coordinate the events and duties in the company. They
also gives objectives used to evaluate the performance of the
company on each level which can help to make future decisions
that will not hurt the company based on the projected
objectives. It can also be used to alert the company of possible
problems or negative trends in the company that need to be
addressed so that there is a clear picture of the overall health of
the company before decisions are made. The budget helps the
company to be able to make an informed decision when making
one. It is there in order to make sure that making a decision like
taking on another company will not hurt the company and is
something that the compnay can sustain based on the budget.
DQ2
Discussion Question 2: Post your response to the following:
What are some of the different types of budgets?
Describe in detail one type of budget covered in the text.
Describe what the budget is used for and what
information it provides a business.
Then, as you respond to your classmates, discuss how the
budget you described relates to the budgets they described.
Discuss how a business benefits from each of the
budgets.
26. There are many different types of budgetting. For example,
there sales budget which allows management to see how many
units that need to be produced, production budget which will
allows everyone to see how many units are going to be
produced in or needed to be produced in order to meet the
inventory for that budget period. One budget that I can describe
in detail is called the direct labor budget and this budget shows
how many people, hours is needed in order to meet the required
budget for that period. This will give management an idea of
how much money is needed such as paying the cost of labor.
The company benefits by each of these budgets because it will
help manage just how much money it will cost the company
during this period. Management can also see if there are
different ways to cost the company out of pocket cost down
during this period.
Another response
I chose to write about the Production Budget. The Production
Budget shows the cost of each unit needed to produce an item
or manufacture a product. The formula used by the Production
Budget :
Budget sales units + Desired ending finished goods units -
Beginning finished goods units = Required production units.
An example would be, every Easter the bakeries in the Bronx
loads up on Hot Cross Buns. My mother and grandmother
would buy these tasty sweet breads,and eat them for breakfast.
I personally would like to eat them every week but, they are
only sold during the Easter season. Maybe, it has something to
do with the glazed cross on the top.
Every Easter Holiday, there appears these Hot Cross Buns and
the bakeries production department allows for the purchases
27. for items needed to make the buns. After Easter has gone, Hot
Cross Buns are not included in the budget.
--------------------------------------------------------------
ACC 291 Week 2 - Fordyce and Atwater (New)
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P10-5A
Fordyce Electronics issues a $400,000, 8%, 10-year mortgage note
on December 31, 2007. The proceeds from the note are to be used in
financing a new research laboratory. The terms of the note provide
for semiannualinstallment payments, exclusive of real estate taxes and
insurance, of $29,433. Payments are due June 30 and December 31.
What is a Flexible budget?
A Flexible budget is a budget that change or is flexible during
different levels or activity. Unlike the static budget which is a budget
based on one activity level, the flexible budget is based off of more
than one activity level.
The steps to development a flexible budget is :
a) Identify the activity index, and the range of activity
b) Find out what the variable cost, and determine the variable cost
per unit
c) Find out what the fixed cost and determine the budgeted
amount for each unit
28. d) Organize the budget for selected additionalactivity within the
appropriate range
The information found on a flexible budget cannot begin with
the master budget. The flexible budget uses the same guidelines the
original budget. The budget consists of Sales, Cost of Goods Sold,
Selling Expenses, General and Administrative Expenses, Income
Taxes, and finally the Net Income.
The information on the budget is a great tool to be used for
evaluation performances. The flexible budget can be used for monthly
comparison purposes. Also during the process that management is
identifying the activity index and the range of activity it will allow
them to see the cost of direct labor hours for that budget period.
--------------------------------------------------------------
ACC 291 Week 2 Assignment Financial Reporting Problem,
Apple Inc
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Purpose of Assignment The purpose of this assignment is to help you
understand the basics of financial statement analysis related to the
assets section of the balance sheet, data interpretation, and how
financial information is obtained to understand how a company
accounts for its long-lived assets. Assignment Steps Resources:
Capstone Discussion Question: Post your response to the following:
29. Think back over what you have studied and learned in this
course. Do you have a new perception of or appreciation for the field
of accounting and how it contributes to business? Explain.
To be perfectly honest with you I truly had no clue what accounting
did for a company and how important it was. I always thought that
accounting only dealt with payroll. In fact accounting does much
more that just payroll and monitor company supplies (coffee, paper,
pens & pencils). The accounting sets budgets for the entire company,
monitors outflow and inflow of profits, plans budgets for each
department, and much more. When I first begun this class I was
really nervous, I truly thought that I was going to have a hard time
understanding the accounting but I happy to say that I was wrong. I
understood every part of this course.
On a personal note I would like to thank you Jess. If it wasn't for your
pep talk I probably would had gave up. You are truly a
great instructor. I wish you all the best! God Bless
Another response
Accounting has taken a whole new meaning to me in my vocabulary.
Prior to this course, I just took accounting as a calculator and
crunching numbers. I now have a new respect for accounting and all
the aspects that are involved. I never once took into consideration
profit, sales, revenue, and balance sheets also being included with
accounting. There is so much more involved with accounting, and
had I not taken this course I would have never known. Accounting is
a very important part of running a business. I feel that it is imperative
to all people thinking of opening a business should take some type of
30. accounting class to become more aware of how to run the
accounting part of a business.
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ACC 291 Week 2 Discussion Question 1
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What are the differences among valuation, depreciation,
amortization, and depletion?
Is it appropriate to calculate depreciation using two different
methods? Why?
Business Plan
By
Kamilah T. Crooms
31. The name of my business is called DestinyWear. DestinyWear is
a urban fashion clothing company for woman, men and youth.
32. DestinyWear specializes in making clothing for every occasion. My
name is Kamilah Crooms and I am the owner and CEO of
DestinyWear.My goal is to ensure that my company will be succesfull
in all areas and in each department. In order for me to make sure that
the company was going to begin in the right direction I had to
priortize what was most important in establishing my business plan.
The main priority is that I had to first choose the appropriate business
structure, a high demanding product, and most of all an outstanding
accounting team.
Business Structure
Upon establishing DestinyWear I had to decide which business
struture that I felt was best for me to pursue. I decided that as a
Entreprenuer the best choice for me abd the direction of the company
would be for me to be sole proprietorship. Sole proprietorship
allowed me to be the sole owner of DestinyWear. The first and most
important reason that I wanted sole proprietorship is because it is
much easier to start a business as sole proprietorships. Sole
proprietorship takes all the profit that and doesn't have to split it
between any other owners or corporations. I also want the power to
33. make and change decisions along the way without having to first
consult anyone else.
DestinyWear Products
DestinyWear products will range from jeans, shirts, accessories and
shoes. The company will first start off with its most profitable product
and that will be the DestinyWear designer jeans line. The jeans line
has over twenty different jeans designs
from straight leg, baggy, cargo, overalls, shorts and much more. The
jeans line will provide services within the United States and Canada
and will eventually service Internationalcustomers. The DestinyWear
jeans line will have its own building. In this building the bottom floor
will consist of the factory and the top floor will have the different
departments such as management, marketing and most importantly
the accounting department.
