02 Jan (a) Amortization of a patent

Devry ACCT504 Week 1 Discussion

Financial Reporting Environment, Financial Statements, and Ratios (graded)

What is the purpose of Accounting? Who are the users of Accounting information?

Devry ACCT504 Week 2 Discussion

Accounting Equation, Accounting Cycle, and Accrual Accounting (graded)

In this area, we will discuss the significance of the accounting equation, the rules of debit and credit, and the steps in the accounting cycle. We will talk about recording of transactions, normal balances, and the creation of the trial balance.

Let’s begin by asking this question: What is the role of the accounting equation in the analysis of business transactions?

Devry ACCT504 Week 3 Discussion

Merchandising Operations, Income Statements, and Inventory Cost-Flow Assumptions (graded)

In this area, we will discuss the accounting for inventory transactions of merchandising companies, the two formats of preparing the income statement, and how to evaluate the profitability of a merchandising company. We will also discuss how companies determine the year-end inventory value and cost of goods sold using one of the cost-flow assumptions. Finally, we will also examine the impact of choosing a certain cost-flow assumption on the tax liability and other financial statement numbers of a company.

Let’s begin with this question: How is the income statement of a merchandising company different from that of a service company?

Devry ACCT504 Week 4 Discussion

Internal Control, Reporting Cash, and Accounting for Receivables (graded)

In this area, we will talk about the importance of internal control in a business organization and the reporting of cash on the balance sheet as well as managing receivables and estimating uncollectible accounts. What is internal control, and what are the objectives of a well-designed internal control structure in an organization?

Devry ACCT504 Week 5 Discussion

Plant Assets, Intangibles, and Accounting for Liabilities (graded)

Companies have a significant amount of investment in long-lived assets, which include property, plant and equipment (commonly referred to as plant assets), and intangible assets. We will also discuss different types of liabilities and understand how to account for and report those liabilities.

Let’s begin by talking about plant assets. Can you tell us what kind of plant assets are used in your company or place of business? Do you have an estimate of the amount invested in those plant assets?

Devry ACCT504 Week 6 Discussion

ccounting for and Reporting Equity and the Statement of Cash Flows (graded)

Stockholders’ equity is an important heading in a corporate Balance Sheet. Let’s begin the discussion of stockholders’ equity by asking: How is the stockholders’ equity section of a corporate Balance Sheet different from that in a single-owner business?

Devry ACCT504 Week 7 Discussion

Different Tools of Financial Analysis (graded)

There are different tools for analyzing the financial statements of a company, such as horizontal analysis, vertical analysis, ratios for measuring financial health and profitability, and so forth. Before we begin using these tools, however, it is important to know the purpose of each tool.

Why do we need different tools for analyzing the financial statements? Don’t the numbers in the financial statements speak for themselves?

Devry ACCT504 Week 3 Case Study

CASE STUDY – THE COMPLETE ACCOUNTING CYCLE

Name: ___________________________________

This Case Study is worth 100 points, or 10% of your final course grade.

This Case Study relates to TCOs E and F, and Chapters 2 and 3.

MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW.

There are 10 sheets in the Workbook, including this one.

All of the information that you need for the project is located in this Workbook.

Requirements

Sheet in Workbook

Requirement 1—Prepare the Journal Entries in the General Journal

Journal Entries

Requirement 2—Post Journal Entries to the General Ledger

General Ledger

Requirement 3—Prepare a Trial Balance

Trial Balance

Requirement 4—Prepare the Adjusting Entries

Adjusting Entries

Requirement 5—Post Adjusting Entries to the General Ledger

General Ledger

Requirement 6—Prepare an Adjusted Trial Balance

Adjusted Trial Balance

Requirement 7—Prepare the Financial Statements

Financial Statements

Requirement 8—Prepare the Closing Entries

Closing Entries

Requirement 9—Post Closing Entries to the General Ledger

General Ledger

Requirement 10—Prepare the Post Closing Trial Balance

Post-Closing Trial Balance

Hint for success: Review the Week 2 Lesson prior to starting this project.

There are also hints contained within certain cells on some of the Worksheet tabs.

You can hover over the red pointer at the top right-hand corner of the cell to read the hint.

Hints are provided for the following balances:

1) The debits for the journal entries are on the Journal Entries tab.

2) The credits for the journal entries are on the Journal Entries tab.

3) The cash balance is on the General Ledger tab.

4) The debits for the trial balance are on the Trial Balance tab.

