...Memorandum To: Shareholders, Carpino Company From: Accounting Team Z Date: November 18, 2010 Re: Cash Flows The Carpino Company’s Accounting Team is pleased to announce that the organization has experienced a very productive and exciting first year. This memo and the attached cash flow statement summarize the important details of Carpino’s statement of cash flows for the period ending January 31, 2007. The information from this financial statement will provide Carpino’s shareholders reasons for the difference between net income and net cash used by operating, investing, and financing activities. The cash flow statements will also determine Carpino’s ability to generate future cash flows, and to pay dividends and meet obligations (Kimmel, Weygandt, & Kieso, 2007). Cash Flow Activities The statement of cash flows provide cash receipts, cash payments, and net change in cash resulting from operating, investing, and financing activities during a period (Kimmel, Weygandt, & Kieso, 2007). How Net Loss Affects Cash Flow Carpino’s cash flow statement shows a net loss because expenses are $30,000 higher than revenues for the end of year. However, depreciation expense of $55,000 must be subtracted from the expenses since it is not an actual cash item expense. The depreciation expense is calculated in the operating activities and result in a positive net income of $20,000. In preparing the cash flow statement, items that do not affect physical cash income must be...
Words: 377 - Pages: 2
...Memorandum To: Shareholders From: Team A Date: October 14, 2012 Subject: Statement of Cash Flow CC: Learning Team A The Carpino Company is pleased to announce that the organization has experience an exciting first year. This memo and the attached cash flow statement summarize the important details of Carpino’s statement of cash flows for the period ending January 31, 2007. It will provide the shareholders reasons for the difference between net income and net cash used by operating, investing, and financing activities. The cash flow statements will also determine Carpino’s ability to generate future cash flows, and to pay dividends and meet obligations. Carpino’s cash flow statement shows a net loss because expenses are $30,000 higher than revenues for the end of year. However, depreciation expense of $55,000 must be subtracted from the expenses since it is not an actual cash item expense. The depreciation expense is calculated in the operating activities and result in a positive net income of $20,000. In preparing the cash flow statement, items that do not affect physical cash income must be adjusted into the original net income figure. While GAAP requires us to accrue for items in the current year, the cash flow is only a view of actual cash in and cash out. The end result is a positive aspect for Carpino Company because the company has a sufficient surplus of revenue. The primary reason Carpino has an increase in cash is based on financing activities. During...
Words: 479 - Pages: 2
...submitted or for the entire course. It may also result in academic dismissal from the University. | | | |Course ID SKS7000-8-3 |Instructor: Instructor: Milton Kabia , PhD | | | | |Course Title: Executive Concepts in Business Strategy. |Assignment Number 3 | Faculty Use Only Assignment #3 You are to create response in the form of a memo for a business finance and accounting. The only required references for this assignment are the chapters...
Words: 1843 - Pages: 8
...Analysis Memo ACC/291 June 28, 2012 James Haynes Ratio Analysis Memo Starting in 1936, in Cleveland, Ohio, K. Huffman founded Huffman Trucking. “The growth of the company was the direct result of World War II and the increased demand for carrier services between factories in the Midwest to ports on the East Coast.” As of today, Huffman Trucking has transitioned from a single tractor trailer to 925 drivers and 800 tractors, and continues to provide the same delivery service across the nation. Our financial analysis team has looked over financial statements to determine the liquidity, profitability, and solvency ratios of Huffman Trucking. These ratios provide detailed information to creditors, investors, and employees. Together, the ratios reveal data related to the performance and position of Huffman Trucking. What do the liquidity, profitability, and solvency ratios reveal about the financial position of the company? The liquidity ratio of a company shows the way the company is able to pay back short-term debt that is owed. Creditors would be interested in this type of ratio. The profitability ratios are the profit performance that makes up the financial success of the company. Profitability ratios would be beneficial to individuals outside of the company such as investors and creditors. Solvency ratios are the ability of the company to pay off the long term debt. The company’s solvency ratios are of interest to long-term creditors and the company’s’ shareholders. Shareholders...
