# ACC 291 Entire Course and Final Guide

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Entire Course And Final Guide You can find here
7 How should mixed costs be classified in CVP analysis?
What approach is used to effect the appropriate
classification?
According to our class materials all mixed cost must be
classified into their fixed and variable and variable
elements. The method that can be used to determine is
called the high/low method. To determine the variable
cost the analysis takes the total cost and divide it with
the low activity level. To get the fixed cost then the
company would have to subtract the total variable with
either the high or low activity level.
9. Cost volume profit CVP analysis is based entirely on
unit costs. Do you agree? Explain.
In my opinion when it comes to making financial
decisions for the company, often times more than one
method is used. Cost volume profit is also based on
Volume or level activities, unit selling prices, variable
cost per unit, total fixed and sales mix.
14. You can find the break point in dollars by drawing a
horizontal line to the vertical axis. I you want to find
the break even point in units it will be a vertical line
from the break even point to the horizontal axis.
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ACC 291 Final Exam Guide (New)

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Discussion Question 1:

Based on what you know about accounting, what role
do you see it playing in business operations? How
dependent do you think a business is on its accounting
department? Why? Axia College Material
Appendix C

Budgets Matrix

Directions: Using the matrix, define each of the
budgets listed and briefly describe its uses.

Budget Definition Describe i
Sales budget Estimate of the The sales
expected sales for the shows dol
period. All of the units. This
other budgets depend managem
on the sales budget. how many
This is where all the produced
other budgets will period
start from
Production budget A production of units Shows ma
needed to be how many
produced in order to produced
meet the projected budget pe
sales what amo
needed to
inventory
Direct materials Is the estimated Shows ma
budget quantity or cost of the how much
raw materials that is materials
needed in order to already on
produce the units or that ne
required to fulfill ordered to
inventory inventory
Direct labor budget A estimate of cost and Shows ho
quantity of direct hours, how
labor needed in order laborers n
to meet production produce t
that budg
Managem
decide wh
the right a
laborers n
the compa
able to me
budget
Manufacturing An estimated This list a
overhead budget expected amount of cost invol
manufacturing cost disbursem
for the budget period quarter
Selling and Anticipated selling Shows are
expense budget expenses in the listed oth
budget period manufactu
Expenses
marketing
cost etc fo
period
Budgeted income Estimate of expected Is a very i
statement profitability of tool becau
operations in a the compa
budget period estimated
the budge
Cash budget A projection of Cash budg
expected cash flows managem
in and out of the tally or to

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ACC 291 Final Exam Guide 1

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we have another New set of Final Exam Guide which could be found
Financial Statements

Discussion Question 1: Post your response to the following:

 You know how important it is to create budgets for your
household. How does budgeting help management make good

Budgeting is a very important skill that can be applied to everyday
life and also when it comes to making good business decisions. I
really like the way our class resources says about Budgeting.
Budgeting is used as a planning tool used by management to make
good decision for the company. If a company is successful than more
than likely that means that the management team is very good at
managing the company finances. Budgeting helps management plan
ahead, defines what is most important, shows warning signs, reach a
company target without over or under budgeting and etc.

Another response

In a business, a budget helps a business make good decisions because
they are used by the company to plan for future events and coordinate
the events and duties in the company. They also gives objectives used
to evaluate the performance of the company on each level which can
help to make future decisions that will not hurt the company based on
the projected objectives. It can also be used to alert the company of
possible problems or negative trends in the company that need to be
addressed so that there is a clear picture of the overall health of the
company before decisions are made. The budget helps the company to
be able to make an informed decision when making one. It is there in
order to make sure that making a decision like taking on another
company will not hurt the company and is something that the
compnay can sustain based on the budget.

DQ2

Discussion Question 2: Post your response to the following:

 What are some of the different types of budgets?

 Describe in detail one type of budget covered in the text.

 Describe what the budget is used for and what information it

 Then, as you respond to your classmates, discuss how the
budget you described relates to the budgets they described.

 Discuss how a business benefits from each of the budgets.

There are many different types of budgetting. For example, there sales
budget which allows management to see how many units that need to
be produced, production budget which will allows everyone to see
how many units are going to be produced in or needed to be produced
in order to meet the inventory for that budget period. One budget that
I can describe in detail is called the direct labor budget and this
budget shows how many people, hours is needed in order to meet the
required budget for that period. This will give management an idea of
how much money is needed such as paying the cost of labor. The
company benefits by each of these budgets because it will help
manage just how much money it will cost the company during this
period. Management can also see if there are different ways to cost
the company out of pocket cost down during this period.
Another response

I chose to write about the Production Budget. The Production Budget
shows the cost of each unit needed to produce an item or manufacture
a product. The formula used by the Production Budget :

Budget sales units + Desired ending finished goods units - Beginning
finished goods units = Required production units.

An example would be, every Easter the bakeries in the Bronx loads up
on Hot Cross Buns. My mother and grandmother would buy these
tasty sweet breads,and eat them for breakfast. I personally would like
to eat them every week but, they are only sold during the Easter
season. Maybe, it has something to do with the glazed cross on the
top.

Every Easter Holiday, there appears these Hot Cross Buns and the
bakeries production department allows for the purchases for items
needed to make the buns. After Easter has gone, Hot Cross Buns are
not included in the budget.

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ACC 291 Final Exam Guide

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ACC 291 Final Exam Study Guide
Question 207

On January 1, a machine with a useful life of five years and a
residual value of \$40,000 was purchased for \$120,000. What is the
depreciation expense for year 2 under the double-declining-balance
method of What is a Flexible budget?

 A Flexible budget is a budget that change
or is flexible during different levels or activity.
Unlike the static budget which is a budget based
on one activity level, the flexible budget is based
off of more than one activity level.

 The steps to development a flexible
budget is :

a) Identify the activity index, and the range of
activity

b) Find out what the variable cost, and
determine the variable cost per unit

c) Find out what the fixed cost and determine
the budgeted amount for each unit

d) Organize the budget for selected additional
activity within the appropriate range
 The information found on a flexible
budget cannot begin with the master budget.
The flexible budget uses the same guidelines the
original budget. The budget consists of Sales,
Cost of Goods Sold, Selling Expenses, General
and Administrative Expenses, Income Taxes, and
finally the Net Income.

 The information on the budget is a great
tool to be used for evaluation performances. The
flexible budget can be used for monthly
comparison purposes. Also during the process
that management is identifying the activity index
and the range of activity it will allow them to see
the cost of direct labor hours for that budget
period.
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ACC 291 Week 1 Assignment Comparative Analysis Problem

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Purpose of Assignment The purpose of this assignment
statement analysis using financial ratios on the assets
section of the balance sheet, data interpretation, and
how ratios are used to gain insight about the
management of receivable. Assignment Steps
Resources: Capstone Discussion Question: Post
 Think back over what you have studied and
learned in this course. Do you have a new perception of
or appreciation for the field of accounting and how it
To be perfectly honest with you I truly had no clue what
accounting did for a company and how important it
was. I always thought that accounting only dealt with
payroll. In fact accounting does much more that just
payroll and monitor company supplies (coffee, paper,
pens & pencils). The accounting sets budgets for the
entire company, monitors outflow and inflow of profits,
plans budgets for each department, and much more.
When I first begun this class I was really nervous, I truly
thought that I was going to have a hard time
understanding the accounting but I happy to say that I
was wrong. I understood every part of this course.

On a personal note I would like to thank you Jess. If it
up. You are truly a great instructor. I wish you all the
best! God Bless

Another response
Accounting has taken a whole new meaning to me in
my vocabulary. Prior to this course, I just took
accounting as a calculator and crunching numbers. I
now have a new respect for accounting and all the
aspects that are involved. I never once took into
consideration profit, sales, revenue, and balance
sheets also being included with accounting. There is so
much more involved with accounting, and had I not
taken this course I would have never known.
Accounting is a very important part of running a
business. I feel that it is imperative to all people
thinking of opening a business should take some type
of accounting class to become more aware of how to
run the accounting part of a business.
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ACC 291 Week 1 Discussion Question 1

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How would you describe the entries to record the disposition of
accounts receivables?

By

Kamilah T. Crooms
The name of my business is called DestinyWear. DestinyWear is
a urban fashion clothing company for woman, men and youth.
DestinyWear specializes in making clothing for every occasion. My
name is Kamilah Crooms and I am the owner and CEO of
DestinyWear.My goal is to ensure that my company will be succesfull
in all areas and in each department. In order for me to make sure that
the company was going to begin in the right direction I had to
priortize what was most important in establishing my business plan.
The main priority is that I had to first choose the appropriate
business structure, a high demanding product, and most of all an
outstanding accounting team.
struture that I felt was best for me to pursue. I decided that as a
Entreprenuer the best choice for me abd the direction of the company
would be for me to be sole proprietorship. Sole proprietorship
allowed me to be the sole owner of DestinyWear. The first and most
important reason that I wanted sole proprietorship is because it is
much easier to start a business as sole proprietorships. Sole
proprietorship takes all the profit that and doesn't have to split it
between any other owners or corporations. I also want the power to
make and change decisions along the way without having to first
consult anyone else.

DestinyWear Products
DestinyWear products will range from jeans, shirts, accessories and
shoes. The company will first start off with its most profitable product
and that will be the DestinyWear designer jeans line. The jeans line
has over twenty different jeans designs

from straight leg, baggy, cargo, overalls, shorts and much more. The
jeans line will provide services within the United States and Canada
and will eventually service International customers. The DestinyWear
jeans line will have its own building. In this building the bottom floor
will consist of the factory and the top floor will have the different
departments such as management, marketing and most importantly
the accounting department.

DestinyWear Accounting Department
The accounting plays a major role in establishing my company
DestinyWear. The accounting department does more than managing
and reporting the company’s financial documents it is the greatest
tool in establishing my business. The key to a powerful accounting
department here at DestinyWear is applying the principles of internal
control. These principles consist of establishment of responsibilities,
segregation of responsibilities, documentation procedures, Physical,
mechanical, and electronic controls, Independent internal verification
and other controls such as Bonding of employees. In order to ensure
that this business plan works DestinyWear has to hire nothing but the
best qualified employees.

DestinyWear Accounting Staff
DestinyWear accounting team of fine employees will all be hired
through the company. There are several requirements that have to be
met in order for myself as the owner and Human Resource
department to even consider the applicant for accounting. We looked
for characteristics, education and work history experience. The first
and far most important qualifying requirements are education. The
applicant has to have a Bachelor BA/BS in accounting degree a plus
if he or she has a master’s.
The second requirement is experience. The applicant must have the
minimum of five years of experience working in accounting. He or
She must have knowledge and employment experience of working
with financial statements, cash management and internal control.
Employees must be experienced in Invest idle cash, planning the
timing of major expenditures, delay payment of liabilities keeping
inventory levels low, and increasing the speed of collection on
receivables. In the category of experience we had to hire applicants
according to the position that had to be filled in accounting. For
example, if a position in accounting such as management or
supervisory needed to be filled, then we would look for years of
experience in management or supervisory positions. I personally
prefer that every employee have some type of management
experience.
Last but not least, the employees characteristics. It is a must that
every accounting staff member has and applies professionalism, great
ethic and moral skills, accuracy, and most importantly punctuality,
and reaching company deadlines. These characteristics are very
important to have at DestinyWear.
DestinyWear Accounting Management Team
The DestinyWear accounting management team will be
reporting to me and to the other head staff each week to report
updates and any new changes. The management team is responsible
to have all the different types of budgeting reports that includes Sales,
Labor, etc. Management must follow the responsibility reporting
system for each department. The managers will use the company’s
financial information to predict outcomes of the business. I require a
report from each responsibility center, cost center, profit center and
investment center to be reported each month. Management is
responsible to ensure that the company does not over or under budget
and if any changes it must be reported immediately.
Conclusion
DestinyWear will be a very successful team not only because of
the products that we produce but because of having a great
accounting team. With the help of accounting team I DestinyWear
products will be in every wardrobe in America.

REFERENCES
 //http:yourdictionary.com /CVP.org Retrieved 3/20/2010
 Thomas, Y. 2005-08-27 “Accounting 101 pg. 52 Statements.
March 19, 2010
 Drucker, P. Managing in the next society 2002. retrieved march
19,2010
 ----------------------------------------------------
ACC 291 Week 1 Discussion Question 2

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How are bad debts accounted for under the direct write-off method?

