CalculatingTools forAccountants

RexASchildhouse

Cover page image 2011 PhotoDisc Inc. Copyright 2011 by John Wiley & Sons, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 070305774, (201)748-6011, fax (201)748-6008, website http://www.wiley.com/go/permissions. To order books or for customer service, please call 1(800)-CALL-WILEY (225-5945). Printed in the United States of America. ISBN 978- 0-470-90058-1

CalculatingTools forAccountants
TABLEOFCONTENTS
LO1: HISTORYANDIMPACTOFACCOUNTINGCALCULATINGTOOLS LO2: MODERNCALCULATORS LO3: MICROSOFTEXCEL LO4: MICROSOFTWORD LO5: INTRODUCTIONTOMICROSOFTACCESS LO6: QUESTIONS,LINKS,ANDREFERENCE

LO1:HISTORYANDIMPACTOFACCOUNTING CALCULATINGTOOLS
There are many calculating tools available to the accountant today and the one most people associate with an accountant is most likely the adding machine. Blaise Pascal (1623-1662) is credited for the first adding machine. His manually operated invention was limited to adding and subtracting, though, and it was difficult to make and operate. Charles Babbage (1791-1871) advanced the adding machine with his Differential Engine and Analytical Engine in the early to mid 1800s. His work with these applied principles earned him the title of the Father of Computing. William Seward Burroughs (18571898) created a much more capable device, the recording adding machine, in the
Blaise Pascal Charles Babbage

late 1880 that was still manually operating and founded a company to market the product and improve the technology. As the twentieth century was born, the race was on and adding machines went from expensive, manually operated devices to what we know and see on many desks as electrically powered, multi-functional printing devices of reasonable costs. William S. Burroughs along with Thomas Metcalfe, W.C. Metcalfe, and R.M. Scruggs founded the American Arithmometer Company in 1886.
William S. Burroughs

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The American Arithmometer Company would become the Burroughs Adding Machine Company in 1905, several years after William S. Burroughs death in 1898. As the American Arithmometer Company they produced many models including the Class 1, Model (or Style) 4 in the early nineteen hundreds. The No. 4, shown in Figure 1 on the next page, was a manually operated, printing device that only added. Costs of early adding machines ranged from one hundred seventy-five dollars through nine hundred dollars at a time when a standard automobile might cost six to seven hundred dollars. Subtracting functions would have to wait until the technology of 1911.

Figure 1 American Arithmometer Companys No. 4 adding machine, circa 1904.

As technology changed, adding machines went from manuallyoperated to electrically-powered, transitioned from add only devices to multi-function, and migrated from purely mechanical to the electro-mechanical and electronic devices we see today on the desks in many offices. Costs traveled in the opposite direction of advancements. While costs could compete or exceed the cost of a new car near the beginning of the twentieth century, today, a modern adding machine, much more powerful than its ancestor, may be less expensive than a good car wash. Figure 2, right, is a modern adding machine costing less than fifty dollars. Figure 2 Modern multi-functional desk top adding machine.

The impact of the adding machine is apparent on the modern computer keyboard. The layout of the numerical keys on a computer keyboard, for example, is identical to the adding machines rather than the telephones, as shown in Figure 3, below.

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Figure 3 Adding machine and telephone numerical key layout. While any arithmetic function accomplished with an adding machine can be accomplished with pencil and paper or in your head, the advantages of adding machines include accuracy of machine processing and speed. Also, most adding machines have a printing function which provides a permanent record of the operation performed a listing the values of the checks being deposited and their total value. While most adding machines today are electrically powered, many receive their power from selectable sources receptacle power, battery power, or solar power.

LO2:MODERNCALCULATORS
MICROSOFTWINDOWCALCULATOR
Microsoft Windows provides a calculator accessed through All Programs > Accessories shown here in Figure 4. This calculators presentation is selected by the user through the drop-down options of View. The upper frame of Figure 4 is the Standard calculator and the lower frame is the Scientific calculator. These calculators are controlled either with the mouse by clicking on the appropriate button or with the numerical key pad and the mathematical functions on the keyboard with Enter being the equal button or key. Each calculator has a memory function with MS being the Memory Store button, MR being the Memory Recall button, and MC being the Clear Memory button. The M+ button adds the current displayed value to the stored memory. To see the result of this operation MR (Memory Recall) must be pressed. When there is a value stored in memory there is an M displayed in the (currently empty) cell above the memory button stack. Figure 4 Microsofts calculators from the Accessories selection of Windows.

