Determine possible alternatives and select a cost flow method for accounting for the bike inventory.
Determine possible alternatives and select a cost flow method for accounting for the bike inventory.
Intermediate Accounting I
Accounting Project
Instructions
A. Submit the completed project on Canvas by Monday, April 29. Submit check-in figures on Canvas on the dates below.
· Other Income and Expense Questions: Due March 9 (6 points)
· Revenue Recognition Questions: Due March 23 (6 points)
· Inventory Questions: Due April 6 (7 points)
· Equipment Questions: Due April 20 (6 points)
· Completed Project: Due April 29 (75 points)
B. The submitted project on April 29th is required to be typed on Word or Excel.
C. This project is an individual assignment. This project is worth 10% of your grade.
D. In this project, you have three main deliverables due on April 29th:
- Financial statements including
a. income statement
b. balance sheet
c. statement of changes in stockholders’ equity
d. all related notes. In the notes to the financial statement include notes on: significant accounting policies, cash and cash equivalents, revenue recognition, inventory, equipment, and any other notes you deem necessary.
You do not need to prepare a statement of cash flows
- A memo to the owners of Cherry & White Bike Company explaining and justifying the following accounting choices:
a. Accounting for inventory: inventory cost flow methods.
i. Determine possible alternatives and select a cost flow method for accounting for the bike inventory.
ii. Present an analysis of the alternatives.
· Show and discuss financial statements effects of the alternative methods and estimates such as change in net income, assets, or liabilities.
· Examine the effects of the alternatives on the relevant common financial statement ratios of profitability, liquidity, and solvency.
iii. Explain why you select the alternative that you use in the financial statements.
b. Accounting for equipment: acquisition price and subsequent depreciation.
i. Determine appropriate method accounting for the acquisition price and subsequent measurement.
ii. Present an analysis of the alternatives depreciation methods.
· Show and discuss financial statements effects of the alternative methods and estimates such as change in net income, assets, or liabilities.
iii. Explain why you select the depreciation method that you use in the financial statements.
You may look at the Accounting Standards Codification (ASC) for guidance on accounting and alternatives.
- Prepare the journal entries for all transactions in the general journal.
Check in Figure Questions and Due Dates
Submit on Canvas by 10 pm on the due date.
Other Income and Expense Questions – Due March 9 (1 point each)
- What is the interest income for the three months ending March 31, 2019?
- What is the total salaries expense for the three months ending March 31, 2019?
- What is the rent expense for the three months ending March 31, 2019?
- What is the insurance expense for the three months ending March 31, 2019?
- What is the utilities expense for the three months ending March 31, 2019?
- What is the supplies expense for the three months ending March 31, 2019?
Revenue Recognition Questions – Due March 23 (1 point each)
- What is the total amount of the tune-up revenue for the three months ending March 31, 2019?
- For one bike sold with the tune-up option on February 21st, what is the amount of the transaction price allocated to bike sales? Make your allocation using the standalone selling prices for the tune-ups and the bike.
- For one bike sold with the tune-up option on February 21st, what is the amount of the transaction price allocated to tune-ups? Make your allocation using the standalone selling prices for the tune-ups and the bike.
- What is the total sales revenue for bike sales for the three months ending March 31, 2019?
- What is the total unearned revenue for tune-ups at March 31, 2019?
- Describe CWB’s accounting policy for revenue from bike sales and for revenue from tune-ups.
Inventory Questions – Due April 6 (1 point each)
- What is the cost of goods sold using the moving average cost flow assumption for the three months ending March 31, 2019?
- What is the cost of goods sold using the FIFO cost flow assumption for the three months ending March 31, 2019?
- What is the cost of goods sold using the LIFO cost flow assumption for the three months ending March 31, 2019?
- What is the ending balance of inventory using the moving average cost flow assumption at March 31, 2019?
- What is the ending balance of inventory using the FIFO cost flow assumption at March 31, 2019?
- What is the ending balance of inventory using the LIFO cost flow assumption at March 31, 2019?
- Describe CWB’s accounting policy for inventory including its cost flow assumption.
Equipment Questions – Due April 20 (1 point each)
- What is the acquisition cost of the light fixtures?
- What is the depreciation expense related to the light fixtures for the three months ending March 31, 2019?
- What is the acquisition cost of the display cases?