5) The credits for the trial balance are on the Trial Balance tab.

6) The debits for the adjusted trial balance are on the Adjusted Trial Balance tab.

7) The credits for the adjusted trial balance are on the Adjusted Trial Balance tab.

8) Net income for the income statement is on the Financial Statements tab.

9) Retained earnings as of July 31 are on the Financial Statements tab.

10) Total assets for the balance sheet are on the Financial Statements tab.

11) Total liabilities and shareholders’ equity for the balance sheet are on the Financial Statements tab.

12) The debits for the post-closing trial balance are on the Post-Closing Trial Balance tab.

13) The credits for the post-closing trial balance are on the Post-Closing Trial Balance tab.

Requirement #1:

During its first month of operation, the Melvin Plumbing Corporation, which specializes in residential plumbing,

completed the following transactions.

July 1

Began business by making a deposit in a company bank account of $90,000, in exchange

for 9,000 shares of $10 par value common stock.

July 3

Paid the current month’s rent, $5,500.

July 5

Paid the premium on a 1-year insurance policy, $4,800

July 7

Purchased supplies on account from Little Company, $900.

July 10

Paid employee salaries, $3,300

July 14

Purchased equipment from Lake Company, $11,500. Paid $1,500 down and the balance was

placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1.

Note: Use accounts payable for the balance due.

July 15

Received cash for plumbing revenue for the first half of July, $7,700

July 19

Made payment on account to Lake Company, $500.

July 31

Received cash for plumbing revenue for the last half of July, $8,505

July 31

Declared and paid cash dividends of $600

Prepare journal entries to record the July transactions in the General Journal below.

Use the following account names for journal entries.

General Journal

Chart of Accounts: Account Title (Normal Balance)

Date

Description(Account Name)

Debit

Credit

Assets

Cash (Debit)

Prepaid Insurance (Debit)

Supplies (Debit)

Equipment (Debit)

Accumulated Depreciation – Equipment (Credit)

Liabilities

Accounts Payable (Credit)

Income Tax Payable (Credit)

Stockholders’ Equity

Common Stock (Credit)

Retained Earnings (Credit)

Dividends (Debit)

Revenue

Revenue (Credit)

Expenses

Rent Expense (Debit)

Salaries Expense (Debit)

Insurance Expense (Debit)

Supplies Expense (Debit)

Depreciation Expense (Debit)

Income Tax Expense (Debit)

0

0

Note: Remember that debits must equal credits—All of your journal entries should balance.

Devry ACCT504 Week 7 Course Project

Course Project: A Financial Statement Analysis

A Comparative Analysis of Nike, Inc. and Under Armour, Inc.

Below is the link for the financial statements for Nike, Inc. for the fiscal year ending 2014. First, select 2014using the drop-down arrow labeled Year, and then select Annual Filings using the drop-down arrow labeled All.

You should select the 10k dated 7/25/2014,and choose to download in PDF, Word, or Excel format.

http://investors.nike.com/investors/news-events-and-reports/?toggle=filings

Below is the link for the financial statements for Under Armour, Inc. for the fiscal year ending 2014.

First, select Annual using the drop-down arrow labeled View, and then select 2015 using the drop-down arrow labeled Year.

You should select the 10k dated 2/20/2015, and choose to download it in PDF or Excel format.

http://www.uabiz.com/sec.cfm

A sample project template is available for download from the Course Resources page’s Course-Specific Resources section.The sample project compares the ratio performance of Tootsie Roll and Hershey using the 2014 financial statements of Tootsie Roll and Hershey provided at their websites.

Description

This course contains a Course Project, where you will be required to submit one draft of the project at the end of Week 5, and the final completed project at the end of Week 7. Using the financial statements for Nike, Inc. and Under Armour, Inc.,respectively, you will calculate and compare the financial ratios listed further down this documentfor the fiscal year ending 2014, and prepare your comments about the two companies’performancesbased on your ratio calculations. The entire project will be graded by the instructor at the end of the final submission in Week 7, and one grade will be assigned for the entire project.

Overall Requirements

For the Final Submission:

Your final Excel workbook submission should contain the following. You cannot use any other software but Excel to complete this project.

1. A Completed Worksheet Title Page tab, which is really a cover sheet with your name, the course, the date, your instructor’s name, and the title for the project.

2. A CompletedWorksheetProfiles tab which contains a one-paragraph description regarding each company with information about their history, what products they sell, where they are located,and so forth.

