CASE STUDY
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WEEK 2
Review the following case study.
When the FASB issues new standards, the implementation date is often 12 months from date of issuance, and early implementation is encouraged. Becky Hoger, controller, discusses with her financial vice president the need for early implementation of a standard that would result in a fairer presentation of the company’s financial condition and earnings.
When the financial vice president determines that early implementation of the standard will adversely affect the reported net income for the year, he discourages Hoger from implementing the standard until it is required.
Write a response of 750 to 1,050 words in which you answer the following requirements:
· Determine an ethical issue that is involved in this case if any.
· Identify if the financial vice president acting improperly or immorally.
· Explain what Hoger have to gain by advocacy of early implementation.
· Identify who might be affected by the decision against early implementation.
Format your submission consistent with APA guidelines.
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WEEK 3
Review the following case study:
FASB ASC 320 requires companies to assign their portfolio of investment securities into:
· Trading securities.
· Securities available for sale.
· Held-to-maturity securities.
Write a response of no more than 1,500 words in which you answer the following:
· Define each of these categories of securities and discuss the accounting treatment for each category.
· Discuss how companies are required to assign each category of securities into its current and noncurrent portions.
· Discuss the arguments for each position. Some individuals maintain that the only proper accounting treatment for all marketable securities is current value. Others maintain that this treatment might allow companies to “manage earnings”.
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WEEK 3
Discuss with your team the following case study:
Client X offers a generous employee compensation package that includes employee stock options. The exercise price has always been equal to the market price of the stock at the date of grant. The corporate controller, John Jones, believes that employee stock options, like all obligations to issue the corporation’s own stock, are equity. The new staff accountant, Marcy Means, disagrees. Marcy argues that when a company issues stock for less than current value, the value of preexisting stockholders’ shares is diluted.
Pretend you are hired to debate the issue of the proper treatment of options written on a company’s own stock.
Write a team paper response of 550 to 700 words in which you address the following requirements:
1. Describe how Client X should account for its employee stock option plan under existing GAAP.
2. Write a summary of your argument, citing concepts and definitions to buttress your case, assuming:
1. You are siding with John.
2. You are siding with Marcy.
Format your submission consistent with APA guidelines.
WEEK 4
Discuss with your team the following case study:
Client X contacted you for clarification and recommendations regarding the instances when goodwill should be adjusted for impairment.
Write a team consensus response of 525 to 700 words to include the following:
· Provide detailed rational of why goodwill must be adjusted for impairment.
· List the tests for impairment.
· Explain the meaning of a non cash impairment charge.
Format your submission consistent with APA guidelines.
Read the following case study:
The Whitley Corporation’s year-end is December 31, 2013. It is now October 1, 2013. The Whitley management team is taking a look at the prior nine months and attempting to make some short-term strategy decisions.
Whitley has experienced steady growth over the five preceding years. The result has been a steadily increasing EPS. Last year, Whitley reported an EPS of 1.95.
This year, owing to a mild recession, Whitley’s sales have fallen off. Management is looking for strategies that can improve the appearance of the financial statements. At the same time, there is a need for new equipment in the plant. Despite the recession, Whitley has enough cash to make the purchase.
Based on the year’s performance to date and extrapolation of the results to year-end, management feels that the pretax financial accounting income for the year will be $200,000. Transactions from prior years have resulted in a deferred tax asset of $15,000 and a deferred tax liability of $70,000 at the beginning of 2013. The temporary difference of $37,500 that resulted in the deferred tax asset is expected to completely reverse by the end of 2013. The deferred tax liability resulted totally from temporary depreciation differences. There will be a pretax reversal of $42,500 in this temporary difference during 2013.
Based on currently enacted tax law, the purchase of the equipment will result in a future taxable amount of $50,000. Whitley management feels that it can wait four to six months to purchase the machine. Whitley’s tax rate is 40 percent.
Write a response of 700 to 1,050 words to the following:
· Determine the projected amount of income tax expense that would be reported if Whitley waits until next year to purchase the equipment.
· Determine the projected amount of income tax expense that would be reported if Whitley purchases the equipment in 2013.
· Explain why Whitley should/shouldn’t wait to purchase the equipment. Your answer should take into consideration the expected financial statement effects, as well as the effect on EPS. Support your conclusions with pro forma data. The number of shares that Whitley will use to calculate EPS is 55,500.
· Determine the ethical considerations of this case.
Format your submission consistent with APA guidelines.
