Deliverables Chart

Time Line
Week Assignment
01 Case Study - Financial Accounting: Excel file - Module 01 Page 1, Page 2 and Page 3

02 Case Study - Financial Statement Analysis: Excel file - Module 02 Page 1, Page 2 and Page 3

03 Case Study - Full Disclosure in Financial Reporting and Management Responsibility: Excel file - Module 03 Page 1 and Page 2

04 Case Study - Management Decision: Excel file - Module 04 Page 1 and Page 2

05 Case Study - Professional Business Ethics and Internal Control: Excel file - Module 05 Page 1, Page 2 and Page 3

06 Case Study - Presentation and Final Exam

Requirements
Your final deliverable is a Case Study presentation addressed to your instructor which outlines the financial situation of the company. In this proposal,
you will comment on each of the business areas or challenges outlined in the timeline above (e.g. Financial Accounting, Financial Statement Analysis,
and so on). The proposal should include adequate and credible research to support your decision about these areas or challenges. In addition, when
outside sources are used, you must include APA-style in-text citations and a reference list. For more information on APA, visit the APA Guide:
http://guides.rasmussen.edu/apa

Due Date
Your final project is due in Module 6. The Case Study project is the main project for this course and will be due along the way. The assignments and
modules that are due are noted in bold in the timeline below. As you can see, your first assignment "Case Study - Financial Reporting" is due in Module
01.

Evaluation
Each assignment leading up to the final project is evaluated and graded independently. Your instructor will provide specific grading criteria for each
step of the project prior to its due date.
Case Study Introduction

Transferable Skills are a set of essential abilities that will position students for success as they develop and build their
careers. College faculty and staff believe it is important that all Rasmussen graduates develop these skill sets, as having
expertise in these areas will be beneficial throughout one's life. Employers have also identified these skills as being
essential in well-rounded employees.

In this course, you will have the opportunity to learn and demonstrate each of these skills. These skills will be measured
as a portion of our course project that has been designed to replicate an authentic workplace project. These skills are the
following: Communication, Critical Thinking, Digital Fluency, Diversity and Teamwork, Ethics and Professional
Responsibility, and Information Literacy.

How can I learn more about the Transferrable Skills? Rasmussen College faculty and staff have worked together to
create a visual guide to each of the Transferable Skills. You are able to view the entire set of six guides at the following
location: http://guides.rasmussen.edu/transferableskills

This Case Study is the major lesson material for this course and incorporates the use of transferable skills.

Case Study
Company Name: GolfPro Center

Introduction
Millions of people every day must make informed decisions about organizations. To make the decisions these people
need information. Accountants measure the activities of an organization and communicate those measurements to
others. Accounting information provided for internal users, such as managers, is referred to as managerial accounting;
accounting information provided to external users is referred to as financial accounting. The two functions of financial
accounting are to measure business activities of a company and then to communicate those measurements to external
parties for decision-making purposes.

GolfPro Center
Let’s say you are ready to begin your new venture of working as the Accounting Manager for a new start-up golf center
called GolfPro Center. The purpose of the golf center is to provide PGA-certified golf instruction and essentials to
customers, such as junior players to develop their opportunity for top university programs. By using the base network of
customers, the company intends to expand to sell nationwide as an integrated multi-channel retailer. The target market of
junior league will be to individual golf pro shops, golf teams and eventually lead to selling through an online store. In
additional to future new store openings, a significant part of the company's strategy is to continue to enhance the internet
aspects of the direct to customer channel. The plan also entails the ongoing development of their own brand portfolio as
they continue to grow.

Golf Industry
The golf retail industry is highly fragmented among mass merchants, off course specialty retailers, Internet merchants,
warehouse type merchants and on course pro shops. The off course specialty golf retail industry has become extremely
competitive as general sporting goods or their golf specialty retails have expanded their markets. The company will face
competition as competitors enter the marketplace in the existing markets.

Company Information
Steve Smith is the owner and Chief Executive Officer of the company. He has appointed a close family member, Mike
Smith as the Chief Financial Officer. You were recently hired by Mike Smith as the Accounting Manager. Your first main
function is to set up the accounting department structure and financial statements. The corporate office is located in
Chandler, Arizona. Let’s look at some initial activities of functions within the new company. The company opened
business on December 1, 2016. You also started employment on this same date. You have been tasked with setting up
the accounting department and internal control process. The financial statements, which you will prepare, will be the first
set of financials for the company. You will also be tasked with setting up the financial notes and management's discussion
and analysis portion of the financial statements. This will include company information, accounting policies, revenue
recognition and inventory components. You will also encounter a few ethical situations along the way which will define
your accounting educational activities.
Let’s talk about how the company developed the investment for opening the business. The company needed about
$35,000 to get the business up and going. Since the company did not have that amount of money to start the business,
they began looking for investors. With their money, investors buy ownership in the company and have the right to share in
the organizations profits. Each share of ownership is typically referred to as a share of common stock. For GolfPro Center
they sell 1,000 shares of common stock for $25 each, receiving cash of $25,000 from investors. The 1,000 shares include
300 sold to family for $7,500, giving them 30% (= 300/1,000) ownership in the company. The company also offered you
100 shares for $2,500, giving you 10% ownership. The remaining 600 shares include 300 to extended partners, 200 to a
friend, and 100 to the owners childhood golf coach. The company now has $25,000 from investors.

To raise the remaining cash needed, the company will borrow $10,000 from a local bank, which is agreed to repay within
three years. Thus, the bank is the creditor. Now, with the $35,000 of cash obtained from investors and creditors, the
company buys equipment. This equipment costs $24,000, leaving $11,000 cash for future use. At this point, the company
has the following resources that can be used for operations.

The investors and creditors has the claims to the company’s resources. Creditors have claims equal to the amount loaned
to the company, $10,000. In other words, $10,000 of the company’s resources are promised to the local bank. Investors
have claims to all remaining resources, $25,000.
You manage the resources of the company on behalf of the owners (stockholders, in this case), while the owner is also
an investor this will help in aligning the interests with the other investors in the company. This is common in many start-up
businesses.