DestinyWear Accounting Department
The accounting plays a major role in establishing my company
DestinyWear. The accounting department does more than managing
and reporting the company’s financial documents it is the greatest
tool in establishing my business. The key to a powerful accounting
department here at DestinyWear is applying the principles of internal
34. control. These principles consist of establishment of responsibilities,
segregation of responsibilities, documentation procedures, Physical,
mechanical, and electronic controls, Independent internal verification
and other controls such as Bonding of employees. In order to ensure
that this business plan works DestinyWear has to hire nothing but the
best qualified employees.
DestinyWear Accounting Staff
DestinyWear accounting team of fine employees will all be hired
through the company. There are several requirements that have to be
met in order for myself as the owner and Human Resource
department to even consider the applicant for accounting. We looked
for characteristics, education and work history experience. The first
and far most important qualifying requirements are education. The
applicant has to have a Bachelor BA/BS in accounting degree a plus
if he or she has a master’s.
The second requirement is experience. The applicant must have the
minimum of five years of experience working in accounting. He or
She must have knowledge and employment experience of working with
financial statements, cash management and internal control.
Employees must be experienced in Invest idle cash, planning the
timing of major expenditures, delay payment of liabilities keeping
inventory levels low, and increasing the speed of collection on
receivables. In the category of experience we had to hire applicants
according to the position that had to be filled in accounting. For
example, if a position in accounting such as management or
supervisory needed to be filled, then we would look for years of
experience in management or supervisory positions. I personally
prefer that every employee have some type of management
experience.
Last but not least, the employees characteristics. It is a must that
every accounting staff member has and applies professionalism, great
ethic and moral skills, accuracy, and most importantly punctuality,
35. and reaching company deadlines. These characteristics are very
important to have at DestinyWear.
DestinyWear Accounting Management Team
The DestinyWear accounting management team will be
reporting to me and to the other head staff each week to report
updates and any new changes. The management team is responsible
to have all the different types of budgeting reports that includes Sales,
Labor, etc. Management must follow the responsibility reporting
system for each department. The managers will use the company’s
financial information to predict outcomes of the business. I require a
report from each responsibility center, cost center, profit center and
investment center to be reported each month. Management is
responsible to ensure that the company does not over or under budget
and if any changes it must be reported immediately.
Conclusion
DestinyWear will be a very successful team not only because of
the products that we produce but because of having a great
accounting team. With the help of accounting team I DestinyWear
products will be in every wardrobe in America.
REFERENCES
//http:yourdictionary.com /CVP.org Retrieved 3/20/2010
36. Thomas, Y. 2005-08-27 “Accounting 101 pg. 52 Statements.
March 19, 2010
Drucker, P. Managing in the next society 2002. retrieved march
19,2010
--------------------------------------------------------------
ACC 291 Week 2 Discussion Question 2
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What types of industries have unearned revenue?
Why is unearned revenue considered a liability?
Costco Wholesale Corporation
If we look at the financial statements of the company we can find that
the company is financially strong. Its strength are:
1. It has enough amount of current asset to repay its current
liability. The current ratio of the company 8.18 indicates that
the company has $8.18 liquid asset to repay its $1 of current
liability.
2. The operating cost of the company is increasing because the
company is able to reduce its expenses.
3. Cash from operating activity has increased for the company.
Apart from this strength the company also has some weakness in its
financial statement:
(i) Increasing inventory indicates that the company inventory
conversion period is increasing.
37. (ii) The cash from investing activity shows that the company cash
outflow is more in the short term investment i.e. in non
operating activity.
(iii) The overall has for the year 2008 has declined for the
company.
Net Income:
If we look at the trend in net income of the company we can find that
the company net income looks fluctuating but it has improved it net
income in 2008 as compared to 2007.
Debt ratio as a percentage of total assets:
$950,000
$1,000,000
$1,050,000
$1,100,000
$1,150,000
$1,200,000
$1,250,000
$1,300,000
2006 2007 2008
Net Income
Net Income
54.90%
55.00%
55.10%
55.20%
55.30%
55.40%
55.50%
55.60%
55.70%
55.80%
2007 2008
Debt ratio as percent of total asset
Debt ratio as percent
of total asset
38. If we look at the debt ratio as percent of total asset we can find that
the debt ratio is declining in 2008 as compared to 2007 i.e. the
company is increasing equity to finance debt.
Debt as a percentage of total equity:
As we can see that the debt as percent of total equity is declining in
2008 as compared to 2007 i.e. the company is increasing equity in its
capital structure.
As we can see that there is nothing negative in 2008 for the company
and this is the reason it has positive trend as compared to 2007.
Hence there is no need to correct anything for the company.
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ACC 291 Week 2 Individual WileyPLUS Assignment Week
Two
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122.50%
123.00%
123.50%
124.00%
124.50%
125.00%
125.50%
126.00%
126.50%
127.00%
2007 2008
Debt as percent of total equity
Debt as percent of
total equity
39. we have another New set of week 2 Willeyplus assignment which
could be found on this link
Analyzing Statements of Cash Flows
4.8. Research Problem
Choose five companies from different industries and locate their
statements of cash flows
for the most recent year.
(a) Create a table to compare the dollars provided or used by
operating, investing, and financing activities, as well as the overall
increase or decrease in cash.
(b) Create a second table for each company comparing this same
information for each of the three years presented in that company’s
statement of cash flows. Include an additional column that looks at
the combined cash flows for all three years.
(c) Write a short analysis of the information gathered. Your
discussion should address, among other things, whether cash flow
from operating activities is large enough to cover investing and
financing activities, and if not, how the company is financing its
activities. Discuss differences and similarities between the
companies you have chosen.
40. (a) Create a table to compare the dollars provided or used by
operating, investing, and financing activities, as well as the overall
increase or decrease in cash.
STATEMENT OF CASH FLOW ANALYSIS
STARBUCK
S
HARELY
DAVIDSON RITE AID
2008 2008 2008
NET INCOME /
STARTING LINE
$
315.5
$
-
$
(1,079.0)
OPERATING
ACTIVITIES
$
1,258.7
$
(684.7)
$
79.4
INVESTING
ACTIVITES
$
(1,086.6)
$
(393.3)
$
(2,933.7)
FINANCING
ACTIVITIES
$
(184.5)
$
1,293.4
$
2,904.0
CASH
$
(11.5)
$
190.7
$
49.9
(b) Create a second table for each company comparing this same
information for each of the three years presented in that company’s
statement of cash flows. Include an additional column that looks at
the combined cash flows for all three years.
