...Chemalite Inc. Group Case Study Financial Accounting 601 March 5, 2015 In late 2012, Bennett Alexander, a chemical engineer invented a small, fragile plastic translucent cylinder containing two chemicals that once mixed, gives off a bright yellow-green glow. He anticipated a substantial demand for the product. With the assistance of close families and friends, he established Chemalite Inc. In June 2013, the shareholders reviewed the mid-year financial statements for Chemalite Inc, and the financial success of Chemalite Inc was questioned. It was agreed that the shareholders will review the financial stability of Chemalite again at the years end. After Alexander prepared the year-end financial statements, he noted that the company’s bank account decreased by another $117,000. He needs to convince the shareholders that Chemalite Inc. is a going concern. In this case study, we need to remind the shareholders that the business has a patent worth 125,000 shares and each share is worth $1. There is also an additional 375,000 shares distributed to investors, totaling 500,000 shares. Because, the prototypes wee instrumental to the success of the business, we choose to keep this account as an asset to the company instead of a research and development expense and will keep the historical value of the prototypes on the books. Next, we analyzed the expenses and depreciation accounts. We concluded that the legal fees of $7,500 were a necessary business expense to incorporate...
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...110-S21 REV. 5 DE JUNIO, 2008 CHARLES CHRISTENSEN DAVID A. WILSON Chemalite, Incorporated A finales de 2002, Bennett Alexander, consultor de ingeniería química, solicitó y le fue concedida una patente sobre uno de sus inventos, el Chemalite. Se insertaba un pequeño y frágil frasco de vidrio conteniendo un cierto producto químico y se cerraba herméticamente después. Al doblar el cilindro se rompía el frasco del interior esparciéndose su contenido. Al combinarse las dos sustancias químicas se producía una luminosidad de un color amarillo verdoso. Alexander previó un importante mercado para el Chemalite. Poseía la cualidad de poder ser utilizado rápidamente en casos de emergencia y no necesitaba ningún tipo de ignición. Preveía una considerable demanda por parte de las Fuerzas Armadas, así como por los fabricantes de señales luminosas y de equipos de salvamento similares. El 2 de enero de 2003, Alexander, junto con algunos familiares y amigos, fundó Chemalite, Inc. Se emitieron 500.000 acciones, de las que Alexander recibió 125.000 a cambio de su patente, y las restantes se vendieron a otros inversores a 1 dólar por acción. En el período transcurrido desde el 2 de enero al 30 de junio de 2003, Chemalite, Inc. incurrió en los siguientes desembolsos: • • • 15 de enero de 2003. Se pagaron 7.500 dólares de gastos legales, costes de cédula y gastos de impresión, todos ellos ligados a la puesta en marcha de la empresa. 15 de junio de 2003. Se compró por valor de 62.500 dólares...
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...J.Chase Case Assignment #1 Questions Chemalite, Inc. MGT 404 , Accounting 2015 a. Journal Entries Date | Entry | Debit | Credit | 2-Jan | Cash | | 375,000 | | | Intangible Assets | 125,000 | | | | Common Equity | | 500,000 | 12-Jan | Administrative Expense | 7,500 | | | | Cash | | 7,500 | 15-Jun | PPE | | 62,500 | | | | Cash | | 62,500 | 24-Jun | Inventory | 75,000 | | | | Cash | | 75,000 | 30-Jun | Retained Earnings | 7,500 | | | | Administrative Expense | | 7,500 | b. Income Statement and Balance Sheet Chemalite, Inc. | Income Statement 2003 | | | | | | 30-Jun-13 | Sales Revenue | $0 | Cost of Goods Sold | $0 | Gross Profit | | $0 | | | | Administrative Expense | $7,500 | Total Expenses | $7,500 | | | | Net Profit | | ($7,500) | | | Chemalite, Inc. | Balance Sheet as at 30-Jun-13 | | | | | | | Assets | | | | | Current Assets | | | | | Cash and Cash Equivalents | | 230,000 | | Merchandise Inventory | | 75,000 | | | Total Current Assets | | 305,000 | Property and Equipment | | | | | Production Equipment | | 62,500 | | | Total Property and Equipment | 62,500 | Intangible Assets | | | | | Patents | | | 125,000 | | | Total Intangible Assets | | 125,000 | Total Assets | | | 492,500 | | | | | | | Liabilities and Shareholder Equity | | | Liabilities | | | | | | Loans Payable | | | | | Interest Payable | | | | Shareholder...