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A major advantage of this style calculator is the easy to use memory functions. For example, suppose the tax rate is 8.75% and as a retailer, you need to apply that value throughout the day. Enter 0.0875, the decimal equivalent, into the calculator. Then press the MS Store this value in memory button and an M is shown at the top of the memory button stack. At the time of sale, add the two prices of a sale, with the following key strokes 18.75, +, 9.99, followed by =, the totals sales value of the event is $28.74. The memory function comes into play here, press the * button, then the MR - recall the stored memory value, your tax rate, and the calculator shows 0.0875, press =, and the tax on the sale at 8.75% is $2.52 rounded up. When you are advised that the tax rate is increased to 8.75%, you can enter the value 0.01 the increase, and press M+ to increase the tax rate without reentering it. The same sale with same key strokes now results in a sales tax value of $2.81, rounded off. When you go to compute the interest of 1.5% monthly, on your accounts receivable you can either use MC to clear the memory first or simply enter 0.015 and then press MS memory store, and overwrite the present value.

TEXASINSTRUMENTSBAIIPLUSCALCULATOR
While the selection of the calculator, like many personal productivity tools, is a matter of personal preference, the Texas Instruments Business Analyst II Plus (TI BA II Plus) series has become a common tool on the desk and in the briefcase of many accountants and financial analysts. Shown in Figure 5, to the right, the keyboard of the TI BA II Plus may appear less powerful when compared with the number of keys and keyboard layout of other calculators. Its power is hidden and easily accessed through the keyboard. While battery powered without a solar source, the calculator does have a manual off and auto off function resulting in long and reliable functioning in most environments.

Figure 5 The keyboard of Texas Instruments BA II Plus calculator. The TI BA II Plus calculator utilizes the standard data entry keystrokes, 4 + 1 = 5 which parallels the adding machine and the =4 + 1 of Microsofts Excel nicely. A capability of this calculator is memory. The TI BA II Plus has ten memories titled 0 through 9 and accessed by the numerical buttons. Using the simple equation, 4 + 1 = 5, press the 4 button, press the + button, press the 1 button, press the = button, and the TI BA II Plus presents 5 in its display. Press the STO (Store) button, the first button in the seventh row from the top, followed by the number 0. Now press the CE/C to clear the display. The value previously displayed, the result of your work, 5 is stored in Memory 0. Now press the RCL (Recall) button followed by 0 and the TI BA II Plus displays the stored value, 5.

MEMORIESSTOREDVALUES
Stored values can be used in other mathematical operations. With 5 from Memory 0 displayed, press + and 4 followed by = and the TI BA II Plus displays 9 which can be

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stored in Memory 1 by pressing the STO button followed by the 1. You can add, subtract, divide, or multiple the value in memory by using the appropriate keystrokes. Verify by pressing RCL and 1 that 9 is stored in Memory 1. Press the CE/C button to clear the display. Press 8 followed by STO then , followed by 1, followed by =. The TI BA II Plus will display 8 at this point. Press RCL (Recall) and 1 and the product of the previous Memory 1, 9, has been multiplied by 8 and the result, 72, is now in Memory 1. Memories are most safely cleared by entering a 0 (zero) value in each memory. To clear all memories at one time press the 2ND button, followed by the 0/MEM button, followed by the 2ND button, followed by the CE/C / CLR Work button.

SEQUENCEOFMATHEMATICALOPERATIONS
Many of us learned mathematical operations utilizing something like Please My Dear Aunt Sally Resolve operations within Parenthesis first, Multiply, Divide, Add, and then Subtract. This is referred to as the Algebraic Operations System. With the equation of 6 + 4 2 (4 3 2) the answer, in steps, Step 1: 6 + 4 2 (4 6), Step 2: 6 + 4 2 ( 2), Step 3: 6 + 2 ( 2), Step 4: 6 + ( 4), Step 5: 2 The TI BA II Plus has the ability to handle parenthesis, the fifth row from the top, the second and third buttons from the left. By default the TI BA II Plus will resolve this problem as a left to right chain as follows: Step 1: 6 + 4 2 (4 3 2), Step 2: 10 2 (4 3 2), Step 3: 5 (4 3 2), Step 4: 5 (1 2), Step 5: 5 2, Step 6: 10 The TI BA II Plus is defaulted to a concept referred to as Chain Mathematical Sequence (Chn) and it will process the formula from left to right without regard to mathematical operation. The options, available within the TI BA II Plus, are Algebraic Operating System (AOS) or Chain Mathematical Sequence (Chn). Using Figure 6, on the next page, this choice is made by pressing the 2ND button followed by the FORMAT/. button in the bottom row. Then using the up or down arrows in the top row to find the Chn or AOS display. If you find Chn and want AOS, while Chn is displayed, press the 2ND button followed by the SET/ENTER button in the top row and AOS will be displayed. Now press the 2ND button followed by the QUIT/CPT button to exit the formatting section. If you want to select the Chn concept, follow the same process as above, when you locate AOS, press the 2ND button followed by the Set/Enter button in the top row and Chn will be displayed. If you

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want Chn and Chn is displayed, press the 2ND button followed by the QUIT/CPT button to exit the formatting section.