STARBUCKS
2008 2007 2006
Net Income/Starting Line 315.5 672.64 564.26
Cash from Operating Activities 1258.70 1331.22 1131.63
Cash from Investing Activities
-
1086.60
-
1201.95 -841.04
Cash from Financing Activities -184.50 -171.89 -155.33
41. Net Change in Cash -11.50 -31.35 138.80
Net Cash - Beginning Balance 281.30 312.61 173.81
Net Cash - Ending Balance 269.80 281.26 312.61
HARLEY
DAVIDSON
2008 2007 2006
Net Income/Starting
Line 0 933.84 1043.15
Cash from
Operating Activities -684.65 798.15 761.78
Cash from Investing
Activities -393.25 391.21 -35.26
Cash from
Financing Activities 1293.39
-
1037.80 -637.02
Net Change in Cash 190.70 164.46 97.42
Net Cash -
Beginning Balance 402.85 238.40 140.98
Net Cash - Ending
Balance 593.56 402.85 238.4
RITE AID
2008 2007 2006
Net Income/Starting
Line
-
1078.99 26.83 1273.01
Cash from Operating
Activities 79.37 309.15 417.17
Cash from Investing
Activities
-
2933.74
-
312.78 -231.08
Cash from Financing
Activities 2903.99 33.72 -272.84
42. Net Change in Cash 49.61 30.08 -86.75
Net Cash - Beginning
Balance 106.15 76.07 162.82
Net Cash - Ending
Balance 155.76 106.15 76.07
(c) Write a short analysis of the information gathered. Your discussion should
is large enough to cover investing and financing activities, and if not, how the
between the companies you have chosen.
Starbucks operating cash flow has gone up in 2007 and decreased a little in 2
down side but previously was doing well. The net loss in cash at end of year
this year there can be a gain.
Harley Davidson's operating cash flow has significantly decreased from 2007
decrease in cash from operating activities is probable from the lack of inform
many people buying at this point could have an effect on why the net income
reflect a positive gain.
Rite Aid's operating cash flow has taken a significant decrease as well from p
and cash from financing, the net change in cash is better than it has been in
ever growing needs in medical supplies. This also could reflect the expansion
44. Lucent Technologies is a company based on networking for service
providers, government, and enterprises worldwide (Lucent
Technologies, n.d., Para 1). The products and services they work
with are separated into three categories; service and maintenance,
wireless mobility networking, and wire line networking. Lucent
Technologies is backed by Bell Labs, which does research and
development in networking technologies.
During the years of 2001 to 2003 this company has experienced a
decrease in demand because of other companies’ loss or capital
used toward spending. This is mainly due to a downturn in the
economy. As an investor this information is necessary to know
because it explains the decrease or increase in sections of the
balance sheet. In order to compare the growth or decline of the
company’s profit, an investor must change a balance sheet into a
common-size balance sheet. First when looking at the balance sheet
an investor will see that the amount of paid in capital has increased
from the year of 2003 to 2004, the assets have increased, but the
liabilities have decreased. When running a debt/asset ratio it is
noticed that this ratio drops from 1.2 in 2003 to 1.0 in 2004. This
shows the company’s risk is low when concerning financial
leverage, usually when the debt ratio is less than one percent it is
financed mainly by company equity, so this company is close to
being debt free from creditors.
After changing the balance sheet to a common-size balance sheet
there are several factors an investor will look at. The current assets
have dropped to .48 from .49 in 2004. This does not show harm to
the company because only the accounts receivable dropped while
the rest of the current assets increased. This means the company is
not in as much danger of default on money owed to it. It does have
a rise in marketable securities. The one concern in the assets is the
45. increase of prepaid cost of pensions and goodwill. Goodwill can be
used for tax breaks but prepaid pensions cannot benefit the
company.
When looking at the liabilities section an investor will see a drop in
pension and liabilities and an increase in long term debt, both of
these could be affected because of the drop in the economy. Long
term liabilities are often increased to help a company control
interest rate increases so as an investor cutting back on pension
liabilities cuts back cost to the company and watching interest rate
increase show the company is concerned with its earning and
investors. This would be encouraging or an investor. The
stockholders deficit shows a drop in accumulated deficits from -1.43
to -1.22 and total deficits of -.26 to -.08. This shows the company is
working to control any money loss and turning it to the company’s
advantage. Overall it shows the company is still earning a profit
although small. With an increase of assets and a drop in liabilities
the company is showing it is working in a low risk capital.
After reviewing this information, a creditor or investor must be able
to compare this company to the industry totals. By comparing how
this company compares to other companies similar to it, a person
can see if it is competitive and worth taking a risk. Running ratios
will also show if the company is capable of paying off any debts it
has or if it can acquire the needed cash in case of emergencies.
Overall as an investor, I would say this company would be worth
investing in.
46. Reference
Axia College. (2007). Understanding Financial Statements.
Retrieved May 10, 2010 from Axia College, Week 2 Assignment,
ACC/230.
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ACC 291 Week 2 Learning Team Weekly Reflection
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Discuss the objectives for Weeks One and Two. Your discussion
should include the topics you feel comfortable with, any topics you
struggled with, and how the weekly topics relate to application in
your field.
Lucent Technologies
Axia College of University of Phoenix
47. Lucent Technologies is a company based on networking for service
providers, government, and enterprises worldwide (Lucent
Technologies, n.d., Para 1). The products and services they work
with are separated into three categories; service and maintenance,
wireless mobility networking, and wire line networking. Lucent
Technologies is backed by Bell Labs, which does research and
development in networking technologies.
During the years of 2001 to 2003 this company has experienced a
decrease in demand because of other companies’ loss or capital
used toward spending. This is mainly due to a downturn in the
economy. As an investor this information is necessary to know
because it explains the decrease or increase in sections of the
balance sheet. In order to compare the growth or decline of the
company’s profit, an investor must change a balance sheet into a
common-size balance sheet. First when looking at the balance sheet
an investor will see that the amount of paid in capital has increased
from the year of 2003 to 2004, the assets have increased, but the
liabilities have decreased. When running a debt/asset ratio it is
noticed that this ratio drops from 1.2 in 2003 to 1.0 in 2004. This
shows the company’s risk is low when concerning financial
leverage, usually when the debt ratio is less than one percent it is
financed mainly by company equity, so this company is close to
being debt free from creditors.
After changing the balance sheet to a common-size balance sheet
there are several factors an investor will look at. The current assets
have dropped to .48 from .49 in 2004. This does not show harm to
the company because only the accounts receivable dropped while
the rest of the current assets increased. This means the company is
not in as much danger of default on money owed to it. It does have
a rise in marketable securities. The one concern in the assets is the
48. increase of prepaid cost of pensions and goodwill. Goodwill can be
used for tax breaks but prepaid pensions cannot benefit the
company.
When looking at the liabilities section an investor will see a drop in
pension and liabilities and an increase in long term debt, both of
these could be affected because of the drop in the economy. Long
term liabilities are often increased to help a company control
interest rate increases so as an investor cutting back on pension
liabilities cuts back cost to the company and watching interest rate
increase show the company is concerned with its earning and
investors. This would be encouraging or an investor. The
stockholders deficit shows a drop in accumulated deficits from -1.43
to -1.22 and total deficits of -.26 to -.08. This shows the company is
working to control any money loss and turning it to the company’s
advantage. Overall it shows the company is still earning a profit
although small. With an increase of assets and a drop in liabilities
the company is showing it is working in a low risk capital.
