Task
Please note this assignment consists of questions from Horngren, C.T., Sundem, G.L., Stratton, W.O. Burgstahler, D., & Shatzberg, J. Introduction to management accounting, (15th edition 2014).
Question 1
16-2, 16-6, 16-33 (illustrate your explanation with a numerical example).?Source: Horngren, et al. (2014). Introduction to management accounting (16th ed., p. 719). Pearson.
16-2. Why should short term prepaid expenses be classified as current assets?
16-6. What factors influence the estimate of useful life in depreciation accounting?
16-33. Study Appendix 16A. Suppose prices are rising and inventories are increasing. Which of the four generally accepted inventory accounting methods will usually result in the highest net income? Explain. Illustrate your explanation with a numerical example.
Question 2
16-A1 Reigle Balance Sheet and Income Statement?Source: Horngren, et al. (2014). Introduction to management accounting (16th ed., p. 716). Pearson.
The Reigle Company had the following items on its December 31, 20X0 balance sheet and 20X0 income statement (in dollars except for the number of shares outstanding):
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Cash and equivalents
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$ 60,000
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Revenues
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$ 790,000
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Notes Payable
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$ 51,000
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Long term debt, excluding current portion
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$ 210,000
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Accounts Receivable, net
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$ 48,000
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Provision for income taxes
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$ 60,000
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Other long-term assets
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$ 110,000
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Interest expense
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$ 55,000
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Deferred income tax liability - long-term
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$ 44,000
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Retained earnings
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$ 204,000
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Income taxes payable
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$ 37,000
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Cost of sales
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$ 470,000
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Inventories
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$ 36,000
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Prepaid expenses
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$ 15,000
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Common stock (50,000 shares)
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$ 25,000
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Property, Plant and equipment, at cost
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$ 580,000
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Accounts payable
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$ 43,000
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Interest income
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$ 15,000
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Goodwill, patents and trademarks
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$ 75,000
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Current portion of long-term debt
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$ 16,000
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Less: Accumulated depreciation
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$ 170,000
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Selling and administrative expenses
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$ 150,000
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Additional paid-in capital
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?
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Prepare in proper form the December 31, 20X0 balance sheet and the 20X0 income statement for Reigle Company
Solve using a spreadsheet following the assignment requirements listed in the 'Requirements' section below, noting the checklist for all spreadsheets: checklist: separate data/report, paste normal view and formula view, display row and column headings, IF functions and submit the doc file with the pasted views AND the spreadsheet file to turnitin.
Create a second version or your spreadsheet, changing the following values:
? Cash & equivalents $305,000
? Revenues $1,180,000
? Notes payable $150,500
? Long term debt, excluding current portion $500,000
How much is the additional paid-in capital??Paste this second version. There is no need to paste the formula view again.
Question 3
16-56 LIFO and FIFO?Source: Horngren, et al. (2014). Introduction to management accounting (16th ed., p. 724). Pearson.
Study Appendix 16A. The inventory of West Virginia Coal Company on June 30 shows 500 tons at $62 per ton. A physical inventory on July 31 shows a total of 600 tons on hand. Revenue from sales of coal for July totals $105,000. The following purchases were made during July: July 5, 1,000 tons at $64 per ton; July 15, 250 tons at $66 per ton; July 25, 300 tons at $69 per ton.
1. Compute the inventory value as of July 31, using (a) FIFO and (b) LIFO.
2. Compute the gross profit, using each method.
Solve using a spreadsheet. Check spreadsheet instructions. Ensure that your data entry and report areas are separate.
Question 4
Watch the ABC Learning videos (see Interact) and answer the following questions. (about 300 - 400 words in total)
1. What went wrong at ABC Learning?
2. What are the major financial reports? What is the purpose of each?
3. Why are profits important? Why is cash flow important?
4. What are the characteristics of a good internal control system? Use the Internet as a resource for this part of the question. Reference your sources.