Figure 6 Changing from Chain to Algebraic Operating System for the TI BA II Plus calculator.

TIMEVALUEOFMONEY
Time value of money is a frequent topic for accountants and the TI BA II Plus handles this task easily. The Weygandt, Kieso, and Kimmel accounting textbooks frequently contain an appendix addressing this subject and its solution with a time-value-of-money capable calculator. Assume that a bond issue has a redemption value of ten million dollars, a life of twenty years with semiannual interest payments, the face/stated/contract rate is ten percent annually while the market/effective/yield rate is eleven percent annually. The key to this problem is the third row of buttons from the top and a set up issue. The technique shown here allows you to use any time value of money issues without being concerned about these settings in solving the problem. First, press the 2ND button, followed by I/Y / P/Y button and P/Y (payment periods per year) or C/Y (interest compounding periods per year) is displayed. If the display shows any value other than 1, press 1 and SET/ENTER, the second button from the left on the top row. Then press either the up or down arrows in the top row. If the remaining value is not 1, set it to 1 by pressing 1 followed by SET/ENTER. Press the 2ND button followed by the QUIT/CPT button to complete the process and leave the configuring displays. The time value of money row, from left to right, has the following buttons: 1) N The number of periods in the bonds life, not the number of years, 2) I/Y reset to relate to the N button as the effective interest per period of the bond, 3) PV the present value of the bond, 4) PMT the interest payment the bond maker must make, and 5) FV the maturity value of the bond. Based on the information of the previous paragraph, for N enter the life of the bond 20

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and since the bond paying interest twice a year, press the button followed by 2 and =. The BA II+ will show 40, press the N button and the display will show N = 40.00. 40 is the number of periods the bond will be issued for. The effective annual interest is eleven percent. Enter 11 followed by pressing the button followed by 2 and the = button. The BA II+ will show 5.50. Press the I/Y button and the BA II+ will display I/Y = 5.50. This represents the effective interest rate PER PERIOD rather than per year. Since we are computing the present value (PV), press 0 followed by the PV (Present value) button to ensure there is no residual value to interfere with the process and PV = 0.00 will be displayed. The interest payments are calculated on the maturity value, ten million dollars, times the face/stated/contract interest rate of ten percent, times the time factor (0.5) for semiannual interest payments. This is entered as 10000000 followed by pressing the button, followed by .10 (for 10% or by entering 10 followed by pressing the % button) followed by pressing button, followed by the entering .5 for semiannual and then pressing the = button. The resultant value of ($10,000,000 10% 0.5) 500,000.00 represents each interest payment made over the twenty year, forty period life of the bonds. Press the +/- button in the bottom row to convert this value from a positive value indicating cash in to a negative value indicating cash out. Press the PMT button and the TI BA II Plus displays PMT = -500,000.00. Enter 10000000 (ten million) as the maturity value of the bonds. The BA II Plus helps by displaying commas in the appropriate places. Again, press the +/- button in the bottom row to convert this value from a positive value indicating cash in to a negative value indicating cash out. Press the FV (Future value) button and FV = -10,000,000. The last step is to direct the BA II Plus to compute the present value. Press the CPT button in the upper left corner followed by the PV button in the middle of the time value of money row. The TI BA II Plus displays PV = 9,197,693.77*. The present value or issue value of these bonds is $9,197,693.77 and the * indicates it is a computed value. You can store this value in Memory 1, then press +, followed by RCL FV and then press = and these bonds will issue at a discount of ($10,000,000 + (-$9,197,693.77) $802,306.23. Accounting textbooks will frequently ask for the present value of the interest payments or the present value of just the bonds. If that is the challenge, for the present value of the interest payments follow the above instructions except make the future value, FV, zero. If the challenge is to find just the present value of the bonds, follow the above instructions except make the payment, PMT, value zero.

DEPRECIATION
Depreciation is a task for accountants when dealing with fixed assets. The TI BA II Plus knows the rules for many of the common methods of depreciation. Figure 7, on the next page, is a series of TI BA II Plus screens (frames) chained together. On the first screen the method of depreciation is selected, in this case it is straight-line, SL. In this case SET in the display indicates that the method of depreciation is selectable by using the 2ND button followed by the SET/ENTER button on the top row. The TI BA II Plus will compute straight-line (SL), sumof-years-digits (SYD), declining balance (DB), and declining balance with conversion to straight-line (DBX). ENTER in the display indicates that you are required to enter the appropriate value or data. The up and down arrows in the first row are used to move between screens.