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...Chemalite, Inc. Income Statement from January 1, 2003 to June 30, 2003 Sales Cost of Sales Gross Profit Depreciation Expenses Operating Expense Net Income $0 $0 $0 $0 ($7,500) ($7,500) Cash Flows Statement from January 1, 2003 to June 30, 2003 Cash flows from Operating Activities Cash collections Cash payments for purchases Cash payments for operating expenses Interest and taxes Total cash payments Net cash provided by operating activities Cash flows from Investing Purchase of hard assets (Building the machinery) Total Cash flows from investing Cash flows from Financing Sale of stock Total cash flow from financing Cash Summary Cash on January 1, 2003 Cash on June 30, 2003 Net Change in Cash $0 ($75,000) ($7,500) $0 ($82,500) ($82,500) ($62,500) ($62,500) $375,000 $375,000 $375,000 $230,000 ($145,000) Chemalite, Inc. Assets Current Assets Cash Accounts Receivable Inventory Total current assets Fixed Assets Equipment Patent Total fixed assets Intangible assets Total assets $230,000 $0 $75,000 $305,000 Balance Sheet for June 30, 2003 Liabilities Liabilities Current Liabilities Accounts payable Taxes payable Total Current Liabilities $0 $0 $0 Long-term liabilities $62,500 Long-term loans $0 $125,000 $187,500 Total liabilities $0 $0 $492,500 Total (Liabilities + Shareholders' Equity) 003 Shareholders' Equity Common Stock $500,000 Retained Earnings ($7,500) Total shareholders' equity $492,500 $492,500 Chemalite, Inc. Income Statement for the...
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...Clematile, Inc, the balance Sheet for the company as of December 31, 2003 and notes. In Appendix you will find the transactions summary(period from January 2, 2003 till December 31, 2003) and the explanations for the final balance sheet. Content: 1. Company Information 2. Balance Sheet (June 2003) 3. Income Statement 4. Balance Sheet (December 2003) 5. Cash Flow (Indirect) 6. Notes 7. Appendix. Company information History: On January 2, 2003, Bennet Alexander, together with a number of relatives and friends, established Chemalite, Inc. Pririor to this, in late 2002, Alexander received a patent for Clemalite. Product: Chemalite is small, fragile glass vial of one chemical was inserted into a plastic, translucent cylinder that was then filled with a second chemical and sealed. Bending the cylinder caused the glass vial inside to break, allowing the two chemicals to mix. When combined, the two chemicals gave off a bright yellowgreen glow. Product applications: Chemalite had the appeal of being readily available in case of emergencies, but yet it did not require any form of ignition. He anticipated a considerable demand from the armed forces and manufacturers of flares and similar safety equipment. Clemalite, Inc. Balance Sheet June, 2003 Assets: Current Assets: Cash Inventory (raw inventory) Total Current Assets: Property, plant, and equipment: Equipment Total Property, Plant and Equipment Intangibles: Patent Total Intangibles: Total Assets: Liabilities and Shareholders' Equity Liabilities:...
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...Chemalite, Inc. Bennett Alexander has invented a glow light using a series of chemicals into a contraption he calls Chemalites. He starts up his business by getting $500,000 from investors and he tries to put his invention on the market. But by the end of 2003, with operations in full swing for a good six months, Chemalite, Inc. is seeing its cash balance drop tremendously, which Alexander and his investors view as a negative. Even though they thought their business was doing well, the numbers they are reading indicate otherwise. We have to determine how these numbers reflect the true nature of the company. Issues 1. Should they continue with business in 2004 and beyond? 2. Do they have a positive cash flow? 3. Are they profitable? Decisions I do believe that Chemalite, Inc. should continue on because they were both profitable and had a positive cash flow. And there are all three answers to the issues in one sentence. Plus, the prototype value will soon increase and the Olympic Games Athens 2004 just placed a huge order with the company, which will both bring in a big profit and help promote the product. The future is looking bright for this company, at least in the short run. Alexander and the investors have to examine the true nature of the company and not simply its increase or decrease in cash from year to year. Analysis Chemalite, Inc. is true profitable. Even with the balance being $230,000 at the end of June 2003, this is a positive cash flow due to all of the investment...
