Deliverables Chart

Time Line
Week Assignment
01 Case Study - Financial Accounting: Excel file - Module 01 Page 1, Page 2 and Page 3

02 Case Study - Financial Statement Analysis: Excel file - Module 02 Page 1, Page 2 and Page 3

03 Case Study - Full Disclosure in Financial Reporting and Management Responsibility: Excel file - Module 03 Page 1 and Page 2

04 Case Study - Management Decision: Excel file - Module 04 Page 1 and Page 2

05 Case Study - Professional Business Ethics and Internal Control: Excel file - Module 05 Page 1, Page 2 and Page 3

06 Case Study - Presentation and Final Exam

Requirements
Your final deliverable is a Case Study presentation addressed to your instructor which outlines the financial situation of the company. In this proposal,
you will comment on each of the business areas or challenges outlined in the timeline above (e.g. Financial Accounting, Financial Statement Analysis,
and so on). The proposal should include adequate and credible research to support your decision about these areas or challenges. In addition, when
outside sources are used, you must include APA-style in-text citations and a reference list. For more information on APA, visit the APA Guide:
http://guides.rasmussen.edu/apa

Due Date
Your final project is due in Module 6. The Case Study project is the main project for this course and will be due along the way. The assignments and
modules that are due are noted in bold in the timeline below. As you can see, your first assignment "Case Study - Financial Reporting" is due in Module
01.

Evaluation
Each assignment leading up to the final project is evaluated and graded independently. Your instructor will provide specific grading criteria for each
step of the project prior to its due date.
Case Study Introduction

Transferable Skills are a set of essential abilities that will position students for success as they develop and build their
careers. College faculty and staff believe it is important that all Rasmussen graduates develop these skill sets, as having
expertise in these areas will be beneficial throughout one's life. Employers have also identified these skills as being
essential in well-rounded employees.

In this course, you will have the opportunity to learn and demonstrate each of these skills. These skills will be measured
as a portion of our course project that has been designed to replicate an authentic workplace project. These skills are the
following: Communication, Critical Thinking, Digital Fluency, Diversity and Teamwork, Ethics and Professional
Responsibility, and Information Literacy.

How can I learn more about the Transferrable Skills? Rasmussen College faculty and staff have worked together to
create a visual guide to each of the Transferable Skills. You are able to view the entire set of six guides at the following
location: http://guides.rasmussen.edu/transferableskills

This Case Study is the major lesson material for this course and incorporates the use of transferable skills.

Case Study
Company Name: GolfPro Center

Introduction
Millions of people every day must make informed decisions about organizations. To make the decisions these people
need information. Accountants measure the activities of an organization and communicate those measurements to
others. Accounting information provided for internal users, such as managers, is referred to as managerial accounting;
accounting information provided to external users is referred to as financial accounting. The two functions of financial
accounting are to measure business activities of a company and then to communicate those measurements to external
parties for decision-making purposes.

GolfPro Center
Let’s say you are ready to begin your new venture of working as the Accounting Manager for a new start-up golf center
called GolfPro Center. The purpose of the golf center is to provide PGA-certified golf instruction and essentials to
customers, such as junior players to develop their opportunity for top university programs. By using the base network of
customers, the company intends to expand to sell nationwide as an integrated multi-channel retailer. The target market of
junior league will be to individual golf pro shops, golf teams and eventually lead to selling through an online store. In
additional to future new store openings, a significant part of the company's strategy is to continue to enhance the internet
aspects of the direct to customer channel. The plan also entails the ongoing development of their own brand portfolio as
they continue to grow.

Golf Industry
The golf retail industry is highly fragmented among mass merchants, off course specialty retailers, Internet merchants,
warehouse type merchants and on course pro shops. The off course specialty golf retail industry has become extremely
competitive as general sporting goods or their golf specialty retails have expanded their markets. The company will face
competition as competitors enter the marketplace in the existing markets.

Company Information
Steve Smith is the owner and Chief Executive Officer of the company. He has appointed a close family member, Mike
Smith as the Chief Financial Officer. You were recently hired by Mike Smith as the Accounting Manager. Your first main
function is to set up the accounting department structure and financial statements. The corporate office is located in
Chandler, Arizona. Let’s look at some initial activities of functions within the new company. The company opened
business on December 1, 2016. You also started employment on this same date. You have been tasked with setting up
the accounting department and internal control process. The financial statements, which you will prepare, will be the first
set of financials for the company. You will also be tasked with setting up the financial notes and management's discussion
and analysis portion of the financial statements. This will include company information, accounting policies, revenue
recognition and inventory components. You will also encounter a few ethical situations along the way which will define
your accounting educational activities.
Let’s talk about how the company developed the investment for opening the business. The company needed about
$35,000 to get the business up and going. Since the company did not have that amount of money to start the business,
they began looking for investors. With their money, investors buy ownership in the company and have the right to share in
the organizations profits. Each share of ownership is typically referred to as a share of common stock. For GolfPro Center
they sell 1,000 shares of common stock for $25 each, receiving cash of $25,000 from investors. The 1,000 shares include
300 sold to family for $7,500, giving them 30% (= 300/1,000) ownership in the company. The company also offered you
100 shares for $2,500, giving you 10% ownership. The remaining 600 shares include 300 to extended partners, 200 to a
friend, and 100 to the owners childhood golf coach. The company now has $25,000 from investors.

To raise the remaining cash needed, the company will borrow $10,000 from a local bank, which is agreed to repay within
three years. Thus, the bank is the creditor. Now, with the $35,000 of cash obtained from investors and creditors, the
company buys equipment. This equipment costs $24,000, leaving $11,000 cash for future use. At this point, the company
has the following resources that can be used for operations.

The investors and creditors has the claims to the company’s resources. Creditors have claims equal to the amount loaned
to the company, $10,000. In other words, $10,000 of the company’s resources are promised to the local bank. Investors
have claims to all remaining resources, $25,000.
You manage the resources of the company on behalf of the owners (stockholders, in this case), while the owner is also
an investor this will help in aligning the interests with the other investors in the company. This is common in many start-up
businesses.

Formally defined, a corporation is a company that is legally separate from its owners. The advantage of being legally
separate is that the stockholders have limited liability. Limited liability prevents stockholders from being held personally
responsible for the financial obligations of the corporation. Stockholders of GolfPro Center can lose their investment of
$25,000 if the company fails, but they cannot lose any of their personal assets (such as homes, cars, computers, and
furniture).

Other common business forms include sole proprietorships and partnerships. A sole proprietorship is a business owned
by one person; a partnership is a business owned by two or more persons. If the owner had decided to start GolfPro
Center without outside investors, he would have formed a sole proprietorship. However, because he did not have the
necessary resources to start the business, being a sole proprietorship (or even one member of a partnership) was not a
viable option. Thus, a disadvantage of selecting the sole proprietorship or partnership form of business is that owners
must have sufficient personal funds to finance the business in addition to the ability to borrow money. Another
disadvantage of being a sole proprietorship or partnership is that neither offers limited liability. Owners (and partners) are
held personally responsible for the activities of the business.

