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Nguyen, Thanh Quang 11464914

ACC 501

Question 1: a1. How do you paste a spreadsheet in a document showing row and column headings? Copying the spreadsheet in Excel 2010: 1. this tab 2. Tick the Row and column headings setting under the print section and Go to Page Layout tab after that click on the Print Titles in the middle of

then click OK to close the Page Setup. 3. 4. Choose the area of cells that you want to copy and then go to Home tab. Click on the Copy Options and a drop down menu will appear. Select As

Picture Copy as Picture after that a window will appear. 5. Select As shown when printed and click OK.

Pasting the spreadsheet in Word 2010: Select the location to paste the spreadsheet and then use Ctrl + V to paste your picture.
A 12 13 14 15 16 17 18 Revenue Cost of goods sold Gross margin Tax rate Tax fee Cash B FIFO 1 $448,000.00 $296,000.00 $152,000.00 40.00% $60,800.00 $91,200.00 C LIFO 1 $448,000.00 $336,000.00 $112,000.00 D FIFO 2 $448,000.00 $264,000.00 $184,000.00 E LIFO 2 $448,000.00 $224,000.00 $224,000.00

$44,800.00 $73,600.00 $89,600.00 $67,200.00 $110,400.00 $134,400.00

a2. How do you paste the formula view of a spreadsheet? Copying the spreadsheet in Excel 2010: 1. Go to Page Layout tab and click on the Print Titles located on the right

corner of the Page Layout group.

Nguyen, Thanh Quang 11464914

ACC 501

2.

Tick the Row and column headings setting under the print section and

then click OK to close the Page Setup. 3. 4. tab. 5. Click on the Copy Options and a drop down menu will appear. Select As Select As shown when printed and click OK. Picture Copy as Picture and then a window will appear. 6. Press the Control ` key combination. Select the ranges of cells that you want to copy and then go to Home

Pasting the spreadsheet in Word 2010: Select the location to paste the spreadsheet and then use Ctrl + V to paste your picture.

A 12 13 14 15 16 17 18 Revenue Cost of goods sold Gross margin Tax rate Tax fee Cash

B FIFO 1 =D8*C8 =B4*C4+8000*C6 =B13-B14 0.4 =B15*$B$16 =B15-B17

C LIFO 1 =D8*C8 =28000*C6 =C13-C14 =C15*$B$16 =C15-C17

D FIFO 2 =D8*C8 =B4*C4+8000*C7 =D13-D14 =D15*$B$16 =D15-D17

E LIFO 2 =D8*C8 =28000*C7 =E13-E14 =E15*$B$16 =E15-E17

Nguyen, Thanh Quang 11464914

ACC 501

b. Capture a screen shot to your computer.

Nguyen, Thanh Quang 11464914

ACC 501

Question 2: 15-2. Define Assets and Liabilities. Assets are things that have their own value like property. Assets are owned by a person or a corporation that can determine to keep or sell them to pay debts. Assets have two types, namely tangible and intangible. Tangible assets are fixed assets such as land, equipment and so on. Intangible are nonphysical assets such as copyrights and goodwill. Assets is considered to bring the future economic advantages and it also be depreciated during the time using. Assets have three essential characteristics. First one is that the probable present benefit involves a capacity, singly or combining with other assets. Second one is that the entity can control asset to make profits. Last one is that the transaction rise to the entitys right to or control of the profit has already occurred. Liabilities are debts of company with outside parties such as accounts payable, loans. The debtor has the responsibility to pay the amount money that they borrowed before. Liabilities, similar to assets, have short and long-term liabilities. It can be seen that liabilities allow a person and a company be able to do their plant even though they do not have enough cash. Therefore, there are so many companies using liabilities to invest in their assets. Many companies use debt as a strategy for their invested plants. Liabilities also include the owners equity. The more proportion of owners equity, the more risk for the company. However, there is a worse if the excesses in debt happened. In fact, to control the debt, company has to decline its consumptions or even investment. As a result, the society will develops slowly. According to Horngren, Sundem, Stratton, Burgstahler & Schatzberg, liabilities are the entitys economic obligations to nonowners (2010, p637). 15-4. Criticize: Net income is the difference in the ownership capital account balances at two points in time. This statement is untrue. This is because net income is a company's total earnings (or profit). Net income is calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses. This statement forgot mentioning about

Nguyen, Thanh Quang 11464914

ACC 501

withdrawals and investment in ownership capital when both of which only influence to owners equity. In fact, withdrawals and investment do not affect to the net income. 15-7. Explain why some accountants want to record R&D expenditures as an asset on acquisition. R & D refer to research and development. Givoly and Shi (2008) point out that the R&D expenditures are the wisdom of investing in intangibles. Furthermore, R&D can be expected net advantages. Thus, GAAPs principle for accounting is appropriate for expenditure of intangible in which it is defined as an asset. 15-9 Depreciation is cost allocation, not valuation. Do you agree? Explain. I agree with this statement because the present market price of an asset or equipment is always lower than the value at the date of exchange. So, this process of allocating the equipment cost to the years its useful life via a depreciation method applies to physical assets. (Horngren et al, 2010, p645). Depreciation expense is the amount of cost allocation within an accounting period. 15-12. Criticize the following statement: As a stockholder, I have a right to more dividends. You have millions stashed away in retained earnings. Its about time that you let the true owners get their hands on that pot of gold I disagree with this statement. This is because the company have to keep the retain earnings to reinvest. After that the company can pay to you the dividend in the end of reinvestment. Dividends are distributions of assets to stockholders that reduce ownership claims. The cash dividends that companies pay typically arise from profitable operations. Thus, journalists often write about dividends or withdrawals as distributions of profits or distributions of retained earnings. If the stockholder wants to get more dividends, it means that the company will have no capital to reinvest again. In addition, the right of stockholder is only earn dividend from profit of company and company always keep amount money called retain earnings to reinvest again (Horngren et al, 2010, p 650).

Nguyen, Thanh Quang 11464914

ACC 501

Question 3: 15-47
A DATA INPUT B C D E F $ 1,604.00 2,619.00 b c 2,206.00 72,483.00 748.00 3,546.00 a 5,225.00 10,355.00 5,361.00 1,921.00 2,455.00 285.00 20,682.00 G H I J K L

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Accured liabilities Cash and cash equivalents Total stockholders' equity Total liabilities Long-term liabilities Total revenues Accounts receivable Common stock Inventories Account payable Property, net of accumulated depreciation Retained earnings Other assets Other liabilities Other stockholders' equity Total assets

Required: Caculate Inventories, taotal stockholders' equity and total liabilities

Nguyen, Thanh Quang 11464914


A B C D REPORT BALANCE SHEET for Costco Wholesale Corporation as at August 31, 2008 (in millions of dollars) ASSETS Current assets Cash and equivalents Account receivable Inventories Total current assets Non-current assets Property, net of accumulated depreciation accumulated depreciation Total noncurrent assets Other assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable Accured liabilities Total current liabilities Non-current liabilities Long-term debt Total noncurrent liabilities Other liabilities Total liabilities Shareholders' equity Common stock Retained earnings Other stockholders' equity Total shareholders' equity Total liabilities and shareholders' equity E F G H I J K

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L

23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63

$ 2,619.00 748.00 5,039.00 8,406.00

10,355.00 10,355.00 1,921.00 20,682.00

5,225.00 1,604.00 6,829.00

2,206.00 2,206.00 2,455.00 11,490.00

3,546.00 5,361.00 285.00 9,192.00 20,682.00

Inventories (a) = total current assets - account receivable - cash and cash equivalents = $5,039.00 Total shareholders' equity (b)= Common stock + retained earnings + other stockholders' equity = $9,192.00 Total liabilities (c)= total current liabilities + total noncurrent liabilities + other liabilities = $11,490.00

