Acc 291 entire course and final guide

ACC 291 Entire Course and Final Guide
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And Final Guide You can find here.
Current assets
When it comes to a company's classified balance sheets you will find
current assets sheet. Current assets is cash or cash equilivants that
the company will use. What you will find on a current asset sheet is
Cash and equilvants, Short term investments, Accounts receivables,
and other assets.
Long-term investments
Long-term investments when it comes to balance sheet are
investments that the company intends to hold onto. The investments
that are listed are as follows, bonds, stocks and cash. You will also
find short-term investments in the company. The difference between
short-term and long-term investments is that the short-term
investments will be sold and the long-term investments normally the
company will choose to keep it.
Property, plant, and equipment
Property, plant, and equipment are what the company calls "fixed
assets". Property, plant and equipment are assets that can not be

easily converted into cash. These are basically items such as company
car (used to deliver products), computers and copier machine, and
freezer used for restaurants.
Intangible assets
Intangible assets are non-monetary items that can not be seen or
touched. For example, trademarks, copywriters, patents and
goodwill. Intangible assets are normally listed in the separate assets.
references
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ACC 291 Final Exam Guide (New)
Discussion Question 1:
Based on what you know about accounting, what role do you see it
playing in business operations? How dependent do you think a
business is on its accounting department? Why?
For Discussion Question 1: Post your response to the following:
• When reviewing a financial report, why should information be
reliable, relevant, consistent, and comparable?

• In other words, why are these accounting characteristics
important?
• What kinds of problems could be created if a financial report is
not reliable, relevant, consistent, or comparable?
It is extremely vital that the company has accurate financial
reporting. This information determines whether or not to invest in
your company's stock. This information will help them decide if it is
profitable to invest or not to invest in your company based what is in
your financial history. The information must be relevant because it
will help the company, investors and lenders make decisions. It helps
answer questions like, "how stable is your company", or "what future
does this company have". The information should be reliable. In other
words the information that is reported must be able to be verified,
backed up with truthful information. Comparable occurs when
different companies use the same accounting principles. This makes it
much easier to compare results between company's. Consistency
happens when the company uses the same accounting method every
year. When the financial statements are reported each year, it paints
a financial picture of where the company is headed now and in the
future.
What kinds of problems will occur if the information does not include
these things?
Falsified or manipulated statements doesn't only effect the company
but it also to name a few effects the lenders, creditors, investor's, etc.
This will result in the company not having a faithful representation.

Another response
The main objective of generating financial information is providing
useful information that can be used in decision-making... only if this
information is relevant, reliable, comparable, and consistent, can it
be useful for decision makers. (Kieso, 2003).
Relevance gives a basis for making decisions that will impact the
future of a business, and it confirms and corrects expectations from
the past. If the information makes a difference in making decisions, it
is relevant.
Reliability means that the information can be depended on and it can
be proven to be free of error, and the information is factual. The
information cannot favor one set of users over another. CPAs audit
financial statements to ensure reliability.
Comparability is also an important characteristic of financial
reporting... this happens when different businesses use similar
accounting principles, making it much easier for one to compare
companies, and the method used in a business must be disclosed to
the users of the information to enable the users to convert the
information as accurately as possible.
Consistency simply means that the business uses the same
accounting principles on a yearly basis... consistently. This helps
decision makers analyze a company's trends. A company can change
the methods used if they can justify the change, showing that the
new method is more useful for analysis. If the method is changed, it
must be disclosed in the notes that go with the statements to show
users a lack of consistency.

These characteristics are very important to a business... decisions
cannot be made based on incorrect information, and everyone
involved in a business venture of any kind, whether they be
management, owners, or investors and creditors, as well as
consumers, etc. must be able to rely on the financial information
provided in order to make any type of decision. Without this
information, it is difficult to imagine any business succeeding, even
for a short time.
Examples of problems that could occur without reliable, relevant,
consistent, or comparable information includes not being able to get
loans or investments; management could make decisions that cause
irreparable damage to entire operations, consumers could easily lose
faith and cut their ties... the possibilities are endless for companies
that lack these qualities in their financial reporting.
DQ2
• How does information from financial reports influence business
decisions?
• Why is it important for business managers to understand the
information found on financial reports?
How does information from financial reports influence business
decisions?

Once the information from the financial reports have been posted
then a team will review the company's financial history to see what
decision were profitable or not. The decisions that were made
previous to the financial reports being posted will show which way
the company needs to go to continue to remain #1.
Why is it important for business managers to understand the
IT is extremely important for he business managers to understand the
information found on the financial reports. The business managers
are going to be the people that are going to make decisions for the
company. They need to know how to interpret the financial reports
and come up with different strategies that will continue to make the
company money.
Another response
The information from financial reports influences business decisions
because it shows where the company stands. The managers use the
information from the financial report compared to the current year
from the previous year, whether the company growths or losses. It is
very important for business managers to understand the information
found on financial reports because the information from the financial
reports enables business managers to see how to improve and keep
the business afloat. It also gives business managers an insight what

came in and went out and the total operating cost of the company as
well as cutting cost in a certain areas. The information from the
financial reports helps the manager manages the business
accurately.
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ACC 291 Final Exam Guide
we have another New set of Final Exam Guide which could be found
on this link
Financial Statements
Internal Cash Control
By
Kamilah Crooms
Accounting 220
Jess Stern

Internal Cash Control
The accounting department receives from sales invoices once a
month. Most of the information is missing on the invoices.
The accounting department relies on each department within the
company and all the information has to be submitted completely and
in a timely matter. In this scenario most of the information that has
been turned in has information that is missing on the invoices. I would
say that the internal controls that are not being followed are
Documentation procedures. Company documentation is very
important and must be turned in complete. These documents show
proof of delivery or proof of services to the customer. Any incomplete
documents can be very costly and can cause a delay in the company
being paid for any services rendered. For example, one of the
requirements in a transportation department is to make sure that the
drivers verify the load and sign for the load prior to leaving the yard,
these documents says that the load left in good condition. Well, it so
happened that we allowed a driver to leave without signing the
paperwork. This caused a delay in accounting because we had to get
signatures from the driver and the customer which took a month later
to complete.
Rob, Sue, and Bob use the same cash register at the donut shop.

Rob, Sue, and Bob all use one register has often turned into not the
best decision ideally for the company. It can increase the risk for the
drawer being short and it will be hard for the company to find out
which employee or employees had shorted the register. The internal
controls that are not being followed are Establishment of
responsibility. Happens when the company assigns one person to be
in control of a specific job or have authority to make decisions (pg
161 Internal Control and Cash). When the company signs one person
to be responsible over the register it will allow the company to hold
that one person responsible for any shortages.
Sam does the ordering of materials at the beginning of every month
and pays the bill.
In this case Sam is ordering materials and paying all the bills. This
process is actually known as related activities (pg 162 Internal
Control and Cash). This occurs when one person is doing two
different responsibilities just like Sam. The internal Control that is
not being applied is Segregation of Duties. It is better for the two to
be a separate responsibility because it will minimize the billing
errors.
Bank reconciliations are done by the person who is responsible for all
cash responsibilities.
The problem with this scenario is that the same person is responsible
for all cash responsibilities, why is this person doing the only one that
does this job? Having one person take on such a major responsibility

increases the chances of embezzlement and thief. The internal control
that is not being applied is rotating employees’ duties and requiring
employees to take vacations. One person should not be completely in
control of one job, the company should encourage vacations or
switching positions to prevent incorrect handling of the company’s
valuable information.
New checks came in and are left on the shelf with other supplies.
This is a tough scenario because there are all sorts of internal
controls that are not being used in this case. I would say in my
opinion that the first internal control that comes to my mind that is
not being applied is bonding of employees who handle cash.
Every employee that works near or with expensive equipment should
be held reliable or responsible for the company’s assets. Bonding of
employees who handle cash protects the company by insuring that the
employee is or isn’t a risky applicant (background checks) or
reassuring that the employee that they will be prosecuted to the fullest
extinct if they are found guilty of thief. For example, I had worked at
Mc Donald’s and
there were my shift managers and one employee that were caught
with stealing money from the company. This situation had happen
very differently. The armor truck dropped off a deposit that belonged
to another company (armors mistake) but they signed it. Those
employees thought that nothing was going to be traced back to them
but the little did they know, all evidence traced back to them. They
each received jail time, and felony records.
Everyone has access to the computer system and the last audit was
seven years ago by the former accountant

This scenario has two things that are going on at the same time. I
will first start off with the computer system and how everyone has
access to the computer. The internal control that is not being applied
is Physical, Mechanical, and Electronic Controls. This allows the
company to control assets through physical or electronic based
systems or programs. It is extremely important for a company to
invest in computer or informational protection for the company and
for their employees. Today’s technology age most companies are
investing in a computerized program. This will help protect from
internal errors and external protection. For example, all companies
invest in a virus protection this will ensure that the company’s
information is protected and not in the wrong hands.
Invest idle cash
Invest idle cash occurs when any excess funds or cash needs to be
invested. The money should be highly invest and risk free. For
example, a major company should make investments with their assets
into profitably investments and risk free.
Plan the timing of major expenditures
This is when a company sets aside money for major cash needs. We
live in a world that things happen daily. A good company would set
aside emergency funds. For example, during a terrible thunderstorm,
the winds practically ripped off the roofing shingles off a commercial
business. The company will be able to use the money for emergency.