Formally defined, a corporation is a company that is legally separate from its owners. The advantage of being legally
separate is that the stockholders have limited liability. Limited liability prevents stockholders from being held personally
responsible for the financial obligations of the corporation. Stockholders of GolfPro Center can lose their investment of
$25,000 if the company fails, but they cannot lose any of their personal assets (such as homes, cars, computers, and
furniture).

Other common business forms include sole proprietorships and partnerships. A sole proprietorship is a business owned
by one person; a partnership is a business owned by two or more persons. If the owner had decided to start GolfPro
Center without outside investors, he would have formed a sole proprietorship. However, because he did not have the
necessary resources to start the business, being a sole proprietorship (or even one member of a partnership) was not a
viable option. Thus, a disadvantage of selecting the sole proprietorship or partnership form of business is that owners
must have sufficient personal funds to finance the business in addition to the ability to borrow money. Another
disadvantage of being a sole proprietorship or partnership is that neither offers limited liability. Owners (and partners) are
held personally responsible for the activities of the business.

Sole proprietorships and partnerships do offer the advantage of lower taxes compared to corporations. Sole
proprietorships and partnerships are taxed at the owner’s personal income tax rate, which is typically lower than the
corporate income tax rate. In addition, a corporation’s income is taxed twice (known as double taxation): (1) the company
first pays corporate income taxes on income it earns and (2) stockholders then pay personal income taxes when the
company distributes that income as dividends to them.

What information would GolfPro Center’s investors and creditors be interested in knowing to determine whether their
investment in the company was a good decision? Ultimately, investors and creditors want to know about the company’s
resources and their claims to those resources. Accounting uses some conventional names to describe such resources
and claims.

GolfPro Center has a liability of $10,000 to the local bank. Other examples of liabilities would be amounts owed to
suppliers, employees, utility companies, and the government (in the form of taxes). Liabilities are claims that must be paid
by a specified date.

Investors, or owners, have claims to any resources of the company not owed to creditors. Therefore GolfPro Center, this
amount is $25,000. We refer to owners’ claims to resources as stockholders’ equity, because stockholders are the
owners.

The relationship among the three measurement categories is called the accounting equation. GolfPo Center has assets of
$35,000 and liabilities of $10,000. The stockholder equity is $25,000.

Of course, all owners hope their claims to the company’s resources increase over time. This increase occurs when the
company makes a profit. Stockholders claim all resources in excess of amounts owed to creditors; thus, profits of the
company are claimed solely by stockholders.
You will calculate the company’s profits by comparing its revenues and expenses. Revenues are the amounts recorded
when the company sells products or provides services to customers. For example, when you or one of your employees
provides golf training to a customer, the company records revenue. However, as you’ve probably heard, “It takes money
to make money.” To operate the academy, you’ll encounter many costs. For example, you’ll have costs related to salaries,
rent, supplies, and utilities.

You’ll notice the use of the term net to describe a company’s profitability. In business, the term net is used often to
describe the difference between two amounts. Here, we measure revenues net of (or minus) expenses, to calculate the
net income or net loss. If we assume that by the end of the first month of operations GolfPro Center has total revenues of
$7,200 and total expenses of $6,000, then we would say that the company has net income of $1,200 for the month. This
amount of profit increases stockholders’ claims to resources but has no effect on creditors’ claims.

When the company has positive net income, it will either distribute those profits back to its stockholders or retain those
profits to pay for future operations. For example, suppose you decide that because GolfPro Center has net income of
$1,200, a cash payment of $200 should be returned to stockholders at the end of the month. These cash payments to
stockholders are called dividends.

The other $1,000 of net income adds to stockholders’ equity of the company. Thus, when GolfPro Center has net income
of $1,200, stockholders receive a total benefit of $1,200, equal to $200 of dividends received plus $1,000 increase in
stockholders’ equity in the company they own.

Let's now proceed to the your new journey in accounting with GolfPro Center.
Module 01: Financial Accounting

Preparing the Financial Statements

Your function as accounting manager is to prepare the financial statements for the first operating period of December 2016.

The December 31, 2016 adjusted trial balance for GolfPro Center is presented below. Using the Trial Balance, complete the following:
1. Prepare an income statement for the year ended December 31, 2016
2. Prepare a statement of stockholder's equity for the year ended December 31, 2016 assuming no common stock was issued during 2016.
3. Prepare a classified balance sheet as of December 31, 2016.
Keep in mind, the beginning balances are zero only because this is the first month of operations for GolfPro Center.

GolfPro Center
Trial Balance December 31, 2016
For the period ending December 31, 2016

Accounts Debit Credit

Cash $ 6,900
Accounts Receivable 2,700
Supplies 1,300
Prepaid Rent 5,500
Equipment 24,000
Accumulated Depreciation $ 400
Accounts Payable 2,300
Salaries Payable 300
Utilities Payable 900
Deferred Revenue 400
Interest Payable 100
Notes Payable 10,000
Common Stock 25,000
Retained Earnings 0
Dividends 200
Service Revenue 7,200
Rent Expense 500
Supplies Expense 1,000
Depreciation Expense 400
Salaries Expense 3,100
Utilities Expense 900
Interest Expense 100
Total $ 46,600 $ 46,600

1 GolfPro Center
Income Statement
For the period ended December 31, 2016

Revenues
Service Revenue 7200

Expenses
Rent Expense 500
Supplies Expense 1,000
Depreciation Expense 400
Salaries Expense 3,100
Utilities Expense 900
Interest Expense 100

Net Income 1,200

2 GolfPro Center
Statement of Stockholder's Equity
For the period ended December 31, 2016

Accounts Common Stock Retained Earnings Total Stockholders Equity

Beginning Balance (Dec 1) $ - $ - $ -
Issuance of common stock 25,000 25,000
Add: Net Income for the period 0 1,200 1,200
Less: Dividends 0 (200) (200)
Ending balance (Dec 31) 25,000 1,000 26,000
3 GolfPro Center
Balance Sheet
For the period ended December 31, 2016
Assets Liabilities
Current Assets: Current Liabilities:
Cash $ 6,900 Accounts Payable 2,300
Accounts Receivable 2,700 Salaries Payable 300
Supplies 1,300 Utilities Payable 900
Prepaid Rent 5,500 Deferred Revenue 400
Total Current Assets $ 16,400 Interest Payable 100
Total Current Liabilities $ 4,000

Long Term Assets: Long Term Liabilities:

Equipment 24,000 Notes Payable 10,000
Less: Accumulated Depreciation 400 Total Liabilities $ 14,000
Total Long term assets $ 23,600
Stockholder's Equity
Common Stock 25,000
Retained Earnings 1,000
Total Stockholders Equity 26,000

Total Assets $ 40,000 Total Liabilities & Stockholders Equity $ 40,000

Critical Thinking: Clarity and Precision

Communication with CFO: In the complexity of preparing the financial statements, the CFO tells you that he prefers the single step income statement
4 because the multiple step format seems to overstate the income. Express in a short declarative manner, how would you respond to this question?
It doesn’t necessarily overstate the income statement, the mulitple step format is just includes more steps and information, thus making it more complex
as well.

