1000 words;Key Assignment Draft;IMPORTANT NOTE: You may have to research more than 1 company to complete the Key Assignment. Plan accordingly.;The purpose of this Key Assignment is to get familiar with annual reports and to understand the financial implications of the following;Equity method of accounting versus consolidation;Reporting of investments based on cost/equity;Goodwill reporting;Intercompany and intracompany transactions;Access the company's Web page on the Internet to read its most recent annual report. The annual report is typically found in an "Investor Relations" or "Company Information" section within the company's Web site. If the company does not provide a full annual report, select another company for your project. Verify that the full annual report includes the following;A letter or report to shareholders from the president of the company;A section providing management's discussion and analysis of the business;A report from the auditor;The company's financial statements;Supplemental notes to the financial statements;Once you have found a full annual report, complete each part of the assignment.;Please cover all of the items listed in the questions below. You can select more than 1 company if your chosen company does not have all the items listed below.;Using the financial statements of your company (or companies), write a 1,000?1,500 word paper that addresses the following questions;What GAAP principles govern the consolidation of financial statements?;How are consolidated and equity methods of accounting different?;What investments has the company made in affiliated companies? Examine its footnotes.;Comment on the accounting for investments in affiliated companies after looking at the footnotes.;List the investments it has.;Does it use cost basis or equity method of accounting, or both?;When do you use the equity method of accounting?;Goodwill is the difference between the acquired assets and acquired liabilities.;(Find a company that has goodwill). Examine the balance sheet and the footnotes. What is the goodwill related to?;What FASB covers the reporting and accounting of goodwill?;What is the difference between old goodwill reporting and new goodwill reporting?;Part 2;As a student of accounting, it is important to understand what triggers the preparation of consolidated financial statements. The statements can be consolidated across divisions, across international locations, and across multiple currencies.;Part 2A;Deliverable Length: 600 words;Analyze the financial statements of the company that you have already selected in Part 1 for intercompany and intracompany transactions.;Why do you think it is important to make entries to eliminate intercompany transactions?;What is the difference between intercompany and intracompany transactions?;Part 2B;Deliverable Length: 400 words;You just got hired to work as an accountant in the consolidations department of a multinational firm. Your boss comes to you and wants to see how much knowledge you have on consolidations. He says, ?I want you to prepare a report explaining the steps that go into preparing consolidated income statements and balance sheets.?;Please prepare the report for your boss.;Part 2C;Deliverable Length: 600 words;ABC Company owns 100% of XYZ Company. During the year, ABC Company sold $30,000 (cost) worth of inventory to XYZ Corporation for $60,000. At the end of the year, XYZ Company has all of the inventory on the books.;Please record the following;Record the entries on ABC books to record the sale and the cost of goods sold.;Record the entry on XYZ books to record the purchase of inventory from ABC.;Record the intercompany transaction.;Explain how failure to record this intercompany transaction will impact the consolidated financial statement.
Paper#80908 | Written in 18-Jul-2015Price : $22