Question 1
Assignment 1: Financial Research Report Imagine that you are a financial manager researching investments for your client that align with its investment goals. Use the Internet to research any U.S. publicly traded company that you may consider as an investment opportunity for your client. (Note: Please ensure that you are able to find enough information about this company in order to complete this assignment. You will create an appendix, in which you will insert related information.) Write a ten to fifteen (10-15) page paper in which you: 1. Provide a rationale for the U.S. publicly traded company that you selected, indicating the significant factors driving your decision as a financial manager. 2. Determine the profile of the investor for which this company may be a fit, relative to that potential investor?s investment strategy. Provide support for your rationale. 3. Select any five (5) financial ratios that you have learned about in the text. Analyze the past three (3) years of the company?s financial data, which you may obtain from the company?s financial statements. Determine the company?s financial health. (Note: Suggested ratios include, but are not limited to, current ratio, quick ratio, earnings per share, and price earnings ratio.) 4.) Based on your financial review, determine the risk level of the company from your investor?s point of view. Indicate key strategies that you may use in order to minimize these perceived risks. 5.) Provide your recommendations of this stock as an investment opportunity. Support your rationale with resources, such as peer-reviewed articles or material from the Strayer Library. 6.) Use at least five (5) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources. Your assignment must follow these formatting requirements: 1.) Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. 2.) Include a cover page containing the title of the assignment, the student?s name, the professor?s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
Question 3
1. Which of the following accounting treatments is proper for a change in reporting entity? a. Restatement of all financial statements presented b. Restatement of current period financial statements c. Note disclosure and supplementary schedules d. Adjustment to retained earnings and note disclosure 2. Which of the following should be reported as a change in accounting estimate? a. Change in the reported beginning inventory amount due to a discovery of a bookkeeping error b. Change from the completed-contract method to the percentage-of- completion method for revenue recognition on long-term construction contracts c. Increase in the rate applied to net credit sales from 1 percent to 1-1/2 percent in determining losses from uncollectible receivables d. Change made to comply with a new FASB pronouncement 3. Which of the following is not a change in accounting principle? a. A change from FIFO to LIFO for inventory valuation b. A change from completed-contracts to percentage-of-completion c. A change from eight years to five years in the useful life of a depreciable asset d. A change from double-declining-balance to straight-line depreciation 4. An example of an item that should be reported as a prior period adjustment is the a. collection of previously written off accounts receivable. b. payment of taxes resulting from examination of prior years' income tax returns. c. correction of an error in financial statements of a prior year. d. receipt of insurance proceeds for damage to a building sustained in a prior year. 5. At the time Fisher Corporation became a subsidiary of Ashbury Corporation, Fisher switched depreciation of its plant assets from the straight-line method to the sum-of-the-years'-digits method used by Ashbury. With respect to Fisher, this change was a a. change in an accounting estimate. b. correction of an error. c. change in accounting principle. d. change in the reporting entity. 6. The effect of a change in accounting principle that is inseparable from the effect of a change in accounting estimate should be reported a. in the period of change and future periods. b. by restating the financial statements of all prior periods presented. c. by showing the pro forma effects of retroactive application. d. as a correction of an error. 7. Lexicon Inc. bought a patent for $600,000 on January 2, 2007, at which time the patent had an estimated useful life of ten years. On February 2, 2011, it was determined that the patent's useful life would expire at the end of 2013. How much would Lexicon record as amortization expense for this patent for the year ending December 31, 2011? a. $140,000 b. $120,000 c. $105,000 d. $60,000 ANS: B 8. Kentucky Enterprises purchased a machine on January 2, 2010, at a cost of $120,000. An additional $50,000 was spent for installation, but this amount was charged erroneously to repairs expense. The machine has a useful life of five years and a salvage value of $20,000. As a result of the error, a. retained earnings at December 31, 2011, was understated by $30,000 and 2011 income was overstated by $6,000. b. retained earnings at December 31, 2011, was understated by $38,000 and 2011 income was overstated by $6,000. c. retained earnings at December 31, 2011, was understated by $30,000 and 2011 income was overstated by $10,000. d. 2010 income was understated by $50,000. 