3. All 16 ratios for each company with the supporting calculations and commentary on your Worksheet Ratio tab. Supporting calculations must be shown either as a formula or as text typed into a different cell.The ratios are listed further down this document. Your comments for each ratio should include more than just a definition of the ratio.You should focus on interpreting each ratio number for each company and support your comments with the numbers found in the ratios.You need to specifically state which company performed better for each ratio.

4. The Summary and ConclusionsWorksheet tab is an overall comparison of how each company compares in terms of the major category of ratios described in Chapter 13 of your textbook.A nice way to conclude is to state which company you think is the better investment and why.

5. The Bibliography Worksheet tab must contain at least your textbook as a reference. Any other information that you use to profile the companies should also be cited as a reference.

Required Ratios for Final Project Submission

1. Earnings per Share of Common Stock

2. Current Ratio

3. Gross (Profit) MarginPercentage

4. Rate of Return (Net Profit Margin) on Sales

5. Inventory Turnover

6. Days’ Inventory Outstanding (DIO)

7. Accounts Receivable Turnover

8. Days’ Sales Outstanding (DSO)

9. AssetTurnover

10. Rate of Return on Total Assets (ROA)

11. Debt Ratio

12. Times-Interest-Earned Ratio

13. Dividend Yield[For the purposes of this ratio, use Yahoo Finance to look up current dividend per share and stock price; just note the date that you looked up this information.]

14. Rate of Return on Common Stockholders’ Equity (ROE)

15. Free cash flow

16. Price-Earnings Ratio (Multiple) [For the purpose of this ratio, for Nike, use the market price per share on May 30, 2014,and for Under Armour, use the market price per share on December 31, 2014.]

The Excel files uploaded in the Dropboxes should not include any unnecessary numbers or information (such as previous years’ ratios, ratios that were not specifically asked for in the project, etc.).

Please upload your final submission to the Week 7 Dropbox by the Sunday ending Week 7.

For the Draft:

Create an Excel spreadsheet or use the project template to show your computations for the first 10 ratios listed above. The more you can complete regarding the other requirements, the closer you will be to completion when Week 7 arrives. Supporting calculations must be shown either as a formula or as text typed into a different cell. If you plan on creating your own spreadsheet, please follow the format provided in the Tootsie Roll and Hershey template file.

Please upload your draft submission to the Week 5 Dropbox by the Sunday at the end of Week 5.

Other Helpful Information:

If you feel uncomfortable with Excel, you can find many helpful tutorials on Excel by performing a Google search.

Chapter 13 contains ratio calculations and comparison comments related to Apple and Dell, so you will likely find this information helpful.

BigCharts.com provides historical stock quotes.

Either APA or MLA style can be used to complete the references on your Bibliography tab. There is a tutorial for APA and MLA style within the Plagiarism link, which can be accessed through the Syllabus

Go to the Course Resources page within the Course-Specific Resources section. The Course Resources page is under Course Home.

Complete your Title page on this tab.

Please include your name, the course, the date,

your instructor’s name, and the title for the project.

Complete one paragraph, profiling each company’s business, including information such as a brief history, where they are located, number of employees, the products they sell, and so forth. Please reference any websites that you used for the Profiles on the Bibliography tab.

Tootsie Roll Industries began in a small candy store in New York in 1896. Tootsie Roll is now headquartered in Chicago and primarily sells their products in the United States, Canada, and Mexico. According to Yahoo Finance, Tootsie Roll has 2,000 full-time employees. Tootsie Roll sells the following branded candy: Tootsie Roll, Tootsie Roll Pop, Charms Blow Pop, Mason Dots, Andes, Sugar Daddy, Charleston Chew, Double Bubble, Razzles, Caramel Apple Pop, and Junior Mints. Tootsie Roll had 2014 net product sales of $539.9 million.

Hershey Company was founded by Milton S. Hershey in 1893 and is headquartered in Hershey, Pennsylvania. According to Yahoo Finance, Hershey has 20,800 full-time employees. Hershey is famous for Good & Plenty, Hershey Bar, Hershey’s Kisses, Hershey’s Bliss, Reese’s, Rolo, Twizzlers, Almond Joy, Kit Kat, and Ice Breakers. Hershey had net product sales of $7.4 billion for 2014.

Use this Excel spreadsheet to compute ratios; show your computations for all ratios on this tab, and also include your commentary.

