cash flow and revenue recognition

Part 1:

Analysis of Cash Flow for a Small Business

Charles, a financial consultant, has been self-employed for two years. His list of clients has grown, and he is earning a reputation as a shrewd investor. Charles rents a small office, uses the pool secretarial services, and has purchased a car that he is depreciating over three years. The following income statements cover Charles’s first two years of business:

Charles believes that he should earn more than $11,500 for working very hard for two years. He is thinking about going to work for an investment firm where he can earn $40,000 per year. What would you advise Charles to do? Support your answer using the given data and what you learned from chapter 2 reading.

Part 2:

Revenue Recognition

You are controller for an architectural firm whose accounting year ends on December 31. As part of the management team, you receive a year-end bonus directly related to the firm’s earnings for the year. One of your duties is to review the transactions recorded by the bookkeepers. A new bookkeeper recorded the receipt of $10,000 in cash as an increase in cash and an increase in service revenue. The $10,000 is a deposit and the bookkeeper explains to you that the firm plans to provide the services to the client in March of the following year.


Did the bookkeeper correctly record the client’s deposit? Explain your answer.

What would you do as controller for the firm? Do you have a responsibility to do anything to correct the books? Explain your answer.

Initial post due by Thursday.  

Week1 (BUS2123 Principles of Accounting II)

1. Identify characteristics of corporations and their organization

2. Explain characteristics of, and distribute dividens between common and preferred stock.

3. Explain the items reported in retained earnings.

       1. The organization takes care of all the corporations problems. The corporation is the who company.

       2. The common stock is when a corporation only have one class of stock.  The preferred stock gives the corporation control over the common stock.

       3.The retained earnings show the net income of the company that is not to be given to it’s stockholders

Cascade’s management is considering the proposal from FHP. There are  many issues involving strategy,cost, risk, and capacity. Prepare a  recommendation

Cascade’s management is considering the proposal from FHP. There are  many issues involving strategy,cost, risk, and capacity. Prepare a  recommendation to management. Use the following questions to guide
your analysis.

Assume Cascade could service the contract with existing equipment.  Use Exhibit 1 to identify the relevant costs concerning the acceptance  of FHP’s request to add two additional loads per week. Which costs are  not relevant? Why?

Calculate the contribution per mile and total annual contribution associated with accepting FHP’s
proposal. What do you recommend? (Use 52 weeks per year in your calculations.)

Consider the strategic implications (including risks) associated  with expanding (or choosing not to expand) operations to meet the  demands of FHP. Analyze this question from a conceptual point of view.
Calculations are not necessary.

After a closer examination of capacity, management believes an additional rig is required to service the
FHP  account. Assume Cascades’s management chooses to invest in one  additional truck and trailer that can serve the needs of FHP (at least  initially). Assume the annual incremental fixed costs associated with  acquiring the additional equipment is $50,000. Further, FHP would agree  to pay $2.20 per mile (total
including FSC and miscellaneous) if  Cascade would sign a five-year contract. What is the annual number of  miles required for Cascade to break even, assuming the company adds one  truck and trailer? What is the expected annual increase in profitability  from the FHP contract? (Use 52 weeks per year in
your calculations.)

Cascade has business relationships with independent contractors, though Alan is reluctant to use them.
Another  possibility for expanding capacity is to outsource the miles requested  by FHP. One of Cascade’s most reliable independent contractors has  quoted a rate of $1.65 per mile. As with question 4, assume FHP would  agree to pay $2.20 per mile if Cascade would sign a five-year contract.  Further, assume Cascade would incur incremental fixed costs of $20,000  annually. These costs would include
insurance, rental trailers,  certain permits, salaries and benefits of garage maintenance, and office  salariessuch as billing. How many annual miles are required for Cascade  to break even if the miles areoutsourced? What is the expected annual  increase in profitability from the FHP contract? What are your

    6a Why might Cascade use an independent operator if the variable  cost per mile is higher than if the company had purchased a rig and  hired a driver?

6b. At what point would management be  indifferent between the scenarios illustrated in questions 4 and 5?  Based on your analysis, would you recommend adding capacity by  purchasing an additional rig or by utilizing the services of an  independent contractor? Why?

3 – Ranking Capital Investment Projects


You are an operations manager for New Foods Company. The company manufactures organic versions of common food items, such as cookies and bread. New Foods has built a reputation for good taste and quality in its products and has developed partnerships with several health food retailers. An opportunity exists to expand into a traditional grocery store chain with a new partnership. This opportunity will require increased production. However, your firm has not previously sold its products in this channel and uncertainty exists about the volume of new product sales that may result.

The executive leadership team of New Foods Company wants to grow the firm and it has been working with the local government on potential tax credits for creating new jobs in the area. The leadership team has also identified a commercial bank that will provide loans for any plant and equipment purchases. An overarching goal of the leadership team is to maintain product quality and the brand’s reputation.

