Explain the differences in stock trading between two different stock exchanges. Explain how a company’s free cash flow impacts its growth potential. Cite the free cash flow of example companies.

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Investing in stocks

Overview

Investing in stocks is an option when planning for retirement or other financial management decisions. In this activity, you will research how to evaluate stocks as an investment option.

Instructions

In a 1-page paper, respond to the following:

  1. Explain the differences in stock trading between two different stock exchanges.
    1. Identify two different stock exchanges in the United States.
    2. Describe the similarities and differences between the two stock exchanges.
  2. Explain how a company’s free cash flow impacts its growth potential. Cite the free cash flow of example companies.
    1. Identify one company (Hasbro) on each of the two stock exchanges you researched.
    2. Determine the free cash flow from 2019 and 2020 for each company.
    3. What inferences can you draw from the companies’ free cash flow?
  1. Apply financial ratios to evaluate the strengths and weaknesses of stocks as investments.
    1. Using the 2019 and 2020 financial statements for both stocks, prepare two financial ratios for each of the following categories: liquidity ratios, asset management ratios, and profitability ratios. You should have a total of six ratios for each stock, per year.
    2. What challenges, strengths, or weaknesses do you see when you examine these ratios?

 

The Adam, the owner, expects a profit of $130,000 (being total return on his capital and remuneration for being the manager). Using the concept of “contribution margin” and a cost-volume-profit notion, estimate how many trips the Lodge needs to make to reach this objective? Is there a realistic expectation?

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Breakeven analysis of Green Lodge

Green Lodge is a company operated by Adam as a summer vacation getaway in the great Arizona valley. It operates camping lodges offering accommodation and adventure trips for individuals and groups. Over the last few years, the average number of tourists trips was 50. The average charge per person for the cruise, including group discounts was $100.The company operates from mid-may until mid-August. On average the lodge takes 90 (adventure trips) during this period.

The lodge requires a staff of 6 and is managed by the owner of the company. University students with extensive tourism experience have been willing to work on a daily basis of $120. They are paid only if there are any adventure trips. The lodge also provides non-alcoholic refreshments and a light lunch. These are required daily from a local cafeteria and cost on average $20 per person. The daily operating expenses, fuel and miscellaneous supplies average $60 per trip. The company has a variety of annual expenses (fixed costs) including: maintenance, depreciation, marketing, licenses, Etc… Totaling approximately $73,440.

Required:

  1. Compute the revenue, variable expenses and the contribution margin for each trip (15 marks)
  2. Compute the number of trips Green Lodge must have each year to breakeven. (8 marks)
  3. The Adam, the owner, expects a profit of $130,000 (being total return on his capital and remuneration for being the manager). Using the concept of “contribution margin” and a cost-volume-profit notion, estimate how many trips the Lodge needs to make to reach this objective? Is there a realistic expectation? (15 marks)
  4. Prepare a contribution margin income statement for Green Lodge assuming 100 adventure trips are being done during this period. (12 marks)

 

Part B

 

Question 1 (30 Marks)

Cost accounting is an accounting process that measures all of the costs associated with production, including both fixed and variable costs. The purpose of cost accounting is to assist management in decision-making processes that optimize operations based on efficient cost management.

Required:

Identify and clearly explain 5 different types of costs that are used in managerial decision making. In addition, provide a clear and relevant example for each of these costs.

Question 2 (20 Marks)

The role of management accountants has been well-known to the corporate world as they widely contribute for performing planning, controlling and decision making functions effectively and efficiently through providing solid accounting information with good analysis. Liebherr Industries has been growing in terms of revenue and its customer base over the past decade. The Board of Directors of the company has been claiming that they should have one management accountant for their company to achieve better performance in the coming periods.

Production and Cost Details

Liebherr manufactures and sells many replacement parts for its equipment. PX-111 is one of such parts that has following cost and selling price structure:

Information   $ per unit
Selling Price 700
Direct Material 300

(per unit of material)

 300
Direct Labour cost 50per hour 300
Number of labor hours needed to manufacture one unit of product 6 hours
Fixed Costs for the company $40,000

Estimations for the next year 2021

The company has estimated the following information;

(i) Sales Estimations

First Quarter Second Quarter Third Quarter Fourth Quarter
Number of units to be sold (Units) 1,000 1,100 1,200 1,300

(ii) Inventory estimations

Inventory Beginning

(first quarter)

 Ending
Finished Goods 200 units The company desires to have an ending inventory each quarter equal to 25% of the next quarter’s sales.The first quarter’s sales for the following year (2022) is expected to be 1,400 units
Materials $120,000 The company desires the ending balance in materials inventory to be 45% of the next quarter’s cost of materials.The cost of materials for the first quarter in the following year (2022) is expected to be $170,400

Required:

Based on the estimated information given above, prepare

  • Sales Budget (10 marks)
  • Production Budget (10 marks)

What motives do people have for hacking? Why has hacking become so popular in recent years? Do you regard it as a crime? Explain your position.

