post university acc 111 all week discussions

Question # 00004242 Posted By: spqr Updated on: 11/28/2013 09:42 AM Due on: 12/28/2013
Subject Accounting Topic Accounting Tutorials:
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unit 2 discussions

You are one of three partners who own and operate Marys Maid Service. The company has been operating for seven years. One of the other partners has always prepared the companys annual financial statements. Recently, you proposed that the statements be audited each year because it would benefit the partners and prevent possible disagreements about the division of profits. The partner who prepares the statements proposed that his uncle, who has a lot of financial experience, can do the job at little cost. Your other partner remained silent.

Required: What position would you take on the proposal? What would you strongly recommend?

Unit 3 discussion

You work as an accountant for a small land development company that desperately needs additional financing to continue in business. The president of your company is meeting with the manager of a local bank at the end of the month to try to obtain this financing. The president has approached you with two ideas to improve the company’s reported financial position. First, he claims that because a big part of the company’s value comes from its knowledgeable and dedicated employees, you should report their Intellectual Abilities as an asset on the balance sheet. Second, he claims that although the local economy is doing poorly and almost no one is buying land or new houses, he is optimistic that eventually things will turn around. For this reason, he asks you to continue reporting the company’s land on the balance sheet at its cost, rather than the much lower amount that real estate appraisers say its really worth.

Required: Comment on the following questions. Why do you think the president is so concerned with the amount of assets reported on the balance sheet? What accounting concept relates to the presidents first suggestion to report Intellectual Abilities as an asset? What accounting concept relates to the presidents second suggestion to continue reporting land at its cost? Who might be hurt by the presidents suggestions, if you were to do as he asks? What should you do?

Unit 5 discussion

Assume you work as an assistant accountant in the head office of a national movie rental business, a la Blockbuster Inc. With the increasing popularity of online movie rental operations, your company has struggled to meet its earnings targets for the year. It is important for the company to meet its earnings targets this year because the company is renegotiating a bank loan next month, and the terms of that loan are likely to depend on the companys reported financial success. Also, the company plans to issue more stock to the public in the upcoming year, to obtain funds for establishing its own presence in the online movie rental business. The chief financial officer ( CFO) has approached you with a solution to the earnings dilemma. She proposes that the depreciation period for the stock of reusable DVDs be extended from 3 months to 15 months. She explains that by lengthening the depreciation period, a smaller amount of depreciation expense will be recorded in the current year, resulting in a higher net income. She claims that generally accepted accounting principles require estimates like this, so it would not involve doing anything wrong.

Required: Discuss the CFOs proposed solution. In your discussion, consider the following questions. Will the change in depreciation affect net income in the current year in the way that the CFO described? How will it affect net income in the following year? Is the CFO correct when she claims that the change in estimated depreciation is allowed by GAAP? Who relies on the video companys financial statements when making decisions? Why might their decisions be affected by the CFOs proposed solution? Is it possible that their decisions would not be affected? What should you do?

Unit 7 discussions

Snake Creek Company has one trusted employee who, as the owner said, handles all of the book-keeping and paperwork for the company. This employee is responsible for counting, verifying, and recording cash receipts and payments, making the weekly bank deposit, preparing checks for major expenditures (signed by the owner), making small expenditures from the cash register for daily expenses, and collecting accounts receivable. The owners asked the local bank for a $ 20,000 loan. The bank asked that an audit be performed covering the year just ended. The independent auditor ( a local CPA), in a private conference with the owner, presented some evidence of the following activities of the trusted employee during the past year:

a. Cash sales sometimes were not entered in the cash register, and the trusted employee pocketed approximately $ 50 per month.
b. Cash taken from the cash register ( and pocketed by the trusted employee) was replaced with expense memos with fictitious signatures ( approximately $ 12 per day).
c. $ 300 collected on an account receivable from a valued out- of- town customer was pocketed by the trusted employee and was covered by making a $ 300 entry as a debit to Sales Returns and a credit to Accounts Receivable.
d. $ 800 collected on an account receivable from a local customer was pocketed by the trusted employee and was covered by making an $ 800 entry as a debit to Sales Discounts and a credit to Accounts Receivable.


1. What was the approximate amount stolen during the past year?
TIP: Assume employees work 5 days a week, 52 weeks a year.
2. What would be your recommendations to the owner?

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Tutorials for this Question
  1. Tutorial # 00004037 Posted By: spqr Posted on: 11/28/2013 09:50 AM
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