Income statement & Accounting project
Problem 1
Income Statement
Please prepare an income statement in proper form for Superior Manufacturing Company
Using the following information for Superior Manufacturing Company, prepare the income statement for the year ended December 31, 2013. (Assume a 30 % income tax.)
Administrative Expenses $ 70,000
Finished Goods Inventory January 1, 2013 120,000
Cost of Goods Manufactured during the year 200,000
Finished Goods Inventory December 31, 2013 60,000
Selling Expenses 40,000
Sales 680,000
Problem 2
Manufacturing Statement
The following information was taken from the accounting records of the Superior Company:
Depreciation of equipment $ 70,000
Direct labor 120,000
Factory taxes 2,000
Goods in process inventory, Dec. 31, 2013 250,000
Indirect labor 10,000
Power 16,000
Raw materials inventory, Dec. 31, 2013 60,000
Raw materials purchases, for year 230,000
Goods in process inventory, January 1, 2013 302,000
Raw materials inventory, January 1, 2013 110,000
Required:Prepare a manufacturing statement for the Superior Company for 2013
In addition please do the following to problem 2:
1.Explain the conceptual difference between total manufacturing costs and cost of goods manufactured. What does it mean?
2.The factory overhead account must be adjusted at the end of an accounting period. Explain why this adjustment is needed and the consequences to the financial
statements if the adjustment is not made.
Accounting Project
Accounting Fundamentals
Project on Cisco Systems, Inc
Project Overview
The objective of the project is for you to improve your understanding of accounting concepts and become familiar with the contents of a company’s annual report, Form
10-K filing with the Securities and Exchange Commission (which is also referred to as an annual report) and a proxy statement for Cisco Systems, Inc. which is a
publicly-held company. This project involves your preparing written answers to the questions below based on the information provided in these documents.
Selected Company: Cisco Systems, Inc.
You will go to the website for Cisco Systems Inc. and obtain a copy of the SEC Form 10-K (2011) annual report and the Proxy Statement (2011) filed with the SEC.
To access these documents, go to http://investor.cisco.com/sec.cfm?NavSection=SEC Under SEC Filings-Scroll down View (located under SEC Filings) and click on “Annual”,
then select 10K Annual Reportfiled Sept.14, 2011 (first 136 pages). For the Proxy, Go back to SEC Filings- scroll down View and click on “Proxy”, then select “Form DEF
14A” Definitive ProxyStatement filed Oct. 18, 2011 (first 67 pages) Make sure you have the right one.
Report
Your report is expected to have a professional appearance as would be expected in most business settings. Prepare your report and save file in Word , using font size
12 and with single line spacing. The format of your report is to follow the outline of the questions included in this handout. In your report, state the question or
item immediately followed by your answer. To facilitate the instructor’s review and your class discussion, you must cross-reference your answers to the sources used
including the document name and the page number. For example: Part 1 item # (a) Name of the company…. Cisco Systems Inc.. See SEC Form 10K , cover page #0 .
Questions
Include in your report the answers to the questions listed below. Also, remember to include the source of your answer, by indicating the document (SEC Form 10-K, and
Proxy Statement) and page number. Please be specific and concise.
I. Background information
a. Name of the company
b. Fiscal year covered by the annual report
c. Stock exchange where shares are traded and stock ticker symbol
d. State of incorporation
e. Describe the company’s business(es), e.g., types of products manufactured.
II. Management and Audit report
a. Who are the company’s auditors?
b. What opinion did the auditors issue?
c. Did the auditors examine all the evidence supporting the amounts and disclosures in all of the financial statements? Explain.
d. What is the auditor’s responsibility for the financial statements?
e. What is management’s responsibility for the financial statements?
f. Under the Sarbanes-Oxley Act of 2002, reports on internal control are required. Did the company’s management acknowledge its responsibility for establishing
and maintaining adequate internal control over financial reporting? What is the auditor’s opinion on the effectiveness of the company’s internal controls?
g. What was their internal control system designed to do?
h. In accordance with what standards did the auditors conduct the audit?
III. Profitability
a. What is the net income for the year covered by the report? How does net income compare to previous years? Why did net income increase or decrease?
b. When is revenue recognized?
c. What effective income tax rate is the company experiencing?
d. What are the extraordinary gains or losses if any? Explain.
IV. Assets
a. What is the company’s largest current asset?
b. What items are classified as cash equivalents?
c. What are restricted assets? How much restricted assets reported in the fiscal year 2007.
d. What was the balance at year end for Allowance for Doubtful Accounts for accounts receivables?
e. What categories of inventory does the company report on its balance sheet? What inventory accounting method(s) does the company utilize?
f. What are the company’s depreciable assets? What method(s) of depreciation does the company use?
g. What kinds of intangible assets does the company have?
h. How much goodwill is on the balance sheet and how is it defined?
BUS 500A Accounting Fundamentals
Project – Summer 2014
Page 3 of 3
V. Liabilities
a. What is the company’s major liability?
b. How much does the company owe within the next fiscal year?
c. How much long-term debt is due and payable? How much of the long-term debt is due within the next fiscal year?
VI. Stockholders’ equity
a. What are the different classes of stock issued by the company?
b. How many shares of common stock were issued? What is the par value of the stock?
c. What were the number of shares and cost of the treasury stock held by the company at year-end?
d. Were cash dividends paid? When? Who makes these decisions?
e. For the current period, what does the Statement of Stockholders’ Equity tell you about Retained Earnings and Treasury Stock?
VII. Earnings per share
a. What is the amount of basic earnings per share (EPS) being reported?
b. Have EPS increased or decreased since the prior year? By how much.
VIII. Business segments
a. How many business segments does the company have?
b. If applicable, what are the revenues for the largest business segment?
c. If applicable, what is the income of the smallest segment?
IX. Cash flows
a. How much cash was provided by operating activities?
b. What is themajor investing activity occurred during the period?
c. What is themajor financing activity occurred during the period?
d. What was the net change in cash during the period?
X. Proxy statement
a. Briefly describe the issues that the stockholders voted on at the annual meeting of the shareholders.
b. What are the standing committees of the Board of Directors?
c. How often are Directors elected and what is their term of office?
d. What were the audit fees charged by the outside audit firm? What were the other non-audit fees?
e. What was the total compensation of the highest paid executive? What was included in the compensation?
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