Communication: Language Usage

Explain how financial accounting information is communicated through financial statements to internal and external users. Construct widely varied
5 sentence types and advance grammatical concepts to explain insight.
Besides the statements themselves, additional information and explanation can be communicated through footnotes.

Critical Thinking: Creativity and Innovation

Describe the role that financial accounting plays in the decision making process. In your response, use human and/or professional in field knowledge
6 through the creation of the response.
Financial accounting plays in a businesses decision making process in that the financials is the companies core. You need the have a proper financial
accounting system in place, when you have that you can then take that information and use it to determine the health of the company.
Module 01: Financial Accounting

Cash Flow Statement

The below information are transactions which analyze the cash effects on GolfPro Center.
Use the information provided to complete the Statement of Cash Flow.

External Transactions of GolfPro Center

Type of Is Cash Inflow or
Transaction External Transactions in December Activity Involved? Outflow?
Sell shares of common stock for $25,000
1 to obtain funds necessary to start the Financing Yes Inflow
business.
Borrow $10,000 from the local bank and
2 sign a note promising to repay the full Financing Yes Inflow
amount of the debt in three years.
Purchase equipment necessary for giving
3 Investing Yes Outflow
golf training, $24,000 cash
Pay one year of rent in advance, $6000
4 Operating Yes Outflow
($500 per month).
5 ??? Purchase supplies on account, $2,300. Operating No ---
Provide golf training to customers for cash,
6 Operating Yes Inflow
$4300
Provide golf training to customers on
7 ??? Operating No ---
account $2000
Receive cash in advance for 12 golf
8 training sessions to be given in the future Operating Yes Inflow
$600
9 Pay salaries to employees $2800 Operating Yes Outflow
Pay cash dividends of $200 to
10 Financing Yes Outflow
shareholders.

1 GolfPro Center
Statement of Cash Flow
For the period ended December 31, 2016

Cash Flows from Operating Activities

Cash inflows:
From customers $ 4,900
Cash outflows:
For salaries (2,800)
For rent (6,000)
Net cash flows from operating activities (3,900)

Cash Flows from investing Activities

Purchase equipment (24,000)
Net Cash Flows from Investing Activities (24,000)

Cash Flows from Financing Activities

Issue common stock 25,000
Borrow from bank 10,000
Pay dividends (200)
Net cash flows from financing activities 34,800
Net increase in cash 6,900
Cash at the beginning of the period 0
Cash at the end of the period $ 6,900
 Communication: Audience and Delivery

In the space provided below, explain to the CEO and CFO the main purpose of the statement of cash flow. In your
response, utilize effective persuasive techniques to influence and engage the CFO and CEO.
2
The statement of cash flow shows us how the cash is being handled, the inflow and outflow if you will.

Communication: Organization, Focus, and Supporting Examples

In the space provided below, explain to the CFO some of the activities reported on the statement of cash flows. In your
response, coordinate your thoughts to synthesize and provide context regarding the concept of the statement of cash
3 flows. Provide carefully integrated thoughts and examples to clarify the topic to the CFO.
On the statement of cashflow we find three keys activities reported on there, the operating activities, financial activities,
and also investing activities.

Communication: Organization, Focus, and Supporting Examples

In the space provided below, describe some of the investing activities on the GolfPro Center statement of cash flows.
4 Use a variety of thoughts integrated to present the meaning of your evidence.
For GolfPro Center, the investing activities at this point is the investment that was made to getting eqiupment to train.

Communication: Content and Voice

Explain to the CEO and CFO the why the net income differs from the amount of cash flow from operating activities. In
your response, explain the relationship between the net income and cash flows such as the investing and financing
activities. Develop a response which incorporates a focus on uniting multi faceted mutually supportive arguments to
create a distinct connection with the content and the audience.
5
"Net income is the profit a company has earned for a period while cash flow from operating activities measures, in part,
the cash going in and out during a company's day-to-day operations. Net income is the starting point in calculating cash
flow from operating activities. However, both are important in determining the financial health of a company."(Murphy, C.
B. )

References
Murphy, C. B. (2018, June 14). How do net income and operating cash flow differ? Retrieved from https://www.investopedia.com/ask/answers/04
stopedia.com/ask/answers/042115/what-difference-between-net-income-and-cash-flow-operating-activities.asp
Module 01: Financial Accounting

Closing Entry

In the space provided below, prepare the Closing Entry for GofPro Center.

Closing Entry for December 31, 2016

1 Journal Entry
Account Debit Credit
a Service Revenue 7,200
Retained Earnings 7,200
Comment: Close revenues to retained earnings. 0

b Retained Earnings 6,000

Rent Expense 500
Supplies Expense 1,000
Depreciation Expense 400
Salaries Expense 3,100
Utilities Expense 900
Interest Expense 100
Comment: Close expense to retained earnings. 0

c Retained Earnings 200

Dividends 200
Comment: Close dividends to retained earnings 0

Critical Thinking: Definitions, Terms, Concepts and Ideas

Communication with CEO and CFO: In the space provided below, in a clear and concise manner, explain to the CEO and
2 CFO the main purpose of these closing entries.
Closing entries are done so we can keep track of accounts on a year to year basis, so at the end of the year we close the
accounts and then start fresh, so to speak, in the new year. This helps us keep track of any and all differences between
years.