Costco Wholesale Corporation
If we look at the financial statements of the company we can find that
the company is financially strong. Its strength are:
1. It has enough amount of current asset to repay its current
liability. The current ratio of the company 8.18 indicates that
the company has \$8.18 liquid asset to repay its \$1 of current
liability.
2. The operating cost of the company is increasing because the
company is able to reduce its expenses.
3. Cash from operating activity has increased for the company.
Apart from this strength the company also has some weakness in its
financial statement:
(i) Increasing inventory indicates that the company inventory
conversion period is increasing.
(ii) The cash from investing activity shows that the company cash
outflow is more in the short term investment i.e. in non
operating activity.
(iii) The overall has for the year 2008 has declined for the
company.
Net Income:
Net Income
\$1,300,000

\$1,250,000

\$1,200,000

\$1,150,000 Net Income

\$1,100,000

\$1,050,000

\$1,000,000

\$950,000
2006 2007 2008

If we look at the trend in net income of the company we can find that
the company net income looks fluctuating but it has improved it net
income in 2008 as compared to 2007.
Debt ratio as a percentage of total assets:

Debt ratio as percent of total asset
55.80%
55.70%
55.60%
55.50% Debt ratio as percent
55.40% of total asset
55.30%
55.20%
55.10%
55.00%
54.90%
2007 2008

If we look at the debt ratio as percent of total asset we can find that
the debt ratio is declining in 2008 as compared to 2007 i.e. the
company is increasing equity to finance debt.
Debt as a percentage of total equity:
Debt as percent of total equity
127.00%
126.50%
126.00%
125.50% Debt as percent of
125.00% total equity
124.50%
124.00%
123.50%
123.00%
122.50%
2007 2008

As we can see that the debt as percent of total equity is declining in
2008 as compared to 2007 i.e. the company is increasing equity in its
capital structure.
As we can see that there is nothing negative in 2008 for the company
and this is the reason it has positive trend as compared to 2007.
Hence there is no need to correct anything for the company.
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ACC 291 Week 1 Wileyplus Assignment E8-4, E8-11, BYP8-
1, and BYP8-2 (New)

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Wiley Plus Assignment Week 1
·E8-4, E8-11, BYP8-1, and BYP8-2 in MS Excel

 Exercise 8-4 Wainwright Company

 Exercise 8-11 Fedex Corporation
Week 1 DQ 1
Due Tuesday, Day 2

Go to the U.S. Securities and Exchange Commission’s Web site
at http://www.sec.gov and the Financial Accounting Standards Board’s Web
site athttp://www.fasb.org. Identify the mission and main activities of each
organization. Then, analyze the similarities and differences between the
roles of each entity. Which entity has more influence over financial
According to the SEC website their mission is to protect investors, maintain fair,
orderly, and efficient markets, and facilitate capital formation. The SEC also
requires public companies to disclose meaningful financial and other information
to the public. This provides a common pool of knowledge for all investors to use
to judge for themselves whether to buy, sell, or hold a particular security. The
SEC is concerned primarily with promoting the disclosure of important market-
related information, maintaining fair dealing, and protecting against fraud.

According to the FASB website the mission of the FASB is to establish and
improve standards of financial accounting and reporting that foster financial
reporting by nongovernmental entities that provides decision-useful information
to investors and other users of financial reports. Since 1973, the Financial
Accounting Standards Board (FASB) has been the designated organization in the
private sector for establishing standards of financial accounting that govern the
preparation of financial reports by nongovernmental entities

The major difference in the SEC and the FASB is that the SEC deals with reporting
of financial statements for all industries while the FASB deals mainly with the
private nongovernmental entities. Both are concerned with the fairness of
financial reports and work in the interest of the public. I believe that the SEC has
more influence over financial statement reporting because they can bring civil
action against companies and individuals for violations of securities laws.
Although according to the FASB website, “the Commission’s policy has been to
rely on the private sector for this function to the extent that the private sector
demonstrates ability to fulfill the responsibility in the public interest.

Response 2

Go to the U.S. Securities and Exchange Commission’s Web site
at http://www.sec.gov and the Financial Accounting Standards Board’s Web site
athttp://www.fasb.org. Identify the mission and main activities of each organization.
Then, analyze the similarities and differences between the roles of each entity. Which
U.S. Securities and Exchange Commission (SEC)

According to the SEC’s website “The mission of the U.S. Securities and Exchange
Commission is to protect investors, maintain fair, orderly, and efficient markets, and
facilitate capital formation”(U.S. Securities and Exchange Commission, 2010, Para. 1).

The main activities of the SEC are to interpret federal securities laws; issue new rules
and amend existing rules; oversee the inspection of securities firms, brokers, investment
advisers, and ratings agencies; oversee private regulatory organizations in the securities,
accounting, and auditing fields; and coordinate U.S. securities regulation with federal,
state, and foreign authorities. (U.S. Securities and Exchange Commission, 2010)

Financial Accounting Standards Board (FASB)

According to the FASB’s website “The mission of the FASB is to establish and improve
standards of financial accounting and reporting that foster financial reporting by
nongovernmental entities that provides decision-useful information to investors and other
users of financial reports. That mission is accomplished through a comprehensive and
independent process that encourages broad participation, objectively considers all
stakeholder views, and is subject to oversight by the Financial Accounting Foundation’s
Board of Trustees” (Financial Accounting Standards Board, n.d., Para. 3).

The main activities of the FASB are to identify financial reporting issues based on
requests/recommendations from stakeholders or through other means. The FASB
Chairman decides whether to add a project to the technical agenda, after consultation with
FASB Members and others as appropriate, and subject to oversight by the Foundation's
Board of Trustees. The Board deliberates at one or more public meetings the various
reporting issues identified and analyzed by the staff. The Board issues an Exposure Draft
to solicit broad stakeholder input. (In some projects, the Board may issue a Discussion
Paper to obtain input in the early stages of a project) The Board holds a public roundtable
meeting on the Exposure Draft, if necessary. The staff analyzes comment letters, public
roundtable discussion, and any other information obtained through due process activities.
The Board redeliberates the proposed provisions, carefully considering the stakeholder
input received, at one or more public meetings. The Board issues an Accounting Standards
Update describing amendments to the Accounting Standards Codification (Financial
Accounting Standards Board, n.d.).

Both the SEC and the FASB have the same goals of fairness, accuracy, and
understandability of financial accounting and reporting. Both agenecys
accomplish these goals in the best interest of the overall public.

The differences between the SEC and the FASB is that the FASB regulates
financial reporting in the private sector of businesses (but are subject to the rules
and regulations of the SEC) and the SEC deals with regulating the financial
reporting of publicly held corporations.

I believe that the SEC has the greatest influence over financial statements
reporting because they have the final approval on all changes of the rules and
regulations. The Sec can also bring civil or administrative enforcement actions
against individuals and companies in violation of the securities laws.
References

Financial Accounting Standards Board. (n.d.). Facts about FASB. Retrieved July
15, 2010, from Financial Accounting Standards
Board:http://www.fasb.org/facts/index.shtml#mission

U.S. Securities and Exchange Commission. (2010, May 3). The Investors
Advocate: How the SEC Protects Investors, Maintains Market Integrity, and
Facilitates Capital Formation. Retrieved July 15, 2010, from U.S. Securities

Week 1 DQ 2
Due Thursday, Day 4

Search the Internet or the Online Library for information about the
Sarbanes-Oxley Act. A useful guide to some of these provisions is
located at http://www.soxlaw.com. Summarize at least two
provisions of the law, and discuss your interpretation of these
provisions with your classmates. Do you think this law will make
financial statements more reliable? Also, discuss how Sarbanes-
Oxley establishes boundaries to ensure ethical practices. What
does the law allow or prohibit, and why?

The Sarbanes-Oxley act has many provisions to give companies guidelines
for responsible, and ethical financial reporting. One of those provisions is
listed in Section 302 of the act. The provision is that periodic statutory
financial reports be certified that signing officers have reviewed the reports,
the report does not contain any untrue, or misleading information. The
financial statements fairly present the financial condition. The signing
officers are responsible for internal controls. A list of all deficiencies in
internal controls, and a list of fraud involving employees, and anything that
could negatively affect the internal controls.

Another provision pertains to the "management assessment of internal
controls". This provision ensures that information is published in annual
reports regarding the adequacy of internal controls, structure and
procedures.

The Sarbanes-Oxley act is designed to help companies promote ethical
accounting procedures. The act gives guidelines as to how financial
statements are reported. The act requires verification that officers within
the company have checked the information in the reports for accuracy and
true. The act also requires that the companies have internal controls in
place to ensure ethical reporting practices. The main thing that the
Sarbanes-Oxley promotes is transparency in reporting.

Response 2

Section 802 of the Sarbanes-Oxley Law defines the penalties that may be
assessed against individuals who failed to comply with the Act. An
individual could be subject to 20 years in jail for altering, destroying,
mutilating, concealing, falsifying records, documents or tangible objects.
Guilt is define by the intent to impede a legal investigation. This part of the
law gets to the heart of how Arthur Anderson reacted by destroying
documents important to Worldcom. The law further defines that any
accountant who knowingly violates their ethics by wilfully violates the
requirements of maintenance of all audit or review papers. These papers
are subject to review up to five years.

The second Section that I reviewed was the Section 302. This actually is
my favorite part of the law because it directly holds the officers and
directors accountable for the accuracy of reporting in their financial
statements. It defines that the management must review and understand
the financial statements and sign that they are true and accurate. It also
holds the management accountable for the internal controls, requiring any
deficiencies to be reported. In the past directors of companies relied
heavily on the internal officers, management, to report the company
performance without questioning the accuracy or taking their role on
oversight committees seriously. They could hide behind a veil of trust of
the key leaders. This Section clearly puts the responsibility for the Board to
remain independent of the executives and function more effectively on the
respective oversight committees they serve. The example I would share is
what happened in WorldCom. The company leaders shared what they
wanted to with the Board, who trusted implicitly the top leaders. Had they
questioned their legal representation or auditors, they potentially could
have uncovered the fraud that was committed by the creation of shell
companies, with WorldCom employees as stockholders.

I would love to think this law would protect the investing community.
Financial reporting has improved to some extent. Unfortunately the scams
still continue. Example would be Barney Madoff or what happened in the
financial mortgage industry. These unethical practices were conducted
after Sarbanes Oxley was implemented. Madoff was able to provide false
financial information to investors. Financial industry was allowed to get to
aggressive in underwriting and product suite. Fines and penalties are
deterrents. Ethics still must be inherent in an individual and company.
Laws and requirements are a guide. There will never be enough auditors,
inspectors or oversight boards to catch all of the fraud in the corporate
community.

The law prohibits falsifying information, failing to notify of material changes,
and destruction of records.
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ACC 291 Week 2 - Fordyce and Atwater (New)

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P10-5A
Fordyce Electronics issues a \$400,000, 8%, 10-year mortgage note
on December 31, 2007. The proceeds from the note are to be used in
financing a new research laboratory. The terms of the note provide
for semiannualinstallment payments, exclusive of real estate taxes
and insurance, of \$29,433. Payments are due June 30 and December
31. Lucent Technologies

Axia College of University of Phoenix
Lucent Technologies is a company based on networking for service
providers, government, and enterprises worldwide (Lucent
Technologies, n.d., Para 1). The products and services they work with
are separated into three categories; service and maintenance,
wireless mobility networking, and wire line networking. Lucent
Technologies is backed by Bell Labs, which does research and
development in networking technologies.
During the years of 2001 to 2003 this company has experienced a
decrease in demand because of other companies’ loss or capital used
toward spending. This is mainly due to a downturn in the economy. As
an investor this information is necessary to know because it explains
the decrease or increase in sections of the balance sheet. In order to
compare the growth or decline of the company’s profit, an investor
must change a balance sheet into a common-size balance sheet. First
when looking at the balance sheet an investor will see that the amount
of paid in capital has increased from the year of 2003 to 2004, the
assets have increased, but the liabilities have decreased. When
running a debt/asset ratio it is noticed that this ratio drops from 1.2 in
2003 to 1.0 in 2004. This shows the company’s risk is low when
concerning financial leverage, usually when the debt ratio is less than
one percent it is financed mainly by company equity, so this company
is close to being debt free from creditors.
After changing the balance sheet to a common-size balance sheet
there are several factors an investor will look at. The current assets
have dropped to .48 from .49 in 2004. This does not show harm to the
company because only the accounts receivable dropped while the rest
of the current assets increased. This means the company is not in as
much danger of default on money owed to it. It does have a rise in
marketable securities. The one concern in the assets is the increase of
prepaid cost of pensions and goodwill. Goodwill can be used for tax
breaks but prepaid pensions cannot benefit the company.
When looking at the liabilities section an investor will see a drop in
pension and liabilities and an increase in long term debt, both of
these could be affected because of the drop in the economy. Long term
liabilities are often increased to help a company control interest rate
increases so as an investor cutting back on pension liabilities cuts
back cost to the company and watching interest rate increase show
the company is concerned with its earning and investors. This would
be encouraging or an investor. The stockholders deficit shows a drop
in accumulated deficits from -1.43 to -1.22 and total deficits of -.26 to
-.08. This shows the company is working to control any money loss
and turning it to the company’s advantage. Overall it shows the
company is still earning a profit although small. With an increase of
assets and a drop in liabilities the company is showing it is working
in a low risk capital.
After reviewing this information, a creditor or investor must be able
to compare this company to the industry totals. By comparing how
this company compares to other companies similar to it, a person can
see if it is competitive and worth taking a risk. Running ratios will
also show if the company is capable of paying off any debts it has or
if it can acquire the needed cash in case of emergencies. Overall as
an investor, I would say this company would be worth investing in.

