External users of financial statements use the information to make key business decisions. Some common users include banks, investors, suppliers, and customers.
DQ1 External users of financial statements use the information to make key business decisions. Some common users include banks, investors, suppliers, and customers. Briefly describe one reason why one of these stakeholders would evaluate the financial information and provide at least one example to illustrate your ideas. Participate in follow-up discussion by providing additional reasons and examples that have not already been listed related to the stakeholders’ evaluation of financial statements.
DQ2 Internal users of financial statements use the information to make key business decisions. Some common users include managers, employees, internal accountants, and executives. Briefly describe one reason why one of these stakeholders would evaluate the financial information and provide at least one example to illustrate your ideas. Participate in follow-up discussion by providing additional reasons and examples that have not already been listed related to the stakeholders’’ evaluation of financial statements.
ACC502 Accounting Practices
Week 2 Discussion
DQ1 Internal users of financial statements use the information to make key business decisions. Some common users include managers, employees, internal accountants, and executives. Briefly describe one reason why one of these stakeholders would evaluate the financial information and provide at least one example to illustrate your ideas. Participate in follow-up discussion by providing additional reasons and examples that have not already been listed related to the stakeholders’’ evaluation of financial statements.
DQ2 As mentioned in Chapter 3 of the textbook, International Financial Reporting Standards (IFRS) are generally utilized by non-U.S.-based companies. Both IFRS and GAAP standards follow core principles, such as asset valuation, revenue recognition, and the matching principle. However, the standards may approach financial reporting differently. Review the “Why Global Accounting Standards?” page of the International Financial Reporting Standards (IFRS) Foundation website at https://www.ifrs.org/use-around-the-world/why-global-accounting-standards and select an item to summarize. As part of your post, provide an opinion on whether U.S. companies should converge to the global standards. Participate in follow-up discussion by trying to professionally persuade classmates who have a different opinion on convergence and why your logic is more appropriate for businesses.
ACC502 Accounting Practices
Week 3 Discussion
Using the first letter of your last name, answer the question below for which the letter of your name falls in the range. Use your own words to summarize the information from the textbook. Provide proper citations for sources used, including the textbook.
A – M: Calculate the accounts receivable turnover and the average collection period ratio for The Coca-Cola Company for the most current year presented. Explain what the results indicate about the company. Summarize how well Coca-Cola is collecting on its receivables based upon the type(s) of products it sells and the industry in which it competes. Justify your speculation by using supporting facts from the income statement, balance sheet, or other resources.
N – Z: Calculate the accounts receivable turnover and the average collection period ratios for PepsiCo for the most current year presented. Explain what the results indicate about the company. Summarize how well PepsiCo is collecting on its receivables based upon the type(s) of products it sells and the industry in which it competes. Justify your speculation by using supporting facts from the income statement, balance sheet, or other resources
Participate in follow-up discussion by comparing the ratios for both companies and explaining what they mean in relation to each other. Also, discuss what specific actions each company should take to improve its ratios. Consider if there are any other ratios that can be looked at to analyze accounts receivable.
DQ2 Respond to Question 5 from Chapter 8 of the textbook: Consider the following statement: “The fewer the uncollectible accounts, the better.” Can you think of instances where this might not be the case? Support your points with an example of why fewer uncollectible accounts may not be better for business. Participate in follow-up discussion by reviewing the fact patterns described by classmates and change them to try to prove the point that fewer uncollectible accounts are not better.
ACC502 Accounting Practices
Week 4 Discussion
DQ1 As indicated in the reading, U.S. GAAP requires the use of historical cost for valuing most assets while IFRS permits the use of fair value. Using the first letter of your last name, answer the question below for which the letter of your name falls in the range. Use your own words to summarize the information from the textbook. Provide proper citations for resources used, including the textbook.
A – M: Assume you are in support of the historical cost basis as required by GAAP. Discuss why you think the historical cost approach best values the long-term assets on the balance sheet. In addition, provide an example to support your position.
N – Z: Assume you are in support of the fair value basis as recommended by IFRS. Discuss why you think the fair value approach best values the long-term assets on the balance sheet. In addition, provide an example to support your position.