Sole proprietorships and partnerships do offer the advantage of lower taxes compared to corporations. Sole
proprietorships and partnerships are taxed at the owner’s personal income tax rate, which is typically lower than the
corporate income tax rate. In addition, a corporation’s income is taxed twice (known as double taxation): (1) the company
first pays corporate income taxes on income it earns and (2) stockholders then pay personal income taxes when the
company distributes that income as dividends to them.

What information would GolfPro Center’s investors and creditors be interested in knowing to determine whether their
investment in the company was a good decision? Ultimately, investors and creditors want to know about the company’s
resources and their claims to those resources. Accounting uses some conventional names to describe such resources
and claims.

GolfPro Center has a liability of $10,000 to the local bank. Other examples of liabilities would be amounts owed to
suppliers, employees, utility companies, and the government (in the form of taxes). Liabilities are claims that must be paid
by a specified date.

Investors, or owners, have claims to any resources of the company not owed to creditors. Therefore GolfPro Center, this
amount is $25,000. We refer to owners’ claims to resources as stockholders’ equity, because stockholders are the
owners.

The relationship among the three measurement categories is called the accounting equation. GolfPo Center has assets of
$35,000 and liabilities of $10,000. The stockholder equity is $25,000.

Of course, all owners hope their claims to the company’s resources increase over time. This increase occurs when the
company makes a profit. Stockholders claim all resources in excess of amounts owed to creditors; thus, profits of the
company are claimed solely by stockholders.
You will calculate the company’s profits by comparing its revenues and expenses. Revenues are the amounts recorded
when the company sells products or provides services to customers. For example, when you or one of your employees
provides golf training to a customer, the company records revenue. However, as you’ve probably heard, “It takes money
to make money.” To operate the academy, you’ll encounter many costs. For example, you’ll have costs related to salaries,
rent, supplies, and utilities.

You’ll notice the use of the term net to describe a company’s profitability. In business, the term net is used often to
describe the difference between two amounts. Here, we measure revenues net of (or minus) expenses, to calculate the
net income or net loss. If we assume that by the end of the first month of operations GolfPro Center has total revenues of
$7,200 and total expenses of $6,000, then we would say that the company has net income of $1,200 for the month. This
amount of profit increases stockholders’ claims to resources but has no effect on creditors’ claims.

When the company has positive net income, it will either distribute those profits back to its stockholders or retain those
profits to pay for future operations. For example, suppose you decide that because GolfPro Center has net income of
$1,200, a cash payment of $200 should be returned to stockholders at the end of the month. These cash payments to
stockholders are called dividends.

The other $1,000 of net income adds to stockholders’ equity of the company. Thus, when GolfPro Center has net income
of $1,200, stockholders receive a total benefit of $1,200, equal to $200 of dividends received plus $1,000 increase in
stockholders’ equity in the company they own.

Let's now proceed to the your new journey in accounting with GolfPro Center.
Module 01: Financial Accounting

Preparing the Financial Statements

Your function as accounting manager is to prepare the financial statements for the first operating period of December 2016.

The December 31, 2016 adjusted trial balance for GolfPro Center is presented below. Using the Trial Balance, complete the following:
1. Prepare an income statement for the year ended December 31, 2016
2. Prepare a statement of stockholder's equity for the year ended December 31, 2016 assuming no common stock was issued during 2016.
3. Prepare a classified balance sheet as of December 31, 2016.
Keep in mind, the beginning balances are zero only because this is the first month of operations for GolfPro Center.

GolfPro Center
Trial Balance December 31, 2016
For the period ending December 31, 2016

Accounts Debit Credit

Cash $ 6,900
Accounts Receivable 2,700
Supplies 1,300
Prepaid Rent 5,500
Equipment 24,000
Accumulated Depreciation $ 400
Accounts Payable 2,300
Salaries Payable 300
Utilities Payable 900
Deferred Revenue 400
Interest Payable 100
Notes Payable 10,000
Common Stock 25,000
Retained Earnings 0
Dividends 200
Service Revenue 7,200
Rent Expense 500
Supplies Expense 1,000
Depreciation Expense 400
Salaries Expense 3,100
Utilities Expense 900
Interest Expense 100
Total $ 46,600 $ 46,600

1 GolfPro Center
Income Statement
For the period ended December 31, 2016

Revenues
Service Revenue 7200

Expenses
Rent Expense 500
Supplies Expense 1,000
Depreciation Expense 400
Salaries Expense 3,100
Utilities Expense 900
Interest Expense 100
6,000
Net Income $ 1,200
### answer: $1200

2 GolfPro Center
Statement of Stockholder's Equity
For the period ended December 31, 2016

Accounts Common Stock Retained Earnings Total Stockholders Equity

Beginning Balance (Dec 1) $ -
Issuance of common stock 25,000 25,000
Add: Net Income for the period 1,200
Less: Dividends (200) 1,000
Ending balance (Dec 31) 25,000 1,000 26,000

25,000 1,000
### 26000
3 GolfPro Center
Balance Sheet
For the period ended December 31, 2016
Assets Liabilities
Current Assets: Current Liabilities:
Cash $ 6,900 Accounts Payable 2,300
Accounts Receivable 2,700 Salaries Payable 300
Supplies 1,300 Utilities Payable 900
Prepaid Rent 5,500 Deferred Revenue 400
Total Current Assets $ 16,400 Interest Payable 100
Total Current Liabilities $ 4,000

Long Term Assets: Long Term Liabilities:

Equipment 24,000 Notes Payable 10,000
Less: Accumulated Depreciation (400) Total Liabilities $ 10,000
Total Long term assets $ 23,600
Stockholder's Equity
Common Stock 25,000
Retained Earnings 1,000
Total Stockholders Equity $ 26,000

Total Assets $ 40,000 Total Liabilities & Stockholders Equity $ 40,000

40000 40000

Critical Thinking: Clarity and Precision

Communication with CFO: In the complexity of preparing the financial statements, the CFO tells you that he prefers the single step income statement
4 because the multiple step format seems to overstate the income. Express in a short declarative manner, how would you respond to this question?
My response is that, the Multiple step format of financial statement does not overstate the income. That could only happen when a mistake is made in the
accounts that are included in the multiple step format. If the correct values are used, then the income is not overstated. Moreover, the single step format is
just obtained by combining several accounts that could appear as standalone items in the multiple step, into larger accounts. Overstating however does
not depend on the type of statement used. It is majorly caused by overstatement of inflows and understatement of outflows.