After reviewing this information, a creditor or investor must be able
to compare this company to the industry totals. By comparing how
this company compares to other companies similar to it, a person
can see if it is competitive and worth taking a risk. Running ratios
will also show if the company is capable of paying off any debts it
has or if it can acquire the needed cash in case of emergencies.
Overall as an investor, I would say this company would be worth
investing in.
49. Reference
Axia College. (2007). Understanding Financial Statements.
Retrieved May 10, 2010 from Axia College, Week 2 Assignment,
ACC/230.
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ACC 291 Week 2 Wileyplus Assignment P8-3A, BE9-11,
DI9-5, E9-7, E9-8, BYP9, P9-2A (New)
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·P8-3A, BE9-11, DI9-5, E9-7, E9-8, BYP9, P9-2A.
Problem 8-3A: Bosworth Company
Brief Exercise 9-11: Nike, Inc.
Do It! 9-5
DifferentiatingDepreciationMethods
There isone main difference betweenstraightline depreciationandaccelerated
depreciation.Straightline isdecidedbytakingthe costof the assets,figuringoutthe salvage
cost whenthe use of the assetisfinishedandhow manyyearsof use the assethas. A person
thentakesthe cost minussalvage anddividesthe remainderbythe numberof yearsof use.
Thisamountis the depreciationexpense subtractedeachyearfromthe cost.The
accelerateddepreciationdoesnothave the same amountof deprecationsubtractedeach
year.It doeshave the cost minussalvage value tofigure outthe amounttouse but is then
dividedoutdifferently.A persontakesthe sumof the yearsof a product’suseful life,suchas
three yearsis3 + 2 + 1 = 6, thena personwoulddividethe depreciationamountby3/6 the
firstyear,2/6 the secondand finally1/6forthe final year.Sothe amountof depreciation
expense islargertosmallerwithacceleratedandequal amountsforstraightline.
50. The advantagesof straightline methodare itis easierandfastertofigure.The advantage of
acceleratedmethodisitismore accurate whenfiguringdepreciationexpense.The
acceleratedmethodhasanadvantage anddisadvantage concerningtaxes.A company can
use the acceleratedmethodtotake advantage of biggertax breaksat the beginningof an
assetslife,butsince thisamountdropsduringthe lifespanif the companyneedsaddedtax
breaksitwill notreceive themfromthese assetsinthe future.With the straightline method
the amountof tax breaksare eventhroughthe life of the product.Most companieschoose
thisformof depreciation forreportingpurpose ontaxesbutwill use the accelerated
methodtofigure taxable income.
As mentionedbeforethe advantage of straightline depreciationisitiseasiertofigure and
usesthe same total each yearfor deductionof depreciationexpense butthe disadvantage is
that if use for taxable income andreportingacompanydoesnotgeta biggertax breakat
the beginningof the assetslife whentheyhave justputoutthe cost forthe itemandmay
needa biggertax break.
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ACC 291 Week 3 Assignment The Liabilities Section of
O’Brian’s Balance Sheet
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Purpose of Assignment The purpose of this assignment is to help you
understand the balance sheet presentation for the liabilities of a
company. Assignment Steps Resources
Preparing an Income Statement
51. Coyote, Inc. Company
Multi-Step Income Statement
200x 201x 202x
Net Sales 1,833,000$
Cost of Goods Sold 1,072,000
Gross Profit 761,000 - -
Selling and Administrative Expenses 454,000
Advertising
Depreciation and Amortization 14,000
Repairs and Maintenance
Operating Profit 293,000 - -
Other Income (Expense)
Interest Income 13,000
Interest Expense (16,000)
Earnings Before Interest and Taxes 290,000 - -
Income Taxes 116,000
Net Earnings 174,000$ -$ -$
The companies’ net income is profitable when the sales exceed the
cost of goods sold. In this, the gross profit is $761k. This is beneficial
to the company. Though we took the cost of goods away from the net
sales there are still other areas which need to take a piece of the pie.
For this company, once the SG&A and depreciation are taken out, the
company still contains a profit of $290k. But the buck does not stop
there. Once the interest income and interest expense are adjusted the
balance before earnings and taxes is $290k. After taxes are taken
out, the company is left with a net profit of $174k.
In this case I think the company has achieved success with a net profit
of $174k. If the company were unable to be profitable, the company
would eventually go out of business. We would be able to tell if the
company was not profitable by looking at each section individually.
52. The cost of goods sold is what stands out for me. If we pay more to
make the product then we are actually selling it for, there is no profit
to be made. So, I think it should all start there.
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ACC 291 Week 3 Discussion Question 1
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Why does a company choose to form as a corporation?
Week 3 DQ 1
Due Tuesday, Day 2
Post your answer to Problem 3.5 on p. 109 (Ch. 3). How might the
information contained within the stockholder equity statement be used
for management and investor decision-making? Provide specific
examples of situations in which the stockholder equity information
might be used.
The statement of stockholders’ equity provides the changes in the
equity accounts during the accounting period more in depth than the
balance sheet. The information found on the statement of
stockholders’ equity includes retained earnings, common and
preferred stock, and additional paid in capital. Management uses the
statement of stockholders’ equity to ensure they are reaching their
goal of maximizing shareholder's equity. The use of market ratios
help with the analysis of the statement of stockholders’ equity, such as
53. earnings per share, price-to-earnings, dividend payout, and dividend
yield. These ratios will help both management and investors in
analyzing the company. For example, if I were looking to invest in a
company’s stocks I would utilize all of the financial ratios, as well as
the market ratios. The earnings per share ratio is calculated before
the price to earnings ratio, P/E, because the earnings per share ratio
is used in the second. If a company pays dividends, the dividend
payout ratio will come in handy. It tells us “The percentage
of earnings paid to shareholders in dividends” (Investopedia, 2010, p.
1).
References
Investopedia. (2010). Dividend Payout Ratio. Retrieved August 3,
2010, from
Investopedia:http://www.investopedia.com/terms/d/dividendpayoutrat
io.asp
Response 2
Explain what can be found on a statement of stockholders’ equity.
The major elements of stockholders' equity include capital stock,
paid-in capital, retained earnings, treasury stock, unrealized loss on
long-term investments, and foreign currency translation gains and
losses.
How might the information contained within the stockholder equity
statement be used for management and investor decision-making?
Provide specific examples of situations in which the stockholder
equity information might be used.
54. Management may look at the stockholder’s equity statement retained
earnings section to determine if company should borrow money for
capital investments or finance it through various forms of equity. It
may also be used by the stockholder to evaluate the compensation
paid to the company officers. Investors may also look at the statement
for cumulative net unrealized gains and losses before purchasing
stock in the company. Investors are also interested in the paid in
capital because they can compare it to the additionalpaid in capital
and the difference between the two values will equal the premium
paid by investors over and above the par value of the shares.
