FASB Codification Case

Discussions

Discussion Matters:
Does
the excess cash represent a return on the seller’s investment? From a valuation
standpoint, theoretically, if we used the discounted cash flow method or
capitalized cash flows method we would arrive at the same $4.8 million value,
didn’t we use the same cash as part of the valuation of cash flows? Is this a
double-dip?
I pouted the whole question for you with clarification in the word file.
I want this assignment done during two days, first you will send me the Discussion board then I will submit it and send it you my first classmate’s post so you have to replay on 3 of my classmate’s post in different time.

Acc-201-R3860 Financial Accounting 22EW3

Accounting Assignment Help Overview
In Milestone One, you completed the first part of your course project to demonstrate your ability to accurately record financial data. In Milestone Two, you will use your journal entries from Milestone One to continue working through the next stages of the accounting cycle in preparation for creating financial statements in Module Seven.
Scenario
You are a certified public accountant (CPA) who is working with a small bakery to prepare their financial statements for three months of the current fiscal year. Because the company is a startup and so small, the accounting is done manually in Microsoft Excel. You have been given the accounts and information you need to prepare their financial statements, but you will need to use the accounting cycle to report accurate information to the finance department.
Prompt
Accrual Basis: In your company accounting workbook, apply the accrual basis of accounting and prepare adjusting entries to ensure accurate accounting for expenses that lack transactions in the current period. (You may refer to the Company Accounting Workbook Template Spreadsheet if necessary, but keep in mind that your work for this milestone should be added to the work you completed in your workbook for the previous milestone.)
Specifically, you must address the following rubric criteria:
Unadjusted Trial Balance: Prepare the unadjusted trial balance portion of the “Trial Balance” tab of the company accounting workbook, ensuring that the total debits and credits match.
Adjusting Entries: Prepare the “Adjusting Entries” tab of the company accounting workbook. Ensure that the entries are correctly transferred to the adjusting entries portion of the “Trial Balance” tab.
Adjusted Trial Balance: Prepare the adjusted trial balance on the “Trial Balance” tab, ensuring that the debit and credit totals match.
Guidelines for Submission
Build on your work from Milestone One to complete the “Trial Balance” and “Adjusting Entries” tabs in your company accounting workbook. This should be completed and submitted using Microsoft Excel. Please note that there are drop-down menus embedded in the “Accounts” columns as well as formulas throughout the spreadsheet to help you complete the workbook without accidentally introducing errors.

1. Compute ROE for all three years reported on the income statement. (Hint: Do your companies report non-controlling interest

1. Compute ROE for all three years reported on the income statement. (Hint: Do your companies report non-controlling interest on the income statement and balance sheet? If so, make certain to use income available to the controlling interest (NICI) in the numerator and equity of the controlling interest (CI) in the denominator. To compute ROE for three years, we must determine average stockholders’ equity for three years, which means we need four balance sheet amounts. Because the balance sheets of each company will report only two years, we must collect prior years’ financial statements.

2. Compute RNOA and its two components (NOPM and NOAT) for all three years reported on the income statement. We must use balance sheet numbers for four years to obtain three averages of net operating assets. Examine the income statements and balance sheets to determine the operating and non operating items. (Hint: Use an online source to understand any line items not described in the textbook. Use cell references in the spreadsheet to compute NOPAT and NOA and the various ratios.)

3. Compare ROE and RNOA and identify differences over time and between the companies. Evaluate the companies’ returns and answer questions such as the following: Which company is more profitable? How do the operating and non-operating portions of ROE compare? Compare the ROE and RNOA with the graph on page 3-25. If the ratios for the companies under analysis differ from the graph, is there an explanation? Is the net operating profit margin similar for the two companies? Given that they are roughly in the same industry, major differences should prompt further exploration. Are the companies’ net operating asset turnover ratios similar or markedly different? Calculate and compare the cash conversion cycle for each year.

4. Determine FLEV and Spread and the non-controlling interest ratio (if applicable). Show that: ROE [RNOA 1 (FLEV – Spread)] * Non-controlling interest ratio. Compare the components of the equation for each company over time and follow up on any differences

5. Prepare a vertical and horizontal analysis of the income statement and balance sheet. Compare the ratios for the companies under analysis and identify differences over time and between companies.

Here is a list of the formulas for OA3, will make things a bit easier.

Net operating profit after tax NOPAT NOPBT-[tax expense (Pretax net non-op expense * tax rate)]
Net operating profit margin NOPM NOPAT/Sales
Net operating asset turnover NOAT Sales/Avg NOA
Return on operating assets RNOA [also for Ch 4] NOPAT/Avg NOA
Return on equity ROE [also for Ch 4] NI/Avg equity
duPont profit margin PM (App3b) NI/Sales
duPont asset turnover AT (App3b) Sales/Avg TA
duPont financial leverage FL (App3b) Avg TA/Avg SE
duPont ROE (App3b) Must be same as ROE above: PM * AT * FL.
ROA (App3b) NI/Avg TA
Current ratio [also for Ch 4} CA / CL
Quick ratio [also for Ch 4] (Cash MktSec Accts rec, net) / CL
Liabilities/Equity [also for Ch 4] TL / TSEq
Times interest earned [also for Ch 4] (EBT Interest expense) / Interest expense