Critical Thinking: Definitions, Terms, Concepts and Ideas

Communication with CEO and CFO: Comment on why adjusting entries are needed and what happens if certain adjusting
3 entries are neglected.
Adjusting entries are needed to ensure proper closing entries, and if neglected it can throw balances off and create wrong
balances.

Digital Fluency: Internet Technology Usage

Go to the FASB website, http://www.fasb.org, to access the FASB Concepts Statements. After you have read the
4 documents, use the search tool in your Internet browser to respond to the following items.
a) What is the objective of financial reporting?
b) What other means are there of communicating information besides financial statements?
c) Indicate the users and the information FASB is most directly concerned with in economic decision making.
A)Essentaily is it to report non-biased, useful, and correct information about the companys performance. B) Footnotes C)
Resource providers, constiuents, gorerning and oversight bodies, and managers.
Module 02: Financial Statement Analysis

Interpret financial data by computing ratios.

Using the GolfPro Center financial information prepared in Module 01, calculate the following ratios:
Liquidity, Leverage and Profitability Ratios

1 Liquidity & Efficiency Analysis Formula December 2016 Ratio

1 Current Ratio Current Assets/Current Liability 410%
2 Total Asset Turnover Net Sales/Average Total Assets 18%
3 Accounts Receivable Turnover Ratio Sales/Average Accounts Receivable 2.67

2 Leverage Analysis Formula December 2016 Ratio

4 Debt to Equity Ratio Total Liabilities/Total Stockholders' Equity 54%
5 Debt Ratio Total Liabilities/Total Assets 35%
5 Times Interest Earned Ratio Income before Interest/Interest Expense 1200%

3 Profitability Analysis Formula December 2016 Ratio

6 Gross Profit Margin Ratio Gross Profit/Net Revenue 86%
7 Profit Margin Ratio Net Income/Net Revenue 17%
8 Return on Total Assets Income/Average Assets 3%
9 Return on Common Stockholders' EquitIncome/Average Equity 5%

Critical Thinking: Definitions, Terms, Concepts and Ideas

In the space provided below, prepare a professional business report to the CFO by describing the analytical use of
each of the nine ratios. Discuss what the financial ratios present and identify two ratios that would be most valuable
4
as a basis in a management decision for expanding sales. In your report, explain the relationship of the asset
turnover to the return on assets.

1) The current ratio shows us how a company pays its debts. 2) The total asset turnover tells us how a company uses
its assets. 3) The accounts receivable turnover ratio tells how the company extends their assets. 4)The debt to equity
ratio show what the comapany uses their debts. 5) The debt ratio is a way to measure how seriouse the companies
debt is. 6) The gross profit margin gives us a way to see if the company is profitable. 7) The profit margin ratio tells us
whats left once a company pays its debts. 8) The return on total assets is what the company is getting back after
what they spent into themselves. 9) The return on common stockholder equity tells us how profitable the stockholders
are. I beleive the two ratios that would be most valuable as a basis in a management decision would be the current
ratio, as we need to know that debts are being paid, and then the profit margin ratio as knowing if the company is
profitable or not can steer decisions.

Critical Thinking: Definitions, Terms, Concepts and Ideas

5 Explain the limitations of ratio analysis:
"Financial ratios are not very useful on a stand-alone basis; they must be benchmarked against
something"(Investopedia) These ratios we calculate must be compared to their past ratios to see any changes and
compared against other companies in the industry to see how they hold up against them.
 Critical Thinking: Definitions, Terms, Concepts and Ideas
6 Discuss what type of users will benefit from ratio analysis within the company and explain how they will benefit.
The people that benefit from these analysis are the stockholders and even competing compnies. This so they can tell
the financial health of your company compared to their own or if investing would be worth it.

References
Investopedia. (2017, December 21). Uses and Limitations of Financial Ratios. Retrieved from https://www.investopedia.com/exam-guide/cf
6,200

37500
25500
stopedia.com/exam-guide/cfa-level-1/financial-ratios/uses-limitations-ratios.asp
Module 02: Financial Statement Analysis

Capital expenditure decision using NPV and IRR.

The CFO of GolfPro Center is considering purchasing an automated fairway weed control machine, but is uncertain as to whether it is a favorable
expenditure decision. The CFO has asked you, the accounting manager, to evaluate the capital expenditure item and report the results. Since the cash
flows don't occur in the same periods and because a dollar today is worth more than a dollar tomorrow, you will need to take into account the time value
of money by using the net present value (NPV) approach and/or the internal rate of return (IRR) approach. The company estimated the equipment will
last 5 years. Each year it will save the company $2000 in wasted spraying conditions. It will also reduce labor costs by $20,000 a year. It is estimated that
the equipment will require $1,000 maintenance costs per year. The equipment costs $70,000 and it is expected to have a residual or salvage value of
$5000 at the end of 5 years. Top management has determined the required rate of return is 12%. Should the company invest in the new equipment?
Report results and decision determination to owner.

1 Net Present Value Approach

Time Period 0 1 2 3 4 5
Cash Flow
Purchase Price $ (70,000)
Labor Savings 20,000 20,000 20,000 20,000 20,000
Paint Savings 2,000 2,000 2,000 2,000 2,000
Maintenance (1,000) (1,000) (1,000) (1,000) (1,000)
Residual Value 5,000
Total Cash Flow 21,000 21,000 21,000 21,000 26,000
PV Factor 0.893 0.797 0.712 0.636 0.567 Work for required rate of return
Total Cash Flow $ 18,753 $ 16,737 $ 14,952 $ 13,356 $ 14,742 $ 78,540
$ 15,708
Required Rate of
Return -22.44 -0.2244

NPV $ 8,540 NPV Using Excel (show formula): combined total cash flow-initial investment
IRR $ 78,540 IRR Using Excel (show formula): combined total cash flows

Critical Thinking: Problem Solving

2 Problem Solving: What is the result consider the NPV? Should the project be undertaken?
The result on the NPV is 8.540, which means that the project will show us a good return rate and that the project should be undertaken.

Critical Thinking: Problem Solving

Problem Solving: What is the result considering both NPV and IRR? Should the project move forward? Creatively solve the problem by determining the best method
3
for the situation.
Given that the NPV is 8.540, which is good, and the IRR at 78.5, which is also good for the company, I would say to continue on with the project.

