Devry ACCT 212 (Financial Accounting) Complete CourseWeek 1Week 1: Introduction to Financial Statements – DiscussionFinancial Statements (graded)One key concept for week 1 is that financial statements are comprised of 4 statements: 1) Income Statement, 2) Balance Sheet, 3) Cash Flows Statement, and 4) Statement of Retained Earnings. External users of financial statements, such as investors or banks, review the financial statements to perform analysis on the company. For example, to determine if s/he wants to buy the stock of a company, the investor may review how much profit the company has generated during the past two years. Or, to determine if a bank should provide a loan to the company, the loan officer may review the company’s cash balance from the previous two years. Which financial statement do you believe provides the best information to determine if a company is performing well financially and/or is financially stable? Why?Week 2Week 2: The Accounting System and Accrual Accounting – Discussion 1Prepaid Expenses vs. Unearned Revenue (graded)From this week’s reading, you were introduced to the concept of unearned revenue and prepaid expenses. Imagine that you are CFO of a company that manufacturers picture frames. Your company wants to become more vertically integrated, meaning it no longer wants to purchase the products that go into the frame, but rather manufacture them. To do this, your company has decided to acquire a glass manufacturing company. There are two glass manufacturers that your company is deciding between: Glass R’ US and Glass Team. In reviewing the balance sheet of each company, you noticed the following:a. Glass R’ US has a large amount of Unearned Revenue and no Prepaid Expenses.b. Glass Team has a large amount of Prepaid Expenses and no Unearned RevenueIn your discussion post, explain what unearned revenue and prepaid expenses represent. Then, basing your decision solely on the amount of unearned revenue and prepaid expenses each company has, tell us which company you would acquire and why? (In answering “why”, be sure to include why you believe that company’s position is superior. For example, “I believe having a large amount of prepaid expenses is a better position because ….”)Week 2: The Accounting System and Accrual Accounting – Discussion 2Accrual vs. Cash Accounting (graded)US GAAP dictates that all financial accounting use accrual accounting. This means that if a company must use accrual accounting if they want to state that their financial statements are in accordance with US GAAP. However, some companies, particularly smaller, privately-owned companies, use cash accounting.What is the difference between accrual and cash accounting? Which accounting method do you prefer and why?Week 3 Internal Controls, Cash, Short-term Investments and Accounts Receivables Discussion 1Ethical Business Decisions (graded)Unfortunately, a quick scan of the business news will normally result in reports of unethical business behavior. To prove this point, let’s start with a review of the news for stories about fraud and other unethical behavior in business. You can use the University Library to start your search. Once you have located an article share it with the class by developing a summary of the important information. Make sure that you give credit to your source.Week 3: Internal Controls, Cash, Short-term Investments and Accounts Receivables – Discussion 2Trade Credit – Accounts Payable (graded)The ability to extend trade credit is a benefit to both sides of the transaction. The seller can increase sales while the buyer can conduct business without spending cash immediately. (For example, imagine you own a business the sells wood to construction companies that build homes. Using trade credit, the construction company can purchase the wood without spending cash immediately and you as the owner have more sales!) It sounds like a perfect relationship and it would be if people were not involved.Let’s take a look beyond the obvious and discuss the pros and cons of Accounts Receivable. Why do companies offer trade credit, and what are the problems?ACCT212 Course Project 1 (Part A + Part B) Rawls Repair CorporationWeek 4Week 4: Inventory Management – Discussion 1Inventory Management (graded)A review of the balance sheet of a retailer, such as Wal-Mart, will disclose that in current assets the majority investment is in inventory. With manufacturers, such as Ford, the inventory is spread between three different categories. Let’s start our discussion with some basic inventory questions. How is inventory valued? Which inventory valuation method is most popular and why? What impact on the financial reports can the selection of an inventory valuation method have?Week 4: Inventory Management – Discussion 2LIFO (graded)Under US GAAP, management has choices about how to value current inventory and also the cost of goods sold. For example, they can choose LIFO or FIFO to value their inventory.) However, under International Financial Reporting Standards (IFRS), LIFO is not an option. To be in compliance with IFRS, international companies cannot use LIFO. Therefore, the majority of companies use FIFO to value their inventory and thus calculate cost of goods.Explain what LIFO means. Then, state whether you believe that IFRS is correct in disallowing LIFO to value inventory and provide your reasoning.ACCT 212 Week 4 Midterm 1 (Explanatory)ACCT 212 Week 4 Midterm 2 (Graded)1. (TCO 1)The Accounting Equation is used to develop the organizations financial reports. (1) Describe what owners’ equity is (10 points) and (2) provide an example of an owners’ equity account. (10 points) (Points : 20)2. (TCO 1)The financial statements present a company to the public in financial terms. (1) Which financial statement identifies how well the company performed during the year (10 points) and (2) explain what information this financial statement provides. (10 points) (Points : 20)3. (TCO 1) The accounting profession follows a set of guidelines for measurement and disclosure of financial information called the Generally Accepted Accounting Principles (GAAP). (1) Explain what the Entity Assumption is (10 points) and (2) provide an example of its application. (10 points) (Points : 20)4. (TCO 2)Transaction analysis results in the development of a journal entry. Supplies are purchased on account agreeing to pay $2,500 within 30 days. (1) Name the accounts impacted and how using the format account name/debit or credit/dollar amount (10 points) and (2) explain how the Accounting Equation is impacted. (10 points) (Points : 20)5. (TCO 3) Adjusting Entries are required at the end of the period to ensure that accrual accounting principles are applied. At the beginning of the month $350 of office supplies were purchased. There was not a beginning balance and the one purchase was the only one for the month. At the end of the month $100 of supplies remained. Develop the adjusting entry.(1) Name the accounts impacted and how using the format account name/debit or credit/dollar amount (10 points) and (2) explain how the Accounting Equation is impacted. (10 points) (Points : 20)6. (TCO 5) Internal Controls are required to safeguard assets and to ensure ethical business practices.(1) Identify and explain the reason for any two of the seven internal control procedures (10 points) and (2) provide examples of how your two selected internal control procedures will meet the goal of safeguarding assets and promoting ethical business practices. (15 points)(Points : 25)7. (TCO 5) The bank account as a control device that helps to protect cash. One of the requirements is to conduct periodic bank statement reconciliations. Using the following data, complete the bank statement reconciliation for Acorn Plumbing, Inc. (Use the format shown on page 255 of your textbook) (25 points)Week 5Week 5: Plant Assets and Liabilities – Discussion 1Non-current Assets and Related Liabilities (graded)In the spotlight about FedEx Corporation, you get a feel for the amount of investment in assets and the resulting liabilities that ar
e required to operate a competitive corporation. Even small businesses require plant, property and equipment to compete and normally rely on some form of debt to finance itself. Let’s start up a company that sells auto parts like Napa or Auto Zone. What assets would we require? How might we finance them?Week 5: Plant Assets and Liabilities – Discussion 2Raising Capital (“Cash”) (graded)Bonds are a unique way of financing only available to corporations and governments. It allows them to bypass the middle man, the bank, and therefore save costs of borrowing. They normally make semiannual interest payments on the principal and the principal is due at some time in the future…it is not uncommon for decades to pass before the principal payment is due.Imagine that you are the CFO of a company looking to raise capital. (This means that the company wants to receive a large, one time influx of cash.) The CEO asks you to recommend if the company should sell bonds or issue more common stock. Which one method would you recommend to raise capital and why?ACCT212 Course Project 1 (Part A + Part B) Rawls Repair CorporationWeek 6Week 6: Stockholders Equity and the Statement of Cash Flows – Discussion 1Stockholders Equity (graded)There are two basic classes of stock that exist: common stock and preferred stock. Since more than one class of stock is available to investors, an investor must determine which class of stock they would prefer to invest in. Additionally, a company must decide