Reference
Axia College. (2007). Understanding Financial Statements. Retrieved
May 10, 2010 from Axia College, Week 2 Assignment, ACC/230.

----------------------------------------------------

ACC 291 Week 2 Assignment Financial Reporting Problem,
Apple Inc

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Purpose of Assignment The purpose of this assignment
statement analysis related to the assets section of the
balance sheet, data interpretation, and how financial
information is obtained to understand how a company
accounts for its long-lived assets. Assignment Steps
Resources: Financial Accounting

Differentiating Depreciation Methods

There is one main difference between straight line
depreciation and accelerated depreciation. Straight line
is decided by taking the cost of the assets, figuring out
the salvage cost when the use of the asset is finished
and how many years of use the asset has. A person
then takes the cost minus salvage and divides the
remainder by the number of years of use. This amount
is the depreciation expense subtracted each year from
the cost. The accelerated depreciation does not have
the same amount of deprecation subtracted each year.
It does have the cost minus salvage value to figure out
the amount to use but is then divided out differently. A
person takes the sum of the years of a product’s useful
life, such as three years is 3 + 2 + 1 = 6, then a person
would divide the depreciation amount by 3/6 the first
year, 2/6 the second and finally 1/6 for the final year.
So the amount of depreciation expense is larger to
smaller with accelerated and equal amounts for
straight line.
The advantages of straight line method are it is easier
and faster to figure. The advantage of accelerated
method is it is more accurate when figuring
depreciation expense. The accelerated method has an
company can use the accelerated method to take
advantage of bigger tax breaks at the beginning of an
assets life, but since this amount drops during the
lifespan if the company needs added tax breaks it will
not receive them from these assets in the future. With
the straight line method the amount of tax breaks are
even through the life of the product. Most companies
choose this form of depreciation for reporting purpose
on taxes but will use the accelerated method to figure
taxable income.
As mentioned before the advantage of straight line
depreciation is it is easier to figure and uses the same
total each year for deduction of depreciation expense
but the disadvantage is that if use for taxable income
and reporting a company does not get a bigger tax
break at the beginning of the assets life when they
have just put out the cost for the item and may need a
bigger tax break.
----------------------------------------------------

ACC 291 Week 2 Discussion Question 1

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What are the differences among valuation, depreciation, amortization,
and depletion?

Preparing an Income Statement

The companies’ net income is profitable when the sales exceed the
cost of goods sold. In this, the gross profit is \$761k. This is beneficial
to the company. Though we took the cost of goods away from the net
sales there are still other areas which need to take a piece of the pie.
For this company, once the SG&A and depreciation are taken out, the
company still contains a profit of \$290k. But the buck does not stop
there. Once the interest income and interest expense are adjusted the
balance before earnings and taxes is \$290k. After taxes are taken out,
the company is left with a net profit of \$174k.

In this case I think the company has achieved success with a net profit
of \$174k. If the company were unable to be profitable, the company
would eventually go out of business. We would be able to tell if the
company was not profitable by looking at each section individually.
The cost of goods sold is what stands out for me. If we pay more to
make the product then we are actually selling it for, there is no profit
to be made. So, I think it should all start there.
----------------------------------------------------

ACC 291 Week 2 Discussion Question 2

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What types of industries have unearned revenue?
Why is unearned revenue considered a liability?
Week 5 DQ 1

Due Tuesday, Day 2

In what ways does the statement of cash flows relate to the balance
sheet and income statement?

It is important to understand what we are doing with the numbers and
the results these numbers give us because the result is the information
that will be available to us from financial statements. Although some
want to see the income statement and ignore the other statements we
need to use them together to see the total picture of what is happening
to our business. The relationship between the numbers on the
financial statements shows us everything we need to know about the

The income statement shows income and expenses for a period of
time and if we are making or loosing money. The balance sheet
compares the assets to liabilities and shows how much money the
business would have if everything is sold today.

The statement of cash flow might be the most critical statement
because there is plenty of information we can gain form it. This
statement relates with the income statement on operating activities to
see if they are generating cash or not. It is related to the balance
sheet on how much cash is used in investing activities. In relationship
with the balance sheet the cash flow statement shows what cash is
provided or used by financing activities. It will tell us how much debt
has been paid and will indicated if we are using more debt or have
paid down the credit line.

When the business makes a sale or receives payment for a sale on
credit that is an inflow. A sale shows up as income on the profit and
loss statement and as an inflow on the cash flow statement. It also
shows up either as cash or accounts receivable on the balance sheet.
Also, how quickly we can collect on accounts receivable will play a
big role in the cash flow. When the business spends money, it shows
up as an expense in the profit and loss statement and as an outflow on
the cash flow statement. It also shows up on the balance sheet as a
decrease in cash, or an increase or decrease in liabilities, depending
on what the expense represents.

Response 2

In what ways does the statement of cash flows relate to the
balance sheet and income statement?

The cash flow statement relates to the income statement and balance
sheet. The net income from the income statement is listed on the
statement of cash flows. Operating activities are analyzed on the
statement of cash flows; this section of the statement reconciles the
net income to the actual cash the company received from or used
during operations. The second section of the statement of cash Flows
is the cash flow from investing activities which include purchase or
sale of assets. The last section in the Statement of Cash Flows is the
cash flows from financing activities that includes raising cash by
selling stocks/bonds or borrowing from backs; or cash out flows from
paying back loans. The balance sheet shows the different account
balances at the end of the accounting period. The statement of cash
flows reflects changes in the accounts listed on the balance sheet
between accounting periods. The net cash from operating, financing,
and investing activities are added up to calculate the net change in
cash.

Week 5 DQ 2

Due Thursday, Day 4

Discuss how the statement of cash flows is utilized by investors. If you
were an investor reviewing a statement of cash flows, what section
might interest you most? Why? Discuss the circumstances in which
other sections of the statement might be important to an investor.

Prior to making an investment in a company, one would want to
understand the decisions the owners are making to fund the
operations of the company daily. Maintaining sufficient cash to
acquire new product, pay overhead, and satisfy generated sales would
be the predominant need of the company. Second need would be for
the company to have sufficient cash to remain competitive. This may
require cash to invest in research and development, increase
inventory as new product introduction, improve efficiency in plant
and equipment, or cash to satisfy prior borrowing obligations. By
reviewing the statement of cash flow, the investor can determine if the
company is generating sufficient cash internally to fund operations or
are they requiring outside injection of cash to finance the short fall in
cash needed to operate the company. Last, the investor can review
the statement of cash flow to better understand the leverage of the
company and the requirement for repayment of debt, or dividends to
reward prior investments.

Response 2

Discuss how the statement of cash flows is utilized by investors. If you
were an investor reviewing a statement of cash flows, what section
might interest you most? Why? Discuss the circumstances in which
other sections of the statement might be important to an investor.

The statement of cash flow is utilized by investors because it has all
information integrated from the balance sheet and the income
statement. The statement of cash flow is used by an investor to see if
the operating activities are greater than the net income to have
earnings that are called “high quality”. If operating activities are
less, then a red flag will be raised as to why the net income is not
becoming cash. Another reason would be investors believe cash is the
best. The statement shows all cash coming and going from the
used, then the company can reduce their debt, acquire another
business, or buy some of the stock back. The last reason why would be
that financial models are based upon the statement of cash flow.

If I was an investor reviewing a statement of cash flows the section
that might interest me the most would be the operating activities. I
would like to know how the company was doing and what areas need
to be improved to have more cash generated in the business. All the
sections are important to an investor so they can see the complete big
picture of their investment.

----------------------------------------------------
ACC 291 Week 2 Individual WileyPLUS Assignment Week
Two

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we have another New set of week 2 Willeyplus assignment which
could be found on this link

Week 3 DQ 1
Due Tuesday, Day 2

Candela Corporation

Axia College of University of Phoenix

Candela Corporation

Candela Corporation and Subsidiaries have been working for
over 34 years developing and commercialize aesthetic laser systems
that allow physicians and personal care providers to treat a variety
of cosmetic and medical conditions such as removal of spider veins,
scars, stretch marks, warts, as well as hair removal and age spots,
freckles and tattoos. Other skin treatments such as psoriasis and
acne and acne scars are also treated. (Axia College, 2007)

Going from top to bottom on The Candela Corporation and
Subsidiaries Consolidated Statement of Cash Flows; for the
operating activities, 2002 shows an alarming loss in the net income
while 2003 and 2004 for the company are showing a significant and
steady climb in the net income. In 2004 there was a new category
added called Provision for the disposal of discontinued operations
and the category has caused an increased the account for 2004.
Loss from discontinued operations grew from 2002 to 2003 but had
a significant decline for 2004. Depreciation has increased over the
last 3 years as well. Provision for bad debts increased significantly
too, but an increase in bad dept is expected as revenue increases.
The provision for deferred taxes shows the company went from a
loss in 2002 and 2003 to show there was no tax loss in 2004. The
tax benefit from exercised stock options has practically doubled
sense 2003. The changes in assets and liabilities for the last 3 years
have been up and down. Receivables have increased, notes
receivable decreased, and inventories have increased. Other current
assets, other assets have also increased. Accounts payable has made
a significant decrease in the last 3 years as well as accrued payroll
expenses. The accrued payroll decreasing could mean that the
amount of employees over the years has decreased as well. The
accrued warranty costs have increased as well; this could mean that
the company renewed equipment warranties. The net cash provided
by operating activities looks to have gone from a loss in 2002 to a
large profit in 2003 and then a decrease, yet still a profit for 2004. It
appears on the operations level that management needs to do more
to regulate the company’s finances so there is not an up and down
variance each year.

The cash flow from investing activities shows me that in the last
three years they had large amount of investments in 2002 and 2003
but now they are letting them decrease.

The cash flow from financing activities states that the proceeds
from issuance of common stock have increased significantly from
2002 to 2003 and rose a little more in 2004. The repurchases of
stock has not happened sense 2002 and the principle payment of
long-term debt grew in 2003 from 2002 and shows no activity for
2004. Same goes for the net borrowing on line of credit; it appears
that Candela Corporation is current on payments to line of credit.
So, the net cash from financial activities looks great for 2004. The
cash and cash equivalents for each year have increased steadily.

After reviewing the consolidated statement of cash flows for
Candela Corporation, I believe the company is making a profit, but
perhaps need some control over their operating activities.
Reference

Axia College. (2007). Statement of Cash Flows. Retrieved June 14,
2010 from Axia

College, Week Six, ACC 230.

----------------------------------------------------

ACC 291 Week 2 IndividualWileyPLUS PracticeCh 8,9,10
Quiz

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Resource:WileyPLUS
Complete the WileyPLUS Week Two Practice Quizzes
for chapters 8, 9, and 10
STOCK DIVIDEND

Analyzing Statements of Cash Flows
4.8. Research Problem
Choose five companies from different industries and
locate their statements of cash flows
for the most recent year.
(a) Create a table to compare the dollars provided or
used by operating, investing, and financing activities,
as well as the overall increase or decrease in cash.
(b) Create a second table for each company comparing
this same information for each of the three years
presented in that company’s statement of cash flows.
Include an additional column that looks at the
combined cash flows for all three years.
(c) Write a short analysis of the information gathered.
whether cash flow from operating activities is large
enough to cover investing and financing activities, and
if not, how the company is financing its activities.
Discuss differences and similarities between the
companies you have chosen.

(a) Create a table to compare the dollars provided or
used by operating, investing, and financing activities,
as well as the overall increase or decrease in cash.

