initial public offering (IPO)

Assume you are the partner in an accounting firm hired to perform the audit on a fortune 1000 company.  Assume also that the initial public offering (IPO) of the company was approximately five (5) years ago and the company is concerned that, in less than five (5) years after the IPO, a restatement may be necessary. During your initial evaluation of the client, you discover the following information:

  • The client is currently undergoing a three (3) year income tax examination by the Internal Revenue Service (IRS). A significant issue involved in the IRS audit encompasses inventory write-downs on the tax returns that are not included in the financial statements. Because of the concealment of the transaction, the IRS is labeling the treatment of the write-down as fraud.
  • The company has a share-based compensation plan for top-level executives consisting of stock options. The value of the options exercised during the year was not expensed or disclosed in the financial statements.
  • The company has several operating and capital leases in place, and the CFO is considering leasing a substantial portion of the assets for future use. The current leases in place are arranged using special purpose entities (SPEs) and operating leases.
  • The company seeks to acquire a global partner, which will require IFRS reporting.
  • The company received correspondence from the Securities and Exchange Commission (SEC) requesting additional supplemental information regarding the financial statements submitted with the IPO.
  • Write an eight to ten (8-10) page paper in which you:
  1. Evaluate any damaging financial and ethical repercussions of failure to include the inventory write-downs in the financial statements. Prepare a recommendation to the CFO, evaluating the negative impact of a civil fraud penalty on the corporation as a result of the IRS audit. In the recommendation, include essential internal control procedures to prevent fraudulent financial reporting from occurring, as well as the major obligation of the CEO and CFO to ensure compliance.
  2. Examine the negative results on stakeholders and the financial statements of an IRS audit which generates additional tax and penalties or subsequent audits. Assume that the subsequent audit and / or additional tax and penalties result from the taxpayer’s use of an inventory reserve account, applying a 10 percent reduction to inventory over three (3) years.
  3. Discuss the applicable federal tax laws, regulations, rulings, and court cases related to the inventory write-downs, and explain the specific relevance of each to the write-down.
  4. Research the current generally accepted accounting principles (GAAP) regarding stock option accounting. Evaluate the current treatment of the company’s share-based compensation plan based on GAAP reporting. Contrast the financial benefits and risks of the share-based compensation stock option plan with the financial benefits and risks of a share-based stock-appreciation rights plan (SARS). Recommend to the CFO which plan the company should use and provide the correct accounting treatment for each.
  5. Research the reporting requirements for lease reporting under GAAP and International Financial Reporting Standards (IFRS). Based on your research, create a proposal for future lease transactions to the CFO. Within the proposal, discuss the use of off-the-balance sheet financing arrangements, capital leases, and operating leases, and indicate the related business and financial risks of each.
  6. Create an argument for or against a single set of international accounting standards related to lease accounting based on the global market and cross border leases of assets. Examine the benefits and risks of your chosen position.
  7. Examine the major implications of SAS 99 based on the factors you discovered during the initial evaluation of the company. Provide support for your rationale.
  8. Analyze the potential for a material misstatement in the financial statements based on the issues identified in your initial evaluation. Make a recommendation to the CFO for the issuance of        restated financial statement restatement. Identify at least three (3) significant issues that can result from the failure to issue restated financial statements.
  9. Examine the economic effect of restatement of the financial statements on investors, employees, customers, and creditors.
  10. Use at least five (5) quality academic resources in this assignment. Note: Wikipedia and similar websites do not qualify as academic resources. You have access to Strayer University’s Online Library at https://research.strayer.edu or iCampus University Library Research page at https://icampus.strayer.edu/library/research.
  11. Your assignment must follow these formatting requirements:
  • This course requires use of new Strayer Writing Standards (SWS). The format is different than other Strayer University courses. Please take a moment to review the SWS documentation for details.
  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow SWS or school-specific format. Check with your professor for any additional instructions.
  • 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.
  • The specific course learning outcomes associated with this assignment are:
  • Apply the proper accounting rules and make recommendations to ensure compliance with generally accepted accounting principles.
  • Determine the appropriateness of decision making in terms of professional standards and ethics
  • Apply advanced federal taxation concepts to business situations.
  1. By submitting this paper, you agree: (1) that you are submitting your paper to be used and stored as part of the SafeAssign™ services in accordance with the Blackboard Privacy Policy; (2) that your institution may use your paper in accordance with your institution’s policies; and (3) that your use of SafeAssign will be without recourse against Blackboard Inc. and its affiliates.

