Materials, WIP and Finished Goods

I caught 3 or 4 people nodding off last night. I started making faces at everyone to see who was paying attention. I didn't see any reaction and think a few people were thinking I was having face spasms. I also said something like raw materials could be nails, lumber, dogs, cats...didn't even see anyone flinch. At least I can entertain myself. I'm always glad when someone leaves then comes back. I often think "that's the last I'll see of Michael" then in 10 mins or so he wanders back in. ha.

Chapter 18 is the introduction to management accounting. We don't get too detailed but give you the outline of what happens in a cost accounting system. Future chapters will go into Process costing, job costing, analyzing, break even etc.

Mary-Liz sounds like she's had some experience with all this. We are talking A, B, and C's and she's near the X, Y, Z's. It's basic at this point. Don't get frustrated.

Homework next class and Test overview. Don't miss the fun.

Analysis overview

Started off looking at a couple of companies for analyzing. Target had an easy downloadable excel tool for their financials. Others from PDF aren't too good but can get some numbers into Excel but doable.

Went over homework. I use the term "went over" lightly. Put the answers up on the screen for everyone to check their work. Started chapter 18 which is a shift in topics. Introduction to management accounting. The introduction chapter is a little fluffy but that only makes for an easy chapter test. Two more classes left before we have a week off. Next Tuesday we have the rest of chapter 18's lecture. Next Thursday is homework and test review. Test will be March 17th.

Got permission to send out a students project from last year. They want royalties on any money I make off it so make sure you pay me lots so I can share the wealth with them. Contact me if you don't get an email in the next hour.

Homework for next Thursday:


•E18-20
•P18-26A
•P18-27A
•P18-30A

Financial analysis chapter

Tried to make the lecture as painless as possible. Hard to do when all that's in the chapter is going over innumerable formulas and problems. The fun stuff was looking at both horizontal and vertical analysis methods. It will hopefully make sense when we do the homework next class.

Next class I'm thinking of going through the homework questions then choosing a company to do a little analysis on so you can see how I'd do the project.

I'll email out some sample writing formats and Excel analysis.

Ashely tried using a computer in class then ran out of battery half way through. Poor thing had to actually pretend to pay attention some of the time. Debye was yawning. Tune talked about tuff times at Semitool. Liz made me laugh about something. Can't remember what it was but was something about every answer is "it depends" (I think). Mary-Liz told us how many jobs there are up in Eureka. Zippo.

Homework is listed on the last post. Only addition to that would be coming to class with the company you want to analyze.

Homework chapter 16

Gave a quiz tonight. I'm sure some of you are thinking "I can't believe this class is so easy". Not to fear, some challenging stuff is ahead. Although it still just seems to me like we are hanging out, having fun, talking about accounting. Some of you asked if my wife knows how dorky I am. Yes my friends, she is well acquainted with my inner (and sometimes outer) geeky tendencies.

Finished homework for statement of cash flows. We are onto chapter 17. Should be a good chapter to bring the project all together.

Everyone should be figuring out what company you are going to do the project on. This would include finding the shareholders annual handout etc. Usually you can download this from the web. They are usually a hundred pages or so. Pass it by me if you have any questions on whether your company would be good or not.

Hope doing the homework in class is still useful. I could sense boredom from some of you, relief that it all came together for others, and anxiety for a select few. Here is a summary of the steps to doing a statement of cash flow:

1. Complete P and L and BS first
2. Enter in Net income at the top of the sheet
3. I usually put in beginning and ending balance in so I know what I'm reconciling to
4. Fill out operating activities section (steps 5 through 8)
5. Add back in Depreciation
6. Add or subtract gains or losses on selling assets
7. Add or subtract the net change on all current assets (increase in balance, decreases cash flow or vice versa. Think opposite thumbs.)
8. Add or subtract current liabilities (increase in balance increases cash flow. Thumbs go in the same direction).
9. Fill out investing activities section (step 10)
10. Add or subtract increases in long term assets (Opposite thumbs)
11. Fill out financing activites section (steps 12 through
12. Add or subtract long term liabilities section (same thumb direction)
13. Add or subtract capital section ( Add issuing of stock, subtract dividend)
14. Make sure your ending balances are equal. Find your mistakes.

Only 14 steps. Sounds simple.

Lost my goggles this weekend. I'm sure someone snagged them. Have any good deals on goggles Ashely?

Homework:

Read chapter 17.

Pre homework for next Thursday for you ambitious types:


•E17-20
•P17-24A
•P17-25A
•P17-26A

Statement of Cash Flow

Went over the test. Everyone did fairly well as a whole. Handed out project. I'll post samples in a few days a blog specifically on the project.

Got done most of Chapter 16 which is statement of cash flows and assigned homework. Tried to keep the class entertaining with stupid accounting jokes on the slides. Hopefully most people stayed awake. I know Sheila was having a struggle with that.

Josh was happy with his test grade. Think Mary-Liz and Nikki wanted a better score. Michael was expecting the worst but was OK with what he got. Tami was disappointed with her grade but found an extra couple of marks to bring her score up a bit.

We will go over homework on Thursday so hopefully it will make everything come together. This is a thumb chapter so you can put those digits to good use again.

Homework:


•E16-29
•P16-35A
•P16-36A
•P16-44B
•P16-45B

Test night

I can sense the anxiety in the room. People are sweating. I've caught a few dismayed looks. Relax the first test is over. It's all down hill from here.

I will present the project next class so you will want to be here for that. It ties in with chapter 17 which is in this unit.

Happy Valentines day and President's day weekend. Bought my wife roses tonight so I could make sure I get them to her before Saturday. Seems like if I don't do it a day early I forget. Truth be told this is the first time I've remembered Valentines day. I hope she doesn't wonder what I did to feel the need to go through the hassle of flowers. I hope I'm not the only guy that is terrible on days such as this. OK, another truth, part of me thinks if I get her roses for tomorrow she'll let me go skiing on Saturday. ha.

Homework:

Read chapter 16

Bond wrap up

Spent the class on bonds. Gave a quiz and went over the answer. The question is similiar to a question on the test. Didn't have much time to go over all the homework. Think we completed 2 questions and the quiz. Had a hard time getting through on the comparing to market rate question. It always is confusing to see the spreadsheet listed as it is.

If you want a set formula for discount versus premium it's this: If market rate is higher than our bond we sell at a discount. If market rate is lower we sell at a premium. Discount means lower than par, premium higher than par.

I sent out the homework answers to everyone I had an email for. If you didn't receive it email me and I'll send it again.

Went over the test so everyone know what to study for. Hopefully that helps in your preparation time. Remember, you can bring in a regular size paper as a cheat sheet. Hopefully that helps your study preparation as well.

Here is the quiz question so you can work it again if you like. This was at a premium. Should also know if it's listed at a discount.

On March 1, 2008, a corporation issued $60,000, 5%, 15-year bonds at 115. The bonds pay interest each September 1 and March 1 and the corporation uses the straight-line method to amortize premium or discount. Prepare entries for the issue of the bonds, for the first interest payment and for the adjusting entry on December 31. (10 Points). (Anyone remember what page the book goes over something like this? 7xx something a ruther.)

Test on Thursday.