STATEMENT OF CASH FLOW ANALYSIS
HARELY
STARBU DAVIDSO
CKS N RITE AID
2008 2008 2008

NET INCOME /
STARTING \$ \$ \$
LINE 315.5 - (1,079.0)
OPERATING \$ \$ \$
ACTIVITIES 1,258.7 (684.7) 79.4
\$
INVESTING (1,086. \$ \$
ACTIVITES 6) (393.3) (2,933.7)
FINANCING \$ \$ \$
ACTIVITIES (184.5) 1,293.4 2,904.0
\$ \$ \$
CASH (11.5) 190.7 49.9

(b) Create a second table for each company comparing
this same information for each of the three years
presented in that company’s statement of cash flows.
Include an additional column that looks at the
combined cash flows for all three years.
STARBUCKS

2008 2007 2006
Net Income/Starting 315. 672.6 564.
Line 5 4 26
Cash from Operating 1258 1331. 1131
Activities .70 22 .63
- - -
Cash from Investing 1086 1201. 841.
Activities .60 95 04
- - -
Cash from Financing 184. 171.8 155.
Activities 50 9 33
-
11.5 - 138.
Net Change in Cash 0 31.35 80
Net Cash - Beginning 281. 312.6 173.
Balance 30 1 81
Net Cash - Ending 269. 281.2 312.
Balance 80 6 61

HARLEY
DAVIDSON

2008 2007 2006

Net 0 933. 1043
Income/Starti 84 .15
ng Line
Cash from -
Operating 684. 798. 761.
Activities 65 15 78
Cash from - -
Investing 393. 391. 35.2
Activities 25 21 6
Cash from - -
Financing 1293 1037 637.
Activities .39 .80 02
Net Change in 190. 164. 97.4
Cash 70 46 2
Net Cash -
Beginning 402. 238. 140.
Balance 85 40 98
Net Cash -
Ending 593. 402. 238.
Balance 56 85 4

RITE AID

200 200
8 7 2006

Net - 26. 1273
Income/Startin 107
g Line 8.99 83 .01
Cash from
Operating 79.3 309 417.
Activities 7 .15 17
Cash from - - -
Investing 293 312 231.
Activities 3.74 .78 08
Cash from -
Financing 290 33. 272.
Activities 3.99 72 84
-
Net Change in 49.6 30. 86.7
Cash 1 08 5
Net Cash -
Beginning 106. 76. 162.
Balance 15 07 82
Net Cash - 155. 106 76.0
Ending Balance 76 .15 7

----------------------------------------------------

ACC 291 Week 2 Learning Team Weekly Reflection

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Discuss the objectives for Weeks One and Two. Your
discussion should include the topics you feel
comfortable with, any topics you struggled with, and
how the weekly topics relate to application in your
field.

Analyzing an Income Statement
Findwhat.com Case - CheckPoint
ACC 230
Findwhat.com has recorded the 135 percent
increase in the revenue which is mainly due to
the business acquired of Espotting during the
year. The different accounting policies are
present for the acquiring firm and the acquired
firm. The company has recorded certain
premature revenues for the amount which
As result, the company is recognizing the vendor
financing as revenue. In some places, the gross
revenue has been recognized while in another,
the net revenue has been recognized. The
network click revenue is recognized at gross
level while the private level revenue is taken at
net level. Some of the revenue expenditures
have been recognized as the capital
expenditures.
Revenue for set up network fee is treated as
deferred revenue and is recognized over a period
of time. The company is very inconsistent with
regards to its accounting policies in terms of
recognition of revenue. The provision and
treatment of amount for doubtful debt is also not
satisfactory. When a customer clicks on a
revenue due to him is recognized. The company
is having a very high amount of doubtful debt
balance at the end of the year ending December
31, 2004.
----------------------------------------------------

ACC 291 Week 2 Wileyplus Assignment P8-3A, BE9-11,
DI9-5, E9-7, E9-8, BYP9, P9-2A (New)

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·P8-3A, BE9-11, DI9-5, E9-7, E9-8, BYP9, P9-2A.

 Problem 8-3A: Bosworth Company

 Brief Exercise 9-11: Nike, Inc.

 Do It! 9-5
 Week 7 DQ 1
Due Tuesday, Day 2

 Post your answer to Study Question 5.2 on p. 180 (Ch. 5). As you
If you compared two different companies that utilized two different
valuation methods, how might the quality of the results differ? Also,
comment on the difficulty of making comparisons between two
firms that use different valuation methods.

 Understanding the different inventory methods is crucial. First
the person that establishes the inventory needs to determine which
method to use. LIFO, or FIFO. LIFO means Last in First Out. This
means that when a purchase is made, and sales are recorded the
newest product is used first. So if I bought 10 combs at \$2 on
December 1st, and then I buy 5 combs at \$2.50 on December
10th. When sales are made I am going to record sales using the
\$2.50 until I sell through the 5 combs that were purchased on the
10th, and then the cost will go to the previous purchase price of \$2
until those 10 combs are sold through. FIFO is just the
opposite. Meaning that goods are used in the order that they are
received. The first items ordered, are the first items sold. Either
method will pass an audit. It is important to note though that
managers can't switch back and forth between the two
methods. Profit will vary depending on which method is being
used. Say you sold only 6 combs at \$3 each. Using the LIFO
method this would equal \$3.50 profit. If you used the FIFO method,
this would result in a \$6.00 profit.

 Response 2
responses, consider the following scenario: If you compared two different companies that
utilized two different valuation methods, how might the quality of the results differ? Also,
comment on the difficulty of making comparisons between two firms that use different
valuation methods.
 It is very important to understand which inventory valuation method is
being used to determine the profit numbers quality. The balance sheet,
statement of cash flow and income statement can be directly impacted by
the valuation method that used to determine the costs of inventory. The
three methods that are used are FIFO, LIFO and Average Cost. The
valuation ratios can be dramatically affected depending on the inventory
valuation that is being used over a long-term period; especially because
prices are likely to rise. When using FIFO you can increase net income, but
then at the same time raise the amount taxes that business is obligated to
pay. When using LIFO the inventory can be obsolete because they are old
this will result in lower net revenue because the products pricing is
higher. The Average Cost results usually fall between LIFO and FIFO. The
bottom line can be affected mainly by the inventory analysis and the ratio
results that are formed from that analysis. It is easier to compare
companies that are in the same line of business, so I believe that quality of
results would differ tremendously if different valuation methods were
used. If you use LIFO that company may seem unattractive but they are
performing well, as for FIFO it may look good as for profit, but may not be
performing well.

 DQ 2
 Week 7 DQ 2
Due Thursday, Day 4

 Post your answer to Study Question 5.6 on p. 180 (Ch. 5). Discuss
the consequences of poor quality reporting. What has the U.S.
government done to improve the quality of reporting after recent
financial scandals such as Enron?

 I think that the significance is that the analysts only see this one
HUGE transaction. The events that actually led up to this large
transaction actually took place over a 2 year period. These items
should have been written off as they occurred. Wall Street would not
have known that the executives refused to write off these accounts
when they should have. Wall Street only see's the one large
transaction. If the company would have been more honest in their
reporting they would have seen (more than likely) that there were
many accounts over a two year period that should have been written
off at different periods. So the analysts would not have seen a
pattern of recurring write-offs. If the analysts only see the one
transaction they are less likely to be able to paint an accurate picture
of the financial standing of the business for investors, or potential
investors. If the investors could see that there were many accounts
that had to be written off maybe their investing decisions would have
been different. The regulation of the accounting field has grown by
leaps and bounds since the Enron scandal. The government has
implemented several agencies and regulations to ensure honesty in
accounting practices. SOX is one example of an agency that has
been put into place to ensure honesty in accounting. SOX
implements things like internal controls, and accountability for CEO's
and CFO's.

 Response 2
 I believe the impact and importance of this write-off event is a very
big matter. It is obvious how they handled it that it was a scandal
from the start. I think that everyone involved had a big role in how
things played out. To me I think of the investors as a really big hit to
this but also feel that audit committees have to be held responsible
as well. It has been shown over many examples that adit oversights
are happening to financial reporting. Although I do feel they are
getting better and tighter due to conforming tightly with the GAAP
requests. I feel over time the accounts receivable should have been
written off in smaller increments and not all taken by \$405 million at
once. Maybe that isn't correct but it would have been easier I would
think to take the receivables over time.

 Response 3
 Wall Street should have read the footnotes and seen that the write off was for accounts
receivables and should have been reported in the allowance for doubtful accounts. Every
company that allow sales on credit face doubtful accounts; therefore, the write off may
reoccur. The significance of this transaction is that WorldCom want to cover up the \$405
million dollars that it was unable to collect from its customers, but WorldCom wrote off a
large sum of money rather recording the write-off as needed and the analyst over looked
it. Depending on how the company policy is for writing off accounts, from 1998 to the
3rd quarter in 2000 is 11 quarters. If the company wrote off bad accounts quarterly it
should have wrote off 36,818,181.82 per quarter. Investors would not want to continue to
invest into a company that has poor collection skills, or poor management. Unusual items
are simply for those items that are not recurring operating expenses. Bad debts do not
fall under this category. Since the Enron and WorldCom scandals many rules and
regulations have been put in place by the government such as SOX. More people are
being held accountable for their actions and consequences follow poor quality reporting
such as fudging the books.
 ----------------------------------------------------
ACC 291 Week 3 Assignment The Liabilities Section of
O’Brian’s Balance Sheet

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Purpose of Assignment The purpose of this assignment
presentation for the liabilities of a company.
Assignment Steps Resources: Financial Accounting:
Tools for Business Decision Making Prepare the
liabilities section of O’Brian’s balance sheet using the
following information: • Accounts payable \$157,000 •
Presenting to Stakeholders
Axia College of University of Phoenix
Presenting to Stakeholders
“Financial statements provide insight into the
company’s current status and lead to the development
of policies and strategies for the future” (Axia, 2007).
Financial statements and notes to the financial
statements should be used to analyze the company.
For instance, what do the financial statements reveal
about why the company has requested a loan or
purchased items on credit? What is the firm’s capital
structure and what does the firm have outstanding?
How well can the company pay back debt? What
recourses are used to pay debt? What is the company’s
performance record and are there any future
expansions? What are the expected returns and how
successful is the company compared to industry
averages? Which areas of operations contributed to the
company’s success, and what are the strengths and
weaknesses of the company? What changes can be
made to improve the future performance of the
company?
Key financial ratios will assist in determining the
information requested. Liquid ratios measure a firm’s
ability to meet cash needs as they arise. The current
ratio is a good tool to use because it measures the
ability the firm has to pay debts when due. The current
ratio for REC is at 2.4 times for 2007, although it is
down from 2006 the company is still able to pay
current debt when due. Cash flow ratio considers cash
flow from operating activities has increased from 2006,
and this indicates an improvement in short-run
solvency. Average collection period has gone down 5
days within the last year. The cash conversion cycle
gives in-site on why the cash flow has improved or
decreased, in this case the conversion period for REC
has improved by 26 days.

Activity ratios measure the liquidity of specific assets
and the efficiency of managing assets. Accounts
payable turnover is up seven times from the prior year
and inventory turnover is also up .25 from last year.
Accounts payable turnover is down 9.05 from 12.10 in
2006. This means that the company is taking longer to
repay payables. The fixed asset turnover and total
asset turnover ratios are used to assess management’s
skills in generating sales from investments in assets.
The fixed asset turnover has dropped slightly, but the
total asset turnover has risen slightly. The increase in
total asset turnover comes from improvements in
inventory and accounts receivable turnover.
Leverage ratios measure the extent of a firm’s
financings with debt relative to equity and its ability to
cover interest and other fixed charges (Axia, 2007).
Debt ratio, long-term debt to total capitalization and
dept to equity have all raised slightly implying a slightly
riskier capital structure. The times interest earned and
the cash interest coverage have increased since 2006.
The interest payments can be covered 7.4 times this
year. The cash interest has improved due to the
operating profits and cash from operations. The fixed
coverage ratio is also important in cases where
companies use operating leases. In this case, the fixed
charges have increased slightly.
Profitability ratios are used to measure the overall
performance of a firm and its efficiency in managing
assets, liabilities, and equity. The ratios used are the
gross profit margin, operating profit margin and net
profit margin. All of which have improved for REC. As
well as the cash flow margin, return on total assets,
return on equity and cash return on assets. Over all the
company seems to be in well financial standings and
looking toward a profitable year.

Reference
Axia College. (2007). The Analysis of Financial
Statements. Retrieved June 28, 2010,
from Axia College, Week Eight, ACC 230.
----------------------------------------------------

ACC 291 Week 3 Discussion Question 1

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Why does a company choose to form as a corporation?

Analysis of Scenarios:

Debt Scenario would increase the debt ratios from to 50%. Equity
Scenario would reduce the debt ratio to 40%. With Debt option,
earnings per share would be higher. Interest declines to 2.86 times
with the Debt option while times interest earned increases to 3.75
times with the Equity option. Either option exhibits a good use of
financial leverage because for both, the financial leverage index
being greater than 1. However, it is higher using the Debt option.

----------------------------------------------------

ACC 291 Week 3 Discussion Question 2

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Why is preferred stock referred to as preferred?
Capstone Discussion Question
Due Tuesday, Day 2

 What have you learned in this course about the process of
analyzing financial statements?

