Devry ACCT 212 (Financial Accounting) Complete Course
Week 1
Week 1: Introduction to Financial Statements – Discussion
Financial Statements (graded)
One key concept for week 1 is that
financial statements are comprised of 4 statements: 1) Income Statement,
2) Balance Sheet, 3) Cash Flows Statement, and 4) Statement of Retained
Earnings. External users
of financial statements, such as investors or banks, review the
financial statements to perform analysis on the company. For example,
to determine if s/he wants to buy the stock of a company, the investor
may review how much profit the company has generated during the past two
years. Or, to determine if a bank should provide a loan to the
company, the loan officer may review the company’s cash balance from the
previous two years. Which
financial statement do you believe provides the best information to
determine if a company is performing well financially and/or is
financially stable? Why?
Week 2
Week 2: The Accounting System and Accrual Accounting – Discussion 1
Prepaid Expenses vs. Unearned Revenue (graded)
From this week’s reading, you were
introduced to the concept of unearned revenue and prepaid expenses.
Imagine that you are CFO of a company that manufacturers picture frames.
Your company wants to become more vertically integrated, meaning it no
longer wants to purchase the products that go into the frame, but rather
manufacture them. To do this, your company has decided to acquire a
glass manufacturing company. There are two glass manufacturers that your
company is deciding between: Glass R’ US and Glass Team. In reviewing
the balance sheet of each company, you noticed the following: a. Glass R’ US has a large amount of Unearned Revenue and no Prepaid Expenses. b. Glass Team has a large amount of Prepaid Expenses and no Unearned Revenue
In your discussion post, explain what unearned revenue and prepaid
expenses represent. Then, basing your decision solely on the amount of
unearned revenue and prepaid expenses each company has, tell us which
company you would acquire and why? (In answering “why”, be sure to
include why you believe that company’s position is superior. For
example, “I believe having a large amount of prepaid expenses is a
better position because ….”)
Week 2: The Accounting System and Accrual Accounting – Discussion 2
Accrual vs. Cash Accounting (graded)
US GAAP dictates that all financial
accounting use accrual accounting. This means that if a company must use
accrual accounting if they want to state that their financial
statements are in accordance with US GAAP. However, some companies,
particularly smaller, privately-owned companies, use cash accounting. What is the difference between accrual and cash accounting? Which accounting method do you prefer and why?
Week 3
Internal Controls, Cash, Short-term Investments and Accounts Receivables Discussion 1
Ethical Business Decisions (graded)
Unfortunately, a quick scan of the
business news will normally result in reports of unethical business
behavior. To prove this point, let’s start with a review of the news for
stories about fraud and other unethical behavior in business. You can
use the University Library to start your search. Once you have located
an article share it with the class by developing a summary of the
important information. Make sure that you give credit to your source.
Week 3: Internal Controls, Cash, Short-term Investments and Accounts Receivables – Discussion 2
Trade Credit – Accounts Payable (graded)
The ability to extend trade credit is
a benefit to both sides of the transaction. The seller can increase
sales while the buyer can conduct business without spending cash
immediately. (For example, imagine you own a business the sells wood to
construction companies that build homes. Using trade credit, the
construction company can purchase the wood without spending cash
immediately and you as the owner have more sales!) It sounds like a
perfect relationship and it would be if people were not involved.
Let’s take a look beyond the obvious and discuss the pros and cons of
Accounts Receivable. Why do companies offer trade credit, and what are
the problems?
ACCT212 Course Project 1 (Part A + Part B) Rawls Repair Corporation
Week 4
Week 4: Inventory Management – Discussion 1
Inventory Management (graded)
A review of the balance sheet of a
retailer, such as Wal-Mart, will disclose that in current assets the
majority investment is in inventory. With manufacturers, such as Ford,
the inventory is spread between three different categories. Let’s start
our discussion with some basic inventory questions. How is inventory
valued? Which inventory valuation method is most popular and why? What
impact on the financial reports can the selection of an inventory
valuation method have?
Week 4: Inventory Management – Discussion 2
LIFO (graded)
Under US GAAP, management has choices
about how to value current inventory and also the cost of goods sold.
For example, they can choose LIFO or FIFO to value their inventory.)
