It starts with a case covering a full financial analysis of two similar companies, which in my opinion was a better investment with an explanation. In my next case, I am doing a shareholder equity analysis with two different companies with different aspects of equity.
Statement of Changes in Stockholder's Equity For Year Ended December 31, 2016
Increase in net cash from interest provided by operating activities ($325) Cash flows from investing activities. Each cash flow is on page 8 for Glenwood and page 15 for Eads.
TOTZ Inc
Income Statement Presentations
Likewise, the EPS effects of those items will not be presented on the face of the income statement.”. The Class Action Settlement Profit will be reported under the operating income of the Income Statement.
Rocky Mountain Chocolate Factory, Inc
Preparation of Financial Statements
Stated Dividends All Other Totals Unadjusted Probation Period Adjustment for Record Salary Adviser's Adjusted Probation Period Before Closing Closing After Closing.
Revenues
For each of the journal entries recorded in the spreadsheet, I interpret where each of the transactions is recorded in the cash flow statement.
Kayla Stevens’ Craft Shop An Analysis of Internal Controls
Some performance of tasks that change hands regularly is required to ensure consistent work with no signs of fraud. Technology Update: Kayla needs to update her accounting software for updates to help prevent fraud. Their credit card machines are behind the register making the registers vulnerable) - Lack of reporting.
Frequent reporting: There should be weekly or bi-weekly reports that can summarize cash flow or other operations within the store to be used to hold the associated clerk accountable via ID number. Inventory Checks: This store should personally use frequent reports and physically check random pieces of inventory to ensure there are no false sales. The store should increase the accountability of the clerks by having them bookkeepers for specific parts of the store/inventory.
Team Management: It might be a good idea to consider hiring more people or asking a few workers (Becca would be a good start because of her small investment in the business that works one day a week.) to ensure consistent quality without workers who are happy and comfortable .
An Analysis of a Manufacturing Company’s Inventory Accounts
Accountability Fraud
- Inventory is recorded net of allowance for obsolete or unmarketable inventory
- The beginning balance for 2012 is the same as the ending balance of 2011
- We would attribute the portion of the reserve for obsolete inventory to Finished Goods. The portion of reserve is probably unable to be sold because
This case involves an analysis of the inventory accounts of an unnamed manufacturing company and how each is accounted for. From the analysis of the financial statements, I have interpreted this based on their notes from their balance sheet. I go into detail about my opinion if I were an investment analyst for this company, based on my interpretations of the financial statements.
Raw materials consist of materials that must be used together with other materials to create Work-in-Process, and when the Work-in-Process is completed, the goods become Finished Goods. Work-in-Process consists of the direct materials and indirect materials along with direct labor and indirect labor. This account is an offset account and the amount is not reported directly on the balance sheet.
Since the company's inventory decreased in the second year, they have become better at selling inventory.
Accounting for Property, Plant, and Equipment
This includes return on assets, return on equity, and also the debt-to-equity ratio. I conduct an analysis of several items, such as line costs, and develop an opinion based on my findings from the FASB codification. Expenses are defined as things that use up assets and liabilities to perform a service or create a product.
The cost should be charged as an expense when it is not expected that the cost will yield material profits in the future. Since this is the largest operating expense by a large amount, I feel they should describe what exactly they are better at. Instead, WorldCom amortized the $3.1 billion over 10 years instead of recording it as an expense for that quarter.
Targa Co
An Analysis of Relocation Expenses
A liability for a cost associated with a severance or disposal activity must be recognized in the period in which the liability is incurred, except as specified in the paragraphs and for a liability for one-off employee benefits that are incurred over time). A company's communication of a promise to provide lump sum benefits to employees is a promise that creates an obligation on the date of communication to provide severance benefits if employees are terminated. The timing of recognition of non-recurring employee benefits depends on whether employees are required to serve until terminated in order to receive the severance payments and, if so, whether employees will be retained for service beyond a minimum retention period.
The timing of measuring a liability for non-recurring severance benefits depends on whether employees are required to provide services until they are terminated to receive the severance benefits and, if so, whether employees will be retained to provide services beyond the minimum. retention period. If employees are required to provide services until they are terminated to receive the severance benefits and will be retained to provide services beyond the minimum retention period, a liability for the severance benefits should be initially measured at the date of communication on a fair value basis . of the obligation from the termination date. An employer providing contractual severance benefits should recognize a liability and a loss when it is probable that employees will be entitled to benefits and whatever amount that may be.
