Based on your work in Part 1, explain how the accrual accounting concept provides guidance to accountants in preparing the income statement and calculating profits.

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Manual Assignment

This assessment consists of 2 parts:

Part 1.

The business has the following opening balances: Additional Information:

  • Cash At Bank $16,611 Bank loan interest rates (% per year) 8
  • Account Receivable $16,248 Motor vehicle useful life (years) 3
  • Motor Vehicle $30,316 Motor vehicle scrap value ($) 3,380
  • Account Payable $8,787 Insurance paid for (months) 2
  • Bank Loan (due 2022) $24,973 Rent paid for (months) 3
  • Furniture $22,514 Furniture useful life (years) 2
  • Promotional Material Supplies $579 Furniture scrap value ($) 0
  • Capital ? Closing stock of promotional materials 30/6 ($)
  • Staff work a 14 day fortnight and are paid on the 15th day. 961

Transactions:

Date Description Amount Date Description Amount

  • 1-Jun Paid General Insurance $2,622 2-Jun Advertising placement fees – Cash $808
  • 3-Jun Rent of Business Premises $4,193 3-Jun Sundry Expenses $421
  • 4-Jun Purchase promotional materials $917 5-Jun Payment to Account Payable $1,184
  • 5-Jun Auction commission – Account $798 5-Jun Auction commission – Account $1,034
  • 7-Jun Advertising Expense – Cash $688 8-Jun Rental commission – Cash $1,845
  • 10-Jun Receive Payment from Account Customers $1,788 10-Jun Cash Withdrawals by Owner $1,060
  • 11-Jun Rental commission – Account $1,431 12-Jun Payment to Account Payable $596
  • 14-Jun Rental commission – Cash $1,990 15-Jun Staff Wages $2,030
  • 16-Jun Advertising placement fees – Cash $888 17-Jun Rental commission – Account $1,452
  • 18-Jun Auction commission – Cash $1,722 19-Jun Advertising placement fees – Account $851
  • 20-Jun Auction commission – Cash $1,787 20-Jun Motor Vehicle Expenses $308
  • 24-Jun Advertising placement fees – Account $1,155 25-Jun Additional cash contributed by owner $3,643
  • 28-Jun Advertising Expense – Account $1,335 28-Jun Receive Payment from Account Customers $1,346
  • 29-Jun Staff Wages $2,030

Assume that this assignment involves an existing business that was purchased by the new owner on 1 June 2019.

Note the list of transactions is in date order, left to right, line by line.

Use three separate ledger accounts for revenue, namely rental commission, auction commission and advertisement placement fees. All revenues relate to the month of June.

Transactions involve cash unless specified as ‘Account’.

Record payments for rent and insurance in prepaid accounts initially.

Information relevant to complete adjusting entries can be found in the top right section of this page.

The periods to which the rent and insurance apply commence on 1 June.

Round your calculations to the nearest dollar.

Using the unique series of business transactions (data) students are required to:

Manually record the transactions through the general journal and general ledger, prepare balance day adjustments, closing entries, financial statements, and a worksheet.

Part 2. Qualitative component (5%) – approximately 250-300 words

Based on your work in Part 1 (Excel component), explain how the accrual accounting concept provides guidance to accountants in preparing the income statement and calculating profits. In your answer, include a discussion of the role of adjusting entries in accrual accounting. To this end, you need to explain your answer using TWO examples based on your work in Part 1 (Excel component).

The qualitative component will be marked based on both i) the quality of the content and ii) the quality of written expression (e.g., spelling, grammar, and appropriate tone).

Note: In order to perform well in this task, you need to ensure that your discussion is specifically related to your work in Part 1 (rather than merely providing a general discussion).

 

Describe budgeting; it’s objective, and its impact on human behavior. Based on your reading and outside research, communicate your own understanding of the requirements.

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Budgeting

Describe budgeting; it’s objective, and its impact on human behavior. Based on your reading and outside research, communicate your own understanding of the requirements. Citations, references, and outside research are required.

 

 

Define and describe “Internal Controls.” Tell why an effective internal control system is necessary and what it is expected to accomplish. Provide the names of three distinct organizations in which you, personally, have observed internal controls and give at least one example of an internal control for each organization.

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Accounting

Write an essay in which you provide the descriptions and examples outlined below. Your essay should be 2-3 pages in length. You are not required to follow any strict professional writing format, but you must use complete sentences, proper punctuation, and cite the work of others used in your work. You must submit your essay via the appropriate Assignments Folder in D2L.

Part 1 – Internal Control

Define and describe “Internal Controls.” Tell why an effective internal control system is necessary and what it is expected to accomplish. Provide the names of three distinct organizations in which you, personally, have observed internal controls and give at least one example of an internal control for each organization. Discuss whether, or not, you believe each internal control is effective and why. If one of your example controls is weak or ineffective, how could the organization improve it? Include your thoughts about the importance of every employee’s contribution to the control environment.

