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Capstone Discussion Question: Post your response
to the following:
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
contributes to business? Explain.
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
wasn't for your pep talk I probably would had gave
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 Final Exam Guide (New)
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?
Business Plan
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.
Business Structure
Upon establishing DestinyWear I had to decide which
business 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 companys
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 Staf

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 masters.
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 companys 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
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ACC 291 Final Exam Guide 1
we have another New set of Final Exam Guide which could be found
on this link
Financial Statements
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:
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:
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:

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 Final Exam Guide
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 depreciation? Week 1 DQ 1
Due Tuesday, Day 2
Go to the U.S. Securities and Exchange

Commissions Web site at http://www.sec.gov and
the Financial Accounting Standards Boards Web
site athttp://www.fasb.org . Identify the mission
and main activities of each organization. Then,
analyze the similarities and diferences between
the roles of each entity. Which entity has more
influence over financial statement reporting?
Explain your answer.
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 diference 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
Commissions 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
Commissions Web site at http://www.sec.gov and
the Financial Accounting Standards Boards Web
site athttp://www.fasb.org . Identify the mission
and main activities of each organization. Then,
analyze the similarities and diferences between
the roles of each entity. Which entity has more
influence over financial statement reporting?
Explain your answer.
U.S. Securities and Exchange Commission (SEC)
According to the SECs 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 FASBs 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 Foundations 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 staf. 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 staf 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 diferences 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 and Exchange
Commission: http://www.sec.gov/about/whatwedo.shtm
l
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 afect 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
efectively 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
Madof or what happened in the financial
mortgage industry. These unethical practices
were conducted after Sarbanes Oxley was
implemented. Madof 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 1 Assignment Comparative Analysis Problem
Purpose of Assignment The purpose of this assignment
is to help you understand the basics of financial
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: 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 companys 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 companys 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 companys 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.
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ACC 291 Week 1 Discussion Question 1
How would you describe the entries to record the disposition of
accounts receivables?
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
products 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
advantage and disadvantage concerning taxes. A 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.
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How are bad debts accounted for under the direct write-off method?
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.
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ACC 291 Week 1 Wileyplus Assignment E8-4, E8-11, BYP8-

1, and BYP8-2 (New)
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 3 DQ 1
Due Tuesday, Day 2

Post your answer to Problem 3.5 on p. 109 (Ch. 3). How might the
information contained within the stockholder equity statement be
used for management and investor decision-making? Provide
specific examples of situations in which the stockholder equity
information might be used.

The statement of stockholders equity provides the changes in the equity accounts
during the accounting period more in depth than the balance sheet. The information
found on the statement of stockholders equity includes retained earnings, common
and preferred stock, and additional paid in capital. Management uses the statement
of stockholders equity to ensure they are reaching their goal of maximizing
shareholder's equity. The use of market ratios help with the analysis of the statement
of stockholders equity, such as earnings per share, price-to-earnings, dividend
payout, and dividend yield. These ratios will help both management and investors in
analyzing the company. For example, if I were looking to invest in a companys
stocks I would utilize all of the financial ratios, as well as the market ratios. The
earnings per share ratio is calculated before the price to earnings ratio, P/E, because
the earnings per share ratio is used in the second. If a company pays dividends, the
dividend payout ratio will come in handy. It tells us The percentage of earnings paid
to shareholders in dividends (Investopedia, 2010, p. 1).
References
Investopedia. (2010). Dividend Payout Ratio. Retrieved August 3, 2010, from
Investopedia:http://www.investopedia.com/terms/d/dividendpayoutratio.asp

Response 2
Explain what can be found on a statement of stockholders equity .
The major elements of stockholders' equity include capital stock, paid-in

capital, retained earnings, treasury stock, unrealized loss on long-term
investments, and foreign currency translation gains and losses.
How might the information contained within the stockholder

equity statement be used for management and investor decision-
making? Provide specific examples of situations in which the
stockholder equity information might be used.
Management may look at the stockholders equity statement retained

earnings section to determine if company should borrow money for capital
investments or finance it through various forms of equity. It may also be
used by the stockholder to evaluate the compensation paid to the
company officers. Investors may also look at the statement for cumulative
net unrealized gains and losses before purchasing stock in the company.
Investors are also interested in the paid in capital because they can
compare it to the additional paid in capital and the difference between the
two values will equal the premium paid by investors over and above the par
value of the shares.
DQ 2
Week 3 DQ 2
Due Thursday, Day 4
Provide an example from the text or the Internet that demonstrates a

situation in which a companys net profits appeared good in the
statements, but the gross or operating profits presented a different
picture. Discuss how this might have occurred. Respond to the
following question, addressed in Problem 3.6 on p. 109 (Ch. 3): Why
is the bottom-line figure, net income, not necessarily a good indicator
of a firms financial success? Look for indicators like liquidity or
solvency to answer this discussion question.
An example that demonstrates the situation is Enron.

