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The double entry system of accounting has been in existence for over 500 years. We still use it because it provides a way to check our work for accuracy. Even the simplest accounting software programs use this system. Discuss the pros and cons of the double entry system, and share any experience you have working either in an accounting department or with accounting software.

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In today’s business environment where publicly traded companies feel pressure to meet short-term earnings expectations, management may be tempted to “manage earnings”. Assess how a financial statement user may be able to detect managed earnings when reviewing the firm’s balance sheet, income statement, and cash-flow statement. Indicate how a potential investor might interpret these “red-flags”. Provide support for your rationale.Assess how the Sarbanes-Oxley Act addresses the concern of corporate “managed earnings”, indicating whether or not you believe the requirements within the Act are sufficient to minimize these concerns. Provide support for your rationale

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Submit the Ratio Analysis portion of the final project. For this milestone, you will be analyzing the financial performance of Starbucks using the financial ratios of liquidity, solvency, and profitability (Critical Element III). Note: To calculate the ratio amounts, you may use the file Key Financial Ratios Explained and Set Up in Excel. This Excel document may also be used for your final project. For additional details, please refer to the Milestone Two Guidelines and Rubric document and the Final Project Guidelines and Rubric document in the Assignment Guidelines and Rubrics section of the course.By submitting this paper, you agree: (1) that you are submitting your paper to be used and stored as part of the SafeAssign™ services in accordance with the Blackboard Privacy Policy; (2) that your institution may use your paper in accordance with your institution’s policies; and (3) that your use of SafeAssign will be without recourse against Blackboard Inc. and its affiliates.Institution Release StatementI understand that SafeAssign will check this assignment against several databases for original content and that it will produce an originality report which my instructor and I can view. This report will show how my paper compares to documents available on the Internet, in many print journals, a database of other papers submitted by SNHU students, as well as a Global Database of papers submitted by all users of SafeAssign at other schools.I understand that SafeAssign will add my paper to the SNHU SafeAssign database for comparison of future papers against my work. I also understand that if I select I agree to submit my paper to the Global Reference Database below, I am agreeing to have my paper stored in a Global Database of submission so that my work will be used to compare future work of myself and other students who use the SafeAssign system. I understand that submitting my paper to the Global Database is completely voluntary. I maintain ownership of the original intellectual property created, but this document must remain a part of the SafeAssign Institutional and Global Databases.

