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  Complete an assessment with two main sections, which address (1) accounting fo

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Complete an assessment with two main sections, which address (1) accounting for current plant assets and (2) receivables aging and plant assets.
Introduction
Note: An accounting cycle requires specific steps that must be executed in a sequence. The assessments in this course are presented in sequence and must be completed in order.
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the course competencies through the following assessment scoring guide criteria:
Competency 1: Define financial accounting conventions to support practice as a professional in the field.

Analyze accounts receivable and the allowance for doubtful accounts.
Apply last in, first out (LIFO) rules to inventory valuation.

Competency 2: Examine the role of accounting as an information system.

Explain how changing depreciation methods for plant assets can be an effective tool for managing earnings.
Explain how changing estimated useful asset lives can be used as a tool to manage earnings.
Explain how impairment losses might be used as an earnings management tool.
Provide an example of how impairment losses might be used as an earnings management tool.

Competency 3: Evaluate economic resources of a business enterprise.

Apply the costs and values for acquiring plant assets.

Competency 4: Analyze financial liabilities and equities of an enterprise.

Calculate depreciation amounts for plant assets.

Competency 5: Communicate in a manner that is professional and consistent with expectations for professionals in the field of accounting.

Explain why a company should adopt the receivable aging method versus direct write-off method.
Communicate in a manner that is professional and consistent with expectations for professionals in the field of accounting.

Preparation
Assessment 3 Template [DOC].
Part 1 – Receivables Problem Sheet [DOC].
Part 2 – Inventory Issues Problem Sheet [DOC].
Part 3 – Acquisition Costs of Realty Problem Sheet [DOC].
Part 4 – Depreciating Plant Assets Problem Sheet [DOC].
Overview
Note: Do not proceed with this assessment until you have reviewed faculty feedback on Assessment 2.
This assessment has two main sections:
Accounting for Current Plant Assets.
Receivable Aging and Plant Assets.
Section 1 has four parts. Each part requires the use of a separate problem sheet. Record your answers from all four parts in the Assessment 3 Template. All problems sheets and the Assessment 3 Template are linked in the Resources under the Required Resources heading. Submit the completed template.
Section 1: Accounting for Current Plant Assets
Imagine your boss just placed four new files for retail and manufacturing businesses on your desk and told you to finish the work before the end of the day. Complete the following, showing all calculations leading to the final solution, where appropriate.
Part 1: Receivables Reporting
In Part 1:
Complete the problems in Part 1 – Receivables Problem Sheet.
Use Part 1 of the Assessment 3 Template to record your answers.
Part 2: Inventory Issues
In Part 2:
Complete the problems in Part 2 – Inventory Issues Problem Sheet.
Use Part 2 of the Assessment 3 Template to record your answers.
Part 3: Acquisition Costs of Realty
In Part 3:
Complete the exercise in Part 3 – Acquisition Costs of Realty Problem Sheet.
Use Part 3 of the Assessment 3 Template to record your answers.
Part 4: Depreciating Plant Assets
In Part 4:
Complete the exercises in Part 4 – Depreciating Plant Assets Problem Sheet.
Use Part 4 of the Assessment 3 Template to record your answers.
Section 2: Receivables Aging and Plant Assets
There are two parts to this section. Complete both parts as described below.
Part 1: Receivables Aging
A heavy-duty trucks parts re-manufacturing company has hired you as a consultant to review its current accounting procedures and to provide it with a report addressing changes that you feel need to be made to improve its internal controls, and the accounting and reporting processes.
The company president does not understand the recommendations that you have offered to improve the accounting and reporting of uncollectible accounts. The company currently uses the direct write-off method and you have suggested that it use the accounts receivable aging method to estimate its future bad debts. The president stated:
In my opinion, financial statements should be based on what actually took place rather than what we think will happen in the future. In other words, I think they should be objective rather than subjective. After all, our bad debt expense has been almost the same amount for each of the past three years and is thus very predictable. By using the direct write-off method, we are reporting exactly what took place. Why do we need to change?
publish a one-page memorandum in Word responding to the concerns and objections of the company president, and in support of your recommendation for the company to adopt the receivable aging method going forward.
Additional Requirements
Part 1 of Section 2 should meet the following requirements:
Written communication: Written communication should be clear, well-organized, and support a central idea, with no technical writing errors, as expected of a business professional.
References: References and citations should be formatted using current APA guidelines for style and formatting.
Length of paper: 1-2 typed, double-spaced pages.
Font and font size: Times New Roman, 12 point.
Part 2: Plant Assets
Managers of publicly traded companies are under constant pressure to meet or exceed Wall Street analysts’ earnings projections from stockholders and creditors, so that stock prices will increase and thus the value of stock options will be increased. Some corporate officials turn to earnings management practices to artificially achieve the desired results.
Answer the following questions in regard to these practices:
Is changing depreciation methods for plant assets an effective tool for managing earnings? Explain.
How might changing estimated useful asset lives be used as a tool to manage earnings? Explain.
What are impairment losses? Explain and provide an example of how this might be used as an earnings management tool.
Additional Requirements
Part 2 of Section 2 should meet the following requirements:
Written communication: Written communication should be clear, well organized, and support a central idea, with no technical writing errors, as expected of a business professional.
References: References and citations should be formatted using current APA guidelines for style and formatting.
Length of paper: 2-3 typed, double-spaced pages.
Font and font size: Times New Roman, 12 point.
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the course competencies through the following assessment scoring guide criteria:
Competency 1: Define financial accounting conventions to support practice as a professional in the field.

Analyze accounts receivable and the allowance for doubtful accounts.
Apply last in, first out (LIFO) rules to inventory valuation.

Competency 2: Examine the role of accounting as an information system.

Explain how changing depreciation methods for plant assets can be an effective tool for managing earnings.
Explain how changing estimated useful asset lives can be used as a tool to manage earnings.
Explain how impairment losses might be used as an earnings management tool.
Provide an example of how impairment losses might be used as an earnings management tool.

Competency 3: Evaluate economic resources of a business enterprise.

Apply the costs and values for acquiring plant assets.

Competency 4: Analyze financial liabilities and equities of an enterprise.

Calculate depreciation amounts for plant assets.

Competency 5: Communicate in a manner that is professional and consistent with expectations for professionals in the field of accounting.

Explain why a company should adopt the receivable aging method versus direct write-off method.
Communicate in a manner that is professional and consistent with expectations for professionals in the field of accounting.

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