Enrons financial statements did not show all the expenses
and costs. Instead of showing them on the income
statement they made entries so the cost and expenses
would post in the balance sheet. The same was done with
the revenues. This way it would be less expenses and the
net profit appeared good. Many debts and losses were not
reported in the financial statements. From the third quarter
of 2000 through the third quarter of 2001, the directors
fraudulently used reserve accounts within Enron Wholesale
to mask the extent and volatility of its windfall trading
profits, particularly its profits from theCalifornia energy
markets; avoid reporting large losses in other areas of its
business; and preserve the earnings for use in later quarters.
By early 2001, Enron Wholesale's undisclosed reserve
accounts contained over $1 billion in earnings. The head of
the company improperly used hundreds of millions of dollars
of these reserves to ensure that analysts' expectations were
met. In addition, Skilling and others improperly used the
reserves to conceal hundreds of millions of dollars in losses
within Enron's EES business unit from the investing
public.This would show the creditors that Enron was making
profits and its position was solid.
The net income is not necessarily a good indicator of a firms
financial success because the income statement only shows
the profit or loss at a period of time and does not show the
whole picture of the company. The Balance Sheet, Statement
of cash flow, Statement of shareholders equity and the
Income Statement all together give the real picture of the
business. Each one of them shows different aspects of the
business. These statements show where the income is
actually coming from; is it from sales or from loans the
company is borrowing? If the company is selling a building or
any other asset but that does not mean that it is selling
more products and making profit. Looking at the Income
Statements the company might be making profit but at the
same time it is extremely leveraged.
Response 2
A companys net income is not the whole picture, just part of it. There are lots of
things that contribute to the net income that may not be significative to the companys
success. If the value of a dollar has a sudden change that can affect the bottom line if
the company happens to hold the medium of exchange that can benefit by the
change that might occur. The company can falsely inflate the bottom line. A
companys net income is coupled with liabilities, cash flow, and selects financial
ratios. Looking at it this way is a much better way of seeing what the companys
success is like. A company can change up many things to make it look like their
income is better. These things that can be changed are single sales events, cash
infusion, or false financial statements. Some things like debt that a company has, the
companys cash on hand, their capital assets conditions, or even their sales trends.
To figure the success of the company, you must look at the whole picture. One thing
cannot tell you all the facts of the companys affairs. You cannot tell the net income of
the company just from the bottom line. Look at all the financial records.
Response 3
Provide an example from the text or the Internet that demonstrates a situation in which a
companys net profits appeared good in the statements, but the gross or operating profits
presented a different picture. Discuss how this might have occurred. Respond to the following
question, addressed in Problem 3.6 on p. 109 (Ch. 3): Why is the bottom-line figure, net
income, not necessarily a good indicator of a firms financial success? Look for indicators like
liquidity or solvency to answer this discussion question.
Net income is not necessarily a good indicator of a firms
financial success because they have ways to manipulate it
by increasing their revenues or hiding some of their
expenses. For investors trying to decide where to invest their
money, they need to look more into assessing how the
company came up with the numbers they presented.
An example of this situation is when Laribee Wire

Manufacturing Co. exaggerated in recording their inventory
value which allowed them in acquiring loans from six banks
totaling to about $130 million using it as collateral. At the
same time, they reported $3 million in net income for the
period, but in actuality they lost $6.5 million.
This company showed a higher net income by reporting fake

inventory in which its value was overstated and transferred
over to their income statement. When the banks assessed
their financial statements, it was enough to sway them into
lending the loans they needed.
Reference:
Investopedia. (2010). Spotting Creative Accounting On The

Balance Sheet. Retrieved
fromhttp://www.investopedia.com/search/searchresults.aspx?
q=Spotting+Creative+Accounting+On+The+Balance+Sheet&submit=Search
--------------------------------------
ACC 291 Week 2 - Fordyce and Atwater (New)