Delay payment of liabilities
Delay payment of liabilities is when a company pays bills not too
soon and not late. This allows the company to have money available
for bills that that really need to be paid allowing excess funds to be
free for other uses.
Keep inventory levels low
This occurs when the company keeps the inventory low so that it will
bring in more profits. For example, if the managers at a fast-food
over plan and fix too many hamburgers and the customers don’t buy
it, then the food will go bad and the company will lose profit.
Increase the speed of collection on receivables
This occurs when money is owed to the company, the company cannot
claim these until the funds have been received. Some companies offer
incentives to encourage customers to pay early or on time. For
example, my job encourages their customers by letting them know that
there will be a price increase on or after a certain date and this really
works because the customers want to pay at a lower price.
References:

http:yourdictionary.com /accounting_statements.org Retrieved
2/13/2010
Thomas, Y. 2005-08-27 “Accounting 101 pg. 52 Stateme
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ACC 291 Final Exam Guide
ACC 291 Final Exam Study Guide
Question 207
On January 1, a machine with a useful life of five years and a residual
value of $40,000 was purchased for $120,000. What is the
depreciation expense for year 2 under the double-declining-balance
method of depreciation?
IFRS Multiple Choice Question 01

Axia College Material
Appendix B
Cash ManagementMatrix
Directions: Using the matrix, list how each of the principles of internal control works, and give an
example for each. Next, list how each of the principles of cash management works, and give an
example for each.
Principles of Internal
Control
How it Works Example
Establishment of responsibility Happens when the company assigns
one person to be in control of a
specific job or have authority to
make decisions.
My job, Our Sales department is
the only one that can waive a
restocking fee. It allows the Sales
team to be in control of the
customers returns
Segregation of duties This is when the company has more
than one person to control a task or
job
A church- You have people who
count the offering and then you have
someone who writes down and logs
in what was received
Documentation procedures Evidence or proof of all company
transactions
My job we deliver ship shingles to
our customers, and we make the
driver sign prior to leaving and we
make the customer sign a “Proof Of
Delivery”form
Physical, mechanical, and
electronic controls
Allows the company to control assets
through physical or electronic based
systems or programs.
Our job has a system called Cisco and
this tracks the employees breaks and
lunches. Also, monitors how long the
CSR have been ready or working.
Physical control would be the
security guard, they require
identification prior to entry.
Independent internal
verification
Anyinformationthat canbe reviewed
, compare, andreconciliationbya
employee
My job has a way of tracking our
inventory and when someone says
that they were shorted on their
order we can go back and track the
inventory and compare the numbers
in the system and a physical count to
determine if the numbers were
incorrect

Other controls Bonding of employees, company
protects against abuse of assets.
Our company fired a girl just recently
because she had used the company
card business card for personal us
that was not work related.
Principles of Cash
Management
How it Works Example
Invest idle cash Occurs when any excess funds or
cash needs to be invested,
My father’s company makes wise
investments and it turns around in
his favor
Plan the timing of major
expenditures
A company wants to make sure that
there is money set aside for major
cash needs
During the recession profits dropped
lower than expected so some
companies pulled from these funds
Delay payment of liabilities When a company pays the bills at an
appropriate time not late and not
too soon.
Ok, when times are tough at home
and bills are due I organize the bills
by which bills needs to be paid the
soonest, because if I pay the bills too
early I will cut off my excess funds
that could be used for something
else
Keep inventory levels low Happens when a company keeps the
inventory low so that it will continue
to bring profit
See’s Chocolate factory has to make
sure that they are not over producing
or making too much or else the sit
and the company will lose money
Increase the speed of
collection on receivables
Money that is owe to the company
by other people or customers is
money that can not be counted
towards the companies funds
When a customer places a order for a
product and has not paid yet, the
company can not count the money as
their’s until it is received.
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ACC 291 Week 1 Assignment Comparative Analysis
Problem

Purpose of Assignment The purpose of this assignment is to help you
understand the basics of financial statement analysis using financial
ratios on the assets section of the balance sheet, data interpretation,
and how ratios are used to gain insight about the management of
receivable. Assignment Steps Resources: Financial Accounting:
Income statement is a financial statement that shows how much
money is coming from product sales and services prior to any
expenses being taken out. Both internal and external users such as
managers and investors are able to access this. For example, if a
investor wanted to see if the company made money or lost money
they would use this financial statement report.
Balance sheet shows what condition the company is currently in.
whereas the other financial statements only came monthly or
annually. For example, what if the management planning team
wanted to see the company's current assets, ownership equity and
liabilities? All they have to do is run the balance sheet report.
CVP income statement or Cost Volume statement reports or monitors
the effects of the changes in cost and volume when it comes to the
company profits. For example, I work at a manufacturing plant for
roofing shingles. The CVP analyst studies the cost which includes but
not limited too, manufacturing, material, labor cost. This financial
statement report would help the management team budget the cost
of manufacturing goods.
Statement of cash flow tracks the movement of cash coming in or out
of the business. This financial statement will show if the company
made cash or not, or if the net income increased or decreased. For
example, the owner or the management department will use this to

determine if the company has earned enough money to be able to for
any expenses.
Retained earnings statements is a percentage that is kept by the
company to be reinvested or to be used to pay debts. For example, if
a company was looking to expand their business by purchasing top of
the line equipment they can use this statement to see how much
money the company has put away.
References:
statements.suite101.com/article.cfm/financial_statements_the_p_l.
Retrieved 2/18/2010
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ACC 291 Week 1 Discussion Question 1
How would you describe the entries to record the disposition of
accounts receivables?
Discussion Question 1: Post your response to the following:

• How would you describe the difference between financial and
managerial accounting? What are the distinguishing features of
managerial accounting?
There are many differences between financial and managerial
accounting. The financial accounting statements are available to
external users such as employees, stockholders, creditors, investors,
etc. This is available to them so that they can monitor the company's
performances quarterly or annually. Managerial accounting provides
financial information for managers and other internal people or
department. Managerial accounting is confidential so it is only
observed by internal users such as management, owner, and will
provided to external users such as the public. Management uses this
for budgeting purposes or to monitor profit loss/gain within the
company. Managerial accounting can be available to them as often as
needed. Managerial accounting statements is a great way for
management to make decisions based on what has been reported.
Another response
The differences between managerial accounting and financial
accounting are distinct. Managerial accounting reports are for those
in managerial and decision making positions. The managers use the
financial report to answer questions, which would advance the
company and its employees. The manager would want to know if
certain investments should be made and should the company advance
an employee's salary. The manager needs the report to decide if a
factory is built or if a certain stock is brought. The financial
accountant has the job of showing the external users such as creditors
and stockholders a picture of the company's stability.
The manager's purpose is to manage by making stable plans, delegate
duties, motivate the workers, and control the atmosphere.
Distinguishing features of managerial accounting are the fact no cpa
will audit the report, and there is no specific frequency of the report.
The reports are done in a need to know basis and for a specific
reason, which is for business purposes. The reports are detailed and

pertain to specific business decisions. The financial accountant need
only be concerned with the company's finances.
DQ2
Discussion Question 2: Post your response to the following:
• Select a management function (planning, directing and
motivating, or controlling) and explain how that function relates to
business as a whole. Next, select a different function listed by a
classmate. Discuss with your classmate how the functions you each
selected complement each other.
The management functions that I choose was controlling. Controlling
job is to make sure that the each department/person is keeping the
company's activities or plans on track and in order to achieve that
they must work closely with Management planning function.
Controlling continually compares the company's performance to make
sure that the planned standards are being met. In my opinion this is
known as the "dirty work". Controlling operations have to know what
to look for and how to keep track of all the company's activities. They
have to take actions and quickly correct any errors and make sure
that the company goals are being achieved in a timely matter or the
time that it was planned. If there are errors it is job of the controlling
operations to take quick action. The controlling operations not only
correct errors after it happens but they also are in charge of
foreseeing any potential errors and act quickly to get that resolved.
Another response
I chose Controlling as part of the management function. The
controlling function relates to business as a whole because it helps
monitoring the firm’s performance to make sure the planned goals are
being met. Managers need to pay attention to costs versus
performance of the organization. let say, if the company has a goal of

increasing sales by 10% over the next two months, the manager may
check the progress toward the goal at the end of month one. If they
are not reaching the goal the manager must decide what changes are
needed to get back on track.
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How are bad debts accounted for under the direct write-off method?
Cost, Volume, and Profit Formulas
By
Kamilah Crooms
Due February 28, 2010
Explain the components of cost-volume-profit analysis.

The components of cost volume-profit analysis consist of Level or
volume of activity, Unit Selling Price, Variable Cost per unit, total
fixed costs, and Sales mix.
What does each of the components mean?
Level or volume of activity is the activity that causes change or
behavior when it comes to the cost. Unit selling Price is the cost for
the product basically how much each unit is selling for. The Variable
Cost per unit is something that can change depending on the activity.
The total fixed cost does stay the same as activities change but differ
per unit. The Sales mix is basically what the name says. It’s a mixture
of sale items when more than one product sold the sales will remain
the consistent.
Based on the formulas you have reviewed, what happens to
contribution margin per unit when unit selling prices increase?
Contribution margin is the amount of revenue left over after
subtracting the variable cost. So basically Unit sales price
subtracting or minus variable cost.
Illustrate your explanation with an example from a fictitious
company of how an increase in unit selling prices might affect
contribution margin.
Kelly’s Sweetheart Flowers

The owner of Kelly’s Sweetheart Flowers is selling their bouquet of
flowers for $10 per unit. The Variable Cost per unit is $4.00. The
contribution margin will be ($10-$4) = $6. If the sells price increases
to say $15, then the contribution margin will be ($15-$6) = $9 per
unit.
When fixed costs decrease, what does this do for sales? Illustrate your
explanation with an example from a fictitious company.
Kelly’s Sweetheart Flowers
When the fixed cost decreases, the contribution margin ratio the net
income and sales will increase.
For example,
The flowers are $10 per unit. The variable cost per unit is $4.00. The
contribution margin will be ($10-$4) = $6. The fixed cost is $3. We
subtract Contribution margin – Fixed Cost= Net income. The net
income is $3.00.
Define contribution ratios
The contribution margin ratio is the contribution margin per unit
margin divided by the unit selling price.
What happens to contribution ratios as one of the components
changes?

