ACC 690 Final Project Guidelines and Grading Guide Consolidation Model
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Friday, 16 October 2015

ACC 690 Final Project Guidelines and Grading Guide Consolidation Model


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ACC 690: Final Project Guidelines and Grading Guide:
Consolidation Model
Overview
The final project for this course is the creation of an Excel spreadsheet model that shows the consolidation worksheet, intercompany elimination entries, other consolidation entries, and the final income statement and balance sheet for a sample parent and subsidiary company. The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitted in Modules Five, Eight, and Ten.


GuidelinesThe Model Assignment:  
·        Students will be given the description of a parent company and a subsidiary company along with the two firms’ trial balances at book value as of December 31, 2012, the end of the year for both firms. (See Company Information below.)
·        The financial data will be presented in English pounds as local currency.
·        Other data pertaining to the consolidation is also to be provided.
·        The student will analyze the data for purpose of consolidation.
·        The student will create a useful Excel model that shows the consolidation worksheet, intercompany elimination entries, other consolidation entries, and the final income statement and balance sheet.
·        Using the consolidated financial statements created, students will then use Excel modeling to translate the consolidated income statement and balance sheet from the English pounds to U.S. dollars based on exchange rates provided. (The U.S. dollar is the functional currency.)

Requirements:

·        This project should be prepared as a report for your supervisor.
·        The report should be visually pleasing.
·        As many computations as possible should be done by the model with the exception of entering the original financial statement data.
·        The report should utilize “macros” and other built-in features found in Excel.

Milestones
Milestone One:Initial Model
In task5-1, you will submit the initial Excel model for the report that shows the consolidation entries and the final income statement and balance sheet. This milestone will be graded using the Final Project Milestone One Rubric.

Milestone Two: Model and Exchange Rates
In task8-2, you will translate the consolidated income statement and balance sheet from English pounds to U.S. dollars.This milestone will be graded using the Final Project Milestone Two Rubric.
Milestone 3: Final Report
In task10-4, you will submit the final report as an attractive, polished artifact that includes all the main elements of the final product. The report should reflect the incorporation of feedback gained throughout the course. This milestone will be graded using the Final Report Rubric (below).


Company Information
Below you will find the trial balance for Parent Company and its wholly owned purchase, Subsidiary Company, as of December 31, 2012. The financial statements are denominated in British pounds.
Company
Parent
Company
Subsidiary
Company
Accounts
Debit
Credit
Debit
Credit
Cash
£10,000

£4,000

Accounts Receivable
25,000

10,000

Inventory
30,000

12,000

Short-Term Investments
40,000

6,000

Prepaid Assets
35,000

12,000

Investment in Subsidiary
290,000



Long-Term Notes Receivable
150,000

14,000

Debt Service Fund
50,000



Depreciable Assets
900,000

350,000

Accumulated Depreciation

£200,000

£50,000
Intangible Assets
45,000

20,000

Current Liabilities

92,000

44,000
Long-Term Notes Payable

225,000

119,000
Common Stock

400,000

200,000
Retained Earnings

482,000

50,000
Sales Revenue

750,000

245,000
Cost of Goods Sold
330,000

160,000

Selling Expenses
100,000

45,000

Administrative Expenses
120,000

70,000

Interest Expense
24,000

5,000

Other Important Information:
1.      Subsidiary Company’s assets and liabilities are all shown at fair value except for:
a.      The fair value of Inventory is 32,000.
b.      The fair value of Depreciable Assets is 370,000.
2.      Subsidiary company sold Parent Company an item that is in Parent Company’s inventory for 10,000 and cost Subsidiary Company 5,000. The sale was made to Parent Company on credit, and no payment has been made.
3.      On December 27, 2012, Parent Company made a long-term loan to Subsidiary Company in the amount of 100,000.
4.      Subsidiary Company paid Parent Company 7,000 for Consulting Services. Subsidiary Company considers this an Administrative Expense, and Parent Company considers it Sales Revenue.
5.      Exchange rates are:
March 31, 2012 Exchange Rate            1 £ = $1.24
Average Rate for 2012                        1 £ = $1.22
December 31, 2012 Exchange Rate            1 £ = $1.20




 
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