accounting

This assignment has 3 parts:

  1. What are some of the groups that need accounting information? What kind of accounting information do they need? Why?
  2. Think of a company you’ve done business with as a consumer. How might managers in this company use accounting information to made decisions?
  3. What might happen to the company if it did not have access to timely and accurate accounting information?

Accounting

Prepare financial statements using the attached excel file. All data is in the excel file.

Computer Depot is a major computer store chain with locations across North America, Europe, and Africa. The company is preparing to report on business transactions that occurred during January.

Download the Excel spreadsheet for Computer Depot in the module folder. The spreadsheet includes the following tabs:

  1. Transactions – Details the transactions that occurred in the month of January
  2. Journal – General journal for the company
  3. Ledger – General ledger for relevant accounts
  4. Trial Balance – Template for unadjusted and adjusted trial balances
  5. IS – Income Statement template
  6. SE – Statement of Stockholders’ Equity template
  7. BS – Balance Sheet template
  8. CF – Statement of Cash Flows template.

Required:

Part A

  • Prepare journal entries for all the transactions occurring in January
  • Post entries to the general ledger
  • Prepare the unadjusted trial balance as of January 31st
  • Prepare adjusting entries at January 31st
  • Post adjusting entries to the general ledger
  • Prepare the adjusted trial balance as January 31st
  • Prepare and post closing entries and prepare trial balance at February 1st
  • Prepare the four primary financial statements on January 31st
  • Include a ratio analysis of your company and include the industry averages. Calculate at least one ratio from each category listed: Liquidity, Solvency, and Profitability, and provide an explanation on what it means to the company.

Part B

In your current position as financial accounting manager, it is your turn to present the financial statements at the monthly leadership meeting.  Prepare a PowerPoint presentation (at least four slides but) analyzing the company’s financial performance for the month of January.

Accounting

Question 1 (4 points)

Saved

Which of the following is not a purpose of government financial reporting:

Question 1 options:

a)

Evaluate efficiency and effectiveness

b)

Compare actual results with the budget

c)

Determine compliance with laws and regulations

d)

Determine the overall profitability of the government entity

Question 2 (4 points)

Saved

A current rate of exchange between two currencies is known as the:

Question 2 options:

a)

Forward Rate

b)

Floating Rate

c)

Average Rate

d)

Spot Rate

Question 3 (4 points)

Saved

Accounting standards relevant to private not-for-profit entities include all of the following except:

Question 3 options:

a)

FASB 101

b)

FASB 116

c)

FASB 93

d)

FASB 117

Question 4 (4 points)

Saved

A(n) _____ to either ____ or _____ some quantity of a particular foreign currency represents a foreign currency option.

Question 4 options:

a)

Right, sell, buy

b)

Right, hold, retain

c)

Obligation, buy, sell

d)

Obligation, hold, retain

Question 5 (4 points)

Saved

A ____________ is a type of governmental fund that accounts for resources for which the governmental units acts of trustee or agent.