Part 2 – Ethics and Fraud

Define and describe “Ethics.” Define “Fraud.” Describe the fraud triangle and tell how it is related to internal controls, ethics, and fraud. Tell why you think high ethical standards are important in the business environment. Tell why the same ethical standards are important for KSU. What kinds of fraud might occur at KSU? Include your thoughts about the importance of every student’s contribution to the ethical environment at KSU.

Part 3 – Ethics and Cheating

Review the class syllabus statements concerning Academic Integrity and relate them to the university’s internal control system. Tell whether you think cheating and other acts of academic dishonesty in your academic environment impact the value of your education and the value of your college degree. Explain how KSU’s Academic Integrity Policies protect the university. Explain how these policies protect students. Include your thoughts about the importance of your role and the role of your instructor in maintaining the university’s control environment. State whether, or not, you think a student who commits acts of academic dishonesty during college could be a trustworthy business partner in the future. Explain.

 

Identify stakeholders or groups of stakeholders relative to your selected industry. Stakeholders are entities or individuals that utilize and benefit from the application.

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The table should be well organized with labels for each application, brief descriptions, and points of interest (how the industry aligns with each application). Identify stakeholders or groups of stakeholders relative to your selected industry. Stakeholders are entities or individuals that utilize and benefit from the application. This might be a 5 to 6 column table with several rows.

Using a minimum of four direct quotes from Hines’ article, explain why financial accounting theory and practice are NOT the scientific, objective, and value-free technical endeavours they are believed to be, and what this means for understanding accounting practices.

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HW2 (15 pts)

  1. “Hines (1988) and other accounting theorists pose the notion that accounting socially constructs reality, rather than merely report the pre-existing reality of accounting transactions. As a result, all accountants must realize that accounting is a fluid, social construction that is constantly changing, and often becomes “what it was not, rather than what it should be.”

Required: Using a minimum of four direct quotes from Hines’ article (don’t forget the end notes of the article!), explain why financial accounting theory and practice are NOT the scientific, objective, and value-free technical endeavours they are believed to be, and what this means for understanding accounting practices.

Use the examples discussed in class and the contents of the article to support your assertions about the social construction of accounting. Include quotations from the article to help support your assertions – a quote can save many words of explanation!

 

Using at least two direct in-text quotations from Young (2006), explain why the FASB and IASB’s conceptual frameworks both focus on a “narrow conceptualization” of three highly specific types of financial statement user.

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HW3 (15 pts)

The FASB’s Statement of Financial Accounting Concepts No. 8 (2010) and the IASB Conceptual Framework for Financial Reporting (2010) both removed “conservatism” (“prudence”) as a qualitative characteristic of useful financial information. Explain why this change was made in 2010, and use the work of Cooper (2015), to explain why “prudence” (“conservatism”) was restored within both the IASB’s Exposure Drafts for a revised Conceptual Framework for Financial Reporting and the final version of its Framework (IASB, 2018). Within the FASB’s own Conceptual Framework, should “conservatism” be reinstated as a qualitative characteristic of useful information if the desire is to produce “reliable” and “faithfully representative” information for users? Explain your answer using supporting quotes.

Using at least two direct in-text quotations from Young (2006), explain why the FASB and IASB’s conceptual frameworks both focus on a “narrow conceptualization” of three highly specific types of financial statement user. How does this limited view of users potential bias both the objectives of providing general-purpose financial statements and the type of information they include/prioritise? Within your answer, briefly discuss whether financial statements should also supply decision relevant and stewardship information for a wider range of userchos, such as employees and the public.

 

Using at least three direct quotations from Hines (1991), briefly discuss her concerns with allowing accounting to be the dominant source of environmental reporting information. Explain whether you agree with her thoughts.

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HW #1 Accounting

  1. a) As the annual rate of consumer price inflation in the U.S. is currently rising by 8.5% per annum, explain the limitations of using historic cost accounting (HCA) as the basis for providing relevant and faithfully representative financial reporting information for investors, lenders and other creditors. Within your answer highlight how alternative accounting measurement and valuation approaches, such as current value, exit value, current purchasing power, and discounted cash flow (DCF) might eliminate some of HCA’s shortcomings in providing useful information for end users. Use our in-class discussion of alternative valuation techniques for Fred’s pineapple business, and the assigned readings for week 1, to support your assertions.
  2. b) Hines (1991) has concerns about the role of accounting and accountants in providing greater accountability about environmental and sustainability issues and performance.

Note: you can find copies of the assigned course articles and additional textbook chapters mentioned in the syllabus in the “articles 2022” folder on the Onedrive.

