AC1420: Project PROJECT DESCRIPTION Course -Produce a balance sheet for a company that distinguishes

| March 29, 2017

Question
AC1420: Project
PROJECT DESCRIPTION
Course Objectives Tested:
1. Produce a balance sheet for a company that distinguishes between current and noncurrent 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.

PROJECT SUBMISSION PLAN
Project

Description/Requirements of Project

Part

Part

1

Evaluation Criteria

Title: Creating a Balance Sheet and
Evaluating Inventory
You will be provided with financial
information about a fictional company.
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.
Click here to download the trial balance.
Page 1

AC1420: Project
Project

Description/Requirements of Project

Part

Evaluation Criteria

Part
Task 2: Perform inventory valuations
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
support your answer with facts.
Submission Requirements:
Click here to download the Task 1
template for calculation.
Page 2

AC1420: Project
Project

Description/Requirements of Project

Part

Evaluation Criteria

Part
Click here to download the Task 2
template for calculation.
Assigned: Week 3
Due: Week 3
Grading Weight: 15%

2

Title: Calculating and Analyzing Ratios

Criteria

provided, calculate the following ratios

Did you

and explain their purpose:

Points

Assigned

Based on the financial information

Points

Earned

calculate the

Current Ratio
Inventory Turnover Ratio
Accounts Receivable Turnover Ratio
Debt to Equity Ratio

80%

10 ratios (8
points for
each)?
Criteria

Asset Turnover Ratio

Did you

Return on Equity Ratio

be used by a

Dividend Yield Ratio

20%

ratios could

Price-Earnings Ratio

Earned

explain which

Profit Margin Ratio

Points

Assigned

Return on Assets Ratio

Points

bank lending

Click here to download the financial

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

AC1420: Project
Project

Description/Requirements of Project

Part

Evaluation Criteria

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
your selection.
Submission Requirements: Submit your
answers in a Microsoft (MS) Word file.
Font: Arial, 12 point, double-spaced
Assigned: Week 5
Due: Week 5
Grading Weight: 15%

Page 4

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