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Introduction to Accounting Information Systems

Assignment Question(s): (Marks 15)

Question 1: (04 Marks)

Explain what an AIS is, describe the basic tasks it performs in an organization using examples of Saudi Companies.

 

Question 2: (03 Marks)

Give examples of Saudi companies that using ERP and what are the advantages of implementing the ERP?

 

Question 3: (04 Marks)

What motives do people have for hacking? Why has hacking become so popular in recent years? Do you regard it as a crime? Explain your position.

 

Question 4: (02 Marks)

Describe at least four ways a company can make fraud less likely to occur.

 

Question 5: (02 Marks)

Personal information about customers is collected, used, disclosed, and maintained only in compliance with internal policies and external regulatory requirements and is protected from unauthorized disclosure. With reference to Privacy Concern how would you deal with SPAM and Identify Theft problem of your business organization?

Draw up the relevant Control Accounts entering end-of-year totals for accounts receivable and accounts payable.

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Statement of Financial Position as at March 31, 2010

 

                                                                                    $                                              $

March 31, 2010                       March 31, 2009

ASSETS

Non-current assets                                                      4,200                                       3,700

 

Current Assets

Inventory                                                                    1,500                                       1,600

Accounts receivable                                                    2,200                                       1,800

3,700                                       3,400

Total Assets                                                                7,900                                       7,100

EQUITY & LIABILITIES

Share capital                                                                1,200                                       1,200

Retained earnings                                                       2,800                                       1,900

Total Equity                                                                4,000                                       3,100

 

Non-Current liabilities

Long term loan                                                            1,600                                       2,050

 

Current Liabilities

Accounts payable                                                        1,250                                       1,090

Taxation                                                                         895                                          655

Bank overdraft                                                               155                                          205

Total Current liabilities                                               2,300                                       1,950

Total Equity & Liabilities                                         7,900                                       7,100

 

 

 

 

ABC Co.,

Income Statement for the year ended March 31, 2010

 

$                                 $

Revenue                                                                      5,270

Cost of sales                                                                2,000

Gross profit                                                                 3,270

Operating expenses                 1,000

Depreciation                               970

1,970

Operating profit                                                          1,300

Interest expense                                                             250

Profit before tax                                                          1,050

Taxation                                                                         450

Profit for the year                                                          600

 

 

Additional information:

(i)  During the year ended March 31, 2010 the company purchased property plant & equipment Of  $870.

(ii)  No interest was owed at the end of the year.

(iii) Dividend paid for the year ending March 31, 2010 is $300.

You are required to prepare the Statement of Cash Flow for ABC Co., for the year ended March 31, 2010 as per IAS7.

 

 

Question 2

The financial year of The Better Trading Company ended on 30 November 2017. You have been asked to prepare a Total Accounts Receivable Account and a Total Accounts Payable Account in order to produce end-of-year figures for Accounts Receivable and Accounts Payable for the draft final accounts.   (20 marks)

You are able to obtain the following information for the financial year from the books of original entry:

$

Sales                – cash                                                                                                   344,890

– credit                                                                                                 268,187

Purchases        – cash                                                                                                     14,440

– credit                                                                                                 496,600

Total receipts from customers                                                                                     600,570

Total payments to suppliers                                                                                        503,970

Discounts allowed (all to credit customers)                                                                    5,520

Discounts received (all from credit suppliers)                                                    3,510

Refunds given to cash customers                                                                                   5,070

Balance in the sales ledger set off against balance in the purchases ledger                         70

Bad debts written-off                                                                                                        780

Increase in the allowance for doubtful debts                                                                      90

Credit notes issued to credit customers                                                                          4,140

Credit notes received from credit suppliers                                                                    1,480

 

According to the audited financial statements for the previous year accounts receivable and accounts payable as at 1 December 2016 were $26,555 and $43,450 respectively.