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KEY FINANCIAL STATEMENT RATIOS
Liquidity ratios
rev. 3-19-2010
rev. Feb 2010
Example:
Current Ratio
Current Assets
Current Liabilities
2.0 to 1
Quick Ratio
“Acid Test”
Quick Assets *
Current Liabilities
0.9 to 1
A “2.0 to 1” ratio means that there is
$2.00 of current assets for every $1
in current liabilities, which suggests
that short-term creditors can be
reasonably sure of being paid.
If current liabilities are rising faster
than the current assets from which
they must be paid, company could
become insolvent (unable to pay
its debts) and eventually bankrupt.
Indicates extent to which claims of
If Current Ratio is OK, but Quick Ratio
short-term creditors are covered by
is low or declining, the cause may
“quick” assets*.
be excessive nonliquid inventory.
* Quick assets include Cash, Marketable Securities, and Accounts Receivable (excludes Inventory)
Asset Management Ratios
Accts Receivable Sales (credit only )
Turnover
Accounts receivable
6.0 times
Avg Number of
Days to Collect
365 (days in yea r)
A/R turnover ratio
60.8 days
Inventory
Turnover
Cost of Goods Sold*
Inventory*
4.0 times
Number of times per year
receivables were generated
and then paid (“turned over”)
Number of days customers are
taking to pay
Number of times merchandise
items are sold and restocked
(“turned over”) per year.
* Some publications use “Sales” as the numerator, and/or average inventory as denominator
Avg Number of
Days in Inventory
365 (days in year)
Inv. turnover ratio
91.3 days
If the turnover ratio is decreasing
or avg number of days to collec t is
increasing or is substantially greater
than credit terms (e.g., “30 days, net”),
then credit and collection policies may
need to be strengthened.
If the turnover ratio is decreasing
or number of days in Inventory is
increasing , inventory may becoming
outdated and possibly overstated
Number of days inventory remains
unsold
Debt (Leverage) (Long-term Solvency) Ratios
Debt to
Assets
Total Liabilities
Total Assets
0.50
The portion of the total financing
supplied by creditors as opposed to
the owner-stockholders.
Debt to
Equity
Total Liabilities
Total Equity
1.5
The financing supplied by creditors
as compared to financing supplied
by the owner-stockholders.
Times interest
Earned
EBIT*
Interest expense
3.2
Measures the extent to which operating
income can decline before firm is
unable to meet interest payments
Debt to Assets and Debt to Equity
are alternative benchmarks that
measure long-term solvency. Higher
ratios (high leverage ) mean greater
risk that cash flows from operations
will be insufficient to cover interest
and principal payments.
Low ratio = low margin of safety,
and can make it difficult to borrow.
* EBIT means “Earnings before Interest and Taxes”
Profitability Ratios (not applicable if net loss)
Net Profit
Margin (%)
Net Income
Sales (net)
5.1%
Net income as a percentage of sales.
If trend is down, product costs and/or
operating expenses are rising faster
than sales.
Low percentage = low safety
margin: higher risk that a decline in
sales will erase profits and result
in a net loss.
Gross Profit
on Sales (%)
Gross Profit
Sales (net)
35.2%
Gross Profit as a percentage of sales.
If low or declining, product costs may
be increasing and/or selling prices
decreasing (steeper discounts).
A low or declining Gross Profit %
indicates less ability to sell goods
at intended selling price, or rising
cost of goods, or both.
Measures how well management
is managing assets to generate
profit from operations.
A low or declining rate could mean
that assets are not being utilized
effectively.
Measures rate of return on stockholders
investment. (However, “dividend yield”
for stockholders is generally much less.)
Low return could be caused by high
debt, i.e., high interest expense.
Return
on Assets (%)
aka ROI
Return
on Equity (%)
Operating Income*
15.3%
Total Operating Assets
Net Income **
Total Equity **
18.4%
* Some publications use Net income (after tax) instead of Operating income (i.e., earnings before interest and income tax, or EBIT)
** If preferred stock exists, subtract Preferred Dividends from Net Income, and also subtract Preferred Stock from Total Equity
Market Value Ratios
Earnings per
Net Income *
$1.23
Share (EPS) Common shares outstanding
EPS is the “real” measure of profitability
used by potential investors (not used
by creditors).
* If preferred stock exists, subtract Preferred Dividends from Net Income.
EPS can decline despite an
increase in total earnings and thus
drive down the market price per
share.
Price/Earnings
Ratio (P/E)
High P/E ratio means that investors
perceive good growth potential—but
they could be (and often are) wrong.
Market Price
EPS *
16.5 times
The multiple-times-earnings that
investors are willing to pay, based on
their perception of future share price.
* If EPS is negative, ratio is “not applicable”
KEY FINANCIAL STATEMENT RATIOS
THIS YEAR
Amounts
Answer
LAST YEAR
Amounts
Answer
Liquidity ratios
Current Ratio
Quick Ratio, or
“Acid Test”
Current Assets =
Current Liabilities
=
=
Quick Assets *
Current Liabilities
* Quick assets include Cash, Marketable Securities, and Accounts Receivable (excludes Inventory)
Asset Management Ratios
Inventory
Turnover
Cost of Goods Sold
Inventory*
Accts Receivable
Turnover
Sales
Accts Receivable*
* Textbooks generally use “average” for the year (beginning + ending ) / 2, but it’s OK to use ending only
Debt (Leverage) (Long-term Solvency) Ratios
Debt to
Assets
Total Liabilities
Total Assets
Debt to
Equity
Total Liabilities
Total Equity
Times interest
Earned
EBIT*
Interest expense
* EBIT means “Earnings before Interest and Taxes”
Profitability Ratios (not applicable if net loss)
Net Profit
Margin (%)
Net Income
Sales
Gross Profit
on Sales (%)
Gross Profit
Sales
Return
on Assets (%)
aka ROI
Net Operating Income
Total Operating Assets
Return
on Equity (%)
Net Income
Total Equity
Market Value Ratios
Earnings per
Share (EPS)
Net Income
No. shares outstanding
Price/Earnings*
Ratio (P/E)
Market Price
EPS
Industry avg.
not relevant
prior year not required
* P/E ratio changes daily with market price. If EPS is negative, ratio is “not applicable”. Use “Basic” , not “Diluted”.
Industry
Average
Industry avg.
not relevant

