CHAPTER 13 Financial Statement Analysis OVERVIEW OF EXERCISES‚ PROBLEMS‚ AND CASES Estimated Time in Learning Outcomes Exercises Minutes Level 1. Explain the various limitations and considerations in financial statement analysis. 2. Use comparative financial statements to analyze a company 12* 45 Mod over time (horizontal analysis). 13* 30 Mod 3. Use common-size financial statements to compare various 12* 45 Mod financial statement items (vertical analysis)
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Customers 2.3. Policy on Granting Collection on Accounts Receivable 2.4. Treatment on Uncollectible Accounts CHAPTER 3 – RESEARCH FRAMEWORK 3.1. Theoretical Framework 3.2. Conceptual Framework 3.3. Operational Framework CHAPTER 4 – RESEARCH DESIGN AND METHODS 4.1. Description of the Research Design 4.2. Data Gathering Methods and Instruments 4.3. Sample Plan Appendix Analysis of the management of accounts receivable applied by Avon Company Inc. in Angeles City as to
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the transaction of transferring the company’s receivables to the financial institution. The company is doing this to get $100‚000 because of the shortage in cash. The accounts receivables are being used as collateral with a charge of 12% fee on this amount and Hamilton’s is required to repurchase the receivables back from the financial institution. In transfers of an entire receivable‚ a group of entire receivables‚ or a portion of an entire receivable with recourse‚ the transferor provides the
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The statement of cash flow is used to illustrate the current cash position‚ liquid assets‚ and accounts receivable. This report is a good indicator of the operational management of the company and the impact of their accounts receivable collection activities. A company can appear financially sound based on the income statement and balance sheets when it is not. A cash flow statement adds context to the reports and reflects the actual cash position. The financial statement of a company provides
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SC (Service charge) CM (Credit Memo) ———————————————————————————————————————— Check No. 18 was correctly written for $708.62 for a payment on account. The NSF check was from S. King‚ a customer‚ in settlement of an accounts receivable. An entry had not been made for the NSF check. The credit memo is for the collection of a note receivable including interest of $60 which has not been accrued. The bank service charge is $25.00. Instructions (a) Prepare a bank reconciliation at October
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Risks • Cash transactions may not be recorded accurately • Cash may not exist Steps 1. Confirm selected bank accounts and special arrangements Select bank accounts for confirmation in order to obtain a moderate to low level of assurance that the aforementioned audit objectives are achieved. Bank confirmations should be sent to all banking relationships to identify accounts not included in the general ledger. Confirmation requests should be sent under our control and‚ second requests
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To: Dr. Brooks From: Team 3 Date: September 24‚ 2014 Objective: ACL Accounts Receivable Relevant Facts: The purpose of this case was to develop an audit program by using ACL audit software‚ and to identify the significance of any findings or audit discrepancies. First‚ we footed the file to the general ledger. Next‚ we checked for duplicate invoices to ensure that we did not account for the account receivable more than once. We then proceeded to create an aging schedule to find unpaid invoices over
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A. What is an account receivable? What other names does it go by? Accounts receivable are amounts owed by customers on account. They result from the sale of goods and services on credit. These receivables are generally expected to be collected within 30 to 60 days. They are typically the most significant type of claim held by a company. Accounts receivable and notes receivable resulting from sales are also known as trade receivables. Accounts receivable resulting from sales are referred to
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cash balances have decreased. Accounts receivable and inventory have increased in this same time span‚ as well. Cash has decreased from $120.1 to $9.4‚ a decline of 92% (120.1 – 9.4 / 120.1) over the four year time span. The Accounts Receivable‚ during this same time‚ went from $90.6 in 2002 to $146.4 in 2005‚ an increase of 62% (90.6 – 146.4 / 90.6). Likewise‚ inventory has increased from $468.3 to $656.9‚ an increase of 40% (468.3 – 656.9 / 468.3). For accounts receivable (increase of 62%)‚ inventory
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corporation’s recorded cash balances and the amount credited to the corporation by the bank. It is the latter item that is of particular interest to us. To the extent a corporation can accelerate check collections to the bank account and slow down check payments from its bank account‚ the cash balance at the bank may exceed the recorded amount on the company books. The differential or float may be thought of as a short-term source of funds to the corporation. 7-5. Float exists because of the delay
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