Question 5 options:

a)

Permanent fund

b)

Special revenue fund

c)

Proprietary fund

d)

Fiduciary fund

Question 6 (4 points)

Saved

___________ are the standards issued by the International Accounting Standards Board.

Question 6 options:

a)

International Financial Reporting Standards

b)

Global Accounting Standards

c)

General Accepted Accounting Principles

d)

IASBs

Question 7 (4 points)

Saved

Agency funds are used for all of the following except:

Question 7 options:

a)

Pass-through grants

b)

Grants, entitlements, shared revenue

c)

Tax collections for itself

d)

Payroll deductions

Question 8 (4 points)

Saved

Convergence initiatives of the FASB include all of the following except:

Question 8 options:

a)

Joint projects with the IASB

b)

IASB member in residence at the FASB

c)

Rewriting all of GAAP to align with IFRS

d)

FASB monitoring IASB projects

Question 9 (4 points)

Chapter ____ is the solution available through the bankruptcy code when a troubled corporation is liquidated.

Question 9 options:

a)

13

b)

11

c)

7

d)

22

Question 10 (4 points)

Saved

All of the following are traits of disclosed information about a segment with the exception of:

Question 10 options:

a)

Disclosure of the segment assets

b)

The measure of profit or loss follows a management approach focusing on internal decision making rather than any strict definition of profit used by the enterprise

c)

Information presented for reportable segments must be reconciled to the respective consolidated amounts for the enterprise as a whole

d)

Information must be presented in the dominant foreign currency if the majority of the segment’s assets are located outside the U.S.

Question 11 (4 points)

All of the following are types of journal entries encountered in government accounting with the exception of:

Question 11 options:

a)

Budgetary entries

b)

Accrual entries

c)

Closing entries

d)

Operating entries

Question 12 (4 points)

Saved

A future rate of exchange between two currencies is known as the:

Question 12 options:

a)

Spot Rate

b)

Forward Rate

c)

Average Rate

d)

Floating Rate

Question 13 (4 points)

A governmental fund balance that represents potential uses of resources planned for a future period is referred to as:

Question 13 options:

a)

Unreserved Designated

b)

Encumbered

c)

Reserved

d)

Unreserved Undesignated

Question 14 (4 points)

This is the applicable reorganization solution available through the bankruptcy code when a corporation remains in business through a restructuring of its debt and/or equity.

Question 14 options:

a)

Chapter 11

b)

Chapter 13

c)

Chapter 22

d)

Chapter 7

Question 15 (4 points)

Saved

Which of the following is not a factor influencing the development of accounting.

Question 15 options:

a)

Geographic location

b)

Standard Setting Process

c)

Social and cultural values

d)

Political and legal systems

Question 16 (4 points)

Orange Co., a domestic entity, sold goods to a British company on 5/10 with the transaction denominated in Pounds. The sales price of the goods was £200,000, and the cost of the goods was $100,000. The receivable is payable in full on 6/10, and Orange Co. prepares their financials monthly. Relevant exchanges rates are 5/10 £1 = $1.25, 5/31 £1 = $1.30, and 6/10 £1 = $1.35. Based on this information, what was the amount booked to cost of goods sold by Company D on 5/10?

Question 16 options:

a)

$100,000

b)

£ 100,000

c)

$80,000

d)

$125,000

Question 17 (4 points)

Company D, a domestic entity, sold goods to a British company on 5/10 with the transaction denominated in Pounds. The sales price of the goods was £300,000, and the cost of the goods was $100,000. The receivable is payable in full on 6/10, and Company D prepares their financials monthly. Relevant exchanges rates are 5/10 £1 = $1.10, 5/31 £1 = $1.15, and 6/10 £1 = $1.20. Based on this information, how much would accounts receivable need to be revalued by on 5/31?

Question 17 options:

a)

$10,000 decrease

b)

$15,000 decrease

c)

$15,000 increase

d)

$0

Question 18 (4 points)

Company F is a foreign subsidiary of a domestic company and Company F’s functional currency is the Euro. On Company F’s financials at the end of the year 2018, they reported €50,000 in inventory. If the spot rate on 1/1/18 was €1 = $1.06, the spot rate on 12/31/18 was €1 $1.15, and the weighted average rate for the full year 2018 was €1 = $1.10, how much is the translated balance of inventory in U.S. $ at year-end?