Communication: Language Usage

Explain how financial accounting information is communicated through financial statements to internal and external users. Construct widely varied
5 sentence types and advance grammatical concepts to explain insight.
Financial information is communicated in financial statements. Firms prepare financial statements to provide an overall picture of the financial health in the
organization. There are several financial statements that are prepared by firms; statement of comprehensive income, balance sheet, cashflow statement
and statement of changes in equity. In all these statements, several aspects of financial health are well indicated. The statements are available for internal
and external users. The users can read the financial information they need and make decisions.
Internal users are the primary users of the accounting information will include:
Management: for analyzing the organization's performance and position and taking appropriate measures to improve the company results.
Employees: for assessing company's profitability and its consequence on their future remuneration and job security.
Owners: for analyzing the viability and profitability of their investment and determining any future course of action.
External users as the secondary users would include:
Creditors: for determining the credit worthiness of the organization. Terms of credit are set by creditors according to the assessment of their customers'
financial health. Creditors include suppliers as well as lenders of finance such as banks.
Tax Authourities: for determining the credibility of the tax returns filed on behalf of the company.
Investors: for analyzing the feasibility of investing in the company. Investors want to make sure they can earn a reasonable return on their investment
before they commit any financial resources to the company.
Critical Thinking: Creativity and Innovation
Customers: for assessing the financial position of its suppliers which is necessary for them to maintain a stable source of supply in the long term.
Describe the role
Regulatory that financial
Authorities: accounting
for ensuring that plays in the decision
the company's making
disclosure process. In information
of accounting your response,
is inuse human and/or
accordance professional
with the in field knowledge
rules and regulations set in order
6 through
to protectthe
thecreation of of
interests thethe
response.
stakeholders who rely on such information in forming their decisions. (http://accounting-simplified.com/financial/users-of-
Financial accounting plays an important role in decision making. The financial accounting information is needed by several users to make decisions. For
accounting-information.html)
instance, shareholders use the financial accounting information to assess the profitability of their investment. Directors can use the information to
determine the progress of the firm, make salary escalation decisions, dividend decisions among other decisions. The external users also use information
in financial statements to make decisions. For instance, the government uses the firm's financial statements to make conclusions about tax liability for the
company. Investors also need to determine if investing in the company is worthy, by checking the financial statements. Lenders too use the financial
information produced by financial accountants to make lending decisions.
Module 01: Financial Accounting

Cash Flow Statement

The below information are transactions which analyze the cash effects on GolfPro Center.
Use the information provided to complete the Statement of Cash Flow.

External Transactions of GolfPro Center

Type of Is Cash Inflow or
Transaction External Transactions in December Activity Involved? Outflow?
Sell shares of common stock for $25,000
1 to obtain funds necessary to start the Financing Yes Inflow
business.
Borrow $10,000 from the local bank and
2 sign a note promising to repay the full Financing Yes Inflow
amount of the debt in three years.
Purchase equipment necessary for giving
3 Investing Yes Outflow
golf training, $24,000 cash
Pay one year of rent in advance, $6000
4 Operating Yes Outflow
($500 per month).
5 Purchase supplies on account, $2,300. Operating No ---
Provide golf training to customers for cash,
6 Operating Yes Inflow
$4300
Provide golf training to customers on
7 Operating No ---
account $2000
Receive cash in advance for 12 golf
8 training sessions to be given in the future Operating Yes Inflow
$600
9 Pay salaries to employees $2800 Operating Yes Outflow
Pay cash dividends of $200 to
10 Financing Yes Outflow
shareholders.

1 GolfPro Center
Statement of Cash Flow
For the period ended December 31, 2016

Cash Flows from Operating Activities

Cash inflows:
From customers $ 4,900
Cash outflows:
For salaries (2,800)
For rent (6,000)
Net cash flows from operating activities (3,900)

Cash Flows from investing Activities

Purchase equipment (24,000)
Net Cash Flows from Investing Activities (24,000)

Cash Flows from Financing Activities

Issue common stock 25,000
Borrow from bank 10,000
Pay dividends (200)
Net cash flows from financing activities 34,800
Net increase in cash 6,900
Cash at the beginning of the period 0
Cash at the end of the period $ 6,900 6900
 Communication: Audience and Delivery

In the space provided below, explain to the CEO and CFO the main purpose of the statement of cash flow. In your
response, utilize effective persuasive techniques to influence and engage the CFO and CEO.
2
The main purpose of the statement of cashflow is to provide a detailed summary of cash inflows and outflows for a
specific period. It includes the sources of cash as well as the use of funds. The statement therefore indicates the change
in cash and cash equivalents for the financial period, from the sum of cash flows from its three main items, financing,
operating and investing activities.

Communication: Organization, Focus, and Supporting Examples

In the space provided below, explain to the CFO some of the activities reported on the statement of cash flows. In your
response, coordinate your thoughts to synthesize and provide context regarding the concept of the statement of cash
3 flows. Provide carefully integrated thoughts and examples to clarify the topic to the CFO.
There are three main activities that are included in the statement of cashflows. These are; operating activities, investing
activities and financing activities. Operating activities are the activities that affect the determination of net income. They
are mostly items in the income statement. Examples of operating activities include cash payment of expenses
appearing in the income statement as well as cash receipt from customers. Non-cash items such as depreciation are not
included as operating activities although they appear in statement of comprehensive income. Investing activities on the
other hand are activities that affect the long-term assets accounts. They include acquisition and disposal of property,
plant and equipment as well as giving and obtaining loans. Examples of investing activities include cash sales from sale
of long term investment, cash receipt from sale of PPE, cash payment in purchase of PPE as well as cash
receipt/payment for sale/purchase of long term investment. Financing activities are cash transactions that affect long
term liabilities and shareholders' equity. Examples are; cash receipt from sale of bonds and stock and cash payment
from payment of dividends, repurchase of stocks and retirement of bonds.
Communication: Organization, Focus, and Supporting Examples
In the space provided below, describe some of the investing activities on the GolfPro Center statement of cash flows.
4 Use a variety of thoughts integrated to present the meaning of your evidence.
In the statement of cashflow for GolfPro, there is one investing activity; purchase of equipment for $24,000. This is a
cash outflow ahose net effect is a reduction in the cash reserve for the year. An investment into equipment is assisting
the company in growth to further their production to lead to an increase in revnue. The purchase of equipment is shown
on the statement of cash flows for the period in which the purchase took place. The equipment will also be reported on
the company's balance sheets at its cost minus its accumulated depreciation.

Communication: Content and Voice

Explain to the CEO and CFO the why the net income differs from the amount of cash flow from operating activities. In
your response, explain the relationship between the net income and cash flows such as the investing and financing
activities. Develop a response which incorporates a focus on uniting multi faceted mutually supportive arguments to
create a distinct connection with the content and the audience.
5
The amount in the income statement differs from that in the cashflow from operating activities for one main reason; the
income statement includes the non-cash items while the amount of cash flow from operating activities includes only the
cash items. Items such as depreciation therefore are included in the statement of comprehensive income but do not
form part of operating activities. The income statement also includes items of investing activities and financing activities
such as dividends which do not form part of operating activities.
Module 01: Financial Accounting

Closing Entry

In the space provided below, prepare the Closing Entry for GofPro Center.

