Accounting – Financial Statements

*** WHAT I NEED DONE:
ADD FORMAL INTRODUCTION PAGE
ANSWER QUESTIONS THAT I’VE MARKED THROUGHOUT PAPER
MAKE ADJUSTMENTS PER COMMENTS IF NEEDED
PROOFREAD AND MAKE ADJUSTMENTS TO FORMATTING FOR APA FORMAT, TEACHER IS VERY STRICT!
I HAVE ALL THE MODULES IN ORDER PER THE RUBRIC AND INSERTED COMMENTS WHERE IT NEEDS TO BE ADJUSTED OR ADDED TO.
MODULE 7 IS MISSING AS IT IS BEING WORKED ON CURRENTLY AND EVERYTHING IS DUE TOMORROW. DO NOT FOCUS ON MODULE 7, JUST EVERYTHING ELSE.

*COMPANY USED FOR PROJECT IS COSTCO * ALL FINANCIAL STATEMENTS WILL BE PROVIDED FOR REVIEW IF YOU NEED THEM TO ADJUST QUESTIONS *

ACC 620 Final Project Guidelines and Rubric
Overview

In this assignment, you will demonstrate your mastery of the following course outcomes:
 Analyze stockholder sections of balance sheets for how they inform stakeholders of equity positioning
 Interpret income measurement for determining the accuracy of financial statements
 Analyze the effect of income taxes and their impact on financial statement accounts for appropriate estimation and planning
 Evaluate various pension plans for their implications on balance sheets and income statements
 Differentiate between operating and capital leases for addressing their impact on balance sheets and income statements
 Analyze complex financial statements for informing stakeholders in making economic decisions.

Through this assessment, you will continue building your Financial Reporting Series portfolio.

Your portfolio pieces for this project will include memos, spreadsheets, and a final report.
At the most recent strategic planning meeting, the board of directors of your company has voted to issue additional stock to raise capital for major expansions
for the company in the next five years. The board is considering issuing a total amount of stock worth $5 billion. The CEO has asked you to analyze the impact of
issuing this stock on the income statement, statement of retained earnings, balance sheet, and cash flow statement. Take the most recent financial statements
and prepare a set of projected financial statements based on the given assumptions.

Specifically, the following critical elements must be addressed:
I. Stockholders’ Equity
A. Determine how your company got its initial financial start in terms of debt (liabilities) or equity (capital). Support your response.
B. Analyze the equity section of your company’s balance sheet as compared to your company’s industry average. Rate the company’s performance
against its competitors.
C. Review your company’s dividend policy and its history. Based on the information, discuss the trends over the past year.
II. Income Measurement/Revenue Recognition
A. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) came together on a unified project to
outline the accounting principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS. Research IAS-18,
Revenue, and discuss how it would apply to your company.
B. Review your company’s revenue over the past two years. Analyze the change in revenue (increase/decrease) and give the reasons for this
change.
C. Reflecting upon your company’s balance sheet, identify the unearned revenue accounts listed. How does your company handle the proper
accounting treatment with regard to recognizing revenue from unearned revenue accounts?
III. Income Taxes
A. If Congress voted to eliminate corporate taxes, what would be the effect on your company’s income statement and balance sheet? Defend your
response.
B. Calculate the income tax rate for your chosen company. What effect will an increase in income of $2,000,000 have on your company?
C. What are the effects on the balance sheet and income statement? Justify your response.
D. How much did your company pay in foreign taxes last year? What percentage of its income is United States vs. foreign?
IV. Leases
A. What are the differences between operating and capital leases?
B. Describe the particular leases of your company based on the liability section of your company’s balance sheet.
C. What impact have the leases had on the company’s financial statements for the most recent year?
D. Discuss the advantages and disadvantages of leasing a building versus purchasing one.

V. Pensions
Address the following elements in the form of a memo to your CEO:
A. From your company’s financial information, what type of pension plan does it have? Discuss the reasons why your company has chosen this
particular plan.
B. What was the effect of the pension plan on your company’s financial statements? Defend your response.
C. Your CEO has informed you—the controller of your company—that the board of directors has made the decision to look at other options of
types of retirement plans. Investigate what other alternatives would be available, and determine which would be appropriate for your particular
company.
VI. Statement of Cash Flows
A. From the perspective of an investor, determine whether or not you would invest in your chosen company based on the company’s Statement of
Cash Flows (SoCF). Support your opinion.
B. Review the company’s SoCF for any concerns that may need to be addressed. As controller of your company, prepare a memo to your CEO,
giving a summary report for possible recommendations.
VII. Report for CEO
At the most recent strategic planning meeting, the board of directors of your company has voted to issue additional stock to raise capital for major
expansions for the company in the next five years. The board is considering $5 billion. Take the most recent financial statements and prepare a set of
projected financial statements based on the given assumptions. The CEO requests that you prepare a written report (including the financial statements)
for her.
A. Generate a projected income statement based on the given scenario.
B. Analyze the impact on the income statement based on the given scenario.
C. Generate a projected statement of retained earnings based on the given scenario.
D. Analyze the impact on the statement of retained earnings based on the given scenario.
E. Generate a projected balance sheet based on the given scenario.
F. Analyze the impact on the balance sheet based on the given scenario.
G. Generate a projected statement of cash flows based on the given scenario.
H. Analyze the impact on the statement of cash flows based on the given scenario.
Milestones
Milestone One: Stockholders’ Equity and Revenue Recognition
In Module Three, you will submit critical elements I and II for review by your instructor. It is important that you incorporate your instructor’s feedback from this
milestone into your final submission. This milestone will be graded with the Milestone One Rubric.
Milestone Two: Income Taxes and Pensions

In Module Five, you will submit critical elements III and V for review by your instructor. It is important that you incorporate your instructor’s feedback from this
milestone into your final submission. This milestone will be graded with the Milestone Two Rubric.
Milestone Three: Leases and Statement of Cash Flows
In Module Seven, you will submit critical elements IV and VI for review by your instructor. It is important that you incorporate your instructor’s feedback from
this milestone into your final submission. This milestone will be graded with the Milestone Three Rubric.
Final Submission: Financial Reporting Series Portfolio
In Module Nine, you will submit your final project. It should be a complete, polished artifact containing all of the critical elements of the final product, including
critical element VII: Report for the CEO. It should reflect the incorporation of feedback gained throughout the course. This submission will be graded with the
Final Project Rubric.

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