DQ 2
Week 3 DQ 2
Due Thursday, Day 4
Provide an example from the text or the Internet that demonstrates a
situation in which a company’s net profits appeared good in the
statements, but the gross or operating profits presented a different
picture. Discuss how this might have occurred. Respond to the
following question, addressed in Problem 3.6 on p. 109 (Ch. 3): “Why
is the bottom-line figure, net income, not necessarily a good indicator
of a firm’s financial success?” Look for indicators like liquidity or
solvency to answer this discussion question.
55. An example that demonstrates the situation is Enron. Enron’s
financial statements did not show all the expenses and costs. Instead
of showing them on the income statement they made entries so the
cost and expenses would post in the balance sheet. The same was
done with the revenues. This way it would be less expenses and the
net profit appeared good. Many debts and losses were not reported in
the financial statements. From the third quarter of 2000 through the
third quarter of 2001, the directors fraudulently used reserve
accounts within Enron Wholesale to mask the extent and volatility of
its windfall trading profits, particularly its profits from
theCalifornia energy markets; avoid reporting large losses in other
areas of its business; and preserve the earnings for use in later
quarters. By early 2001, Enron Wholesale's undisclosed reserve
accounts contained over $1 billion in earnings. The head of the
company improperly used hundreds of millions of dollars of these
reserves to ensure that analysts' expectations were met. In addition,
Skilling and others improperly used the reserves to conceal hundreds
of millions of dollars in losses within Enron's EES business unit from
the investing public.This would show the creditors that Enron was
making profits and its position was solid.
The net income is not necessarily a good indicator of a firm’s
financial success because the income statement only shows the profit
or loss at a period of time and does not show the whole picture of the
company. The Balance Sheet, Statement of cash flow, Statement of
shareholders’ equity and the Income Statement all together give the
real picture of the business. Each one of them shows different aspects
of the business. These statements show where the income is actually
coming from; is it from sales or from loans the company is
borrowing? If the company is selling a building or any other asset but
that does not mean that it is selling more products and making profit.
Looking at the Income Statements the company might be making
profit but at the same time it is extremely leveraged.
56. Response 2
A company’s net income is not the whole picture, just part of it. There
are lots of things that contribute to the net income that may not be
significative to the company’s success. If the value of a dollar has a
sudden change that can affect the bottom line if the company happens
to hold the medium of exchange that can benefit by the change that
might occur. The company can falsely inflate the bottom line. A
company’s net income is coupled with liabilities, cash flow, and
selects financial ratios. Looking at it this way is a much better way of
seeing what the company’s success is like. A company can change up
many things to make it look like their income is better. These things
that can be changed are single sales events, cash infusion, or false
financial statements. Some things like debt that a company has, the
company’s cash on hand, their capital assets conditions, or even their
sales trends. To figure the success of the company, you must look at
the whole picture. One thing cannot tell you all the facts of the
company’s affairs. You cannot tell the net income of the company just
from the bottom line. Look at all the financial records.
Response 3
Provide an example from the text or the Internet that demonstrates a
situation in which a company’s net profits appeared good in the
statements, but the gross or operating profits presented a different
picture. Discuss how this might have occurred. Respond to the
following question, addressed in Problem 3.6 on p. 109 (Ch. 3): “Why
is the bottom-line figure, net income, not necessarily a good indicator
of a firm’s financial success?” Look for indicators like liquidity or
solvency to answer this discussion question.
Net income is not necessarily a good indicator of a firm’s financial
success because they have ways to manipulate it by increasing their
revenues or hiding some of their expenses. For investors trying to
decide where to invest their money, they need to look more into
assessing how the company came up with the numbers they
presented.
57. An example of this situation is when Laribee Wire Manufacturing Co.
exaggerated in recording their inventory value which allowed them in
acquiring loans from six banks totaling to about $130 million using it
as collateral. At the same time, they reported $3 million in net income
for the period, but in actuality they lost $6.5 million.
This company showed a higher net income by reporting fake
inventory in which its value was overstated and transferred over to
their income statement. When the banks assessed their financial
statements, it was enough to sway them into lending the loans they
needed.
Reference:
Investopedia. (2010). Spotting Creative Accounting On The Balance
Sheet. Retrieved
fromhttp://www.investopedia.com/search/searchresults.aspx?q=Spotti
ng+Creative+Accounting+On+The+Balance+Sheet&submit=Search
--------------------------------------------------------------
ACC 291 Week 3 Discussion Question 2
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Why is preferred stock referred to as preferred?
58. STOCK DIVIDEND
Stock Split
University of Phoenix
Stock Dividend
In the present time, the stock dividend has become important concept.
When dividend is given in form of stock, it is called stock dividend. In
this form of dividend, the cash does not use. It is important, when the
corporation declares stock dividend, the market value of the share
decreases because the number of stock increases. The many
companies prefer stock dividend due to the tax benefit. If the
individual gets stock dividend, he does not pay any tax on stock
dividend. Thus the stock dividend reduces tax burden. On the other
hand, the ownership of investors also spurs up in the company
because the number of holding share increases. There is also
disadvantage of stock dividend. The market value of the share
decreases, so the market value of holding also decreases (Kennon,
2009).
The ABC Company is leading company in its industry. The number of
outstanding share of the company is one million. On the other hand,
the number of investors is five millions. The value of market
capitalization is $100 million. The management declares 20% stock
dividend. Thus the 200000 shares will be distributed as a stock
dividend. The number of outstanding share will be increased by
200000 and the new total number of outstanding stock will be 1.2
million. On the other hand, the new value per share in the market will
be $83.33 (100 million/1.2 million). This example is taken from below
mentioned link:
Stock Split
59. The stock split is also an important concept. When the management
wants to increases number of shares, the management follows this
method. In this method, the face value of the share is split and number
of share gets increased. Due to increment in number of outstanding
share, the market value of per share also gets affected but the total
market capitalization of the company does not affect. Both stock split
and stock dividend increase number of outstanding shares but both
are different due to the accounting treatment. In the stock split, the
investors do not get any real benefit. It is also known as non-cash
distribution of dividend. The motto behind stock split is to increase
trading of the shares in the market (Baker, 2009)
For example, the face value of per share is $100 and the total
outstanding shares are 100 million. If the management of the
company announces stock split in ratio of 1:2, the total outstanding
shares will be increased by 100 million, thus the new total number of
the share will be 200 million. On the other hand, the face value of the
share will reduce by 50%. So the new face value of the share will be
$50. Due to effect of stock split, the holding share of the investor will
also increase in the prorate basis. If the investor has 10 shares, now
he will have 20 shares. It is important thing that the total issued
capital will not be changed. The illustration of stock split has been
got from following link:
Reverse Stock Split
The reverse stock split is just opposite of stock split. In this process,
the management reduces the number of outstanding shares. The
company increase face value of the share. In this method corporation
decides a ratio such as 2:1. Thus the company accumulates two
shares in one share. In this method, the total market value of company
does not change. Due to reverse stock split, the earning per share and
face value of per share rises. Thus the reverse stock split provides just
opposite result from stock split. It is important question, why company
selects this method. When the management seems that the face value
of the share is less as compared to competitors then the company goes
for this method to make its share value to equal to competitor’s
share’s face value. It is also a sound strategy to increase treading of
60. shares. If the face value of share is too cheap in comparison to
competitors, the investors will be discouraged for investment. For
increasing the confidence of investors, the management uses this
method (Mladjenovic, 2009).