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.
STOCK DIVIDEND
Stock Split
University of Phoenix
Stock Dividend
In the present time, the stock dividend has become important concept.
When dividend is given in form of stock, it is called stock dividend. In
this form of dividend, the cash does not use. It is important, when the
corporation declares stock dividend, the market value of the share
decreases because the number of stock increases. The many
companies prefer stock dividend due to the tax benefit. If the
individual gets stock dividend, he does not pay any tax on stock
dividend. Thus the stock dividend reduces tax burden. On the other
hand, the ownership of investors also spurs up in the company
because the number of holding share increases. There is also
disadvantage of stock dividend. The market value of the share
decreases, so the market value of holding also decreases (Kennon,
2009).
The ABC Company is leading company in its industry. The number of

outstanding share of the company is one million. On the other hand,
the number of investors is five millions. The value of market
capitalization is $100 million. The management declares 20% stock
dividend. Thus the 200000 shares will be distributed as a stock
dividend. The number of outstanding share will be increased by
200000 and the new total number of outstanding stock will be 1.2
million. On the other hand, the new value per share in the market will
be $83.33 (100 million/1.2 million). This example is taken from below
mentioned link:
Stock Split
The stock split is also an important concept. When the management

wants to increases number of shares, the management follows this
method. In this method, the face value of the share is split and number
of share gets increased. Due to increment in number of outstanding
share, the market value of per share also gets affected but the total
market capitalization of the company does not affect. Both stock split
and stock dividend increase number of outstanding shares but both
are different due to the accounting treatment. In the stock split, the
investors do not get any real benefit. It is also known as non-cash
distribution of dividend. The motto behind stock split is to increase
trading of the shares in the market (Baker, 2009)
For example, the face value of per share is $100 and the total
outstanding shares are 100 million. If the management of the
company announces stock split in ratio of 1:2, the total outstanding
shares will be increased by 100 million, thus the new total number of
the share will be 200 million. On the other hand, the face value of the
share will reduce by 50%. So the new face value of the share will be
$50. Due to effect of stock split, the holding share of the investor will
also increase in the prorate basis. If the investor has 10 shares, now
he will have 20 shares. It is important thing that the total issued
capital will not be changed. The illustration of stock split has been
got from following link:
Reverse Stock Split
The reverse stock split is just opposite of stock split. In this process,
the management reduces the number of outstanding shares. The
company increase face value of the share. In this method corporation
decides a ratio such as 2:1. Thus the company accumulates two
shares in one share. In this method, the total market value of company
does not change. Due to reverse stock split, the earning per share and
face value of per share rises. Thus the reverse stock split provides just
opposite result from stock split. It is important question, why company
selects this method. When the management seems that the face value
of the share is less as compared to competitors then the company goes
for this method to make its share value to equal to competitors
shares face value. It is also a sound strategy to increase treading of
shares. If the face value of share is too cheap in comparison to
competitors, the investors will be discouraged for investment. For
increasing the confidence of investors, the management uses this
method (Mladjenovic, 2009).
For example, an investor holds 100 shares of XYZ Company and the
face value per share is $50. If the management go for reverse stock
split option and declares one share for 10 shares then the holding of
the individual will reduce 9 shares for every 10 shares. Thus the new
holding of the investor will be 10 (100/10) shares but the face value
per share will be $500. It is also important that the total market
capitalization will remain as same as before reverse split. The
example of the reverse split is take form below mentioned link:
http://www.sec.gov/answers/reversesplit.htm.
References
Baker, H. K. (2009). Dividends and Dividend Policy. John Wiley and
Sons.
Kennon, J. (2009). All About Dividends. Retrieved May 31, 2010,
from
http://beginnersinvest.about.com/od/dividendsdrips1/a/aa040904_2.h
tm
Mladjenovic, P. (2009). Stock Investing for Dummies. Dummies.
--------------------------------------
ACC 291 Week 2 Assignment Financial Reporting Problem,

Apple Inc
is to help you understand the basics of financial
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:
Analyzing an Income Statement