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Figure 7 BA II Plus depreciation worksheet sequence for straight-line through first month, M01.

The asterisk, *, indicates it is a computed only value. All values are entered into the depreciation worksheet by pressing ENTER. The up and down arrows on the first row moves the worksheet through its screens. In the second screen, LIF, the life is entered by keying in a value such as 10 and pressing ENTER. Then, the down arrow on the first row is pressed to continue through the depreciation worksheet. The third screen, M01, is the month of depreciation and the percentage of that month. 1 indicates the first month of the fiscal year, and .00 indicates a full month. .50 would be one half month. When entered press ENTER followed by the down arrow to continue. The fourth screen, shown in Figure 8, is cost CST. This is the total cost of the asset. The TI BA II Plus will calculate depreciable value after salvage value, SAL is entered in the fifth screen. The sixth screen is a frequented screen as you can enter the year of life you want the assets depreciation for. In this display, it is showing the first year. To change it simply enter the year, for example, 6, and press ENTER. And the TI BA II Plus will respond with the depreciation for that year and the values presented in Remaining Book Value RBV and Remaining Depreciable Value RDV screens which are both based on this year as shown in screens seven, eight, and nine, to the right in Figure 8.

Figure 8 BA II Plus depreciation sequence for straight-line continued.

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The verification of this data is that if the asset cost $110,000 with a salvage value of $10,000, the depreciable value is $100,000. With a life of ten years the depreciation each year is $10,000 so the book value after one year would be ($110,000 - $10,000) $100,000, and the remaining depreciable value would be ($110,000 - $10,000 - $10,000) $90,000.

LO3:MICROSOFTEXCEL
Microsoft Corporation has published its Microsoft Office suite in numerous versions for years and they have become a mainstay productivity suite for just about any personal computer system. The suite, depending on the version and platform, will usually include Word, Excel, and PowerPoint. Other versions of the suite may include Access, Outlook, or Outlook Express as well as other offerings by Microsoft. Excel is a valuable computing tool for all accounting students. It is a spreadsheet application used to analyze and share information for better business decisions. Through its data and text manipulation, its versatility and usability increases with every version released.

EXCELOVERVIEW
While Microsoft may call Excel a spreadsheet application, they prefer to call the individual sheets within the application worksheets and call the collection of worksheets within a file a workbook. Within the worksheet, the vertical columns are identified by letters starting with A and continue out to the right to provide up to more than sixteen thousand columns. The rows are numbered by default starting with 1 and provide over one million rows. Figure 9, below, shows worksheets or tabs, columns, and rows.

Formula bar
Formula bar

Rows

Worksheets

Columns

Figure 9 Microsoft Excels formula bar, worksheets, columns, and rows.

We will look at some of the calculation tools within the Excel application. A simple formula, such as adding 2 + 3 may be input in numerous ways. You can click into the upper left cell, identified as A1 (Column A, Row 1) in Figure 9, and enter =2+3 and then press Enter or click the mouse cursor into another cell. Excel will display 5 in Cell A1 and =2+3 in the formula bar if you click back into Cell A1. You can enter the formula directly into the formula bar by clicking into Cell A1 to select the target cell then click into the formula bar and enter

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=2+3 and press Enter. Again, Excel will display 5 in Cell A1 and =2+3 in the formula bar. You can also enter 2 in Cell A1 and 3 in Cell A2, the cell immediately below Cell A1 (Column A, Row 2), and then click into Cell A3, the cell immediately below Cell A2, (Column A, Row 3), followed by clicking on the Sigma () symbol in the task bar of Excel and then press the Enter key. And Excel will provide a 5 in Cell A3. There are options associated with the Sigma () symbol by clicking on the drop-down arrow to the right of the symbol and selecting the desired option.

FORMATTING
Formatting within Excel provides consistent presentation. In Figure 10, all of the cells in both columns are formatted differently. The right 8 is not consistently aligned vertically and the presentation of negative values changes. Excels formatting options are accessed by right clicking on a cell or on the select all block which is the unidentified block above the row numbers and to the left of the column letters. From the pop-up menu, select Format Cells which will bring up the Format Cells dialog box, seen in Figure 10. From this dialog box you can select any of the preset formats or create your own, with limitations, by using Custom. A personal preference for values is Currency where decimal places, currency symbols, and the presentation of negative values are all individually selectable options.