For example, an investor holds 100 shares of XYZ Company and the
face value per share is $50. If the management go for reverse stock
split option and declares one share for 10 shares then the holding of
the individual will reduce 9 shares for every 10 shares. Thus the new
holding of the investor will be 10 (100/10) shares but the face value
per share will be $500. It is also important that the total market
capitalization will remain as same as before reverse split. The
example of the reverse split is take form below mentioned link:
http://www.sec.gov/answers/reversesplit.htm.
61. References
Baker, H. K. (2009). Dividends and Dividend Policy. John Wiley and
Sons.
Kennon, J. (2009). All About Dividends. Retrieved May 31, 2010,
from
http://beginnersinvest.about.com/od/dividendsdrips1/a/aa040904_2.ht
m
Mladjenovic, P. (2009). Stock Investing for Dummies. Dummies.
--------------------------------------------------------------
ACC 291 Week 3 Individual WileyPLUS Assignment
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we have another New set of week 3 Willeyplus assignment which
could be found on this link
Analyzing an Income Statement
62. The net income of Kodak has decreased a bit; it appears that the
company is more profitable. By conducting a side by side analysis
from 2004 to 2003 the company has increased in current assets and
decreased in total assets. It appears that the company went down in
property, plant and equipment net as well as discontinued
operations. So, despite the decrease in total assets it looks like the
company has made a good decision.
The company has also decreased its total liabilities by about 4%. I
believe this to be good because the short term borrowings and long
term debt has decreased. To me, this means that the company is
tightening their belt and paying off old debt.
Total shareholders’ equity has down a little bit in dollars, but on the
percentage level the company’s percentage has gone up. I believe
this is because the company issued $104k more shares in 2004 than
in 2003. The company has the same amount of shares outstanding
in 2004 that it did in 2003 as well. Retained earnings on the stock
have gone up in 2004 as well. I believe this is contributed by the
more shares that have been issued.
I believe the profitability of the company is under good standings.
They appear to be making the necessary adjustments in the
company to stay with in a profitable income.
--------------------------------------------------------------
ACC 291 Week 3 Individual WileyPLUS Practice Quiz Ch.
11,12
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Resource:WileyPLUS
Cash Flow Statement Analysis
Cash Flow Statement Analysis
The cash flow statement is important financial statement of the
corporation. The cash flow statement states from where cash has
come and where cash has been gone. Thus the cash flow statement
makes a relationship between beginning balance and ending
balance of cash. The cash flow statement is prepaid on the basis of
income statement and balance sheet of the company. The Little Bit
Inc’s beginning cash balance including marketable securities was
$24000. On the other hand, the ending cash balance including
marketable securities of the company was $40000 (Weygandt,
Kimmel & Kieso, 2009).
The net income of the company was $5500 during 2009. The
company generated cash inflow from operating activity is less as
compared cash out flow from operating activities. The company
generated $9000 negative cash balance in operating activity
section of the cash flow statement. On the other hand, in the
investment section, the firm has also negative cash balance. The
firm has $7000 negative balance in investment section of the cash
flow statement. The Little Bit Inc made investment during the year
instead of selling of assets. Last section of the cash flow statement
is financing activity section. In which, all finance related activities
come. The corporation sold some shares and borrowed some money
64. from outside lenders therefore the company has positive case
balance by $32000 in financing activity section.
Reference
Weygandt, J.J.,Kimmel, P.D. & Kieso, D.E. (2009). Managerial
Accounting: Tools for Business Decision Making. John Wiley and
Sons.
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ACC 291 Week 3 Learning Team Weekly Reflection
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Discuss the objectives for Week Three. Your discussion should include
the topics you feel comfortable with, any topics you struggled with,
and how the weekly topics relate to application in your field.
65. Week 5 DQ 1
Due Tuesday, Day 2
In what ways does the statement of cash flows relate to the
balance sheet and income statement?
It is important to understand what we are doing with the numbers
and the results these numbers give us because the result is the
information that will be available to us from financial statements.
Although some want to see the income statement and ignore the
other statements we need to use them together to see the total
picture of what is happening to our business. The relationship
between the numbers on the financial statements shows us
everything we need to know about the business.
The income statement shows income and expenses for a period of
time and if we are making or loosing money. The balance sheet
compares the assets to liabilities and shows how much money the
business would have if everything is sold today.
The statement of cash flow might be the most critical statement
because there is plenty of information we can gain form it. This
statement relates with the income statement on operating
activities to see if they are generating cash or not. It is related to
the balance sheet on how much cash is used in investing activities.
In relationship with the balance sheet the cash flow statement
shows what cash is provided or used by financing activities. It will
tell us how much debt has been paid and will indicated if we are
using more debt or have paid down the credit line.
66. When the business makes a sale or receives payment for a sale on
credit that is an inflow. A sale shows up as income on the profit and
loss statement and as an inflow on the cash flow statement. It also
shows up either as cash or accounts receivable on the balance
sheet. Also, how quickly we can collect on accounts receivable will
play a big role in the cash flow. When the business spends money, it
shows up as an expense in the profit and loss statement and as an
outflow on the cash flow statement. It also shows up on the
balance sheet as a decrease in cash, or an increase or decrease in
liabilities, depending on what the expense represents.
Response 2
In what ways does the statement of cash flows relate to the
balance sheet and income statement?
The cash flow statement relates to the income statement and
balance sheet. The net income from the income statement is listed
on the statement of cash flows. Operating activities are analyzed
on the statement of cash flows; this section of the statement
reconciles the net income to the actual cash the company received
from or used during operations. The second section of the
statement of cash Flows is the cash flow from investing activities
which include purchase or sale of assets. The last section in the
Statement of Cash Flows is the cash flows from financing activities
that includes raising cash by selling stocks/bonds or borrowing
from backs; or cash out flows from paying back loans. The balance
sheet shows the different account balances at the end of the
accounting period. The statement of cash flows reflects changes in
67. the accounts listed on the balance sheet between accounting
periods. The net cash from operating, financing, and investing
activities are added up to calculate the net change in cash.
Week 5 DQ 2
Due Thursday, Day 4
Discuss how the statement of cash flows is utilized by investors. If
you were an investor reviewing a statement of cash flows, what
section might interest you most? Why? Discuss the circumstances in
which other sections of the statement might be important to an
investor.
Prior to making an investment in a company, one would want to
understand the decisions the owners are making to fund the
operations of the company daily. Maintaining sufficient cash to
acquire new product, pay overhead, and satisfy generated sales
would be the predominant need of the company. Second need
would be for the company to have sufficient cash to remain
competitive. This may require cash to invest in research and
development, increase inventory as new product introduction,
improve efficiency in plant and equipment, or cash to satisfy prior
borrowing obligations. By reviewing the statement of cash flow,
the investor can determine if the company is generating sufficient
cash internally to fund operations or are they requiring outside
68. injection of cash to finance the short fall in cash needed to operate
the company. Last, the investor can review the statement of cash
flow to better understand the leverage of the company and the
requirement for repayment of debt, or dividends to reward prior
investments.