Closing Entry for December 31, 2016

1 Journal Entry
Account Debit Credit
a Service Revenue 7,200
Retained Earnings 7,200
Comment: Close revenues to retained earnings.

b Retained Earnings 6,000

Rent Expense 500
Supplies Expense 1,000
Depreciation Expense 400
Salaries Expense 3,100
Utilities Expense 900
Interest Expense 100
Comment: Close expense to retained earnings.

c Retained Earnings 200

Dividends 200
Comment: Close dividends to retained earnings

Critical Thinking: Definitions, Terms, Concepts and Ideas

Communication with CEO and CFO: In the space provided below, in a clear and concise manner, explain to the CEO and
2 CFO the main purpose of these closing entries.
The purpose of the closing entries is for the preparation of the financial statements. It starts with the trial balance. The
closing figures are the figures that appear in the trial balance. From the trial balance, other financial statements are made.
The closing figures give the closing balances for various accounts. These balances are used in respective financial
statements.

Critical Thinking: Definitions, Terms, Concepts and Ideas

Communication with CEO and CFO: Comment on why adjusting entries are needed and what happens if certain adjusting
3 entries are neglected.
The closing entries are needed for preparation of financial statements. They give a summary of different accounts during
the accounting period. If certain entries are neglected, the financial statements would be wrong. For instance, the balance
sheet would not balance. It is important therefore to include all the adjusting entries.

Digital Fluency: Internet Technology Usage

Go to the FASB website, http://www.fasb.org, to access the FASB Concepts Statements. After you have read the
4 documents, use the search tool in your Internet browser to respond to the following items.
a) What is the objective of financial reporting?
b) What other means are there of communicating information besides financial statements?
c) Indicate the users and the information FASB is most directly concerned with in economic decision making.
A) The objective of financial reporting is to provide financial information about a company to internal and external users for
decision making such as investors, lenders as well as other creditors. B) Apart
from financial statements, financial information is also communicated through memos to internal and external users, notes
to financial statements, supporting documents attached as well as appendices.

C) Users- potential investors, creditors, business researchers, employees, trade unions, financial reporting agencies,
legislators, tax agencies, economists, lawyers, brokers, advisors, financial analysts, customers, directors, managers,
creditors, lenders, among others. Information- they are
all concerned with the financial health of the organization to determine their interest, whether direct or indirect, in the
company.
Module 02: Financial Statement Analysis

Interpret financial data by computing ratios.

Using the GolfPro Center financial information prepared in Module 01, calculate the following ratios:
Liquidity, Leverage and Profitability Ratios

1 Liquidity & Efficiency Analysis Formula December 2016 Ratio

1 Current Ratio Current Assets/Current Liability 4.10
2 Total Asset Turnover Net Sales/Average Total Assets 0.03
3 Accounts Receivable Turnover Ratio Sales/Average Accounts Receivable 0.44

2 Leverage Analysis Formula December 2016 Ratio

4 Debt to Equity Ratio Total Liabilities/Total Stockholders' Equity 54%
5 Debt Ratio Total Liabilities/Total Assets 35%
5 Times Interest Earned Ratio Income before Interest/Interest Expense 5900%

3 Profitability Analysis Formula December 2016 Ratio

6 Gross Profit Margin Ratio Gross Profit/Net Revenue 100%
7 Profit Margin Ratio Net Income/Net Revenue 17%
8 Return on Total Assets Income/Average Assets 0.03
9 Return on Common Stockholders' EquitIncome/Average Equity 0.05

Critical Thinking: Definitions, Terms, Concepts and Ideas

In the space provided below, prepare a professional business report to the CFO by describing the analytical use of
each of the nine ratios. Discuss what the financial ratios present and identify two ratios that would be most valuable
4
as a basis in a management decision for expanding sales. In your report, explain the relationship of the asset
turnover to the return on assets.

The current ratio indicates the capability of the company to meet current obligations. Total asset turnover shows the
effectiveness in the management of assets in generation of sales. Accounts receivable turnover shows the
effetiveness in the management of accouts receivables/ debt collection. Debt to equity ratio is represents the capital
structure of the firm. Debt ratio shows the proportion of assets that is financed by debt. Times interest earned ratio
shows how the interest is covered by the Earnings Before interest and tax, therefore showing the capability to pay
interest obligations. Gross margin ratio shows the proportion of sales revenue, that is reported in gross profit and
therefore indicated the effetiveness in management of cost of sales. Profit margin ratio indicated the effectiveness in
management of both cost of sales and expenses. Return on assets shows the effectiveness of the GolfPro in utilizing
assets to make profit. return on common stockholders' equity indicated the effectiveness of the management in
utilizing stockholders' equity to make profits.

Critical Thinking: Definitions, Terms, Concepts and Ideas

5 Explain the limitations of ratio analysis:
Many companies have more than 1 divisions and therefore generation of proper set of division ratios is a hard task.
Moreover, inflation adversely affects the financial ratio from time to time and therefore comparison of financial ratios
from time to time may have incorrect conclusions. Several accounting practices may be used which lead to distortion
of inter-company comparison of financial ratios. sometimes, it is hard to determine if a ratio is good or bad, especially
if there is no benchmark. lastly, the same company may have both bad and good financial rations making conclusion
hard.
 Critical Thinking: Definitions, Terms, Concepts and Ideas
6 Discuss what type of users will benefit from ratio analysis within the company and explain how they will benefit.
The ratio analysis is used mainly by the stakeholders and the managers. Managers use the ratios to estimate
progress. They also use the ratios to make important decisions such as dividend payment, and expansion/
contraction decisions.
Module 02: Financial Statement Analysis

Capital expenditure decision using NPV and IRR.

The CFO of GolfPro Center is considering purchasing an automated fairway weed control machine, but is uncertain as to whether it is a favorable
expenditure decision. The CFO has asked you, the accounting manager, to evaluate the capital expenditure item and report the results. Since the cash
flows don't occur in the same periods and because a dollar today is worth more than a dollar tomorrow, you will need to take into account the time value of
money by using the net present value (NPV) approach and/or the internal rate of return (IRR) approach. The company estimated the equipment will last 5
years. Each year it will save the company $2000 in wasted spraying conditions. It will also reduce labor costs by $20,000 a year. It is estimated that the
equipment will require $1,000 maintenance costs per year. The equipment costs $70,000 and it is expected to have a residual or salvage value of $5000 at
the end of 5 years. Top management has determined the required rate of return is 12%. Should the company invest in the new equipment? Report results
and decision determination to owner.