Select all block

Figure 10 Excels Format Cells dialog box.

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FORMULASWITHINEXCEL
There are MANY prestructured formulas (functions) within Excel. One way to access them is to click on the Fx symbol to the left edge of the formula bar, seen in Figure 10, above. When Fx is clicked, Excel brings up its Insert Function dialog box, shown in the upper frame of Figure 11. The dialog box shows the most recently used formulas and functions as a default. By clicking on the drop-down arrow associated with the Or select a category window you can view all of the categories of formulas (functions) available. In the middle frame of Figure 11, the drop-down selection menu is shown. If Financial is clicked, as shown in the lower frame of Figure 11, a portion of the formulas (functions) available under financial are shown. The slide bar to the right of the listing indicates that more formulas and functions are available by using the mouse to scroll through the list. When a formula (function) is highlighted the formula and a brief description is provided underneath the Select a function box. In the lowest frame of Figure 11, ACCRINT is highlighted. The formula, or function, Returns the accrued interest for a security that pays periodic interest.

Figure 11 Excels Insert Function (Formula) dialog box.

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PRESENTVALUE
Below is the dialog box brought up when PV (Present Value) is selected from the drop-down menu options of Financial. Figure 12, below, is four frames, the upper three frames show the entire function. The lower frame shows the cell referenced values. The upper left frame shows the values for a 3.99% annual interest loan with a duration of sixty months, and payments of four hundred and twentyfive dollars per month without a final balloon payment with payments made at the end of the month.

Figure 12 Excels Present Value PV formula dialog box.

You can directly enter the values or by references to cells. The upper left frame is direct entry, the upper right frame is referencing the cells in the lowest frame of Figure 12. The annual interest rate of 3.99% must be divided by twelve (months) to get the monthly interest rate, as shown in the Rate window of the upper left frame. In the upper right frame, the function looks to Cell F21 where the formula =3.99%/12 has been entered. The loan period of sixty months is entered into Nper (number of periods). The payment is entered as -425, Excel is cash flow sensitive, this correctly indicates cash out, the payment, and the result, $23,082.76 indicates cash in, the loan, at the time of purchase. Type indicates when the payment is made, 1 indicates the beginning of the period, 0 indicates the end of the period. Within the function dialog box the results of the function are shown, if they can be computed, in the lower left corner in this case, as $23,082.76 or immediately below the data entry cells as 23082.76001. If the present value was a cash outflow, there would be a parenthesis around the value to indicate cash outflows. Excel is sensitive to cash flows and shows cash inflows as positive values and cash outflows as negative values.

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CONCATENATE
Concatenate is a function which joins text and numerical data into a string. The formula is =CONCATENATE( followed by the text, numerical data, or references, followed by a closing parenthesis. Figure 13, below, is an example of how concatenate can be utilized and it demonstrates embedded functions. In Column A of Figure 13, the text and values appear in random order. The formula is shown in Column B shows the results of the formula. Notice that the values can be used more than once. A7, the word is, appears twice the sentence and it appears only once in Column A.

Figure 13 Excels Concatenate function. All text inserted directly into the concatenate function must be contained within double quotes as shown in the formula cells of Figure 13. Therefore, the dollar signs, spaces, and the period at the end of the sentence are all in double quotes. A comma separates each value of the formula.

FIXED
In the first results cell, Cell B1, the result of the math operation, $4.25 10, $42.5 is not proper as it does not show the two decimal places associated with pennies on the price, $42.50. This is corrected in the lower formula, Cell B7, by using Fixed. With Fixed you can determine the number of decimal places to be shown and if commas are appropriate 0 for commas, 1 for no commas. The formula Fixed(A10*A8,2,0) multiples the value of Cell A10 by the value in Cell A8 then sets the decimal places to two and, if applicable, inserts a comma.

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CIRCULARREFERENCEWARNINGS
The fixed function will work in any cell, for example, as =FIXED(A10*A8,2,0) entered in any cell other than Cell A10 or Cell A8. If the formula refers to a cell it occupies, it is a circular reference error and, when detected, Excel will usually provide an advisory such as that shown in Figure 14, below.

Figure 14 Excels Circular Reference Warning. When working with complex formulas resolving a circular reference may not be easy or quick. Excel will generally not allow you to leave the cell with the circular reference error until it is resolved and resolution may require you to look elsewhere. Try putting a character or space in front of the equal sign. This will turn the formula into readable text, as shown in the previous screen prints. When the character or space is removed, after the reference issue is resolved, the formula is fully functional again.

