Accounting project

AC1320: Project

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PROJECT DESCRIPTION

In order to assess your knowledge of the fundamentals of financial and managerial accounting,

two projects have been included in the course. These chapters will give you an opportunity to

apply your knowledge and improve your proficiency in performing routine accounting

procedures and managerial tasks. The project aims at simulating the main managerial

accounting concepts, principles, and procedures covered in the prescribed text and

encountered in practice.

Project Part 1 Introduction:

You need to research two corporations using the ITT Tech Virtual Library. Once you have

identified the two corporations, you will have to find the financial statements, income

statement, balance sheet, and statement of cash flows. You will then identify from the

statement of cash flows if the corporation uses the indirect or direct method. You will also

identify how much cash was generated from operations, financing, and investing. You should

also specify how much free cash flow each corporation has generated. You should then

calculate the current ratio, inventory turnover, gross profit percentage days’ sales in

receivables, and debt ratio. You must choose which corporation you would invest in and why.

Project Part 2 Introduction:

You will be given a set of transactions for a company, based on which you will have to prepare

journal entries, open T-accounts, and post the journal entries to the accounts. You will then

prepare a trial balance for the end of the month. Using the work-in-process T-account, you will

prepare a schedule for cost of goods sold manufactured for the month. You will also prepare an

income statement for the month and post any corrections that may be needed for under/over

allocated manufacturing overhead.

Course Objectives Tested:

1. Identify characteristics of a corporation, record issuance of stock, and illustrate retained

earnings transactions.

2. Prepare and analyze the income statement, balance sheet, and statement of cash flows.

AC1320: Project

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3. Distinguish between managerial accounting and financial accounting and apply ethical

standards to decision making.

4. Differentiate between job order costing and process costing.

5. Perform Cost-Volume-Profit (CVP) analysis and calculate break-even point; describe a

Just-In-Time production system and develop activity-based costs (ABC).

6. Examine relevant factors for making short-term special business decisions.

Please refer to the Project Submission Plan for project details.

PROJECT SUBMISSION P LAN

Project

Part

Description/Requirements of Project Part

1 Task 1: Statement of Cash Flows

Use ITT Tech Virtual Library and research two public companies. Review the

statements of cash flows and report on how much cash was generated

from operating, investing, and financing activities. Remember to cite the

source where you found the required information.

Task 2: Calculating Financial Ratios

Calculate a set of financial ratios for each of the two public companies you

researched. Also, calculate the following set of ratios:

Current ratio

Inventory turnover

Gross profit percentage

Days’ sales in receivables

Debt ratio

Task 3: In 50-75 words, explain which corporation you would invest in and

why.

Submission Requirements:

AC1320: Project

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Project

Part

Description/Requirements of Project Part

Complete Task 2 in an MS Excel worksheet and submit it on Questa to

your instructor.

Complete Task 1 and Task 3 in an MS Word document and submit it on

Questa to your instructor.

Due: Week 3

Grading Weight: 12.5%

2 Refer to Project_Part 2.xlsx to view the complete project. Then do the

following:

Prepare journal entries for the transactions

Open T-accounts for the general ledger

Post the journal entries to the accounts

You will then prepare a trial balance for the end of the month. Using the

work-in-process T-account, you will prepare a schedule for cost of goods

sold and manufactured for the month.

You will then prepare an income statement for the month and post any

corrections that may be needed for under/over allocated manufacturing

overhead.

Submission Requirements:

Complete the required tasks in an MS Excel worksheet and submit the

worksheet on Questa to your instructor.

Due: Week 6

Grading Weight: 12.5%

(End of Project Description)