Critical Thinking: Clarity and Precision

Summarize the comparison of net present value and internal rate of return methods. In your response, be sure to use a complex idea expressed in a short,
4
declarative response.
"NPV and IRR are two methods for making capital-budget decisions, or choosing between alternate projects and investments when the goal is to increase the value
of the enterprise and maximize shareholder wealth."(Investopedia) So essentailly, when making a decision on which project should be overtaken, using NPV or IRR
will help you know which one is better for the company financially.

Critical Thinking: Definitions, Terms, Concepts and Ideas

The CFO asks, how do the net present value and internal rate of return methods differ in their approach to evaluating this investment decision? How do you respond
5
to this question?
"Instead of relying on external data (i.e. a discount rate), the IRR is purely a function of the inflows and outflows of that project."(Investopedia) The NPV is based off
of some assumed numbers, while the IRR goes off of the companys inflow and outflow.
 Critical Thinking: Definitions, Terms, Concepts and Ideas
6 The CFO asks, why is it important to take into account the time value of money when making capital budgeting decisions?
For one simple reason, money today is worth more then money tomorrow.

Information Literacy: Evaluating Information

Research an Accounting Issue: Decide which would be a better option for the company: should the company acquire a lease option as opposed to purchase option?
7 Research lease options versus purchase options for the company. In your response discuss how the lease option would be accounted for financially. Analyze and
select which is a better decision for the company, the lease option or purchase option?

With a lease option, the company must consistantly pay rent over their entirity of being there, they also could have certain restrictions (i.e hours they can be open,
painting, decorating, signs, building layout ect.) Financially for leases "must classify each lease payment as a rental expense by debiting its rental expense account
and crediting its lease payable account. Once the periodic lease obligation is paid, the company records a credit to the cash account and a debit to the lease
payable account."(Staff, I)
When purchasing, of course you must be able to pay the monthly morgage, but the building is owned by the company to be able to make their own decisions upon
it.

References
Investopedia. (2017, December 21). Net Present Value and the Internal Rate of Return. Retrieved from https://www.investopedia.com/exam-guide/cfa-level-1/quantitative-methods/discounted-cash-fl
Staff, I. (2018, June 22). Operating Lease. Retrieved from https://www.investopedia.com/terms/o/operatinglease.asp#ixzz5PIcaT53pFollow us: Investopedia on Facebook
el-1/quantitative-methods/discounted-cash-flow-npv-irr.asp
Module 02: Financial Statement Analysis

Communication: Purpose and Meaning and Digital Fluency: Creation of Digital Files
Prepare an analysis report for the capital expenditure decision.
Once completed, publish the created file online for a board audience using open source repositories with sharing and viewing capabilities.
The CFO of GolfPro Center is considering purchasing an automated fairway weed control machine, but is uncertain as to whether it is a favorable expenditure decision. Th

Net Present Value Approach NPV 8540

Time Perio 0 1 2 3 4 5 IRR 78540
Cash Flow
Purchase P -70000
Labor Savings 20000 20000 20000 20000 20000
Paint Savings 2000 2000 2000 2000 2000
Maintenance -1000 -1000 -1000 -1000 -1000
Residual Value 5000
Total Cash Flow 21000 21000 21000 21000 26000
PV Factor 0.893 0.797 0.712 0.636 0.567
Total Cash Flow 18753 16737 14952 13356 14742
r it is a favorable expenditure decision. The CFO has asked me, the accounting manager, to evaluate the capital expenditure item and report the results. The company estimated the equipment will las
company estimated the equipment will last 5 years. Each year it will save the company $2000 in wasted spraying conditions. It will also reduce labor costs by $20,000 a year. It is estimated that the eq
$20,000 a year. It is estimated that the equipment will require $1,000 maintenance costs per year. The equipment costs $70,000 and it is expected to have a residual or salvage value of $5000 at the
residual or salvage value of $5000 at the end of 5 years. Top management has determined the required rate of return is 12%. Should the company invest in the new equipment? I believe that the com
the new equipment? I believe that the company should invest in the new equipment, bases on the charts below.
Module 03: Full Disclosure in Financial Reporting and Management Responsibility

Financial Disclosure: Notes and MD&A

Financial Notes
Financial statements are included in the annual report which is presented to its shareholders. In this section,
prepare the financial statement notes as indicated.

Critical Thinking: Creativity and Innovation

1 Prepare the Financial Statements Notes: Note 1. The Company
GolfPro Center is a company with multiple investors, together they invested $25,000 to help start the company.
Selling 1,000 shares of common stock for $25 each, receiving cash of $25,000 from investors. The 1,000
shares include 300 sold to family for $7,500, giving them 30% (= 300/1,000) ownership in the company. The
company also offered myslef 100 shares for $2,500, giving me 10% ownership. The remaining 600 shares
include 300 to extended partners, 200 to a friend, and 100 to the owners childhood golf coach.Ownership
needed an additional $10,000 to start up, this was abtained through a bank loan. With the now $35,000 in
assets, $10,000 in liabilities; the company then had $25,000 in stockholders equity. GolfPro then started up
and used

Critical Thinking: Creativity and Innovation

2 Prepare the Financial Statements Notes: Note 1. Revenue Recognition
GolfPro Centers first months total revenues of $7,200 and total expenses of $6,000, this would then give the
company a net income of $1,200. From the $1,200 of net income, $200 will be returned as dividends to the
stockholders.
 Critical Thinking: Creativity and Innovation
3 Prepare the Financial Statements Notes: Note 2. Inventories
GolfPro Centers would use a FIFO system for their inventory, inventory for them would be golf supplies that are
used to train and to play with.

Critical Thinking: Creativity and Innovation

Prepare the Financial Statements Notes: In this section create a financial statement of your choice. You may
4
create and assess any category of the financial statements accordingly.
The statement of cash flow shows us how the cash is being handled, the inflow and outflow if you will. It shows
the $4,900 that came from customers, the $3,900 from that was paid to salaries and rent, the 24,000 that went
into equipment for the center, and 34,800 from financing activities.
 Management's Discussion and Analysis
In addition to the financial statements and disclosure notes, each annual report of a public company requires a
lengthy discussion and analysis provided by the company's management. In this section review the views on
significant events, trends, and uncertainties which pertain to GolfPro Center's operations, liquidity and capital
resources.