Words: 753 - Pages: 4
...Memo of Financial Analysis Sena Lopez ACC/291 December 9, 2014 Malinda Marsh INTERNAL MEMO TO: KOHL COMPANY FROM: SENA LOPEZ RE: FINDINGS FROM VERTICAL AND HORIZONTAL ANALYSIS DATE: 9TH DECEMBER 2014 I am writing to let you know the performance of the company (Kohl) as compared to its competitive company (J.C Penny) in the same industry. Horizontal analysis: This also known as a trend analysis is used to evaluate financial statements over a period. Its main purpose is to determine if an increase or decrease have occurred. Kohl’s current assets are less by 11.38% from $6370. The reported gross profit of kohl’s is ($7032) which is higher than a penny by 1.03%. The net sales of Kohl Company are $18391 which is higher than a penny by 3.56%. From the ratios trend, Kohl Company is in poor financial operation. Vertical analysis: This also known as the common-size analysis is used with the financial statement data in a percent base amount. Kohl Company has a low current ratio of 2.1 as compared to 2.4 of J.C Penny. The gross profit of Kohl Company is 38.2% which is lower by 1% as compared to J.C penny. The assets turnover of Kohl Company is slightly lower than that of J.C penny. In general Kohl, Company is performing poorly as compared to Penny Company. Liquidity ratios measure the ability of a company to meet the short – term obligations when they fall due. Short-term creditors such as bankers and suppliers are more interested in this information to access liquidity...
Words: 532 - Pages: 3
...Basic Financial Statements Jane Antonovsky Colorado Technical University Online Instructor: Dr. Tracie C. Edmond ACCT614-1301A-02: Applied Managerial Accounting January 14, 2013 Abstract The Board of Directors and executive management team of Sparklin Automotive Company (SAC) need to make informed and accurate decisions regarding the management of the enterprise, therefore it is up to the corporate business financial analyst to provide the financial information essential to that decision-making process. In this memo, we will review the basic financial statements that must be submitted to the Board of Directors and executives, as well as what each statement contains. Furthermore, we will evaluate how the information contained within these statements will be useful for the management as far as helping them in the enterprise management. As in most processes, there is maximum and minimum that can be achieved, therefore we will review specific limitations of the information provided within these statements. In addition, management team must be aware of the possible information limitations, as well as how they can make sure that they receive whole picture of the enterprise. * Some work repurposed from ACC350-1101B-01, Instructor: Johnnie Bannier, 2/17/2011 Basic Financial Statements This memo will address the basic financial statements that must be submitted to the Board of Directors and executives of SAC, as well as what each statement does and contains within...
Words: 2596 - Pages: 11
...Cash dividends is a distribution of cash to shareholders. For a corporation to pay a cash dividend, it must have all three of the following: 1. Enough retained earnings 2. Enough cash 3. A declaration of dividends On the declaration date, a company’s board of directors formally declares the cash dividend and announces it to shareholders. ● An entry is required to recognize the increase in cash dividends and the increase in the current liability dividends payable. Example: To illustrate a cash dividend paid to preferred shareholders, assume that on December 1 the directors of Media General declare a $0.50-per-share quarterly cash dividend on the company’s 100,000, $2- noncumulative preferred share. The dividends totals $50,000 ($2 4= $0.50 X 100000) and is payable on January 23 to shareholders of record on December 30. Declaration Date Dec 1 Cash Dividends- Preferred 50,000 Dividends Payable 50,000 ● The balance in dividends payable is a current liability. On the record date, ownership of the shares is determined so that the corporation knows who to pay the dividend to. On the payment date, dividend cheques are mailed to shareholders and the payment of the dividend is recorded. Example: Payment Date Jan23 Dividends Payable 50,000 Cash 50,000 ● The cumulative effect of the declaration...
Words: 1542 - Pages: 7
...grandfather in the years after World War II. The company’s major competitors were John Deere, The Toro Company, Simplicity, and Husqvarna—much older and larger corporations with extensive lines of lawn care and maintenance equipment. Originally, Merrimack mowers were manufactured and assembled in a workshop and factory in Nashua. However, by 2008 the company was buying all of its tractors and machines, manufactured to its specifications, from a contract manufacturer in China, and it was operating almost exclusively as a machine-and-parts designer and distributor. The company had incorporated in 1980, and an initial public offering was followed by additional offerings of shares over the next decade. By 2008 the company had about 4,000 shareholders, including some mutual funds. About 25% of the outstanding stock was held by members of the Martino family, and shares were traded on NASDAQ. Rick had been elected president after the death of his father late in 1995. Martino’s father had initiated several changes and made decisions that led to the company’s current situation. In the early 1980s, management closed down the last manufacturing operations in Nashua. Labor costs in Japan, and later in China, had historically been well below those in the United States, so it made sense to outsource manufacturing to Japanese and, later, Chinese manufacturers. Even with shipping costs, the mowers’ variable cost was substantially less...
