University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

388

Pages:

2
Author:

stud_ice13

Key Problem Areas and Solutions 1. Asset Depreciation Calculation: o Compute the depreciation expense for office and computer equipment using the straight-line method assuming no additional purchases. o Determine the book value of these assets by the end of the year, factoring in accumulated depreciation. 2. Asset Turnover Ratio: o Calculate total asset turnover for Business Solutions by comparing total revenue against average total assets (using values from prior and current periods). o Assess the company’s performance relative to a competitor's benchmark (e.g., a 2.5 annual average turnover) to provide insight into operational efficiency. Analytics and Exercises Using Tableau • Tableau Dashboard Activities for: o Straight-line Depreciation and Book Value. o Depreciation Methods: Activities exploring straight-line, units-ofproduction, and double-declining balance methods, comparing their impacts on financials. Company and Comparative Analysis 1. Apple’s Depreciation and Asset Turnover: o Calculate the percentage of undepreciated property, plant, and equipment for 2018 and 2019. o Analyze Apple's R&D expenses to understand accounting practices (capitalize vs. expense as incurred). o Compute asset turnover ratios and analyze trends, assessing whether changes are favorable. 2. Comparative Analysis of Apple, Google, and Samsung: o Compute and compare total asset turnover across two years for these companies, assessing which is more efficient and how they measure against industry standards. Extended Analytical Topics • Plant Assets: o Characteristics, cost inclusion, distinctions between land and land improvements, and the rationale behind allocating costs in lumpsum purchases. o Treatment of accumulated depreciation, depreciation methods (like MACRS), ordinary vs. extraordinary repairs, and disposal criteria. • Natural Resources and Intangible Assets: o Address depletion of natural resources and methods for amortizing intangible assets. o Understand goodwill and the conditions for its recognition and amortization. Practical and Ethical Considerations 1. Ethics Challenge: o Ethical considerations in depreciation decisions, exemplified by a business owner potentially adjusting asset use dates to manage reported profit margins. 2. Communicating in Practice: o Calculate total asset turnover for industry comparisons, and present findings on how companies within an industry (using Form 10-K data) compare in asset efficiency. 3. Teamwork and Depreciation Methods: o Team activities focus on each member becoming an expert on a specific depreciation method and presenting calculations and implications of different methods. Entrepreneurial Decision Case: SpaceX Expansion • Evaluate a hypothetical expansion scenario for SpaceX, computing total asset turnover under current and expanded operations. This involves assessing the impact of increased net sales against the required asset growth, evaluating risks and potential benefits of expansion based on turnover and other financial considerations. This summary emphasizes calculating and interpreting key financial metrics (depreciation, asset turnover), analyzing ethical practices in asset accounting, and team collaboration for enhanced understanding of accounting principles.