Journal Assignment:
1) Obtain a copy of a company's financial statements (Any company from the Internet). Find the report/opinion provided by the public accountants who audited the entity's financial statements. Identify the firm that performed the audit and summarize the conclusions drawn as a result of their examination.
2) Discuss the relationships between the company's balance sheet, income statement and statement of retained earnings (i.e. reconcile the numbers that tie the three statements together). What is the nature of the company's assets, liabilities and equities? Did the company generate a profit for the period being reported? Did the company pay a dividend?
3) What are the various methods for revenue recognition? How and when does the company recognize revenue? Do they recognize revenue aggressively or conservatively? Examine and discuss any footnotes pertaining to revenue recognition.
4) Does the firm have inventory? If so, what cost flow assumption is being used? Examine and discuss any footnotes pertaining to inventory. If not, work with a partner's data or gather some information about a publicly traded company to complete the assignment.
5) Discuss the manner in which the company is capitalized (debt vs. equity). Discuss the nature of the firm's debt instruments. If the firm is a public company, does it have both common and preferred stock outstanding? What is the average price the company has received for all of the common stock it has issued? Has the market value of these stocks changed over the last year? Discuss the impact of these stock price changes thefirm's operations.
6) What is the difference between a recurring and a nonrecurring income item? Was the company's income generated predominantly through recurring or nonrecurring items? Discuss the basis on which the company discriminates between the two.
7) Select one of the products or services that the company provides and identify the cost components that go into making the product or rendering the service. Determine which are fixed, variable and mixed. Break the mixed costs down into fixed and variable components and try to specify a cost function for the product or service. Attempt to identify which costs would be avoidable versus unavoidable if the company decided to discontinue making the product or providing the service.

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