Need 300 words initial Post for each discussion. I will send replies later for each dis later.
Module 5 Discussion
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1. Summarize the events of a recent accounting scandal.
2. Identify how the illegal/unethical act was detected and the punishments that resulted (fines, prison terms, etc.).
3. What could have been done to detect this act earlier.
4. What could have been done to prevent this from happening in the first place.
Module 6 Discussion
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This week we learn about long-lived assets (Property Plant and Equipment – Chapter 9) and current liabilities and payroll (Chapter 11).
This week’s discussion questions are as follows:
1. How is the cost of a lump-sum purchase allocated to the individual assets acquired? Provide a simple example of how the allocation would be performed if your company paid $1,000,000 cash in total for a restaurant (land, building, and equipment), and the appraised value was actually $1,
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0,000 for the 3 asset components $400,000, $500,000, and $300,000, respectively.
2. Does the balance in the Accumulated Depreciation – Machinery account represent funds to replace the machinery when it wears out? If not, what does it represent?
3. Assume you work for a company in sales and therefore are entitled to not only hourly pay, but commission and bonus as well. You work 40 hours in a payroll week. Calculate your gross pay for your company if you make $x per hour (you select your rate!), earn a 5% bonus (of gross pay), and earn 10% commission (of gross pay).
4. Unfortunately, you do not get to keep all your Gross Pay. Assuming you have the following withholding deductions taken out of your pay, now calculate your Net Pay.
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Withholding deductions: |
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Employee income tax (20%) |
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Employee OASDI tax (see book for how to calculate) |
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Employee Medicare tax (1.45%) |
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Employee health insurance |
75 |
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Employee contribution to United Way |
20 |
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Total withholdings: |
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Table of Contents
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Module 7
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Module 7 Discussion
Module 7 Discussion
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In this Module, we learn about Stockholders’ Equity (Chapter 13). This week’s discussion questions are as follows:
1). Discuss the difference between authorized shares and outstanding shares.
2). Are there other classifications of shares that are important to consider?
3). What are treasury stocks and why do companies engage in their purchase?
Module 8 Discussion
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This week we learn about the Statement of Cash Flows (Chapter 14). This week’s discussion questions are as follows:
1). What is the reporting purpose of the statement of cash flows? Why is this important to investors?
2). Summarize the three types of cash flow activities, and describe at least 2 types of cash flows in EACH type of activity
3). Is depreciation a source of cash flow? Why or why not?
TILLMON-DISCUSSION 8
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Donna Tillmon posted Jun 21, 2020 10:45 PM
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The statement of cash flows presents cash inflows as well as cash outflows for a given reporting period. On this statement the cash flows are further classified as operating, investing, or financing activities. The information is useful as it tells potential investors what an organization’s ability to generate cash is. It also discloses how those funds are used once generated.
Operating activities include cash activities that are related to net income. Examples of this are revenue that is generated from the sale of goods and cash that is used to pay for merchandise. Investing activities include those cash activities that are related to noncurrent assets. This could include long-term investments, property, plant, and equipment. Examples of this activity type are cash that is generated from a land sale or the money that is used to invest into another company. Financing activities include activities related to noncurrent liabilities and owners’ equity. Examples of this are the principal amount of long-term debt (such as a note) stock sales and repurchases.
Depreciation is not a source of cash flow. This transaction is tracked by debiting Depreciation Expense and crediting Accumulated Depreciation. The account Cash is not involved at all in this transaction. It is needed to convert accrual net income to any cash provided. It reduces a corporation’s taxable income, while not being a cash source.
References
Bragg, S. (2019, September 30). The purpose of the statement of cash flows. Retrieved from
https://www.accountingtools.com/articles/what-is-the-purpose-of-the-statement-of-cash-flows.html
(n.d.). Retrieved from
https://saylordotorg.github.io/text_managerial-accounting/s16-02-three-types-of-cash-flow-activ.html
Module 8 Discussion
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Jennifer Colgan posted Jun 23, 2020 3:29 AM
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Hello Professor Cuppett and Classmates
1). What is the reporting purpose of the statement of cash flows? Why is this important to investors?
Cash flow statement is prepared to show the flow of cash in the company over a period of time. It is prepared to show the sources from where cash has come and where it is spending. It is prepared to show the sources and uses of cash. It is important for investors to know the sources of funds like cash is coming either from operations of the company or from sale of investments and assets of the company or from issuing of financial securities. it is also important to know whether the cash is a result of operating activities of the business. The purpose of the statement of Cash flows is to Predict future cash flows from past cash receipts and payments help predict future cash flows, Evaluate Management to help business prosper, to give investors and creditors useful cash flow information to help in decision making, and Predict ability to pay debts and dividends to help show when lenders can be paid and Stockholder dividends are paid out on their investments( pg. 734., Matsumura, Tracie Miller-Nobles; Brenda Mattison; Ella M.,2018).
2). Summarize the three types of cash flow activities, and describe at least 2 types of cash flows in EACH type of activity
There are three types of activities are involved into cash flow statement
(1) Cash flow from operating activities are from the activities through which businesses use to produce net income. Examples Operating cash flows include sources from sales and cash used to purchase inventory and to pay for operating expensed such as salaries or utilities. Operating cash flows can also include cash flows from interest and dividend revenue interest expense, and income tax.
(2) Cash flow from investing activities like cash from sale of old machine and equipment and purchase of new plant and machinery. Cash flows from investing activities are cash business transactions related to a business’ investments in long-term assets. They can be identified from changes in the Fixed Assets section of the long-term assets section of the balance sheet. Examples of investing cash flows are payments for the purchase of land, buildings, equipment, and other investment assets and cash receipts from the sale of land, buildings, equipment, and other investment assets.
(3) Cash flow from financing activities like issuance of shares and debentures (unsecured loan certificates issued by a company backed by general credit rather that specified assets) and payment of dividend and payment of interest. Examples can include cash proceeds from issuance of capital stock, cash payments for dividend distributions, principal repayment or redemption of notes or bonds payable, or purchase of treasury stock. Cash flows related to changes in equity can be identified on the Statement of Stockholder’s Equity, and cash flows related to long-term liabilities can be identified by changes in long-term liabilities on the balance sheet
3). Is depreciation a source of cash flow? Why or why not?
No. Depreciation is not a source of cash flow, it is an non cash expenditure which is reduced from gross profit to reduce the tax liability of the company and it does not have any impact on the cash flow of the company so it is not a source of cash flow. Depreciation needs to be added back to a cash flow statement in the operating activities section, along with other expenses such as amortization and depletion. It is calculated by dividing the yearly amount of depreciation by the time period the cash flow statement is applicable for. If a cash flow statement is prepared for each quarter, the yearly depreciated amount must be divided by four to reflect the quarterly depreciated amount (Parker, John., 2020).
References
Parker, John. “How Does Depreciation Affect Cash Flow?” Investopedia, Investopedia, 5 Feb. 2020, www.investopedia.com/ask/answers/080216/how-does-depreciation-affect-cash-flow.asp.
Matsumura, Tracie Miller-Nobles; Brenda Mattison; Ella M. Horngren’s Financial & Managerial Accounting. Pearson Education (US), pg.734., 2018. [Bookshelf].
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