Response 2
Discuss how the statement of cash flows is utilized by investors. If
you were an investor reviewing a statement of cash flows, what
section might interest you most? Why? Discuss the circumstances in
which other sections of the statement might be important to an
investor.
The statement of cash flow is utilized by investors because it has all
information integrated from the balance sheet and the income
statement. The statement of cash flow is used by an investor to see
if the operating activities are greater than the net income to have
earnings that are called “high quality”. If operating activities are
less, then a red flag will be raised as to why the net income is not
becoming cash. Another reason would be investors believe cash is
the best. The statement shows all cash coming and going from the
business. If the company generates additional cash than what is
being used, then the company can reduce their debt, acquire
another business, or buy some of the stock back. The last reason
why would be that financial models are based upon the statement
of cash flow.
If I was an investor reviewing a statement of cash flows the section
that might interest me the most would be the operating activities. I
69. would like to know how the company was doing and what areas
need to be improved to have more cash generated in the
business. All the sections are important to an investor so they can
see the complete big picture of their investment.
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ACC 291 Week 3 Wileyplus Assignment P9-7A, E10-5, E10-
8, E10-13, E10-22, E10-24, BYP10, P10-9A, P10-13A,
IFRS10-4 (New)
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·P9-7A, E10-5, E10-8, E10-13, E10-22, E10-24, BYP10, P10-9A, P10-
13A, IFRS10-4.
Candela Corporation
Axia College of University of Phoenix
Candela Corporation
Candela Corporation and Subsidiaries have been working for
over 34 years developing and commercialize aesthetic laser
systems that allow physicians and personal care providers to
treat a variety of cosmetic and medical conditions such as
removal of spider veins, scars, stretch marks, warts, as well as
hair removal and age spots, freckles and tattoos. Other skin
treatments such as psoriasis and acne and acne scars are also
treated. (Axia College, 2007)
70. Going from top to bottom on The Candela Corporation and
Subsidiaries Consolidated Statement of Cash Flows; for the
operating activities, 2002 shows an alarming loss in the net
income while 2003 and 2004 for the company are showing a
significant and steady climb in the net income. In 2004 there
was a new category added called Provision for the disposal of
discontinued operations and the category has caused an
increased the account for 2004. Loss from discontinued
operations grew from 2002 to 2003 but had a significant
decline for 2004. Depreciation has increased over the last 3
years as well. Provision for bad debts increased significantly
too, but an increase in bad dept is expected as revenue
increases. The provision for deferred taxes shows the company
went from a loss in 2002 and 2003 to show there was no tax
loss in 2004. The tax benefit from exercised stock options has
practically doubled sense 2003. The changes in assets and
liabilities for the last 3 years have been up and down.
Receivables have increased, notes receivable decreased, and
inventories have increased. Other current assets, other assets
have also increased. Accounts payable has made a significant
decrease in the last 3 years as well as accrued payroll expenses.
The accrued payroll decreasing could mean that the amount of
employees over the years has decreased as well. The accrued
warranty costs have increased as well; this could mean that the
company renewed equipment warranties. The net cash
provided by operating activities looks to have gone from a loss
in 2002 to a large profit in 2003 and then a decrease, yet still a
profit for 2004. It appears on the operations level that
management needs to do more to regulate the company’s
finances so there is not an up and down variance each year.
The cash flow from investing activities shows me that in the
last three years they had large amount of investments in 2002
and 2003 but now they are letting them decrease.
The cash flow from financing activities states that the
proceeds from issuance of common stock have increased
71. significantly from 2002 to 2003 and rose a little more in 2004.
The repurchases of stock has not happened sense 2002 and the
principle payment of long-term debt grew in 2003 from 2002
and shows no activity for 2004. Same goes for the net
borrowing on line of credit; it appears that Candela Corporation
is current on payments to line of credit. So, the net cash from
financial activities looks great for 2004. The cash and cash
equivalents for each year have increased steadily.
After reviewing the consolidated statement of cash flows for
Candela Corporation, I believe the company is making a profit,
but perhaps need some control over their operating activities.
Reference
Axia College. (2007). Statement of Cash Flows. Retrieved June
14, 2010 from Axia
College, Week Six, ACC 230.
72.
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ACC 291 Week 4 Discussion Question 1
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Why are companies required to prepare a statement of cash flows?
Why is the statement of cash flows divided into three sections?
Analyzing Statements of Cash Flows
4.8. Research Problem
Choose five companies from different industries and locate their
statements of cash flows
for the most recent year.
(a) Create a table to compare the dollars provided or used by
operating, investing, and financing activities, as well as the overall
increase or decrease in cash.
(b) Create a second table for each company comparing this same
information for each of the three years presented in that company’s
statement of cash flows. Include an additionalcolumn that looks at
the combined cash flows for all three years.
73. (c) Write a short analysis of the information gathered. Your
discussion should address, among other things, whether cash flow
from operating activities is large enough to cover investing and
financing activities, and if not, how the company is financing its
activities. Discuss differences and similarities between the companies
you have chosen.
(a) Create a table to compare the dollars provided or used by
operating, investing, and financing activities, as well as the overall
increase or decrease in cash.
STATEMENT OF CASH FLOW ANALYSIS
STARBUCK
S
HARELY
DAVIDSON RITE AID
2008 2008 2008
NET INCOME /
STARTING LINE
$
315.5
$
-
$
(1,079.0)
OPERATING
ACTIVITIES
$
1,258.7
$
(684.7)
$
79.4
INVESTING
ACTIVITES
$
(1,086.6)
$
(393.3)
$
(2,933.7)
FINANCING
ACTIVITIES
$
(184.5)
$
1,293.4
$
2,904.0
CASH
$
(11.5)
$
190.7
$
49.9
(b) Create a second table for each company comparing this same
information for each of the three years presented in that company’s
statement of cash flows. Include an additionalcolumn that looks at
the combined cash flows for all three years.
