...Pedram Sharokhi FI 504 08/23/2008 Hershey Company & Tootsie Roll Company Company History Both the Hershey Company and the Tootsie Roll Company specialize in a wide variety of chocolate candy products. "The Hershey Company is a leading snack food company and the largest North American manufacturer of quality chocolate and non-chocolate confectionery products, with revenues of over $4 billion and more than 13,000 employees worldwide". The Hershey Company originated with the candy manufacturer Milton Hershey. In 1894 Milton Hershey wanted to design a sweet coating for his already existing caramels, thus his new enterprise, the Hershey Chocolate Company began. The Hershey Company went public on the New York Stock Exchange (NYSE) in 1922. The Tootsie Roll Industries, Inc. was established in 1896. "The round piece of chewy, chocolatey candy that delights Americans today still looks and tastes amazingly like the first Tootsie Roll, made over 109 years ago". The Tootsie Roll "still sells for one penny, the original price, even though the company now offers candy packages priced up to $6.99. The first penny candies to be individually wrapped in paper, Tootsie Rolls are protected today". The Tootsie Roll Industry produces more than 60 million Tootsie Rolls per day and is also the world's largest lollipop supplier, producing 20 million lollipops daily. The Tootsie Roll Industries, Inc. went public on the NYSE in 1927. New York Stock Exchange Company Information The Hershey...
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...FI504 exam 1. The ACE Company has five plants nationwide that cost $100 million. The current market value of the plants is $500 million. The plants will be recorded and reported as assets at a. $100 million. b. $600 million. c. $400 million. d. $500 million. _____ 2. A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the a. stand alone concept. b. monetary unit assumption. c. corporate form of ownership. d. economic entity assumption. _____ 3. A net loss will result during a time period when a. liabilities exceed assets. b. dividends exceed revenues. c. expenses exceed revenues. d. revenues exceed expenses. _____ 4. As of December 31, 2008, Anders Company has assets of $35,000 and stockholders' equity of $20,000. What are the liabilities for Anders Company as of December 31, 2008? a. $15,000 b. $10,000 c. $25,000 d. $20,000 _____ 5. A credit is not the normal balance for which account listed below? a. Common stock account b. Revenue account c. Liability account d. Dividend account _____ 6. An accountant has debited an asset account for $1,000 and credited a liability account for $500. What can be done to complete the recording of the transaction? a. Nothing further must be done. b. Debit an stockholders' equity account for $500. c. Debit another asset account for $500. d. Credit a different asset account for $500. _____ 7. Which of the...
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...Microsoft 2007 Annual net income = Average Stock Holders Equity= Preferred Stock Divendends= Weighted Average Common Shares Outstanding= Total Current Liabilities= Common Stock Cash Dividends= Stock Holders Equity (Beginning of the period)= Stock Holders Equity (End of the period)= Average Stock Holders Equity= Net Cash from Operation(income)= Capital Expenditures= Total Assets= Cash Dividends Paid= Free Cash Flow= Average Current Liabilities= Average Total Liabilities= Earning Per Share (Basic)A/B= Earning Per Share (Diluted)A/C= Average Market Price Per Share June 31, 2007= Price Per Earning Ratio= Gross Profit= Net Sales= Cost of Goods Sold= Average Inventory= 2007 Ending Inventory= 2007 Beginning Inventory= Inventory Purchases= (IN MILLIONS) $14,065.00 $62.00 $9,380.00 $23,754.00 $3,937.00 $59,005.00 $60,557.00 $59,781.00 $17,796.00 $39,417.00 $63,171.00 ‐$29,460.00 $7,839.00 $66,384.00 Oracle 2007 Annual net income = Average Stock Holders Equity= Preferred Stock Divendends= Weighted Average Common Shares Outstanding= Total Current Liabilities= Common Stock Cash Dividends= Stock Holders Equity (Beginning of the period)= Stock Holders Equity (End of the period)= Average Stock Holders Equity= Net Cash from Operation(income)= Capital Expenditures= Total Assets= Cash Dividends Paid= Free Cash Flow= Average Current Liabilities= Average Total Liabilities= Earning Per Share (Basic)A/B= Earning Per Share (Diluted)A/C= Average Market Price Per Share June 31, 2007= Price Per Earning Ratio=...