Question 18 options:

a)

$53,000

b)

$50,000

c)

$55,000

d)

$57,500

Question 19 (4 points)

Company F is a foreign subsidiary of a domestic company and Company F’s functional currency is the Euro. On Company F’s financials at the end of the year 2018, they reported €200,000 in cost of goods sold. If the spot rate on 1/1/18 was €1 = $1.12, the spot rate on 12/31/18 was €1 $1.02, and the weighted average rate for the full year 2018 was €1 = $1.18, how much is the translated balance of cost of goods sold in U.S. $ at year-end?

Question 19 options:

a)

$236,000

b)

$224,000

c)

$204,000

d)

$200,000

Question 20 (4 points)

Company F is a foreign subsidiary of a domestic company and Company F’s functional currency is the Euro. The total U.S. $ Translated balances of total assets per the trial balance at year-end but prior to closing entries is $850,000, liabilities is $200,000, equity is $450,000, and net income adds up to $150,000. The amount to be entered into Accumulated Translation Adjustment will be:

Question 20 options:

a)

$100,000 debit

b)

$50,000 credit

c)

$50,000 debit

d)

$100,000 credit

Question 21 (4 points)

Lydia, James, and Lola form a partnership where each partner will have an equal share to start. Lydia contributes $60,000 in cash, James contributes $60,000 in equipment, and Lola contributes $20,000 in cash and bring to the table expertise that the partners agree is worth $40,000, and choose to account for the value of this expertise using the goodwill method. Immediately after formation, Lola’s capital account would reflect a balance of:

Question 21 options:

a)

$20,000 credit

b)

$60,000 credit

c)

$20,000 debit

d)

$45,000 credit

Question 22 (4 points)

Saved

Lydia, James, and Lola’s partnership calls for the following allocation of income: James and Lola are to receive lump sum salary payments of $50,000 each, Lydia and Lola are to receive interest of 5% of their ending capital balances, if there’s a profit James is to receive a bonus equal to 10% of the profit, and any remaining income is to be split between Lydia, James, and Lola 40%, 20%, and 40% respectively. Lydia, James, and Lola’s ending capital balances were $100,000, $50,000, and $150,000 respectively. If there was a partnership net profit of $500,000, how much was allocated to Lola in total?

Question 22 options:

a)

$192,500

b)

$57,500

c)

$167,500

d)

$150,000

Question 23 (4 points)

Saved

Lydia, James, and Lola’s partnership calls for the following allocation of income: James and Lola are to receive lump sum salary payments of $20,000 each, Lydia and Lola are to receive interest of 5% of their ending capital balances, if there’s a profit James is to receive a bonus equal to 10% of the profit, and any remaining income is to be split between Lydia, James, and Lola 40%, 20%, and 40% respectively. Lydia, James, and Lola’s ending capital balances were $100,000, $50,000, and $150,000 respectively. If there was a partnership net loss of <$100,000>, how much was allocated to or <from> James in total?

Question 23 options:

a)

<$56,000>

b)

$20,000

c)

<$33,500>

d)

<$10,500>

Question 24 (4 points)

Saved

Lydia, James, and Lola are in a partnership together and each have capital balances of $250,000. A new partner, Shawn, pays James $200,000 directly for 100% of his interest in the new partnership, replacing him in the partnership. The journal entry on the books of the partnership to account for this transaction would be:

Question 24 options:

a)

Debit Capital-James $200,000, Debit Cash $50,000; Credit Capital-Shawn $250,000

b)

Debit Capital-James $250,000; Credit Capital-Shawn $250,000

c)

Debit Cash $250,000; Credit Capital-Shawn $250,000

d)

No entry is made on the partnership’s books as the transaction was made directly between James and Shawn

Question 25 (4 points)