1 Net Present Value Approach

Time Period 0 1 2 3 4 5
Cash Flow
Purchase Price $ (70,000)
Labor Savings + 20,000 20,000 20,000 20,000 20,000
Paint Savings + 2,000 2,000 2,000 2,000 2,000
Maintenance (1,000) (1,000) (1,000) (1,000) (1,000)
Residual Value 5,000
Total Cash Flow $ (70,000) $ 21,000 $ 21,000 $ 21,000 $ 21,000 $ 26,000
PV Factor 1 0.8928571429 0.7971938776 0.71178024781 0.6355180784 0.5674268557
Total Cash Flow $ (70,000) $ 18,750 $ 16,741 $ 14,947 $ 13,346 $ 14,753

Required Rate of
Return 0.12 Complete from text above
Manual Calculation
NPV $ 8,537 Listed in $$ NPV Using Excel (show formula): $8,538.43
IRR 17% Listed in % IRR Using Excel (show formula): 17%
IRR is 17% which is before PV factor.

Critical Thinking: Problem Solving

2 Problem Solving: What is the result consider the NPV? Should the project be undertaken?
The results of the NVP analysis shows that, the project has a positive NVP of $8,537. Since the NVP is positive, the purchase project should be undertaken.

Critical Thinking: Problem Solving

Problem Solving: What is the result considering both NPV and IRR? Should the project move forward? Creatively solve the problem by determining the best method
3
for the situation.
according to the NVP and IRR, the results indicate that the project should be undertaken. The project has a positive NVP which is the decision rule for acceptance of
the project. The IRR too, is less than the required rate of return. The decision rule for acceptance of projects is to accept a project if it has a IRR lesser than the
required rate of return. Both tools therefore tend to same conclusions, accept the project. The best is however the NVP, because it shows a positive value from the
project.

Critical Thinking: Clarity and Precision

Summarize the comparison of net present value and internal rate of return methods. In your response, be sure to use a complex idea expressed in a short, declarative
4
response.
The Net present value determines if the overall project gives a positive value or negative, while the IRR shows the point where the net present value of the project
changes from negative to positive.

Critical Thinking: Definitions, Terms, Concepts and Ideas

The CFO asks, how do the net present value and internal rate of return methods differ in their approach to evaluating this investment decision? How do you respond to
5
this question?
The NVP differs from IRR in that, for NVP approach, a project should have a positive value to be accepted, while for IRR, a project should have a lower IRR than the
required rate of return to be accepted. The higher the NVP, the better the project is, while the lower the IRR, the better the project is.
 Critical Thinking: Definitions, Terms, Concepts and Ideas
6 The CFO asks, why is it important to take into account the time value of money when making capital budgeting decisions?
It is important to take in consideration the time value of money, because the value of a unit currency today, is not the same as a year to come, due to the interest rate.
It is important to discount cash flows so that the value of a unit currency is the same for all the years.

Information Literacy: Evaluating Information

Research an Accounting Issue: Decide which would be a better option for the company: should the company acquire a lease option as opposed to purchase option?
7 Research lease options versus purchase options for the company. In your response discuss how the lease option would be accounted for financially. Analyze and
select which is a better decision for the company, the lease option or purchase option?

An accounting issue would be the replacement of a machinery in a company. If a company needs to replace an old machine, it may choose to lease it or buy it. The
best option would be the buy option. This is because, in a purchase option, the asset belongs to the company, as opposed to a lease option where the property in the
good is the property of the lesser. It is also possible to sell or trade with the assets in transactions, for instance, it can be used as a security for a loan.However,
Leaseed assets cannot be used as loan security. Leased assets are reflected in modern financial position. Buy option is better for a company.
Module 02: Financial Statement Analysis

Communication: Purpose and Meaning and Digital Fluency: Creation of Digital Files
Prepare an analysis report for the capital expenditure decision.
Once completed, publish the created file online for a board audience using open source repositories with sharing and viewing capabilities.

cumulative
years cash Flow cash flow A graph of NVP against year
0 -70,000 -70,000 20,000
1 18750 -51,250 10,000
2 16,741 -34,509 0
3 14,947 -19,562 -10,000
0 1 2 3 4 5
4 13,346 -6,216 -20,000
5 14,753 8,537

NPV
-30,000
-40,000
-50,000
-60,000
-70,000
-80,000
Year

The capital expenditure decision making process involves the use of capital budgeting tools to determine if a project is worth undertaking.
In the above project, NVP and IRR tools were used to determine if the project should be undertaken. The NVP results showed that, the NVP is positive.
the decision rule for NVP is that, a project should be undertaken if it has a positive NVP. From the above analysis, the cumulative discounted cashflows
are calculated. The cumulative discounted cashflows are negative from year 0-4. however, it turns positive in the fifth year. The point of intersection of the
NVP curve with the X-axis shows the point where the NVP is zero, once the line crosses the X-axis to the area above the X-axis, the NVP is positive and
therefore the project should be accepted. as a result, according to NVP, the project should be undertaken.
Another tool that is used for the capital expendirure decision is the IRR. according to the IRR, a project should be undertaken if it has an IRR that is
lesser than the expected return. For the project, the IRR is lower than the expected return, and therefore, it should be undertaken.
 the NVP is positive.
iscounted cashflows
nt of intersection of the
he NVP is positive and

as an IRR that is
Module 03: Full Disclosure in Financial Reporting and Management Responsibility

Financial Disclosure: Notes and MD&A

Financial Notes
Financial statements are included in the annual report which is presented to its shareholders. In this section,
prepare the financial statement notes as indicated.

Critical Thinking: Creativity and Innovation

1 Prepare the Financial Statements Notes: Note 1. The Company
GolfPro center is a golf center that was established to provide PGA certified golf instruction and essential to its
customers. The major company customers are the junior leagues that need relatively cheap golf materials. The
company distributors are the online stores and golf pro shops. The owner of the company is Steve smith who is
also the chief executive officer. The financial controller of the company is mike smith. The corporate office is
situated in the chandler Arizona. The company started being operation on December, 1, 2016

Critical Thinking: Creativity and Innovation

2 Prepare the Financial Statements Notes: Note 1. Revenue Recognition
The sale revenue of the company is derived from the sale of general sporting goods, sale of services such as
PGA certified golf instruction to their customers. It is the nature of the company to recognize the revenue when
the arrangement of purchase has been made, product delivered to the customer and the payments of the
goods delivered made. The company recognizes revenue as per the guidelines of the Generally accepted
accounting standards of the united states. sales
related expenses, the company recognises the expenses related to sales for example the distribution cost
when the Golf related products are finaly delivered to the intended customers. the expenses are the added to
other cost of sales to obtain the the net sales.
 Critical Thinking: Creativity and Innovation
3 Prepare the Financial Statements Notes: Note 2. Inventories
Inventories are measured at the lower of the cost computed through FIFO method and the net realizable value.
All the company adjustments effected to reduce the cost of the stock to their respective realizable value are
recognized in the current periods earning. As at 31st December 2017, the company stock comprises of the
imported sporting products.

