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BYP 4-2 COMPARATIVE ANALYSIS PROBLEM
(a)
(in millions)
PepsiCo
Coca-Cola
1.
Total current assets
22,203
31,304
(b) PepsiCo’s current assets were 24% greater than its current liabilities,
while Coca-Cola’s current assets were 13% greater than its current
liabilities. From this information, it appears that PepsiCo is in a better
liquidity position than Coca-Cola.
BYP 4-3 COMPARATIVE ANALYSIS PROBLEM
(a)
(in millions)
Amazon
Wal-Mart
1.
Total current assets
24,625
61,185
2.
Net property, plant & equipment
10,949
115,364
(b) Current assets are cash and other resources that are reasonably ex-
pected to be realized in cash or sold or consumed within one year or
the company’s operating cycle, whichever is longer. Current liabilities
are obligations that are reasonably expected to be paid from existing
current assets or through the creation of other current liabilities.
BYP 4-4 REAL-WORLD FOCUS
The solution is dependent upon the companies chosen by the student.
BYP 4-5 DECISION MAKING ACROSS THE ORGANIZATION
(a) WHITEGLOVES JANITORIAL SERVICE
Balance Sheet
December 31, 2017
Assets
Current assets
Cash ................................................ $ 6,500
Accounts receivable
($9,000 + $3,700) ......................... 12,700
Supplies ($5,200 – $2,700) ............. 2,500
Liabilities and Owner’s Equity
Current liabilities
Notes payable due within one year .................. $10,000
Accounts payable ($2,500 + $500) ................... 3,000
BYP 4-5 (Continued)
WHITEGLOVES JANITORIAL SERVICE
Balance Sheet (Continued)
December 31, 2017
*Capital balance as reported ................................. $54,000
Add: Earned but unbilled fees ........................... 3,700
(b) Whitegloves Janitorial Service met the terms of the bank loan because
BYP 4-6 COMMUNICATION ACTIVITY
MEMO
To: Accounting Instructor
From: Student
Re: Accounting Cycle
The required steps in the accounting cycle, in the order in which they
should be completed, are:
1. Analyze business transactions.
2. Journalize the transactions.
3. Post to ledger accounts.
4. Prepare a trial balance.
The optional steps in the accounting cycle include preparing a worksheet
and preparing reversing entries. If a worksheet is prepared, it is done after
step 3 above, and it includes steps 4 and 6. The worksheet is a form used
BYP 4-7 ETHICS CASE
(a) The stakeholders in this case are:
You, as controller.
Mike Flanary, president.
Users of the company’s financial statements.
BYP 4-8 ALL ABOUT YOU
The following is a personal balance sheet using the classified presentation.
Note that the earnings from the part-time job as well as the tuition costs are
not listed since neither of those items is an asset, liability, or equity item.
Assets
Current assets
Cash ................................................................. $1,200
Money market account ................................... 1,800
Certificate of deposit ...................................... 3,000
Liabilities and Owner’s Equity
Current liabilities
Current portion of automobile loan ............... $1,500
Current portion of credit card payable .......... 150
Total current liabilities ............................ $ 1,650
Owner’s equity
BYP 4-9 FASB CODIFICATION ACTIVITY
(a) 1. Current assets is used to designate cash and other assets or
resources commonly identified as those that are reasonably ex-
pected to be realized in cash or sold or consumed during the normal
operating cycle of the business.
(b) Access FASB Codification 210-20-45
A right of setoff exists when all of the following conditions are met:
IFRS EXERCISES
IFRS 4-1 The statement of financial position required under IFRS and the
balance sheet prepared under GAAP usually present the same information
regarding a company’s assets, liabilities, and stockholders’ equity at a point
in time. IFRS does not dictate a specific order but most companies list
noncurrent items before current. Differences in ordering are
IFRS
GAAP
Statement of Financial
Position presentation
Balance Sheet
presentation
Under IFRS, current assets are usually listed in the reverse order of liquidity.
IFRS 4-2 IFRS uses the term statement of financial position rather than
balance sheet.
IFRS 4-3
WALLBY COMPANY
Partial Statement of Financial Position
Current assets
Prepaid insurance ................................................................... £ 3,600
IFRS 4-4
SUTTER BOWLING ALLEY
Statement of Financial Position
December 31, 2017
Assets
Property, plant, and equipment
Land ............................................... $64,000
Buildings ....................................... $128,800
Total assets .......................................... $231,120
Equity and Liabilities
Equity
Owner’s capital ($115,000 + $3,440*) ......... $118,440
Non-current liabilities
IFRS 4-5 INTERNATIONAL COMPARATIVE ANALYSIS PROBLEM
Differences in the format of the statement of financial position (balance
sheet) used by Louis Vuitton and Apple include the following
Louis Vuitton
Apple
1.
Non-current assets listed first
Current assets listed first
2.
Goodwill listed before property,
Property, plant, and equipment
