COURSE: FINANCIAL ACCOUNTING II
Sardar Asim Hassan Khan
Core Reading List:
Text Books:
1. Warren, Carl, Reeve J. & Duchac, J. (2007) Accounting, 22nd Edition. Thomson South-Western Co.
2. Larson, Wild, Chiapetta, (2005) Fundamental Accounting Principles, 17th Edition, McGraw Hill
Publishing Co.
Reference Books:
1. Warren, Carl, Reeve J. & Duchac, J. (2009) Accounting, 23rd Edition. Thomson South-Western Co.
2. Fess Philip E; and Carls Warren. (1990) Accounting Principles, 16th Edition, South-Western Co.
3. Williams, Haka, Bettner, Meigs, (2003) Financial Accounting, 11th Edition, McGraw Hill Publishing
Company.
Course Objective:
This course is a continuation of Accounting I. It covers elementary partnership accounting (Formation, income
division and liquidation). Special emphasis is given to measurement problems of corporations. A part of the
course is devoted to topics including inter company investments, international accounting, financial statement
analysis, and the statement of cash flows. This course also covers elementary cost and managerial accounting for
manufacturing companies.
Final Assessment Criteria:
The Final Grade will be based on the following:
Mid-term Exam
Final-term Exam
Term Paper
Quizzes
Assignments (Cases)
Attendance & Participation
25%
40%
15%
10%
05%
05%
1
COURSE: FINANCIAL ACCOUNTING II
LECTU
RE NO.
1
2
3
4
5
6
7
8
9 & 10
11
11
12
13
14
CHAPT
ER
Warren
11
Warren
11
Larson
12
Warren
12
Larson
12
Warren
12
Larson
12
Warren
12
Larson
13
Warren
13
Larson
13
Warren
13
Warren
14
Larson
15
Warren
14
Larson
14
Warren
15
Larson
14
Warren
15
Larson
14
Warren
15
LECTURE SESSION
QUIZ/ASSIGNMENT
Current Liabilities, Short-term Notes payable, Payroll and
Payroll Taxes, Liability for Employer’s Payroll Taxes
Accounting Systems for Payroll and Payroll Taxes, Employees
Fringe Benefits, Postretirement Benefits other than Pensions
Characteristics of Proprietorships, Partnerships, and Limited
Liability Companies, Advantages and Article of Partnership.
Formation
EO. 1,2,3,4,5, Ex. 11-1,2,3 to 11
Prob. 1A, 2A, 3A, 4A, 5A, 6A
EO. 6 to 14, Ex. 4,5,6,7 to 22
Prob. 2A, 3A, 4A, 5A, 6A
Quiz 01, EO. 1 to 6, Ex.12-1, Prob.
1A
Division of Net Income and Net Loss
Dissolution of Partnership – Admission and withdrawal of
partners.
EO. 7 to 13, Ex.12-2,3,4 to 18, 1226
Prob. 2A, 3A, 4A
Liquidation of Partnership
Discussion Questions; Exercises and Problems
EO. 14, Ex. 12-5,6 19 to 25,
Prob. 5A, 6A
Nature of the corporate form of organization & sources of
stockholder’s equity. Classes of Capital Stock Accounting for
Stocks Share Values – issuing of stocks
Quiz 02, EO 1, 2, 3, 5, 6, Ex.13, 1,
2, 3, 4,5, 6, 7, 8 ,Prob. 1A, 2A, 3A
Accounting for Dividends, Treasury stock transactions,
Reporting of stockholder’s equity. Retained Earnings
restrictions and prior-period adjustments. Effect of stock splits
on corporate financial statements
Corporate Earning & Income Taxes, including deferred income
taxes. Allocation of Income Taxes between Periods, Unusual
items in Financial Statements
Income statement reporting earnings per share data, concept
and reporting of comprehensive income. Business
Combination, Investment in Stocks (Short-Term and LongTerm) Accounting for Investment in Stocks.
Potential impact of long-term borrowing on the earning per
share.
Characteristics, terminology, and pricing of bonds payable.
EO. 4, 7, 8, 10 to 13, 15, 17
Ex. 3, 4, 9, 10, 11, 12, 13, 15 to 22
Problem.3A, 4A, 5A
Quiz 3, EO. 1 to 7, Ex.1 to 13, 19
Prob. 1A, 2A, 3A
EO. 8 to 16, Ex.13 to 24, Prob.3A,
4A,
5A,6A
Quiz 4, EO. 1 to 8, Ex. 1 to 10, 13,
Prob.1A, 2A, 3A
Accounting for Bonds Payable, Amortization of bonds, ZeroCoupon Bonds
EO. 9, 10, 12,Ex. 8 to 15,Prob. 4A
Appropriation of Bonds, Bond Redemption, entries for bond
redemption.
Journalize entries for the purchase, interest, discount and
premium amortization, and sale of bond investments.
