Unit 5 Assignment
REAL WORLD FOCUS UNIT 4 CASE STUDY PART 1 0
Real World Focus Unit 4 Case Study Part 1
Bryan C. May
Kaplan University
CT1-5
REAL WORLD FOCUS Unit 4 Case Study Part 1
What is the company name?
Sony Inc. Company
What is the company’s net income? Over what period was this achieved?
The net income of Sony Inc. Company is one hundred (100) million United States dollars or Japanese yen. This was achieved in the period of 2008 to 2017 (period of nine years)
What are the company’s total sales? Over what period was this achieved?
The total sales of Sony Inc. Company is over 100 million products for the period of 2008-2017 (Bhasin, 2015)
What is the company industry? The Sony Inc. Company industry is mainly electronics across the globe
What are the names of four companies in the industry? The four companies in the industry include Sonny software limited, Sonny hardware limited, Sony Corporation, Sonny movie and music.
Choose one of the competitors. What are the names, total sales and the net income
The competitor to Sony Inc Company is Samsung, the total sales is about 90 million Japanese yen, and the net income being 90-100 million dollars
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REAL WORLD FOCUS
Purpose: Identify summary liquidity, solvency, and profitability information about companies, and compare this information across companies in the same industry.
What is the company’s name? What were the company's current ratio and debt to equity ratio (a variation of the debt to assets ratio)?the company’s name is Sony Inc Company limited, current is $7,870/$4,550, the debt to equity ratio is 1.6004
What is the company’s industry? The Sony Inc Company industry
What is the name of the competitor? Samsung, with current ratio $6780 /$ 3550 and equity debt ratio of 1.9806 (Bhasin, 2015)
Based on these measures, which company is more liquid? Which company is more solvent? Sony Inc. Company is more liquid and also more solvent
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REAL WORLD FOCUS
What event spurred the creation of the SEC? Why was the SEC created?
The government conducted hearings in discussing the decline in the American economy which catapulted the United States into Great Depression. On the basis of what the Congress discussed in the hearings, Congress passed the Security Act of 1933.the security exchange act of 1933 and the law led to the creation of the SEC.SEC was mainly designed to restore the confidence of investors in the capital market through the provision of clear policies and information to the investors and the global market. The act was created to enforce faith, honesty in the investment gain and also to provide close monitoring and evaluation of the investment activities (Pal, Sana, & Chaudhuri, 2014).
CT4-5
REAL WORLD FOCUS
What is the five division of the SEC? Briefly describe the purpose of each
Division of the corporate finance this division mainly focuses on the ability of the enterprise to provide transparency with the investment and financial activities.
The division of markets and trade this division maintains all the investment markets. The Division staff provides daily oversight of the key security market participants, the securities exchange, firms, (SRO) the self -regulatory organizations, the credit rating agencies, agent’s transfers. Others include the financial industry regulatory authorities.
The division of investment management it helps in providing protection for the investors and also provides an oversight on the investment management industries.
Enforcement division-this division helps in the execution of the current laws.
The division of economic and risk analysis this provides assistance to the Commission in executing and implementing its mission to provide protection to the investors, maintaining fairly, orderly. Efficiency in the markets.in addition to facilitating the capital information through the integration of economic analysis.
What are the responsibilities of the chief accountant?
The chief accountant assists the commission in auditing and accounting on the matters that affect the organization. The chief accountant is also responsible for the accounting principles, standards, and either approval or disapproval of the auditing rules and regulations.
CT6-5
REAL WORLD FOCUS
Purpose: Use SEC filings to learn about a company's inventory accounting practices.
The name of the company is - Sony Inc Company Limited
How has the inventory changed from the previous year? The inventory of the company has increased due to more materials and products that are being purchased due to high demand.
What is a number of raw materials, work in process and finished goods inventory? There a lot of raw materials that could amount to million dollars, the work in process are much and the finished goods in the inventory amount to a lot of dollars.
What inventory method does the company use? The LIFO method
Calculate the inventory turnover and days in inventory for the current year
The inventory turnover ratio of the company is 9, while the number of days is the number of days in an annual year divided by the turnover ration
The number of days becomes 365/9- becomes 41 days.
If the company uses LIFO, what was the amount of its LIFO reserve?
LIFO reserve=FIFO-LIFO inventory
Example the Sony Inc Company has FIFO of $100,000 and LIFO inventory of $55,000 for the fiscal year
LIFO reserve=$100,000-$55, 000
=$45,000
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REAL WORLD FOCUS
The Financial Accounting Standards Board (FASB)
What is the mission of the FASB?-The mission of the FASB is establishing and improving standards of the financial accounting and giving reports for guidance and education of the general public including the audits, issues, and users of the financial data (Weidner, 2016).