Words: 2525 - Pages: 11
...of Comprehensive Income This memo is in response to your questions regarding the reporting of comprehensive income on the financial statements of the Lennon Company. Comprehensive Income Comprehensive Income includes Net Income and Other Comprehensive Income. Purpose of reporting comprehensive income is to “report a measure of all changes in equity of an entity that result from recognized transactions and other economic events of the period other than transactions with owners in their capacity as owners.” Other Comprehensive Income (OCI) and impact on balance sheet OCI includes revenue, expenses, gains and losses that change shareholders’ equity but are not included in net income. OCI is reported in the balance sheet under shareholders equity as accumulated other comprehensive income (AOCI: a cumulative presentation of OCI period over period). AOCI is shown separate from retained earnings and additional paid in capital. The following items are considered as OCI (net of tax): (a) Net unrealized holdings gains (losses) on available-for-sale (AFS). (b) Debt securities transferred from held to maturity (HTM) to AFS. (c) Portion of other-than-temporary impairments (OTTI) for debt securities held as AFS or HTM not recognized in earnings. (d) Subsequent decrease (if not OTTI) or increase in fair value of AFS securities previously written down as impaired. (e) Deferred gains and losses on derivatives cash flow hedge resulting from fair value adjustments...
Words: 444 - Pages: 2
...EXIT INTERVIEW QUESTIONS 1. Under the adjusted balance method, the book balance and the bank balance are brought to a correct cash balance that must appear on the balance sheet. The credit memos are always added to the book balance and the debit memos are always deducted from the book balance. Book Reconciling Items: Credit Memos – Items not representing deposits credited by the bank to the account of the depositor but not yet recorded by the depositor as cash receipt. They increase the bank balance. Debit Memos - Items not representing checks paid by bank which are charged by the bank to the account of the depositor but not yet recorded by the depositor as cash disbursement. They decrease the bank balance. Errors. Bank Reconciling Items Deposit in Transit, Outstanding Check, Errors 2. Accounting cycle are: 1. Collecting and analyzing data from transactions and events. - develop a chart of accounts as part of setting up your accounting and bookkeeping system. The chart of accounts is an index of all the accounts where the company files its financial information. A source document in an accounting transaction is evidence that the transaction has occurred. It should be recorded as a journal entry as soon as possible. Examples are canceled checks, invoices, purchase orders, and other business documents. 2. Putting transactions into the general journal. - When a small business makes a financial transaction, they make a journal entry in their accounting journal in...
Words: 3127 - Pages: 13
... COLLAPSED telco One.Tel may have been insolvent up to six months ago, joint administrator Peter Walker swore in an affidavit released by the Supreme Court of New South Wales yesterday. In his court statement Mr Walker, a partner of Ferrier Hodgson, said he had found One.Tel had serious working capital problems in December despite glowing public statements from the company and was ``clearly insolvent'' when he was appointed on May 29. Other papers which Justice Robert Austin made public yesterday, despite a legal battle by One.Tel's former joint managing director Jodee Rich to have them suppressed, showed the Australian Securities & Investments Commission suspects serious Corporations Law breaches. One.Tel was placed in voluntary administration on May 29 with 3000 creditors owed more than $600 million after a cash crisis was discovered during due diligence into the company by major shareholders News Limited and Publishing & Broadcasting. The two companies, led by One.Tel non-executive directors Lachlan Murdoch and James Packer, had been considering underwriting an emergency $132 renounceable rights issue for working...
Words: 770 - Pages: 4
...another person’s work represented as that of the Learner’s without properly citing the source of the work will be considered plagiarism and will result in an unsatisfactory grade for the work submitted or for the entire course, and may result in academic dismissal. | | | |SKS7000-8 |Gillian Silver | | | | |Doctoral Comprehensive Strategic Knowledge Studies |#4 Memo Business Finance and Accounting | | | | Faculty Use Only...
