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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:
Net Income
$1,300,000
$1,250,000
$1,200,000
$1,150,000 Net Income
$1,100,000
$1,050,000
$1,000,000
$950,000
2006 2007 2008
If we look at the trend in net income of the company we can find that
the company net income looks fluctuating but it has improved it net
income in 2008 as compared to 2007.
Debt ratio as a percentage of total assets:
Debt ratio as percent of total asset

55.80%
55.70%
55.60%
55.50% Debt ratio as percent
55.40% of total asset
55.30%
55.20%
55.10%
55.00%
54.90%
2007 2008
If we look at the debt ratio as percent of total asset we can find that
the debt ratio is declining in 2008 as compared to 2007 i.e. the
company is increasing equity to finance debt.
Debt as a percentage of total equity:

Debt as percent of total equity
127.00%
126.50%
126.00%
125.50% Debt as percent of
125.00% total equity
124.50%
124.00%
123.50%
123.00%
122.50%
2007 2008
As we can see that the debt as percent of total equity is declining in

2008 as compared to 2007 i.e. the company is increasing equity in its
capital structure.
As we can see that there is nothing negative in 2008 for the company
and this is the reason it has positive trend as compared to 2007.
Hence there is no need to correct anything for the company.
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ACC 291 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?
IFRS Multiple Choice Question 01 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 effectively on the respective oversight
committees they serve. The example I would share is
what happened in WorldCom. The company leaders
shared what they wanted to with the Board, who
trusted implicitly the top leaders. Had they questioned
their legal representation or auditors, they potentially
could have uncovered the fraud that was committed by
the creation of shell companies, with WorldCom
employees as stockholders.
I would love to think this law would protect the

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

of material changes, and destruction of records.
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ACC 291 Week 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: Financial Accounting 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 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.
----------------------------------------------

What are the differences among valuation, depreciation, amortization,
and depletion? 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.
----------------------------------------------
What types of industries have unearned revenue?
Why is unearned revenue considered a liability?
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.
----------------------------------------------
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
Complete the WileyPLUS Week Two Practice Quizzes
for chapters 8, 9, and 10
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: Financial Accounting:
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 does a company choose to form as a corporation?
Analysis of Scenarios:
Debt Scenario would increase the debt ratios from to 50%. Equity
Scenario would reduce the debt ratio to 40%. With Debt option,
earnings per share would be higher. Interest declines to 2.86 times
with the Debt option while times interest earned increases to 3.75
times with the Equity option. Either option exhibits a good use of
financial leverage because for both, the financial leverage index
being greater than 1. However, it is higher using the Debt option.
----------------------------------------------
Why is preferred stock referred to as preferred?
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 Assignment

Capstone Discussion Question

Due Tuesday, Day 2
What have you learned in this course about the process of

analyzing financial statements?
I have learned that there is a lot more to analyzing financial