9. Under the direct method, cash paid to suppliers can be computed as cost of goods sold for the period a. plus an increase in inventory and minus an increase in accounts payable. b. plus a decrease in inventory and minus an increase in accounts payable. c. minus an increase in inventory and plus an increase in accounts payable. d. minus a decrease in inventory and plus an increase in accounts payable. 10. Which of the following investments should be classified as cash equivalents for Able Company in preparing the statement of cash flows? 1 Shares of stock in Able Company. 2 A one-month Treasury note purchased by Able Company when only 3 months remained in the note's term. 3 Share in a money market fund purchased by Able Company; the fund purchases only investment grade corporate debt instruments with maturities of 2 months or less. 4 A one-year treasury note purchased by Able Company when the treasury note was issued, which now has only 2 months remaining in its term. a. 2, 4 b. 2, 3, 4 c. 2, 3 d. 1, 2, 3, 4 11. Which of the following transactions would not be reported on the statement of cash flows? a. Purchase of treasury stock b. Purchase of an operational asset by issuing common stock c. Declaration of a cash dividend which has not yet been paid d. Patent amortization 12. Which of the following is not required by generally accepted accounting principles? a. Statement of cash flows b. Earnings per share c. Cash per share d. Disclosure in notes to financial statements of the projected benefit obligation of a defined-benefit pension plan 13. Which of the following is not classified as an operating activity? a. Interest received b. Interest paid c. Dividends received d. Dividends paid 14. The statement of cash flows and related disclosures would be of the least assistance in helping a potential investor assess a. a firm?s ability to generate cash. b. a firm?s ability to meet its obligations. c. a firm?s ability to make good use of cash reserves to earn interest or other return. d. the reasons for differences between income and associated cash flows. 15. Which of the following is the primary factor in determining the functional currency of a foreign subsidiary? a. How the costs for the foreign entity's product are determined b. The denomination of the foreign entity's financing c. The location of the primary sales market that influences the price of the foreign entity's product d. Management's assessment of all relevant factors 16. A translation adjustment resulting from the translation process is disclosed on the financial statements as a. a separate component of stockholders' equity. b. a below-the-line item on the income statement. c. an adjustment to retained earnings. d. a part of income from operations on the income statement. 17. Which of the following is the least likely means a company might choose to meet the needs of international investors? a. Translation of financial statements or annual reports into the language of the user. b. Denomination of the financial statements in the currency of the country where the financial statements will be used. c. Partial or complete restatement of financial statements to the accounting principles of the financial statement users' country. d. Mutual recognition in which one country accepts the financial statements of another country for regulatory purposes such as listing on stock exchanges or filing annual reports. 18. The SEC currently requires foreign companies that list shares on U.S. exchanges to provide a. both complete U.S. GAAP financial statements and a reconciliation of their reported income under non-U.S. GAAP to the reported income under U.S. GAAP. b. only complete U.S. GAAP financial statements; the SEC will not accept under any circumstances only a reconciliation of an entity?s reported income under non-U.S. GAAP to reported income under U.S. GAAP. c. complete U.S. GAAP financial statements or a reconciliation of their reported income under non-U.S. GAAP to reported income under U.S. GAAP. d. only a reconciliation of their reported income under non-U.S. GAAP to reported income under U.S. GAAP; the SEC will not accept under any circumstances only a complete set of U.S. GAAP financial statements. 19. Current generally accepted accounting principles require that the translation of a foreign subsidiary?s accounting records should be accomplished by the a. monetary/nonmonetary method. b. current rate method. c. current/noncurrent method. d. functional currency method. 