Participate in follow-up discussion by responding to classmates who posted about the opposite approach and professionally debate why the approach you reported on is the better method for valuing the long-term assets on the balance sheet.
DQ2 Refer to Question 10 in Chapter 17 of the textbook: How is the use of the equity method subject to manipulation? How might a financial statement reader detect such behavior? In addition, provide an example to prove how the equity method may result in manipulation of the financial results.
Participate in follow-up discussion by providing recommendations to classmates’ fact patterns on how a company could implement procedures to prevent manipulation of the use of the equity method.
ACC502 Accounting Practices
Week 5 Discussion
DQ1 The ability for a company to meet its liability obligations is important when assessing financial stability. Consider what high liability balances might indicate about a company and explain the pros and cons of this type of balance. Provide real-world examples to illustrate your ideas. Participate in follow-up discussion by discussing whether you agree or disagree with the assessment provided and offer additional examples to justify your position.
DQ2 The principles regarding leases were recently updated by FASB, as discussed in the textbook. Explain two main differences between capital and operating leases.
Select a publicly traded company and access its most recent financial statements, form 10-K. Include the name of the company in your subject line, and do not choose a company about which one of your classmates has already posted. Navigate to the notes to the financial statements and locate the company’s note on lease disclosures. Identify the types of leases the company has and explain how you can tell which types of leases are used. Participate in follow-up discussions by comparing the lease reporting of your company to that of a classmate’s company and comment on any similarities or differences between the companies.
ACC502 Accounting Practices
Week 6 Discussion
DQ1 The stockholders’ equity section of the balance sheet typically includes the line items of retained earnings, common stock, treasury stock, and other comprehensive income. Select two of these line items and explain what their balances might indicate about how the company is utilizing the investment by its stockholders. In your response, address whether you would want to purchase stock in the company based on your analysis. Participate in follow-up discussion by reviewing the information provided by classmates and providing your opinion as to whether you would purchase the company’s stock. In your response, compare your opinions and note any significant similarities or differences.
DQ2 Companies may issue common or preferred stock to generate cash flow. However, sometimes companies will buy back stock that was issued to shareholders. Discuss at least one reason why a company would buy back its own stock and provide an example to support your points. In addition, discuss any potential negative effects of the stock repurchase. Participate in follow-up discussion by changing the fact patterns provided by classmates to show when/why a company may want to reissue its treasury stock. Provide an example to support your points.
ACC502 Accounting Practices
Week 7 Discussion
DQ1 Select a publicly traded company and access its most recent financial statements, form 10-K. Include the name of the company in your subject line, and do not choose a company about which one of your classmates has already posted. Navigate to the notes to the financial statements and locate the company’s note on their statement of cash flows that was prepared using an indirect method. Discuss an item that was included when calculating net income but is adjusted as an increase or decrease to determine cash provided by (used in/by) operating activities. Specifically an asset, liability, gain, or loss. Include a summary of how that item impacted net income (or net loss) and why an adjustment might be necessary to reconcile net income to net cash flows from operations. Use an item not already used in a classmate’s post, if possible. In your post, include a screenshot of the statement of cash flows you are analyzing. Participate in follow-up discussion by providing additional explanations on line items identified by your classmates.
DQ2 Many small business owners focus on the cash balance in their bank accounts and may not use the statement of cash flows to analyze how their businesses are generating or using cash. Discuss what one piece of information is found on the statement of cash flows that is just as important as the bank balance (or more so) for the purpose of understanding the financial position of a company. Participate in follow-up discussion by adding additional detail or asking additional questions to the posts of a classmate regarding the differences and similarities between the statement of cash flows and the income statement information.
ACC502 Accounting Practices
Week 8 Discussion
DQ1 In the textbook there are 21 questions provided regarding items to consider when conducting an industry analysis. Review the questions listed on pages 116 and 117. Choose three that you think are the most important of all questions provided. Discuss why those three items are important when conducting an industry analysis. Participate in follow-up discussion by reviewing classmates’ posts and discussing whether the cost leadership or differentiation competitive strategy would be the most effective approach based on the three items provided.
DQ2 Refer to Problem 6.1 in the textbook: Exhibit 6.3 shows common-size balance sheet and income statements for 12 companies, described on page 141 & 143. Your job is to match each company with its financial statements. Using the first letter of your last name, answer the question below for which the letter of your name falls in the range.