Critical Thinking: Creativity and Innovation

Prepare the Financial Statements Notes: In this section create a financial statement of your choice. You may
4
create and assess any category of the financial statements accordingly.

Assets
Cash 500
Inventory1500
Equity
Capital1000
Liabilities
Loan 750
Payables750
The liabilitiesare provided by net assets and capital.
The liabilities affect the capacity of the company tohave sufficient cash inflows since
they lead to potential cash outflows that affect the going concern of the business.
5
the management is responsible for the accompanied financial statement of the company. the financial
statements have been prepared according to the International financial reporting standards. As per the
accounting policies used In the preparation of the financial statemets, some elements of the statements are
based on the mere financial estimates. the manangement has deternined such amounts on reasonable basis in
order to be sure that the financial statements are fairly presented in all material aspects.the company chief
excutive officer and the chief financial officer are responsible for the establishment and maintaince of the
disclosures and the procedure of the preparation of the financial statements.

Critical Thinking: Creativity and Innovation

6 Prepare the Management Discussion & Analysis: Management's Responsibility
The management of the Golf pro center is responsible for the preparation, intergrity and the fair presentation of
the financial statements. The financial statements presented in page 2 have been prepared in the cornformity
with the accounting principles such as the generally accepted accounting principles of the united states and as
such include the amounts based on the judgements and the estimates by the managements.
 Critical Thinking: Creativity and Innovation
7 Prepare the Management Discussion & Analysis: Internal Control
the Golfpro center maintains a system of the internal control over financial reporting which are designed to
provide reasonable assurance to the board of directors regarding the preparation of the reliable consolidated
financial statements. The controls are maintaibed by the establishement and the communication of the
accounting policies and procedures. this is done by the selection and training of the qualified personnel. it is
also done using the properly designed auditing program to identify the internal control weakness and suggest
to the management the appropriate actions which can be taken to correct the weakness.

Critical Thinking: Creativity and Innovation

Prepare the Management Discussion and Analysis: In this section create a component of the MD&A of your
8
choice. You may create and assess any category of the financial statements accordingly.
It is necessary to manage the liquidity of the assets since while it is necessary that the company requires liquid
cash to pay for its daily operations. It is necessary that the company does not have idle assets which may
affect the return on assets. In addition, it is necessary that the debt level is kept in check so that the financial
costs do not reduce the level of profitability the company has.
 Critical Thinking: Creativity and Innovation

The CFO has asked you to explain the major advantages of notes to the financial statements and to identify
9
the items are typically reported in the notes. Also explain what the full disclosure principle means in accounting.

the notes to the financial are important in the audited financial statements in that they give the full explanation
of the financial statements is presented. The notes gives the readers a good background of understanding the
financial statements better. The most important elements to the consolidated statements presented in the notes
include, the method of valuation of the inventory, The basis of presentation of the financial statemets, changes
in the accounting policies and lastly internal control structures that put in place to prevent the risk of
mistate/ments. Full disclosure principle means that the individual responsible for the preparation of the financial
statements should be able to disclose all the necessary information concerning the financial statements without
any bias.

Critical Thinking: Definition, Terms, Concepts and Ideas

10 Explain what the MD&A section provides and the viewpoint it contains.
The MD & A section provides the management responsility concerning the financial statements. It also gives
the management view on the general trends of the business for example the sales, competition and the level of
the growth.

Critical Thinking: Definition, Terms, Concepts and Ideas

11 Explain what the note disclosures offers to users.
The note disclosures offers additional information either to explain the information presented in the financial
statements or to provide information note included in the financial statements.

Communication: Audience and Delivery

Explain to the CEO and CFO the responsibility of company management and the independent auditors in the
12 accounting communication process. Use audience specific and influential tones to engage others on points
made.
The management is required to provide the independent auditors with all the necessary information that they
may need.Again the management are required by the GAAP standard not to influence the independ of the
auditors during the audit process.
Module 03: Full Disclosure in Financial Reporting and Management Responsibility

Management Responsibility

Demonstrate leadership characteristics of the managerial accounting profession.

The IMA’s Statement of Ethical Professional Practice was designed to help finance professionals “to link ethical perspectives directly
to their ongoing workplace responsibilities.” Unfortunately, some individuals may choose to act unethically and perhaps cause great
harm to other individuals and organizations. Review the Institute of Management Accountants (IMA) website and read the IMA's
Statement of Ethical Professional Practice. In each of the following examples, determine which of the four standards of ethical
conduct has been violated. Some examples may violate more than one standard.

You are the accounting manager for GolfPro Center. Betty Jones is a new accountant you have hired and reports directly to you.
The company is now selling third party golf carts at cost plus 25% and charges a fee of $250 per delivery and time spent on each
engagement. Recently the CFO asked Betty directly to charge the delivery fee to the Peachtree Golf Course account when instead it
was actually delivered to the Pelican Hills Golf Course account. The rationale: “Look, Pelican Hills Golf Course is a struggling start-
up course and they can barely afford to buy our golf carts. We made a mistake at delivery and did not deliver the right amount at the
estimate due to some unforeseen problems, and they’ll balk if we charge them for all of our time. Peachtree Golf Course, on the
other hand, is a highly profitable course, and we’re providing services that are going to make them even more profitable. They’ll have
no problem with their bill.”

Digital Fluency: Evaluation of Digital Resources & Information Literacy: Evaluating Information, Ethical Use of Information,
and Creation of New Information/Participation in Field

According to the IMA's ethical standards, what do you suggest that would help Betty resolve this issue? In your answer, cite specific
1 language in the IMA code. Which IMA principle(s) was/were violated? Assess the reliability/credibility of the material and cite your
sources in APA-style, including in-text citations and a reference list at the bottom of this box.

Betty should discuss the problem with the management and seek for their direction. The IMA principles violated include intergrity,
objectivity and independence. When Betty is directly being instructed to charge a wrong account by the CFO, her proffession
intergrity is serious influenced. again she can also make independent decision on her own regarhding which account to charge since
CFO is under direct influnence (Rhame & Walsh, 2016).

Rhame, S., Mulig, L., Prachyl, C., & Walsh, R. (2016). Using Codes of Conduct to Integrate Ethics Education in the Accounting Curriculum. Teaching E

Information Literacy: Inquiry Development

Let's say you found out that in a the CFO's prior workplace he had lied to federal investigators saying that there was a standing
order to sell the stock if the share price fell below a certain average. In return for lying the CFO reportedly received money, airplane
2
ticked and extra vacation money. Which IMA standard(s) was violated? In your response, analyze the topic based on the scope,
depth and the assignment.
The IMA violated in this case is the principle of public interest this states that members should not accept to the obligation to act in a
way that will serve the public interest, honor the public trust and demonstrate a, commitment to mantaining a proffessional standard.