Required:

  1. i) Using at least three direct quotations (i.e. in-text quotes from the source) from Hines (1991), briefly discuss her concerns with allowing accounting to be the dominant source of environmental reporting information. Explain whether you agree with her thoughts.
  2. ii) Using quotations from two different articles published in the Business Source Premier (BSP) database at the Auraria Library since 2015, briefly explain how the accounting profession can, and is, contributing towards the development of improved forms of environmental and sustainability reporting and audit information.

In total, your written answer to part b) of HW1 must:

(a) Be at least one page long (excluding the list of references)

(b) Include at least four direct supporting in-text quotations from these sources:

  • Hines (1991) – at least two direchoct quotations from this article.

 

Look at the Income Statement for the last two years. What caused the changes in the Income Statement from last year to this year? What type of audit opinion did the external auditors give? What accounting standards did they use? Where are each of these components found?

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Financial Reporting

Step ONE: Analysis of Annual Report

Select a business from the provided list and analyze their latest annual report (either on the company website under investor relations or on finance.yahoo.com).

  • Company Stock Symbol
  • Amazon AMZN
  • Apple AAPL
  • Bank of America BAC
  • Best Buy BBY
  • Citigroup C
  • Continental Airlines CAL
  • Chipotle CMG
  • Costco
  • Wholesale COST
  • Chevron CVX
  • Dell DELL
  • eBay EBAY
  • Edison
  • International EIX
  • FedEx FDX
  • General Electric GE
  • Google GOOGL
  • Harley Davidson HOG
  • Hershey HSY
  • Intel INTC
  • Jet Blue JBLU
  • Johnson & Johnson JNJ
  • KB Homes KBH
  • Kraft Foods KFT
  • Microsoft MSFT
  • Pepsi PEP
  • Proctor and Gamble PG
  • Rubio’s RUBO
  • Starbucks SBUX
  • Verizon
  • Communications VZ
  • Wal-Mart WMT
  • Exxon Mobil XOM
  • Taco Bell, YUM YUM

Complete the following steps for the selected company’s Annual Report. You can use information from the footnotes to answer these questions but make sure to reference from where the information came. Must be one page double spaced.

Look at the balance sheet for the last two years. What caused the changes in the balance sheet from last year to this year? Use account names and numbers for both years to explain your answer.

Look at the Income Statement (sometimes called Statements of Operations) for the last two years. What caused the changes in the Income Statement from last year to this year? Use account names and numbers for both years to explain your answer.

What type of audit opinion did the external auditors give? What accounting standards did they use? Where are each of these components found?

Include the Annual report used with your submission as an attachment.

Step TWO: Create the Financial Statements

Use the step 2 attachment to do the following – create an income statement, statement of retained earnings, balance sheet, and statement of cash flows (note: use first four spreadsheet tabs for this step).

Financial Reporting Summative Problem.x

Step THREE: Reflection

USE the step 3 attachment for the following – Analyze the statements you have created and use them to answer the following questions

Is Wells Mobile Apps paying too much out in dividends? Why or why not? Explain your reasoning.

For Scenic Industries, there was an increase in cash from the first year to the next. What was the single biggest event that caused this? Explain your reasoning.

 

The Inflation Reduction Act that was recently signed into law by President Biden, included a new corporate minimum tax that takes effects in 2023. Do you think that the minimum tax is a good tax policy? Why or Why not?

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Will the new corporate alternative minimum tax rate be successful in reducing inflation?

Brief packback post on the Topic: The Inflation Reduction Act that was recently signed into law by President Biden, included a new corporate minimum tax that takes effects in 2023. Do you think that the minimum tax is a good tax policy? Why or Why not?

Identify several courses of action that Tamira could have taken instead of the one she took. If you were in Tamira’s situation, what would you have done? Briefly justify your response.

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BOOK:Fundamental Accounting Principles

Edition: 25th
Author:John Wild,Ken Shaw,Kermit Larson

On January 20, 2019, Tamira Nelson, the accountant for Picton Enterprises, is feeling pressure to complete the annual financial statements. The company president has said he needs up-to-date financial statements to share with the bank on January 21 at a dinner meeting that has been called to discuss Picton’s obtaining loan financing for a special building project. Tamira knows that she will not be able to gather all the needed information in the next 24 hours to prepare the entire set of adjusting entries. Those Page 164entries must be posted before the financial statements accurately portray the company’s performance and financial position for the fiscal period ended December 31, 2018. Tamira ultimately decides to estimate several expense accruals at the last minute. When deciding on estimates for the expenses, she uses low estimates because she does not want to make the financial statements look worse than they are. Tamira finishes the financial statements before the deadline and gives them to the president without mentioning that several account balances are estimates that she provided.

Respond to the following questions
1. Identify several courses of action that Tamira could have taken instead of the one she took.
2. If you were in Tamira’s situation, what would you have done? Briefly justify your response.