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ACC 690: Final Project Guidelines and Rubric: OverviewThe final project for this course is the creation of an Excel spreadsheet model that shows the consolidation worksheet, intercompany elimination entries, other consolidation entries, and the final income statement and balance sheet for a sample parent and subsidiary company. The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitted in Modules Four, Seven, and Nine.Assume the following when completing the project:Assume that the parent owned the subsidiary for the entire year for which financial statements are being prepared. The scenario indicates that as of December 31, there is a difference between book value and fair value for inventory and depreciable assets. Assume that these differences existed at the date of acquisition. Record only the differential and do not worry about amortization of the differential. Prepare the consolidation worksheet using the equity method. Assume that the trial balance was prepared prior to any entry the parent company made to record the net loss from the subsidiary.GuidelinesThe Model Assignment: Students will be given the description of a parent company and a subsidiary company along with the two firms’ trial balances at book value as of December 31, 2012, the end of the year for both firms (see Company Information below).The financial data will be presented in English pounds (£) as local currency.Other data pertaining to the consolidation is also to be provided.The student will analyze the data for purpose of consolidation. The student will create a useful Excel model that shows the consolidation worksheet, intercompany elimination entries, other consolidation entries, and the final income statement and balance sheet.Using the consolidated financial statements created, students will then use Excel modeling to translate the consolidated income statement and balance sheet from English pounds to U.S. dollars based on exchange rates provided (the U.S. dollar is the functional currency).Requirements: This project should be prepared as a report for your supervisor.The report should be visually pleasing.As many computations as possible should be done by the model with the exception of entering the original financial statement data.The report should utilize “macros” and other built-in features found in Excel.MilestonesMilestone One: Initial ModelIn Module Four, you will submit the initial Excel model for the report that shows the consolidation entries and the final income statement and balance sheet. This milestone will be graded using the Final Project Milestone One Rubric.Milestone Two: Model and Exchange RatesIn Module Seven, you will translate the consolidated income statement and balance sheet from English pounds to U.S. dollars. This milestone will be graded using the Final Project Milestone Two Rubric. Milestone Three: Final ReportIn Module Nine, you will submit the final report as an attractive, polished artifact that includes all the main elements of the final product. The report should reflect the incorporation of feedback gained throughout the course. This milestone will be graded using the Final Report Rubric (below).Company InformationBelow you will find the trial balance for Parent Company and its wholly owned purchase, Subsidiary Company, as of December 31, 2012. The financial statements are denominated in British pounds.CompanyParentCompanySubsidiaryCompanyAccountsDebitCreditDebitCreditCash£10,000 £4,000 Accounts Receivable25,000 10,000 Inventory30,000 12,000 Short-Term Investments40,000 6,000 Prepaid Assets35,000 12,000 Investment in Subsidiary290,000 Long-Term Notes Receivable150,000 14,000 Debt Service Fund50,000 Depreciable Assets900,000 350,000 Accumulated Depreciation £200,000 £50,000Intangible Assets45,000 20,000 Current Liabilities 92,000 44,000Long-Term Notes Payable 225,000 119,000Common Stock 400,000 200,000Retained Earnings 482,000 50,000Sales Revenue 750,000 245,000Cost of Goods Sold330,000 160,000 Selling Expenses100,000 45,000 Administrative Expenses120,000 70,000 Interest Expenses24,000 5,000 Other Important Information:Subsidiary Company’s assets and liabilities are all shown at fair value except for:The fair value of Inventory is 32,000.The fair value of Depreciable Assets is 370,000.Subsidiary company sold Parent Company an item that is in Parent Company’s inventory for 10,000 and cost Subsidiary Company 5,000. The sale was made to Parent Company on credit, and no payment has been made.On December 27, 2012, Parent Company made a long-term loan to Subsidiary Company in the amount of 100,000. Subsidiary Company paid Parent Company 7,000 for Consulting Services. Subsidiary Company considers this an Administrative Expense, and Parent Company considers it Sales Revenue.Exchange rates are:March 31, 2012, Exchange Rate: 1 £ = $1.24Average Rate for 2012:1 £ = $1.22December 31, 2012, Exchange Rate:1 £ = $1.20Final Report RubricRequirements of Submission: The project must be in Excel format, using as many calculations in Excel as possible.Critical ElementsExemplary Proficient Needs Improvement Not Evident ValueAnalysis of DataWell-developed, accurate, and effective analysis of the data for purpose and consolidation Accurate and effective analysis of the data for purpose and consolidation Accurate analysis of the data for purpose and consolidation The report does not include an accurate analysis of the data for purpose and consolidation 35Accuracy of ModelThe report includes useful, clear models with no errors or omissionsThe report includes useful, clear models with a few minor errors or omissionsThe report includes models with several errors or omissionsThe report contains multiple serious errors or omissions35Effective Use of Excel (Macros, Formulas)All items that can be computed are computed with ExcelMost items that can be computed are computed with ExcelSome items that can be computed are computed with ExcelFew items that can be computed are computed with Excel15ReportDesign and LayoutDesign and layout are professional, visually striking, clear, and unclutteredDesign and layout are generally professional and visually appealingDesign and layout are somewhat professional and visually acceptableDesign and layout are unprofessional15Earned TotalComments:100%
Solution: ACC 690 Final Project Milestone Two: Model and Exchange Rates