The net income of Kodak has decreased a bit; it
appears that the company is more profitable. By
conducting a side by side analysis from 2004 to 2003
the company has increased in current assets and
decreased in total assets. It appears that the company
went down in property, plant and equipment net as well
as discontinued operations. So, despite the decrease in
total assets it looks like the company has made a good
decision.
The company has also decreased its total liabilities by

about 4%. I believe this to be good because the short
term borrowings and long term debt has decreased. To
me, this means that the company is tightening their
belt and paying off old debt.
Total shareholders equity has down a little bit in

dollars, but on the percentage level the companys
percentage has gone up. I believe this is because the
company issued $104k more shares in 2004 than in
2003. The company has the same amount of shares
outstanding in 2004 that it did in 2003 as well.
Retained earnings on the stock have gone up in 2004
as well. I believe this is contributed by the more shares
that have been issued.
I believe the profitability of the company is under good

standings. They appear to be making the necessary
adjustments in the company to stay with in a profitable
income.
--------------------------------------
What are the differences among valuation, depreciation, amortization,
and depletion?
Week 7 DQ 1
Due Tuesday, Day 2
Post your answer to Study Question 5.2 on p. 180 (Ch. 5). As you
read your classmates 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.
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
Post your answer to Study Question 5.2 on p. 180 (Ch. 5). As you
read your classmates 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.
--------------------------------------
What types of industries have unearned revenue?
Why is unearned revenue considered a liability?
Cash Flow Statement Analysis
Cash Flow Statement Analysis
The cash flow statement is important financial statement of the

corporation. The cash flow statement states from where cash has
come and where cash has been gone. Thus the cash flow statement
makes a relationship between beginning balance and ending balance
of cash. The cash flow statement is prepaid on the basis of income
statement and balance sheet of the company. The Little Bit Incs
beginning cash balance including marketable securities was $24000.
On the other hand, the ending cash balance including marketable
securities of the company was $40000 (Weygandt, Kimmel & Kieso,
2009).
The net income of the company was $5500 during 2009. The company
generated cash inflow from operating activity is less as compared
cash out flow from operating activities. The company generated
$9000 negative cash balance in operating activity section of the cash
flow statement. On the other hand, in the investment section, the firm
has also negative cash balance. The firm has $7000 negative balance
in investment section of the cash flow statement. The Little Bit Inc
made investment during the year instead of selling of assets. Last
section of the cash flow statement is financing activity section. In
which, all finance related activities come. The corporation sold some
shares and borrowed some money from outside lenders therefore the
company has positive case balance by $32000 in financing activity
section.
Reference
Weygandt, J.J.,Kimmel, P.D. & Kieso, D.E. (2009). Managerial

Accounting: Tools for Business Decision Making. John Wiley and
Sons.
--------------------------------------
ACC 291 Week 2 Individual WileyPLUS Assignment Week

Two
we have another New set of week 2 Willeyplus assignment which
could be found on this link
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 business.
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
business. If the company generates additional cash than what is
being 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 IndividualWileyPLUS PracticeCh 8,9,10

Quiz
Resource:WileyPLUS
Candela Corporation
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 companys 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 Learning Team Weekly Reflection
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 Statements of Cash Flows
4.8. Research Problem

Choose five companies from diferent 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 companys
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. Your discussion should address, among
other things, 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 diferences 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 companys
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
Income/Starti 933. 1043
ng Line 0 84 .15
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 -
Income/Startin 107 26. 1273
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
(c) Write a short

analysis of the
information gathered.
Your discussion should
address, among other
things, 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
diferences and
similarities between
the companies you
have chosen.
Starbucks operating cash flow has gone up in 2007 and

Starbucks looks a on the down side but previously was d
decreasing from the previous year. This could mean tha
Harley Davidson's operating cash flow has significantly

on an upward cycle from 2006. The decrease in cash fro
information supplied for net income. With the economy
point could have an efect on why the net income is dec
coming year could reflect a positive gain.
Rite Aid's operating cash flow has taken a significant de

taking in cash from investing and cash from financing, t
previous years. Rite Aids net gain in cash could be from
also could reflect the expansion of the company.
--------------------------------------
ACC 291 Week 2 Wileyplus Assignment P8-3A, BE9-11,