statements than I thought. This class has made me question my
decision to go into the accounting field. I feel inadequate after taking
this class. I am not an articulate, or analytical person. I tend to get
confused easily and do better at putting the information together than
I am at figuring out what it all means. This is my last block of classes
before my Bachelor program starts, and I don't know if I am ready, or
if I even want to continue. Analyzing financial statements takes a
very detail oriented mind, and one that is great at problem solving. It
is critical to understand the financial statements, and how they relate
to one another. There is a lot of information that is not as obvious as
it would seem. Looking at the bottom line will not give a good picture
of how a company is doing financially. It is important to know the
how and why the bottom line looks the way that it does.
Response 2
I have learned that it takes someone that has the patience, tenacity,
and motivation to truly analyze the statements. If you go about it not
wanting to do the work you wont give a good analysis. I found that
you have to be willing to dig deeper than most would to get a full
picture of the company. I found that it is not an easy task to complete.
For me the process is a tedious one. I don't think I would want to go
into that type of accounting where I have to analyze the statements of
a company. I think for me I would be better in specialized accounting
like A/P or A/R. I am better at figuring out problems and figuring out
ways to make them better. I am better at specific tasks so for me I
wouldn't want to analyze the statements. I am glad to have learned
how, because at some point I am sure it will come in handy.
Response 3
All financial statements are essential documents because they tell
what has happened to a business over a period of time but most users
of financial statement are more concerned about what will happen in
the future. Stockholders and creditors are concerned with future
earnings and dividends and company's future ability to repay its
debts. Management is concerned with the company's ability to
finance future expansion.
Working as a bookkeeper I do all the steps in monthly cycles
consisting of entering transactions into the journals, working with
A/R, A/P, payroll and preparing the reports, but I have not been able
to analyze the reports the way I learned in this class. I learned how
important is to monitor and interpret the results. I learned how to
compare financial statements of a company with a company from the
same industry and point out the differences and similarities. This
class taught me the importance of analyzing the Income Statement,
Balance Sheet, Cash Flow Statement and 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.
----------------------------------------------
ACC 291 Week 3 Individual WileyPLUS Practice Quiz Ch.
11,12
Resource:WileyPLUS
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
efective 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.3
4pc.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
----------------------------------------------
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.
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 afected 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 diferent for diferent
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 31st January
2010, which is 0.68 for the industry. It means
the proportion of debt of the company in its
capital structure is lesser than the equity. The
company is less leveraged so the interest burden
on the company is minimal. Wal-Mart has
capacity to borrow from the market for its CAPEX
in the future. The interest coverage ratio is 13
times in January 2010, which is 21.9 for the
industry. Wal-Mart needs to improve profitability
to improve interest coverage ratio for the
reduction of risk of the lenders of the company
(Wal-Mart Stores Inc: Financial Statement, 2010).
The total revenues received by the organization
in the year ending January 2010 were $408.2
billion whereas revenues in the year ending
January 2009 were $404.3 billion dollars. The
revenues in the year ending January 2008 stood
at $377 billion dollars. Thus, it can be easily
analyzed that the total revenues of the
organization has grown over the years steadily.
This has also impacted the net income of the
organization and thus, increments could also be
seen in the net income of the organization. Net
Income, which stood in the year ending 2008 at
$12.7 billion, increased to $13.4 billion for the
year ending 2009 and again increased to $14.3
billion in the year ending 2010 (Wal-Mart Stores
Inc: Financial Statement, 2010).
Again if cash flow statement of the organization
is analyzed it can easily be viewed that the cash
flow from operating activities have always
increased from the last three years. The cash
flow from operating activities stood at $20.6
billion in the year ending 2008 has increased to
$23.1 billion for the year ending 2009 and too
further increased to $26.2 billion for the year
ending 2010. But the cash flow from investing
and financing activities has seen positive and
negative fluctuations both. Here where net cash
outflow from investing activities has decreased
first and increased later again. For the year
ending 2008, it stood at $15.6 billion which
decreased to $10.7 billion but again increased to
$11.6 billion. Again the net cash outflow from
financing activities increased constantly since at
the end of year 2008, it stood at $7.4 billion
which further for the year ending 2009 increased
to $9.9 billion and further increased to $14.1
billion for the year ending 2010 (Wal-Mart Stores
Inc: Financial Statement, 2010).
Wal-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 efectiveness 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
diferent asset turnover ratios and trends could
easily analyze that assets are efectively 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 Efect: 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
----------------------------------------------
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

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.
----------------------------------------------