I have learned that there is a lot more to analyzing financial
statements than I thought. This class has made me question my
decision to go into the accounting field. I feel inadequate after taking
this class. I am not an articulate, or analytical person. I tend to get
confused easily and do better at putting the information together than
I am at figuring out what it all means. This is my last block of classes
before my Bachelor program starts, and I don't know if I am ready, or
if I even want to continue. Analyzing financial statements takes a
very detail oriented mind, and one that is great at problem solving. It
is critical to understand the financial statements, and how they relate
to one another. There is a lot of information that is not as obvious as
it would seem. Looking at the bottom line will not give a good picture
of how a company is doing financially. It is important to know the
how and why the bottom line looks the way that it does.

Response 2
I have learned that it takes someone that has the patience, tenacity,
and motivation to truly analyze the statements. If you go about it not
wanting to do the work you wont give a good analysis. I found that
you have to be willing to dig deeper than most would to get a full
picture of the company. I found that it is not an easy task to complete.
For me the process is a tedious one. I don't think I would want to go
into that type of accounting where I have to analyze the statements of
a company. I think for me I would be better in specialized accounting
like A/P or A/R. I am better at figuring out problems and figuring out
ways to make them better. I am better at specific tasks so for me I
wouldn't want to analyze the statements. I am glad to have learned
how, because at some point I am sure it will come in handy.
Response 3
All financial statements are essential documents because they tell
what has happened to a business over a period of time but most users
of financial statement are more concerned about what will happen in
the future. Stockholders and creditors are concerned with future
earnings and dividends and company's future ability to repay its
debts. Management is concerned with the company's ability to
finance future expansion.
Working as a bookkeeper I do all the steps in monthly cycles
consisting of entering transactions into the journals, working with
A/R, A/P, payroll and preparing the reports, but I have not been able
to analyze the reports the way I learned in this class. I learned how
important is to monitor and interpret the results. I learned how to
compare financial statements of a company with a company from the
same industry and point out the differences and similarities. This
class taught me the importance of analyzing the Income Statement,
Balance Sheet, Cash Flow Statement and Stockholder’s Equity each
one individually. I learned how essential is the quality reporting and
how useful this quality is in business decision making. I learned about
key financial ratios: liquidity ratios, activity ratios, leverage ratios,
and profitability ratios. All these ratios are valuable as analytical
tools and will help me indicate the areas of strength and weakness in
a business. Even though I learned the information step by step in this
class I tent to go over every single chapter all over again to better
absorb the material. This class taught us the potential of some
management manipulations of financial statements, thus following the
general accounting rules, being honest, ethical and professional are
the ways on leading to safe and profitable decisions.
----------------------------------------------------

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Evaluating Financial Health 1

Evaluating Financial Health

Apple Inc. (AAPL)
Axia College of University of Phoenix

Evaluating Financial Health 2
Apple Inc. (AAPL)
Apple is one of the strong market participants of computer industry. It also

involve in manufacturing of telecom devices, software and other peripherals. It

enjoys full advantage of USA as home country, as it has a strong retail network of

273 physical stores whose majority is in USA, beside the E-retail outlet around

the globe. The diversified product portfolio empowers the apple to strive in tough

competition against Dell, HP & Compaq (Electronista, 2010). Amongst its

competitor Apple’s outclass profitability is witnessed of its effective

diversification efficient reach of product to customer and state of an art Research

and Development.
Management‘s Strategy
It is clear from the financial and the strategic analysis of the Apple Inc.

that the management of the company believes in continued research, innovation

and product development. It may be the sole reason that why the firm avoids the

cash dividend and rely over the stock options. Besides the hardware business of

computer the apple is also focus on developing application software operating

system, and all such software application which added the value of its product.

The management is of the view that R&D, integrated marketing channels and its

product diversification is the source of competitive edge against rivals of its

industry. Management is aware of the need of the investment in the promotion

awareness about the products. Management also considers focusing on the retail

store as it is the source to remain in contact with customer and a way to market

the product directly; it is also a way to cross sell the market to customer.

Evaluating Financial Health 3
Financial returns in Comparison to Industry
An investor is always keen to know about the profitability. Hence we start

with the assessment of profitability. Apple Inc. has shown a tremendous

improvement in net sales and profitability since 2005 to 2009. In 2008 the net

income increases 75.07% and in 2009 increases 34.58% shown that Apple cop. is

continuously enhancing its profit. Company earning P\S is also at increasing

trend. In 2009 basic EPS is 9.22 from 6.94 last year, and it was 4.04 in 2007. It

should be noted that no cash dividend is announced since 2005, although stock

base benefit and compensation is given. An increase in return on asset has been

observed in 2009 i.e.26.96% against 19.33% last year while industries average is

19.8. Hence Apple is leading the Industry from this angle. Return on equity is

18.92% into 2009 lower than 33.40% of industry benchmark, meaning apple is at

lower leverage with a roe increase of 4.03% this year (Hardware Marketplace,

2010).
Financial Risk and Industry
At this stage of our analysis we extend our findings to assessment of risk

associated with the investment opportunities in APPLE Inc. Analyzing the liquidity

we observed that Apple has a sound ability to meet its short term obligation. It is

revealed by the healthy current ratio of 2.74 for the year 2009; it is improved

from 2.46 of the last year 2008. If we had a glace on the industry it reflects a

standard of 2.5. In the computer equipment industry a very low inventory has

been observed. That is why the acid test ratio fall lightly below the current ratio

i.e. acid test ratio is 2.70 for the year 209 in comparison to 2008, which were

2.43. If we compare the acid test of 2009 i.e. 2.70 with industry average, which

is 2.5 (msn.com, 2010). On the liquidity

Evaluating Financial Health 4

situation it is stated that the risk avoider will be glad to look at the

satisfactory liquidity position.
As far as the solvency risk is concern in the long run the debt equity ratio

is 0.11 for the year 2009, which is increased from 0.08 of 2008. Here it is

important to refer to the industry average of 0.07 (OnlyHardwareBlog, 2010).

Hence it is apparent that though the APPLE Inc. is more risky in the long run, but

it does not sound like the alarm.
Cash Flow Analysis
Due to the increase in sale the operation of the firm expanded, and hence

besides other assets, the requirement of the cash also increases in 2009. \$1.11

billion is generated from operations, which is 5.87% higher than the last year.

The deferred tax expense in 2009 is v1040 million this noon cash expense last

year it was 39 million and 78 million in 2007 (Electronista, 2010).
The company actively invests in marketable securities that not only

improve its liquidity, but rather give a room to meet hazardous need of raw

inventory at any point of time. Investing activities gives negative balance \$

17.434 billion. It is also clear from the cash flow that firm does not announce any
dividend in cash, rather it takes a tax benefit form stock base benefit; secondly,

firm keeps healthy cash in hand.
Apple and its Main Competitor
When comparing the Apple with its major competitor like Dell & HP, Apple

marks higher price earning ratio of 19.10 times that is greater than Dell and HP,

which is 16 times and

Evaluating Financial Health 5

18.3 times respectively. We analyze the share price to book value it is 5.71 times;

again higher than 4.1 times of Dell and 1.38 times of HP. Cause of higher market

price is the retention of profit and stock base benefits. Apple also has high

capitalization; the date is \$ 250.0 billion (Electronista, 2010).
Apple’s Performance and Economy
Global economic recession is on the way to recovery, although Europe and

America needs some more time to normalize. However, reasonable growth is

observed in emerging market like Brazil, Malaysia, India and China. Triad block

recorded a poor growth. What is going to be with the world economic outlook is

the global economy is going to revive with the “V” shape pattern or its recovery

would be like expanded “U” as some economist say growth will be slow. I am of

the view that Apple Inc. should more focus on the emerging market like India,

China, South Pacific region countries. So Apple needs to exploit more and more

opportunities outside the USA. I am optimistic that the idea of direct marketing

will work out side the USA as well. Hence Apple needs to introduce maximum

retail store outside the USA.

It is important to look at trend analysis and industry comparisons as a

means of determining if it is the best time to expand or stay put and to see how

its future products will be accepted by the public.
Evaluating Financial Health 6

References
Electronista. (2010). Apple only US computer builder to outgrow industry

average. Retrieved
July 2, 2010, from
http://www.electronista.com/articles/10/06/04/isuppli.sees.apple.at.34pc.world.market.share/
Hardware Marketplace. (2010). Computer Hardware. Retrieved July 2, 2010 from
http://www.hardwaremarketplace.com/computer-hardware/
msn.com. (2010). Apple Inc: Key Ratios. Retrieved July 2, 2010 from
http://moneycentral.msn.com/investor/invsub/results/compare.asp?Page=PriceRatios&Sy
mbol=AAPL
OnlyHarwareBlog. (2010). Highest debt to equity ratio in the computer hardware

industry
detected in shares of international business machines. Retrieved July 2,

