Management Strategy Paper 2– MCI Communications

Writing clear instructions: MCI communications
MCI provides a full range of telecommunications services to businesses and residential customers. The company owns and operates one of the world’s largest communications networks, representing a gross investment of more than $10 billion. Selected accounts and balances from a recent set of the firm’s financial statements, simplified for purposes of presentation, follow. (Note: All amounts are in millions.)

Cash $ 165
Capital Stock 1,928
Long-term debt 2,366
Other assets 2,237
Accounts payable 742
Accounts receivable 2,131
Retained earnings 2,785
Other long-term liabilities 996
Communications system 10,735
Miscellaneous current assets 305
Current portion of long-term debt 215
Accumulated deprecation 4,297
Other current liabilities 2,244

Imagine that MCI has just hired a new computer programmer. The programmer understands the nature of assets, liabilities and owners’ (stockholders’) equity, but has no knowledge about how to classify accounts on a balance sheet. You are an accountant for the company and must supervise the new employee while she develops a program to prepare a classified balance sheet.

Instructions

1. Prepare written instructions that will allow the programmer to understand the content and positioning of the specific categories (current assets, property, plant & equipment, etc) on a balance sheet. Give a step by step for each step. Example – 1. Prepare and center a statement heading that shows the company’s name, the type of financial statement being produced (i.e., balance sheet), and the date of the statement.

To give the programmer some guidance in her work, construct the balance sheet that the program should be capable of producing. The balance sheet should be dated December 31, 2007. Use the accounts and numbers…