Nguyen, Thanh Quang 11464914


A B REPORT BALANCE SHEET for Costco Wholesale Corporation as at August 31, 2008 (in millions of dollars) ASSETS Current assets Cash and equivalents Account receivable Inventories Total current assets Non-current assets Property, net of accumulated depreciation accumulated depreciation Total noncurrent assets Other assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable Accured liabilities Total current liabilities Non-current liabilities Long-term debt Total noncurrent liabilities Other liabilities Total liabilities Shareholders' equity Common stock Retained earnings Other stockholders' equity Total shareholders' equity Total liabilities and shareholders' equity C D E F

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23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59

$ 2619 748 =F33-F30-F31 =F39-F37-F38

10355 =F36 1921 20682

5225 1604 =F43+F44

2206 =F48 2455 =F45+F49+F50

3546 5361 285 =SUM(F54:F56) =F57+F51

Question 4: 16-5 Criticize: Depreciation is the loss in value of a fixed asset over a given span of time This statement is untrue. As a defined assets is what a company owns, which are expected to last more than one year, are called Fixed Assets. These assets include such things as automobiles, computers, furniture, office buildings, and equipment. These fixed assets that a company owns have a set amount of useful life. This means that a fixed asset is not expected to last forever, and thus its value depreciates over time. The definition of depreciation is the decline in the useful life of a fixed asset. However, land is also a type of fixed asset but land is not subject to depreciation as we do not use up land (Horngren et al, 2010, p 645). Therefore, when this statement mentions about fixed asset but not excluding land, it means that it is wrong.
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Nguyen, Thanh Quang 11464914

ACC 501

16.8. Goodwill may have nothing to do with the personality of the manager or employees. Do you agree? Explain. I disagree with this statement because McLaney & Atrill (2010, p 62) point out that the term goodwill is often used to cover various attributes such as the quality of the product, the skill of employees and the relationship with customers. Therefore, the personality of the managers and employees also affect on goodwill. 16.28. Why is there usually a difference between the cash collections from customers and sales revenue in a periods financial statement? There is usually a difference between the cash collections from customers and sales revenue in a periods financial statement because the former includes the current cash sales plus collection of the previous periods credit sales (Horngren et al, 2010, p 295). Therefore, the sales revenue only equals the cash collection when the previous periods credit sale is 0. 16.34. Study Appendix 16A. Purchases of inventory at the end of a fiscal period can have a direct effect on income under LIFO. Do you agree? Explain. I agree with this statement because in the LIFO method, the latest inventory will be sold first. So, when the company buys the inventory at the end of a fiscal period, there are two circumstances happened. One is that if the value of goods increases in comparison with the purchased price, the income will increase as well. However, if the value of goods decreases compared with the purchased price, the income also decreases. In conclusion, the LIFO method has a direct effect on income (Appendix 16A, Horngren et al, p707).

Nguyen, Thanh Quang 11464914

ACC 501

Question 5
A B C D E F 3 DATA INPUT 4 5 $ 6 Cash and equivalents 55,000.00 7 Revenues 800,000.00 8 Notes payable 51,000.00 9 Longterm debt, excluding current portion 210,000.00 10 Accounts receivable, net 48,000.00 11 Provision for income taxes 60,000.00 12 Other long-term assets 110,000.00 13 Interest expense 55,000.00 14 Deferred income tax liability-longterm 44,000.00 15 Retained earnings 204,000.00 16 Income taxes payable 37,000.00 17 Cost of sales 470,000.00 18 Inventories 36,000.00 19 Prepaid expenses 15,000.00 20 Common stock (50,000 shares outstanding 25,000.00 21 Property, plant, ad equipment, at cost 580,000.00 22 Accounts payable 43,000.00 23 Interest income 15,000.00 24 Goodwill, patents, and trademarks 75,000.00 25 Current portion of long-term debt 16,000.00 26 Less: Accumulated depreciation 170,000.00 27 Selling and administrative expenses 150,000.00 28 Additional paid-in capital ? 29 30 Required: 31 Prepare balance sheet and income statement for Weikart 32 Company. Include the proper amount for additional paid-in capital G

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Nguyen, Thanh Quang 11464914


H I REPORT BALANCE SHEET for Weikart Company as at December 31, 20x0 ASSETS Current assets Cash and equivalents Account receivable, net Inventories Prepaid expenses Total current assets Non-current assets Property, plant, and equipment At cost Less: accumulated depreciation Goodwill, patents, and trademarks Other long-term assets Total nuncurrent assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities current portion of long-term debt Notes payable Accounts payable Income taxes payable Total current liabilities Non-current liabilities Long-term debt Deferred income taxes Total noncurrent liabilities Total liabilities Shareholders' equity Common stock Retained earnings Additional paid-in capital Total shareholders' equity Total liabilities and shareholders' equity J K L M N O P Q R S

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66

$ 55,000.00 48,000.00 36,000.00 15,000.00 154,000.00

580,000.00 -170,000.00 75,000.00 110,000.00 595,000.00 749,000.00

16,000.00 51,000.00 43,000.00 37,000.00 147,000.00

210,000.00 44,000.00 254,000.00

25,000.00 204,000.00 119,000.00 348,000.00 749,000.00

The amount for additional paid-in capital = Total shareholders' equity - common stock - retained earnings = $119,000.00 INCOME STATEMENT for Weikart Company for the month ending December 31, 20x0 Revenues Cost of sales Gross margin Selling and administrative expenses Income from operations Other (expense) income Interest income Interest expense Total other (expense) income Income before income taxes Provision for income taxes Net income Earnings per share $800,000.00 $470,000.00 $330,000.00 $150,000.00 $180,000.00 $15,000.00 -$55,000.00 -$40,000.00 $140,000.00 $60,000.00 $80,000.00 $1.60

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Nguyen, Thanh Quang 11464914


H REPORT BALANCE SHEET for Weikart Company as at December 31, 20x0 ASSETS Current assets Cash and equivalents Account receivable, net Inventories Prepaid expenses Total current assets Non-current assets Property, plant, and equipment At cost Less: accumulated depreciation Goodwill, patents, and trademarks Other long-term assets Total nuncurrent assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities current portion of long-term debt Notes payable Accounts payable Income taxes payable Total current liabilities Non-current liabilities Long-term debt Deferred income taxes Total noncurrent liabilities Total liabilities Shareholders' equity Common stock Retained earnings Additional paid-in capital Total shareholders' equity Total liabilities and shareholders' equity I J K L M

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66

$ 55000 48000 36000 15000 =SUM(M8:M11)

580000 -170000 75000 110000 =SUM(M16:M19) =M12+M20

16000 51000 43000 37000 =SUM(M26:M29)

210000 44000 =M33+M34

25000 204000 =M43-M40-M39 =M45-M30-M35 =M22

The amount for additional paid-in capital = Total shareholders' equity - common stock - retained earnings = $119,000.00 INCOME STATEMENT for Weikart Company for the month ending December 31, 20x0 Revenues Cost of sales Gross margin Selling and administrative expenses Income from operations Other (expense) income Interest income Interest expense Total other (expense) income Income before income taxes Provision for income taxes Net income Earnings per share 800000 470000 =M54-M55 150000 =M56-M57 15000 -55000 =M60+M61 =M58+M62 60000 =M63-M64 =M65/50000

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ACC 501

Question 6:
A 1 2 3 4 5 6 7 8 9 10 11 12 13 DATA INPUT Date Dec 31 20x0 During 20x1 Question 1 Question 2 Inventories Unit cost Sales 20000.00 $10.00 30000.00 30000.00 $12.00 $8.00 $16.00 B C D E F

28,000.00

Required: 1. At price $12 per unit. Assume FIFO and then FIFO 2. At price $8 per unit. AssumeFIFO and LIFO 3. Tax rate = 40%. Which method results in more cash for Kansas City Fertilizer for each question.
A B C D E F G