A – F: Using numbers 1, 2 and 3 on Exhibit 6.3 match the companies to the respective number.
G– L: Using numbers 4, 5 and 6 on Exhibit 6.3 match the companies to the respective number.
M – R: Using numbers 7, 8 and 9 on Exhibit 6.3 match the companies to the respective number.
S – Z: Using numbers 10, 11 and 12 on Exhibit 6.3 match the companies to the respective number.
Participate in follow-up discussion by reviewing classmates’ posts who used the same numbers as you and provide details supporting why their companies chosen are incorrect. Remember to use a professional tone. Try to locate a classmates’ post with different results than what you determined to be correct.
ACC502 Accounting Practices
Week 1 Assignment
Company Overview
For this assignment you will be making adjustments to the financial statements based on new transactions and describing various financial reports. Refer to the Excel spreadsheet, “Company Overview Template,” for the instructions and details to complete this assignment.
While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines, which can be found in the APA Style Guide, located in the Student Success Center.
This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.
You are not required to submit this assignment to LopesWrite.
Toys, Inc began operations on December 31, 2019 with the following transactions:
1. Purchased equipment for $15,000
2. Purchased inventory on account for $6,000
3. Issued common stock for $20,000
Toys, Inc’s balance sheet including those transactions as of December 31, 2019, was as follows:
Toys, Inc.
Balance Sheet
As of December 31, 2019
Assets:
Cash $ 5,000
Receivables –
Inventory 6,000
Land –
Property Plant and Equipment 15,000
Total Assets $ 26,000
Liabilities and Equity:
Accounts Payable $ 6,000
Note Payable –
Common Stock 20,000
Retained Earnings – Total liabilities and stockholders’ equity $ 26,000
During January 2020, the company had the following transactions:
Example: Made payments of $4,000 on outstanding accounts payable
1. Sold $2,000 of inventory to customers for $3,000 in cash.
2. Purchased $2,500 of new inventory for cash
3. Sold $3,500 of inventory to customers on account for $5,500.
4. During the month, received $3,500 from customers as payments on their accounts
5. Borrowed $20,000 from the bank and issued stock for $5,000 to purchase land for $25,000 for a future warehouse
6. Paid employees $2,000 for payroll
Required:
1. Record the January 2020 transactions by adding and subtracting amounts in the rows of the following table in a way that the row totals represent the end of the month balances in the financial statements. (fill in the shaded area as needed)
2. Explain the main characteristics of the balance sheet and the income statement and the relationship between those two statements.
Balance Transaction Number
at 12/31/19 Example 1 2 3 4 5 6 Total
Cash $ 5,000 (4,000) $ 1,000
Receivables – –
Inventory 6,000 6,000
Land – –
Property Plant and Equipment 15,000 15,000
Total Assets $ 26,000 $ 22,000
Accounts Payable $ 6,000 (4,000) $ 2,000
Note Payable – –
Common Stock 20,000 20,000
Retained Earnings – – –
Total Liabilities and Equity $ 26,000 $ 22,000
Check (must equal zero) –
Income Statement
Sales $ –
Cost of Goods Sold –
Payroll expenses –
Net Income $ –
Requirement 2
Characteristics of a Balance Sheet
Characteristics of an Income Statement
Relationship between the Balance Sheet and the Income Statement
ACC502 Accounting Practices
Week 2 Assignment
Analyzing Revenue
The purpose of this assignment is to apply the accounting revenue recognition concepts in a case study.
One of the most common methods to manipulate revenue is through a strategy called channel stuffing. Refer to the “Krispy Kreme, Sarbanes-Oxley, and Corporate Greed” and the “A Hole in Krispy Kreme’s Story,” located in the study materials, and summarize the company’s unethical accounting practices and the impact on its stock price. Provide a 500-750 word memo to your supervisor summarizing and analyzing the Krispy Kreme transactions and their impact on financial reporting and stock value. You must address the following items in your memo:
Describe the five steps of the revenue recognition model. Specifically provide an explanation and example as to what signifies a performance obligation.