20. Foreign currency translation adjustments arising from translation of the financial statements of a foreign subsidiary are reported in a. stockholders? equity of the foreign subsidiary. b. revenue or expenses of the foreign subsidiary. c. consolidated net income of the parent company and the foreign subsidiary. d. stockholders? equity of the parent company. 21. A useful tool in financial statement analysis is the common-size financial statement. What does this tool enable the financial analyst to do? a. Evaluate financial statements of companies within a given industry of approximately the same value. b. Determine which companies in the same industry are at approximately the same stage of development. c. Ascertain the relative potential of companies of similar size in different industries. d. Compare the mix of assets, liabilities, capital, revenue, and expenses within a company over time or between companies within a given industry without respect to relative size. 22. Which of the following transactions would increase a firm's current ratio? a. Purchase of inventory on account b. Payment of accounts payable c. Collection of accounts receivable d. Purchase of temporary investments for cash 23. Millward Corporation's books disclosed the following information for the year ended December 31, 2011: Net credit sales .................................... $1,500,000 Net cash sales ...................................... 240,000 Accounts receivable at beginning of year ............ 200,000 Accounts receivable at end of year .................. 400,000 Millward's accounts receivable turnover is a. 3.75 times. b. 4.35 times. c. 5.00 times. d. 5.80 times. 24. Which of the following is an appropriate computation for return on investment? a. Net income divided by total assets b. Net income divided by sales c. Sales divided by total assets d. Sales divided by stockholders' equity 25. From the standpoint of the stockholders of a company, the ratio that measures the overall performance of a company would be calculated using which of the following? a. Average total assets and net income b. Average stockholders? equity and net sales c. Average stockholders? equity and net income d. Net sales and average total assets 26. Which of the following ratios does not measure liquidity? a. Current ratio b. Quick ratio c. Working capital to total assets d. Debt to equity 27. Which of the following ratios does not measure efficiency or activity of an entity? a. Accounts receivable turnover b. Age of accounts receivable c. Net cash flow to current liabilities d. Times interest earned 28. Which of the following ratios does not measure liquidity? a. Net cash flow to current liabilities b. Working capital to total assets c. Current ratio d. Quick ratio 29. The book value per share of common stock measures a. liquidity. b. profitability. c. equity position and coverage. d. efficiency. 30. Which of the following is true regarding the debt to equity ratio? a. The debt to equity ratio is a stringent measure of liquidity. b. The debt to equity ratio measures the productivity and desirability of the equity investment. c. The debt to equity ratio measures management?s ability to productively employ all its resources. d. The debt to equity ratio measures the capital structure of the entity. Short Essay I Ideally, managers should make accounting changes only as a result of new experience or information or due to changes in economic conditions that demand methods of accounting that more accurately reflect such changing conditions. Managers should be attempting to achieve the closest match between reporting and economic reality. Identify motivations for managers to make accounting changes other than the goal of achieving congruence between reporting and economic reality. The essay should be at least three paragraphs Short Essay II Laura Anderson has just been assigned as the senior accountant on the audit of Larsen Manufacturing Company. Laura currently is planning the audit and has been considering what procedures to perform in examining the company's inventories of raw materials, work-in-process, and finished goods. She has determined that the calculation of certain ratios and other financial analysis techniques will prove useful to her in deciding how to approach the audit of the company's inventory accounts. Identify the ratios to be calculated and the factors to be considered in Laura's analysis of the company's inventory accounts. The essay should be at least three paragraphs
Question 5