Appendix—Effective Interest Rate Method Of Amortization
Revision
MID TERM EXAMINATION
EO. 11, 13, Ex. 14 to 20, Prob. 5A
2
Quiz 5, Ex. 21 to 24,Prob. 6A, 7A,
8A
15
16
17
18
19
20
21
22
23
24
25
26
26
Larson
16
Warren
16
Larson
16
Warren
16
Larson
17
Warren
17
Larson
17
Warren
17
Larson
18
Warren
18
Larson
18
Warren
18
Larson
19
Warren
19
Larson
19
Warren
19
Larson
20
Warren
20
Larson
20
Warren
20
Larson
20
Warren
20
Larson
22
Warren
21
Larson
22
Warren
21
Checking of Papers Nature of Statement of Cash Flows,
Reporting Cash Flows
EO. 1 to 4, 10, 12, Ex.1, 2, 3, 6, 7,
Prob. 1A
Assembling data & Preparation of Statement of Cash Flows using EO. 5 to 9, Ex. 4, 5, 6, 7, 8, 15 to
the indirect and direct method.
18
Prob. 2A, 3A, 4A, 5A, 6A, 7A
Basic Analytical Procedures
Horizontal & Vertical analysis
Quiz 6, EO. 1 to 4, Ex.1 to 5,
Prob.1A, 2A
Solvency Analysis , Profitability Analysis, Contents of
corporate annual reports
EO. 5 to 23 , Ex. 6 to 19, Prob. 3A
to 11A
Financial & Managerial Accounting, Characteristics of
Management Accounting Reports, Manufacturing, Non
Manufacturing Costs
Quiz 7, EO. 1 to 15, Ex. 1-7, Prob.
1A. 2A, 3A, 4A
Financial Statements for Manufacturing Enterprises
EO. 17 to 21, Ex. 8 to 17, Prob.
5A
Accounting systems used by manufacturing businesses, Journal
entries for a job order cost accounting system. Accounting for
materials , Accounting for labor
Quiz 8, EO. 1 to 10, 15, Ex. 1 to 8
Prob. 1A, 2A, 3A, 4A, 5A
Allocation of Overhead, Over applied and Under applied
Overhead
Summary journal entries for a job order cost accounting system
EO. 1, 12 to 15, Ex. 1, 8, 9 to 14
Prob. 1A, 2A, 3A, 4A, 5A, 6A
Process Cost System, Cost of Production Report
Quiz 9, EO. 1 to 5, Ex.1-4, 18, 19,
Prob.1A, 2A, 5A
FIFO Method, Service Deptt. & Product Costs
EO. 6 to 9, Ex. 5 to 19 Prob.1A,
2A, 3A, 4A
Joint Products & By-products, contrast just in time processing,
Illustration of Process Costing, Appendix—Average Cost
Method
EO. 10 to 15, Ex.3, 4,18, 19,
Prob.5A,6A,7A
Quiz 10
Cost Behavior, Cost-Volume-Profit Relationship
Quiz 10, EO. 1 to 8, Ex.1 to 8,
Prob.1A
Contribution margin, contribution margin ratio and the unit
contribution margin. Break-Even Point and Target Profit, CostVolume-Profit Chart
EO. 15, Ex. 9 to 19, Prob. 2A, 3A,
5A
3
27
Larson
22
Warren
21
28
Sales Mix Consideration, Special cost volume relationships,
Limitation of cost value profit relationship.
FINAL EXAM
COURSE: FINANCIAL ACCOUNTING II
Grade Range:
85 – 100
81 – 84
77 – 80
73 – 76
70 – 72
65 – 69
60 – 64
55 – 59
50 - 54
Below 50 %
A
AB+
B
BC+
C
CD
F
4
EO. 16, 17, Ex.21 to 25, Pro.6A,
Quiz 11
Term Paper
SECTION 1
1.
2.
Brief History of the representative company.
Analysis of the data in terms of:
i.
Horizontal Analysis
ii.
Vertical Analysis, [Common-size statements]
iii.
All ratios and percentages & analysis such as liquidity, profitability, ROI, etc.
3.
Interpretation of the data in terms of:
i.
Horizontal Analysis
ii.
Vertical Analysis [Common-size statement]
iii.
All ratios and percentages & analysis such as liquidity, profitability, ROI, etc.
SECTION 2
1.
2.
Brief history of the leading company in the industry
Analysis of the data in terms of:
i.
Horizontal Analysis
ii.
Vertical Analysis [Common-size statement]
iii.
All ratios and percentages & analysis such as liquidity, profitability, ROI, etc.
3.
Interpretation of the data in terms of:
i.
Horizontal Analysis
ii.
Vertical Analysis [Common-size statements]
iii.
All ratios and percentages & analysis such as liquidity, profitability, ROI etc.
SECTION 3
Perform Inter-company comparison of representative and leading company
Conclusion
State whether the representative company is doing well or not.
Note:
a.
b.
Pick most recent annual reports of a representative company, for three years.
Pick most recent annual reports of the leading company, for two years.
5