However, under International Financial Reporting Standards (IFRS), LIFO
is not an option. To be in compliance with IFRS, international companies
cannot use LIFO. Therefore, the majority of companies use FIFO to value
their inventory and thus calculate cost of goods.
Explain what LIFO means. Then, state whether you believe that IFRS is
correct in disallowing LIFO to value inventory and provide your
reasoning.
ACCT 212 Week 4 Midterm 1 (Explanatory)
ACCT 212 Week 4 Midterm 2 (Graded)
1. (TCO 1)The
Accounting Equation is used to develop the organizations financial
reports. (1) Describe what owners’ equity is (10 points) and (2) provide
an example of an owners’ equity account. (10 points) (Points : 20)
2. (TCO 1)The
financial statements present a company to the public in financial terms.
(1) Which financial statement identifies how well the company performed
during the year (10 points) and (2) explain what information this
financial statement provides. (10 points) (Points : 20)
3. (TCO 1) The
accounting profession follows a set of guidelines for measurement and
disclosure of financial information called the Generally Accepted
Accounting Principles (GAAP). (1) Explain what the Entity Assumption is
(10 points) and (2) provide an example of its application. (10
points) (Points : 20)
4. (TCO 2)Transaction
analysis results in the development of a journal entry. Supplies are
purchased on account agreeing to pay $2,500 within 30 days. (1) Name the
accounts impacted and how using the format account name/debit or
credit/dollar amount (10 points) and (2) explain how the Accounting
Equation is impacted. (10 points) (Points : 20)
5. (TCO 3) Adjusting
Entries are required at the end of the period to ensure that accrual
accounting principles are applied. At the beginning of the month $350 of
office supplies were purchased. There was not a beginning balance and
the one purchase was the only one for the month. At the end of the month
$100 of supplies remained. Develop the adjusting entry.(1) Name the
accounts impacted and how using the format account name/debit or
credit/dollar amount (10 points) and (2) explain how the Accounting
Equation is impacted. (10 points) (Points : 20)
6. (TCO 5) Internal
Controls are required to safeguard assets and to ensure ethical business
practices.(1) Identify and explain the reason for any two of the seven
internal control procedures (10 points) and (2) provide examples of how
your two selected internal control procedures will meet the goal of
safeguarding assets and promoting ethical business practices. (15
points)(Points : 25)
7. (TCO 5) The bank
account as a control device that helps to protect cash. One of the
requirements is to conduct periodic bank statement reconciliations.
Using the following data, complete the bank statement reconciliation for
Acorn Plumbing, Inc. (Use the format shown on page 255 of your
textbook) (25 points)
Week 5
Week 5: Plant Assets and Liabilities – Discussion 1
Non-current Assets and Related Liabilities (graded)
In the spotlight about FedEx
Corporation, you get a feel for the amount of investment in assets and
the resulting liabilities that are required to operate a competitive
corporation. Even small businesses require plant, property and equipment
to compete and normally rely on some form of debt to finance itself.
Let’s start up a company that sells auto parts like Napa or Auto Zone.
What assets would we require? How might we finance them?
Week 5: Plant Assets and Liabilities – Discussion 2
Raising Capital (“Cash”) (graded)
Bonds are a unique way of financing
only available to corporations and governments. It allows them to bypass
the middle man, the bank, and therefore save costs of borrowing. They
normally make semiannual interest payments on the principal and the
principal is due at some time in the future…it is not uncommon for
decades to pass before the principal payment is due.
Imagine that you are the CFO of a company looking to raise capital.
(This means that the company wants to receive a large, one time influx
of cash.) The CEO asks you to recommend if the company should sell bonds
or issue more common stock. Which one method would you recommend to
raise capital and why?
ACCT212 Course Project 1 (Part A + Part B) Rawls Repair Corporation
Week 6
Week 6: Stockholders Equity and the Statement of Cash Flows – Discussion 1
Stockholders Equity (graded)
There are two basic classes of stock
that exist: common stock and preferred stock. Since more than one class
of stock is available to investors, an investor must determine which
class of stock they would prefer to invest in. Additionally, a company
must decide which class of stock they would like to issue.