Words: 1049 - Pages: 5
...Nordstrom Executive Summary This memo will provide a brief history and financial overview of Nordstrom, a high-end, quality clothing store operating in 28 states with more than 200 stores according to Nordstrom’s Business Wire press release on December 2, 2010 (Nordstrom, 2010). Additionally, an overview of the financial information includes specific details from the balance sheet, income statements, and statement of cash flow for 2007 through 2009 and any latest reporting for 2010. The statements are attached for reference. Company History Wallin & Nordstrom was founded in 1901 by John W. Nordstrom and Carl Wallin as a shoe store in downtown Seattle. John retired in 1928 and Carl a year later, both sold their shares to John’s sons. In 1963 Nordstrom expanded to include fine apparel, in 1966 they expanded further to include clothing for men and children and changed the name of the store to Nordstrom Best. Bruce Nordstrom, known as Mister Bruce by Nordstrom employees, took over in 1968 and can still be found in his office above the downtown flagship store even though Blake, Peter, and Eric Nordstrom currently run the company. In 1971 Nordstrom went public; in 1973 the name changed to Nordstrom, Inc. (Nordstrom, 2010). Stock Exchange And Audit Firm Nordstrom stock trades on the New York Stock Exchange under the ticker symbol JWN (New York Stock Exchange, 2010). Nordstrom stock has done well over the past decade, . oOn December 18, 2000 the closing price for Nordstrom...
Words: 1474 - Pages: 6
...longer and more detailed cases include the Deloitte Trueblood cases (www.deloitte.com/more/DTF/cases_subj.htm), as well as the AICPA cases (www.aicpa.org). Topical Index of Student Cases INTERMEDIATE ACCOUNTING Case 1: Reporting acquisition and repayment transactions in the Statement of Cash Flows Case 2: Recording a forfeited payment Case 3: Revenue and expense recognition associated extended warranties Case 4: Accounting for “due on demand” note payable Case 5: Purchase of a controlling interest with a greenmail premium Case 6: Revenue recognition in the construction industry Case 7: Accrual and measurement of interest payments Case 8: Recognition of an asset transfer when title has not yet been received Case 9: Capitalization of interest and property taxes on a construction project Case 10: Deferred compensation and life insurance policy recognition Case 11: Reporting earnings per share balances for subsidiary companies Case 12: Deferment of lease payments Case 13: Disclosure of prior period adjustments in the statement of cash flows Case 14: Measurement and recording of payments for sick days Case 15: Comparative cash flow statements Case 16: Social security benefits as assets Case 17: Recording a stock dividend as a stock...
Words: 5765 - Pages: 24
...Memo To: Retire at Age Fifty Fund (RAFF) From: Penelope Magouliotis, Jeffery Childs, Marcus Eggleston, Syed Azeem Date: February 15, 2014 Subject: Ford’s Shareholder Value Enhancement Plan (VEP) Evaluation Ford Motor Company Ford Motor Company is an American automaker, it is the world's fifth largest automaker based on worldwide vehicle sales. Its headquarters are based in Dearborn, Michigan, which is a suburb in Detroit. Henry Ford founded Ford Motor Company on June 16, 1903 and it became one of the largest and most profitable companies in the world, as well as being one of the few to survive the Great Depression. Ford Company is the largest family-controlled company in the world; it has been in continuous family power for over 110 years. Ford now incorporates two brands: Ford and Lincoln. Ford once owned 5 other luxury brands which where were Volvo, Land Rover, Jaguar, Aston Martin and Mercury. But over time those brands were sold to other companies and Mercury was discontinued. Nasser was CEO of Ford Motor Company from 1998 to 2001. Todays CEO is Alan Mulally. Brief Summary of the Article The article talks about how in April 2000, Ford Motor Co. announced a shareholder Value Enhancement Plan (VEP) to recapitalize the company’s ownership structure. Ford had accumulated $23 billion in cash reserves and under the VEP would return as much as $10 billion of this cash to shareholders. For each share currently held, the plan would give stockholders one...
Words: 2124 - Pages: 9