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

SOLUTION

Sales Beginning inventory Purchases Cost of goods available for sale Ending inventory Cost of goods sold Gross profit Tax rate

FIFO 1 $448,000.00 $200,000.00 $360,000.00 $560,000.00 $264,000.00 $296,000.00 $152,000.00 40.00%

LIFO 1 $448,000.00 $200,000.00 $360,000.00 $560,000.00 $224,000.00 $336,000.00 $112,000.00

FIFO 2 $448,000.00 $200,000.00 $240,000.00 $440,000.00 $176,000.00 $264,000.00 $184,000.00

LIFO 2 $448,000.00 $200,000.00 $240,000.00 $440,000.00 $216,000.00 $224,000.00 $224,000.00

3a. In question 1 gross profit is higher under FIFO. However, cash will be higher under LIFO by 3b. In question 2 gross profit is higher under LIFO. However, cash will be higher under FIFO by

$16,000.00 $16,000.00

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A 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 SOLUTION B C D E F

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G

Sales Beginning inventory Purchases Cost of goods available for sale Ending inventory Cost of goods sold Gross profit Tax rate

FIFO 1 =$D$8*$C$8 =$B$4*$C$4 =B6*C6 =B19+B20 =22000*C6 =B21-B22 =B18-B23 0.4

LIFO 1 =$D$8*$C$8 =$B$4*$C$4 =B6*C6 =C19+C20 =(B4*C4)+(2000*C6) =C21-C22 =C18-C23

FIFO 2 =$D$8*$C$8 =$B$4*$C$4 =B7*C7 =D19+D20 =22000*C7 =D21-D22 =D18-D23

LIFO 2 =$D$8*$C$8 =$B$4*$C$4 =B7*C7 =E19+E20 =(B4*C4)+(2000*C7) =E21-E22 =E18-E23

3a. In question 1 gross profit is higher under FIFO. However, cash will be higher under LIFO by 3b. In question 2 gross profit is higher under LIFO. However, cash will be higher under FIFO by

=B26*(B24-C24) =B26*(E24-D24)

Question 7 a. What went wrong at ABC? The first wrong is that the ACB paid too much for childcare centers. Even though ABC learning improved significantly from 2001 to 2006, with the increasing from $2 to $8.6 in share price, it collapses from 2007 because of astronomical debt, crisis of liquidity and inflated asset value. Astronomical debt of ACB is reflected by company had to issue share to raise capital and every $0.3 in equity, ACB owes more than $1 in debt. Crisis of liquidity is presented by the decreasing in market price to $0.54. The issue of inflated asset value is the international expansion. There are also some issues of ACB such as the recognition revenue runs unreasonable, the expending large amount of cash, growing cost without any reasonable management, incorrect of intangible asset valuation and behaviors repeat themselves. Finally, we can realize three reasons for failure of ACB are valuation of intangible assets and goodwill, accounting irregularities and unrealistic growth ambitions. b. Why are profits important? One company always wants make profit to survive. Profit is important in any business because the profit relates to the shareholders and stockholders. Firstly, it is a sign whether they operate effectively or efficiently. Secondly, shareholders are investing money on a consistent basis in
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hopes of receiving returns on their investment. If there is no profit, investors will stop investing and business cannot continue. Therefore, in order to attract investors to make investments, companies need to generate profit. Why is cash flow important? Cash flow for a business is simply the flow of cash through the organization over time. Cash flows are necessary for the firm to survive and prosper. Understanding cash flow means you understand your money and you can make smart decisions with your money. The cash flow is important because of two reasons. The first one is that if a company has a positive cash flow, it is critical to remaining solvent which is opposite to bankrupt. However, if you have a negative cash flow, you are going to be broke. In fact, negative net cash flow is a main way most people and most businesses go bankrupt c. What are the characteristics of a good internal control system? Internal control system provides some policies to protect and make the most efficient use of an organizations asset. Internal control system is recognized with clearly roles and duties. In fact, it provides the reasonable assurance to achieve the goals (CPA). The characteristics of a good internal control system are: Effectiveness and efficiency of operations. Reliability of financial reporting and compliance with compliance with

applicable laws and regulations (Ucop). Question 8 17-11. It is better to recognize goodwill than to write up assets to their fair market values Do you agree? Why? I disagree. This is because goodwill is defined as a difference between the purchased price and the fair value of an asset. Companies record goodwill as an asset only when one company purchases another. A purchase may be willing to pay more than the sum of the fair values because the acquired company is able to generate abnormally high earning. So it should mention

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Nguyen, Thanh Quang 11464914

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in balance sheet until its value is impaired and it is no longer present (Horngren et al, 2010, p742). 17.13. Why is it useful to analyze income statements and balance sheets by component percentages? The reason is that it will make comparisons across companies easier when we compare between two companies which are different about size. Moreover, changes between one year can reveal easily compared with average method because component percentage can help the accountant understand how developed of company is. However, the average method only shows the number which is very difficult to calculate the developed level of company (Horngren et al, 2010, p746). 17.14. Name the three types of comparisons made with ratios. The names of three types of comparisons are: time-series comparisons, benchmark comparisons and cross-sectional comparisons (Horngren et al, 2010, p747) 17.17.An efficient capital market is one where securities are traded through stockbrokers. Do you agree? Explain. This statement is untrue in respect with accounting. This is because in accounting, it is important to recognize that the market is efficient only in regard to publicly available information. Thus, accounting issues that deal with the disclosure of new information are more important than those that simply change securities from one to another through brokers or dealers. The meaning of efficient does not mean that efficiency in quantity or quality of trade, but means efficiency in gathering date and information. (Horngren et al, 2010, p751-752) 17.19. Evaluate the following quotation from Forbes: if IBM had been forced to expense [the software development cost of] $785 million, its earnings would have been cut by 72 cents a share. With IBM selling at 14 times earnings, expensing the costs might have knocked over $10 off IBMs share price The quotation from Forbes is not correct. In the first sentence, it is right because increasing in expense leads to the decreasing in net income. Therefore, earnings per share will be decreased. However, in the first phrase of second sentence, they already mentioned the relation between
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selling and earnings. This means that the earnings is constant. Moreover, expensing the costs has no relation with share price when share price is calculated by net income and average common shares outstanding. Question 9:
A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Abercrombie & Fitch DATA INPUT Dividends per common share Market price Number of share 0.7 17.85 86.816 B C D E

Income statement for the year ended Jan 31,2009 (in millions) Net sales 3540.00 Cost of sales 1178.00 Gross profit 2362.00 Other expenses (summarized) 1911.00 Earnings before income taxes 451.00 Provision for income taxes 179.00 Net earnings 272.00 Balance sheet (in millions) Assets Inventories Other current assets (smummarized) Total current assets Property and equipment ( net) Other assets Total assets Liabilities and stockholders' equity Current liabilities (summarized) Long-term liabilities (summarizied) Total liabilities Stockholders' equity (summarized) Total liabilities and stockholders' equity Jan 31,2009 Feb 2,2008

372.00 713.00 1085.00 1399.00 364.00 2848.00

333.00 807.00 1140.00 1318.00 110.00 2568.00

450.00 553.00 1003.00 1845.00 2848.00

543.00 406.00 949.00 1619.00 2568.00

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A SOLUTION Financial ratios Abercrombie & Fitch applied to 31st Jan 2009 Typical Name of Financial Ratios 1. Current ratio 2. Total debt to equity 3. Gross profit rate 4. Return on sales 5. Return on stockholders' equity 6. Earnings per share 7. Price earnings 8. Divident yeild 9. Divident payout B C D