The 2014 financial statements used to calculate these ratios are available in the Investor Relations section of the Tootsie Roll and Hershey websites.

Tootsie Roll

Hershey

Interpretation and comparison between the two companies’ ratios (reading Chapter 13 will help you prepare the commentary).

The comparison of the ratios is an important part of the project. A good approach is to briefly explain what the ratio tells us. Indicate whether a higher or lower ratio is better. Then compare the two companies on this basis. Remember—each ratio below requires a comparison.

Earnings per Share of Common Stock (basic – common)

As given in the income statement

##

$ 3.91

Current Ratio

Current assets

######

=

##

=

1.16

Current liabilities

######

Gross (Profit) Margin Percentage

Gross margin

######

=

##

=

45.0%

Net sales

######

Rate of Return (Net Profit Margin) on Sales

Net income

######

=

##

=

11.4%

Net sales

######

Inventory Turnover

Cost of goods sold

######

5.2

5.6

Average inventory

######

times

times

Days’ inventory outstanding (DIO)

365

365

=

71

=

65

Inventory turnover

5.2

days

days

Accounts Receivable Turnover

Net sales (assume all sales are credit sales)

######

=

##

=

13.8

Average net accounts receivable

######

Days’ Sales Outstanding (DSO)

365

365

=

##

=

26.4

Accounts receivable turnover

12.9

days

days

Asset turnover

Net sales

######

=

##

=

1.35

Average total assets

######

Rate of Return on Total Assets (ROA)

Rate of return on sales times asset turnover

=

##

=

15.4%

Debt Ratio

Total Liabilities

######

=

##

=

73.0%

Total Assets

######

Times-Interest-Earned Ratio

Income from operations

######

=

##

=

16.6

Interest expense

$99

Dividend Yield

Dividend per share of common stock (Yahoo Finance 12/24/2015)

$0.36

=

##

=

2.6%

(Please follow the Course Project instructions to calculate the current dividend yield.)

Market price per share of common stock (Yahoo Finance 12/24/2015)

$32.04

Rate of Return on Common Stockholders’ Equity (ROE)

Net income – Preferred dividends

######

=

##

=

54.0%

Average common stockholders’ equity

######

Free cash flow

Net cash provided by operating activities minus cash payments earmarked for investments in plant assets

=

##

######

=

Price-Earnings Ratio (Multiple)

Market price per share of common stock as of 12/31/2014

$30.65

=

29

=

27

(Please see the Course Project instructions for the dates to use for this ratio.)

Earnings per share

$1.05

Your textbook and any information that you use to profile the companies should be cited as a reference below.

Big Charts for Hershey (12/31/2014). Retrieved December 24, 2015 from http://bigcharts.marketwatch.com/historical/default.asp?symb=hsy&closeDate=12%2F31%2F14&x=0&y=0

Big Charts for Tootsie Roll (12/31/2014). Retrieved December 24, 2015 from http://bigcharts.marketwatch.com/historical/default.asp?symb=tr&closeDate=12%2F31%2F14&x=0&y=0

Harrison, W.T., Horngren C.T. & Thomas, C.W. (2015). Financial Accounting, 10th ed. Upper Saddle River, NJ: Pearson Education, Inc.

Hershey’s 2014 Annual Report (2015). Retrieved December 24, 2015 from http://www.thehersheycompany.com/pdfs/PDF_Proxy%20Statement_2014.pdf

HSY Profile (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q/pr?s=HSY+Profile

HSY Stock Price (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q?s=hsy&ql=1

Tootsie Roll Industries 2014 Annual Report (2015). Retrieved December 24, 2015 from http://tootsie.com/financials/

TR Profile (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q/pr?s=TR+Profile

TR Stock Price (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q?s=TR&ql=1

Devry ACCT504 Week 4 Midterm

Question 1. Question :

(TCO A) Assets include

prepaid insurance and prepaid rent.

dividends paid to shareholders.

loans obtained by the company.

stockholders’ investment in the business.

Question 2. Question :

(TCO B) For 2014, CAP Corporation reported net income of $96,000; net sales $1,440,000; and weighted average shares outstanding of 9,600. There were no preferred dividends. What was the 2014 earnings per share?

$100.00

$150.00

$10.00

$15.00

Question 3. Question :

(TCO C) Issuing debt is an example of a(n)

operating activity.

investing activity.

financing activity.

noncash investing and financing activity.