DI9-5, E9-7, E9-8, BYP9, P9-2A (New)
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
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 advertisers had made only
the advance deposit. 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 sponsored
advertisement, the whole of the 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 3 Assignment The Liabilities Section of
OBrians Balance Sheet
is to help you understand the balance sheet
presentation for the liabilities of a company.
Assignment Steps Resources: Week 7 DQ 1
Due Tuesday, Day 2
Post your answer to Study Question 5.2 on p. 180 (Ch.
5). As you read your classmates 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.
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
5). As you read your classmates 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
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.
--------------------------------------
Why does a company choose to form as a corporation?
Presenting to Stakeholders
Presenting to Stakeholders
Financial statements provide insight into the companys 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 firms
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 companys 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 companys 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 firms 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
managements 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 firms 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.
--------------------------------------
Why is preferred stock referred to as preferred?
What are some of the features added to preferred stock that make it
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 Individual WileyPLUS Assignment
Interpreting Financial Ratios
Luna Lighting, a retail firm, has experienced modest sales growth

over the past three years
but has had difficulty translating the expansion of sales into improved
profitability. Using
three years financial statements, you have developed the following
ratio calculations and
industry comparisons. Based on this information, suggest possible
reasons for Lunas profitability problems.
Industry
2009 2008 2007 2009

Current 2.3X 2.3X 2.2X 2.1X
Average collection period 45 days 46 days 47 days 50
days
Inventory turnover 8.3X 8.2X 8.1X 8.3X
Fixed asset turnover 2.7X 3.0X 3.3X 3.5X
Total asset turnover 1.1X 1.2X 1.3X 1.5X
Debt ratio 50% 50% 50% 54%
Times interest earned 8.1X 8.2X 8.1X 7.2X
Fixed charge coverage 4.0X 4.5X 5.5X 5.1X
Gross profit margin 43% 43% 43% 40%
Operating profit margin 6.3% 7.2% 8.0%
7.5%
Net profit margin 3.5% 4.0% 4.3%
4.2%
Return on assets 3.7% 5.0% 5.7%
6.4%
Return on equity 7.4% 9.9% 11.4%
11.8%
Based on this information, some possible reasons for Lunas

profitability problems are suggested as under:
a) Net Profit margin of the company has degraded and this might
be due to decrease in the net income of the company due to
increase in expenses. This needs to be improved upon by cost
control and cost reduction.
b) Return on equity of the company has degraded further and this

also indicates that there is a decrease in the net income of the
company due to increase in expenses. This needs to be improved
upon by cost control and cost reduction.
c) Fixed charge coverage has fallen, which means that the debt
payment along with interest might have increased and this will
also lead to decrease in the net income of the company and thus
degrading the profitability position of the company.
d) Operating profit margin has dropped even though gross profit

margin has remained constant. It means that the operating
expenses are higher and need to e controlled to improve the
profitability of the company.
e) The fixed assets turnover and the return on assets have also
degraded; this also indicates decrease in the net income of the
company.
--------------------------------------
ACC 291 Week 3 Individual WileyPLUS Practice Quiz Ch.
11,12
Resource:WileyPLUS
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 diferences and similarities.
This class taught me the importance of analyzing
the Income Statement, Balance Sheet, Cash Flow
Statement and Stockholders 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.
--------------------------------------
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.
Evaluating Financial Health 1
Evaluating Financial Health

Apple Inc. (AAPL)

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
Apples outclass profitability is witnessed of its
effective diversification efficient reach of product to
customer and state of an art Research and
Development.
Managements 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 and advertisement
activities; it increases the brand equity, brand loyalty
and 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.

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
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

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).
Apples 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.
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.34
pc.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 Wileyplus Assignment P9-7A, E10-5, E10-

8, E10-13, E10-22, E10-24, BYP10, P10-9A, P10-13A,
IFRS10-4 (New)
P9-7A, E10-5, E10-8, E10-13, E10-22, E10-24,
BYP10, P10-9A, P10-13A, IFRS10-4.
Exercise 10-5: Olinger Company
Exercise 10-8: Ortega Company
Exercise 10-13: Romine Company
Exercise 10-22: Cole Corporation

Exercise 10-24: Nance, Co.
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 business holders in the
USA as their business 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 WalMart
Incorporated, we find that debt equity ratio of Wal-Mart is 0.71 on 31 st
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-Marts 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-Marts 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 organizations 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-Marts 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
http://walmartstores.com/AboutUs/297.aspx
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
--------------------------------------
Why are companies required to prepare a statement of cash flows?
Why is the statement of cash flows divided into three sections?
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.
--------------------------------------
What are some common ratios used to analyze financial information?
Which are the most important?
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.
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
experience a loss of business.
--------------------------------------
ACC 291 Week 4 Individual WileyPLUS Assignment
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 companys

financial balances of the business. This sheet includes the
companys total of assets and liabilities. It is used for all three types
of business sole proprietorship, business partnership and corporate
business companys. 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

companys profit and losses. It basically shows all the companys
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

companys 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 IndividualWileyPLUS Practice
Resource:WileyPLUS
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 diferently than sole proprietorships.
Partnerships is a business that owned by more
that one person/s. This is the number one
diference 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
diference 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.
--------------------------------------