LOANPAYMENTS,INTEREST,ANDPRINCIPALVALUES
Loans are common to business and the journal entries associated with them need to differentiate the amount paid to principal and the amount paid to interest for the period payment. Excel has numerous to address loans. Figure 15, below, shows some of these formulas. In Column B is the title of the value appearing in Column C. The interest rate, Cell C8, is 5% annually divided by twelve months of the year. The loan is for thirty years with monthly payments in the amount of three hundred sixty thousand dollars.

Figure 15 Excels Circular Reference Warning. As shown in Figure 15, the values titled by Column B and entered in Column C are used repetitively in the formulas. The first and second formulas, results are shown in Column E and the formulas are shown in Column F, compute the cumulative payment to interest (=CUMIPMT() and the cumulative payment to principal (=CUMPRINC() between the first and fifth periods of the loan. Third and fourth cells shown of Column E shows the interest payment (=IPMT() and the principal payment (=PPMT() for a specific period, in this case, period 1, referenced within Cell C11. The fifth cell of Column E shows the payment re-

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quired by the loan with the factors contained in Column C. The sum of the interest payment and principal payment for the same period, in this example, Period 1, must equal the value of the computed payment. By using referenced cells, as shown here, the factors can be changed by entering new values in Column C without entering the formulas of Column E. The values within the [ ] brackets of the formulas are optional and are assumed to be zero if not provided.

DEPRECIATION,STRAIGHTLINE,ANDACCELERATEDMETHODS
Excel handles many types of depreciation with a variety of formulas as shown in Figure 16, below. As shown earlier, all of these formulas are referencing the titled values in Column C. Because of the various mathematical requirements, the various methods require different values. For example, double-declining balance, DDB, requires the period you want the depreciation while straight-line, SLN, does not. Accelerated depreciations such as double-declining balance and variable-declining balance require the factor, Cell C13, in common values such as 150%, 175%, or 200%.

Figure 16 Excels deprecation options.

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INTERNALRATEOFRETURN
In business analysis the internal rate of return is frequently a consideration and Excel handles it very easily with the =IRR(Values,Guess) formula as shown in Figure 17, below. The requirement of for IRR is that there must be one positive value and one negative value and, for accurate calculations, the positive and negative cash flows must be in proper sequence and the same time interval. A guess is optional and is defaulted to 10%. If the formula returns a #NUM! try a different percentage as the formula has limited reiterations.

Figure 17 Excels Internal Rate of Return formula.

DAYSBETWEENDAYS
Excel knows dates and days and has numerous formatting capabilities. To calculate the dates between dates format the first and third cell in the column, Cells E8 and E10, to date in the format desired. The example, Figure 18, below, selected day of the week and date without abbreviation. Leave the middle cell, such as E9, in general formatting. You can now populate any two of Cell E8, Cell E9, or Cell E10 and writing a simple formula such as =E8+E9 in Cell E10 and the result will be the result of the number of days from the date in Cell E8. To determine the number of days between two dates, enter the newest in Cell E8, the oldest in Cell E10, and in Cell E9 enter =E10-E8.

Figure 18 Excels Format Cells dialog box for dates.

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VLOOKUPANDHLOOKUP
Excel has two superb search and return functions. They are Vlookup and Hlookup and both operate the same way with slightly different orientations one vertical, and one horizontal. The matrix and formula are shown in Figure 19, on the next page. The formula for vertical look up reads as =VLOOKUP(Lookup_value,Table_array,Column_index_num, [Range_lookup]). Using Figure 19 as a reference, the sequence of vlookup formula is provided in the bottom cell, the formulas are written in Column F with the text of that formula in Column G. The Lookup value is referencing the cell on its row in Column E. The matrix, the key to the Vlookup and Hlookup formula, is from Cell B2 through Cell C10, the matrix can contain many rows and columns. The next item is the index column in the table, the desire here is to find a matching value for the value in Column E in the first column of the matrix from B2 through B10, then return not the second column of the worksheet but the second column of the matrix. The last value, either a 0 or 1, determines is the formula will return only exact matches (0), or the match before indexing to the next option (1). The values shown in Column F are values associated with the located values in Column B. Notice that Pecan in Column E is not an exact match to Pecans in Column B so the formula, set to 0, returned #N/A as the value is not found. Brussels Sprouts and Brussel Sprouts are also not an exact match. When using the 1 value as the last element of the formula caution must be exercised and the first column of the matrix must be in alphabetical order as the search is alphanumerically controlled. If you are searching for C and the order of column 1 in the matrix is A, B, D, C, E, the C will not be located as the D is the next index value so the value associated with B will be returned. Warning 1 returns the last value before the search value if the search value is not found.