In this discussion post, discuss the
following: What are the advantages and disadvantages of each? Imagine
that you created a newly formed entity. Would you issue common stock,
preferred stock, or both? Why?
Week 6: Stockholders Equity and the Statement of Cash Flows – Discussion 2
Net Income vs. Net Operating Cash (graded)
Net Income and Net Operating Cash
Flows are both important indicators of the health of a company. But why
are they different? What do they have in common, and what makes them
so important? Is there a relationship with the other sections of the
cash flow statement? From an investors perspective, what are those
relationships. Start this discussion out by looking into these questions and addressing them.
Week 7
Week 7: Financial Statement Analysis – Discussion
Financial Statement Analysis (graded)
If you were to get a physical from
your Doctor and they only took your blood pressure prior to stating that
you are in good health, would you be concerned? If you have noticed in
your readings starting in Chapter 3 that there has been explanation of
the methods by which you could determine the financial health of a
company. Name one and explain how it is computed? Which financial
statement(s) does the input come from? Most importantly, what does it
tell you about the financial performance or health?
ACCT212 Course Project 2 (McDonough Products)
Week 8
ACCT212 Course Project 1 (Part A + Part B) Rawls Repair Corporation
ACCT212 Course Project 2 (McDonough Products)
ACCT 212 Week 8 Final Exam (Explanatory)
1. (TCO 3) At the
end of the period it is necessary to close all temporary accounts. (1)
Explain why this process is required (10 points) and (2) provide an
example of the closing of an expense account, Salary Expense in the form
of a journal entry. (10 points) (Points : 20)
2. (TCO 2) As
required to complete Course Project 1, one must follow the cycle that
includes 10 steps to complete the accounting cycle. (1) Explain how the
debit/credit rules are used when developing journal entries (10 points)
and (2) provide an example of the application of the debit/credit rules
in the form of a journal entry. (10 points)(Points : 20)
3. (TCO 5) Internal
Control Procedures are required to safeguard company assets and to
ensure ethical operation of the business. (1) Explain how limited access
can satisfy the purpose of internal control (10 points) and (2) provide
an example of how this control could be implemented. (10
points) (Points : 20)
4. (TCO 4) Inventory
valuation methods determine the cost of goods sold and the inventory
balance. (1) Explain how the First in First out (FIFO) method is applied
(10 points) and (2) provide an example of the impact that this method
of inventory valuation will have on Gross Profit. (10 points) (Points :
20)
5. (TCO 1) To
evaluate the financial operation and health of a business ratio analysis
is used. (1) Provide the formula for the Current Ratio and explain how
it is computed (10 points) and (2) provide an example of how this ratio
can be used in decision-making in business. (10 points) (Points : 20)
6. (TCO 6) BagODonuts
Company bought a used delivery truck on January 1, 2010, for $19,200.
The van was expected to remain in service 4 years (30,000 miles).
BagODonuts’ accountant estimated that the truck’s residual value would
be $2,400 at the end of its useful life. The truck traveled 8,000 miles
the first year, 8,500 miles the second year, 5,500 miles the third
year, and 8,000 miles in the fourth year…(Points : 25)
7. (TCO 7) ABC Inc.
was incorporated on 1/15/12. Their corporate charter authorized the
following capital stock: Preferred Stock: 7%, par value $100 per share,
100,000 shares. Common Stock: $1 par value, 500,000 shares….(Points :
25)
8. (TCO 5) Fraud is
an intentional misrepresentation of facts, made for the purpose of
persuading another party to act in a way that causes injury or damage to
that party. In our readings and discussions we have seen several
examples of fraud in business. Using that experience (1) provide an
example of a common fraudulent practice in business with an explanation
of how the practice works and (2) name and describe each of the elements
of the Fraud Triangle.
9. (TCO 5) Internal
Control Procedures are in place to protect the assets of every business
as mentioned in the textbook and our discussions. Of the seven internal
control procedures, list five of these controls and describe how each
procedure is implemented (Points : 25)
10. (TCO2) Below are
the accounts of Super Pool Service, Inc. The accounts have normal
balances on June 30, 2012. The accounts are listed in no particular
order…(Points : 25)
11. (TCO4) Linda’s Lampshades started business on Jan. 1, 2001. They had the following inventory transactions :….(Points : 25)
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