2010 from
http://onlyhardwareblog.com/?p=2107

----------------------------------------------------

ACC 291 Week 3 Individual WileyPLUS Practice Quiz Ch.
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Financial Analysis
Wal-Mart Stores Incorporated operates chain of
retail stores in USA as well as outside the USA.
The first Wal-Mart store was opened by Sam
Walton in Arkansas in USA in 1962. Within a
span of five years; he opened more stores and he
number increased to 24 stores across Arkansas.
The incorporation of Wal-Mart Stores
Incorporated was done in 1969. Wal-Mart grew in
the United States of America by opening of more
stores in to the country. The company not only
opened the stores across Arkansas but also
across the United States of America (Wal-Mart
Corporate, 2010).
Wal-Mart was opposed by the unorganized retail
was affected by opening Wal-Mart stores. The
company also opened its first store outside the
USA in South America in 1995. Wal-Mart wanted
to spread itself not only to the USA, but in other
countries as well. In 2006, the company was
having 3800 stores in USA and more than 2980
stores outside USA making it one of the largest
retail chains in the world. This corporation was
also having a vision to establish itself in to a
global entity. Wal-Mart was one of the first
companies to operate in the organized retail
sector (Fishman, 2006). The modes of entry
used by the company were different for different
countries. Wal-Mart used the mode of entry in to
various countries according to the rules and
regulations prevailing in to that country (Wal-
Mart Stores Inc: Financial Statement, 2010).
The sales of the company for the financial year
ending in January 2010 are 413.8 billion dollars
and income for the same period is 14.7 billion
dollars. The quarterly sales growth for the
company has been 5.90%, while the industry
average is 6.80 %. The five-year annual growth
in the sales of the company has been recorded at
7.50 % while five year annual growth of income
is 6.58 %. By analyzing the financial statements
of Wal–Mart Incorporated, we find that debt
equity ratio of Wal-Mart is 0.71 on 31st January
2010, which is 0.68 for the industry. It means
the proportion of debt of the company in its
capital structure is lesser than the equity. The
company is less leveraged so the interest burden
on the company is minimal. Wal-Mart has
capacity to borrow from the market for its CAPEX
in the future. The interest coverage ratio is 13
times in January 2010, which is 21.9 for the
industry. Wal-Mart needs to improve profitability
to improve interest coverage ratio for the
reduction of risk of the lenders of the company
(Wal-Mart Stores Inc: Financial Statement, 2010).
The total revenues received by the organization
in the year ending January 2010 were \$408.2
billion whereas revenues in the year ending
January 2009 were \$404.3 billion dollars. The
revenues in the year ending January 2008 stood
at \$377 billion dollars. Thus, it can be easily
analyzed that the total revenues of the
organization has grown over the years steadily.
This has also impacted the net income of the
organization and thus, increments could also be
seen in the net income of the organization. Net
Income, which stood in the year ending 2008 at
\$12.7 billion, increased to \$13.4 billion for the
year ending 2009 and again increased to \$14.3
billion in the year ending 2010 (Wal-Mart Stores
Inc: Financial Statement, 2010).
Again if cash flow statement of the organization
is analyzed it can easily be viewed that the cash
flow from operating activities have always
increased from the last three years. The cash
flow from operating activities stood at \$20.6
billion in the year ending 2008 has increased to
\$23.1 billion for the year ending 2009 and too
further increased to \$26.2 billion for the year
ending 2010. But the cash flow from investing
and financing activities has seen positive and
negative fluctuations both. Here where net cash
outflow from investing activities has decreased
first and increased later again. For the year
ending 2008, it stood at \$15.6 billion which
decreased to \$10.7 billion but again increased to
\$11.6 billion. Again the net cash outflow from
financing activities increased constantly since at
the end of year 2008, it stood at \$7.4 billion
which further for the year ending 2009 increased
to \$9.9 billion and further increased to \$14.1
billion for the year ending 2010 (Wal-Mart Stores
Inc: Financial Statement, 2010).
Wal-Mart’s return on equity has improved in the
last three years, which is a good sign for the
shareholders of the company. It was 19.9% in
January 2008, which increased to 20.3 % in 2009
and then again marginally increased to 20.4 % in
2010. The return on asset has also shown the
same trends in the last three years. In 2008 the
return on asset was 7.9 %. It increased to 8.1 %
in 2009 and then further increased to 8.4 % in
2010. It shows the increase in the efficiency in
the utilization of the assets of the company. The
net profit margins have been almost the same in
the last three years in the company. It was 3.4 %
in 2008, 3.3 % in 2009 and 3.5 % in 2010 (Wal-
Mart Stores Inc: Financial Statement, 2010).
The price to sales ratio and price to book value
ratio have shown negative trends in the last
three years, which shows that the stock of the
company is available at cheap price as compare
to the price it was carrying three years back. The
price to sales ratio, which was 0.55 in 2008, was
decreased to 0.46 in 2009 and then improved to
0.51 in 2010. Similarly, price to book value ratio
reduced from 3.12 in 2008 to 2.83 in 2009 and
then improved marginally to 2.86 in 2010. This
represents the better opportunity available for
the shareholders to invest in to the stock of the
company. The book value per share of the
company has also increased in the last three
years. It was 16.26 dollars per share in 2008,
which increased to 16.63 dollars per share in
2009 and further improved to 18.69 dollars per
share in 2010. This represents the increase in
the retained earnings of the shareholders in the
company (Shim & Siegel, 2007).
Wal-Mart’s current assets level has shown
stability in the last three years for the company,
which shows the lesser investment in current
assets for the company even with the increased
sales. In 2008 the cash and marketable securities
available with the company was 48020 million
dollars, which increased to 48949 million dollars
in 2009 and then decreased to 48331 million
dollars in 2010.
Quantitative Analysis holds huge significance
while evaluating the financial health of the
organization. Three types of techniques are used
for quantitative analysis. The three techniques
are trend analysis, common-size analysis and
ratio analysis. Trend analysis is one of the
significant quantitative analysis tools that assist
in analyzing the financial health of the company
as compared to its previous years. The year on
year trends in the financial statements are
studied to analyze whether organization is
improving upon its past performance or it is
further going down (Brigham & Houston, 2007).
Common-Size analysis is another quantitive
analysis tool again one of another tool that helps
in making evaluation of the financial health of
the company as against its competitors. The
financial statements of the company and its
industry competitors are compared by taking a
common base and then performance is analyzed
as against the competitors. It helps in knowing
whether the organization is performing better
than its competitors or not. Ratio analysis is also
used to evaluate the financial statements of an
organization. This analysis is used to interpret
the performance shown in the financial
statements of the organization. The ratio
analysis helps the organization compare
performance over the years or in the same year
(Brigham & Houston, 2007).
Quantitative Analysis is used by the company
and its stakeholders to analyze the financial
performance of the organization. Trend analysis
is used by the company, the shareholders and
the investors to analyze the performance of the
company over the years. Common-Size analysis
is used by the competitors, management, and
investors to evaluate the organization that is
performing better whereas ratio analysis is used
specifically by all the stakeholders to interpret
clear and well defined results shown in the
financial statements of the company (Brigham &
Houston, 2007).
These techniques help to evaluate the liquidity
or short-term solvency. By using current ratio,
one can analyze the effectiveness of the liquidity
position of the organization. Profitability of the
organization is also analyzed through
profitability ratios, common-size analysis, as it
helps to know the organization’s profits earned
by the company as compared to others. Trend
analysis and ratio analysis with the help of
different asset turnover ratios and trends could
easily analyze that assets are effectively used or
not (Brigham & Houston, 2007).
Wal-Mart’s current stock price is 50.56 dollars.
The stock has gone up as high as 56.27 dollars,
and as low as 47.35 dollars in the last year. The
earnings per share of the company which was
3.16 dollars per share in 2008, was increased to
3.35 dollars in 2009. Earnings per share further
increased to 3.76 dollars in 2010. The analysis
shows the improvement in the earnings of the
company in the last three year. The current price
earnings ratio of the company is 13.2 which is
less than the industry average of P/E ratio of 15
times (Wal-Mart Stores Inc (WMT), 2010).
Analyzing the stock of the company from the
investment point of view, we can estimates that
the fundamentals of the company are very
strong. The stock has return on equity, return on
assets better than the industry average of 22.9
% and 9.1 % respectively. The company has given
a better annual average return on asset and
return on equity in the last five years as
compared to the industry. The company has a
debt equity ratio and net profit margin, which is
less than the industry. However, Wal-Mart is
improving on the efficiency front. As a result,
Wal-Mart stock is recommended for investment.
References
Brigham, E.F. & Houston, J.F. (2007).
Fundamentals of Financial Management. (11th
ed.). Cengage Learning.
Fishman, C. (2006). The Wal-Mart Effect: How the
World Most Powerful Company Really Works--
and How it's Transforming the American
Economy. Penguin Group
Shim, J.K. & Siegel, J.G. (2007). Schaum's Outline
of Financial Management. (3rd ed.). McGraw-Hill
Professional.
Wal-Mart Corporate. (2010). History. Retrieved
July 25, 2010 from
Wal-Mart Stores Inc: Financial Statement (2010).
Retrieved May 31, 2010, from
http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?
Symbol=WMT
Wal-Mart Stores Inc. (WMT) (2010). Retrieved
May 31, 2010, from http://finance.yahoo.com/q/co?
s=WMT+Competitors
----------------------------------------------------

ACC 291 Week 3 Learning Team Weekly Reflection

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Discuss the objectives for Week Three. Your discussion
should include the topics you feel comfortable with,
any topics you struggled with, and how the weekly
topics relate to application in your field.
For this week's checkpoint we had to look up
three job postings in the field of accounting. I'm
glad that I got this opportunity because it
actually opened my eyes and expanded my
knowledge in the accounting field. The three job
positions are listed below. The first job title was
Senior Internal Auditor. A Senior Internal Auditor
responsibilities is to plan and perform financial,
operational audits, and identify business process
risk. This job position only specified that the pay
was well over 100k a year!!!! Qualifications
BA/BS, and minimum of 3-4 years public
accounting. The second job posting was a Tax
Manager. Tax Manager is responsible for
conducting basic tax research, maintain tax
records and ensure proper tax accounting. This
position requires a BA in Accounting, and a
minimum of 7-8 years of expereience.The job pay
is listed as 120k!!! The third job posting was
Assistant Corporate Controller- SR Management.
Assistant Corporate Controller- SR Management
position Inventory Accounting for North America,
Credit management for North America and
Corporate accounting for Latin America,
responsible for assuring accuracy of inventory
and sales and works closely with external
auditors on receivable audits. The requirements
for this position is as follows, BA/BS, public
accounting experience preferred, Strong verbal
and written communication. For the Assistant
Corporate Controller- SR Management the salary
pay starts at 110k-130k with bonus and benefits.

I didn't know that Accounting career actually
paid this much. I might think about changing my
careers.
----------------------------------------------------

ACC 291 Week 3 Wileyplus Assignment P9-7A, E10-5, E10-
8, E10-13, E10-22, E10-24, BYP10, P10-9A, P10-13A,
IFRS10-4 (New)

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·P9-7A, E10-5, E10-8, E10-13, E10-22, E10-24,
BYP10, P10-9A, P10-13A, IFRS10-4.

 Discussion Question 1:

Based on what you know about accounting, what role do you see it playing in business
operations? How dependent do you think a business is on its accounting department? Why?
 Accounting plays many important roles especially when it comes to
business operations. Accounting is mainly responsible for almost all
of the financial needs of the business. It keeps track of all spending,
profit and loss that the company inquires.
The business is very dependent on it accounting department.
Accounting department is responsible for monitoring more than the
cash flow, it also works closely with IRS, government to make sure
that everything is being done correctly (payroll, taxes, etc). The
accounting side of the business can be considered to be the lungs of
the company next to the heart.

 Discussion Question 2:

Why are ethics so important in the field of accounting?
 Wow where should I start? First of all the when dealing with
accounting there must be consistent clear communication between
the business and the accounting department. Honesty is always the
best policy. Good ethnics keeps the business running at its top
level. The company's personal information, employee
information could be given to the wrong hands and it can destroy the
company. A good accounting department has way too much to lose
and they will not want to risk a horrible reputation in the field.

 Another response
 People bring all their financial information to an accountant who in turn looks
through all of it with a fine tooth comb. People need to know that they can
trust this person with all of their personal information. Most licensed
professionals swear to a code of ethics, whether they follow them or not is up to
that professional. Unfortunately there are many out there that do not and they
ruin the trust for other professionals. Accountants really need to have the
trust of their clients being that they work with peoples taxes and finances and
need much information from their clients.
 Another response
 Ethics are important in the field of accounting
for several reasons. Ethics mean different
things to differnt depending on the role of the
accountant. If an accountant is hired by an
individual or a business, that accountant is
trusted with the finances of the person or
business. The accountant is trusted to give
an honest account of finances and not to
defraud or jeopardize that individuals or
companies relationship with the government,
creditors of financiers. Individuals and
businesses also trust the ethics of
accountants insofar that they do not disclose
their information to those that do not have a
right to it. Finally, In the accounting
profession, much like many other
professional service professions, an
accountants reputation is the continuing
source of employment. If they are knows to
have a bad or even flexible ethical code then
they can develop a bad reputation and
 ----------------------------------------------------
ACC 291 Week 4 Discussion Question 1

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Why are companies required to prepare a statement of cash flows?

Financial Statements

Today, I will be describing a balance sheet, income statement,
retained earnings statement, and statement of cash flows and how a
company uses these financial statements as a tool to make future
decisions for the company.

Balance Sheet

A balance sheet a statement sheet that reports the company’s financial
balances of the business. This sheet includes the company’s total of
assets and liabilities. It is used for all three types of business sole
company’s. Creditors rely on this financial sheet to determine if the
company will be able to repay.

Income Statement

An Income Statement is a financial statement that shows the
company’s profit and losses. It basically shows all the company’s
gains and losses that were made during a period of time. After the
company deducts the expenses from the revenue then you will get a
total net income. This is a great statement to use especially because
this will show investors how much net income is the company
bringing in, or how financially stable the company truly is.

Retained Earnings Statements

Retained Earnings Statements reports the changes to the retained
earnings (net income in a corporation) during a certain time period.
This financial statement shows dividends, profits and loses. Investors
and Lenders monitor the retained Earning Statements especially
when it comes to monitoring dividends. Some invest use this tool to
see if the company is paying high/low dividends. Retained Earnings
Statement is part of the balance sheet under Stockholders equity.

Statement of Cash Flow

Statement of Cash Flows provides information regarding the
company’s cash receipts. This statement gives a detailed account of
the operating, investing and financial activities of the company. It
also allows investors a chance to observe how financially stable the
company is so that they can make a choice if they want to take a risk
on investing into the company. Also the accounting department needs
this statement in order to see if the company has enough money for
payroll uses.
All four of these financial statements are all extremely important tools
to use in the business. Another statement that was not listed but is
often used is called comparative statements. Comparative statement
gives a side by side comparison of the financial statements above.

Reference

http:yourdictionary.com /accounting_statements.org Retrieved
1/28/10

Thomas, Y. 2005-08-27 “Accounting 101 pg. 52 Statements

----------------------------------------------------

ACC 291 Week 4 Discussion Question 2

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What are some common ratios used to analyze financial information?
Which are the most important?

Compare and contrast sole proprietorships, partnerships, and
corporations.
Sole proprietorships means that a business that owned by one person.
That includes and not limited to all profits and losses, debts and
unlimited liability, all will come from the solely one owner and not a
group or in this case a partner or co-owner etc. Partnerships are seen
much differently than sole proprietorships. Partnerships is a business
that owned by more that one person/s. This is the number one
difference from being a sole proprietorship or sole owner. Basically,
two or more people come together and split the cost, debts, and
liability. Corporations is an business that has separate entity owned
by stockholders. The huge difference between corporations and the
other two is that they are owned by stockholders. Stockholders make
decisions that is first best for their company, secondly the company
that they have together.
Why would a entrepreneur want to choose one over the other?
An Entrepreneur is a person that wants to start a business with their
vision and have more power of the decision making. The best choice
for an entrepreneur is to choose sole proprietorship out of all the
three choices. The first and most important reason is because it is
much easier to start a business as sole proprietorships. Sole
proprietorship takes all the profit that and doesn't have to split it
between any other owners or corporations.
If I was to start a new business which one would I choose?
In this case it depends on the type of business. My case I will be
opening a hair salon and I would prefer sole partnerships. i choose
that because I want to be in control and I don't want to split the profit.