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E

34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

Numerator Current assets Total liabilities Gross profit Net earnings Net earnings Net earnings less dividents on preferred stock, if any. Market price per share of common stock Dividends per common share Dividends per common share

Denominator Current liabilities Stockholders' equity Net sales Net sales Average stockholders' equity Average common shares outstanding. Earnings per share Market price per common share Earnings per share

Numbers 2.411111111 54.4% 66.7% 7.7% 15.7% $3.13 $5.70 3.9% 22.3%

39 40 41 42 43 44 45 46 47 48 49 50

A Typical Name of Financial Ratios 1. Current ratio 2. Total debt to equity 3. Gross profit rate 4. Return on sales 5. Return on stockholders' equity 6. Earnings per share 7. Price earnings 8. Divident yeild 9. Divident payout

B Numerator Current assets Total liabilities Gross profit Net earnings Net earnings Net earnings less dividents on preferred stock, if any. Market price per share of common stock Dividends per common share Dividends per common share

D Denominator Current liabilities Stockholders' equity Net sales Net sales Average stockholders' equity Average common shares outstanding. Earnings per share Market price per common share Earnings per share

E Numbers =B20/B26 =B28/B29 =B9/B7 =B13/B7 =B13/((B29+C29)/2) =B13/E5 =E4/E45 =E3/E4 =E3/E45

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A B Make up data for income statement for the year ended Feb 2,2008 Net sales 3230.00 Cost of sales 938.00 Gross profit 2292.00 Other expenses (summarized) 2011.00 Earnings before income taxes 281.00 Provision for income taxes 89.00 Net earnings 192.00 Financial ratios Abercrombie & Fitch applied to Feb 2, 2008 Typical Name of Financial Ratios 1. Current ratio 2. Total debt to equity 3. Gross profit rate 4. Return on sales 5. Return on stockholders' equity 6. Earnings per share Numerator Current assets Total liabilities Gross profit Net earnings Net earnings Net earnings less dividents on preferred stock, if any. Market price per share of common stock Dividends per common share Dividends per common share Denominator Current liabilities Stockholders' equity Net sales Net sales Average stockholders' equity Average common shares outstanding Earnings per share Market price per common share Earnings per share C D

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E

53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72

2008 2.099447514 58.6% 71.0% 5.9% 11.1% $2.21 $8.07 3.9% 31.7%

7. Price earnings 73 74 8. Divident yeild 75 9. Divident payout

53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72

A B Make up data for income statement for the year ended Feb 2,2008 Net sales 3230 Cost of sales 938 Gross profit =B54-B55 Other expenses (summarized) 2011 Earnings before income taxes =B56-B57 Provision for income taxes 89 Net earnings =B58-B59 Financial ratios Abercrombie & Fitch applied to Feb 2, 2008 Typical Name of Financial Ratios 1. Current ratio 2. Total debt to equity 3. Gross profit rate 4. Return on sales 5. Return on stockholders' equity 6. Earnings per share 7. Price earnings

Numerator Current assets Total liabilities Gross profit Net earnings Net earnings Net earnings less dividents on preferred stock, if any. Market price per share of common stock Dividends per common share Dividends per common share

Denominator Current liabilities Stockholders' equity Net sales Net sales Average stockholders' equity Average common shares outstanding Earnings per share Market price per common share Earnings per share

2008 =C20/C26 =C28/C29 =B56/B54 =B60/B54 =B60/((B29+C29)/2) =B60/E5 =E4/E72 =E3/E4 =E3/E72

73 74 8. Divident yeild 75 9. Divident payout

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Graph to compare between 2008 and 2009 in 9 ratios


9 8 7 6
5 4

3 2 1 0

2009
2008

Question 10:
A 2 3 4 5 6 7 8 9 10 11 DATA INPUT $ Price per unit Cost per order Purchased worth per year Workings day Lead time Carrying cost 3 68 6000 250 6 15% of the value of inventory B C D

Required: EOQ, reoder point, annual inventory costs

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A 14 15 16 17 18 19 20 21 22 SOLUTION Annual demand Average purchased worth Cost of carrying one unit for one year Daily usage EOQ Reoder point Annual inventory costs 2000 3000 0.45 8 777.4603 48 6349.857 B C D E F G

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H

Reoder point = leadtime x daily usage TAIC = odering costs+ carrying costs+ purchase outlay

A 14 15 16 17 18 19 20 21 22 SOLUTION Annual demand Average purchased worth Cost of carrying one unit for one year Daily usage EOQ Reoder point Annual inventory costs

=B6/B4 =B6/2 =B4*B9 =B16/B7 =SQRT((2*B16*B5)/B18) =B8*B19 =(B16*B5/B20)+(B18*B20)/2+(B16*B4)

25 Cost table for graph: 26 27 Q Order Cost Holding cost 28 200 680 45 29 300 453.3333333 67.5 30 400 340 90 31 500 272 112.5 32 600 226.6666667 135 33 700 194.2857143 157.5 34 800 170 180 35 900 151.1111111 202.5 36 1000 136 225 37 1100 123.6363636 247.5 38 1200 113.3333333 270 39 1300 104.6153846 292.5 40 1400 97.14285714 315 41 1500 90.66666667 337.5 42 1600 85 360 43 1700 80 382.5 44 With holding cost = 15% x value of average inventory 45 With order cost = number of order x cost per order = (D/Q) x cost per order

B Start at

D 200 increment by

E 100 Total cost 725 520.833333 430 384.5 361.666667 351.785714 350 353.611111 361 371.136364 383.333333 397.115385 412.142857 428.166667 445 462.5

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A 25 Cost table for graph: 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 With holding cost = 15% x value of average inventory 45 With order cost = number of order x cost per order = (D/Q) x cost per order B Start at Q 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 200 Order Cost =($B$16/B28)*$B$5 =($B$16/B29)*$B$5 =($B$16/B30)*$B$5 =($B$16/B31)*$B$5 =($B$16/B32)*$B$5 =($B$16/B33)*$B$5 =($B$16/B34)*$B$5 =($B$16/B35)*$B$5 =($B$16/B36)*$B$5 =($B$16/B37)*$B$5 =($B$16/B38)*$B$5 =($B$16/B39)*$B$5 =($B$16/B40)*$B$5 =($B$16/B41)*$B$5 =($B$16/B42)*$B$5 =($B$16/B43)*$B$5 C increment by Holding cost =15%*$B$4*(B28/2) =15%*$B$4*(B29/2) =15%*$B$4*(B30/2) =15%*$B$4*(B31/2) =15%*$B$4*(B32/2) =15%*$B$4*(B33/2) =15%*$B$4*(B34/2) =15%*$B$4*(B35/2) =15%*$B$4*(B36/2) =15%*$B$4*(B37/2) =15%*$B$4*(B38/2) =15%*$B$4*(B39/2) =15%*$B$4*(B40/2) =15%*$B$4*(B41/2) =15%*$B$4*(B42/2) =15%*$B$4*(B43/2) D 100 Total cost =C28+D28 =C29+D29 =C30+D30 =C31+D31 =C32+D32 =C33+D33 =C34+D34 =C35+D35 =C36+D36 =C37+D37 =C38+D38 =C39+D39 =C40+D40 =C41+D41 =C42+D42 =C43+D43

ACC 501
E

800

Boeing Company Economic order quantity

700

600

500
Total cost ($)

400

Order cost Holding cost Total cost

300

200

100

0 200 300 400 500 600 700 800 900 10001100120013001400150016001700

Order quantity (units)

