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Reporting in Action — BTN 6-1
1.
($ in millions)
Balance
September
28, 2013
Cash and
equivalents
as % of:
Balance
September
29, 2012
Cash and
equivalent
s as % of:
Cash and cash
equivalents ...............
$ 14,259
—
$ 10,746
—
Current assets............
73,286
19.5%
57,653
18.6%
Current liabilities .......
43,658
32.7
38,542
27.9
Shareholders’ equity .
123,549
11.5
118,210
9.1
Total assets ................
207,000
6.9
176,064
6.1
Analysis comment: Cash and cash equivalents have slightly increased
as a percent of the various bases over this period. Looking at this
measure only, Apple’s liquidity position has probably slightly improved.
2. Per the statement of cash flows for year ended September 28, 2013
($ millions):
Cash and equivalents, beginning-year ............... $10,746
Cash and equivalents, year-end ........................... $14,259
Reporting in Action (Concluded)
3. Days' Sales Uncollected ($ thousands)
Days’ sales uncollected = x 365
4. Solution depends on the annual report information obtained.
Accounts receivable
Net sales
Comparative Analysis — BTN 6-2
Days’ sales uncollected = x 365
(5.5)%, while Apple’s increase in days’ sales uncollected is 9.8%. For the
Accounts receivable
Net sales
Ethics Challenge — BTN 6-3
1. In a small business office it is very important that the owner of the
2. Unfortunately, due to collusion of the employees, the bank
3. Despite the collusion, the scheme is not foolproof. For example, some
ways in which the scheme might be uncovered or prevented include the
following:
A bank employee may become suspicious and call Dr. Conrad and
4. Dr. Conrad should review her salary schedules for employees to make
sure that she is at least offering market pay. She may want to consider
Communicating in Practice — BTN 6-4B
Memorandum
To: “Owner”
From: “Consultant”
Date: __________
Subject: Advice on monitoring purchase discounts
[Instructor’s Note: The response should acknowledge the owner’s concern and
recommend the net method of recording purchases. It should explain how this method
results in the recording of “Discounts Lost,” which will flow through to the income
statement, thus providing the information desired. The memo might look something like
the following.]
The net method gives management an advantage in controlling and
monitoring purchase discounts. When invoices are recorded at gross
for paying bills on time to take advantage of favorable discounts. This also
Taking It to the Net — BTN 6-5
[Instructor Note: These answers were taken from the ACFE’s 2014 Report to the Nations.]
http://www.acfe.com/rttn/docs/2014-report-to-nations.pdf
1. The median loss caused by the frauds in our study was $145,000.
Additionally, 22% of the cases involved losses of at least $1 million.
3. The median duration — the amount of time from when the fraud
4. Asset misappropriations are the most common fraud, occurring in 85% of
5. Only 9% of cases involved financial statement fraud, but those cases had
7. Owners/executives only accounted for 19% of all cases, but they caused a
8. Approximately 77% of the frauds in our study were committed by
finance.
Teamwork in Action — BTN 6-6
Common internal controls visible in a typical retail store include:
1. Door locks and roll-down screens for after-hours lock-up.
2. Electronic detection devices stationed at entrances or anti-theft
devices on merchandise that must be removed by cashier with special
equipment.
Entrepreneurial Decision — BTN 6-7
1. Seven principles of internal control along with examples are:
a. Establish responsibilities. The clerks at the counter should be
responsible for handling cash. The other employees should be
responsible for preparing the orders and helping customers. There
also should be employees assigned responsibilities such as
2. As the business grows, controls will become more important. The
Hitting the Road — BTN 6-8
No formal solution exists for this activity. It is usually interesting for the
class to exchange their discoveries via class discussion. This is
particularly the case with respect to popular college service/product
centers. Common controls found in college units include:
Global Decision — BTN 6-9
1.
(KRW millions)
Current
year
balance
Cash as
percent
of:
Prior
year
balance
Cash as
percent
of:
Cash (and equivalents)............
16,284,780
—
18,791,460
—
Current assets........................
110,760,271
14.7%
87,269,017
21.5%
Total assets ............................
214,075,018
7.6
181,071,570
10.4
Current liabilities ...................
51,315,409
31.7
46,933,052
40.0
Total equity.............................
150,016,010
10.9
121,480,206
15.5
Analysis comment: Cash has decreased as a percent of current assets
and total assets compared to the prior year. Similarly, cash has
decreased as a percent of current liabilities and total equity. Samsung’s
liquidity position has probably slightly declined over this period.
Global Decision (Concluded)
2. Cash, beginning-year (KRW millions) ......................................... 18,791,460
3. Days' Sales Uncollected Formula (KRW millions)
Days’ sales uncollected = x 365
Accounts receivable
Net sales
27,875,934