----------------------------------------------------

ACC 291 Week 4 Individual WileyPLUS Assignment

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Current assets
When it comes to a company's classified balance sheets you will
find current assets sheet. Current assets is cash or cash equilivants
that the company will use. What you will find on a current asset
sheet is Cash and equilvants, Short term investments, Accounts
receivables, and other assets.
Long-term investments
Long-term investments when it comes to balance sheet are
investments that the company intends to hold onto. The investments
that are listed are as follows, bonds, stocks and cash. You will also
find short-term investments in the company. The difference between
short-term and long-term investments is that the short-term
investments will be sold and the long-term investments normally the
company will choose to keep it.
Property, plant, and equipment
Property, plant, and equipment are what the company calls "fixed
assets". Property, plant and equipment are assets that can not be
easily converted into cash. These are basically items such as
company car (used to deliver products), computers and copier
machine, and freezer used for restaurants.
Intangible assets
Intangible assets are non-monetary items that can not be seen or
touched. For example, trademarks, copywriters, patents and
goodwill. Intangible assets are normally listed in the separate assets.

references
http://www.investopedia.com/terms/i/intangibleasset.asp
----------------------------------------------------

ACC 291 Week 4 IndividualWileyPLUS Practice
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For Discussion Question 1: Post your response to
the following:
 When reviewing a financial report, why
should information be reliable, relevant,
consistent, and comparable?
 In other words, why are these accounting
characteristics important?
 What kinds of problems could be created
if a financial report is not reliable, relevant,
consistent, or comparable?
It is extremely vital that the company has
accurate financial reporting. This information
determines whether or not to invest in your
company's stock. This information will help them
decide if it is profitable to invest or not to invest
history. The information must be relevant
because it will help the company, investors and
lenders make decisions. It helps answer
questions like, "how stable is your company", or
"what future does this company have". The
information should be reliable. In other words
the information that is reported must be able to
be verified, backed up with truthful information.
Comparable occurs when different companies
use the same accounting principles. This makes
it much easier to compare results between
company's. Consistency happens when the
company uses the same accounting method
every year. When the financial statements are
reported each year, it paints a financial picture of
where the company is headed now and in the
future.

What kinds of problems will occur if the
information does not include these things?

Falsified or manipulated statements doesn't only
effect the company but it also to name a few
effects the lenders, creditors, investor's, etc.
This will result in the company not having a
faithful representation.

Another response
The main objective of generating financial
information is providing useful information that
can be used in decision-making... only if this
information is relevant, reliable, comparable,
and consistent, can it be useful for decision
makers. (Kieso, 2003).
Relevance gives a basis for making decisions
that will impact the future of a business, and it
confirms and corrects expectations from the
past. If the information makes a difference in
making decisions, it is relevant.
Reliability means that the information can be
depended on and it can be proven to be free of
error, and the information is factual. The
information cannot favor one set of users over
another. CPAs audit financial statements to
ensure reliability.
Comparability is also an important characteristic
of financial reporting... this happens when
principles, making it much easier for one to
compare companies, and the method used in a
business must be disclosed to the users of the
information to enable the users to convert the
information as accurately as possible.
Consistency simply means that the business uses
the same accounting principles on a yearly
basis... consistently. This helps decision makers
analyze a company's trends. A company can
change the methods used if they can justify the
change, showing that the new method is more
useful for analysis. If the method is changed, it
must be disclosed in the notes that go with the
statements to show users a lack of consistency.
These characteristics are very important to a
incorrect information, and everyone involved in a
business venture of any kind, whether they be
management, owners, or investors and creditors,
as well as consumers, etc. must be able to rely
on the financial information provided in order to
make any type of decision. Without this
information, it is difficult to imagine any
business succeeding, even for a short time.
Examples of problems that could occur without
reliable, relevant, consistent, or comparable
information includes not being able to get loans
or investments; management could make
decisions that cause irreparable damage to
entire operations, consumers could easily lose
faith and cut their ties... the possibilities are
endless for companies that lack these qualities in
their financial reporting.

DQ2
For Discussion Question 2: Post your response to
the following:
 How does information from financial
 Why is it important for business
managers to understand the information found
on financial reports?

How does information from financial reports

Once the information from the financial reports
have been posted then a team will review the
company's financial history to see what decision
were profitable or not. The decisions that were
made previous to the financial reports being
posted will show which way the company needs
to go to continue to remain #1.

Why is it important for business managers to
understand the information found on financial
reports?

IT is extremely important for he business
managers to understand the information found
on the financial reports. The business managers
are going to be the people that are going to
make decisions for the company. They need to
know how to interpret the financial reports and
come up with different strategies that will
continue to make the company money.

Another response
The information from financial reports influences
business decisions because it shows where the
company stands. The managers use the
information from the financial report compared
to the current year from the previous year,
whether the company growths or losses. It is
very important for business managers to
understand the information found on financial
reports because the information from the
financial reports enables business managers to
see how to improve and keep the business
afloat. It also gives business managers an insight
what came in and went out and the total
operating cost of the company as well as cutting
cost in a certain areas. The information from the
financial reports helps the manager manages the
----------------------------------------------------

ACC 291 Week 4 Learning Team Weekly Reflection

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Discuss the objectives for Week Four. Your discussion
should include the topics you feel comfortable with,
any topics you struggled with, and how the weekly
topics relate to application in your field.

Internal Cash Control
By
Kamilah Crooms
Accounting 220
Jess Stern
Internal Cash Control

The accounting department receives from sales
invoices once a month. Most of the information
is missing on the invoices.

The accounting department relies on each
department within the company and all the
information has to be submitted completely and
in a timely matter. In this scenario most of the
information that has been turned in has
information that is missing on the invoices. I
would say that the internal controls that are not
being followed are Documentation procedures.
Company documentation is very important and
must be turned in complete. These documents
show proof of delivery or proof of services to the
customer. Any incomplete documents can be very
costly and can cause a delay in the company
being paid for any services rendered. For
example, one of the requirements in a
transportation department is to make sure that
prior to leaving the yard, these documents says
that the load left in good condition. Well, it so
happened that we allowed a driver to leave
without signing the paperwork. This caused a
delay in accounting because we had to get
signatures from the driver and the customer
which took a month later to complete.
Rob, Sue, and Bob use the same cash register at
the donut shop.

Rob, Sue, and Bob all use one register has often
turned into not the best decision ideally for the
company. It can increase the risk for the drawer
being short and it will be hard for the company
to find out which employee or employees had
shorted the register. The internal controls that
are not being followed are Establishment of
responsibility. Happens when the company
assigns one person to be in control of a specific
job or have authority to make decisions (pg 161
Internal Control and Cash). When the company
signs one person to be responsible over the
register it will allow the company to hold that
one person responsible for any shortages.
Sam does the ordering of materials at the
beginning of every month and pays the bill.
In this case Sam is ordering materials and paying
all the bills. This process is actually known as
related activities (pg 162 Internal Control and
Cash). This occurs when one person is doing two
different responsibilities just like Sam. The
internal Control that is not being applied is
Segregation of Duties. It is better for the two to
be a separate responsibility because it will
minimize the billing errors.

Bank reconciliations are done by the person who
is responsible for all cash responsibilities.

The problem with this scenario is that the same
person is responsible for all cash responsibilities,
why is this person doing the only one that does
this job? Having one person take on such a major
responsibility increases the chances of
embezzlement and thief. The internal control
that is not being applied is rotating employees’
duties and requiring employees to take
vacations. One person should not be completely
in control of one job, the company should
encourage vacations or switching positions to
prevent incorrect handling of the company’s
valuable information.

New checks came in and are left on the shelf
with other supplies.
This is a tough scenario because there are all
sorts of internal controls that are not being used
in this case. I would say in my opinion that the
first internal control that comes to my mind that
is not being applied is bonding of employees who
handle cash.
Every employee that works near or with
expensive equipment should be held reliable or
responsible for the company’s assets. Bonding of
employees who handle cash protects the
company by insuring that the employee is or
isn’t a risky applicant (background checks) or
reassuring that the employee that they will be
prosecuted to the fullest extinct if they are found
guilty of thief. For example, I had worked at Mc
Donald’s and

there were my shift managers and one employee
that were caught with stealing money from the
company. This situation had happen very
differently. The armor truck dropped off a
deposit that belonged to another company
(armors mistake) but they signed it. Those
employees thought that nothing was going to be
traced back to them but the little did they know,
all evidence traced back to them. They each
received jail time, and felony records.
the last audit was seven years ago by the former
accountant

This scenario has two things that are going on at
the same time. I will first start off with the
computer system and how everyone has access
to the computer. The internal control that is not
being applied is Physical, Mechanical, and
Electronic Controls. This allows the company to
control assets through physical or electronic
based systems or programs. It is extremely
important for a company to invest in computer or
informational protection for the company and for
their employees. Today’s technology age most
companies are investing in a computerized
program. This will help protect from internal
errors and external protection. For example, all
companies invest in a virus protection this will
ensure that the company’s information is
protected and not in the wrong hands.

Invest idle cash
Invest idle cash occurs when any excess funds or
cash needs to be invested. The money should be
highly invest and risk free. For example, a major
company should make investments with their
assets into profitably investments and risk free.
Plan the timing of major expenditures
This is when a company sets aside money for
major cash needs. We live in a world that things
happen daily. A good company would set aside
emergency funds. For example, during a terrible
thunderstorm, the winds practically ripped off
the roofing shingles off a commercial business.
The company will be able to use the money for
emergency.
Delay payment of liabilities
Delay payment of liabilities is when a company
pays bills not too soon and not late. This allows
the company to have money available for bills
that that really need to be paid allowing excess
funds to be free for other uses.
Keep inventory levels low
This occurs when the company keeps the
inventory low so that it will bring in more profits.
For example, if the managers at a fast-food over
plan and fix too many hamburgers and the
and the company will lose profit.
Increase the speed of collection on receivables
This occurs when money is owed to the company,
the company cannot claim these until the funds
have been received. Some companies offer
incentives to encourage customers to pay early
or on time. For example, my job encourages their
customers by letting them know that there will
be a price increase on or after a certain date and
this really works because the customers want to
pay at a lower price.
References:

http:yourdictionary.com
/accounting_statements.org Retrieved 2/13/2010
Thomas, Y. 2005-08-27 “Accounting 101 pg. 52
Statements

----------------------------------------------------

ACC 291 WEEK 4 Stockholders’ Equity Section of the
Balance Sheet (Lachlin Corporation Balance Sheet)

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Purpose of Assignment The purpose of this assignment is to
equity section of the balance sheet. Assignment Steps
Resources: Financial Accounting: Tools for Business Decision
Making Answer the following questions in 1,050 words using
the Lachlin Corporation Balance Sheet (partial) below: Axia
College Material
Appendix B

Cash Management Matrix

Directions: Using the matrix, list how each of the principles of internal control works, and give an
example for each. Next, list how each of the principles of cash management works, and give an
example for each.

Principles of Internal Control How it Works

Establishment of responsibility Happens when the company assigns My job, Our Sa
one person to be in control of a specific the only one th
job or have authority to make restocking fee
decisions.
team to be in c
customers retu

Segregation of duties This is when the company has more A church- You ha
than one person to control a task or job the offering and
someone who w
what was receiv

Documentation procedures Evidence or proof of all company My job we delive
transactions customers, and
sign prior to lea
customer sign a
form

Physical, mechanical, and electronic controls Allows the company to control assets Our job has a sy
through physical or electronic based this tracks the e
systems or programs. lunches. Also, m
CSR have been r

Physical control
guard, they requ
to entry.

Independent internal verification Any information that can be reviewed , My job has a wa
compare, and reconciliation by a employee inventory and w
they were short
can go back and
and compare th
system and a ph
determine if the
incorrect

Other controls Bonding of employees, company Our company fir
protects against abuse of assets. because she had
was not work re

Principles of Cash Management How it Works E

Invest idle cash Occurs when any excess funds or cash My father’s com
needs to be invested, investments and
favor

Plan the timing of major expenditures A company wants to make sure that During the reces
there is money set aside for major cash lower than expe
needs companies pulle

Delay payment of liabilities When a company pays the bills at an Ok, when times
appropriate time not late and not too bills are due I or
soon. which bills need
soonest, becaus
early I will cut o
could be used fo

Keep inventory levels low Happens when a company keeps the See’s Chocolate
inventory low so that it will continue to sure that they a
bring profit or making too m
the company wi

Increase the speed of collection on Money that is owe to the company by When a custome
receivables other people or customers is money product and has
that can not be counted towards the company can no
companies funds their’s until it is

----------------------------------------------------

ACC 291 Week 4 Wileyplus Assignment Do It! 11-1, E11-5,
E11-7, BYP11-1, BYP11-2, P11-5A, P11-8A (New)

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·Do It! 11-1, E11-5, E11-7, BYP11-1, BYP11-2,
P11-5A, P11-8A.