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...Chemalite Inc. B 3. In analyzing the cash flows from Chemalite using both the direct and indirect methods, one can see similar patterns in the where the uses of cash is directed. The money in both methods is going towards the company itself and funds necessary to make sure it stays afloat. The main source of the cash inflow is from the sale of Chemalite. The sale from 1991 brought in a total of $754,000 and 1992 brought in a total of $1,886,250. A sales increase of about 250% is very impressive for one year is responsible for bringing in the majority of cash for Chemalite Inc. Cash outflow is a slightly different case. Cash outflow for Chemalite is mostly going back into the company itself for the sake of growth. Growth in the cash flow in this case is demonstrated by cash flows from investing. Chemalite purchased new land for $250,000 and property, plant and equipment for $907500. Companies who are not doing well do not purchase upwards of a million dollars in new assets. This is a good sign of healthy investing and good operations within the company. Cash flows from investing from 1992 are substantially higher than 1991. Cash flows from operations increased as expected for 1992. Cash is being directed towards material and labor for the large portion of outflow while the smaller portion of cash outflow being directed to new avenues like insurance, increased advertising, and R&D. Other expenditures for operations were generally normal for various expenses like interest on...
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...BGI COURSE SYLLABUS |Course Number and Title |MGT 553 Finance, Accounting, and the Triple Bottom Line I | | | | |Instructors |Kate Lancaster, PhD, CPA | | |kate.lancaster@bgi.edu | | |(W) 805.756.2922, (H-MB) 805.772.7452 | | |(H-BI) 206.780.1015, (C) 805.440.4618 | | |Toni Smith, PhD, CPA | | |toni.smith@bgi.edu | | |603.659.5108 | | |Brian Setzler, MBA, CPA | | ...
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...Date Topic Reading Practice Problems Assignment Due 1/3 Introduction 1/5 Overview of Accounting Environment Chpt 1 E1-1, 6, 7, 8 1/10 Review Accounting Process Adjusting Entries and Financial Statement Preparation Chpt 2 pp. 50-83 E2-1,2,3,4,8, 11; P2-5, 7 Top Dawn Espresso Problem* 1/12 WorldCom Case WorldCom Case 1/17 Accrual vs. Cash Flows; Inferring JE’s; Statement of Cash Flows Chpt 2 pp. 83-93; Chpt 4 pp. 198-207 E2-14, 17; 1/19 Chemalite Case Chemalite Case 1/24 Income Statement Presentation Chpt 4 pp. 168-198 E4-4, 6, 10; P4-1 1/26 Balance Sheet and Disclosures Chpt 3 pp. 112-132 E3-2, 5, 13; P3-2, 9 1/31 Financial Statement Analysis; Review Chpt 3 pp. 132-138; Chpt 5 pp. 263-269 E3-17,18,20; E5-20, 21, 22 2/2 Midterm 2/7 Revenue Recognition Chpt. 5 pp. 232-258, SAB 104 E5-2, 4, 10, 11, 14 2/9 Revenue Recognition Chap 5 pp. 258-263; P5-8; E5-1, 15, 16; 2/14 Revenue Recognition Chap 5 2/16 Circuit City Case Circuit City case 2/21 Revenue Recognition (wrap-up); Receivables Chpt 7 pp. 336-352; Skip Sales Returns E7-5, 6, 8, 9, 11; P7-1, 2; 2/23 Review of Time Value of Money and Notes Receivable Chpt 6; Chpt 7 pp. 352-368 E6-1, 3, 6; E7-12, 13, P7-6 Writing Assignment 2/28 Receivables (wrap-up); Inventory Chpt 8, pp. 394-420 E8-13, 15, 19; P8-8, 9 3/1 Inventory Chpt. 8, pp- 420-424 E 8-23, P8-15, 16 3/6 Inventory Chpt 9, pp. 446-465 LCM only E9-1, 2, 13, 14 3/8 Catch up and Review 3/13 Finan...
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...The University of Illinois Executive MBA July 13, 2004 Tentative Syllabus Managerial Perspective on Financial Accounting Accountancy 401X; Fall 2004 Michael J. Sandretto, 225C David Kinley Hall (217) 244-6410 (office); (217) 352-4832 (home, before 10:30 p.m.) sandrett@uiuc.edu or michaeljsandretto@earthlink.net Texts: Antle, Rick, and Stanley J. Garstak, Financial Accounting, Southwestern (United States), second edition, 2004 (Antle). Palepu, Krishna G., Paul M. Healy, and Victor L. Bernard, Business Analysis and Valuation: Using Financial Statements, Text Only, Southwestern (United States), fourth edition, 2004 (Palepu). Background: Accounting is called the language of business for at least two reasons. First, accounting terms such as sales, revenues, profit, net income, costs, gross margin, expense, and capitalize are widely used in business. Any businessperson is expected to understand those terms. Second, managers rely on accounting to understand an organization’s economic condition at a point in time and its economic performance over a period of time. As a result, they use accounting information to communicate with others. Managerial Perspective on Financial Accounting will help you understand publicly available financial statements for publicly traded companies and financial statements prepared for internal use. It is also an introduction to financial statement analysis and valuation methods. The basic financial accounting methodology...
