...If LJB decides to go public the first thing the President needs to about new internal control requirements is the Sarbanes-Oxley Act or SOX. The Sarbanes-Oxley Act is a United States federal law which sets new or enhanced standards for all U.S. public companies. The reason that this SOX bill was created was because a a number of major corporate and accounting scandals. When these scandals happened they cost investors billions in losses because the share prices fell it shook public confidence in our securities markets. With the SOX act all publicly traded companies must maintain internal controls where there are checks and balances when it comes to the company’s finances. Another thing LJB must look at if the company decides to go public is the most basic component of the internal control system both in the environment as well as its control activities. In the environment the President of LJB mush make sure that his employees value integrity and understand that all unethical activity will not be tolerated. When looking at the control activities, the President should understand the importance of controlling the activities of the company. He must understand the importance of preventing fraud. The president must also know that in order to reduce the occurrence of fraud he should have policies and procedures in place to address the specific risks faced by the company and going back to environmental controls, the President should also make it known that if such activity does occur...
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...FI504 Case Study 3 on Cash Budgeting The cash budget was covered during Week 4 when we covered TCO D and you read Chapter 7. There is also a practice case study to work on. Your Professor will provide the solution to the practice case study at the end of Week 5. This case study should be uploaded by 11:59PM Mountain time of the Sunday ending Week 6 to the Week 6 Assignment Dropbox. You are encouraged to use the Excel template file provided in Doc Sharing. The Oxford Company has budgeted sales revenues as follows: July August September Credit sales $30,000 $24,000 $18,000 Cash sales 18,000 51,000 39,000 Total sales $48,000 $75,000 $57,000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on credit and 50% is paid in the month of purchase and 50% in the month following purchase. Budgeted inventory purchases are $65,000 in July, $45,000 in August, and $21,000 in September. Other budgeted cash receipts: (a) sale of plant assets for $12,350 in August, and (b) sale of new common stock for $16,850 in September. Other budgeted cash disbursements: (a) operating expenses of $6,750 each month, (b) selling and administrative expenses of $12,500 each month, (c) dividends of $19,000 will be paid in August, and (d) purchase of equipment for $6,000 cash in September. The company has a cash...
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...FI504 Case Study 3 on Cash Budgeting The cash budget was covered during Week 4 when we covered TCO D and you read Chapter 7. There is also a practice case study to work on. Your Professor will provide the solution to the practice case study at the end of Week 5. This case study should be uploaded by 11:59PM Mountain time of the Sunday ending Week 6 to the Week 6 Assignment Dropbox. You are encouraged to use the Excel template file provided in Doc Sharing. The Oxford Company has budgeted sales revenues as follows: July August September Credit sales $30,000 $24,000 $18,000 Cash sales 18,000 51,000 39,000 Total sales $48,000 $75,000 $57,000 Past experience indicates that 60% of the credit sales will be collected in the month of sale and the remaining 40% will be collected in the following month. Purchases of inventory are all on credit and 50% is paid in the month of purchase and 50% in the month following purchase. Budgeted inventory purchases are $65,000 in July, $45,000 in August, and $21,000 in September. Other budgeted cash receipts: (a) sale of plant assets for $12,350 in August, and (b) sale of new common stock for $16,850 in September. Other budgeted cash disbursements: (a) operating expenses of $6,750 each month, (b) selling and administrative expenses of $12,500 each month, (c) dividends of $19,000 will be paid in August, and (d) purchase of equipment for $6,000 cash in September. The company has a cash balance of $10...
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...The FI504 Final Exam will be an online open-book, open-notes, open-computer exam with a time limit of three hours and 30 minutes. It will be worth 250 points or 25% of your course grade. The Final Exam is two pages long and will consist of 14 multiple-choice questions worth five points each and six essays worth 30 points. Some of the multiple-choice questions are problem-based. Of the six essays, five of the essays are problem-based since this is an Accounting course. Terminal Course Objectives A, B, C, D, E, F, and G are all addressed on this exam. You should review the following concepts for this exam. For the multiple choice questions worth a total of 70 points, you should know: 1. The characteristics of the corporate form of business. 2. About the term "cash dividend". 3. Which accounts have debit or credit balances. 4. The difference between cash-basis versus accrual-basis of accounting. 5. The meaning and implications of using FIFO, LIFO, and weighted average cost-flow assumptions. 6. How to calculate depreciation using the straight-line method. 7. The journal entry for the issuance of bonds (at par, discount, or premium) and for the issuance of stock (at par or above par). 8. How to determine the market value of a bond. 9. The various adjustments that are made to net income in arriving at net cash flow from operating activities. 10. The different tools of financial statement analysis, and how each tool is used, as well...
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...Week 1 Question 1 Welcome to our Week 1 Discussions! To get us started, let's consider the following questions. 1) Would a traditional income statement differ depending on whether the business is a service organization, merchandiser, or manufacturer? 2) Could we use managerial accounting tools to assess the profitability of an organization other than a manufacturing business, or are the topics that we are learning only related to manufacturing? 3) If we could use these concepts in service and/or merchandising businesses, how would we go about doing so? Let's start with the first question. According to Casteele (2013), income statements are important to most business. It allows owners, managers, and shareholders to see how money is flowing into the company. This article also stated that service and manufacturing companies have several differences between their statements since the businesses have different types of expenses and different income sources. The article further explains, businesses adapt their income statements to their needs based upon the industry the business is in. A business in the service industry could not use the same income statement template as manufacturing industry businesses, because of the significant differences in how the businesses operate and earn money. Casteele, J. (2013). The Difference Between Service and Manufacturing Income Statements. Retrieved from http://smallbusiness.chron.com/difference-between-service-manufacturing-income-statements-34551...
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