WEEK 5
About Your Signature Assignment
Signature/Benchmark Assignments are designed to align with specific program student learning outcome(s) in your program. Program Student Learning Outcomes are broad statements that describe what students should know and be able to do upon completion of their degree.
Signature/Benchmark Assignments are graded with a grading guide or an automated rubric that allows the University to collect data that can be aggregated across a location or college/school and used for course/program improvements.
Read Case 3, Charitable Contributions and Debt: A Comparison of St. Jude Children’s Research Hospital/ALSAC and Universal Health Services in the Mastery of the Financial Accounting Research System (FARS) Through Cases book.
Write a response of 700 to 1,050 words in which you address the following questions from Case 3, Charitable Contributions and Debt: A Comparison of St. Jude Children’s Research Hospital/ALSAC and Universal Health Services:
· Requirement A, 1-4.
· Requirement B, 1-2.
· How would your answers to Requirements A and B differ if the government owned and operated the hospital?
Format your submission consistent with APA guidelines.
WEEK ONE DISCUSSION QUESTION ONE
DQ-1
FASB Codification System provides the accountant with a vast array of information related to accounting issues. Assume that you are responsible for providing guidance to management on the implementation of the company’s strategic plans and you want to insure that management has all of the pertinent information relative to the implementation of the company’s strategic plans. What other data bases might you use to insure that management has all of the pertinent information necessary for the successful implementation?
DISCUSSION QUESTION TWO
FASB Codification System contains nine different data bases. When providing guidance and direction to management concerning business decisions and how accounting treatment of these decisions will impact the financial treatment of these decisions – which data base would you rely upon to give management the proper advice.
WEEK 2
DQ 1
Generally management is defined as “The effective and efficient use of limited organizational resources to achieve organizational goals and to maximize productivity”. Discuss the Managerial Accountant’s role in achieving these objectives. Take into consideration the three broad functions of management in this discussion, (i.e. planning, organizing and controlling).
DQ 2
Assume that you are the CFO of a mid size company located in the mid western U.S… You report to the President and currently your company’s has concentrated its activities in the continental U.S.
The National Association of AICPA’s is conducting a three day training seminar in New York City. The topic is the “Convergence of U.S. GAAP and IFRS”.
Discuss how you would justify the time and resources for you to attend this seminar and why the topic has relevance to your company.
WEEK 3
DQ1 1
The Treasury Department issues two types of regulations “interpretative” and “legislative”. Compare and contrast “interpretative” and “legislative” regulations and briefly discuss why the courts are less likely to invalidate a legislative regulation.
DQ 2
The U.S. Tax Court issues both regular and memorandum decisions. Assume that you are a Tax Practitioner and one of your client’s poses the following query: “If we take my case to the U.S. Tax Court I have heard that they could render either a “regular” or a “memorandum” decision – what is the difference between the two and are there any similarities?” Discuss “regular” and “memorandum” U.S. Tax Court decisions as a response to your client’s query.
WEEK 4
DQ 1
Respond to the following question with a 200 – 300 word response and include personal or work experience where applicable. What experience do you have with auditor work within your company? Are there items that you need to provide them that you feel relates to risk assessment? If not, how can auditors mitigate risks and liability factors when auditing a company?
DQ 2
Respond to the following question with a 200 – 300 word response. Include personal or work experience where applicable. Has SOX improved the quality of the audit? Why or why not? How do you think SOX has affected the jobs of accountants and internal auditors within your company?
WEEK 5
DQ 1
Respond to the following question with a 200 – 300 word response and include personal or work experience where applicable. The Governmental Accounting Standards Board (GASB) is a private, nonprofit organization formed in 1984 to develop and improve accounting and financial standards for state and local governments. In June, 1999, GASB approved GASB-34, entitled Basic Financial Statements-and Managements Discussion and Analysis- for State and Local Governments. This statement establishes new requirements for the annual financial reports of state and local governments.
There are approximately six major requirements outlined in GASB-34 – one of these is “Required Supplementary Information” (RSI). Describe this requirement and discuss the changes in reporting requirements RSI now requires of state and local governments.
DQ 2
Respond to the following question with a 200 – 300 word response. Include personal or work experience where applicable. GASB-34 requires that state and local governments will include a Management Discussion and Analysis (MD&A) section preceding the basic financial statements. Describe and discuss this requirement and compare this requirement with the SB-2 Report – (MD&A) as required by SOX.