Discuss the objectives for Week Four. Your discussion
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
diference 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 Stockholders Equity Section of the

Balance Sheet (Lachlin Corporation Balance Sheet)
is to help you become familiar with examining the
stockholders' equity section of the balance sheet.
Assignment Steps Resources: Financial Accounting: 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 in your company based what is
in your financial 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 different
businesses use similar accounting 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
business... decisions cannot be made based on
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 reports
influence business decisions?
Why is it important for business managers to
understand the information found on financial reports?
How does information from financial reports influence

business decisions?
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
business accurately.
--------------------------------------
ACC 291 Week 4 Wileyplus Assignment Do It! 11-1, E11-5,

E11-7, BYP11-1, BYP11-2, P11-5A, P11-8A (New)
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
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 the drivers
verify the load and sign for the load 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 companys 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 companys assets. Bonding of employees who
handle cash protects the company by insuring that the employee is or isnt 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 Donalds 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.
Everyone has access to the computer system and 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.
Todays 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 companys 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 customers dont buy it, then the food will go bad 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
--------------------------------------
Why do corporations buy back their own stock?
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 Example

Establishment of responsibility Happens when the company My job, Our
assigns one person to be in is the only o
control of a specific job or a restocking
have authority to make Sales team to
decisions. the customer
Segregation of duties This is when the company has A church- Yo

more than one person to who count th
control a task or job then you hav
writes down
was received
Documentation procedures Evidence or proof of all My job we d

company transactions shingles to o
we make the
to leaving an
customer sig
Delivery fo
Physical, mechanical, and Allows the company to control Our job has
electronic controls assets through physical or Cisco and th
electronic based systems or employees b
programs. lunches. Als
long the CSR
or working.
Physical con
security gua
identification
Independent internal Any information that can be My job has a

verification reviewed , compare, and our inventor
reconciliation by a employee someone say
shorted on th
go back and
inventory an
numbers in t
physical cou
the numbers
Other controls Bonding of employees, Our compan

company protects against recently beca
abuse of assets. the company
card for pers
not work rel
Principles of Cash How it Works Example

Management
Invest idle cash Occurs when any excess funds My fathers c

or cash needs to be invested, wise investm
around in hi
Plan the timing of major A company wants to make sure During the r
expenditures that there is money set aside dropped lowe
for major cash needs so some com
from these fu
Delay payment of liabilities When a company pays the bills Ok, when tim
at an appropriate time not late home and bi
and not too soon. organize the
bills needs to
soonest, beca
bills too earl
excess funds
used for som
Keep inventory levels low Happens when a company Sees Chocol

keeps the inventory low so that make sure th
it will continue to bring profit over produci
much or else
company wil
Increase the speed of collection Money that is owe to the When a cust
on receivables company by other people or order for a p
customers is money that can not paid yet,
not be counted towards the not count the
companies funds until it is rec
--------------------------------------
ACC 291 Week 5 Individual Effect of Unethical Behavior

Article Analysis
Write a 350- to 700-word article analysis in which you
identify situations that might lead to unethical
practices and behavior in accounting.
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 efects 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_st
atements_the_p_l. Retrieved 2/18/2010
--------------------------------------
ACC 291 Week 5 Individual WileyPLUSAssignment
we have another New set of week 5 Willyplus assignment which
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)
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 financial report to answer questions, which would advance
the company and its employees. The manager would want to know if
certain investments should be made and should the company
advance 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 firms 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 Learning Team Ratio Analysis Memo
Resource:Virtual Organizations
Click the Virtual Organization link on the student
website to access the Virtual Organizations.
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
difer per unit. The Sales mix is basically what
the name says. Its 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 afect contribution margin.
Kellys Sweetheart Flowers
The owner of Kellys 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.
Kellys 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
--------------------------------------
Discuss the objectives for Week Five. Your discussion
7 How should mixed costs be classified in CVP

analysis? What approach is used to efect 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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