Saved

Lydia, James, Lola, and Shawn are in a partnership together and have a combined capital balance of $700,000. A new partner, Carol pays the partnership $300,000 directly for a 1/5 interest in the new partnership. The partnership chooses the goodwill method to existing partners to account for this transaction and will allocate any increase in implied value evenly amongst the existing partners. The journal entry on the books of the partnership to account for this transaction would be:

Question 25 options:

a)

Debit Goodwill $400,000, Debit Cash $800,000; Credit each of the existing partner’s capital accounts $200,000 each, Credit Capital-Carol $400,000

b)

Debit Goodwill $300,000, Debit Cash $800,000; Credit each of the existing partner’s capital accounts $200,000 each, Credit Capital-Carol $300,000

c)

A Debit Cash $300,000, Debit Goodwill $400,000; Credit each of the existing partner’s capital accounts $100,000 each, Credit Capital-Carol $300,000

d)

Debit Cash $300,000, Debit Goodwill $500,000; Credit each of the existing partner’s capital accounts $125,000 each, Credit Capital-Carol $300,000

Submit Quiz15 of 25 questions saved

Accounting

This assignment has 3 parts:

Every business or organization must utilize accounting to record, summarize and report business transactions.  While the focus in this course is the use of accounting within a business, the same concepts can be used on a personal level.

  1. How can you use accounting to manage your personal finances?
  2. What are the benefits of keeping track of personal transactions – income and expenses – in an organized manner?
  3. What are some of the possible risks if you don’t keep track of personal transactions?

Accounting

Purpose of Assignment

The purpose of this assignment is to help you become familiar with the parts of the multiple‐step income statement.

Assignment Steps

Resources: Financial Accounting: Tools for Business Decision Making

Scenario: An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years.

SIMON COMPANY

Income Statement
For the Year Ended December 31, 2017

Revenues

Net sales

$850,000

Other revenues

22,000

872,000

Cost of goods sold

555,000

Gross profit

317,000

Operating expenses

Selling expenses

109,000

Administrative expenses

103,000

212,000

Net earnings

$105,000

As an experienced, knowledgeable accountant, you review the statement and determine the following facts:

  1. Net sales consist of: sales $911,000, less freight-out on merchandise sold $33,000, and sales returns and allowances $28,000.
  2. Other revenues consist of sales discounts $18,000 and rent revenue $4,000.
  3. Selling expenses consist of salespersons’ salaries $80,000, depreciation on equipment $10,000, advertising $13,000, and sales commissions $6,000.  The commissions represent commissions paid. At December 21, $3,000 of commissions have been earned by salespersons but have not been paid.  All compensation should be recorded as Salaries and Wages Expense.
  4. Administrative expenses consist of office salaries $47,000, dividends $18,000, utilities $12,000, interest expense $2,000, and rent expense $24,000, which includes prepayments totaling $6,000 for the first quarter of 2018.

Prepare a detailed multi-step income statement with a brief explanation of 700 words. Assume a 25% tax rate.

Show your work on the Excel® spreadsheet and submit with your explanation.

accounting

Assignment 3: Excel ProblemsAt the  end of each module, you will apply the module’s concepts by completing  comprehensive assignments from the textbook. Complete problems P9-28A (p. 517), P10-A-9B (p. 586), and  P11-29A (p. 631) in your textbook. Present  your analysis of the assigned problems in Excel format. Enter non-numerical  responses in the same worksheet using textboxes. By Week 4, Day 7 deliver your  assignment to the M4: Assignment 3  Dropbox.Create  the file with the following name: LastnameFirstInitial_M4A3.Excel.xls. Assignment 3 Grading Criteria

Maximum Points

P9-28A:
Preparation of depreciation schedule for each depreciation method showing asset, depreciation expense, accumulate depreciation and asset  book value.

15

P10-A-9B:
Present value of Plan A

6

Present value of Plan B

6

Plan selected based on least cost

6

P11-29A:
Assess the total market value of the common stock.

5

Compute the book value per share of the common stock.

7

Accuracy and timeliness.

5

Total:

50