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Question 11:
A B C D E F G 1 DATA INPUT 2 3 August 31, bank balance $4,660 4 Two charges for NSF #1 $360.00 5 #2 $160.00 6 Watson checks are outstanding at August 31: 7 8 Check No. Amount 9 237 $80.00 10 288 $180.00 11 291 $550.00 12 294 $630.00 13 295 $30.00 14 296 $120.00 15 16 Collection from customers $1,100.00 17 Bank has not recored yet 18 Dividend revenue $950.00 19 Interrest revenue $40.00 20 Bank service charges $60.00 21 Deposit in transit $340.00 22 Bank statement includes a $500.00 23 deduction - bank error 24 Cash account on August 31 $2,400.00 25 26 Required : prepare bank reconciliation for Watson's Heathcare at August 31,2012 H

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A B C D E F 28 REPORT 29 30 Bank reconciliation for Watson's Healthcare at August 31, 2012 31 32 $ 33 Balance as per bank statement as at 31st August 4660 34 35 Add : Deposit in transit 340 36 Bank correction: incorrect cheque 500 37 Less: outstanding cheques 38 237 -80 39 288 -180 40 291 -550 41 294 -630 42 295 -30 43 296 -120 44 45 Adjusted bank balance as at 31st August 3910 46 47 Balance as per our records as at 31st August 2400 48 49 Add: 50 Collection from customer 1100 51 Dividend revenue 950 52 Interest revenue 40 53 54 Less 55 Two charges from customers #1 -360 56 #2 -160 57 Service charges -60 58 59 Adjusted balance as per our records as at 31st August 3910

ACC 501

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A 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 REPORT Bank reconciliation for Watson's Healthcare at August 31, 2012 $ 4660 340 500 -80 -180 -550 -630 -30 -120 B C D E

ACC 501
F

Balance as per bank statement as at 31st August Add : Less: Deposit in transit Bank correction: incorrect cheque outstanding cheques 237 288 291 294 295 296

Adjusted bank balance as at 31st August Balance as per our records as at 31st August Add: Collection from customer Dividend revenue Interest revenue Less Two charges from customers Service charges Adjusted balance as per our records as at 31st August #1 #2

=SUM(F33:F43) 2400

1100 950 40

-360 -160 -60 =F47+SUM(F50:F57)

Question 12: 1. Triple bottom line (TBL) reporting. Triple bottom line reporting makes companies accountable for economic, social and environmental effects of doing business. This is a popular form of accounting for non-profit companies and government organizations to show a commitment to corporate social responsibilities. For these companies, social and ecological performance is just as important as financial performance. The facts of TBL: The idea of triple bottom line reporting was first used by John Elkington in 1994. He wrote a book on this topic in 1998, "Cannibals with Forks: the Triple Bottom Line of

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21st Century Business." Triple bottom line reporting has gained momentum in all industries and sectors, not just nonprofit and government organizations. The function of TBL: Triple bottom line reporting requires a company to be responsible to shareholders and to all stakeholders of a company. Stakeholders are made up of all shareholders, employees, customers, suppliers and anyone else who is affected by the actions of the business. Triple bottom line reporting demands that a company be accountable for every aspect of business. The benefits of TBL: The social aspect of triple bottom line reporting focuses on fair treatment of a company's human capital. Besides providing a safe workplace and fair wages for employees, being socially responsible also entails performing beneficial and responsible business practices in the surrounding community. Triple bottom line reporting requires a company to engage in sustainable environmental activities. Companies should exert an effort to help the environment, or at least reduce the harm they inflict on the environment as much as possible. A company that uses triple bottom line reporting manages the consumption of energy, reduces waste, recycles, and avoids producing harmful items such as chemicals or weapons. The significance of TBL: Appearing socially and environmentally responsible to customers helps businesses increase profits. It's often the case to see a company in the headlines for accounting scandals, unfair wages, unsafe workplaces, discrimination and much more; these reports hurt a company's reputation and goodwill, resulting in lost revenue. Also, focusing on more things just profits can help a company open market potential that was unattainable before. Companies may also lose market share to other competing businesses that are utilizing triple bottom line reporting because they appear more socially responsible to consumers. Misconceptions: Triple bottom line reporting isn't just traditional accounting, with environmental and social impact factored in. The economic section of this accounting approach is focused on the economic impact of the company and is not limited to the revenues and expenses of a business.

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2. Lean accounting. What is Lean Accounting? Accounting, control, measurement, and management methods that truly reflect lean thinking and lean practice. Lean Accounting leads to better decisionmaking by providing accurate, understandable, and actionable cost & profitability information. Lean Accounting saves time and money by eliminating much of the waste associated with traditional accounting &control systems. Lean Accounting motivates lean improvement over the longerterm by providing measurement and reporting information that is thoroughly leanfocused. Lean Accounting enables companies to make more money by identifying the potential financial benefits of lean improvement and developing strategies to realize that profit. Lean Accounting methods such as Target Costing and SOFP provide shortterm and longterm focus on customer value through the value stream, and the teambased continuous improvement required to grow the business, eliminate cost, and improve profitability. How to implement Lean Accounting? Lean Accounting does not stand alone. It supports lean manufacturing, lean product design, lean logistics, and so forth. Lean Accounting is the servant of the operation. There is a prudent and orderly maturity path to the implementation of Lean Accounting. As your company matures with lean manufacturing (and other lean processes) more and more of the benefits of Lean Accounting can be implemented and realized. Question 13: 1-4. Distinguish among scorekeeping, attention directing, and problem solving. Scorekeeping is the classification, accumulation, and reporting of data that help users understand and evaluate organizational performance of a division for the preceding year. This is a routine evaluation of an organizational unit for which managers want systematic date on a regular basis. For example, Apple gathers numerous reports from numerous stores to evaluate performance for the preceding year.

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Attention directing usually involves routine reports that compare actual results to before-the-fact expectations. Attention directing identifies products that need attention, managers want information that highlights deviations of actual results from pre-specified expectations in the budget. For example, Coca-Cola Company made a profit of $30 million dollars, while the expected profit was $35million dollars. Therefore, managers will look for the explanation why the company cannot achieve its budget. Problem solving often involves an analysis of the impacts of each alternative to identify the best course to follow. This is a one-time decision for which managers need information about the potential impacts of each of alternatives under consideration. For instance, each year Starbucks decides to add and delete some inappropriate from their menu. So, the analysis presents how these products affect on revenues and costs, managers will give the decisions. 1-22. The problem with accounting is that accountants never get to become top managers such as CEOs. Do you agree? Explain I disagree with this statement. A research by Financial Executive magazine presented that 33% of CEOs in big companies with revenues higher than $500 million had increased through finance/accounting ranks, in comparison with 26% from operations and 21% from sales and marketing (Horngren et al, 2010, 34). Moreover, when accountants are CEOs, they may make various right decisions in purchasing, manufacturing, wholesaling, retailing and so one because they know what wrong with their company. It is found in the balance sheet, income statement, and cash flow statement. For instance, James Sutherland is an accountant and CEO in cricket Australia and Tim Pethick in Nudie Foods Australia and so on. 1-23. How are changes in technology affecting management accounting? The technology has affected on the increasing capabilities and decreasing cost of computer processing and storage in management accounting. Databases in computer allow managers to access data directly and to generate their own reports and analyses. Because of using advanced technology such as B2C and B2B, many companies have reduced more than 70% processing cost. Moreover, data and information will be reserved carefully without risky in comparison with keeping in the papers. With all the promise that information technologies have given us, the accounting profession must embrace the changes that come along with new technology and learn
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to use it to our advantage, or risk being replaced by nonprofessionals. For example, Oracle describes its ERP as one that helps you integrate all aspects of your business and SAP, Microsoft Dynamics and the Sage Group argue that ERP system provides the financial information that managers need. 2-11. Why is break-even analysis a misnomer? The study of cost-volume-profit relationship is some time called as break even analysis. In the opinion of some, it is a misnomer as break even analysis depicts a point where costs and total sales revenue is same. Beyond this point, it is called cost-volume- profit relationship. Some hold the view, that break even analysis can be interpreted in two senses narrow and broad sense. In narrow sense, it refers to determine the level of output where total costs equal to total revenue i.e. no profit, no loss. In the broad sense, it is used to determine the probable profit at any level of output. In addition, cost-volume-profit analysis does much more than compute the break-even point. It is often an important part of a companys planning process. It helps managers to predict how their decisions will affect sales, costs, and net income. Nevertheless, computing a breakeven point is one application of cost-volume-profit analysis. 2-20. CVP relationships are unimportant in nonprofit organizations. Do you agree? Explain. I disagree with this statement. This is because nonprofit organizations have to know how much they can spend on operation. CVP relationship can be used to calculate the number of patient served by city hospital. For example, a city has a $120,000 lump-sum to serve patient. Variable costs are $600 per patient and fixed costs are $40,000. In this case, we must use break-even equation to find how many people can be served. Question 14: 1. Description of what you think would make for good corporate citizenship for 7 categories. Environment: corporates should focus on environment by implementing some right actions such as decreasing hazardous waste.