The cost of the termination benefits recognized as a liability and loss will include the amount of any lump sum payments and the present value of any expected future payments.
Xilinx Inc
An Analysis of Restricted Stock
Stock options are offered by a company to their employees to make them feel that they are earning their "piece of the pie" and it also helps to attract and retain a motivated staff. RSUs are an award of units equal to one share of stock, and Xilinx does not issue the stock at the time of grant. Unlike stock options, RSUs will always have value regardless of whether the price of the stock goes up or down.
Granted options/RSUs entitle employees to purchase a specified number of shares of the company's stock at a predetermined price. It is also required to record this expense for the unvested portion of the employee stock-based compensation. The exercise price of the employee stock options is equal to the market price of Xilinx common stock.
Xilinx uses the straight-line method to recognize stock-based compensation expense over the requisite service period of the award.
Bier Haus
An Analysis of Revenue Recognition
A contract for the purchase of a cup of beer takes place when the university student asks the bartender for a beer in exchange for money. A contract for the purchase of both a mug and beer occurs when the university student orders a beer and mug from the bartender. The transaction price for this exchange is $7 total for both the mug and the beer.
The $7 revenue is recognized today when the customer receives the beer and beer mug. The performance obligation for Bier Haus is to refill the thermo cup with beer and to provide pretzels at a later date when the customer redeems the discount voucher. The transaction price for this exchange totals $7 for both the beer and pretzel coupon.
Beer refill revenue is recognized at the time the beer is filled and given to the customer.
Zagg Inc
An Analysis of Book vs. Tax Income
- Describe what is meant by the term book income? Which number in ZAGG’s statement of operation captures this notion for fiscal 2012? Describe how a company’s book income differs
- In your own words, define the following terms
- Explain in general terms why a company reports deferred income taxes as part of their total income tax expense. Why don’t companies simply report their current tax bill as their income
- Explain what deferred income tax assets and deferred income tax liabilities represent. Give an example of a situation that would give rise to each of these items on the balance sheet
- Explain what a deferred income tax valuation allowance is and when it should be recorded
- Consider the information disclosed in Note 8 – Income Taxes to answer the following questions
Explain in general terms why a company reports deferred income taxes as part of its total income tax expense. Why don't companies simply report their current tax bill as their income tax expense? A company reports deferred income taxes to show the investor whether it will benefit the investor or harm the investors.
A deferred tax valuation allowance is created for a deferred tax asset and must be created if there is a greater than 50% probability that the entity will not realize a certain portion of the asset. Using the information in the first table in Note 8, show the underlying entry recorded by ZAGG for the income tax provision in fiscal year 2012. Using the information in the third table in Note 8, break down the amount of “net deferred income taxes” recorded in income entry of the tax journal in part f.
Deferred tax assets of $6,912 can be found in the current assets section of the balance sheet.
Build-A-Bear Workshop An Analysis of Capital Leases
The criteria it meets are that the lease transfers ownership of the property to the lessee, the lease contains a purchase option, the lease term is greater than or equal to 75 percent or more of the expected economic life of the leased, and the present value of the minimum lease payments (excluding executor costs) is equal to or exceeds 90 percent of the fair value of the leased item. A sales-type lease is the same as a direct finance lease, except for the manufacturer's or dealer's gross profit (or loss). In a sales-type leasing contract, the lessor records the sales price for the asset, the price of goods sold and associated inventory reduction and the lease receivable.
Upon expiration of the lease, ownership of the location does not transfer to Build-A-Bear, nor is there an option to purchase. The present value of the expected lease payments will be treated as a "right to use the leased asset." A corresponding capital lease. Note that the current portion of the liability under capital leasing is the most significant portion of the liability that will be repaid in fiscal year 2010.).
When structured as an operating lease, there will be a decrease in the amount of reported debt (both short and long term), a decrease in the amount of total assets (specifically long-lived assets) and a higher income early in life . of the lease and therefore higher retained earnings.