Figure 19 Excels Vlookup formula. Hlookup works the same as Vlookup except in a horizontal matrix format rather than a vertical format. As such, it does not index to a column but a row within the matrix.

ABSOLUTEREFERENCES
When you drag a formula through cells such as writing the vlookup formula in Cell G2 of Figure 19, and drag/copy it through to Cell G10, the matrix will shift down one row with each row the formula is drag/copied down into. The solution is to put the $ in front of the values you do not want changed before dragging it into the other cells. In this case, you want the matrix to remain from B2 through C10 so dollars signs are inserted as $B$2:$C$10. This makes both the column and row an absolute reference and it is not changed when dragged or copied into a new cell. If you want only absolute reference to columns, insert the dollar sign before the column identifier. If you want only the rows to be absolute referenced, insert the dollar sign only

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in front of the row identifier. You can make any or all of the column and row references absolute $B2:C10, B$2:C10, B2:C10, B2:$C10, B2:C$10, $B$2:C10, B2:$C$10, B$2:$C$10, etc, are all good absolute references.

SUBTOTAL
Subtotal is a superb tool for events such as inventory where you have multiple lines of the same items and want to know the totals. Figure 20, on the next page, contains the original data in Columns B and C with B containing the identifier, and C containing the quantity in pounds. Note that one item is Apple while others are Apples for a demonstration reason. For this example, the values were copied into Columns F and G where they must be sorted alphabetically before subtotaling. Once sorted the area from Cell F5 through G21 is selected. In Figure 20, the function inserted rows changing the references. When the appropriate area is selected, the Subtotal function from the Data menu is selected. The subtotal dialog box, the lower frame of Figure 20, appears. With At each change in set to Items, with Use function set to Sum, and Add subtotal to set to Pounds OK is clicked. And Subtotal divides the table into sets of rows by their items which is why they must be sorted first, and provides a subtotal for each item which is why you need to normalize the data first is Apple a different item than Apples, and it provides a grand total at the bottom. Notice that with Apple in the middle of the Apples stack, you have three presentations of what could be one or two items. The process also creates a set of view option arrows to the left side of the worksheet. By clicking on the 1, 2, or 3, various detail levels are hidden or exposed. Subtotal is a minor misnomer as there are numerous options under the Use Functions menu. Subtotals are removed as required by clicking into any cell of the subtotaled table, bringing up the Subtotal dialog box, and clicking Remove All at the bottom of the dialog box.

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Figure 20 Excels Subtotal function and results.

COPYANDPASTESPECIALVALUES
There are times you want to remove the formulas and functions from a worksheet while retaining the values or results. In the upper frame of Figure 21, on the next page, the subtotal formula inserted by the subtotal function is shown in the formula bar. Select the cells you want to convert from formulas and functions to values or select the entire worksheet by either clicking on the select all block to the left of the column identifiers and above the row identifiers. Then copy with the icon on the task bar or by using Control C key strokes. Then, without clicking elsewhere, right click into any selected cell and select Paste Special from the pop-up menu.

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When presented with the Paste Special dialog box, select Values, as shown in the lower frame of Figure 21, and click OK. And Excel has removed the formulas, functions, and the detail bars to the left of the worksheet. Now, in Cell G9 only the value 6,719 will be shown. This also reduces the size of the file which contains the worksheet.

Figure 21 Excels Paste Special dialog box.

There are many more functions and formulas to work with in Excel and F1, the help key, is a key to locating them as well as opening the functions and formulas dialog box by clicking on the Fx to the left of the formula bar and then selecting All in the Insert Function dialog box.

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LO4:MICROSOFTWORD
TABLESWITHINWORD
Microsoft Word has the ability to accept a pasted table from Excel or create its own table. The upper frame of Figure 22, below, is a Word table. Word tables are accessed through the Insert menu and format is most easily accepted by clicking on the block of the drop-down menu representing the desired columns and rows, in this case, three columns and three rows was selected. Formatting the items within the tables cells is the same as formatting any other item within Word. Rather well hidden is the capability to insert formulas in these tables. When the bottom cell in the first column is clicked into, followed by clicking into the Layout menu, followed by clicking on Data and then Formula you can insert numerous formulas into these cells. Formulas in Word are not the same format as formulas in Excel. In the bottom cell of the first column is the Word formula =SUM(ABOVE). Inside the Formula dialog box is also the formatting options for numbers. When using the Paste Function options to select a formula ensure that the default formula is removed before the new formula is inserted.

Figure 22 Microsoft Words insert table options, table, and formulas dialog box.