Shown in the example above, if one or more of the components
changes is will cause the net income to increase or decrease.
Reference
statements.suite101.com/article.cfm/cost_volume_profits*the_p_l.
Retrieved 2/28/2010
//http:yourdictionary.com /CVP.org Retrieved 2/26/2010
Thomas, Y. 2005-08-27 “Accounting 101 pg. 52 Sta
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ACC 291 Week 1 Wileyplus Assignment E8-4, E8-11,
BYP8-1, and BYP8-2 (New)
Wiley Plus Assignment Week 1
·E8-4, E8-11, BYP8-1, and BYP8-2 in MS Excel
 Exercise 8-4 Wainwright Company
 Exercise 8-11 Fedex Corporation
 7 How should mixed costs be classified in CVP analysis? What
approach is used to effect the appropriate classification?

According to our class materials all mixed cost must be classified into
their fixed and variable and variable elements. The method that can
be used to determine is called the high/low method. To determine the
variable cost the analysis takes the total cost and divide it with the
low activity level. To get the fixed cost then the company would have
to subtract the total variable with either the high or low activity level.
9. Cost volume profit CVP analysis is based entirely on unit costs. Do
you agree? Explain.
In my opinion when it comes to making financial decisions for the
company, often times more than one method is used. Cost volume
profit is also based on Volume or level activities, unit selling prices,
variable cost per unit, total fixed and sales mix.
14. You can find the break point in dollars by drawing a horizontal
line to the vertical axis. I you want to find the break even point in units
it will be a vertical line from the break even point to the horizontal
axis.
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
ACC 291 Week 2 - Fordyce and Atwater (New)
P10-5A
Fordyce Electronics issues a $400,000, 8%, 10-year mortgage note
on December 31, 2007. The proceeds from the note are to be used in
financing a new research laboratory. The terms of the note provide
for semiannualinstallment payments, exclusive of real estate taxes and
insurance, of $29,433. Payments are due June 30 and December 31.

Axia College Material
Appendix C
Budgets Matrix
Directions: Using the matrix, define each of the budgets listed and briefly describe its uses.
Budget Definition Describe its uses
Sales budget Estimate of the expected sales for
the period. All of the other
budgets depend on the sales
budget. This is where all the
other budgets will start from
The sales budget shows dollars
and units. This will allow
management to see how many
units will be produced for the
period
Production budget A production of units needed to
be produced in order to meet the
projected sales
Shows management how many
units will be produced during
each budget period and what
amount is needed to fulfill
inventory demands
Direct materialsbudget Is the estimated quantity or cost
of the raw materials that is
needed in order to produce the
units required to fulfill inventory
Shows management how much
raw materials that is already on
hand and or that needs to be
ordered to meet inventory
demands.
Direct labor budget A estimate of cost and quantity of
direct labor needed in order to
meet production
Shows how many hours, how
many laborers needed to produce
the units for that budget period.
Management will decide what
will be the right amount of
laborers needed and if the
company will be able to meet the
budget
Manufacturing overhead
budget
An estimated expected amount of
manufacturing cost for the
budget period
This list all overhead cost
involving cash disbursement in a
quarter
Selling and administrative
expense budget
Anticipated selling and
administrative expenses in the
Shows area of budget expenses
that are not listed other than
manufacturing. Expenses such as

budget period marketing, promotion cost etc for
the budget period
Budgeted income statement Estimate of expected profitability
of operations in a budget period
Is a very important tool because it
shows the company estimated
profit for the budget period.
Cash budget A projection of expected cash
flows in and out of the business.
Cash budget helps management
keep a tally or total of all cash
balances.
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ACC 291 Week 2 Assignment Financial Reporting Problem,
Apple Inc
understand the basics of financial statement analysis related to the
assets section of the balance sheet, data interpretation, and how
financial information is obtained to understand how a company
accounts for its long-lived assets. Assignment Steps Resources:
Financial Accounting For Discussion Question 1: Post your response to
the following:
• When reviewing a financial report, why should information be
reliable, relevant, consistent, and comparable?
• In other words, why are these accounting characteristics
important?

• What kinds of problems could be created if a financial report is
not reliable, relevant, consistent, or comparable?
It is extremely vital that the company has accurate financial
reporting. This information determines whether or not to invest in
your company's stock. This information will help them decide if it is
profitable to invest or not to invest in your company based what is in
your financial history. The information must be relevant because it
will help the company, investors and lenders make decisions. It helps
answer questions like, "how stable is your company", or "what future
does this company have". The information should be reliable. In other
words the information that is reported must be able to be verified,
backed up with truthful information. Comparable occurs when
different companies use the same accounting principles. This makes it
much easier to compare results between company's. Consistency
happens when the company uses the same accounting method every
year. When the financial statements are reported each year, it paints
a financial picture of where the company is headed now and in the
future.
What kinds of problems will occur if the information does not include
these things?
Falsified or manipulated statements doesn't only effect the company
but it also to name a few effects the lenders, creditors, investor's, etc.
This will result in the company not having a faithful representation.

Another response
The main objective of generating financial information is providing
useful information that can be used in decision-making... only if this
information is relevant, reliable, comparable, and consistent, can it
be useful for decision makers. (Kieso, 2003).
Relevance gives a basis for making decisions that will impact the
future of a business, and it confirms and corrects expectations from
the past. If the information makes a difference in making decisions, it
is relevant.
Reliability means that the information can be depended on and it can
be proven to be free of error, and the information is factual. The
information cannot favor one set of users over another. CPAs audit
financial statements to ensure reliability.
Comparability is also an important characteristic of financial
reporting... this happens when different businesses use similar
accounting principles, making it much easier for one to compare
companies, and the method used in a business must be disclosed to
the users of the information to enable the users to convert the
information as accurately as possible.
Consistency simply means that the business uses the same
accounting principles on a yearly basis... consistently. This helps
decision makers analyze a company's trends. A company can change
the methods used if they can justify the change, showing that the
new method is more useful for analysis. If the method is changed, it
must be disclosed in the notes that go with the statements to show
users a lack of consistency.
These characteristics are very important to a business... decisions
cannot be made based on incorrect information, and everyone

involved in a business venture of any kind, whether they be
management, owners, or investors and creditors, as well as
consumers, etc. must be able to rely on the financial information
provided in order to make any type of decision. Without this
information, it is difficult to imagine any business succeeding, even
for a short time.
Examples of problems that could occur without reliable, relevant,
consistent, or comparable information includes not being able to get
loans or investments; management could make decisions that cause
irreparable damage to entire operations, consumers could easily lose
faith and cut their ties... the possibilities are endless for companies
that lack these qualities in their financial reporting.
DQ2
• How does information from financial reports influence business
decisions?
• Why is it important for business managers to understand the
How does information from financial reports influence business
decisions?

Once the information from the financial reports have been posted
then a team will review the company's financial history to see what
decision were profitable or not. The decisions that were made
previous to the financial reports being posted will show which way
the company needs to go to continue to remain #1.
Why is it important for business managers to understand the
IT is extremely important for he business managers to understand the
information found on the financial reports. The business managers
are going to be the people that are going to make decisions for the
company. They need to know how to interpret the financial reports
and come up with different strategies that will continue to make the
company money.
Another response
The information from financial reports influences business decisions
because it shows where the company stands. The managers use the
information from the financial report compared to the current year
from the previous year, whether the company growths or losses. It is
very important for business managers to understand the information
found on financial reports because the information from the financial
reports enables business managers to see how to improve and keep
the business afloat. It also gives business managers an insight what
came in and went out and the total operating cost of the company as

well as cutting cost in a certain areas. The information from the
financial reports helps the manager manages the business
accurately.
------------------------------------------------------------------
What are the differences among valuation, depreciation,
amortization, and depletion?
Is it appropriate to calculate depreciation using two different
methods? Why?
What is a Flexible budget?
• A Flexible budget is a budget that change or is flexible during
different levels or activity. Unlike the static budget which is a budget
based on one activity level, the flexible budget is based off of more
than one activity level.
• The steps to development a flexible budget is :
a) Identify the activity index, and the range of activity
b) Find out what the variable cost, and determine the variable cost
per unit
c) Find out what the fixed cost and determine the budgeted
amount for each unit

d) Organize the budget for selected additionalactivity within the
appropriate range
• The information found on a flexible budget cannot begin with
the master budget. The flexible budget uses the same guidelines the
original budget. The budget consists of Sales, Cost of Goods Sold,
Selling Expenses, General and Administrative Expenses, Income
Taxes, and finally the Net Income.
• The information on the budget is a great tool to be used for
evaluation performances. The flexible budget can be used for monthly
comparison purposes. Also during the process that management is
identifying the activity index and the range of activity it will allow
them to see the cost of direct labor hours for that budget period.
------------------------------------------------------------------
What types of industries have unearned revenue?
Why is unearned revenue considered a liability?
When is the unearned revenue recognized in the financial
statements?
DiscussionQuestion1: Post yourresponse tothe following:
 You know how important it is to create budgets for your household. How
does budgeting help management make good business decisions?
Budgeting is a very important skill that can be applied to everyday life and
also when it comes to making good business decisions. I really like the way
our class resources says about Budgeting. Budgeting is used as a planning