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Just need to Case C. All the files are attached.Thanks

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ASSIGNMENT 2:
T Accounts and Financial Statements
What You Submit to the Dropbox:
1. A single Excel spreadsheet containing financial statements for:
A. Mary Berg Case
B. Fung Research Case
C. Dick’s Repair Service in Moose Jaw (Problem 4B-4)
A. Mary Berg Case
Mary Berg, a young lawyer, began her own practice and completed these transactions during September
of the current year:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
9/2 Sold a personal investment in Xerox stock for $2,845 and invested $2,500 of the proceeds in
the law practice.
9/2 Rented the furnished office of a lawyer who was retiring, and paid three months’ rent in advance
$1,050.
9/2 Purchased the law library of the retiring lawyer for $1,750, paying $750 in cash and agreeing
to pay the balance in one year.
9/5 Purchased office supplies for cash, $75.
9/6 Purchased law books from West Publishing company on credit, $250.
9/8 Completed legal work for Security Bank on credit, $700.
9/15 Paid for the law books purchased on credit on September 6.
9/19 Completed legal work for Coast Realty on credit, $600.
9/25 Received $700 from Security Bank for the work completed on September 15.
9/30 Paid office secretary’s salary, $800.
9/30 Paid the monthly telephone bill, $25.
9/30 Recognized that one month’s rent on the office had expired and become an expense.
9/30 Took an inventory of unused office supplies and determined that $20 of supplies had been
used thus expensible.
Instructions:
Prepare the:
A. T accounts
B. Trial Balance for September 30
C. Balance Sheet for the month ending September 30
D. Income Statement for the month of September
.
Everything is done in an Excel spreadsheet which you will prepare and submit with tabs.
B. Fung Research Services (FRS) Case
On August 2014, Grace Fung incorporates and opens Fung Research Services Inc. (FRS). During the
company’s first ten days of operations, it completes the following transactions:
1.
2.
3.
4.
5.
6.
7.
8.
9.
To begin operations, Grace Fung deposits $400,000 of personal funds in a bank account entitled
Fung’s Research Services Inc. and the business issues shares of common stock in the amount of
$400,000. Grace had obtained the $400,000 by selling off RRSPs that she had saved over the years.
$400,000 was the proceeds used from the sale of $500,000 worth of RRSPs.
FRS pays $300,000 cash for a small house which is to be used as an office.
Grace has a personal use residential property from which she does some work although the bulk of
her days are spent at the FRS offices in the other small house. She does repairs on the residential
property in the amount of $10,000 although this is not to be expensed against the business as such
an expenditure is considered to be a personal and living expense.
Grace goes over to Staples/Business Depot and buys $500 worth of office supplies for the business.
She opens up a charge account with Staples/Business Depot and thus has 30 days to pay.
FRS finds a government surplus office equipment sale in the newspaper and goes to an auction to
buy office equipment. A bargain is found and FRS pays $6,000 cash for office furniture.
The company pays $250 on the Staples/Business Depot purchase in #4.
Grace decided she needs a vacation and pays herself a $1,000 dividend out of FRS.
FRS does some research work for the Hamilton Tiger Cats and bills them $15,000. She receives