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...CHAPTER 13 Financial Analysis: The Big Picture Study Objectives 1. 2. 3. 4. 5. 6. 7. Understand the concept of sustainable income. Indicate how irregular items are presented. Explain the concept of comprehensive income. Describe and apply horizontal analysis. Describe and apply vertical analysis. Identify and compute ratios used in analyzing a company’s liquidity, solvency, and profitability. Understand the concept of quality of earnings. Summary of Questions by Study Objectives and Bloom’s Taxonomy Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT Questions 1. 2. 3. 4. 5. 1. 2. 3. 1. 2. 1 2 1 2 6 2 2 2 2 1, 2, 6 C C C C C AP AP C AP C 6. 7. 8. 9. 10. 4. 5. 6. 3. 4. 5. 2. 2. 4, 5 4, 5 4, 5 6 6 4 5 4 4 5 4, 5 6 6 C C AP K C AP AP AP AP AP AP AP AP 11. 12. 13. 14. 15. 7. 8. 9. 6. 7. 8. 3. 3. 6 6 6 6 6 4 5 4 Exercises 4, 5 6 6 6 6 AP AP AP AN AN 9. 10. 11. 4. 4. 6 6 6 6 6 AP AP AP AN AN 5. 5. 6 6 E E 12. 6 AP K C C C C AP AP AP 16. 17. 18. 19. 20. 10. 11. 12. 6 6 6 6 6 6 6 6 C C C C AP AP AN AN 13. 14. 15. 6 6 6 AN AN AN 21. 22. 7 7 C AN Brief Exercises Problems: Set A 1. 1. 5, 6 5, 6 AN AN Problems: Set B 13-1 ASSIGNMENT CHARACTERISTICS TABLE Problem Number 1A 2A Difficulty Level Simple Simple Time Allotted (min.) 20–30 20–30 Description Prepare vertical analysis and comment on profitability. Compute ratios from balance sheet and income statement. Perform ratio analysis, and discuss change in financial position and operating results. Compute ratios;...
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...Morningstar Document Research FORM 10-K ORACLE CORP - ORCL Filed: June 28, 2011 (period: May 31, 2011) Annual report with a comprehensive overview of the company ® ℠ Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended May 31, 2011 OR � TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 000-51788 Oracle Corporation (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 54-2185193 (I.R.S. Employer Identification No.) 500 Oracle Parkway Redwood City, California (Address of principal executive offices) 94065 (Zip Code) (650) 506-7000 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, par value $0.01 per share The NASDAQ Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ⌧ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES � NO...
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...Case Study 2 FI504 Accounting and Finance for Managerial Use and Analysis Recommendations for LJB Company: Requirements for Going Public: A requirement of all publicly traded companies is to comply with the Sarbanes-Oxley Act of 2002. This means that LJB would be required to maintain a system of internal control. The controls must be reliable and effective, which the executives and Board of Directors must monitor. Also, an outside auditor must confirm that the control systems are sufficient. Although there will be additional work on both designing, testing and auditing of controls if LBJ decides to go public, but the control system may result in money and time saved in the long-term regardless. Good practices: LJB Company currently has some good practices I suggest they continue. The use of pre-numbered invoices allows for missing or undocumented invoices to be caught quickly. This practice is considered a documentation procedure under internal controls. Having two managers approve new hires helps ensure a good fit. It’s good that the accountant completes bank reconciliation. While using a bank is a form of control for cash, the reconciliation enables LJB to make sure there are no errors between what the bank and what they have on the books. Areas of Improvement: There are a number of practices by LJB that don’t deter fraud and would need to be changed before considering going public. Segregation of duties: The duties for handling assets...
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...Tootsie Roll Industries, Inc. and its subsidiaries manufacture and sell confectionery products in the United States, Canada, and Mexico. It sells its products under various names. The company markets its products to wholesale distributors of candy and groceries, supermarkets, variety stores, dollar stores, chain grocers, drug chains, discount chains, cooperative grocery associations, warehouse and membership club stores, vending machine operators, and the U. S. military and fund-raising charitable organizations. Tootsie Roll Industries was founded in 1896 and is based in Chicago, Illinois. The Hershey Company, together with its subsidiaries, engages in manufacturing, marketing, selling, and distributing various chocolate and confectionery products, pantry items, and gum and mint refreshment products worldwide. It offers various chocolate and confectionery products as well as various snack products, a line of refreshment products, such as mints, chewing gum, and bubble gum, and a line of pantry items. It sells its products through sales representatives and food brokers, primarily to wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, department stores, and natural food stores. The company was founded in 1893 and is based in Hershey, Pennsylvania. Tootsie Roll Industries Ratios Hershey Foods Corporation Ratios Interpretation and Comparison between the...