5 Prepare the Management Discussion & Analysis: Accounting Policy and Internal Control
The policies and internal controls were set up by myself, the accounting manager for GolfPro Center.

Critical Thinking: Creativity and Innovation

6 Prepare the Management Discussion & Analysis: Management's Responsibility
Managentments responsibiities is to provide all the necessary informarion that is correct and relevant to make
sure the most accurate financial statements are created.
 Critical Thinking: Creativity and Innovation
7 Prepare the Management Discussion & Analysis: Internal Control
Internal control is the processes and procedures that are performed within the company. So in the accounting
department, it is our job to provide the most accurate information that is relevant to the financial statements.
And when something goes wrong, they must know to report it to myself, the accounting manager, and if I need
to report any further information the the executives when necessary.

Critical Thinking: Creativity and Innovation

Prepare the Management Discussion and Analysis: In this section create a component of the MD&A of your
8
choice. You may create and assess any category of the financial statements accordingly.
The closing entries are important as they show are year as a whole. At the end of the year all accounts are
balanced and closed so we can see the year as a whole, and then start the new year fresh. This also allows us
to compare year to year and make predictions.
 Critical Thinking: Creativity and Innovation

The CFO has asked you to explain the major advantages of notes to the financial statements and to identify
9
the items are typically reported in the notes. Also explain what the full disclosure principle means in accounting.

Financial notes are adventagous in that they provide a written explanation of what the statements mean and
why the statements are important. They are used by auditors and management, these statements give a
background in the years financial information as a whole.

Critical Thinking: Definition, Terms, Concepts and Ideas

10 Explain what the MD&A section provides and the viewpoint it contains.
The MD&A section provides management with written explanations of the financial statements for the year in
whole giving them a view of the businesses health.

Critical Thinking: Definition, Terms, Concepts and Ideas

11 Explain what the note disclosures offers to users.
The note disclosures offers additional information either to explain the information presented in the financial
statements or to provide information note included in the financial statements.

Communication: Audience and Delivery

Explain to the CEO and CFO the responsibility of company management and the independent auditors in the
12 accounting communication process. Use audience specific and influential tones to engage others on points
made.
It is managements job to provide the auditors with all the necassery information they need to complete their
audit.
Module 03: Full Disclosure in Financial Reporting and Management Responsibility

Management Responsibility

Demonstrate leadership characteristics of the managerial accounting profession.

The IMA’s Statement of Ethical Professional Practice was designed to help finance professionals “to link ethical perspectives directly
to their ongoing workplace responsibilities.” Unfortunately, some individuals may choose to act unethically and perhaps cause great
harm to other individuals and organizations. Review the Institute of Management Accountants (IMA) website and read the IMA's
Statement of Ethical Professional Practice. In each of the following examples, determine which of the four standards of ethical
conduct has been violated. Some examples may violate more than one standard.

You are the accounting manager for GolfPro Center. Betty Jones is a new accountant you have hired and reports directly to you.
The company is now selling third party golf carts at cost plus 25% and charges a fee of $250 per delivery and time spent on each
engagement. Recently the CFO asked Betty directly to charge the delivery fee to the Peachtree Golf Course account when instead it
was actually delivered to the Pelican Hills Golf Course account. The rationale: “Look, Pelican Hills Golf Course is a struggling start-
up course and they can barely afford to buy our golf carts. We made a mistake at delivery and did not deliver the right amount at the
estimate due to some unforeseen problems, and they’ll balk if we charge them for all of our time. Peachtree Golf Course, on the
other hand, is a highly profitable course, and we’re providing services that are going to make them even more profitable. They’ll have
no problem with their bill.”

Digital Fluency: Evaluation of Digital Resources & Information Literacy: Evaluating Information, Ethical Use of Information,
and Creation of New Information/Participation in Field

According to the IMA's ethical standards, what do you suggest that would help Betty resolve this issue? In your answer, cite specific
1 language in the IMA code. Which IMA principle(s) was/were violated? Assess the reliability/credibility of the material and cite your
sources in APA-style, including in-text citations and a reference list at the bottom of this box.

I believe that Betty should charge the fee to the correct account and not create false charges to another clients accounts like what is being suggested. T

Information Literacy: Inquiry Development

Let's say you found out that in a the CFO's prior workplace he had lied to federal investigators saying that there was a standing
order to sell the stock if the share price fell below a certain average. In return for lying the CFO reportedly received money, airplane
2
ticked and extra vacation money. Which IMA standard(s) was violated? In your response, analyze the topic based on the scope,
depth and the assignment.
This violates integrity and credibility. As it shows that the CFO has not integrity and will easily lie, as well as show the he is not
credible and therefore can not be a trusted source.

Information Literacy: Inquiry Development

Let's say you found out that a golf shop competitor's CFO was just charged with recording operating expense as capital assets.
3 Depreciating these assets over time inflated the company's profits and hid the expenses from the company's auditors. Which IMA
standard(s) was violated? In your response, analyze the topic based on the scope, depth and the assignment.
 This violates competence and integrity. It shows that that CFO is imcompetent and doesn’t care about correct relaible financial
statements and only wants to make money, thus showing he also has no integrity.

Critical Thinking: Self Reflection and Logical Thought

Discuss the importance of ethical behavior in managerial accounting. In your response, demonstrate self awareness with an ability to
4
question your own ideas and belief systems.
Ethical behavior in managerial accounting is very important. As it is up to you provide truthful and relevant information to the
companies financial statements, as those are being looked to too asses the companys financial health.

References
(n.d.). Retrieved from https://www.imanet.org/career-resources/ethics-center?ssopc=1
ts like what is being suggested. The IMAs own website states "IMA's overarching ethical principles include: Honesty, Fairness, Objectivity, and Responsibility." This is wou
vity, and Responsibility." This is would go against confidentiality and competence.
Module 04: Management Decision

Access cost-volume-profit techniques to determine optimal managerial decision.

Examine the effects of changes in sales price, cost and volume.