Provide an overview of Krispy Kreme’s business model and summarize the unethical accounting and business practices at the company as detailed in “Krispy Kreme, Sarbanes-Oxley, and Corporate Greed.” Specifically, report on the company’s channel stuffing business procedures.
Summarize the facts presented in Krispy Kreme’s stock value as detailed in “A Hole in Krispy Kreme’s Stock.”
Explain the relationship between the company’s unethical accounting practices and the decrease in value of its stock.
ACC502 Accounting Practices
Week 3 Assignment
Analyzing Asset Ratios
The purpose of this assignment is to calculate asset ratios, analyze them, and compare them between two competitors in the same industry.
Review the most recent annual reports of The Coca-Cola Company and PepsiCo focusing on the balance sheet and footnote inventories.
Using the correct formulas and a separate tab for each ratio, calculate the following ratios for each company for the last 2 years using Excel:
Inventory turnover
Average days in inventory
In a Word file, include the following:
Explain the meaning of each ratio and what the calculated results tell you about each of the companies. Refer to the calculated ratios in your analysis. Your explanation should consider how the ratios changed in the last 2 years. Your explanation should include a separate paragraph for each ratio.
Summarize how effective the company is in managing inventory based upon the type(s) of products the company sells and the industry in which it competes. Include discussion about whether the inventory turnover ratio is increasing or decreasing, what is causing the ratio increase/decrease, and whether the total value of inventory is increasing or decreasing on the balance sheet.
ACC502 Accounting Practices
Week 4 Assignment
Long-Term Asset Capitalization
The purpose of this assignment is to analyze long-term assets in the financial statements and to interpret financial statement footnotes related to long-term assets.
Complete Problem 10.6 from the textbook.
Name the PDF file LastnameFirstinitial.ACC502.T4, where the T4 refers to Topic 4 assignment.
ACC502 Accounting Practices
Week 5 Assignment
Analyzing Liabilities
The purpose of this assignment is to analyze liabilities when making business decisions.
Read Case Study 13-1 “Accounting for Contingent Assets: The Case of Cardinal Health,” from Chapter 13 in the textbook.
In a 250-500 word executive summary to the Cardinal Health CEO, address the following:
Explain the justification that could be given for deducting the expected litigation gain from cost of good sold and explain why Cardinal Health chose this alternative rather than reporting it as a nonoperating item.
Explain what the senior Cardinal Health executive meant when he said, “We do not need much to get over the hump, although the preference would be the vitamin case so that we do not steal from Q3.” Include specific clarification of the phrase “not steal from Q3.”
Explain specifically what Cardinal Health did to get into trouble with the SEC.
Justify the timing of the $10 million and $12 million gains, and explain how Cardinal Health’s senior managers defend these decisions.
Cardinal Health received more than $22 million from the litigation settlement. Discuss whether the actions of Cardinal Health senior managers were so wrong that they justify the actions of the SEC. Classify Cardinal Health’s behavior on a scale from 1-10, with 1 being “relatively harmless” and 10 being “downright fraudulent.” Justify your rating..
ACC502 Accounting Practices
Week 6 Assignment
Analyzing Stockholders’ Equity
The purpose of this assignment is to analyze stockholders’ equity to recommend strategies for generating cash. Understanding a company’s position as it relates to stockholders and stockholders’ equity is important when considering options and making decisions related to the strategies that should be implemented to generate cash for the company.
The chief executive officer (CFO) of the company wants to generate cash for the organization and has tasked you to review the current stockholders’ equity position for the company and use your findings to recommend strategies for generating cash flow. The CEO has requested you summarize your findings in a memo that is addressed to the CFO, but one that could be shared with other stakeholders.
Refer to the “Annual Reports for Approved Companies” and access the Form 10-K. Review and study the following information related to stocks:
Identify and discuss the current types of stock, such as common or preferred stock, currently issued, and outstanding. Include a narrative description along with the values and number of shares found on the balance sheet.
Identify the presence of treasury stock and its impact on overall stockholders’ equity. If the company does not have treasury stock, indicate the absence of treasury stock and provide some discussion as to why the company may not have purchased back any of its originally issued stock.
Review the notes to the financial statements to determine if the company has any convertible bonds and summarize the characteristics of those bonds. If there are no convertible bonds in the notes, discuss why a company may want to consider convertible bonds in the future.