"Which of the following activities is most likely to be classified as value-added for a manufacturing company? A. storing B. ordering C. inspecting D. assembling 2. Which of the following activities is most likely to be classified as value-added for a merchandise company? A. purchasing B. waiting C. receiving D. setting up 3. Activity-based cost management (ABM) can best be defined as A. a cost system using multiple departmental overhead rates. B. the use of cost information gathered using activity-based costing (ABC). C. a quality-control system focusing on eliminating errors and mistakes. D. an incentive system for a company's key decision-makers. 4. Which of the following items would be classified as a hatch-level cost in an activity-based cost management (ABM) system? A. indirect labor B. production supervisor's salary C. depreciation on factory building D. machinery set-up costs 5. Which of the following items would be classified as a product-level cost in an activity-based cost management (ABM) system? A. change order to meet new a new customer's specification B. movement or materials for products in production C. long-term lease payments for factory equipment D. insurance and property taxes on faculty building 6. Which of the following items would not he used as the cost driver for a volume-level cost in an activity-based cost management (ABM) system? A. direct labor hours B. machine hours C. units produced D. square footage 7. In an activity-based cost management (ABM) system, facility-level costs are those that are incurred to: A. sustain the company's marketing program. B. maintain the plant's production capacity. C. support the research and development process. D. caused by a change in the engineering plans for a product. 8. Activity-based costing (ABC) information cannot be used by managerial decision-makers to evaluate the A. profitability of a customer. B. market potential of a product. C. cost of using a particular supplier. D. whether to continue providing a service. 9. Green Lumber Supply noticed a recent decline in the amount of purchases from a key customer. Worried that other customers might also reduce their purchases, Green's management decided to evaluate the cost of its delivery service. Which of the following cost drivers should be used for general administrative costs of the Delivery Department'? A. number of orders entered B. value ofeach order C. number of items in each order D. number of deliveries made 10. The unused resource capacity is the difference between the resources supplied and the resources A. purchased. B. wasted. C. used. D. on hand. 11. The amount of production possible under normal working conditions, including planned downtime and scheduled vacations, is called A. actual capacity B. normal capacity. C. practical capacity. D. theoretical capacity. 12. Which of the following statements regarding quality costs is(are) false'? (A) In a cost of quality system, internal and external failure costs are called conformance costs. (B) Prevention costs are costs incurred to detect individual units of product that do not conform to its specifications. A. Only A is false. B. Only B is false. C. Both A and I3 are false. D. Neither A nor B is false. 13. Which of the following is not an example of a prevention cost? A. Training employees to improve quality B. Designing products to reduce production problems C. Correcting product defects before they are sold D. Inspecting the production process as it occurs 14. Which of the following is an example of a prevention cost? A. Machine inspection B. Warranty repairs C. Field testing D. Marketing costs 15. Which of the following is an example of an internal failure cost? A. Training employees to improve quality B. Designing products to reduce production problems C. Correcting product defects before they are sold D. Inspecting the production process as it occurs. 16. Which of the following is not an example of an external failure cost'! A. Accepting company liability resulting from product failure B. experiencing decreasing sales as a result of poor-quality products C. Repairing or replacing defective products after they've been sold D. Testing products in use at the customer's site 17. Which of the following items is included in almost all quality control systems'? A. Quality-related waiting time B. Quality planning and analysis C. Excess or obsolete inventory D. Quality-related overtime 18. Beta Company is preparing its annual profit plan. As part of its analysis of the profitability of its customers, management estimates that the $12,000 for sales support should be assigned to the individual customers from the information given as follows: Customer A Customer B Units purchased 100,000 200,000 Purchase orders(annual) 5 20 What is the amount of the sales support costs that should be allocated to customer A assuming Beta uses activity-based costing (ABC)? A. $2,400 B. $4,000 C. 8,000 D. 9,600 E. Some other answer 19. Which of the following statements about activity-based costing (ABC) is not true? (CIA adapted) A. In ABC, cost drivers are what cause costs to be linked to products. B. ABC is useful for assigning marketing and distribution costs C. ABC differs from traditional costing systems in that products are not cross-subsidized. D. ABC is more likely to result in major differences from traditional costing systems if the firm manufactures only one product rather than multiple products. 