tool used by management to make good decision for the company. If a
company is successful than more than likely that means that the
management team is very good at managing the company finances.
Budgeting helps management plan ahead, defines what is most important,
shows warning signs, reach a company target without over or under
budgeting and etc.
Another response
In a business,abudgethelpsabusinessmake gooddecisionsbecause theyare usedbythe company
to planfor future eventsandcoordinate the eventsanddutiesinthe company. Theyalsogives
objectivesusedtoevaluate the performance of the companyon eachlevel whichcanhelptomake
future decisionsthatwill nothurtthe companybasedonthe projectedobjectives. Itcan alsobe
usedto alertthe companyof possible problemsornegative trendsinthe companythatneedtobe
addressedsothatthere is a clearpicture of the overall healthof the companybefore decisionsare
made.The budgethelpsthe companytobe able tomake an informeddecisionwhenmakingone. It
isthere inorder to make sure that makinga decisionliketakingonanothercompany will nothurt
the companyand is somethingthatthe compnaycansustainbasedonthe budget.
DQ2
DiscussionQuestion2: Post yourresponse tothe following:
 What are some of the differenttypesof budgets?
 Describe indetail one type of budgetcoveredinthe text.
 Describe whatthe budgetisusedforand whatinformationitprovidesabusiness.
 Then,as yourespondtoyour classmates,discusshow the budgetyoudescribedrelatesto
the budgetstheydescribed.
 Discusshowa businessbenefitsfromeachof the budgets.
There are many different types of budgetting. For example, there sales
budget which allows management to see how many units that need to be
produced, production budget which will allows everyone to see how many
units are going to be produced in or needed to be produced in order to
meet the inventory for that budget period. One budget that I can describe in
detail is called the direct labor budget and this budget shows how many

people, hours is needed in order to meet the required budget for that
period. This will give management an idea of how much money is needed
such as paying the cost of labor. The company benefits by each of these
budgets because it will help manage just how much money it will cost the
company during this period. Management can also see if there are different
ways to cost the company out of pocket cost down during this period.
Another response
I chose to write about the Production Budget. The Production Budget shows the
cost of each unit needed to produce an item or manufacture a product. The
formula used by the Production Budget :
Budget sales units + Desired ending finished goods units - Beginning finished
goods units = Required production units.
An example would be, every Easter the bakeries in the Bronx loads up on Hot
Cross Buns. My mother and grandmother would buy these tasty sweet breads,and
eat them for breakfast. I personally would like to eat them every week but, they
are only sold during the Easter season. Maybe, it has something to do with the
glazed cross on the top.
Every Easter Holiday, there appears these Hot Cross Buns and the bakeries
production department allows for the purchases for items needed to make the
buns. After Easter has gone, Hot Cross Buns are not included in the budget.
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ACC 291 Week 2 Individual WileyPLUS Assignment Week
Two

we have another New set of week 2 Willeyplus assignment which
could be found on this link
Resource:WileyPLUS
Complete the followingWileyPLUS Week Two Exercises and
Problem:
 Exercise E8-3
 Exercise BE9-13
 Exercise Do It! 9-4
 Exercise E9-9
 Exercise E9-10
 Problem P9-5A
 Capstone Discussion Question: Post your response to the following:
  Think back over what you have studied and learned in this course. Do
you have a new perception of or appreciation for the field of accounting
and how it contributes to business? Explain.
 To be perfectly honest with you I truly had no clue what accounting
did for a company and how important it was. I always thought that
accounting only dealt with payroll. In fact accounting does much
more that just payroll and monitor company supplies (coffee, paper,
pens & pencils). The accounting sets budgets for the entire company,
monitors outflow and inflow of profits, plans budgets for each
department, and much more. When I first begun this class I was
really nervous, I truly thought that I was going to have a hard time
understanding the accounting but I happy to say that I was wrong. I
understood every part of this course.
On a personal note I would like to thank you Jess. If it wasn't for your
pep talk I probably would had gave up. You are truly a
great instructor. I wish you all the best! God Bless

 Another response
 Accountinghastakena whole new meaningtome inmy vocabulary.Priortothiscourse, I
justtook accountingasa calculatorand crunchingnumbers.Inow have a new respectfor
accountingand all the aspectsthat are involved.Ineveronce tookintoconsiderationprofit,
sales,revenue,andbalance sheetsalsobeingincludedwithaccounting.There issomuch
more involvedwithaccounting,andhad I not takenthiscourse I wouldhave neverknown.
Accountingisa veryimportantpart of runninga business.Ifeel thatitisimperative toall

people thinkingof openingabusinessshouldtake some type of accountingclasstobecome
more aware of howto run the accountingpart of a business.
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ACC 291 Week 2 IndividualWileyPLUS PracticeCh 8,9,10
Quiz
Resource:WileyPLUS
Complete the WileyPLUS Week Two Practice Quizzes for chapters 8,
9, and 10
Business Plan
By
Kamilah T. Crooms

The name of my business is called DestinyWear. DestinyWear is a urban fashion
clothing company for woman, men and youth. DestinyWear specializes in making clothing
for every occasion. My name is Kamilah Crooms and I am the owner and CEO of

DestinyWear.My goal is to ensure that my company will be succesfull in all areas and in
each department. In order for me to make sure that the company was going to begin in the
right direction I had to priortize what was most important in establishing my business plan.
The main priority is that I had to first choose the appropriate business structure, a high
demanding product, and most of all an outstanding accounting team.
Business Structure
Upon establishing DestinyWear I had to decide which business struture that I felt was
best for me to pursue. I decided that as a Entreprenuer the best choice for me abd the
direction of the company would be for me to be sole proprietorship. Sole proprietorship
allowed me to be the sole owner of DestinyWear. The first and most important reason that I
wanted sole proprietorship is because it is much easier to start a business as sole
proprietorships. Sole proprietorship takes all the profit that and doesn't have to split it
between any other owners or corporations. I also want the power to make and change
decisions along the way without having to first consult anyone else.
DestinyWear Products

DestinyWear products will range from jeans, shirts, accessories and shoes. The
company will first start off with its most profitable product and that will be the DestinyWear
designer jeans line. The jeans line has over twenty different jeans designs
from straight leg, baggy, cargo, overalls, shorts and much more. The jeans line will provide
services within the United States and Canada and will eventually service International
customers. The DestinyWear jeans line will have its own building. In this building the bottom
floor will consist of the factory and the top floor will have the different departments such as
management, marketing and most importantly the accounting department.
DestinyWear Accounting Department
The accounting plays a major role in establishing my company DestinyWear. The
accounting department does more than managing and reporting the company’s financial
documents it is the greatest tool in establishing my business. The key to a powerful
accounting department here at DestinyWear is applying the principles of internal control.
These principles consist of establishment of responsibilities, segregation of responsibilities,
documentation procedures, Physical, mechanical, and electronic controls, Independent
internal verification and other controls such as Bonding of employees. In order to ensure
that this business plan works DestinyWear has to hire nothing but the best qualified
employees.
DestinyWear Accounting Staff
DestinyWear accounting team of fine employees will all be hired through the
company. There are several requirements that have to be met in order for myself as the
owner and Human Resource department to even consider the applicant for accounting. We
looked for characteristics, education and work history experience. The first and far most

important qualifying requirements are education. The applicant has to have a Bachelor
BA/BS in accounting degree a plus if he or she has a master’s.
The second requirement is experience. The applicant must have the minimum of five
years of experience working in accounting. He or She must have knowledge and
employment experience of working with financial statements, cash management and internal
control. Employees must be experienced in Invest idle cash, planning the timing of major
expenditures, delay payment of liabilities keeping inventory levels low, and increasing the
speed of collection on receivables. In the category of experience we had to hire applicants
according to the position that had to be filled in accounting. For example, if a position in
accounting such as management or supervisory needed to be filled, then we would look for
years of experience in management or supervisory positions. I personally prefer that every
employee have some type of management experience.
Last but not least, the employees characteristics. It is a must that every accounting staff
member has and applies professionalism, great ethic and moral skills, accuracy, and most
importantly punctuality, and reaching company deadlines. These characteristics are very
important to have at DestinyWear.
DestinyWear Accounting Management Team
The DestinyWear accounting management team will be reporting to me and to the
other head staff each week to report updates and any new changes. The management team
is responsible to have all the different types of budgeting reports that includes Sales, Labor,
etc. Management must follow the responsibility reporting system for each department. The
managers will use the company’s financial information to predict outcomes of the business. I
require a report from each responsibility center, cost center, profit center and investment
center to be reported each month. Management is responsible to ensure that the company
does not over or under budget and if any changes it must be reported immediately.
Conclusion
DestinyWear will be a very successful team not only because of the products that we
produce but because of having a great accounting team. With the help of accounting team I
DestinyWear products will be in every wardrobe in America.