- What is the depreciation expense related to the display cases for the three months ending March 31, 2019?
- What is the depreciation expense related to the equipment on hand at January 1, 2019 for the three months ending March 31, 2019?
- Describe CWB’s accounting policy for equipment including its depreciation policy.
Intermediate Accounting
Accounting Cycle Project
Grading Rubric
Requirements
Points
1 – Limited
2 – Developing
3 – Proficient
4 – Exemplary
- Financial statements including
24
a. income statement
6
Income statement is not complete, inaccurate, or not properly formatted multi-step income statement.
Income statement presentation is lacking in being sufficiently complete, or accurate, or properly formatted as multi-step income statement.
Income statement presentation is adequate as it is mostly complete, and accurate, and properly formatted as multi-step income statement.
Income statement presentation is complete, accurate, and properly formatted multi-step income statement.
b. balance sheet
6
Balance sheet is not complete, inaccurate, or not properly formatted as a classified balance sheet.
Balance sheet presentation is lacking in being sufficiently complete, or accurate, or properly formatted as a classified balance sheet.
Balance sheet presentation is adequate as it is mostly complete, and accurate, and properly formatted as a classified balance sheet.
Balance sheet presentation is complete, accurate, and properly formatted a classified balance sheet.
c. statement of changes in stockholders’ equity
5
Statement is not complete, inaccurate, or not properly formatted multi-step statement.
Statement presentation is lacking in being sufficiently complete, or accurate, or properly formatted as multi-step statement.
Statement presentation is adequate as it is mostly complete, and accurate, and properly formatted as multi-step statement.
Statement presentation is complete, accurate, and properly formatted multi-step statement.
d. all related notes. In the notes to the financial statement include notes on: significant accounting policies, cash and cash equivalents, revenue recognition, inventory, equipment, and any other notes you deem necessary.
10
Notes are not complete, inaccurate or not well written.
Notes are not lacking in being sufficiently complete, accurate or well written.
Notes are adequate in being sufficiently complete, accurate and well written.
Notes are complete, accurate and well written.
Requirements
Points
1 – Limited
2 – Developing
3 – Proficient
4 – Exemplary
- A memo to the owners of Cherry & White Bike Company explaining and justifying the following accounting choices:
a. Accounting for inventory: inventory cost flow methods.
18
TOTAL
i. Determine possible alternatives and select a cost flow method for accounting for the bike inventory.
3
Proposes an alternative that is difficult to evaluate because it is vague or only indirectly addresses the problem statement.
Proposes one alternative that is “off the shelf” rather than individually designed to address the specific contextual factors of the problem.
Proposes one or more alternatives that indicates comprehension of the problem. Alternatives are sensitive to contextual factors of the case.
Proposes one or more alternatives that indicates a deep comprehension of the problem. Alternatives are sensitive to contextual factors of the case.
ii. Present an analysis of the alternatives.
· Show and discuss financial statements effects of the alternative methods and estimates such as change in net income, assets, or liabilities.
· Examine the effects of the alternatives on the relevant common financial statement ratios of profitability, liquidity, and solvency.
iii. Explain why you select the alternative that you use in the financial statements.
6
6
3
Evaluation of alternatives superficial (for example, contains cursory, surface level explanation) and fails to include the following: considers history of problem, reviews logic/ reasoning, examines feasibility of alternative, and weighs impacts of alternative.
Evaluation of alternatives is brief (for example, explanation lacks depth) and includes some of the following: considers history of problem, reviews logic/ reasoning, examines feasibility of alternative, and weighs impacts of alternative.
Evaluation of alternatives is adequate (for example, contains thorough explanation) and includes most of the the following: considers history of problem, reviews logic/ reasoning, examines feasibility of alternative, and weighs impacts of alternative.
Evaluation of alternatives is deep and elegant (for example, contains thorough and insightful explanation) and includes, deeply and thoroughly, all of the following: considers history of logic/ reasoning, examines feasibility of problem, reviews alternative, and weighs impacts of alternative.
b. Accounting for equipment: purchase price and subsequent depreciation.
12
TOTAL
i. Determine appropriate method accounting for the acquisition price and subsequent measurement.
3
Proposes an accounting treatment that is difficult to evaluate because it is vague or only indirectly addresses the problem statement.
Proposes one appropriate accounting treatment that is “off the shelf” rather than individually designed to address the specific contextual factors of the problem.