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...哈佛商学院 9-177-078 2006 年 1 月 5 日修订 化学灯公司（Chemalite, Inc.） 2002年年底，化学顾问工程师贝内特·亚历山大（Bennett Alexander）为他的一项发明 ——化学灯（Chemalite）——申请并获得了专利。将一只装着某种化学原料的易碎的小玻 璃瓶插进一个半透明的塑料圆柱体内，然后注入另一种化学原料并封口。将圆柱体倾斜使 得里面的小玻璃瓶破碎，让两种化学原料混合。这两种化学原料混合后，会释放出明亮的 黄绿色光芒。 亚历山大预测化学灯会很有市场。它的魅力在于一旦出现紧急情况就会发光，而不需 要以任何方式点燃。他推测武装部队、信号灯和其它安全设备制造商对这种商品会有相当 大的需求。 2003年1月2日，亚历山大和他的一些亲戚、朋友共同创建了化学灯公司。他们总共发 行了500,000股股票，其中亚历山大凭他的专利占有125,000股，剩余的股票以每股1美元的 价格卖给了其他投资者。从2003年1月2日到2003年6月30日，化学灯公司发生了以下开支： 1月15日，支付7,500美元的律师费、注册手续费以及与公司成立相关的印刷费。 6月15日，花费62,500美元购置了一台设备，用来生产第一批化学灯样品。 6月24日，购买了价值75,000美元的塑料和化学原料，用于生产上市销售的化学灯。 6月底， 在化学灯公司主要负责管理的亚历山大和公司其他股东会面， 提交了一份报告， 并讨论了公司今后的营销战略。他希望公司能在8月底开始生产化学灯。亚历山大的一个朋 友苏姗·彼得森（Susan Peterson）在公司投入了可观的资金。她在会上提出，她已经接到 一个汽车配件分销商的订货要求及其希望得到的价格。那个分销商想购买大量的化学灯， 以配合他高速公路安全的推广活动，而且他有兴趣创建自己的私人品牌。 会议至此，一位几乎没有任何商业经验，甚至也不太懂财务报表的股东——拉森 （Larson）先生插话说：“我们将要讨论的这个议题很好，但是，我所看到的事实是：6个 月以前我们有375,000美元， 而现在只有230,000美元。 据我估算， 6个月来， 我们失去了145,000 本案例由访问教授 David A. Wilson 完成，并经 Charles Christensen 教授修订。 本案例仅用于课堂讨论， 而不作为正式文件、基本数据来源以及管理活动是否有效的证明。 本案例中文翻译经哈佛商学院授权，由清华大学经济管理学院组织完成。 1976 年哈佛大学版权所有。如需订购或请求复制许可，请致电话 1-800-545-7685，或致信 Harvard Business School Publishing，Boston，MA02163，或访问网址 http://www.hbsp.harvard.edu。未经哈佛商学院 的许可，禁止将本案例复制，在检索系统中储存，在表格中引用，或以任何形式或方法传播——包括电子 版，印刷，复印，录音等等。 177-078 化学灯公司 美元，却没有取得显著的成效。” 一些股东表示同意拉森的观点。事实上，从1月2日到6月30日，公司的银行存款余额从 375,000美元下降到了230,000美元。另一名股东得克鲁斯（D’Cruz）女士指出，因为公司的 经营尚未进入成熟阶段，所以这些前期开支可能更应该被视作是对公司的投资，而不是亏 损。 经过大量深入讨论， 股东们决定于2004年1月初再召开一次会议， 共同探讨公司的状况。 大家普遍认为，到那时公司的运营应该已经全面展开，现在所讨论的试运营阶段所出现的...