REFERENCES
 //http:yourdictionary.com /CVP.org Retrieved 3/20/2010
 Thomas, Y. 2005-08-27 “Accounting 101 pg. 52
Statements. March 19, 2010
 Drucker, P. Managing in the next society 2002. retrieved
 ------------------------------------------------------------------
ACC 291 Week 2 Learning Team Weekly Reflection
Discuss the objectives for Weeks One and Two. Your discussion
should include the topics you feel comfortable with, any topics you
struggled with, and how the weekly topics relate to application in
your field.
Costco Wholesale Corporation

If we look at the financial statements of the company we can find that the company is financially
strong. Its strength are:
1. It has enough amount of current asset to repay its current liability. The current ratio of
the company 8.18 indicates that the company has $8.18 liquid asset to repay its $1 of
current liability.
2. The operating cost of the company is increasing because the company is able to
reduce its expenses.
3. Cash from operating activity has increased for the company.
Apart from this strength the company also has some weakness in its financial statement:
(i) Increasing inventory indicates that the company inventory conversion period is
increasing.
(ii) The cash from investing activity shows that the company cash outflow is more in
the short term investment i.e. in non operating activity.
(iii) The overall has for the year 2008 has declined for the company.
Net Income:

If we lookat the trendinnet income of the companywe can findthat the companynetincome looks
fluctuating but it has improved it net income in 2008 as compared to 2007.
Debt ratio as a percentage of total assets:
If we look at the debt ratio as percent of total asset we can find that the debt ratio is declining in
2008 as compared to 2007 i.e. the company is increasing equity to finance debt.
Debt as a percentage of total equity:

As we can see that the debt as percent of total equity is declining in 2008 as compared to 2007 i.e.
the company is increasing equity in its capital structure.
As we can see that there is nothing negative in 2008 for the company and this is the reason it has
positive trend as compared to 2007. Hence there is no need to correct anything for the company.
------------------------------------------------------------------
ACC 291 Week 2 Wileyplus Assignment P8-3A, BE9-11,
DI9-5, E9-7, E9-8, BYP9, P9-2A (New)
·P8-3A, BE9-11, DI9-5, E9-7, E9-8, BYP9, P9-2A.
 Problem 8-3A: Bosworth Company
 Brief Exercise 9-11: Nike, Inc.
 Do It! 9-5
 Week 1 DQ 1
Due Tuesday, Day 2

Go to the U.S. Securities and Exchange Commission’s Web site
at http://www.sec.gov and the Financial Accounting Standards
Board’s Web site athttp://www.fasb.org. Identify the mission and main
activities of each organization. Then, analyze the similarities and
differences between the roles of each entity. Which entity has more
influence over financial statement reporting? Explain your answer.
 Accordingto the SEC website theirmissionistoprotectinvestors,maintainfair,orderly,and
efficientmarkets,andfacilitate capital formation.The SECalsorequirespubliccompaniesto
disclose meaningful financial andotherinformationtothe public. Thisprovidesacommon
pool of knowledge forall investorstouse tojudge forthemselveswhethertobuy,sell,or
holda particularsecurity. The SEC isconcernedprimarilywithpromotingthe disclosure of
importantmarket-relatedinformation,maintainingfairdealing,andprotectingagainst

fraud.

 Accordingto the FASBwebsite the missionof the FASBisto establishandimprove standards
of financial accountingandreportingthatfosterfinancial reportingbynongovernmental
entitiesthatprovidesdecision-useful informationtoinvestorsandotherusersof financial
reports.Since 1973, the Financial AccountingStandardsBoard(FASB) hasbeenthe
designatedorganizationinthe private sectorforestablishingstandardsof financial
accountingthat govern the preparationof financial reportsbynongovernmentalentities

 The major difference inthe SECand the FASBis thatthe SEC dealswithreportingof financial
statementsforall industrieswhile the FASBdealsmainlywiththe privatenongovernmental
entities.Bothare concernedwiththe fairnessof financialreportsandworkinthe interestof
the public.Ibelieve thatthe SEChas more influence overfinancial statementreporting
because theycanbring civil actionagainstcompaniesandindividualsfor violationsof
securitieslaws.Althoughaccordingtothe FASBwebsite,“the Commission’spolicyhasbeen
to relyonthe private sectorforthisfunctiontothe extentthatthe private sector
demonstratesabilitytofulfillthe responsibilityinthe public interest.


 Response 2
 Go to the U.S. Securities and Exchange Commission’s Web site
at http://www.sec.gov and the Financial Accounting Standards Board’s Web site
athttp://www.fasb.org. Identify the mission and main activities of each
organization. Then, analyze the similarities and differences between the roles of each
entity. Which entity has more influence over financial statement reporting? Explain
your answer.
 U.S. Securities and Exchange Commission (SEC)
 According to the SEC’s website “The mission of the U.S. Securities and Exchange
Commission is to protect investors, maintain fair, orderly, and efficient markets, and
facilitate capital formation”(U.S. Securities and Exchange Commission, 2010, Para.
1).
 The main activities of the SEC are to interpret federal securities laws; issue new
rules and amend existing rules; oversee the inspection of securities firms, brokers,
investment advisers, and ratings agencies; oversee private regulatory organizations in
the securities, accounting, and auditing fields; and coordinate U.S. securities
regulation with federal, state, and foreign authorities. (U.S. Securities and Exchange
Commission, 2010)
 Financial Accounting Standards Board (FASB)
 According to the FASB’s website “The mission of the FASB is to establish and
improve standards of financial accounting and reporting that foster financial reporting
by nongovernmental entities that provides decision-useful information to investors
and other users of financial reports. That mission is accomplished through a
comprehensive and independent process that encourages broad participation,
objectively considers all stakeholder views, and is subject to oversight by the
Financial Accounting Foundation’s Board of Trustees” (Financial Accounting
Standards Board, n.d., Para. 3).
 The main activities of the FASB are to identify financial reporting issues based on
requests/recommendations from stakeholders or through other means. The FASB
Chairman decides whether to add a project to the technical agenda, after consultation
with FASB Members and others as appropriate, and subject to oversight by the

Foundation's Board of Trustees. The Board deliberates at one or more public meetings
the various reporting issues identified and analyzed by the staff. The Board issues an
Exposure Draft to solicit broad stakeholder input. (In some projects, the Board may
issue a Discussion Paper to obtain input in the early stages of a project) The Board
holds a public roundtable meeting on the Exposure Draft, if necessary. The staff
analyzes comment letters, public roundtable discussion, and any other information
obtained through due process activities. The Board redeliberates the proposed
provisions, carefully considering the stakeholder input received, at one or more public
meetings. The Board issues an Accounting Standards Update describing amendments
to the Accounting Standards Codification (Financial Accounting Standards Board,
n.d.).
 Boththe SEC andthe FASBhave the same goalsof fairness,accuracy,and
understandabilityof financialaccountingandreporting.Bothagenecysaccomplish these
goalsinthe bestinterestof the overall public.
 The differencesbetweenthe SECandthe FASBis thatthe FASBregulatesfinancialreporting
inthe private sectorof businesses(butare subjecttothe rulesandregulationsof the SEC)
and the SEC dealswithregulatingthe financial reportingof publiclyheldcorporations.
 I believethatthe SEChas the greatestinfluenceoverfinancial statementsreporting
because theyhave the final approval onall changesof the rulesandregulations.The Seccan
alsobringcivil or administrative enforcementactionsagainstindividualsandcompaniesin
violationof the securitieslaws.

 References
 Financial AccountingStandardsBoard.(n.d.). FactsaboutFASB.RetrievedJuly15,2010,
fromFinancial Accounting Standards
Board:http://www.fasb.org/facts/index.shtml#mission
 U.S. SecuritiesandExchange Commission.(2010,May 3). The InvestorsAdvocate:How the
SEC ProtectsInvestors,MaintainsMarketIntegrity,and FacilitatesCapitalFormation.
RetrievedJuly15,2010, from U.S.SecuritiesandExchange
Commission:http://www.sec.gov/about/whatwedo.shtml






 Week 1 DQ 2
Due Thursday, Day 4
 Search the Internet or the Online Library for information about the
Sarbanes-Oxley Act. A useful guide to some of these provisions is
located at http://www.soxlaw.com. Summarize at least two provisions
of the law, and discuss your interpretation of these provisions with
your classmates. Do you think this law will make financial statements
more reliable? Also, discuss how Sarbanes-Oxley establishes
boundaries to ensure ethical practices. What does the law allow or
prohibit, and why?



 The Sarbanes-Oxley act has many provisions to give companies
guidelines for responsible, and ethical financial reporting. One of
those provisions is listed in Section 302 of the act. The provision is
that periodic statutory financial reports be certified that signing
officers have reviewed the reports, the report does not contain any
untrue, or misleading information. The financial statements fairly
present the financial condition. The signing officers are responsible
for internal controls. A list of all deficiencies in internal controls, and
a list of fraud involving employees, and anything that could negatively
affect the internal controls.
 Another provision pertains to the "management assessment of
internal controls". This provision ensures that information is
published in annual reports regarding the adequacy of internal
controls, structure and procedures.
 The Sarbanes-Oxley act is designed to help companies promote
ethical accounting procedures. The act gives guidelines as to how
financial statements are reported. The act requires verification that
officers within the company have checked the information in the
reports for accuracy and true. The act also requires that the
companies have internal controls in place to ensure ethical reporting
practices. The main thing that the Sarbanes-Oxley promotes is
transparency in reporting.