Three options for increasing production have been identified.

The first option is to purchase and refurbish a manufacturing plant location in a nearby town that has been closed for several years. Equipment to operate this plant would also have to be acquired. The location is large enough to build production for the expected volume and have excess space to accommodate growth of 200% in the future. This refurbished location could be operational in 12 months.

The second option is to lease capacity from another food manufacturing firm that does not make its own branded products but operates as a co-manufacturer for others. This firm currently has enough available capacity for the expected volume, but not to increase above that level. This production process could be operational in 3 months.

The third option is to expand your existing plant location by purchasing adjacent land and constructing a new building. Equipment to operate this expansion would also have to be acquired. The land is large enough to build production for the expected volume and have excess space to accommodate growth of 50% in the future. This new location could be operational in 18 months.


Using the financial data provided in the Excel files attached, calculate a net present value, internal rate of return, and payback period for each option.

Prepare a PowerPoint presentation that summarizes the calculated results from the financial analysis and provides the key operational and strategic points for each option. One slide must be a ranked list of the three project options. Include a justification of which financial metrics and non-financial data were prioritized for ranking the three options.

Submit the Excel file with the completed calculations and the PowerPoint presentation.


2 separate papers 400 each

Diversity of the healthcare workforce, healthcare globalization, use of technology, focus on teamwork in patient care, integrated delivery systems (IDS), pay for performance model, and use of social media as a communication tool are all current trends in healthcare that will affect healthcare human resource management (HRM). Discuss in detail (based on current research) the impact of 1 of the above noted trends on the healthcare industry and the current initiatives or strategies formulated to confront the trend of your choosing.

fin 2

Consider the following abbreviated financial statements for Weston Enterprises:  WESTON ENTERPRISES
2019 and 2020 Partial Balance SheetsAssets Liabilities and Owners’ Equity   2019  2020    2019  2020   Current assets$1,198 $1,275  Current liabilities$538 $580   Net fixed assets 5,727  6,023  Long-term debt 3,188  3,429  WESTON ENTERPRISES
2020 Income Statement  Sales$17,349    Costs 5,143    Depreciation 1,492    Interest paid 648   a.What was owners’ equity for 2019 and 2020? (Do not round intermediate calculations.)

b.What was the change in net working capital for 2020? (Do not round intermediate calculations.)

c-1.In 2020, the company purchased $3,070 in new fixed assets. How much in fixed assets did the company sell? (Do not round intermediate calculations.)

c-2.In 2020, the company purchased $3,070 in new fixed assets. What was the cash flow from assets for the year? The tax rate is 25 percent. (Do not round intermediate calculations.)

d-1.During 2020, the company raised $722 in new long-term debt. How much long-term debt must the company have paid off during the year? (Do not round intermediate calculations.)

d-2.During 2020, the company raised $722 in new long-term debt. What was the cash flow to creditors? (Do not round intermediate calculations.)   


During the year, the Senbet Discount Tire Company had gross sales of $535,900. The company’s cost of goods sold and selling expenses were $176,600 and $103,200, respectively. The company also had debt of $482,000, which carried an interest rate of 7 percent. Depreciation was $61,500. The tax rate was 22 percent.

 a.What was the company’s net income? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

b.What was the company’s operating cash flow? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)   

5j c

In the last couple of weeks, you have been studying investment methods and opportunities for corporations. Using some of the same information and theories, you will apply this to your own personal finance investing opportunities.

Investing can be a struggle for many people. The many different options and directions available can quickly become overwhelming. Some are riskier than others. The very best thing to do for yourself is to always go into any investment armed with information. Having a complete picture of your current finances (net worth, net income, and monthly/yearly plan for spending) is the first step in determining the best investment options for you. Having a complete picture of the investment options that might interest you is the second step.

After reviewing the Personal Investment and Diversification Resource, in particular the last page of resources, determine how you might incorporate some of these investment opportunities into growing your own personal wealth. Your reflection should be a minimum of 350 words.

5 ccc

Assume you are the CFO of a medium-sized company and you are advising the CEO on some upcoming strategic initiatives that will have long-term implications. In other words, these are important decisions.

For your initial discussion forum post, address the following questions posed by the CEO:

It appears we may need to raise more capital. Is expanding debt a good idea? Why or why not and should our given assets impact this decision?

In our economic environment, should we issue bonds, common stock, or preferred stock? What would be some pros and cons?

Or should we forego this immediate opportunity and buy back some of our outstanding common stock? What market conditions would make this a good move; what might be some pros and cons?

Should we issue a dividend, or should we retain cash in the company for future opportunities? How might this impact future growth? Are we obligated to pay our shareholders a dividend?