The company has developed a target budget for selling 50,000 units in the upcoming year. The estimated budget is to sell 40,000 golf shirts and 10,000 pairs of
shoes. Therefore the sales mix is 4 golf shirts for every pair of golf shoes sold. No fixed expenses are assigned to either golf shirts or golf shoes. As long as the
company keeps selling golf shirts and shoes, the fixed expenses will not change therefore they are deducted in total rather than allocated to the individual product
lines. The forecasted income statement is listed below.

GolfPro Center
Forecasted Income Statement
For the year ended 2017

Golf Shirts Golf Shoes Total Company

Sales Total Per Unit Percentage Total Per Unit Percentage Total Percentage
Cost of goods sold $800,000 $20.00 100% $450,000 $45.00 100% $1,250,000 100%
Sales commission 592,000 14.80 74% 360,000 36.00 80% 952,000 76.16%
Variable expenses 48,000 1.20 6% 27,000 2.70 6% 75,000 6%
Contribution margin 640,000 16.00 80% 387,000 38.70 86% 1,027,000 82.16%
Selling and marketing 160,000 4.00 20% 63,000 6.30 14% 223,000 17.84%
Administrative expense 125,000
Fixed expense 53,400
Operating income 178,400
44,600

Golf Shirts Golf Shoes

Sales Price $20.00 $45.00
Cost of goods sold 14.80 36.00
Sales Commission 1.20 2.70
Total Variable expenses 16.00 38.70
Contribution Margin $4.00 $6.30

Use the data tables above to solve Case Study problems:

The CFO is in the process of making a business decision based on revenue generating concepts to increase sales for next year. He has asked for your assistance in
examining the effects of financial changes in the sales mix. He needs assistance using cost-volume-profit techniques.

1 His first question to you: what is the company's CM ratio and variable expense ratio for golf shirts and golf shoes?

CM ratio = unit CM/unit selling price

Golf Shirts 20%
Golf Shoes 14%

Variable Expense Ratio = variable expense/selling price

Golf Shirts 80%
Golf Shoes 86%

2 His second question, is what is the current break even point? (use the equation method)
(4*4x)+(6.30*x)-178,400=0
178,400 $178,400.00
(4*4x)+(6.30*x)=178,400
16x+6.30x=178,400
22.30x=178,400
x=8000 Breakeven Point is 8000

His third question, what would happen if we increase sales by $400,000 next year. Let's assume the cost behavior pattern remains unchanged, by how much will the
3
company's net income increase? (use the CM ratio to compute answer)

Increase in Sales $400,000

CM ratio 34%
Expected increase in CM $136,000

4 His fifth question is how many golf shirts and pairs of shoes are needed to be sold to earn $66,900 in operating income?

(4*4x)+(6.30*x)-178,400=66,900 245300
(4*4x)+(6.30*x)=245,300
16x+6.30x=245,300
22.30x=245,300 11000
x=11,000
 They need to sell 11,000 to reach 66,900

Based on the information provided to the CFO, he has now developed a new proposal to increase sales for next year. The CFO is determined to increase sales
therefore he has set up a commission of 6% to the sales staff team. Consider the golf shop's original sales mix of 40,000 golf shirts and 10,000 shoes. In an effort to
stimulate sales, the golf shop sales incentive will be use the target market of youth golf teams. This move has increased the sales commission paid on each golf shirt
to 12.3%. The CFO believes that this move will generate additional sales of 10,000 golf shirts, with no effect on shoes sales.

5 How will this move alter the golf shops sales mix?
Sales price $20.00
Cost of goods sold 14.80
Sales commission 2.46
Total Variable expenses 17.26
Contribution margin $2.74

6 Calculate and explain how will it affect the breakeven point?

50,000 golf shirts/10,000= 5
5x*2.74 + x*6.3 = 178,400
13.70x+6.3x=178,400
20x=178,400
x=8920

Information Literacy: Creation of New Information/Participation in Field

Select and organize expert information and weigh the information against your own emerging research. Do
you think the company should accept the CFO's proposal to increase sales commission? By lowering the
7 contribution margin per unit of golf shirts and shifting a greater percentage of sales to those golf shirts, more
golf shirts and more shoes will have to be sold in order to break even. Is this change a good move? Include in
your analysis, what happens to the breakeven point if the sales mix changes.

Original contribution margin: Golf shirts $160,000

New contribution margin: Golf shirts $137,000
Reduction in contribution margin $23,000

8 If the sales proposal should be accepted and if sales remain at current level, what will the income or loss from operations be for the budgeted year.

Sales
$800,000

COGS
592,000

Sales commission
98400

Variable costs
690,400

Contribution margin
$109,600

Fixed costs
178,400

Operating income/loss
-$68,800

Identify basic cost behavior patterns and explain how changes in activity level affect the total cost and unit
9
cost.
As Activity Increases As Activity Decreases
Cost behavior Total Cost Cost per Unit Total Cost Cost per Unit
Variable
Fixed
Mixed
Module 04: Management Decision

Digital Fluency: Creation of Digital Files

The CFO is anxious to increase the company's profit and has asked you to prepare an analysis and summary of your
findings. Prepare an analysis report to support the business decision. You may use graphs and other statistical data to
present findings. Apply advanced formatting features to present and produce a professional document. Create the
information to present to users in a visually interesting and organized manner.
Module 05: Professional Business Ethics and Internal Control

Select an appropriate conclusion to an ethical dilemma.

You have now worked for GolfPro Center for a few years and along your journey have obtained your CPA license. Now that you
have become a CPA you have taken on extra work on the side by performing tax services to some small business clients. Desert
Willow Golf Course is one of your new small business accounts and you are obligated to compete their corporate tax return by April
15th.

Ironically, Desert Willow Golf Course, is also a customer of GolfPro Center as they purchase inventory to stock their pro-shop at the
golf course. Desert Willow Golf Course has recently fallen more than 90 days past due on paying their bills to GolfPro Center. In your
position at GolfPro Center you have been assigned to review and perform an internal audit of Desert Willow Golf Course's customer
account. In addition, you are also responsible for preparing and estimating the Allowance for Doubtful Accounts for GolfPro Center.
When preparing the report, you have left Desert Willow Golf Course off of the aging report. The CFO has asked you for your
justification for not including Desert Willow Golf Course on the 90+ aging report. Your reply is, it seems there are some audit related
questions about the collectible amount for Desert Willow Golf Course; therefore you have come up with an explanation for not
including them in the estimated allowance report which satisfies the CFO.