 Response 2
 Section 802 of the Sarbanes-Oxley Law defines the penalties that
may be assessed against individuals who failed to comply with the
Act. An individual could be subject to 20 years in jail for altering,
destroying, mutilating, concealing, falsifying records, documents or
tangible objects. Guilt is define by the intent to impede a legal
investigation. This part of the law gets to the heart of how Arthur
Anderson reacted by destroying documents important to Worldcom.
The law further defines that any accountant who knowingly violates
their ethics by wilfully violates the requirements of maintenance of all
audit or review papers. These papers are subject to review up to five
years.
The second Section that I reviewed was the Section 302. This
actually is my favorite part of the law because it directly holds the
officers and directors accountable for the accuracy of reporting in
their financial statements. It defines that the management must
review and understand the financial statements and sign that they
are true and accurate. It also holds the management accountable for
the internal controls, requiring any deficiencies to be reported. In the

past directors of companies relied heavily on the internal officers,
management, to report the company performance without
questioning the accuracy or taking their role on oversight committees
seriously. They could hide behind a veil of trust of the key leaders.
This Section clearly puts the responsibility for the Board to remain
independent of the executives and function more effectively on the
respective oversight committees they serve. The example I would
share is what happened in WorldCom. The company leaders shared
what they wanted to with the Board, who trusted implicitly the top
leaders. Had they questioned their legal representation or auditors,
they potentially could have uncovered the fraud that was committed
by the creation of shell companies, with WorldCom employees as
stockholders.
I would love to think this law would protect the investing community.
Financial reporting has improved to some extent. Unfortunately the
scams still continue. Example would be Barney Madoff or what
happened in the financial mortgage industry. These unethical
practices were conducted after Sarbanes Oxley was implemented.
Madoff was able to provide false financial information to investors.
Financial industry was allowed to get to aggressive in underwriting
and product suite. Fines and penalties are deterrents. Ethics still
must be inherent in an individual and company. Laws and
requirements are a guide. There will never be enough auditors,
inspectors or oversight boards to catch all of the fraud in the
corporate community.
The law prohibits falsifying information, failing to notify of material
changes, and destruction of records.
 ------------------------------------------------------------------
ACC 291 Week 3 Assignment The Liabilities Section of
O’Brian’s Balance Sheet

understand the balance sheet presentation for the liabilities of a
company. Assignment Steps Resources: Financial Accounting: Tools
for Business Decision Making Prepare the liabilities section of
O’Brian’s balance sheet using the following information: • Accounts
payable $157,000 • Notes payable (due May 1, 2018) $20,000 Lucent
Technologies
Axia College of University of Phoenix

LucentTechnologiesisacompanybasedonnetworkingforservice providers,government,and
enterprisesworldwide(LucentTechnologies,n.d.,Para1).The products andservicestheyworkwith
are separatedintothree categories;serviceandmaintenance,wirelessmobilitynetworking,and
wire line networking. LucentTechnologiesisbackedbyBell Labs,whichdoesresearchand
developmentinnetworkingtechnologies.
Duringthe years of 2001 to 2003 thiscompanyhas experiencedadecrease indemandbecauseof
othercompanies’lossorcapital usedtowardspending.Thisismainlydue toadownturninthe
economy.Asan investorthisinformationisnecessarytoknow because itexplainsthe decreaseor
increase insectionsof the balance sheet.Inordertocompare the growth or decline of the
company’sprofit,aninvestormustchange a balance sheetintoacommon-size balancesheet.First
whenlookingatthe balance sheetaninvestorwill seethatthe amountof paidin capital has
increasedfromthe yearof 2003 to 2004, the assetshave increased,butthe liabilitieshave
decreased.Whenrunningadebt/assetratioitisnoticedthatthisratiodropsfrom 1.2 in2003 to 1.0
in2004. Thisshowsthe company’sriskis low whenconcerningfinancial leverage,usuallywhenthe
debtratiois lessthanone percentitis financedmainlybycompanyequity,sothiscompanyisclose
to beingdebtfree fromcreditors.
Afterchangingthe balance sheettoa common-size balance sheetthereare several factorsan
investorwill lookat.The currentassetshave droppedto.48 from .49 in2004. Thisdoesnot show
harm to the companybecause onlythe accountsreceivable droppedwhile the restof the current
assetsincreased.Thismeansthe companyisnotinas much dangerof defaultonmoneyowedtoit.
It doeshave a rise inmarketable securities.The one concerninthe assetsisthe increase of prepaid
cost of pensionsandgoodwill.Goodwill canbe usedfortax breaksbut prepaidpensionscannot
benefitthe company.
Whenlookingatthe liabilitiessectionaninvestorwill seeadropin pensionandliabilitiesandan
increase inlongtermdebt,bothof these couldbe affectedbecause of the dropinthe economy.
Long termliabilitiesare oftenincreasedtohelpacompanycontrol interestrate increasessoasan
investorcuttingbackon pensionliabilitiescutsbackcost to the companyand watchinginterestrate
increase showthe companyisconcernedwithitsearningandinvestors.Thiswouldbe encouraging
or an investor.The stockholdersdeficitshowsadropinaccumulateddeficitsfrom -1.43to -1.22 and
total deficitsof -.26 to -.08. Thisshowsthe companyisworkingto control any moneylossand
turningitto the company’sadvantage.Overall itshowsthe companyisstill earningaprofitalthough
small.Withan increase of assetsanda drop inliabilitiesthe companyisshowingitisworkingina
lowriskcapital.
Afterreviewingthisinformation,acreditororinvestormustbe able to compare thiscompanyto the
industrytotals.Bycomparinghowthiscompanycomparesto othercompaniessimilartoit,a person
can see if it iscompetitive andworthtakingarisk.Runningratioswill alsoshow if the companyis
capable of payingoff any debtsithas or if it can acquire the neededcashincase of emergencies.
Overall asan investor,Iwouldsaythiscompanywouldbe worthinvestingin.

Reference
AxiaCollege.(2007).UnderstandingFinancial Statements.RetrievedMay10, 2010 from AxiaCollege,
Week2 Assignment,ACC/230.
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Why does a company choose to form as a corporation?
What are the steps required to become a corporation?
Preparing an Income Statement

Coyote, Inc. Company
Multi-Step Income Statement
200x 201x 202x
Net Sales 1,833,000$
Cost of Goods Sold 1,072,000
Gross Profit 761,000 - -
Selling and Administrative Expenses 454,000
Advertising
Depreciation and Amortization 14,000
Repairs and Maintenance
Operating Profit 293,000 - -
Other Income (Expense)
Interest Income 13,000
Interest Expense (16,000)
Earnings Before Interest and Taxes 290,000 - -
Income Taxes 116,000
Net Earnings 174,000$ -$ -$
The companies’netincome isprofitable whenthe salesexceedthe costof goodssold.In this,the
gross profitis$761k. Thisis beneficial tothe company.Thoughwe tookthe cost of goodsaway from
the netsalesthere are still otherareaswhichneedtotake a piece of the pie.Forthiscompany,once
the SG&A and depreciationare takenout, the companystill containsaprofitof $290k. But the buck
doesnotstop there.Once the interestincome andinterestexpense are adjustedthe balance before
earningsandtaxesis$290k. Aftertaxesare takenout,the companyis leftwithanetprofitof $174k.
In thiscase I thinkthe companyhas achievedsuccesswithanetprofitof $174k. If the company were
unable tobe profitable,the companywouldeventuallygooutof business.We wouldbe able totell
if the companywas not profitable bylookingat eachsectionindividually.The costof goodssoldis
whatstands outfor me.If we paymore to make the productthenwe are actuallysellingitfor,there
isno profitto be made.So,I thinkit shouldall startthere.
------------------------------------------------------------------

Why is preferred stock referred to as preferred?
What are some of the features added to preferred stock that make it
more attractive to investors?
Would you select preferred stock or common stock as an investment?
Week 3 DQ 1
Due Tuesday, Day 2
Post your answer to Problem 3.5 on p. 109 (Ch. 3). How might
the information contained within the stockholderequity
statement be used for management and investor decision-
making? Provide specific examples of situations in which the
stockholderequity information might be used.
The statement of stockholders’ equity provides the changes in the equity accounts during the
accounting period more in depth than the balance sheet. The information found on the
statement of stockholders’ equity includes retained earnings, common and preferred stock,
and additional paid in capital. Management uses the statement of stockholders’ equity to
ensure they are reaching their goal of maximizing shareholder's equity. The use of market
ratios help with the analysis of the statement of stockholders’ equity, such as earnings per
share, price-to-earnings, dividend payout, and dividend yield. These ratios will help both
management and investors in analyzing the company. For example, if I were looking to
invest in a company’s stocks I would utilize all of the financial ratios, as well as the market
ratios. The earnings per share ratio is calculated before the price to earnings ratio, P/E,
because the earnings per share ratio is used in the second. If a company pays dividends,
the dividend payout ratio will come in handy. It tells us “The percentage of earnings paid to
shareholders in dividends” (Investopedia, 2010, p. 1).
References
Investopedia. (2010). Dividend Payout Ratio. Retrieved August 3, 2010, from
Investopedia:http://www.investopedia.com/terms/d/dividendpayoutratio.asp

Response 2
Explainwhat can be found on a statementof stockholders’ equity.
The majorelementsof stockholders'equityinclude capital stock,paid-incapital,retainedearnings,
treasurystock,unrealizedlossonlong-terminvestments,andforeigncurrencytranslationgainsand
losses.
How might the informationcontainedwithin the stockholderequity statementbe used for
managementand investordecision-making?Provide specificexamplesofsituationsinwhich the
stockholderequityinformationmight be used.
Managementmaylookat the stockholder’sequitystatement retainedearningssectiontodetermine
if companyshouldborrowmoneyforcapital investmentsorfinance itthroughvariousformsof
equity.Itmayalsobe usedbythe stockholdertoevaluate the compensationpaidtothe company
officers.Investorsmayalsolookatthe statementforcumulativenetunrealizedgainsandlosses
before purchasingstockinthe company.Investorsare alsointerestedinthe paidincapital because
theycan compare it to the additional paidincapital and the differencebetweenthe twovalueswill
equal the premiumpaidby investors overandabove the parvalue of the shares.
DQ 2
Week 3 DQ 2
Due Thursday, Day 4
Provide an example from the text or the Internet that
demonstrates a situation in which a company’s net profits
appeared good in the statements, but the gross or operating
profits presented a different picture. Discuss how this might have
occurred. Respond to the following question, addressed in
Problem 3.6 on p. 109 (Ch. 3): “Why is the bottom-line figure, net
income, not necessarily a good indicator of a firm’s financial
success?” Look for indicators like liquidity or solvency to answer
this discussion question.