Proposes one or more appropriate accounting treatment and any possible alternatives that indicates comprehension of the problem. Alternatives are sensitive to contextual factors of the case.
Proposes an appropriate accounting treatment and any possible alternatives that indicates a deep comprehension of the problem. Treatments and alternatives are sensitive to contextual factors of the case.
ii. Present an analysis of the alternatives.
· Show and discuss financial statements effects of the alternative methods and estimates such as change in net income, assets, or liabilities.
iii. Explain why you select the treatment that you use in the financial statements.
6
3
Evaluation of appropriate accounting treatment and any possible alternatives is superficial (for example, contains cursory, surface level explanation) and fails to include the following: considers history of problem, reviews logic/ reasoning, examines feasibility of alternative, and weighs impacts of alternative.
Evaluation of appropriate accounting treatment and any possible alternatives is brief (for example, explanation lacks depth) and includes some of the following: considers history of problem, reviews logic/ reasoning, examines feasibility of alternative, and weighs impacts of alternative.
Evaluation of appropriate accounting treatment and any possible alternatives is adequate (for example, contains thorough explanation) and includes most of the following: considers history of problem, reviews logic/ reasoning, examines feasibility of alternative, and weighs impacts of alternative.
Evaluation of appropriate accounting treatment and any possible alternatives is deep and elegant (for example, contains thorough and insightful explanation) and includes, deeply and thoroughly, all of the following: considers history of logic/ reasoning, examines feasibility of problem, reviews alternative, and weighs impacts of alternative.
Requirements
Points
1 – Limited
2 – Developing
3 – Proficient
4 – Exemplary
b. Prepare the journal entries for all transactions in the general journal.
10
Writing and Communication – See Fox BBA Rubric
10
FOX BBA: Written Communication Rubric – Adapted for Intermediate Accounting
Written Communication Traits
1 – Limited
2 – Developing
3 – Proficient
4 – Exemplary
Language
Uses language (word choice, vocabulary) that generally conveys meaning with several errors. Jargon used somewhat appropriately.
Uses language (word choice, vocabulary) that mostly conveys meaning with some errors. Jargon used appropriately
Uses language (word choice, vocabulary) that effectively conveys meaning with few errors. Jargon used appropriately
Uses language (word choice, vocabulary) that skillfully and clearly conveys meaning with no errors. Jargon used strategically and appropriately.
Grammar/
Spelling/
Punctuation
Occasional grammatical, spelling or punctuation errors, but does not distract reader or obscure meaning
Generally free or almost free of any grammatical, spelling or punctuation errors.
Free of any and all grammatical, spelling or punctuation errors.
Demonstrates sophisticated awareness and use of grammar and written mechanics. Free of any and all grammatical, spelling or punctuation errors.
Style and Appropriateness
Somewhat uses an appropriate, professional style and tone for the audience. Ability to somewhat analyze and address the needs of the assignment and intended audience.
Generally uses an appropriate, professional style and tone for the audience Suitable ability to analyze and appropriately address the needs of the assignment and intended audience.
Mostly uses an appropriate, professional style and tone for the audience Good ability in analyzing and appropriately addressing the needs of the assignment and intended audience.
Consistently uses an appropriate, professional style and tone for the audience. Strong ability in analyzing and effectively addressing the needs of the assignment and intended audience.
Organization
Lacks a consistently organized, logical and effective message. Main points somewhat clear. Paragraphs reasonably coherent with some effective transitions.
Presents a generally organized, logical and effective message. Main points mostly identified. Paragraphs are generally coherent with effective transitions.
Presents an organized, logical and effective message. Main points clearly identified. Paragraphs coherent with effective transitions.
Presents an organized and influential message supported by very clearly identified main points. Paragraphs coherent, well sequenced and transitions display progression of thoughts/ideas.
Design and Formatting
Document formatting and supporting visuals somewhat enhance the effectiveness of the presentation and slightly limit clarity/cohesiveness
Document formatting and supporting visuals appropriately enhance the effectiveness of the presentation and its clarity/cohesiveness
Document formatting and supporting visuals display creativity and appropriately enhance the effectiveness of the presentation and its clarity/cohesiveness
Document formatting and supporting visuals strongly enhance the effectiveness of the presentation and its clarity/cohesiveness
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