PIERCE COLLEGE Business 220 Principles of Financial Accounting II Winter, 2007
Course: Time: Room: Text: Bus 220; Item # 1033 AW Monday to Friday – 8 to 8:50 a.m. Olympic 308 Financial Accounting, 9th ed., Warren, et.al. Access certificate for Financial Accounting L. L. Price, Ph.D. C.P.A. 213 Olympic 7:20 to 8:00 a.m.; 10:50 to 11:30 a.m. 7:20 to 8:00 a.m.; 10:50 to 11:00 a.m. 7:20 to 8:00 a.m.; 10:50 to 11:30 a.m. 7:20 to 8:00 a.m.; 10:50 to 11:00 a.m. 7:20 to 8:00 a.m.;
Instructor: Office:
Office Hours: Monday Tuesday Wednesday Thursday Friday Contact:
Phones: Office (253) 964-6571; Residence (253) 858-3838 Email: lprice@pierce.ctc.edu drllprice@harbornet.com Do not hesitate to call me if you have any questions. I have listed my home phone for your convenience. If I am not at home, please leave a message. Be sure and leave a number where I can reach you and how late I may return a call.
Conduct of the class: The class will be a combination of presentations and discussions. Your success in large part will depend on your preparation outside of class. I will assume that you are prepared for each and every class and that I may freely call on you in regards to the reading or homework. Naturally, I do not want to embarrass anyone, so if you are not prepared, tell me before class and I will refrain from calling on you. If you are in need of any special accommodations, please contact the special needs office. The access certificate will allow you access to a web site for this text. You will be able to check your exercises, get hints, solutions, and track your progress. This will be explained in detail the first day of class. The integration of the on-line tutorial with the course is not without some quirks, so please be patient and allow for some initial difficulties.
Grading: There will be a total of 800 points available in the course. There will be 7 quizzes and a comprehensive final exam. I reserve the right to deduct points for missing class, lack of participation, or lack of preparation. The following grading scale will be in effect unless I decide to change it in a manner that would improve your grade. I will not make the scale more difficult. My expectation is that the median grade in the course would be approximately a B-. Projected grading scale: A range 90 to 100% B range 80 to 89 C range 70 to 79 D range 60 to 69 Failing 0 to 59
7206405604800-
800 points 719 639 559 479 (or any academic dishonesty)
Information regarding the quizzes and the final exam: Each quiz is worth 100 points. The final exam will be worth 100 points. Each quiz will cover one chapter. We will be studying chapters 11 through 16. The final exam will be comprehensive. Tentative Schedule: It is your responsibility to keep apprised of the activities scheduled for the class. We will use about seven class days to cover each chapter. We will not have a set schedule, as some of the more complex chapter may need additional time. We will have a maximum of only one quiz in given week, and the quizzes will be announced in advance. The first quiz (on chapter 11) will be during the second week of class. Homework assigned: Chapter Exercises 11 10 11 12 13 14 15 1 to 11, 16, 18, 19 1 to 21 1 to 25 1 to 12, 14 to 24 1 to 19; 21 to 24 1 to 23 1, to 23
Problems 11-1A 12-1A, 12-3A, 12-5A 13-2A, 13-6A 14-4A 15-1A, 15-2A, 15-6A, 15-7A 16-1A, 16-4A 17-4A
Quiz and Final Exam Previews: (note – these are subject to some variation – they are intended to give you a reasonable idea of the nature and content of each quiz) Each chapter quiz is worth 100 points. The final exam will be worth 100 points. Chapter 11 True/False Current liabilities Contingent liability FICA-2 FUTA Fringe benefits Proceeds of discounting a note Gross Pay Net Pay Payroll tax liability Pension Benefits
Problems Discounting notes, note payable JE’s JE for buyer and seller, converting an account receivable/payable to a note receivable/payable JE for purchase, converting an account payable to a note payable; year end AJE JE installment note JE vacation accrual Warranty expense and liability Chapter 12 True/False Corporation Characteristics – 3 Dividend income Stockholders equity Dividends – 2 Issuing stock for non-cash assets Premium – 2 Stock split Date of record Problems Compute dividends per share – preferred and common JE – issue of stock JE – organizational costs JE – treasury stock transactions Stock split Effect of A = L + OE of cash and stock dividends JE’s for cash and stock dividends Income tax – corporate Organization costs Retained deficit – 2 Preferred stock – 3 Stock discounts Treasury stock – 3 Declaration of a cash dividend Stock dividends – 4