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Climate change: corporates can achieve this goal if they give some plant such as recreating forest. Human rights: is presented by supporting for poor children have right to go to school by giving scholarship. Employees relation: can be performed by centering on employees benefits by giving appropriate working time and salary. Philanthropy: a good corporate citizenship is to organize some charity and donation for people living in poverty. Financial: contribute to solving the unemployment in society. Governance: there should be not conflict between company with government and between employees and managers. 1. Predict top 2 companies in each of 7 rated categories.

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In environment rank: In 2010, Intel Corp and International Business Machines Corp stood at number 1 and 2 respectively. After that, in 2011, the latter jumped to number 1, whereas the former dropped to number 4. In conclusion, even though there was a small change in position, I
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predict that in 2012 Intel Corp and International Business Machines Corp continue standing at top 2. In climate change rank: International Business Machines Corp also got high position in this rank when it stood at number 5 and 1 in 2010 and 2011 respectively. However, Dell was number 1 in 2010 and number 7 in 2011. In my knowledge, I believe that Dell will get higher position in 2012 at top 2 and International Business Machines Corp still stand at number 1. In human rights rank: Ford Motor Co and Johnson Control Inc will be top 2 companies in this rank because during two years 2010 and 2011 they always stood at high position, with 1 and 4 in 2010 and 1 and 2 in 2011 respectively. In employees relation rank: Citigroup Inc jumped up from top 3 to top 1 and it prospects a high rank in future year. In addition, Gap Inc already increased significantly its position in the rank from 45 in 2010 to 4 in 2011. Therefore, top 2 for this rank is citigroup Inc and Gap Inc. In philanthropy rank: Procter & gamble Co reflected a high jump in its potential from 19 to top 2, whereas there was a major decrease in Intel Corp from top 1 to 13. In brief, I also think that both of them will be at top 2 of this rank. In financial rank: In my opinion, Cummins Inc and Nike Inc may get top 2 because during the last two years, they developed and increased slightly in comparison with others. In governance rank: Surprisingly, there were a lot of companies have the rate of number 1 in this rank, such as Campbell Soup Co, Mattel Inc, 3M Co, HP, Nike, Gap and so on. Therefore, all of them can get the same opportunity of top 2 of this rank.

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Question 15:
A 2 DATA INPUT 3 Total area cleaned ( 4 in square feet) 5 Time work per day In March, number of 6 time cleaning Cost of labor and rent 7 equipment Cleaning supplies 8 used cost 9 Charge rate per time 10 11 Required: 12 13 14 15 B C D E F G

$50,000.00 7 60 $24,000.00 $10,800.00 $680.00 1.Table shows labor cost, cleaning supplies cost, total cost, taotal cost per square and what is the predicted total cost of store cleaning for the next quarter with 50, 46, 35 times cleaning respectively in April, May and June 2. Prepare a single graph to predict the fixed, variable and total cleaning cost 3. charge rate for cleaning $680/time. Will Kroger save money or not

1.
A 16 17 18 19 20 21 22 23 REPORT The cost for labor and rent on equipment is fixed for every month with Cost of cleaning supplies cost for one time ( variable cost) $24,000.00 $180.00 B C D E F G H I

Table for the cost in store for the next quarter

Labor cost and Cleaning Total cost per Time of cleaning Total cost rent supplies cost square 24 25 35 24000 6300 30300 0.606 26 40 24000 7200 31200 0.624 27 45 24000 8100 32100 0.642 28 46 24000 8280 32280 0.6456 29 50 24000 9000 33000 0.66 30 55 24000 9900 33900 0.678 31 60 24000 10800 34800 0.696 32 33 The predicted total cost of store cleaning is $33000, $32280 and $30300 respectively for the next quarter from April to June

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A 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 REPORT The cost for labor and rent on equipment is fixed for every month with Cost of cleaning supplies cost for one time ( variable cost) 24000 =B8/B6 B C D E F

ACC 501

Table for the cost in store for the next quarter Time of cleaning 35 40 45 46 50 55 60 Labor cost and rent =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 Cleaning supplies cost =A25*$F$19 =A26*$F$19 =A27*$F$19 =A28*$F$19 =A29*$F$19 =A30*$F$19 =A31*$F$19 Total cost =B25+C25 =B26+C26 =B27+C27 =B28+C28 =B29+C29 =B30+C30 =B31+C31 Total cost per square =D25/$B$4 =D26/$B$4 =D27/$B$4 =D28/$B$4 =D29/$B$4 =D30/$B$4 =D31/$B$4

2.
A B C D 35 Data for the graph of Kroger store in Cleveland start at 36 Labor cost and Cleaning Time of cleaning Total cost rent supplies cost 37 38 0 24000 0 24000 39 5 24000 900 24900 40 10 24000 1800 25800 41 15 24000 2700 26700 42 20 24000 3600 27600 43 25 24000 4500 28500 44 30 24000 5400 29400 45 35 24000 6300 30300 46 40 24000 7200 31200 47 45 24000 8100 32100 48 50 24000 9000 33000 49 55 24000 9900 33900 50 60 24000 10800 34800 E 10 F Increment by G H 5

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A 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Time of cleaning 0 5 10 15 20 25 30 35 40 45 50 55 60 B Labor cost and =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 =$F$18 C Cleaning supplies cost =A38*$F$19 =A39*$F$19 =A40*$F$19 =A41*$F$19 =A42*$F$19 =A43*$F$19 =A44*$F$19 =A45*$F$19 =A46*$F$19 =A47*$F$19 =A48*$F$19 =A49*$F$19 =A50*$F$19 D Total cost =B38+C38 =B39+C39 =B40+C40 =B41+C41 =B42+C42 =B43+C43 =B44+C44 =B45+C45 =B46+C46 =B47+C47 =B48+C48 =B49+C49 =B50+C50

ACC 501

3.