Information Literacy: Inquiry Development

Let's say you found out that a golf shop competitor's CFO was just charged with recording operating expense as capital assets.
3 Depreciating these assets over time inflated the company's profits and hid the expenses from the company's auditors. Which IMA
standard(s) was violated? In your response, analyze the topic based on the scope, depth and the assignment.
 the IMA principle violated ,in this case scenerio is the principle integrity. The standard requires the proffessional to their work with a
lot honestry but CFO is particular lies to the auditor after fraudelently mistating the financial statements.

Critical Thinking: Self Reflection and Logical Thought

Discuss the importance of ethical behavior in managerial accounting. In your response, demonstrate self awareness with an ability to
4
question your own ideas and belief systems.
Ethical behavior in management accounting is important in that it enables the practitioners stick to the work standard hence
maintaining a higher level of proffessionalism. The principle include, public interest, due care,intergrity, responsiblities and
objectivity and independence.
ounting Curriculum. Teaching Ethics Across the Management Curriculum, Volume III: Contributing to a Global Paradigm Shift.
Module 04: Management Decision

Access cost-volume-profit techniques to determine optimal managerial decision.

Examine the effects of changes in sales price, cost and volume.

The company has developed a target budget for selling 50,000 units in the upcoming year. The estimated budget is to sell 40,000 golf shirts and 10,000 pairs of
shoes. Therefore the sales mix is 4 golf shirts for every pair of golf shoes sold. No fixed expenses are assigned to either golf shirts or golf shoes. As long as the
company keeps selling golf shirts and shoes, the fixed expenses will not change therefore they are deducted in total rather than allocated to the individual product
lines. The forecasted income statement is listed below.

GolfPro Center
Forecasted Income Statement
For the year ended 2017

Golf Shirts Golf Shoes Total Company

Sales Total Per Unit Percentage Total Per Unit Percentage Total Percentage
Cost of goods sold $800,000 $20.00 100% $450,000 $45.00 100% $1,250,000 100%
Sales commission 592,000 14.80 74% 360,000 36.00 80% 952,000 76.16%
Variable expenses 48,000 1.20 6% 27,000 2.70 6% 75,000 6%
Contribution margin 640,000 16.00 80% 387,000 38.70 86% 1,027,000 82.16%
Selling and marketing 160,000 4.00 20% 63,000 6.30 14% 223,000 17.84%
Administrative expense 125,000
Fixed expense 53,400
Operating income 178,400
446,000

Golf Shirts Golf Shoes

Sales Price $20.00 $45.00
Cost of goods sold 14.80 36.00
Sales Commission 1.20 2.70
Total Variable expenses 16.00 38.70
Contribution Margin $4.00 $6.30

Use the data tables above to solve Case Study problems:

The CFO is in the process of making a business decision based on revenue generating concepts to increase sales for next year. He has asked for your assistance in
examining the effects of financial changes in the sales mix. He needs assistance using cost-volume-profit techniques.

1 His first question to you: what is the company's CM ratio and variable expense ratio for golf shirts and golf shoes?

CM ratio = unit CM/unit selling price

Golf Shirts
Golf Shoes

Variable Expense Ratio = variable expense/selling price

Golf Shirts
Golf Shoes

2 His second question, is what is the current break even point? (use the equation method)
Calculate the breakeven point:
CM of item 1 + CM of item 2 - Total Fixed Expenses = Operating Income
($4.00 * 4x) + ($6.30 * x) - $178,400 = $0

x = ??? Pairs of Shoes

5x = ??? Golf Shirts

Breakeven is sales dollars is ??? Which is ??? For jerseys ($Sales Price x Break Even point) and ??? $Sales
Price x Break Even Point)

His third question, what would happen if we increase sales by $400,000 next year. Let's assume the cost behavior pattern remains unchanged, by how much will the
3
company's net income increase? (use the CM ratio to compute answer)

Increase in Sales
CM ratio
Expected increase in CM *Increase in sales * Expected increase in CM ratio
4 His fifth question is how many golf shirts and pairs of shoes are needed to be sold to earn $66,900 in operating income?

Use the same concept as the formula above but with updated numbers and we know the other side or the result of the formula is $66,900

Based on the information provided to the CFO, he has now developed a new proposal to increase sales for next year. The CFO is determined to increase sales
therefore he has set up a commission of 6% to the sales staff team. Consider the golf shop's original sales mix of 40,000 golf shirts and 10,000 shoes. In an effort to
stimulate sales, the golf shop sales incentive will be use the target market of youth golf teams. This move has increased the sales commission paid on each golf shirt
to 12.3%. The CFO believes that this move will generate additional sales of 10,000 golf shirts, with no effect on shoes sales.

5 How will this move alter the golf shops sales mix?
Sales price
Cost of goods sold
Sales commission ($20 x 0.123)
Total Variable expenses
Contribution margin

6 Calculate and explain how will it affect the breakeven point?

Calculate the breakever point:

Information Literacy: Creation of New Information/Participation in Field

Select and organize expert information and weigh the information against your own emerging research. Do
you think the company should accept the CFO's proposal to increase sales commission? By lowering the
7 contribution margin per unit of golf shirts and shifting a greater percentage of sales to those golf shirts, more
golf shirts and more shoes will have to be sold in order to break even. Is this change a good move? Include in
your analysis, what happens to the breakeven point if the sales mix changes.

Explain in detail answer!

Original contribution margin: Golf shirts

New contribution margin: Golf shirts
Reduction in contribution margin

8 If the sales proposal should be accepted and if sales remain at current level, what will the income or loss from operations be for the budgeted year.

Identify basic cost behavior patterns and explain how changes in activity level affect the total cost and unit
9
cost.
As Activity Increases As Activity Decreases
Cost behavior Total Cost Cost per Unit Total Cost Cost per Unit In the boxes identify the following:
Variable Increases
Fixed Reamins Constant
Mixed Decreases
In this section describe the cost behavior!!
Module 04: Management Decision

Digital Fluency: Creation of Digital Files

The CFO is anxious to increase the company's profit and has asked you to prepare an analysis and summary of your
findings. Prepare an analysis report to support the business decision. You may use graphs and other statistical data to
present findings. Apply advanced formatting features to present and produce a professional document. Create the
information to present to users in a visually interesting and organized manner.

THIS AREA IS WHERE YOU PRESENT ALL THE DATA FROM MODULE 4 PAGE 1.
MAKE A BREAKEVEN POINT GRAPH AND EXPLAIN IN WRITING WHAT IT MEANS
MAKE A CVP GRAPH AS DETAILED TO THE RIGHT
USE CALCULATIONS
GOOD DECISION: YES OR NO? EXPLAIN!
Module 05: Professional Business Ethics and Internal Control

Select an appropriate conclusion to an ethical dilemma.