Question 4. Question :

(TCO D) What is the correct order to create the financial statements?

Balance Sheet, Income Statement, Statement of Retained Earnings, and Statement of Cash flows.

Statement of Cash flows, Balance Sheet, Statement of Retained Earnings, and Income Statement.

Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash flows.

Income Statement, Balance Sheet, Statement of Retained Earnings, and Statement of Cash flows.

Question 5. Question :

(TCO E) Which of the following describes the normal balance and classification of the Accumulated Depreciation account?

Debit, asset

Credit, liability

Credit, asset

Debit, expense

Question 6. Question :

(TCO F) Which of the following items is handled as a deferral?

Accrued Expenses

Accrued Revenues

Prepaid Expenses

Depreciation

Question 7. Question :

(TCO A) XYZ Company recorded the following events involving a recent merchandise purchase.

– Received goods for $50,000, terms 2/10, n/30.

– Returned $1,000 of the shipment for credit due to damaged goods.

– Paid $1,500 for freight-in.

– Paid the invoice within the discount period.

As a result of these events, the company’s merchandise inventory

increased by $50,500.

increased by 49,500.

increased by $49,470.

increased by $49,520.

Question 8. Question :

(TCO B) In a period of declining prices, which of the following inventory methods generally results in the highest gross profit figure?

Average cost method

LIFO

FIFO

Cannot be determined based on the information given

Question 9. Question :

(TCO A) On a classified balance sheet, which is the least liquid asset listed below?

Inventories

Cash and cash equivalents

Accounts receivable, net

Short-term investments

Question 10. Question :

(TCO E) Which of the following is an internal control procedure?

Control environment

Comparisons and compliance monitoring

Promote operational efficiency

Encourage employees to follow company policies

Devry ACCT504 Week 8 Final Exam

Question 1.

(TCO D) Please describe the purpose of the Income Statement and the interrelationship between the income statement and the other major financial statements that we covered in this class. In your answer, please also address which financial statements should be created before the Income Statement, if any, and which financial statements need to be completed after the Income Statement, if any.

Question 2. Question :

(TCO E) Your friend, Lisa, plans to open a nail salon. Lisa states that she does not have time to develop and implement a system of internal controls.
(a) Explain to Lisa the components of internal control. (10 points)
(b) Explain to Lisa at least 5 internal control procedures she must establish to protect herself against fraud. You should state specific internal control procedures from the textbook, and relate your answer to her nail salon business. (15 points)

Question 3. Question :

(TCO A) The following items are taken from the financial statements of PQR Company for 2013:

Cash

$100,000

Inventory

150,000

Accounts Payable

123,000

Accounts Receivable

40,000

Supplies

10,000

Salaries Payable

30,000

Unearned Revenue

75,000

Intangible assets

78,000

Property, plant, and equipment, net

156,000

Long term debt

50,000

Common Stock

25,000

Additional Paid in Capital

175,000

Retained Earnings, 12/31/2012

13,000

Service revenue

402,000

Cost of Goods Sold

250,000

Rent expense

48,000

Supplies expense

25,000

Insurance expense

36,000

Instructions:

(1) Create a classified balance sheet in good form for the year ended 2013. (30 points)

(2) Calculate the current ratio and debt ratio and explain your findings. (6 points)

Question 4. Question :

(TCO B) The Delta Company gathered the following condensed data for the year ended December 31, 2014:

Cost of goods sold

$300,000

Net sales

525,000

Administrative expenses

110,000

Interest expense

18,000

Common stock dividends paid

25,000

Selling expenses

52,000

Income tax percentage

33%

Instructions:
(1) Prepare a multiple-step income statement for the year ended December 31, 2014. (30 points)

(2) Compute the gross margin percentage and net profit margin ratio. Delta Company’s assets at the beginning of the year were $800,000, and the total assets were $1,000,000 at the end of the year. To qualify for full credit, you must state the formula you are using, show your computations, and explain your findings. (6 points)

Question 5. Question :

(TCO C) This is a 2-part question.

Part 1) Indicate which section of the statement of cash flows should contain each of the following items, and whether each item would result in an inflow or outflow of cash. The sections are Operating, Investing, and Financing. (30 points)

(a) Amortization of a patent
(b) Increase in accounts payable
(c) Paid cash dividends to common stockholders
(d) Purchased equipment with cash
(e) Increase in inventory

Part 2) Please explain how to calculate free cash flow and the importance of free cash flow to investors. (6 points)