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A B C The table of comparison between two method : D E F G Method 1 is hiring labor and rent equipment Method 2 is hiring an outside cleaning company H I

ACC 501
J

76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101

Month April May June

Time cleaning 50 46 35 Total

Total cost 1 Total cost 2 $33,000.00 $34,000.00 $32,280.00 $31,280.00 $30,300.00 $23,800.00 $95,580.00 $89,080.00

The total cost of hiring outside cleaning company is lower than another. Thus, Kroger will save money over the next quarter Time cleaning 0 5 10 15 20 25 30 35 40 45 50 55 60 Totalcost 2 0 3400 6800 10200 13600 17000 20400 23800 27200 30600 34000 37400 40800

76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101

A The table of comparison between two method :

D Method 1 is hiring labor and rent equipment Method 2 is hiring an outside cleaning company Total cost 2 =B80*$B$9 =B81*$B$9 =B82*$B$9 =SUM(D80:D82)

Month April May June

Time cleaning 50 46 35 Total

Total cost 1 =D29 =D28 =D25 =SUM(C80:C82)

The total cost of hiring outside cleaning company is lower than another. Thus, Kroger will save money over the next quarter Time cleaning 0 5 10 15 20 25 30 35 40 45 50 55 60 Totalcost 2 =$B$9*B89 =$B$9*B90 =$B$9*B91 =$B$9*B92 =$B$9*B93 =$B$9*B94 =$B$9*B95 =$B$9*B96 =$B$9*B97 =$B$9*B98 =$B$9*B99 =$B$9*B100 =$B$9*B101

Question 16: Ai. I think I will not change my choice. In my point of view, when the TV host opened one

door, the percentage for the right door will be 50% for each circumstance. Therefore, each door
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has the same opportunity. In addition, there would be a tricky on what I chose if I already chose the right door. In contrast, if I decide to change my choice, it is not appropriate to my standpoint because I always concentrate on what I think it is right. The survey by taking from my friends has a result of 50% for each respect. I think this result cause from human thinking when people are wavering between two decisions. Aii. In my own explanation for swapping door, there were 2 goats and 1 car. In first

circumstance, assume that you picked the car at the first time, the percentage of picking a car will be 33%. Therefore, when you change your choice, you will be lost the price and the probability of choosing right door is 0%. However, in second circumstance, assume that you pick the goat at the first time, the percentage of picking a goat will be 66.7% because there were 2 goats. Then, TV host had to open the remaining door with the goat inside because one goat you already chose. After that, if you change your choice, you will definitely get the car, with 100% Thus, the probability of getting car will be: 33% x 0% + 66.7% x 100% = 66.7% Therefore you should change your choice. This graph below will present clearly my explanation:

Many people get wrong answer when they think that there will be 50% chance for each choice. This is because they think when one door already was opened, they only had to choose

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between two doors. They only calculate the chance of picking card from two doors not calculate the chance of picking car from 3 doors. B. A: The test is positive H1: The man has a deadly disease H2: The man has no disease P(H1)=1/1000 P(H2)=999/1000 P(A/H1)=95% P(A/H2)=5% Using the Bayes formula The probability of having disease:

) ( )

P (H1/A) =

) (

= 0.0186 or 1.86%

When this question was put to a group of medical doctors, the probability of having disease: P= 0.0186 x 80% = 0.01488 or 1.488% This probability is too low for him to have this disease. Thus he does not need to worry. C. What strategy would you employ? My strategy is that I will calculate how many circumstance we have when we pick one marble.

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And then calculate how many proportion of red and black marble we have when we take it out from urn. Moreover, the quantity of marble does not change because we put it back in urn after shown the colour. What would you guess? I guess that the chance of picking red marble is three times as many as black marble because the quantity of the former is three times as many as the latter. In particular, the probability of picking the red one is 75% and black one is 25%. Assume 4 red come out in a row. What would your next guess be? Why? I still believe that the next marble will be the red one. This is because the probability of red marble is higher than black marble. D. Discuss the rationality of human decision making using these and other examples. Are there implications for business decision making? These examples gave the fact that investors always want to invest in some project having less risky. They will decide to choose what method can bring more probabilities of earning profit. This also affects on business decision making because any business always want to choose which way have more safety than others. What Does Black Swan Mean? An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. This term was popularized by Nassim Nicholas Taleb, a finance professor and former Wall Street trader. Characteristics of Black Swan

Black swan events are typically random and unexpected. For example, the previously successful hedge fund Long Term Capital Management (LTCM) was driven into the ground as a result of the ripple effect caused by the Russian government's debt default. The Russian government's default represents a black swan event because none of LTCM's computer models could have predicted this event and its subsequent effects.

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A Black Swan can occur in different forms, on different levels of complexity and in various environments. So, what common characteristics can be identified? To begin with, all the events are rare in the sense that something similar has never happened before and their possibilities are even too rare to imagine. Why the 11/9-attacks happened? Why global financial crisis spread quickly? Some events are just too rare to predict. Secondly, the events have a major impact and influence their surroundings extensively. The financial crisis has decelerated the advance of the world economy, the penicillin has saved millions of lives and the terrorist attacks on the Twin towers ended up in a seemingly neverending war against terrorism. These events will change the way how those affected view the world. The third and last characteristic is about predictability and in order to define this, a point of observation has to be taken. In the forward-looking perspective the event is totally unpredictable. Additionally, in the hindsight the events appear to be explainable and totally logical. Why should the US government have ordered a higher level of security by the knowledge of the holy war of the islamists against the USA auspicated by Osama bin Laden in 1998. Shortly, it is always easy to look intelligent and find indicators of an event retrospectively after all facts have been presented. To summarize, each and every event classified as a Black Swan can be ascribed with the three following characteristics: -The event is rare, -The event has a major impact, -In advance the event is unpredictable, but retrospectively its explainable.

Question 17 Critically evaluate Six Sigma. Six Sigma is a rigorous and a systematic methodology that utilizes information (management by facts) and statistical analysis to measure and improve a company's operational performance, practices and systems by identifying and preventing 'defects' in manufacturing and servicerelated processes in order to anticipate and exceed expectations of all stakeholders to accomplish effectiveness. Six Sigma can be understood/perceived at three levels:

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1. Metric: 3.4 Defects Per Million Opportunities. DPMO allows you to take complexity of product/process into account. Rule of thumb is to consider at least three opportunities for a physical part/component - one for form, one for fit and one for function, in absence of better considerations. Also you want to be Six Sigma in the Critical to Quality characteristics and not the whole unit/characteristics. 2. Methodology: DMAIC/DFSS structured problem solving roadmap and tools. 3. Philosophy: Reduce variation in your business and take customer-focused, data driven decisions. Six Sigma is a popular process improvement methodology that started in the manufacturing sector and has spread to other areas as well. Many companies have seen tremendous success, while others have abandoned the methodology or found it too overwhelming to support. Based on Data In Six Sigma, decisions are made based on empirical evidence, not just on assumptions and anecdotal evidence. This includes determining the need for a project, determining the cause of the problem being addressed, and deciding what improvements will be made. In all these cases, data is required for decision making. Proven Success Beginning with Motorola, many large companies have successfully rolled out Six Sigma initiatives and driven positive change in their organizations. The results have benefited customers, employees, and shareholders. Sustainable Solutions The DMAIC and DMADV processes are specifically designed for sustainable solutions. In DMAIC, the improvements to a process are confirmed with data, and an entire phase is devoted to ensuring that the gains are sustained. In DMADV, which is used for creating new products and processes, a similar mindset holds.
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Timeframe As the saying goes, "Do you want it fast or do you want it right?" In order to effectively use the Six Sigma methodology, a substantial amount of time must be allowed for a project. It does not provide simple fixes, and at times the people involved can become frustrated with the time required to systematically follow the improvement model. Training Requirements In traditional Six Sigma implementations, employees go through extensive training to become Six Sigma project leaders (Black Belts and Green Belts) and sponsors (Champions and Process Owners). For the Black Belt role in particular, training can take several weeks or more, and occur over a period of months. This is not feasible in some environments. Corporate Focus Although the principles underlying Six Sigma could certainly be made applicable to small business and organizations, it is primarily an option for larger corporate organizations. Overwhelmingly, the majority of training and information available is geared toward that sector. This makes it difficult for other groups to see any benefit in adopting the methodology.

In conclusion, although there are still some disadvantages, Six Sigma still demonstrates it has been an essential tool for choosing an effective project.