 

Required:

Draw up the relevant Control Accounts entering end-of-year totals for accounts receivable and accounts payable.

Differentiate with suitable examples the relevant cash flows and irrelevant cash flows. What relevant role do these cash flows provide in management decision-making? Provide a suitable example in context to an organization to support your answer.

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Accounting Question

Assignment Question(s):   (Marks 15)

Q1. Differentiate with suitable examples the relevant cash flows and irrelevant cash flows. What relevant role do these cash flows provide in management decision-making? Provide a suitable example in context to an organization to support your answer.   (3 Marks)

Note: Your answer must include suitable examples of relevant and irrelevant cash flows for management decision-making.   (Week 2, Chapter 1)

 

Q2. What are the various methods of estimating cost functions? Explain each method with suitable numerical examples.   (4 Marks)

Note: You are required to assume values for numerical examples of your own, and they should not be copied from any sources.   (Week 3, Chapter 2)

Q3. ALC ltd. manufactures a product ‘X’ for which the selling price per unit, variables cost per unit, and fixed costs are as follows:   (4 Marks)

Selling price per unit SAR 750
Variable cost per unit SAR 225
Total Fixed Costs SAR 425,000

Answer the following questions using cost volume profit analysis:

  1. Determine the break-even point in units.
  2. Determine the break-even point in sales SAR.
  3. What will be the pretax profit if the company sells 1,400 units of the product?
  4. How many units the company will be required to sell to reach a target pretax profit of SAR 200,000?
  5. The margin of safety in units if the company’s estimated next year budgeted sales are 1,500 units.        (Week 4, Chapter 3)

 

Q4. KCC Ltd. uses a process costing system for its sole processing department. There were 35,000 units in the beginning WIP inventory for June and 325,000 units were started in June. The beginning WIP units were 50% complete and the 30,000 units in the ending WIP were 40% complete. All materials are added at the start of processing.      (4 Marks)

You are required to:

  1. a) Compute the no. of units started & completed.
  2. b) Compute the EUP for DM and CC using FIFO and WA methods.
  3. c) Calculate total manufacturing cost/EUP under both methods with the following details:
  FIFO WA
Direct Material Cost SAR 850,000 SAR 1,000,000
Conversion Cost SAR 1,025,000 SAR 1,350,000

(Week 5, Chapter 6)

Consolidated financial statements present the financial position and results of operations for controlling entity and one or more controlled entities. ‘Consolidated Financial Statement has some advantages but at the same time it is not free from limitations.’ Elaborate this statement.

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Accounting Question

  • Assume Large Corporation Invested $ 600,000 for Small Corporation and the estimated Fair Market Values of Assets, Liabilities and Equity Accounts are as follows:
Assets Amount $ Liabilities Amount $
Account Receivable

Inventory

LT Marketable Securities

PP & E

 125,000

50,000

55,000

170,000

400,000

 

 Account Payables

Retained Earnings

Commons Stock

 180,000

120,000

100,000

 

400,000

 

 

Required:    (2+3 Marks)

  1. Determine the Amount of Goodwill or Bargain Purchase.
  2. What is the Journal Entry in the book of Large Corporation?

 

  • From the following Table pass Basic Elimination Entry under Equity Method in the book of Parent Company: (5 Marks)
  Total

Book Value

 = Common

Stock

 + Additional

Paid in Capital

 + Retained

Earnings
Beginning Book Value

+ Net Income

–         Dividend

 600

 

200

(50)

 150 550 (100)

 

200

(50)
Ending

Book Value

 750 150 550 50

 

  • Consolidated financial statements present the financial position and results of operations for controlling entity and one or more controlled entities. ‘Consolidated Financial Statement has some advantages but at the same time it is not free from limitations.’ Elaborate this statement. (5 Marks)

 

You have been asked to present the pros and cons of converting to the IFRS standards, thus allowing your company to move to international markets. Explain how this change will affect the financial statements.

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Discussion

Merchandising companies invest large sums of money in inventory, having to account for the purchasing, selling, and costs. Most U.S. based companies or companies on U.S. exchanges have previously had to follow the GAAP standards. As IFRS has moved forward in many countries, these companies have to review if the GAAP or the IFRS standards should be used.

