SCC220-SE Form 10-k Project Question

| June 5, 2016

Question
We need to start accumulating information about the SEC-filing company that you previously selected. This information will be used in the 1 to 2 page paper that you will complete, and in the eight-slide PowerPoint presentation you will prepare (includes 1 cover slide and 1 works-cited slide, leaving 6 slides for material about your company).

To this end, please create a Word document under your company’s name and insert the following information about your company:

· The name and location of your company

· A brief description of what the company does (you can find this at the very beginning of the Form 10-K where there will be discussion of the company’s business).

· A description of the fiscal year for your company (is it December 31 or the last Saturday in January, etc.).

· The name of the outside audit firm (there will be a letter addressing the audit of the financial statements and internal control). Major public accounting firms include Deloitte, KPMG, PwC (PricewaterhouseCoopers), and Ernst & Young (there are also others, but these are the “Big Four”). You will typically find the audit opinion letter just before (but in some cases just after) the financial statements in the Form 10-K (sometimes the company places its financial statements in an exhibit to its main 10-K form, e.g., it might be in exhibit 13). That letter will be signed by the outside audit firm for your company.

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1. In Chapter 3, on page 87, we learned, and in Chapter 5, on page 197, we again referred to, the “Revenue Recognition Principle.” For your company, what does it state in the financial statement notes with respect to its revenue recognition policy?

2. In Chapter 6, on page 240, we learned about the different classifications of inventory for a merchandising company and for a manufacturing company. We found out that the former needs only one inventory classification, “merchandise inventory,” while the latter usually uses three inventory classifications: finished goods, work-in-process (or W-I-P), and raw materials.

In Chapter 6, we also learned about methods used for “inventory costing,” i.e., specific identification, FIFO, LIFO, and average-cost, and how we determine the cost of goods sold.

For your company, find the following information (which you will find in its financial statements) and add it to the Word document that you have created previously:

· What it shows about “Inventory” in its Balance Sheet

· What it states about its inventory accounting method (you will find this in Note 1: Summary of Significant Accounting Policies, in the financial statements)

· What it discloses about the components of its inventory (e.g., materials and supplies, work-in-process, finished goods, possibly different classes of inventory, etc.; many of your companies will not have many, if any, of these sub-classes of inventory, and if that is the case just state that fact) in its financial statement footnotes. You will find this either in Note 1, itself, or in a separate Note about Property, Plant and Equipment. If you can’t find it in either of these places, it may be discussed somewhere in Management’s Discussion in Parts I and II of the Form 10-K, but this should be the last place you look.

· What it includes in the “Cost of Goods Sold.”

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In Chapter 9, we learned about accounting for Accounts Receivable.

In Chapter 10, we learned about Plant Assets (may also be referred to as Property, Plant and Equipment; Plant and Equipment; Fixed Assets) and Intangible Assets, and Depreciation and Amortization.

In Chapter 11, we learn about Current Liabilities.

For your company, find the following information (which you will find in its financial statements, including the Footnotes to those statements) and add it to the Word document that you have created previously:

· Accounts Receivable

o Amount for Accounts Receivable in the Balance Sheet

o Total Assets in the Balance Sheet

o Ratio of Accounts Receivable to Total Assets

o Detail of items (and amount for each) included in Accounts Receivable (from the Footnotes)

· Plant Assets and Depreciation

o Amounts for these items (assets and accumulated depreciation) from the Balance Sheet (accumulated depreciation may be shown only in the Footnotes)

o Ratio of Net Book Value of Plant Assets to Total Assets

o Detail of categories (and amount for each) included in Plant Assets (may be in the Balance Sheet, but more likely to be in the Footnotes)

o Method(s) used to depreciate these assets (found in the Footnotes)

· Intangible Assets, Amortization, Natural Resources, and Depletion

o Amounts for these items (intangible assets, amortization, natural resources, and accumulated depletion) from the Balance Sheet (accumulated depletion may be shown only in the Footnotes)

o Ratio of Net Book Value of Intangible Assets to Total Assets

o Detail of categories (and amount for each) included in Intangible Assets (may be in the Balance Sheet, but more likely to be in the Footnotes)

· Current Liabilities

o Amount for Current Liabilities in the Balance Sheet

o Total Liabilities in the Balance Sheet

o Ratio of Current Liabilities to Total Liabilities

o Detail of items (and amount for each) included in Current Liabilities (from the Footnotes)

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