Using the summary of your research, write a 500-word memo to the CEO explaining the pros and cons of issuing new stock, reissuing treasury stock (if applicable), and issuing convertible bonds. In addition, include your recommendations on how the company could generate cash from issuing new common stock, preferred stock, convertible bonds or reissuing treasury stock. Support your recommendations with examples that show the impact on cash.
ACC502 Accounting Practices
Week 7 Assignment
Analyzing Statement of Cash Flows
The purpose of this assignment is to analyze a statement of cash flows to determine the financial strengths and weaknesses of a company.
Understanding a company’s major sources and uses of cash and how cash is being used in the business through the analysis of the statement of cash flows is essential. This analysis guides financial decision making and is used to determine financial strengths and weaknesses within the company.
The accounting manager has asked you to prepare a 5-10 minute presentation for company stakeholders summarizing your analysis of the statement of cash flows and the financial strengths and weaknesses of the company.
In the Form 10-K for the company you selected, review the M&D section of the annual report and the management’s discussion of changes in the cash flows.
Create a PowerPoint presentation (5-8 slides) that summarizes your analysis and addresses the following. Include screenshot content from the statement of cash flows as needed to illustrate key findings and information.
Discuss the company’s major sources of cash in each of the three sections.
Discuss the company’s major uses of cash in each of the three sections.
Discuss the major differences between the net income and the cash provided or used by operating activities, and explain the cause of the major difference between the two values.
Summarize the financial strengths of the business and justify your analysis based on evidence in the statement of cash flows. Include discussion of whether you anticipate the company will experience continued success and explain why. Only information from the statement of cash flow should be referenced.
Summarize the financial weaknesses of the business and justify your analysis based on evidence in the statement of cash flows. Include discussion of whether you anticipate the company will experience continued challenges in this area and explain why. Only information from the statement of cash flows should be referenced.
Refer to the resource, “Creating Effective PowerPoint Presentations,” located in the Student Success Center, for additional guidance on completing this assignment in the appropriate style.
Using the PowerPoint you created, practice your presentation. Use Loom to record your 5-10 minute presentation for the company stakeholders and submit the Loom file to the instructor. Refer to the study materials for additional guidance on recording your presentation with Loom.
ACC502 Accounting Practices
Week 8 Assignment
Investment Recommendations
The purpose of this assignment is to analyze the financial performance of a company to make recommendations to potential investors about the purchase of stock. Studying all aspects of a company’s financial statements is necessary in order to understand the financial performance and health of a company. This is particularly important for investors trying to determine whether to buy stock in the company.
An investor has approached you about whether purchasing stock in the company would be a wise investment. Using your financial analysis of the company, you will send a letter to the investor summarizing your findings and explaining whether you recommend a stock purchase at this time. Refer to the “Annual Reports for Approved Companies” located in the course materials. You will use information in the Form 10-K to complete this assignment. Using the correct formulas and a separate tab for each analysis, calculate the following ratios using Excel
You will use information in the Form 10-K for the company you selected in the Topic 1 to complete this assignment. Using the correct formulas and a separate tab for each analysis, calculate the following ratios using Excel:
Three liquidity ratios for the past 2 years
Three solvency ratios for the past 2 years
Three profitability ratios for the past 2 years
In addition, conduct research about a competitor company within the same sector using IBIS World and other topic resources. Complete a competitor analysis that includes a minimum of three ratios and compares your company to a competitor company using these ratios to determine financial performance as well as how the company compares to overall industry averages. Justify your analysis by explaining your findings.
Using your research findings and analysis of company performance in relation to industry competitors, construct a 500-750 word letter making stock purchase recommendations for a potential investor. In the letter, address the following, referencing specific ratios and comparative numbers as appropriate.
Discuss the overall financial performance of your company in relation to industry averages and a specific competitor. Explain whether the company performed better or worse than the competition using specific numbers and providing an explanation of what the numbers illustrate.
Recommend whether the potential investor should purchase stock in your company and justify your recommendation based upon your research and analysis of the company ratios and industry competition.
Submit the Excel file that contains your ratios and the Word file letter to LoudCloud.
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