Chapter 13 True/False Partnership characteristics – 4 Liquidation – 2 Mutual Agency Income sharing – 2 Problems Dividing income under different assumptions (two sets) Beginning capital in a new partnership formation Adding a partner (3 sets) A partner leaving a partnership (2 sets) Partnership liquidation ( 2 sets) Capital deficiency Statement of partners’ equity Withdrawals LLC – 2
Chapter 14 True/False Deferred income tax Extraordinary items – 2 Prior period adjustments Retained earnings statement Investments in stock – 2 Cost method – 3 Parent Consolidated financial statements – 2 Problems Deferred taxes Prepare an income statement with extraordinary items, discontinued operations, and EPS Prepare a stockholders equity section JE investments using both cost and equity methods ( 2 sets) Discontinued operations Diluted EPS Appropriated retained earnings Comprehensive income – 2 Equity method – 2 Mergers Purchase method of consolidation Minority interest – 2
Chapter 15 True/False Bond characteristics Serial Bonds Bond Premium/discount – 2 Interest expense vs. interest paid – 2 Callable bonds Redeeming bonds Amortization of discounts/premiums – 2 Bond Premium Problems JE bond issue JE bond issue, interest payment, interest accrual, st. line amortization ( 3 sets) JE bond issue, interest payment, redemption JE bond issue and purchase, st. line amortization Identify where several items would appear on a balance sheet Computer PV of a bond Compute interest expense – interest method. Debentures Present value Straight-line amortization Sinking fund – 2 Carrying value Bond investments – 2 Sale of a bond investment
Chapter 16 True/False Statement of cash flows – 5 Investing/Financing/Operating – 6 Indirect – 2 Free cash flow Problems Identify as to operating/investing/financing Compute cash from operations – indirect method Indicate +/- to net income for cash from operations – indirect method. Prepare a statement of cash flows indirect method. Prepare a statement of cash flows direct method. Given data, convert from accrual to cash flow (several sets) Cash equivalents direct/indirect – 3 direct
Chapter 17 True/false Percentage changes Vertical analysis Ratios Quick ratio Acid test ratio Accounts receivable turnover – 2 Inventory turnover – 2 Earnings per share – 2 Analysis – 3 Problems Horizontal analysis Vertical analysis Compute working capital, current ratio, and acid test ratio Compute inventory turnover, days sales in inventory Compute accounts receivable turnover, days sales in accounts receivable Compute Rate of return on stockholders equity, rate earned on common equity, earnings per share, P/E ratio, dividend yield. Compute fixed asset to long term liability, liability to stockholders equity. horizontal analysis common sized statements leverage – 2 profitability quick assets days sales in inventory return on total assets – 2 P/E ratio – 2
Final Exam preview The final exam will consist of 100 multiple-choice questions. You will need a scantron® card and a soft lead pencil. Those questions that involve a computation are marked with an asterisk (*). *maturity value of a note pension plans corporate characteristics stockholders equity stock issuance stock dividend dates deferred income tax change in accounting principle *EPS retained earnings investments – cost method consolidated financial statements – 2 callable bonds bond interest rate *cash received – 2 *working capital *acid test ratio *accounts receivable turnover *discounting of a note warranties retained earnings *preferred dividends stock splits treasury stock extraordinary items EPS financial statements prior period adjustment investments – equity method bond premium/discount *issuance of bonds *cash paid out operating/investing/financing –4 *days sales in inventory *return on equity