You have now worked for GolfPro Center for a few years and along your journey have obtained your CPA license. Now that you
have become a CPA you have taken on extra work on the side by performing tax services to some small business clients. Desert
Willow Golf Course is one of your new small business accounts and you are obligated to compete their corporate tax return by April
15th.

Ironically, Desert Willow Golf Course, is also a customer of GolfPro Center as they purchase inventory to stock their pro-shop at the
golf course. Desert Willow Golf Course has recently fallen more than 90 days past due on paying their bills to GolfPro Center. In your
position at GolfPro Center you have been assigned to review and perform an internal audit of Desert Willow Golf Course's customer
account. In addition, you are also responsible for preparing and estimating the Allowance for Doubtful Accounts for GolfPro Center.
When preparing the report, you have left Desert Willow Golf Course off of the aging report. The CFO has asked you for your
justification for not including Desert Willow Golf Course on the 90+ aging report. Your reply is, it seems there are some audit related
questions about the collectible amount for Desert Willow Golf Course; therefore you have come up with an explanation for not
including them in the estimated allowance report which satisfies the CFO.

GolfPro Center is now growing and has decided to expand by opening a new store in Southern California. Since you have now
obtained your CPA license the company has offered you a nice promotion and raise with GolfPro Center. You will have to transfer to
a new location to begin gathering a team to start the finance department at the new store in Southern California. You have accepted
the promotion and leave immediately. In the mean time you have decided to quit doing accounting on the side which includes your
business with Desert Willow Golf Course. In moving, you have not completed the corporate tax return Form 1120 for Desert Willow
Golf Course which should be filed with the IRS by a specific date. You also failed to inform Desert Willow Golf Course of your new
relocation. In trying to locate you, Desert Willow Golf Course contacts GolfPro Center and discloses your side work business.

Ethics and Professionalism: Ethical and Situational Awareness

Determine the best outcome for this situation: Do you think it is ethically appropriate to provide tax services to Desert Willow Golf
1 Course, a customer of GolfPro Center, while at the same time being employed by GolfPro Center? Evaluate the impact this decision
has on laws and on your own core of beliefs and personal ethics.

Information Literacy: Ethical Use of Information

According to the Case Study, have you violated any of your ethical responsibilities to GolfPro Center and to Desert Willow Golf
2 Course? In your response be specific and reference the AICPA Code of Professional Conduct in answering the question. Provide
attribution and integrate citations for all resource types. Provide APA style in-text citations and a reference entry for the AICPA Code.

Ethics and Professionalism: Integrity

What if your new boss at your new job in Southern California just found out about your dual role as internal auditor and tax
3 accountant for the corporate office of GolfPro Center. What would you expect the new boss should do? Determine the level
responsibility your new boss has on the impact this decision will make for the overall department.
Module 05: Professional Business Ethics and Internal Control

Internal Control

Ethics and Professionalism: Attitudes

1 Explain to the department what internal control is and why the company should establish an internal control system.

Ethics and Professionalism: Attitudes

Currently John works as the accountant for GolfPro Center. He opens the mail for the company everyday and sets aside all of the incoming
checks for the company. He lists all incoming checks on a spreadsheet which includes the name of the customer and the check amount. He
then records all of the checks into the accounting system by applying the payment to the customers account. Next he prepares the checks for
the bank deposit. He completes the bank deposit slip and attaches all checks. He then gives the incoming check spreadsheet, checks and bank
2 deposit to you the review and sign off on. After your approval, he then hand carries the checks to the bank each day to deposit. Define cash
receipts and discuss the basic controls for cash receipts. Also, explain directly how the company could improve its internal control procedure for
handling cash receipts. Include in your response the demonstration of the importance of understanding the segregation of duties and how
additional proper documentation could be used to improve the final approval process.

Ethics and Professionalism: Attitudes

John approves all requests for payment out of the $200 fund, which is replenished at the end of each month. At the end of each month, John
submits a list of all accounts and amounts to be charged and a check is written to him for the total amount. John is the only person ever to tally
3 the fund. Explain the internal control weakness and describe how internal controls can be improved upon. What questions would you ask to find
out additional information regarding this internal control situation?

Ethics and Professionalism: Attitudes

All of the company’s cash disbursements are made by check. Each check must be supported by an approved voucher, which is in turn
supported by the appropriate invoice and, for purchases, a receiving document. After reviewing the supporting documentation, you approve the
4 voucher. John prepares the checks for the CFO's signature. John also maintains the company’s check register (the cash disbursements
journal) and reconciles the bank account at the end of each month.

Diversity and Teamwork: Skills

GolfPro Center has just completed the annual audit. The auditors presented a list of control deficiencies to the CFO. The CFO has asked you to
meet with your team to decide on a improvement plan. Using the above examples as control evidences, explain how you would gather your
department team to discuss how to improve on these items. Include the following details in your response: Discuss the team members and
5 resources you would gather to discuss this matter. Advocate respect, value and appreciation for individuals working within the finance
department, explain the communication skills needed to approach the team. Describe the professional skills needed to accomplish the task.
 Diversity and Teamwork: Skills

Continuing along the results of the annual audit, explain how an audit enhances the quality for financial statement reporting and managements
6 report on internal controls. Include in your repose if an audit actually guarantee a fair presentation of a company's financial statements.
Module 05: Professional Business Ethics and Internal Control

Diversity of Accounting Issues

Diversity and Teamwork: Knowledge

Research the FASB Website.

Go to the website of the Financial Accountant Standards Board (http://www.fasb.org). Identify the most recently issued financial
reporting standard and summarize briefly its principal provisions. Also search under Project Activities to identify the reporting issue
1
with the most recent update. Describe the issue and the nature of the action taken by the FASB. In your response, demonstrate a
profound appreciation of the meaning of diversity in accounting standards, explain the need for diverse perspectives.

Diversity and Teamwork: Knowledge

Research the IASB Website
Go to the website of the International Accounting Standards Board (http://www.isab.org). Search for the International Financial
Reporting Standards (IFRS) summaries. Identify the most recently issue international financial reporting standard and summarize
2
briefly its principle provisions. In your response, demonstrate a profound appreciation of the meaning of diversity in accounting
standards, explain the need for diverse perspectives.

Diversity and Teamwork: Attitudes

Critique and criticize bias regarding accounting practice issues in diversity by explaining the reasons for differences in accounting
3
practice's across countries.

Diversity and Teamwork: Skills

International Financial Reporting Standards are gaining support around the globe. In 2007, the SEC eliminated the requirement for
foreign companies that issue stock in the United States to include in their financial statements a reconciliation of IFRS to U.S. GAAP.
There also is serious discussion of allowing U.S. companies to choose whether to prepare their financial statements according to
4
U.S. GAAP or IFRS. Do you think U.S. companies should be allowed the choice of reporting under either U.S. GAAP or IFRS?
Provide arguments both for and against this idea. Interpret intercultural experience from multiple perspectives and worldviews.