An example that demonstrates the situation is Enron. Enron’s financial
statements did not show all the expenses and costs. Instead of showing them on
the income statement they made entries so the cost and expenses would post in
the balance sheet. The same was done with the revenues. This way it would be
less expenses and the net profit appeared good. Many debts and losses were not
reported in the financial statements. From the third quarter of 2000 through the
third quarter of 2001, the directors fraudulently used reserve accounts within
Enron Wholesale to mask the extent and volatility of its windfall trading profits,
particularly its profits from theCalifornia energy markets; avoid reporting large
losses in other areas of its business; and preserve the earnings for use in later
quarters. By early 2001, Enron Wholesale's undisclosed reserve accounts
contained over $1 billion in earnings. The head of the company improperly used
hundreds of millions of dollars of these reserves to ensure that analysts'
expectations were met. In addition, Skilling and others improperly used the
reserves to conceal hundreds of millions of dollars in losses within Enron's EES
business unit from the investing public.This would show the creditors that Enron
was making profits and its position was solid.
The net income is not necessarily a good indicator of a firm’s financial success
because the income statement only shows the profit or loss at a period of time
and does not show the whole picture of the company. The Balance Sheet,
Statement of cash flow,Statement of shareholders’ equity and the Income
Statement all together give the real picture of the business. Eachone of them
shows different aspects of the business. These statements show where the
income is actually coming from; is it from sales or from loans the company is
borrowing? If the company is selling a building or any other asset but that does
not mean that it is selling more products and making profit. Looking at the Income
Statements the company might be making profit but at the same time it is
extremely leveraged.
Response 2
A company’s net income is not the whole picture, just part of it. There are lots of things that
contribute to the net income that may not be significative to the company’s success. If the
value of a dollar has a sudden change that can affect the bottom line if the company
happens to hold the medium of exchange that can benefit by the change that might occur.

The company can falsely inflate the bottom line. A company’s net income is coupled with
liabilities, cash flow, and selects financial ratios. Looking at it this way is a much better way
of seeing what the company’s success is like. A company can change up many things to
make it look like their income is better. These things that can be changed are single sales
events, cash infusion, or false financial statements. Some things like debt that a company
has, the company’s cash on hand, their capital assets conditions, or even their sales trends.
To figure the success of the company, you must look at the whole picture. One thing cannot
tell you all the facts of the company’s affairs. You cannot tell the net income of the company
just from the bottom line. Look at all the financial records.
Response 3
Provide an example from the text or the Internet that demonstrates a situation in which a company’s
net profits appeared good in the statements, but the gross or operating profits presented a different
picture. Discuss how this might have occurred. Respond to the following question, addressed in
Problem 3.6 on p. 109 (Ch. 3): “Why is the bottom-line figure, net income, not necessarily a good
indicator of a firm’s financial success?” Look for indicators like liquidity or solvency to answer this
discussion question.
Net income is not necessarily a good indicator of a firm’s financial success
because they have ways to manipulate it by increasing their revenues or hiding
some of their expenses. For investors trying to decide where to invest their
money, they need to look more into assessing how the company came up with
the numbers they presented.
An example of this situation is when Laribee Wire Manufacturing Co. exaggerated
in recording their inventory value which allowed them in acquiring loans from six
banks totaling to about $130 million using it as collateral. At the same time, they
reported $3 million in net income for the period, but in actuality they lost $6.5
million.
This company showed a higher net income by reporting fake inventory in which
its value was overstated and transferred over to their income statement. When
the banks assessed their financial statements, it was enough to sway them into
lending the loans they needed.
Reference:
Investopedia. (2010). Spotting Creative Accounting On The Balance
Sheet. Retrieved

fromhttp://www.investopedia.com/search/searchresults.aspx?q=Spotting+Creative+Accounting+O
n+The+Balance+Sheet&submit=Search
------------------------------------------------------------------
ACC 291 Week 3 Individual WileyPLUS Assignment
we have another New set of week 3 Willeyplus assignment which
could be found on this link
STOCK DIVIDEND
University of Phoenix
Stock Dividend
In the present time, the stock dividend has become important
concept. When dividend is given in form of stock, it is called stock
dividend. In this form of dividend, the cash does not use. It is
important, when the corporation declares stock dividend, the market
value of the share decreases because the number of stock increases.
The many companies prefer stock dividend due to the tax benefit. If
the individual gets stock dividend, he does not pay any tax on stock
dividend. Thus the stock dividend reduces tax burden. On the other
hand, the ownership of investors also spurs up in the company
because the number of holding share increases. There is also
disadvantage of stock dividend. The market value of the share
decreases, so the market value of holding also decreases (Kennon,
2009).

The ABC Company is leading company in its industry. The number
of outstanding share of the company is one million. On the other
hand, the number of investors is five millions. The value of market
capitalization is $100 million. The management declares 20% stock
dividend. Thus the 200000 shares will be distributed as a stock
dividend. The number of outstanding share will be increased by
200000 and the new total number of outstanding stock will be 1.2
million. On the other hand, the new value per share in the market
will be $83.33 (100 million/1.2 million). This example is taken from
below mentioned link:
Stock Split
The stock split is also an important concept. When the management
wants to increases number of shares, the management follows this
method. In this method, the face value of the share is split and
number of share gets increased. Due to increment in number of
outstanding share, the market value of per share also gets affected
but the total market capitalization of the company does not affect.
Both stock split and stock dividend increase number of outstanding
shares but both are different due to the accounting treatment. In the
stock split, the investors do not get any real benefit. It is also known
as non-cash distribution of dividend. The motto behind stock split is
to increase trading of the shares in the market (Baker, 2009)
For example, the face value of per share is $100 and the total
outstanding shares are 100 million. If the management of the
company announces stock split in ratio of 1:2, the total outstanding
shares will be increased by 100 million, thus the new total number
of the share will be 200 million. On the other hand, the face value of
the share will reduce by 50%. So the new face value of the share will
be $50. Due to effect of stock split, the holding share of the investor
will also increase in the prorate basis. If the investor has 10 shares,
now he will have 20 shares. It is important thing that the total issued
capital will not be changed. The illustration of stock split has been
got from following link:
Reverse Stock Split

The reverse stock split is just opposite of stock split. In this process,
the management reduces the number of outstanding shares. The
company increase face value of the share. In this method
corporation decides a ratio such as 2:1. Thus the company
accumulates two shares in one share. In this method, the total
market value of company does not change. Due to reverse stock
split, the earning per share and face value of per share rises. Thus
the reverse stock split provides just opposite result from stock split.
It is important question, why company selects this method. When
the management seems that the face value of the share is less as
compared to competitors then the company goes for this method to
make its share value to equal to competitor’s share’s face value. It is
also a sound strategy to increase treading of shares. If the face
value of share is too cheap in comparison to competitors, the
investors will be discouraged for investment. For increasing the
confidence of investors, the management uses this method
(Mladjenovic, 2009).
For example, an investor holds 100 shares of XYZ Company and
the face value per share is $50. If the management go for reverse
stock split option and declares one share for 10 shares then the
holding of the individual will reduce 9 shares for every 10 shares.
Thus the new holding of the investor will be 10 (100/10) shares but
the face value per share will be $500. It is also important that the
total market capitalization will remain as same as before reverse
split. The example of the reverse split is take form below mentioned
link: http://www.sec.gov/answers/reversesplit.htm.
References
Baker, H. K. (2009). Dividends and Dividend Policy. John Wiley
and Sons.
Kennon, J. (2009). All About Dividends. Retrieved May 31, 2010,
from
http://beginnersinvest.about.com/od/dividendsdrips1/a/aa040904_2.
htm

Mladjenovic, P. (2009). Stock Investing for Dummies. Dummies.
------------------------------------------------------------------
ACC 291 Week 3 Individual WileyPLUS Practice Quiz Ch.
11,12
Resource:WileyPLUS
Analyzing an Income Statement
The net income of Kodak has decreased a bit; it appears that the
company is more profitable. By conducting a side by side analysis
from 2004 to 2003 the company has increased in current assets and
decreased in total assets. It appears that the company went down
in property, plant and equipment net as well as discontinued
operations. So, despite the decrease in total assets it looks like the
company has made a good decision.