which class of stock they would like to issue.In this discussion post, discuss the following: What are the advantages and disadvantages of each? Imagine that you created a newly formed entity. Would you issue common stock, preferred stock, or both? Why?Week 6: Stockholders Equity and the Statement of Cash Flows – Discussion 2Net Income vs. Net Operating Cash (graded)Net Income and Net Operating Cash Flows are both important indicators of the health of a company. But why are they different? What do they have in common, and what makes them so important? Is there a relationship with the other sections of the cash flow statement? From an investors perspective, what are those relationships. Start this discussion out by looking into these questions and addressing them.Week 7Week 7: Financial Statement Analysis – DiscussionFinancial Statement Analysis (graded)If you were to get a physical from your Doctor and they only took your blood pressure prior to stating that you are in good health, would you be concerned? If you have noticed in your readings starting in Chapter 3 that there has been explanation of the methods by which you could determine the financial health of a company. Name one and explain how it is computed? Which financial statement(s) does the input come from? Most importantly, what does it tell you about the financial performance or health?ACCT212 Course Project 2 (McDonough Products)Week 8ACCT212 Course Project 1 (Part A + Part B) Rawls Repair CorporationACCT212 Course Project 2 (McDonough Products)ACCT 212 Week 8 Final Exam (Explanatory)1. (TCO 3) At the end of the period it is necessary to close all temporary accounts. (1) Explain why this process is required (10 points) and (2) provide an example of the closing of an expense account, Salary Expense in the form of a journal entry. (10 points) (Points : 20)2. (TCO 2) As required to complete Course Project 1, one must follow the cycle that includes 10 steps to complete the accounting cycle. (1) Explain how the debit/credit rules are used when developing journal entries (10 points) and (2) provide an example of the application of the debit/credit rules in the form of a journal entry. (10 points)(Points : 20)3. (TCO 5) Internal Control Procedures are required to safeguard company assets and to ensure ethical operation of the business. (1) Explain how limited access can satisfy the purpose of internal control (10 points) and (2) provide an example of how this control could be implemented. (10 points) (Points : 20)4. (TCO 4) Inventory valuation methods determine the cost of goods sold and the inventory balance. (1) Explain how the First in First out (FIFO) method is applied (10 points) and (2) provide an example of the impact that this method of inventory valuation will have on Gross Profit. (10 points) (Points : 20)5. (TCO 1) To evaluate the financial operation and health of a business ratio analysis is used. (1) Provide the formula for the Current Ratio and explain how it is computed (10 points) and (2) provide an example of how this ratio can be used in decision-making in business. (10 points) (Points : 20)6. (TCO 6) BagODonuts Company bought a used delivery truck on January 1, 2010, for $19,200. The van was expected to remain in service 4 years (30,000 miles). BagODonuts’ accountant estimated that the truck’s residual value would be $2,400 at the end of its useful life. The truck traveled 8,000 miles the first year, 8,500 miles the second year, 5,500 miles the third year, and 8,000 miles in the fourth year…(Points : 25)7. (TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock: Preferred Stock: 7%, par value $100 per share, 100,000 shares. Common Stock: $1 par value, 500,000 shares….(Points : 25)8. (TCO 5) Fraud is an intentional misrepresentation of facts, made for the purpose of persuading another party to act in a way that causes injury or damage to that party. In our readings and discussions we have seen several examples of fraud in business. Using that experience (1) provide an example of a common fraudulent practice in business with an explanation of how the practice works and (2) name and describe each of the elements of the Fraud Triangle.9. (TCO 5) Internal Control Procedures are in place to protect the assets of every business as mentioned in the textbook and our discussions. Of the seven internal control procedures, list five of these controls and describe how each procedure is implemented (Points : 25)10. (TCO2) Below are the accounts of Super Pool Service, Inc. The accounts have normal balances on June 30, 2012. The accounts are listed in no particular order…(Points : 25)11. (TCO4) Linda’s Lampshades started business on Jan. 1, 2001. They had the following inventory transactions :….(Points : 25)
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