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...FI504 Case Study 3 on Cash Budgeting Requirements: 1. Use this information to prepare a Cash Budget for the months of August and September, using the template provided in Doc Sharing. Excel Spreadsheet 2. What are the three sections of a Cash Budget, and what is included in each section? The cash budget is separated into three sections: cash receipts, cash disbursements, and financing (Cenar, 2009). The first section, cash receipts, is exactly what the name implies, which is the cash expected to be received for goods or services rendered by the company. Because it is driven mostly by sales, cash is not just the physical dollar amounts being received by the company but also includes interest and dividends as well as planned sales of assets like stock or inventory or plant sales (Parry, 2006). The second section is cash disbursements, which just means payments for expenses that the company incurs to do business (DeThomas, 1980). Examples of these payments would be labor costs, raw materials cost, and income taxes (DeThomas, 1980). Anything that is used or will be used to maintain operations or production for the company would be put into this category of the cash budget. Finally, the financing section is where any money borrowed from investors, banks, and other financial sources can be located (Cenar, 2009). This section shows borrowing and repayment of that borrowed money, and is necessary to utilize as a guide against cash deficiency (Cenar, 2009)...
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...Internal Controls Report To: CEO/President –LJB Company From: It is important to understand all internal control requirements before the company decides to go public. Internal control systems must cover five primary elements: controlled environment, risk assessment, controlled activities, information and communication and monitoring. The following are internal control requirement activities that LJB Company must implement and maintain to mitigate risk and loss. * Establishment of responsibility * Segregation of duties * Documentation procedures * Physical controls * Independent internal verification * Human resource controls Key attributes/”best practices” of LJB company: * Faith and trust in long term employees. (Establishment of responsibility) * Usage of pre- numbered invoices to maintain controls around printed documents. (Documentation procedures) * Retaining items overnight in safe (Physical controls) Item: | Recommendation: | Reason: | Indelible Ink Machine | Yes | Further enhancement of documentation procedures. Reduces chances of manipulation of invoices and procurement of fraudulent documents. | Areas of concern: The accountant playing the role of both Treasurer and Controller is not acceptable. Controller and Treasurer are meant to play opposite roles in order to maintain balance. The accountant incorporates too many roles/duties and too much power/responsibility thus increasing chances to commit fraud. This...
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...CHAPTER 1 Introduction to Financial Statements ANSWERS TO QUESTIONS 1. The three basic forms of business organizations are (1) sole proprietorship, (2) partnership, and (3) corporation. 2. Advantages of a corporation are limited liability (stockholders not being personally liable for corporate debts), easy transferability of ownership, and easier to raise funds. Disadvantages of a corporation are increased taxation and government regulations. 3. Proprietorships and partnerships receive favorable tax treatment compared to corporations and are easier to form than corporations. They are also owner controlled. Disadvantages of proprietorships and partnerships are unlimited liability (proprietors/partners are personally liable for all debts) and difficulty in obtaining financing compared to corporations. 4. Yes. A person cannot earn a living, spend money, buy on credit, make an investment, or pay taxes without receiving, using, or dispensing financial information. Accounting provides financial information to interested users through the preparation and distribution of financial statements. 5. Internal users are managers who plan, organize, and run a business. To assist management, accounting provides timely internal reports. Examples include financial comparisons of operating alternatives, projections of income from new sales campaigns, forecasts of cash needs for the next year, and financial statements. 6. External users are those outside the business...