Why are companies required to prepare a statement of cash flows?
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.
----------------------------------------------
What are some common ratios used to analyze financial information?
Which are the most important?
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 Individual WileyPLUS Assignment
Compare and contrast sole proprietorships, partnerships, and

corporations.
Sole proprietorships means that a business that owned by one
person. That includes and not limited to all profits and losses, debts
and unlimited liability, all will come from the solely one owner and
not a group or in this case a partner or co-owner etc. Partnerships
are seen much differently than sole proprietorships. Partnerships is
a business that owned by more that one person/s. This is the
number one difference from being a sole proprietorship or sole
owner. Basically, two or more people come together and split the
cost, debts, and liability. Corporations is an business that has
separate entity owned by stockholders. The huge difference between
corporations and the other two is that they are owned by
stockholders. Stockholders make decisions that is first best for their
company, secondly the company that they have together.
Why would a entrepreneur want to choose one over the other?
An Entrepreneur is a person that wants to start a business with
their vision and have more power of the decision making. The best
choice for an entrepreneur is to choose sole proprietorship out of all
the three choices. The first and most important reason is because it
is much easier to start a business as sole proprietorships. Sole
proprietorship takes all the profit that and doesn't have to split it
between any other owners or corporations.
If I was to start a new business which one would I choose?
In this case it depends on the type of business. My case I will be
opening a hair salon and I would prefer sole partnerships. i choose
that because I want to be in control and I don't want to split the
profit.
----------------------------------------------
ACC 291 Week 4 IndividualWileyPLUS Practice
Resource:WileyPLUS
Complete the WileyPLUS Week Four Practice Quizzes
for chapters 13 and 14.
Current assets
When it comes to a company's classified balance sheets you will find
current assets sheet. Current assets is cash or cash equilivants that
the company will use. What you will find on a current asset sheet is
Cash and equilvants, Short term investments, Accounts receivables,
and other assets.
Long-term investments
Long-term investments when it comes to balance sheet are
investments that the company intends to hold onto. The investments
that are listed are as follows, bonds, stocks and cash. You will also
find short-term investments in the company. The difference between
short-term and long-term investments is that the short-term
investments will be sold and the long-term investments normally the
company will choose to keep it.
Property, plant, and equipment
Property, plant, and equipment are what the company calls "fixed
assets". Property, plant and equipment are assets that can not be
easily converted into cash. These are basically items such as company
car (used to deliver products), computers and copier machine, and
freezer used for restaurants.
Intangible assets
Intangible assets are non-monetary items that can not be seen or
touched. For example, trademarks, copywriters, patents and
goodwill. Intangible assets are normally listed in the separate assets.
references
http://www.investopedia.com/terms/i/intangibleasset.asp
----------------------------------------------
Discuss the objectives for Week Four. Your discussion
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 diferent 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

efect the company but it also to name a few
efects 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 diference 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
diferent 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 diferent 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 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:
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
----------------------------------------------
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

Income statement is a financial statement that shows how much money is coming
from product sales and services prior to any expenses being taken out. Both internal
and external users such as managers and investors are able to access this. For
example, if a investor wanted to see if the company made money or lost money they
would use this financial statement report.
Balance sheet shows what condition the company is currently in. whereas the other
financial statements only came monthly or annually. For example, what if the
management planning team wanted to see the company's current assets, ownership
equity and liabilities? All they have to do is run the balance sheet report.
CVP income statement or Cost Volume statement reports or monitors the effects of
the changes in cost and volume when it comes to the company profits. For example,
I work at a manufacturing plant for roofing shingles. The CVP analyst studies the cost
which includes but not limited too, manufacturing, material, labor cost. This financial
statement report would help the management team budget the cost of manufacturing
goods.
Statement of cash flow tracks the movement of cash coming in or out of the
business. This financial statement will show if the company made cash or not, or if
the net income increased or decreased. For example, the owner or the management
department will use this to determine if the company has earned enough money to be
able to for any expenses.
Retained earnings statements is a percentage that is kept by the company to be
reinvested or to be used to pay debts. For example, if a company was looking to
expand their business by purchasing top of the line equipment they can use this
statement to see how much money the company has put away.
References:
http://www.investopedia.com/terms/r/retainedearnings.asphttp://financial- Retrieved
2/18/2010
statements.suite101.com/article.cfm/financial_statements_the_p_l. Retrieved
2/18/2010