How are topics added to the FASB’s technical agenda?
The organization gets requests for its action on different financial accounting and reporting subjects or topics from different segments from diverse constituencies including SEC. The auditing career is significant and sensitive for the emerging trends in practices and is also a source of requests. Generally, the requests for actions include new topics and reconsideration or review of the existing pronouncements. FASB is always alert on the trends of financial reporting through the observation of the published reports in liaison with the organizations with interest.in addition to recommendations from the discussion of the emerging issues. FASB’s staff members receive several technical and vital inquiries through the telephone or letters. This may provide clear evidence that certain topics or pronouncement has become a challenge. FASB is also alert to the changes that occur in the financial reports surroundings that are likely to emerge as a result of regular decisions or new regulations
What characteristics make FASB’s procedures an open decision-making process?
There are multiple investments and investors hence the decision-making process becomes more open for all the investors. The investors are not related to the managers of the FASB, and ownership is provided in the form of partnership or equity. There are core values that govern FASB’s procedures therefore making it an open decision-making process. There is consistency, neutrality, verifiability, and relevance by the FASB (Weidner, 2016). These qualitative traits make it have more followers and investors depend on it for better decision making. Other primary characteristics include reliability, timeliness, relevance, and representational faithfulness. The characteristics enable the FASB to achieve it set objectives and mission during the decision-making process.
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REAL WORLD FOCUS
Purpose to learn more about factoring from the websites that provide factoring services
What are some of the benefits of factoring? Factoring in business has several benefits. These include:
The unlimited capital-factoring grows with the sales of the business. With the increase in sales, there is availability of more cash which allows the individuals to meet their business demands (Michalski, 2014)
Fast and easy-Methods used in establishing factoring is fast and cheap than other types of financing sources. There are no tax returns, business plans, financial statements that are needed. There are no debts incurred since factoring is not a loan. This helps in maintaining the balance sheets hence making it easier to sell the organization or source for other means of funds.
Credit screening-Factoring provides credit information to the company about the new consumers hence allowing for better credit decisions.it may not be for everyone but factoring provides better credit screening especially for those on the banking sectors (Michalski, 2014). Other benefits of factoring include nor individual/personal guarantees, there is faster payment of the invoices,, increased elimination of worst debts, professional collections of products.it is also characterized by payment discounts
What is the range of the percentages of the typical discount rate?
The factoring rate is used by the factoring companies that purchase the commercial invoices at more discounted prices. The range of the percentages of the typical discount rates is between (95-100%) (Pal, Sana, & Chaudhuri, 2014).this is always affected by the monthly factored volume, the size of the individual invoice, the industry and credit of the clients.
Percentage of the value of the receivables-The percentage expected is 75% and the cash should be received immediately the business is transacted. The receivables should be made with better liquidity for better percentages to increase profits for the company.
CT9-5
REAL WORLD FOCUS
Purpose: Use an annual report to identify a company's plant assets and the depreciation method used
a. What is the company name? -Sony Inc. limited
b. What is the internet address of the annual report? -the annual reports about the internet that occurs after analysis and recommendations
(c) At fiscal year-end, what is the net amount of its plant assets?
The net amount of the Sony Inc Company plant assets amount P 100,000(net plant assets)
(d) What is the accumulated depreciation?
This is the heading of Contra assets accounts which are always credited when the expenses of depreciation are recorded for the each accounting period.it is mainly used in the determination of the firm asset’s carrying value.
(e) Which method of depreciation does the company use?-the Sony Inc. Company uses the declining-balance method to calculate its level of depreciation since the method results in higher depreciation expense (Michalski, 2014).
References
Weidner, D. J. (2016). New FASB Rules on Accounting for Leases: A Sarbanes-Oxley Promise Delivered.
Correia, M. M. (2014). Political connections and SEC enforcement. Journal of Accounting and Economics, 57(2), 241-262.
Michalski, G. (2014). Factoring and the firm value.
Bhasin, M. L. (2015). Creative Accounting Practices in the Indian Corporate Sector: An Empirical Study.
Pal, B., Sana, S. S., & Chaudhuri, K. (2014). Optimal pricing and ordering policy for two-echelon varying production inventory system. Journal of Industrial Engineering, 2014.
Tatum, A. W. (2015). Writing Through the Labyrinth of Fears. Journal of Adolescent & Adult Literacy, 58(7), 536-540.
