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).

You are required to complete all questions and submit all necessary workings. Follow the assignment requirements (refer below to the Requirements section) very closely.

Content Assessed
Topics 2, 3, and 4



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): 

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 http://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 (¥).

Exhibit 17-10

Honda Motor Company, Ltd

Income Statement for the Year Ended March 31, 2011 (in billions, except per-share amounts)

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
 

Rationale

This assignment allows students to demonstrate their understanding of Topics 2, 3, and 4, and seeks to assess your ability to be able to construct and analyse accounting reports, research accounting issues, demonstrate spreadsheet skills and apply critical thinking in communicating results. In doing this it is aligned with the following subject learning outcomes:

◦     To be able to discuss and apply basic accounting ideas that underlie and limit the usefulness of accounting information;

◦     To be able to explain and analyse the nature, and measurement, of assets, equities, revenues, expenses and income;

◦     To be able to apply computer software to quantitative business decisions;

◦     To be able to implement and critique analytic and interpretative techniques used in accounting; and

◦     To be able to explain and implement financial analysis and management accounting procedures.

Marking criteria

Your assignment will be marked as a whole with recognition being given to demonstration of knowledge, quality thinking, application of skills and critical thinking. For some questions students have a chance to demonstrate some creativity, or provide their own examples or give evidence of wider reading or to structure a spreadsheet in an innovative manner. We also need to avoid the snowballing effects of cumulative errors – that is, an error early in a practical question which carries through. Thus a grading system is used with deductions for errors and omissions. Full marks are a possibility for well structured, complete, quality answers.

Students will be provided with a grade based on the work submitted and will also be provided with suggested solutions or guidelines. Feedback to students will normally consist of the grade, comments and the suggested solutions.

Penalties will be applied to poor presentation including poor grammar, punctuation and spelling, and for poor use of software.

Presentation

Solutions to questions should vary in length according to the nature of the question and be in a format similar to that demonstrated in the text and study guide. Choose your own examples in discussion questions, and ensure you adhere to the spreadsheet requirements (refer below to the Requirements section) carefully.

Your turnitin submission will consist of two files – a Word doc (or pdf) and an Excel file. Submit one after the other. Paste the spreadsheet solutions and a formula view of each spreadsheet in the Word doc displaying row and column headings. Thus your Word doc will provide a complete answer to every question. The separate Excel file will provide a clear demonstration of correct spreadsheet structures. The formula view may need to have adjusted column widths to display formulas correctly. Use portrait orientation wherever possible. Name the two files with your family name plus assignment number (eg WilsonAss1.docx and WilsonAss1.xlsx) as the file name.
 

Requirements

The work you submit must be your own. In the past a few students have received heavy penalties for submitting assignments which were not entirely their own work.

1. Submit through turnitin.

2. The first page of your assignment should consist of the following parts:

    a. subject code and name;
    b. your name and student ID number;
    c. list of questions attempted and a list of questions not attempted;
    d. dates and details of any extension granted;
    e. an academic integrity statement that the work submitted is your own and that all sources used have been    acknowledged. The following statement can be used: THE WORK IN THIS ASSIGNMENT IS MY OWN WORK, AND HAS NOT BEEN PLAGIARISED.

3. Record your name, student number and page number as a footer on every page of your assignment.

4. Present assignment solutions in sequence. Provide references throughout (question by question if appropriate) and include a bibliography of all sources used including internet resources, at the end of your assignment. If using internet resources, include the URL and date of access.

5. Utilise the online forum to clarify any assignment format issues. Single spacing and small margins are preferred.

6. Keep backup copies of all your work. Make copies of your work progressively in case your computer has an accident. Remember that assignments will NOT be returned to students but will be retained by staff to facilitate discussion between students and staff whereby each can look at the same work; further, the retention of assignments by staff may assist in marginal grade decisions and in resolving any potential plagiarism.

7. Please check for viruses. Do not use macros in your spreadsheet files.

8. Students can discuss their work with each other on the forum prior to submission. However, please do not post complete versions of answers to the forum. Do not leave assignments until the last minute.

9. Plagiarism. Refer to the section in this Subject Outline and to the University website. Ensure that you include the academic integrity statement at the beginning of your assignment.

10. Penalties will apply for late submission at 10% of the total mark available per day late.

11. It is important that submitted assignments are complete; missing answers will result in mark deductions.

12. Refer to the University regulations contained in the handbook for matters pertaining to special consideration, misadventure and extenuating circumstances, academic misconduct, code of conduct for users of electronic facilities, assessment regulation, grading scale, progression and academic performance, grade point average, examination regulations and other matters pertaining to assessment. The regulations can be found at the University’s web site: http://www.csu.edu.au.

Spreadsheet requirements

1. Your turnitin submission will consist of two files – a Word doc (or pdf) and an Excel file. Submit one after the other. Paste the spreadsheet solutions and a formula view of each spreadsheet in the Word doc displaying row and column headings. Thus your Word doc will provide a complete answer to every question. The separate Excel file will provide a clear demonstration of correct spreadsheet structures. The formula view may need to have adjusted column widths to display formulas correctly. Use portrait orientation wherever possible. Name the two files with your family name plus assignment number (eg WilsonAss1.docx and WilsonAss1.xlsx) as the file name.

2. For good spreadsheet design it is very important that you have completely separate data entry and solution/report areas. A good spreadsheet solution format is to key in the question in a structure which allows the solution to be completely formula driven. There should be no data in the report/solution area.

3. Create all spreadsheets as separate spreadsheets in one workbook. Name the tags at the bottom of the computer screen with the question number. See examples in the spreadsheet advice section in Interact Resources.

4. Where appropriate, use the IF function to provide built in checks of balances, net income/net loss, favourable/unfavourable variances etc.etc.

5. How can you display negative numbers in brackets? Google the question! Hint. Format / Cells / Number and select Custom. Enter this: #,##0;(#,##0);0.

6. Save your workbook with the cursor in cell A1 of the first spreadsheet.

7. We have provided spreadsheet examples to guide you in the Spreadsheet Advice document in Interact – it is important that you read these examples. Also consider using the spreadsheet templates available with your text and other online spreadsheet advice.