----------------------------------------------
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.
Discussion Question 1: Post your response to the

following:
How would you describe the diference
between financial and managerial accounting?
What are the distinguishing features of
managerial accounting?
There are many diferences 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 diferences 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
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 diferent 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 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)
Resource:WileyPLUS
Complete the following Week Five WileyPLUSExercises and

Problems:
7 How should mixed costs be classified in CVP

analysis? What approach is used to effect the
appropriate classification?
According to our class materials all mixed cost
must be classified into their fixed and variable and
variable elements. The method that can be used to
determine is called the high/low method. To
determine the variable cost the analysis takes the
total cost and divide it with the low activity level.
To get the fixed cost then the company would have
to subtract the total variable with either the high
or low activity level.
9. Cost volume profit CVP analysis is based entirely
on unit costs. Do you agree? Explain.
In my opinion when it comes to making financial
decisions for the company, often times more than
one method is used. Cost volume profit is also
based on Volume or level activities, unit selling
prices, variable cost per unit, total fixed and sales
mix.
14. You can find the break point in dollars by
drawing a horizontal line to the vertical axis. I you
want to find the break even point in units it will be
a vertical line from the break even point to the
horizontal axis.
----------------------------------------------
ACC 291 Week 5 Learning Team Ratio Analysis Memo
Resource:Virtual Organizations
Click the Virtual Organization link on the student
website to access the Virtual Organizations.
Select one of the Virtual Organizations as the basis for
the assignment. Axia College Material
Appendix C
Budgets Matrix
Directions: Using the matrix, define each of the

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

following:
You know how important it is to create
budgets for your household. How does budgeting
help management make good business
decisions?
Budgeting is a very important skill that can be
applied to everyday life and also when it comes
to making good business decisions. I really like
the way our class resources says about
Budgeting. Budgeting is used as a planning tool
used by management to make good decision for
the company. If a company is successful than
more than likely that means that the
management team is very good at managing the
company finances. Budgeting helps management
plan ahead, defines what is most important,
shows warning signs, reach a company target
without over or under budgeting and etc.
Another response
In a business, a budget helps a business make
good decisions because they are used by the
company to plan for future events and
coordinate the events and duties in the
company. They also gives objectives used to
evaluate the performance of the company on
each level which can help to make future
decisions that will not hurt the company based
on the projected objectives. It can also be used
to alert the company of possible problems or
negative trends in the company that need to be
addressed so that there is a clear picture of the
overall health of the company before decisions
are made. The budget helps the company to be
able to make an informed decision when making
one. It is there in order to make sure that
making a decision like taking on another
company will not hurt the company and is
something that the compnay can sustain based
on the budget.
DQ2
following:
What are some of the diferent types of
budgets?
Describe in detail one type of budget
covered in the text.
Describe what the budget is used for and
what information it provides a business.
Then, as you respond to your classmates,
discuss how the budget you described relates to
the budgets they described.
Discuss how a business benefits from
each of the budgets.
There are many diferent types of budgetting.

For example, there sales budget which allows
management to see how many units that need to
be produced, production budget which will
allows everyone to see how many units are going
to be produced in or needed to be produced in
order to meet the inventory for that budget
period. One budget that I can describe in detail
is called the direct labor budget and this budget
shows how many people, hours is needed in
order to meet the required budget for that
period. This will give management an idea of
how much money is needed such as paying the
cost of labor. The company benefits by each of
these budgets because it will help manage just
how much money it will cost the company during
this period. Management can also see if there
are diferent ways to cost the company out of
pocket cost down during this period.
Another response
I chose to write about the Production Budget.
The Production Budget shows the cost of each
unit needed to produce an item or manufacture a
product. The formula used by the Production
Budget :
Budget sales units + Desired ending finished

goods units - Beginning finished goods units =
Required production units.
An example would be, every Easter the bakeries

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

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

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