Reference no: EM13501949
-Details: You were recently hired as management director of the new I Can Business Incorporated (ICBI). You have been asked to establish policies and systems for the business. The first one you choose to work on is a financial reporting system.
For this assignment, you must develop a memo that you will deliver to the board of directors of ICBI. You will describe what a financial reporting system is and explain how management of ICBI should use an activity based budget instead of an operating budget. Be sure to explain the similarities and the differences of the two. Finally, give examples of budget guidelines for ICBI. You must answer the following questions:
• Describe the meaning and the components of a financial reporting system.
• Write a description of how management should use an activity based budget instead of an operating budget
o Explain the similarities and differences of the two budgets
• Give an example of budget guidelines that ICBI should follow in order to successfully plan.
o Identify and describe at least five (5) basic budget guidelines.
Remember to use the library or other credible resources to support your argument. Be sure to cite your sources using the correct standard of APA.
Objective: •critically appraise budgeting operational plans, cost categories and budgeting guidelines.
-Details: You are an accountant for The Flower Shoppe. Your supervisor has asked you to help her prepare the year-end financial statements. Before you do, she wants to ensure that you understand some main points.
A. Explain the following:
o The elements of the balance sheet, their purposes, and how to measure them
o The elements and purpose of the statement of changes in stockholder's equity
B. Based on the adjusted trial balance and additional information, prepare the following in an Excel file to give to the controller for review:
o Balance sheet
o Income statement
o Statement of retained earnings
o Statement of cash flows
The following is additional information about the Flower Shoppe that is needed for financial-statement preparation:
• Net income for the year ended December 31, 2008 was $10,845.
• Changes from the prior year's balances included the following:
o a decrease in accounts receivable of $300.
o a decrease in inventory of $450.
o an increase in accounts payable of $250.
o an decrease in accrued expenses of $100.
• Land was purchased in April for $3,500.
• Cash as of January 1, 2008 was $10,105.
The Flower Shoppe
Adjusted Trial Balance
December 31, 2008
DebitCredit
|
|
|
Cash
|
$22,750
|
|
|
Accounts Receivable
|
3,200
|
|
|
Inventory
|
8,000
|
|
|
Land
|
27,000
|
|
|
Building
|
56,000
|
|
|
Accumulated Depreciation
|
|
16,800
|
|
Accounts Payable
|
|
4,600
|
|
Accrued Expenses
|
|
2,500
|
|
Common Stock
|
|
20,000
|
|
Additional Paid-in Capital
|
|
10,000
|
|
Dividends
|
1,200
|
|
|
Retained Earnings
|
|
53,405
|
|
Sales
|
|
112,020
|
|
Returns
|
1,300
|
|
|
Purchases
|
47,000
|
|
|
Salaries
|
38,000
|
|
|
Supplies
|
870
|
|
|
Utilities
|
5,225
|
|
|
Telephone
|
2,850
|
|
|
Bank Charges
|
330
|
|
|
Depreciation Expense
|
5,600
|
|
|
$219,325
|
$219,325
|
Objective:
•Describe the three specific objectives of financial reporting, discuss the types of useful information for investment and credit decision making, explain the qualities of useful accounting information, the purposes, elements of the balance sheet and how to measure them.
• Classify the assets and liabilities of a balance sheet, explain the statement of changes in stockholders' equity, and describe the Security and Exchange Commission (SEC) integrated disclosures and the major components of an income statement, compute income from continuing operations, and report the results from discontinued operations.