$5,000 immediately in cash and the balance is to be paid in 90 days (the Ti-Cats are in dire straits
from a cash-flow point of view, but Grace is understanding, plus she needs the work).
Grace realizes that she has used $100 worth of supplies and decides to expense it accordingly.
Instructions:
Prepare the t-account entries and key the transactions according to what happened above.
a) Post the entries to the T-accounts and calculate ending balances.
b) Prepare the trial balance of FRS at August 10, 2014.
c) Prepare the financial statements for the first 10 days of operations at FRS.
Use the T Account Template provided in Weeks 2/3 and employ the tabs feature in Excel.
C. Dick’s Repair Service in Moose Jaw Case
Required: Prepare the analyses and financial statements requested in the case problem 4B-4, Page 179
of your textbook using an Excel spreadsheet. Note the check figure provided (Net Income = $1,012).
Assets = Liabilities + Owner’s Equity
+
Assets
Liabilitie
Cash
A/R
Computer
Prepaid Rent
Bank Loan
Salaries Payable
Truck
Office Supplies
Expenses
Rent X
Owner’s E
Yee Salary X
Revenues
Supplies X
Cell Phone X
wner’s Equity
+
Liabilities
Bank Loan
A/P
Salaries Payable
Owner’s Equity
Revenues
Capital
c. Depreciation on moving truck, 3580
d. Wages earned but unpaid, $410
KEVIN’S MOVING CO.
TRIAL BALANCE
OCTOBER 31, 2017
Cr
Choot figure
Net Loss $1,62a
Di
39 2000
328 800
140.000
106 N 00
Cash
Prepaid Insurance
Moving Supplies
Moving Truck
Accumulated Depreciation, Moving Truck
Accounts Payable
K. Hoff, Capital
K. Hot Withdrawals
Revenue from Moving
Wages Expense
Rent Expense
Advertising Expense
366.000
13 12 00
14N 200
240.00
H16 200
57 12 00
108000
3100
30 6 1 600
506 1 600
Comprehensive problem
20 (60 min)
43-4. As the bookkeeper of Dick’s Repair Service in Moose Jaw, use the informa
tion that follows to prepare:
1. A worksheet for the month of November
2. An income statement for November, a statement of owner’s equity for
November, and a balance sheet as of November 30, 2016
DICK’S REPAIR SERVICE
TRIAL BALANCE
NOVEMBER 30, 2016
eck Figure
Cr.
Income $1,012
Dr.
320 600
400000
77000
310600
Cash
Prepaid Insurance
Repair Supplies
Repair Equipment
Accumulated Depreciation, Repair Equipment
Accounts Payable
D. Hom, Capital
Revenue from Repairs
Wages Expense
Rent Expense
Advertising Expense
650 00
1904.00
625 800
5634 00
160.000
156000
20 600
1444600
1444600
Adjustment Data
a. Insurance expired, $300
b. Repair supplies on hand, $170
c. Depreciation on repair equipment, $250
d. Wages earned but unpaid, $106
THE ACCOUNTING CYCLE CONTINUED
179

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“Segmented Information and Reporting Requirements” Please respond to the following:Suppose that management is considering preparing segmented information but is unsure on how to identify a segment and is unsure on why the information is important. Outline a brief memo to management explaining the importance of segmented information, and create an action plan on the main steps management should take to identify a segment. Also, provide your opinion on the effect segmented information will have on the company’s financial disclosure.Speculate as to why there has been an increase in reporting requirements in the last ten (10) years. Also, give your opinion on whether the increase in reporting requirements has improved investors’ and creditors’ confidence in corporations. Provide at least two (2) specific examples of improvements to support your opinion.

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