Your company has been following GAAP standards and is looking to expand to international markets. You have been using a LIFO cost of inventory system and have had several inventory items marked down under the lower-of-cost-or-market. You have been asked to present the pros and cons of converting to the IFRS standards, thus allowing your company to move to international markets. Explain how this change will affect the financial statements.

150 words-300.

On March 31, Sarah paid SAR 4,000 cash to the supplier for the inventory purchased on credit earlier in the month. Prepare the journal entry.

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Assignment Question(s):(Marks 15)

Question 1: (5 Marks)

Sarah owns a boutique that sells women’s clothing and accessories. She keeps track of her business transactions using a journal.

  • On March 1, Sarah invested SAR 10,000 cash in her business to start operations. Prepare the journal entry.
  • On March 5, Sarah purchased inventory for SAR 5,000 on credit from a supplier. Prepare the journal entry.
  • On March 10, Sarah sold SAR 3,000 worth of inventory for cash. Prepare the journal entry.
  • On March 15, Sarah paid SAR 1,000 cash for rent for the month. Prepare the journal entry.
  • On March 20, Sarah purchased office supplies for SAR 200 cash. Prepare the journal entry.
  • On March 25, Sarah received a bill for SAR 800 for advertising expenses incurred during the month. Prepare the journal entry.
  • On March 31, Sarah paid SAR 4,000 cash to the supplier for the inventory purchased on credit earlier in the month. Prepare the journal entry.

Instructions: Prepare the journal entry in SAR currency for each of the above transactions.

Question 2: (5 Marks)

Omar owns a catering service company that provides food and beverage services for events such as weddings and corporate events. He uses the accrual basis of accounting to record his company’s financial transactions. Here are some of the transactions that occurred during the year:

  • On January 1, Omar signs a contract with a client to provide catering services for their wedding on July 1. The total contract amount is SAR 25,000. When should Omar recognize the revenue for this transaction under the accrual basis?
  • On July 1, Omar provides catering services to the client from the January 1 contract. The client pays the full amount of SAR 25,000 on the day of the event. When should Omar recognize the revenue for this transaction under the accrual basis?
  • On October 1, Omar provides catering services to a corporate client and invoices them for SAR 12,000. The payment is not received until November 15. When should Omar recognize the revenue for this transaction under the accrual basis?

Question 3:(5 Marks)

ABC Consulting is a company that provides consulting services to clients in various industries. The company also rents out a portion of its office space to other businesses. As the accountant for ABC Consulting, you are tasked with preparing the company’s income statement for the year 2022 based on the following information taken from the trial balance:

  • Consulting revenue: SAR70,000
  • Rental revenue: SAR30,000
  • Supplies expense: SAR5,000
  • Rent expense: SAR20,000
  • Wages expense: SAR30,000

Your task is to prepare the income statement for ABC Consulting in 2022 based on the information provided above.

Write a policy statement based on your analysis that discusses Jacksonville’s strengths and challenges going forward, and policy options for dealing with those challenges.

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Government Budgeting and Finance

Using one set of the factors (environmental or financial ) used to determine financial solvency as discussed in Table 7.1 of this chapter, analyze the financial condition of Jacksonville. Your analysis should focus on the condition of the city not an agency within the city. Your trend analysis must use as least 5 years of data. Hence you will need financial data and demographic data for Jacksonville for at least five years. The financial information can be found in Jacksonville’s Comprehensive Annual Financial Reports (found her Links to an external site.). The community needs and resources demographic data can be obtained from the US Census Bureau Quick Facts on-line portal. Instructions for finding the Census data are attached below. It would take too long to examine each characteristic, so choose four key factors from the list of financial or environmental factors. Use the Table template attached below to present your analysis. Use graphs of the trends in the key financial and demographic variables where appropriate to support your analysis. Finally write a policy statement based on your analysis that discusses Jacksonville’s strengths and challenges going forward, and policy options for dealing with those challenges.

You can choose whether to analyze financial factors or environmental factors for this assignment by going to the People/Group button on the left-hand side menu and self-selecting into a group

COJ.net – Annual Comprehensive Financial Reports

Summarize the code (6 principles), explain what is meant by each principle, give your opinion on who benefits from the code and why.

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AICPA Code of Professional Conduct

Summarize the code (6 principles), explain what is meant by each principle, give your opinion on who benefits from the code and why. Paper should be 5 or more pages, double spaced, and a works cited page. Must have at least 3 sources. The more sources and information, the better the grade.