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...LJB COMPANY: Internal Control Review I. NEW INTERNAL CONTROL REQUIREMENTS FOR GOING PUBLIC Sarbanes-Oxley Act of 2002 (SOX), enacted on July 29,2002, is a United States Federal law that imposed new rules and regulations for all US public companies. Under SOX Section 404, all publicly listed corporations are required to maintain an adequate system of internal control. Under SOX, corporate executives and the board of directors are personally responsible for making sure that the internal controls in place are effective and reliable. Independent auditors should also attest to the reliability of the said internal controls. Failure to do so would result to fines and/or imprisonment1. The following should be included in LJB Company’s annual report if the company decides to go public: * A statement of the management’s responsibility for establishing and maintaining effective internal control * A statement specifying the framework that the management used to evaluate the effectiveness of the company’s internal control * Management’s assessment of the effectiveness of their Internal Control. It must also include any “material weaknesses” currently present. The internal control is only deemed effective once all material weaknesses are properly addressed and solved. * A statement that a registered public accounting firm has issued an attestation report on the management’s internal control .2 If LJB Company decides to go public, it must take into account...
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...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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...Swinton & Associates Accounting Firm 6711 14th Street Washington, DC 20310 202-678-0076 November 27, 2011 Mr. John Jones: President LBJ Corporation 100 E Main Street Alexandria, VA 22303 First and foremost, thank you for selecting Swinton & Associates Accounting Firm to evaluate LBJ’s Internal Control Systems. I realize that there are a plethora of accounting firms that you could have chosen therefore; I wanted to express my sincere gratitude for trusting our firm to assist you with your needs. With that said, I have carefully assessed the information you provided to my colleague at the initial meeting regarding LBJ’s posture for going public. I have outlined the key areas of concern and have broken the areas down into the following categories: 1. Internal Control Requirements - After numerous corporate scandals came to light in the early 2000s, Congress addressed this issue by passing the Sarbanes-Oxley Act of 2002 (SOX). Under SOX, all publicly traded U.S. corporations are required to maintain an adequate system of internal control. Corporate executives and boards of directors must ensure that these controls are reliable and effective. In addition, independent outside auditors must attest to the adequacy of the internal control system. Companies that fail to comply are subject to fines, and company officers can be imprisoned. SOX also created the Public Company Accounting Oversight Board (PCAOB), to establish auditing standards...
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...(TCO G) 1. Determine the basic concept of responsibility, accountability, and liability as applied to ethical decisions. How these concepts related? (25 points) Answer: BASIC CONCEPTS: RESPONSIBILITY, ACCOUNTABILITY, AND LIABILITY Ethical choices are decisions made by individuals who are responsible for the consequences of their actions. Responsibility is a key element of ethical action. Responsibility means that you accept the potential costs, duties, and obligations for the decisions you make. Accountability is a feature of systems and social institutions: It means that mechanisms are in place to determine who took responsible action, and who is responsible. Systems and institutions in which it is impossible to find out who took what action are inherently incapable of ethical analysis or ethical action. Liability extends the concept of responsibility further to the area of laws. Liability is a feature of political systems in which a body of laws is in place that permits individuals to recover the damages done to them by other actors, systems, or organizations. Due process is a related feature of law-governed societies and is a process in which laws are known and understood, and there is an ability to appeal to higher authorities to ensure that the laws are applied correctly. These basic concepts form the underpinning of an ethical analysis of information systems and those who manage them. First, information technologies are filtered through social institutions, organizations...
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...SUBJECT: Evaluation of Internal Controls Mr. Smith, We have completed our assessment of LBJ Company’s system of internal controls. In addition, our firm researched the regulation regarding publicly traded firms in order to provide you with the most current information. Securities and Exchange Commission. “Official U.S. Agency Web Site.” Web. 24 September 24, 2011. Publicly traded corporations are required to implement the guidelines of the Sarbanes-Oxley Act of 2002. This means that publicly traded companies must include a management report on the internal controls of the company. The annual report must include an attestation report from a registered public accounting firm. The executive officers and the board of directors Wilson 2 of LBJ Company are responsible for implementing and maintaining effective internal controls. Furthermore, the executive officers and board of directors of publicly traded companies must attest to the adequacy of the internal controls of the company. Failure to comply with the standards of SOX subjects LBJ Company, along with the executive officers and board of directors to severe penalties of fines and imprisonment. The five principles of internal control are the following: * Establishment of Responsibility * Segregation of Duties * Documentation Procedures * Physical Controls * Independent Internal Verification * Human Resource Controls The accountant’s decision to start using pre-numbered invoices...
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