These videos are also available on YouTube https://www.youtube.com/watch?v=YYF6JW9vJKo
Question 5
17-18 (also explain which 3 of these ratios is, in your opinion, the most useful to management)?Source: Horngren, et al. (2014). Introduction to management accounting (16th ed., p. 761). Pearson.
17-18. Name two short term ratios and five profitability ratios. Explain which 3 of these ratios is, in your opinion, the most useful to management.
Question 6
17-47 Financial Ratios?Source: Horngren, et al. (2014). Introduction to management accounting (16th ed., p. 769). Pearson.
Honda Motor Company is a major Japanese company with sales equivalent to more than $100 billion.
The company's income statement and balance sheet for the year ended, March 31, 2011, are shown in Exhibit 17-10 and 17-11. Monetary amounts are in Japanese Yen (¥).
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Net sales
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¥ 8,937
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Cost of sales
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6,497
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Gross profit
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2,440
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Selling and administrative
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1,383
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Research and development
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487
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Operating Income
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570
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Other income (expense)
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Interest income
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23
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Interest expense
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(9)
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Equity in income of affiliates
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140
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Other, net
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46
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Income before income taxes
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770
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Income tax expense
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207
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Net income
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563
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Amounts per share
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Net income (EPS)
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296
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Cash dividends
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54
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Exhibit 17-10
Honda Motor Company, Ltd
Income Statement for the Year Ended March 31, 2011 (in billions, except per-share amounts)
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Assets
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Current Assets
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Cash and cash equivalents
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¥1,279
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Receivables
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1,919
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Inventories
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900
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Other
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592
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Total Current Assets
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4,690
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Property, plant and equipment
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3,297
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Investments
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640
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Other assets
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2,944
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Total assets
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¥11,571
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Liabilities and Shareholder's Equity
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Current liabilities
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¥1,095
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Short-term debt
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717
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Payables
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525
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Accrued Expenses
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962
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Current portion of long-term debt
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269
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Other
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3,568
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Total current liabilities
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Long-term liabilities
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Long-term debt
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2,043
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Other
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1,377
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Total long-term liabilities
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3,420
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Stockholder's equity
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Common stock
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86
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Additional paid-in capital
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173
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Retained earnings
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5,667
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Other
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(1,476)
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Total Honda Motor Company shareholder's equity
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4,450
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Noncontrolling interests
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133
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Total stockholder's equity
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4,583
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Total liabilities and stockholder's equity
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¥11,571
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Exhibit 17-11
Honda Motor Company, Ltd
Balance Sheet March 31, 2011 (in billions)
1. Prepare a common-size income statement, that is, one show component percentages.
2. Compute the following ratios:
a. Current ratio
b. Total debt to equity
c. Gross profit rate
d. Return on stockholder's equity (March 31, 2010 stockholder's equity was ¥4,456 billion).
e. P/E ratio (the market price on March 31, 2011, was approximately ¥2,207 per share)
f. Dividend-payout ratio
3. What additional information would help you interpret the percentages and ratios you calculated?
Answer all sections, noting the following:
? For section 1, prepare a spreadsheet solution which complies with the assignment requirements. Then incorporate an appropriate graph style in your spreadsheet to show the component parts (and their relative size) of total assets, total liabilities, and total stockholder's equity. The purpose of this part of the question is for you to demonstrate graphing/charting skills using Excel.
? For section 2 use a spreadsheet which is linked to the data in your section 1 spreadsheet.
Question 7
Prepare a business report (as if for senior management) on two of the following. Use the Internet as a resource. Length about 300 - 400 words each not counting appendices. Use correct referencing and include a bibliography. Relate your report to the function of accounting. Refer to the earlier 'Assessment Information' section for essay/report writing resources. The Internet can also be search for advice on business report structures.
a. Digital Dashboards. Include in your report definitions, types, history, benefits, disadvantages and screenshots of examples.
b. Bounded rationality in decision making.
c. 'Predictably irrational' - Dan Ariely
d. The Checklist Manifesto - Gawande??e. Accounting and Impression Management