The company has also decreased its total liabilities by about 4%. I
believe this to be good because the short term borrowings and long
term debt has decreased. To me, this means that the company is
tightening their belt and paying off old debt.
Total shareholders’ equity has down a little bit in dollars, but on the
percentage level the company’s percentage has gone up. I believe
this is because the company issued $104k more shares in 2004 than
in 2003. The company has the same amount of shares outstanding
in 2004 that it did in 2003 as well. Retained earnings on the stock
have gone up in 2004 as well. I believe this is contributed by the
more shares that have been issued.
I believe the profitability of the company is under good standings.
They appear to be making the necessary adjustments in the
company to stay with in a profitable income.
------------------------------------------------------------------
ACC 291 Week 3 Learning Team Weekly Reflection

Discuss the objectives for Week Three. Your discussion should include
the topics you feel comfortable with, any topics you struggled with,
and how the weekly topics relate to application in your field.
Cash Flow Statement Analysis
Cash Flow Statement Analysis
The cash flow statement is important financial statement of the
corporation. The cash flow statement states from where cash has
come and where cash has been gone. Thus the cash flow statement
makes a relationship between beginning balance and ending
balance of cash. The cash flow statement is prepaid on the basis of
income statement and balance sheet of the company. The Little Bit
Inc’s beginning cash balance including marketable securities was
$24000. On the other hand, the ending cash balance including

marketable securities of the company was $40000 (Weygandt,
Kimmel & Kieso, 2009).
The net income of the company was $5500 during 2009. The
company generated cash inflow from operating activity is less as
compared cash out flow from operating activities. The company
generated $9000 negative cash balance in operating activity
section of the cash flow statement. On the other hand, in the
investment section, the firm has also negative cash balance. The
firm has $7000 negative balance in investment section of the cash
flow statement. The Little Bit Inc made investment during the year
instead of selling of assets. Last section of the cash flow statement
is financing activity section. In which, all finance related activities
come. The corporation sold some shares and borrowed some money
from outside lenders therefore the company has positive case
balance by $32000 in financing activity section.
Reference
Weygandt, J.J.,Kimmel, P.D. & Kieso, D.E. (2009). Managerial
Accounting: Tools for Business Decision Making. John Wiley and
Sons.
------------------------------------------------------------------
ACC 291 Week 3 Wileyplus Assignment P9-7A, E10-5, E10-
8, E10-13, E10-22, E10-24, BYP10, P10-9A, P10-13A,
IFRS10-4 (New)

·P9-7A, E10-5, E10-8, E10-13, E10-22, E10-24, BYP10, P10-9A, P10-
13A, IFRS10-4.
 Exercise 10-5: Olinger Company
 Exercise 10-8: Ortega Company
 Exercise 10-13: Romine Company
 Exercise 10-22: Cole Corporation
 Week 5 DQ 1
Due Tuesday, Day 2


In what ways does the statement of cash flows relate to the balance sheet and
income statement?

 It is important to understand what we are doing with the numbers and the
results these numbers give us because the result is the information that
will be available to us from financial statements. Although some want to
see the income statement and ignore the other statements we need to use
them together to see the total picture of what is happening to our
business. The relationship between the numbers on the financial
statements shows us everything we need to know about the business.
 The income statement shows income and expenses for a period of time
and if we are making or loosing money. The balance sheet compares the
assets to liabilities and shows how much money the business would have if
everything is sold today.
 The statement of cash flow might be the most critical statement because
there is plenty of information we can gain form it. This statement relates
with the income statement on operating activities to see if they are
generating cash or not. It is related to the balance sheet on how much cash
is used in investing activities. In relationship with the balance sheet the
cash flow statement shows what cashis provided or used by financing
activities. It will tell us how much debt has been paid and will indicated if
we are using more debt or have paid down the credit line.
 When the business makes a sale or receives payment for a sale on credit
that is an inflow. A sale shows up as income on the profit and loss
statement and as an inflow on the cash flow statement. It also shows up
either as cashor accounts receivable on the balance sheet. Also, how

quickly we can collect on accounts receivable will play a big role in the cash
flow. When the business spends money, it shows up as an expense in the
profit and loss statement and as an outflow on the cash flow statement. It
also shows up on the balance sheet as a decrease in cash, or an increase or
decrease in liabilities, depending on what the expense represents.


 Response 2
 In what ways does the statement of cash flows relate to the balance sheet and income
statement?
 The cash flowstatementrelatestothe income statementandbalance sheet.The netincome
fromthe income statementislistedonthe statementof cashflows. Operatingactivitiesare
analyzedonthe statementof cashflows;thissectionof the statementreconcilesthe net
income tothe actual cash the companyreceivedfromorusedduringoperations.The second
sectionof the statementof cashFlowsisthe cash flow frominvestingactivitieswhich
include purchase orsale of assets.The lastsectioninthe Statementof CashFlowsisthe cash
flowsfromfinancingactivitiesthatincludesraisingcashbysellingstocks/bondsorborrowing
frombacks; or cash out flowsfrompayingbackloans. The balance sheetshowsthe different
account balancesatthe endof the accountingperiod.The statementof cashflowsreflects
changesinthe accountslistedonthe balance sheetbetweenaccountingperiods.The net
cash fromoperating, financing,andinvestingactivitiesare addedupto calculate the net
change in cash.


 Week 5 DQ 2
Due Thursday, Day 4

Discuss how the statement of cash flows is utilized by investors. If you were an
investor reviewing a statement of cash flows, what section might interest you most?
Why? Discuss the circumstances in which other sections of the statement might be
important to an investor.


 Prior to making an investment in a company, one would want to
understand the decisions the owners are making to fund the
operations of the company daily. Maintaining sufficient cash to
acquire new product, pay overhead, and satisfy generated sales
would be the predominant need of the company. Second need would
be for the company to have sufficient cash to remain competitive.
This may require cash to invest in research and development,
increase inventory as new product introduction, improve efficiency in
plant and equipment, or cash to satisfy prior borrowing obligations.
By reviewing the statement of cash flow, the investor can determine if
the company is generating sufficient cash internally to fund
operations or are they requiring outside injection of cash to finance
the short fall in cash needed to operate the company. Last, the
investor can review the statement of cash flow to better understand
the leverage of the company and the requirement for repayment of

debt, or dividends to reward prior investments.

 Response 2
 Discuss how the statement of cash flows is utilized by investors. If you were an investor
reviewing a statement of cash flows, what section might interest you most? Why? Discuss the
circumstances in which other sections of the statement might be important to an investor.

 The statementof cash flowisutilizedbyinvestorsbecause ithasall informationintegrated
fromthe balance sheet andthe income statement. The statementof cashflow isusedbyan
investortosee if the operatingactivitiesare greaterthanthe netincome tohave earnings
that are called“highquality”. If operatingactivitiesare less,thenaredflagwill be raisedas
to whythe net income isnotbecomingcash. Anotherreasonwouldbe investorsbelieve
cash isthe best. The statementshowsall cashcomingand goingfromthe business. If the
companygeneratesadditional cashthanwhatis beingused,thenthe companycanreduce
theirdebt,acquire anotherbusiness,orbuysome of the stock back. The lastreasonwhy
wouldbe that financial modelsare baseduponthe statementof cashflow.
 If I wasan investorreviewingastatementof cashflowsthe sectionthatmight interestme
the most wouldbe the operatingactivities. Iwouldlike toknow how the companywasdoing
and whatareas needtobe improvedtohave more cash generatedinthe business. All the
sectionsare importanttoan investorsotheycan see the complete bigpicture of their
investment.


 ------------------------------------------------------------------
Why are companies required to prepare a statement of cash flows?
Why is the statement of cash flows divided into three sections?
Differentiating Depreciation Methods

There is one main difference between straight line depreciation and
accelerated depreciation. Straight line is decided by taking the cost of
the assets, figuring out the salvage cost when the use of the asset is
finished and how many years of use the asset has. A person then takes
the cost minus salvage and divides the remainder by the number of
years of use. This amount is the depreciation expense subtracted each
year from the cost. The accelerated depreciation does not have the
same amount of deprecation subtracted each year. It does have the
cost minus salvage value to figure out the amount to use but is then
divided out differently. A person takes the sum of the years of a
product’s useful life, such as three years is 3 + 2 + 1 = 6, then a
person would divide the depreciation amount by 3/6 the first year, 2/6
the second and finally 1/6 for the final year. So the amount of
depreciation expense is larger to smaller with accelerated and equal
amounts for straight line.
The advantages of straight line method are it is easier and faster to
figure. The advantage of accelerated method is it is more accurate
when figuring depreciation expense. The accelerated method has an
advantage and disadvantage concerning taxes. A company can use
the accelerated method to take advantage of bigger tax breaks at the
beginning of an assets life, but since this amount drops during the
lifespan if the company needs added tax breaks it will not receive
them from these assets in the future. With the straight line method the
amount of tax breaks are even through the life of the product. Most
companies choose this form of depreciation for reporting purpose on
taxes but will use the accelerated method to figure taxable income.
As mentioned before the advantage of straight line depreciation is it is
easier to figure and uses the same total each year for deduction of
depreciation expense but the disadvantage is that if use for taxable
income and reporting a company does not get a bigger tax break at
the beginning of the assets life when they have just put out the cost for
the item and may need a bigger tax break.
------------------------------------------------------------------

What are some common ratios used to analyze financial information?
Which are the most important?
Candela Corporation
Axia College of University of Phoenix

Candela Corporation
Candela Corporation and Subsidiaries have been working for
over 34 years developing and commercialize aesthetic laser systems
that allow physicians and personal care providers to treat a variety of
cosmetic and medical conditions such as removal of spider veins,
scars, stretch marks, warts, as well as hair removal and age spots,
freckles and tattoos. Other skin treatments such as psoriasis and acne
and acne scars are also treated. (Axia College, 2007)
Going from top to bottom on The Candela Corporation and
Subsidiaries Consolidated Statement of Cash Flows; for the operating
activities, 2002 shows an alarming loss in the net income while 2003
and 2004 for the company are showing a significant and steady climb
in the net income. In 2004 there was a new category added called
Provision for the disposal of discontinued operations and the
category has caused an increased the account for 2004. Loss from
discontinued operations grew from 2002 to 2003 but had a significant
decline for 2004. Depreciation has increased over the last 3 years as
well. Provision for bad debts increased significantly too, but an
increase in bad dept is expected as revenue increases. The provision
for deferred taxes shows the company went from a loss in 2002 and
2003 to show there was no tax loss in 2004. The tax benefit from
exercised stock options has practically doubled sense 2003. The
changes in assets and liabilities for the last 3 years have been up and
down. Receivables have increased, notes receivable decreased, and
inventories have increased. Other current assets, other assets have

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