GolfPro Center is now growing and has decided to expand by opening a new store in Southern California. Since you have now
obtained your CPA license the company has offered you a nice promotion and raise with GolfPro Center. You will have to transfer to
a new location to begin gathering a team to start the finance department at the new store in Southern California. You have accepted
the promotion and leave immediately. In the mean time you have decided to quit doing accounting on the side which includes your
business with Desert Willow Golf Course. In moving, you have not completed the corporate tax return Form 1120 for Desert Willow
Golf Course which should be filed with the IRS by a specific date. You also failed to inform Desert Willow Golf Course of your new
relocation. In trying to locate you, Desert Willow Golf Course contacts GolfPro Center and discloses your side work business.

Ethics and Professionalism: Ethical and Situational Awareness

Determine the best outcome for this situation: Do you think it is ethically appropriate to provide tax services to Desert Willow Golf
1 Course, a customer of GolfPro Center, while at the same time being employed by GolfPro Center? Evaluate the impact this decision
has on laws and on your own core of beliefs and personal ethics.

Information Literacy: Ethical Use of Information

According to the Case Study, have you violated any of your ethical responsibilities to GolfPro Center and to Desert Willow Golf
2 Course? In your response be specific and reference the AICPA Code of Professional Conduct in answering the question. Provide
attribution and integrate citations for all resource types. Provide APA style in-text citations and a reference entry for the AICPA Code.

Ethics and Professionalism: Integrity

What if your new boss at your new job in Southern California just found out about your dual role as internal auditor and tax
3 accountant for the corporate office of GolfPro Center. What would you expect the new boss should do? Determine the level
responsibility your new boss has on the impact this decision will make for the overall department.
Module 05: Professional Business Ethics and Internal Control

Internal Control

Ethics and Professionalism: Attitudes

1 Explain to the department what internal control is and why the company should establish an internal control system.

Ethics and Professionalism: Attitudes

Currently John works as the accountant for GolfPro Center. He opens the mail for the company everyday and sets aside all of the incoming
checks for the company. He lists all incoming checks on a spreadsheet which includes the name of the customer and the check amount. He
then records all of the checks into the accounting system by applying the payment to the customers account. Next he prepares the checks for
the bank deposit. He completes the bank deposit slip and attaches all checks. He then gives the incoming check spreadsheet, checks and bank
2 deposit to you the review and sign off on. After your approval, he then hand carries the checks to the bank each day to deposit. Define cash
receipts and discuss the basic controls for cash receipts. Also, explain directly how the company could improve its internal control procedure for
handling cash receipts. Include in your response the demonstration of the importance of understanding the segregation of duties and how
additional proper documentation could be used to improve the final approval process.

Ethics and Professionalism: Attitudes

John approves all requests for payment out of the $200 fund, which is replenished at the end of each month. At the end of each month, John
submits a list of all accounts and amounts to be charged and a check is written to him for the total amount. John is the only person ever to tally
3 the fund. Explain the internal control weakness and describe how internal controls can be improved upon. What questions would you ask to find
out additional information regarding this internal control situation?

Ethics and Professionalism: Attitudes

All of the company’s cash disbursements are made by check. Each check must be supported by an approved voucher, which is in turn
supported by the appropriate invoice and, for purchases, a receiving document. After reviewing the supporting documentation, you approve the
4 voucher. John prepares the checks for the CFO's signature. John also maintains the company’s check register (the cash disbursements
journal) and reconciles the bank account at the end of each month.

Diversity and Teamwork: Skills

GolfPro Center has just completed the annual audit. The auditors presented a list of control deficiencies to the CFO. The CFO has asked you to
meet with your team to decide on a improvement plan. Using the above examples as control evidences, explain how you would gather your
department team to discuss how to improve on these items. Include the following details in your response: Discuss the team members and
5 resources you would gather to discuss this matter. Advocate respect, value and appreciation for individuals working within the finance
department, explain the communication skills needed to approach the team. Describe the professional skills needed to accomplish the task.
 Diversity and Teamwork: Skills

Continuing along the results of the annual audit, explain how an audit enhances the quality for financial statement reporting and managements
6 report on internal controls. Include in your repose if an audit actually guarantee a fair presentation of a company's financial statements.
Module 05: Professional Business Ethics and Internal Control

Diversity of Accounting Issues

Diversity and Teamwork: Knowledge

Research the FASB Website.

Go to the website of the Financial Accountant Standards Board (http://www.fasb.org). Identify the most recently issued financial
reporting standard and summarize briefly its principal provisions. Also search under Project Activities to identify the reporting issue
1
with the most recent update. Describe the issue and the nature of the action taken by the FASB. In your response, demonstrate a
profound appreciation of the meaning of diversity in accounting standards, explain the need for diverse perspectives.

Diversity and Teamwork: Knowledge

Research the IASB Website
Go to the website of the International Accounting Standards Board (http://www.isab.org). Search for the International Financial
Reporting Standards (IFRS) summaries. Identify the most recently issue international financial reporting standard and summarize
2
briefly its principle provisions. In your response, demonstrate a profound appreciation of the meaning of diversity in accounting
standards, explain the need for diverse perspectives.

Diversity and Teamwork: Attitudes

Critique and criticize bias regarding accounting practice issues in diversity by explaining the reasons for differences in accounting
3
practice's across countries.

Diversity and Teamwork: Skills

International Financial Reporting Standards are gaining support around the globe. In 2007, the SEC eliminated the requirement for
foreign companies that issue stock in the United States to include in their financial statements a reconciliation of IFRS to U.S. GAAP.
There also is serious discussion of allowing U.S. companies to choose whether to prepare their financial statements according to
4
U.S. GAAP or IFRS. Do you think U.S. companies should be allowed the choice of reporting under either U.S. GAAP or IFRS?
Provide arguments both for and against this idea. Interpret intercultural experience from multiple perspectives and worldviews.