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...The University of Illinois Executive MBA Case Summaries Accy 401, EMBA; Fall 2000 Accounting courses are usually separated into five general categories. Two, taxes and auditing, are usually quite technical and often focus on CPA preparation. The other three categories are more general: 1. Financial accounting deals almost strictly with financial statement preparation. It focuses on pronouncements issued by the Financial Accounting Standards Board (FASB) and the SEC, and on accounting concepts such as materiality, matching revenues and expenses, relevance, and consistency. It also considers highly technical details about consolidated financial statements, leases, pensions, income taxes, and inventory valuation methods that are often found on the CPA exam. 2. Financial accounting from a management perspective covers many of the same topics as financial accounting but it does so from the view of a manager using financial accounting information to help make decisions or to report an organization’s performance to others. This is the typical focus of an MBA financial accounting course, or a financial accounting course in a non-degreed program for executives. It is the primary focus of Accy 401, EMBA. 3. Cost and managerial accounting deals almost exclusively with accounting as a tool to help manage and understand a business. These courses focus on areas such as fixed and variable costs, how costs behave over time (e.g., the learning curve), cost...
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...FARA - Slot I Review Points A. Income Statement (a) Manufacturing Companies: 1. Compute COGS – show each item separately. Follow Birla 3M format. COGM = (opening WIP + material expenses + conversion charges/other manufacturing expenses – closing WIP). COGS = (Opening FG inventory + COGM +Purchase of traded goods, if any – Closing FG inventory). Note: Amortisation of process know-how fees, technology fees, or any such intangible asset related to manufacturing is to be treated as product cost and included in COGM. 2. Treatment of Excise duty: Two options are there: (i) include in COGM (as was done in case of Birla 3M) or (ii) subtract from Gross Sales (exclude from COGM) as shown below: Gross Sales 100 Less: Excise duty (30) Net Sales 70 Excise duty amount to be shown in income statement = (Opening balance of advance excise duty + ED paid during the year – closing balance of advance excise duty). (b) Non-manufacturing companies Provide break-up of expenses under the headings (like Cost of Sales, General & Admin, Selling & Distribution, Finance Charges), if given/asked. (c) Please remember instances of: (i) converting asset into expense (prepaid rent, insurance, write-offs of non-refundable deposits, etc.) (ii) converting liability into revenue (Unearned/deferred revenue) (iii) apllying accrual concept for revenue not received or expenses not paid. (d) Trade discounts on purchases are always netted off. Similarly, trade discounts...
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...Bob’s Chocolate Chips and More, a bakery specializing in gourmet pizza and chocolate chip cookies, started business on October 1, 2011. The following transactions occurred during the month. 1. The company issued 6,000 shares of common stock at $15 per share. 2. The company acquired office equipment on October 1 for $30,000 cash. The equipment was used for administrative tasks. 3. The company purchased $15,000 of ingredients on account. 4. Rent is $500 a month. On October 1, the company paid rent for October, November, and December. 5. The company sold pizza and cookies for $35,000. The transaction was a credit sale. The pizza and cookies cost $9,000 to make. 6. The company paid salaries totaling $5,200. 7. The company collected $26,000 of the amount owed by customers. 8. The company paid $10,000 for ingredients previously purchased on account. 9. The company paid $800 for utilities on its corporate headquarters and $400 for advertising. 10. The company borrowed $12,000 from the bank for additional working capital requirements. The company repaid $3,000 by month-end. 11. The company paid $500 cash dividends to shareholders during October. 12. The company received an order from a customer for two luncheons. The sales price for the order was $20,000 ($10,000 for each luncheon). The customer paid $20,000 in advance for the order. Adjusting Entries Assume that the company has a monthly accounting cycle. Use the following information to construct the corresponding...
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...FEMBA Program M203A Financial Accounting for Management, Winter 2013 Section 1: 7:00-9:50pm Tuesday, SB 117 Section 2: 8:30-11:20am Saturday, SB 117 Instructor: Office: Office Hours: Website: T.A.: T.A.: Terry Shevlin SB 321 By appointment https://eee.uci.edu/13w/39520 Tim Haight Qin Li Phone: 949.824.6149 Email: tshevlin@uci.edu Email: thaight@uci.edu Email: qin.li@uci.edu Weekly TA Discussion Session: Monday evenings 7:00-8:20pm TLTC (starts Jan 13) This course is designed for individuals who have a desire to learn about accounting (the “language of business”) and its role in society. The practice of accounting goes back thousands of years and affects individuals, not-for profit organizations, large for-profit corporations, government entities, nonprofessional and professional sports teams, and many other entities. Understanding how to create and use accounting information is therefore critical to your future success as a strategic thinker and leader in any organization. Our focus is for-profit businesses. What is the objective of the course? The objective of the course is to help those of you who know little about accounting, but who are willful and active participants in their education, gain a basic understanding of accounting, its role in society, and how accounting information can be used to make informed decisions. Please note that many of you will find the material we will cover challenging. Thus, being a “willful and active participant” may require...
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