Question 18: Ten desired features of well-designed multiple choice questions (MCQ): Feature 1: Test knowledge comprehension, not just recall A MCQ should ask about explanation, evaluation or prediction of a situation than definition. Feature 2: Use simple sentence structure and precise wording Write test questions in a simple structure that is easy to understand and also avoid misunderstanding meaning of question. Feature 3: Place most of the words in the question stem

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ACC 501

Because of doing this, the answer options can be short, making them less confusing and more legible. Feature 4: Make all distractions plausible All of the wrong answer choices should be completely reasonable. Feature 5: Keep all answer choices the same length This can be difficult to achieve, but expert test-takers can use answer length as a hint to the correct answer. Often the longest answer is the correct one. When I cant get all four answers to the same length, I use two short and two long. Feature 6: Avoid double negatives Dont use combinations of these words in the same question: not, no, nor, the -un prefix, etc. For example, this type of question could confuse test-takers: Which of the following comments would NOT be unwelcome in a work situation? Feature 7: Mix up the order of the correct answers Make sure that most of your correct answers arent in the b and c positions, which can often happen. Keep correct answers in random positions. Feature 8: Keep the number of options consistent A question should have 4 or 5 options is best because it is enough for test-taker to get the right answer much easier. Feature 9: Avoid tricking test-takers As faulty as they are, tests exist to measure knowledge. Never use questions or answer options that could trick a learner. If a question or its options can be interpreted in two ways or if the difference between options is too subtle, then find a way to rewrite it. Feature 10: Use All of the Above and None of the Above with caution The All of the Above option can encourage guessing if the learner thinks one or two answers are correct. In addition, the downside to None of the Above is that you cant tell if the learner really knew the correct answer. 1. Six multiple choice questions:

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Nguyen, Thanh Quang 11464914


A B C D E F G H I J 1 1. Nonfinancial information that management might evaluate in making a decision would not include: 2 a. Employee turnover. 3 b. Contribution margin. 4 c. The environment. 5 d. The corporate profile in the community. 6 e. None of the above. 7 Answer: b. Contribution margin.
A B C D E F G H I J The following data relates to question 2, 3 and 4 VongCanh Company just received its bank statement and is preparing the bank reconciliation. The following information is known. The company's cash account shows a balance of $30,000. The company had outstanding cheques of $13,200 and deposits in transit of $7,000. Customers had paid directly $15,500 to the bank, but VongCanh Company was unaware of this. There was a dishonoured cheque in the amount of $200 that VongCanh was also unaware of. 2. What is the correct amount of VongCanh Company's cash? a. $45,300.00 b. $14,300.00 c. $45,700.00 d. $14,700.00 e. None of the above Answer: a. 45,300 3. What was the balance reported on the bank statement? a. $51,500.00 b. $20,500.00 c. $51,900.00 d. $20,900.00 e. None of the above Answer: a. 51,500 4. Which of the following items will require VongCanh Company to make adjustments to their cash account? a. Outstanding cheques b. Deposits in transit c. Dishonoured cheque d. Both A and B e. Both A and C Answer: c. Dishonoured cheque

ACC 501
K

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37

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Nguyen, Thanh Quang 11464914

ACC 501

M N O 9 SOLUTION 10 11 Balance per bank statement 12 Add : deposit in transit 13 Less: outstanding cheques 14 Adjustment bank balance 15 16 Balance per our records 17 Add: collection from customers 18 Less: dishonoured cheque 19 Adjustment our records balance
M SOLUTION Balance per bank statement Add : deposit in transit Less: outstanding cheques Adjustment bank balance Balance per our records Add: collection from customers Less: dishonoured cheque Adjustment our records balance N O

Right Wrong Wrong Wrong 51,500 20,500 51,900 20,900 7000 7000 7000 7000 -13,200 -13200 -13200 -13200 45300 14300 45700 14700 30000 15500 -200 45300
P Q Right =Q14-Q13-Q12 7000 -13200 =Q19 30000 15500 -200 =SUM(Q16:Q18)

30000 -15500 -200 14300


R Wrong =R14-R13-R12 7000 -13200 =R19 30000 -15500 -200 =SUM(R16:R18)

30000 15500 200 45700


S Wrong =S14-S13-S12 7000 -13200 =S19 30000 15500 200 =SUM(S16:S18)

30000 -15500 200 14700


T Wrong =T14-T13-T12 7000 -13200 =T19 30000 -15500 200 =SUM(T16:T18)
J K

9 10 11 12 13 14 15 16 17 18 19

A B C D E F G H I 38 5. A company can produce and sell one of the following two products 39 40 Labor hours required Contribution margin per unit 41 Product A 5 $35.00 42 Product B 7 $56.00 43 44 Time working of labour 3000 hours 45 what is the total contribution margin of the product it should produce to maximize net income? 46 $33,600.00 a. 47 $21,000.00 b. 48 $24,000.00 c. 49 $15,000.00 d. 50 e. Cannot be determined 51 Answer: c. 24000

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Nguyen, Thanh Quang 11464914

ACC 501

L M N O 41 CALCULATION 42 43 Contributon margin per hour 44 A (right) $7.00 45 B (right) $8.00 46 A (wrong) $5.00 47 B (wrong) $11.20

Total contribution $21,000.00 $24,000.00 $15,000.00 $33,600.00

L 41 CALCULATION 42 43 44 A (right) 45 B (right) 46 A (wrong) 47 B (wrong)

Contributon margin per hour =G41/D41 =G42/D42 =G41/D42 =G42/D41 =M44*$E$44 =M45*$E$44 =M46*$E$44 =M47*$E$44

Total contribution

A B C D E F G H 52 6. Which following answer is appropriate to the characteristic of " break-even point" 53 a. Fixed cost = variable cost 54 b. Total revenue > total cost 55 c. Total revenue < total cost 56 d. Total revenue = total cost 57 e. Fixed cost < variable cost 58 59 Answer: d. Total revenue = total cost

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Nguyen, Thanh Quang 11464914

ACC 501

References : 10 Rules For Writing Multiple Choice Questions. Retrieved from: http://theelearningcoach.com/elearning_design/rules-for-multiple-choice-questions/

AICPA Code of Professional Conduct. (1988). Jersey City, NJ: American Institute of Certified Public Accountants.

Black swans. Retrieved from: http://www.math.chalmers.se/~rootzen/finrisk/group4_PeterStegersjo_ViktorWiderberg_ BlackSwan.pdf CRs 100 best corporate citizens 2010. Retrieved from: http://www.thecro.com/files/CR100Best3.pdf CRs 100 best corporate citizens 2011. Retrieved from: http://www.thecro.com/files/100Best2011_List_revised.pdf D. Givoly and C. Shi, "Accounting Choice for Software Development Costs and the Cost of Capital: Evidence from Underpricing of Initial Public Offerings in the Software Industry", Journal of Accounting, Auditing and Finance, 2008, 23 No. 2. Horngren, C, T., Sundem, G, L., Stratton, W, O., Burgstahler, D. & Schatzberg, J. 2010. Introduction to management accounting (15 ed). USA: Pearson.

IMA. (1997). Statements on Management Accounting: Objectives of Management Accounting, Statement No. 1B. New York: Institute of Management Accountants.

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Nguyen, Thanh Quang 11464914

ACC 501

Investopedia. Retrieved from: http://www.investopedia.com/terms/b/blackswan.asp#ixzz1Wwf9RUYY Kimmel,D.P., Carlon, S., Loftus,J., Mladenovic,R.,Kieso,D.,& Weygandt,J.(2006). Accounting: Building business skills (2nd ed.). Brisbane: Prentice- Hall. McLaney, E., & Atrill, P. 2010. Accounting- an introduction (5th ed). England: Prentice Hall. Meet some Chartered Accountants. Retrieved from: http://www.charteredaccountants.com.au/Chartered-Accountants/What-is-a-CharteredAccountant/Meet-some-Chartered-Accountants.aspx Retrieve from: http://w4.stern.nyu.edu/emplibrary/AccountingforSWCandCostofCapitalGivolyShi-July-07.pdf

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