20. In an activity-based costing (ABC) system, cost reduction is accomplished by identifying and eliminating (CPA adapted) All Cost Drivers Nonvalue-added Activities A. No no B. Yes yes C. No yes D. Yes no 21. Black Company?s cost management and product costing procedures follow activity-based costing (ABC) principles. Activities have been identified and classified as being either value-added or nonvalue ?added for each product. Which of the following activities, used in Black?s production process, is nonvalue-added? (CPA adapted A. Drill press activity B. Heat treatment activity C. Design engineering activity D. Raw materials storage activity BC Enterprises? quality control report for august 2008 contains the following item. Gathering, analysis, and reporting quality data $1,000 Inspecting raw materials received from vendors $2,000 Testing and inspecting finished products $3,000 Visiting customer sites and addressing complaints $4,000 Designing product to reduce production problems $5,000 Repairing and/ or replacing products under warranty $6,000 Maintaining the equipment used to gather quality data $7,000 Cost (net) of materials wasted during production $8,000 22. What would be the total of the prevention costs on the August 2008 quality control report for BC Enterprises? A. $5,000 B. $7,000 C. $11,000 D. $12,000 E. Some other answer 23. What would be the total of the appraisal costs on the August 2008 quality control report for BC Enterprises? A. $8000 B. $11,000 C. $12000 D. $15000 E. Some other answer 24. What would be the total of the internal failure costs on the august 2008 quality control report for BC Enterprises? A. $8,000 B. $13000 C. $14,000 D. $16,000 E. Some other answer 25. What would be the total of the external failure costs on the August 2008 quality control report for BC Enterprises? A. $4,000 B. $6,000 C. 7,000 D. 14,000 E. Some other answer 26. What would be the total of the conformance costs on the August 2008 quality control report for BC Enterprises? A. $22,000 B. $20,000 C. $15,000 D. $13,000 E. Some other answer 27. What would be the total of the nonconformance costs on the August 2008 quality control report for BC Enterprises? A. $22,000 B. 21,000 C. 14,000 D. 13,000 E. Some other answer Another section Basic decision analysis using cvp 1.Anu?s Amusement center has collected the following data for operations for the year Total revenues $800,000 Total fixed costs $218,750 Total variable costs $450,000 Total tickets sold $50,000 Required a. What is the average selling price for a ticket? b. What is the average variable cost per ticket ? c. What is the average contribution margin per ticket? d. What is the break-even point? e. Anu has decided that unless the operation can earn at least $43,750 in operating profits, she will close it down. What number of tickets must be sold for anu?s amusements to make a $43,750 operating profit for the year on ticket sales? 2. basic CVP analysis The manager of Kima?s food Mart estimates operating costs for the year will include $900,000 in fixed costs. Required a. Find the break-even point in sales dollars with a contribution margin ratio of 40 percent b. Find the break-even point is sales dollars with a contribution margin ratio of 25 percent c. Find the sales dollars required to generate a profit of $200,000 for the year assuming a contribution margin ratio of 40 percent. 3. basic decision analysis using CVP Cambridge, inc is considering the introduction of a new calculator with the following price and cost characteristics: Sales price $18 each Variable costs 10 each Fixed costs 20,000 per month a. What number must cambridge sell per month to break even? b. What number must cambride sell to make an operating profit of $16,000 for the month? 4. Basic Decision Analysis using CVP Refer to the data for cambridge, Inc (the question above). Assume that the projected number of units sold for the year is 7,000. Consider requirements (b),(c) and (d) independently of each other. a. What will the operating profit be? b. What is the impact on operating profit if the sales price decreases by 10percent? Increases by 20 percent c. What is the impact on operating profit if variable costs per unit decreases by 10 percent? Increase by 20 percent? d. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changed have on operating profit for the year? Will profit go up? Down? By how much? 5. CVP and margin of safety Rainbow tours gives walking tours of springfield, Rainbow charges $40 per person for the tour and incurs $16 in variable costs for labor, drinks, and maps. The monthly fixed costs for rainbow tours are 3,000 a. How many tours must rainbow sell every month to break even? b. Rainbow tours?s owner believes that 175 people a month will sign up for the walking tour. What is the margin of safety in terms of the number of people signing up for the tour? 6. maria?s food service provides meals that nonprofit organizations distribute to handicapped and elderly people. Here is her forecasted income statement for April, when she expects to produce and sell 3,000 meals: Sales revenue $18,000 $6.00 per unit Costs of meals produced $13,500 4.50 per unit Gross profit $4500 $1.50 per unit Administrative costs $ 2,100 0.07 Operating profit $2,400 $0.80 Fixed costs included in this income statement are 4,500 for meal production and $600 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.50 per meal for 300 meals on April 10. Maria has sufficient idle capacity to fill this special order. These meals will incur all of the variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected. a. What impact would accepting this special order have on operating profit? b. Should Maria accept the order? 7. Mobility partners makes wheelchairs and other assistive devices. For years it has made the rear wheel assembly for its wheelchairs. A local bicycle manufacturing firm, trailblazers, inc offered to sell these rear wheel assemblies to mobility. If mobility makes the assembly, its cost per rear wheel assembly is a as follows (based on annual production of 2,000 units): Direct materials $25 Direct labor $53 Variable overhead $16 Fixed overhead $47 Total $141 Trailblazers has offered to sell the assembly to mobility for $110 each. The total order would amount to 2,000 rear wheel assemblies per year , which mobility?s management will buy instead of make if mobility can save at least $10,000 per year. Accepting trailblazer?s offer would eliminate annual fixed over head of $40,000 a. Should mobility make rear wheel assemblies or buy them from trailblazers? Prepare a schedule that shows the differential costs per rear wheel assembly. 7. Mel?s meals 2 go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. Mel?s kitchen and adjoining meeting room operate at 70 percent of capacity. Mel?s purchases the cookies for $0.60 each but is considering making them instead. Mel?s can bake each cookie for $0.20 for materials, $0.15 for direct labor and $0.45 for overhead without increasing its capacity. The $0.45 for overhead includes an allocation of $0.30 per cookie for fixed overhead. However, total fixed overhead for the company would not increase if mel?s makes cookies. Mel himself has come to you for advice. ?it would cost me $0.80 to make the cookies, but only $0.60 to buy. Should I continue buying them?? materials and labor are variable costs, but variable overhead would be only $0.15 per cookie. Two cookies are put into every lunch a. how would you advise mel? Prepare a schedule to show the differential costs. 8. estimate machine hours worked from overhead data Sydney Corporation estimates that machine-hours for the year would be 20,000 hours and over head(all fixed) would be $80,000. Sydney applies its overhead on the basis of machine hours during the year, all overhead costs were exactly as planned ($80,000). There was $11,000 in over-applied overhead. a. How many machine hours were worked during the period? Show computations. 9. compute equivalent units: Weighted- Average Method Clean Corporation manufactures liquid window cleaner. The following information concerns its work in process: ? Beginning inventory, 8,000 partially complete gallons ? Transferred out, 42,000 gallons ? Ending inventory (materials are 10 percent complete; conversion costs are 20 percent complete) ? Started this month 48,000 gallons a. Compute the equivalent units for materials using the weighted- average method. b. Compute the equivalent units for conversion costs using the weighted-average method. 10. compute equivalent units: Weighted- Average Method Missouri Corporation shows the following information concerning the work in process at its plant: ? Beginning inventory was partially complete (material s are 100 percent complete; conversion costs are 60 percent complete) ? Started this month, 180000 units ? Transferred out, 150,000 units ? Ending inventory, 100,000 units (materials are 100percent complete; conversion costs are 15 percent complete) a. Compute the equivalent units for materials using the weighted-average method. b. Compute the equivalent units for conversion costs using the weighted-average method. 11. Compute Equivalent Units: FIFO method Materials are added at the beginning of the production process at Santiago Company which uses a FIFO process costing system. The following information on the physical flow of units is available for the month of april: ? Beginning work in process (40%complete) 45,000 ? Started in April 510,000 ? Completed in April and transferred out 480,000 ? Ending work in process (70% complete) 75,0000 a. Compute the equivalent units for the conversion costs calculation.,where else can i get assistance?