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LO5:INTRODUCTIONTOMICROSOFTACCESS
Microsoft Access, a relational database, has the ability to use data contained in its data fields as components of mathematical operations. For this to occur, it is simplest to first enter the base data into a table. Figure 23, below, shows a table with three items, apples, bananas, and cherries.

Figure 23 Microsoft Access table with item, quantity, and unit cost. If computed by a mathematical operation such as quantity times cost, Access will not store the extended value in the table but will store the process as a function of a query. A query is formatted questioning process which will filter and process data as instructed to provide the information (answers) required. The structure of the query is shown in the upper frame of Figure 24, on the next page. To create it the desired elements are dragged from the reference table in the upper portion of the screen to the desired column. While they are in order here, they need not follow the sequence of the source table. The extended value is a formula, not an imported value from the source table. To title the column and insert the mathematical function the text is Extended Cost: [Quantity:]*[Unit cost:]. The Extended Cost is the title to be seen in the query results, the [Quantity:]*[Unit cost:] is the mathematical operation of taking quantity and multiplying it by unit cost. One of the memory saving features of Access and, at the same time, one of the flexibility features of Access is that the process of the query is saved, not the results of the query. So, when the query is run, it is current information rather than history. The results of the query, which can be activated by clicking on Run near the upper left corner of the task bar, is shown in the lower frame of Figure 24.

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Figure 24 Microsoft Access query structure with the formula for extended cost inserted and the results of the executed query.

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One of the advantages of Access over Excel is the ability to create forms and reports. Access calls presentations intended for use on the screen a form and presentations intended to be printed a report. An input screen, a form, is shown in Figure 25, below, which presents a user friendly input format without unnecessary fields. If the table has two hundred and fifty seven fields and the receiving clerk needed only three that is all the fields he or she need be presented with.

Figure 25 An Access input screen for the table. Access will build quick reports, which are intended to be printed, through the Create menu utilizing Report. The results of such a report are shown in Figure 26, on the next page. As with queries, reports are saved as a structure rather than as a document. Therefore, each time it is accessed, it is current, based on the source table data. As addressed earlier, the flexibility of Access, giving the user an input screen appropriate to the task without distractions, and to generate reports without additional data is a substantial asset to the accountant.

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Figure 26 An Access report for the table. The accountant is frequently challenged to compute numerous values both financially and nonfinancially. There are many tools available to help with those challenges and the key to success is knowing which tool is appropriate to the challenge, how to use it, and the appropriate input values. This paper has only exposed you to some of the common tools and their uses.

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LO6:QUESTIONS,LINKS,ANDREFERENCE
1. Where is the calculator within the Microsoft Windows operating system located? 2. How many view options does the calculator within the Microsoft Windows operating system offer? 3. How do you switch between the available views of the calculator within the Microsoft Windows operating system? 4. How do you change the default display of significant digits on the Texas Instruments BA II Plus calculator? 5. How do you change the interest compounding periods per year and the payments per period within the BA II Plus calculator? 6. How do you store a value in Memory 8 of the BA II Plus calculator? 7. What is the difference between the Chn (Chain) to AOS (Algebraic Operating System)? 8. How do you change from Chn (Chain) to AOS (Algebraic Operating System)? 9. What are two methods of entering a formula or function within Microsoft Excel? 10. Where/how can you view the many formulas and functions available within Excel? 11. What can be done to ensure that values are presented in a similar, non-distracting appearance? 12. Explain how Excel formulas can be entered so that you need not enter the formula or function itself to change the values utilized by the formula or function. 13. Explain when a circular reference within Excel would occur and how you would resolve the issue. 14. How would you utilize Excel to calculate the days between two dates?

LINKSANDADDITIONALINFORMATIONSITES: Texas Instruments BA II Plus reference page: http://education.ti.com/educationportal/sites/US/productDetail/us_baii_plus.html Microsoft Corporations Microsoft Office reference page: http://office.microsoft.com/en-us/FX102855261033.aspx Casio Computer Co. Ltd. reference page: http://www.casio.com/home/

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COPYRIGHT,TRADEMARKS,ANDSERVICEMARKSACKNOWLEDGEMENTS:
BA II Plus and Texas Instruments among others, are registered copyrights, trademarks and/or registered service marks of Texas Instruments, Dallas, Texas, in the United States of America and other countries.

Microsoft, Microsoft Access, Microsoft Excel, and Microsoft Word, among others, are registered copyrights, trademarks and/or registered service marks of Microsoft Corporation, Redmond, Washington, in the United States of America and other countries.

Photos of William Seward Burroughs and the American Arithmometer Company No. 4 copyrighted and graciously provided by Mr. Michael Hancock, http://www.xnumber.com/xnumber/hancock7.htm

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