 Do It! 11-1

 Exercise 11-5 Garcia Corporation

 Exercise 11-7 Pele Company

 Income statement is a financial statement that shows how much money is coming
from product sales and services prior to any expenses being taken out. Both internal
and external users such as managers and investors are able to access this. For
example, if a investor wanted to see if the company made money or lost money they
would use this financial statement report.
Balance sheet shows what condition the company is currently in. whereas the other
financial statements only came monthly or annually. For example, what if the
management planning team wanted to see the company's current assets, ownership
equity and liabilities? All they have to do is run the balance sheet report.
CVP income statement or Cost Volume statement reports or monitors the effects of
the changes in cost and volume when it comes to the company profits. For example,
I work at a manufacturing plant for roofing shingles. The CVP analyst studies the cost
which includes but not limited too, manufacturing, material, labor cost. This financial
statement report would help the management team budget the cost of manufacturing
goods.
Statement of cash flow tracks the movement of cash coming in or out of the
business. This financial statement will show if the company made cash or not, or if
the net income increased or decreased. For example, the owner or the management
department will use this to determine if the company has earned enough money to be
able to for any expenses.
Retained earnings statements is a percentage that is kept by the company to be
reinvested or to be used to pay debts. For example, if a company was looking to
expand their business by purchasing top of the line equipment they can use this
statement to see how much money the company has put away.

References:

http://www.investopedia.com/terms/r/retainedearnings.asphttp://financial- Retrieved
2/18/2010

statements.suite101.com/article.cfm/financial_statements_the_p_l. Retrieved
2/18/2010

 ----------------------------------------------------
ACC 291 Week 5 Discussion Question 1
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Why do corporations buy back their own stock?

What does it tell you about the corporation?

Discussion Question 1: Post your response to the following:

 How would you describe the difference between financial and
managerial accounting? What are the distinguishing features of
managerial accounting?
There are many differences between financial and managerial
accounting. The financial accounting statements are available to
external users such as employees, stockholders, creditors, investors,
etc. This is available to them so that they can monitor the company's
performances quarterly or annually. Managerial accounting provides
financial information for managers and other internal people or
department. Managerial accounting is confidential so it is only
observed by internal users such as management, owner, and will
provided to external users such as the public. Management uses this
for budgeting purposes or to monitor profit loss/gain within the
company. Managerial accounting can be available to them as often as
needed. Managerial accounting statements is a great way for
management to make decisions based on what has been reported.
Another response
The differences between managerial accounting and financial
accounting are distinct. Managerial accounting reports are for those
in managerial and decision making positions. The managers use the
company and its employees. The manager would want to know if
an employee's salary. The manager needs the report to decide if a
factory is built or if a certain stock is brought. The financial
accountant has the job of showing the external users such as creditors
and stockholders a picture of the company's stability.

The manager's purpose is to manage by making stable plans, delegate
duties, motivate the workers, and control the atmosphere.
Distinguishing features of managerial accounting are the fact no cpa
will audit the report, and there is no specific frequency of the report.
The reports are done in a need to know basis and for a specific
reason, which is for business purposes. The reports are detailed and
pertain to specific business decisions. The financial accountant need
only be concerned with the company's finances.

DQ2
Discussion Question 2: Post your response to the following:
 Select a management function (planning, directing and
motivating, or controlling) and explain how that function relates to
business as a whole. Next, select a different function listed by a
classmate. Discuss with your classmate how the functions you each
selected complement each other.
The management functions that I choose was controlling.
Controlling job is to make sure that the each
department/person is keeping the company's activities or plans on
track and in order to achieve that they must work closely with
Management planning function. Controlling continually compares the
company's performance to make sure that the planned standards
are being met. In my opinion this is known as the "dirty work".
Controlling operations have to know what to look for and how to keep
track of all the company's activities. They have to take actions and
quickly correct any errors and make sure that the company goals are
being achieved in a timely matter or the time that it was planned. If
there are errors it is job of the controlling operations to take quick
action. The controlling operations not only correct errors after it
happens but they also are in charge of foreseeing any potential errors
and act quickly to get that resolved.

Another response
I chose Controlling as part of the management function. The
controlling function relates to business as a whole because it helps
monitoring the firm’s performance to make sure the planned goals are
being met. Managers need to pay attention to costs versus
performance of the organization. let say, if the company has a goal of
increasing sales by 10% over the next two months, the manager may
check the progress toward the goal at the end of month one. If they
are not reaching the goal the manager must decide what changes are
needed to get back on track.

----------------------------------------------------

ACC 291 Week 5 Individual Effect of Unethical Behavior
Article Analysis

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Write a 350- to 700-word article analysis in which you
identify situations that might lead to unethical
practices and behavior in accounting.

Cost, Volume, and Profit Formulas

By

Kamilah Crooms

Due February 28, 2010
Explain the components of cost-volume-profit
analysis.

The components of cost volume-profit analysis
consist of Level or volume of activity, Unit Selling
Price, Variable Cost per unit, total fixed costs,
and Sales mix.

What does each of the components mean?

Level or volume of activity is the activity that
causes change or behavior when it comes to the
cost. Unit selling Price is the cost for the product
basically how much each unit is selling for. The
Variable Cost per unit is something that can
change depending on the activity. The total fixed
cost does stay the same as activities change but
differ per unit. The Sales mix is basically what
the name says. It’s a mixture of sale items when
more than one product sold the sales will remain
the consistent.
Based on the formulas you have reviewed, what
happens to contribution margin per unit when
unit selling prices increase?
Contribution margin is the amount of revenue
left over after subtracting the variable cost. So
basically Unit sales price subtracting or minus
variable cost.

Illustrate your explanation with an example from
a fictitious company of how an increase in unit
selling prices might affect contribution margin.

Kelly’s Sweetheart Flowers

The owner of Kelly’s Sweetheart Flowers is
selling their bouquet of flowers for \$10 per unit.
The Variable Cost per unit is \$4.00. The
contribution margin will be (\$10-\$4) = \$6. If the
sells price increases to say \$15, then the
contribution margin will be (\$15-\$6) = \$9 per
unit.

When fixed costs decrease, what does this do for
sales? Illustrate your explanation with an
example from a fictitious company.
Kelly’s Sweetheart Flowers

When the fixed cost decreases, the contribution
margin ratio the net income and sales will
increase.

For example,
The flowers are \$10 per unit. The variable cost
per unit is \$4.00. The contribution margin will be
(\$10-\$4) = \$6. The fixed cost is \$3. We subtract
Contribution margin – Fixed Cost= Net income.
The net income is \$3.00.
Define contribution ratios
The contribution margin ratio is the contribution
margin per unit margin divided by the unit
selling price.

What happens to contribution ratios as one of
the components changes?
Shown in the example above, if one or more of
the components changes is will cause the net
income to increase or decrease.
Reference

statements.suite101.com/article.cfm/cost_volum
e_profits*the_p_l. Retrieved 2/28/2010
//http:yourdictionary.com /CVP.org Retrieved
2/26/2010
Thomas, Y. 2005-08-27 “Accounting 101 pg. 52
Statements
----------------------------------------------------

ACC 291 Week 5 Individual WileyPLUSAssignment

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we have another New set of week 5 Willyplus assignment which
could be found on this link

ACC 291 Week 5 Wileyplus Assignment E7-3, E12-1, E12-8, P12-
9A, P12-10A, E13-3, E13-4, IFRS13-1, P13-2A (New)

Resource:WileyPLUS
Complete the following Week Five WileyPLUSExercises and
Problems:

 7 How should mixed costs be classified in CVP
analysis? What approach is used to effect the
appropriate classification?
According to our class materials all mixed cost
must be classified into their fixed and variable and
variable elements. The method that can be used to
determine is called the high/low method. To
determine the variable cost the analysis takes the
total cost and divide it with the low activity level.
To get the fixed cost then the company would have
to subtract the total variable with either the high
or low activity level.
9. Cost volume profit CVP analysis is based entirely
on unit costs. Do you agree? Explain.
In my opinion when it comes to making financial
decisions for the company, often times more than
one method is used. Cost volume profit is also
based on Volume or level activities, unit selling
prices, variable cost per unit, total fixed and sales
mix.
14. You can find the break point in dollars by
drawing a horizontal line to the vertical axis. I you
want to find the break even point in units it will be
a vertical line from the break even point to the
horizontal axis.

 ----------------------------------------------------
ACC 291 Week 5 Learning Team Ratio Analysis Memo
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Resource:Virtual Organizations
Click the Virtual Organization link on the student
website to access the Virtual Organizations.
Select one of the Virtual Organizations as the basis for
the assignment.
Axia College Material
Appendix C

Budgets Matrix

Directions: Using the matrix, define each of the
budgets listed and briefly describe its uses.

Budget Definition Describe its
uses
Sales budget Estimate of the The sales
expected sales budget shows
for the period. dollars and
All of the other units. This will
budgets allow
depend on the management to
sales budget. see how many
This is where units will be
all the other produced for
budgets will the period
start from
Production A production of Shows
budget units needed management
to be produced how many
in order to units will be
meet the produced
projected sales during each
budget period
and what
amount is
needed to
fulfill
inventory
demands
Direct Is the Shows
materials estimated management
budget quantity or how much raw
cost of the raw materials that
is needed in hand and or
order to that needs to
produce the be ordered to
units required meet inventory
to fulfill demands.
inventory
Direct labor A estimate of Shows how
budget cost and many hours,
quantity of how many
direct labor laborers
needed in needed to
order to meet produce the
production units for that
budget period.
Management
will decide
what will be
the right
amount of
laborers
needed and if
the company
will be able to
meet the
budget
Manufacturing An estimated This list all
budget amount of involving cash
manufacturing disbursement
cost for the in a quarter
budget period
Selling and Anticipated Shows area of
budget expenses in are not listed
the budget other than
period manufacturing.
Expenses such
as marketing,
promotion cost
etc for the
budget period
Budgeted Estimate of Is a very
income expected important tool
statement profitability of because it
operations in a shows the
budget period company
estimated
profit for the
budget period.
Cash budget A projection of Cash budget
expected cash helps
flows in and management
out of the keep a tally or
balances.
----------------------------------------------------

ACC 291 Week 5 Learning Team Weekly Reflection

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Discuss the objectives for Week Five. Your discussion
should include the topics you feel comfortable with,
any topics you struggled with, and how the weekly
topics relate to application in your field.

Discussion Question 1: Post your response to the
following:
 You know how important it is to create
budgets for your household. How does budgeting
decisions?
Budgeting is a very important skill that can be
applied to everyday life and also when it comes
to making good business decisions. I really like
the way our class resources says about
Budgeting. Budgeting is used as a planning tool
used by management to make good decision for
the company. If a company is successful than
more than likely that means that the
management team is very good at managing the
company finances. Budgeting helps management
plan ahead, defines what is most important,
shows warning signs, reach a company target
without over or under budgeting and etc.

Another response
good decisions because they are used by the
company to plan for future events and
coordinate the events and duties in the
company. They also gives objectives used to
evaluate the performance of the company on
each level which can help to make future
decisions that will not hurt the company based
on the projected objectives. It can also be used
to alert the company of possible problems or
negative trends in the company that need to be
addressed so that there is a clear picture of the
overall health of the company before decisions
are made. The budget helps the company to be
able to make an informed decision when making
one. It is there in order to make sure that
making a decision like taking on another
company will not hurt the company and is
something that the compnay can sustain based
on the budget.

DQ2
Discussion Question 2: Post your response to the
following:
 What are some of the different types of
budgets?
 Describe in detail one type of budget
covered in the text.
 Describe what the budget is used for and
what information it provides a business.
 Then, as you respond to your classmates,
discuss how the budget you described relates to
the budgets they described.
 Discuss how a business benefits from
each of the budgets.
There are many different types of budgetting.
For example, there sales budget which allows
management to see how many units that need to
be produced, production budget which will
allows everyone to see how many units are going
to be produced in or needed to be produced in
order to meet the inventory for that budget
period. One budget that I can describe in detail
is called the direct labor budget and this budget
shows how many people, hours is needed in
order to meet the required budget for that
period. This will give management an idea of
how much money is needed such as paying the
cost of labor. The company benefits by each of
these budgets because it will help manage just
how much money it will cost the company during
this period. Management can also see if there
are different ways to cost the company out of
pocket cost down during this period.

Another response
I chose to write about the Production Budget.
The Production Budget shows the cost of each
unit needed to produce an item or manufacture a
product. The formula used by the Production
Budget :

Budget sales units + Desired ending finished
goods units - Beginning finished goods units =
Required production units.
An example would be, every Easter the bakeries
in the Bronx loads up on Hot Cross Buns. My
mother and grandmother would buy these tasty
sweet breads,and eat them for breakfast. I
personally would like to eat them every week
but, they are only sold during the Easter season.
Maybe, it has something to do with the glazed
cross on the top.

Every Easter Holiday, there appears these Hot
Cross Buns and the bakeries production
department allows for the purchases for items
needed to make the buns. After Easter has gone,
Hot Cross Buns are not included in the budget.