# AC1420: Project Page 1 PROJECT DESCRIPTION

| October 3, 2018

AC1420: Project
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PROJECT DESCRIPTION

Course Objectives Tested:

1.
Produce a balance sheet for a company that
distinguishes between current and non-current assets and liabilities.

2.
Create a balance sheet from a trial balance.

3.
Create a comparison of net income based on different methods of
inventory accounting.

4.
Analyze a statement of cash flows and show where
each line item can be found or calculated from the other financial statements.

5.
Prepare a full analysis of key financial ratios
for a company and state conclusions about the financial strength of the company
compared to industry ratios.
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PROJECT SUBMISSION PLAN

Project

Description/Requirements of Project

Evaluation Criteria

Part

Part

1

Title: Creating a Balance Sheet and

Evaluating Inventory

You will be provided with financial

You will have to determine what

information is relevant for Project
Parts 1

and 2.

Task 1:Create a balance sheet from a

trial balance for a given scenario.
Make

sure you classify the accounts

appropriately as current or
non-current.

Page 1

AC1420: Project
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Project

Description/Requirements of Project

Evaluation Criteria

Part

Part

using LIFO, FIFO, and weighted average

methods based on the following

information. Explain the impact of each

method on the cost of goods sold and

ending inventory.

The company imports microwaves from a

supplier in China for the US market. At

the end of the first quarter, 100

microwaves are in stock. The company

purchased a total of 400 microwaves

during the quarter at various prices:

January: 100 units @ \$75

February: 250 units @ \$83

March: 50 units @ \$87

The company had no inventory at the

beginning of the quarter.

Task 3:If the company’s goal is to

maximize net income, which evaluation

method will you use and why?

Use the ITT Tech Virtual Library to

Submission Requirements:

template for calculation.

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AC1420: Project
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Project

Description/Requirements of Project

Evaluation Criteria

Part

Part

template for calculation.

Assigned:Week 3

Due:Week 3

2

Title: Calculating and Analyzing Ratios

Criteria

Points

Points

Based on the financial information

Assigned

Earned

provided, calculate the following
ratios

Did you

80%

and explain their purpose:

calculate the

Current Ratio

10 ratios (8

Inventory Turnover Ratio

points for

Accounts Receivable Turnover Ratio

each)?

Debt to Equity Ratio

Criteria

Points

Points

Return on Assets Ratio

Assigned

Earned

Asset Turnover Ratio

Did you

20%

Return on Equity Ratio

explain which

Profit Margin Ratio

ratios could

Price-Earnings Ratio

be used by a

Dividend Yield Ratio

bank lending

officer and

statements.

why?

Note:When a balance sheet amount is

related to an income statement amount

in computing a ratio, the balance sheet

amount should be an average of that

Page 3

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AC1420: Project
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Project

Description/Requirements of Project

Evaluation Criteria

Part

Part

period. The average is calculated by

adding the ending balances of this year

and last year and dividing the result
by 2.

Describe how a bank lending officer

might use ratio analysis. Select five
ratios

that would be most useful for the

purpose and explain the rationale for

Submission Requirements:Submit your

answers in a Microsoft (MS) Word file.

Font:Arial, 12 point, double-spaced

Assigned:Week 5

Due:Week 5