STARBUCKS
74. 2008 2007 2006
Net Income/Starting Line 315.5 672.64 564.26
Cash from Operating Activities 1258.70 1331.22 1131.63
Cash from Investing Activities
-
1086.60
-
1201.95 -841.04
Cash from Financing Activities -184.50 -171.89 -155.33
Net Change in Cash -11.50 -31.35 138.80
Net Cash - Beginning Balance 281.30 312.61 173.81
Net Cash - Ending Balance 269.80 281.26 312.61
HARLEY
DAVIDSON
2008 2007 2006
Net Income/Starting
Line 0 933.84 1043.15
Cash from
Operating Activities -684.65 798.15 761.78
Cash from Investing
Activities -393.25 391.21 -35.26
Cash from
Financing Activities 1293.39
-
1037.80 -637.02
Net Change in Cash 190.70 164.46 97.42
Net Cash -
Beginning Balance 402.85 238.40 140.98
Net Cash - Ending
Balance 593.56 402.85 238.4
RITE AID
2008 2007 2006
75. Net Income/Starting
Line
-
1078.99 26.83 1273.01
Cash from Operating
Activities 79.37 309.15 417.17
Cash from Investing
Activities
-
2933.74
-
312.78 -231.08
Cash from Financing
Activities 2903.99 33.72 -272.84
Net Change in Cash 49.61 30.08 -86.75
Net Cash - Beginning
Balance 106.15 76.07 162.82
Net Cash - Ending
Balance 155.76 106.15 76.07
(c) Write a short analysis of the information gathered. Your discussion should a
large enough to cover investing and financing activities, and if not, how the com
the companies you have chosen.
Starbucks operating cash flow has gone up in 2007 and decreased a little in 20
side but previously was doing well. The net loss in cash at end of year is decre
there can be a gain.
Harley Davidson's operating cash flow has significantly decreased from 2007.
in cash from operating activities is probable from the lack of information supp
buying at this point could have an effect on why the net income is decreasing.
gain.
Rite Aid's operating cash flow has taken a significant decrease as well from pr
cash from financing, the net change in cash is better than it has been in previou
growing needs in medical supplies. This also could reflect the expansion of the
76. --------------------------------------------------------------
ACC 291 Week 4 Discussion Question 2
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What are some common ratios used to analyze financial information?
Which are the most important?
Findwhat.com Case - CheckPoint
ACC 230
Findwhat.com has recorded the 135 percent increase in the revenue
which is mainly due to the business acquired of Espotting during the
year. The different accounting policies are present for the acquiring
firm and the acquired firm. The company has recorded certain
premature revenues for the amount which advertisers had made only
the advance deposit. As result, the company is recognizing the vendor
77. financing as revenue. In some places, the gross revenue has been
recognized while in another, the net revenue has been recognized.
The network click revenue is recognized at gross level while the
private level revenue is taken at net level. Some of the revenue
expenditures have been recognized as the capital expenditures.
Revenue for set up network fee is treated as deferred revenue and is
recognized over a period of time. The company is very inconsistent
with regards to its accounting policies in terms of recognition of
revenue. The provision and treatment of amount for doubtfuldebt is
also not satisfactory. When a customer clicks on a sponsored
advertisement, the whole of the revenue due to him is recognized. The
company is having a very high amount of doubtful debt balance at the
end of the year ending December 31, 2004.
--------------------------------------------------------------
ACC 291 Week 4 Individual WileyPLUS Assignment
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we have another New set of week 4 Willeyplus assignment which
could be found on this link
Week 7 DQ 1
Due Tuesday, Day 2
Post your answer to Study Question 5.2 on p. 180 (Ch. 5). As you
read your classmates’ responses, consider the following scenario: If
you compared two different companies that utilized two different
valuation methods, how might the quality of the results differ? Also,
78. comment on the difficulty of making comparisons between two firms
that use different valuation methods.
Understanding the different inventory methods is
crucial. First the person that establishes the inventory needs to
determine which method to use. LIFO, or FIFO. LIFO means Last
in First Out. This means that when a purchase is made, and sales
are recorded the newest product is used first. So if I bought 10
combs at $2 on December 1st, and then I buy 5 combs at $2.50 on
December 10th. When sales are made I am going to record sales
using the $2.50 until I sell through the 5 combs that were purchased
on the 10th, and then the cost will go to the previous purchase price
of $2 until those 10 combs are sold through. FIFO is just the
opposite. Meaning that goods are used in the order that they are
received. The first items ordered, are the first items sold. Either
method will pass an audit. It is important to note though that
managers can't switch back and forth between the two
methods. Profit will vary depending on which method is being
used. Say you sold only 6 combs at $3 each. Using the LIFO
method this would equal $3.50 profit. If you used the FIFO
method, this would result in a $6.00 profit.
Response 2
Post your answer to Study Question 5.2 on p. 180 (Ch. 5). As you
read your classmates’ responses, consider the following scenario: If
you compared two different companies that utilized two different
valuation methods, how might the quality of the results differ? Also,
comment on the difficulty of making comparisons between two firms
that use different valuation methods.
It is very important to understand which inventory valuation method
is being used to determine the profit numbers quality. The balance
sheet, statement of cash flow and income statement can be directly
impacted by the valuation method that used to determine the costs of
79. inventory. The three methods that are used are FIFO, LIFO and
Average Cost. The valuation ratios can be dramatically affected
depending on the inventory valuation that is being used over a long-
term period; especially because prices are likely to rise. When using
FIFO you can increase net income, but then at the same time raise
the amount taxes that business is obligated to pay. When using
LIFO the inventory can be obsolete because they are old this will
result in lower net revenue because the products pricing is
higher. The Average Cost results usually fall between LIFO and
FIFO. The bottom line can be affected mainly by the inventory
analysis and the ratio results that are formed from that analysis. It
is easier to compare companies that are in the same line of business,
so I believe that quality of results would differ tremendously if
different valuation methods were used. If you use LIFO that
company may seem unattractive but they are performing well, as for
FIFO it may look good as for profit, but may not be performing
well.
DQ 2
Week 7 DQ 2
Due Thursday, Day 4
Post your answer to Study Question 5.6 on p. 180 (Ch. 5). Discuss
the consequences of poor quality reporting. What has the U.S.
government done to improve the quality of reporting after recent
financial scandals such as Enron?
80. I think that the significance is that the analysts only see this one
HUGE transaction. The events that actually led up to this large
transaction actually took place over a 2 year period. These items
should have been written off as they occurred. Wall Street would
not have known that the executives refused to write off these
accounts when they should have. Wall Street only see's the one
large transaction. If the company would have been more honest in
their reporting they would have seen (more than likely) that there
were many accounts over a two year period that should have been
written off at different periods. So the analysts would not have seen
a pattern of recurring write-offs. If the analysts only see the one
transaction they are less likely to be able to paint an accurate
picture of the financial standing of the business for investors, or
potential investors. If the investors could see that there were many
accounts that had to be written off maybe their investing decisions
would have been different. The regulation of the accounting field
has grown by leaps and bounds since the Enron scandal. The
government has implemented several agencies and regulations to
ensure honesty in accounting practices. SOX is one example of an
agency that has been put into place to ensure honesty in
accounting. SOX implements things like internal controls, and
accountability for CEO's and CFO's.
Response 2
I believe the impact and importance of this write-off event is a very
big matter. It is obvious how they handled it that it was a scandal
from the start. I think that everyone involved had a big role in how
things played out. To me I think of the investors as a really big hit
to this but also feel that audit committees have to be held
responsible as well. It has been shown over many examples that
adit oversights are happening to financial reporting. Although I do
feel they are getting better and tighter due to conforming tightly
with the GAAP requests. I feel over time the accounts receivable