ECON 127 – INTRODUCTION TO FINANCIAL ACCOUNTING
Prof. Gosman -- Spring 2014
2:40 – 4:00, Tuesdays and Thursdays
COURSE INFORMATION
Instructor and Office: Prof. Martin Gosman, PAC 213
Telephone and e-mail: mgosman@wesleyan.edu; (860) 685-4634
Office Hours: Tuesdays & Thursdays 1:15-2:15 pm, and by appointment.
Reading: Spiceland, Thomas, and Herrmann, Financial Accounting, 3rd edition McGraw-Hill Irwin, 2014.
Gosman, ECON 127 Course Packet, Spring 2014 (purchase from Prof. Gosman)
Course Objectives: Upon completion of this course,
1.
You will have an introductory understanding of basic structure of income statements and balance sheets
prepared by firms, major items contained therein, and the purposes and limitations of those statements.
2.
You will understand how accrual-basis accounting differs from cash-basis accounting and why accrual
accounting is considered a more accurate basis for reporting.
3.
You will have an introductory understanding of the accounting numbers that appear in financial
statements and note disclosures for inventories, depreciation, and leases, the choices given to firms in
their reporting of these items, and how the use of different accounting methods for similar economic
events creates challenges for analysts.
4.
You will have begun to understand the purpose of the statement of cash flows, the reasoning behind its
structure, and why many analysts believe that the statement of cash flows can be the financial statement
that offers the most insight.
5.
You will have become familiar with the types of data/information presented in firms’ SEC 10-Ks, 10Qs, and Proxy Statements and be better able to interpret and use that data/information in a variety of
decisions.
6.
You will appreciate why controversy continues with respect to when firms recognize revenue and
understand the economic significance for firms and stakeholders.
7. You will have an introductory understanding of the different components of earnings and why analysts
value some more highly then others.
8. You will have begun to understand why financial ratios are calculated in certain ways, how those ratios
relate to each other, and are used (and sometimes misinterpreted) by credit and equity analysts,
Academic Integrity
During examinations, you must do your own work; collaboration is not permitted. Any such behavior will
result (at a minimum) in a zero on the exam
It is important that you purchase the text and the Course Packet during the first week of class and bring them
to each and every class. I will refer to specific pages in the text and in the Course Packet several times
during each class. Students who do not have the text and packet in front of them while I am referring to
specific pages find that their class notes are incomplete, placing them at a disadvantage when it comes to
reviewing for the exams.
Laptops, Cell Phones, and All Other Electronic Devices: Not to be turned on/used during class.
Behavior in class: It is most important that I have the attention of all students at all times. When students chat
with each other during class or text, it is more difficult for me to concentrate on the challenging material that I
need to cover and it is more difficult for the students who are paying attention to learn. If you chat with your
neighbor or text during class, you may be asked to leave that class and your seat location may be changed.
Class Discussion Notes: Class discussion notes are in the Course Packet. It is helpful to read the notes that
relate to the assigned chapter BEFORE reading the assigned text pages. In this way, you will have a sense of
what the major concepts are that will be discussed and what you need to especially focus on.
Homework: Several homework assignments may be collected. Many written assignments will be covered in
class on date for which they are listed. Solutions to exercises and problems shown in bold and larger size
are in Course Packet.
Questions listed are from REVIEW (Not Self-Study) QUESTIONS SECTION at end of chapter.
Exercises listed are in EXERCISES (Not Brief-Exercises) SECTION at end of chapter.
Unless noted otherwise, all Problems listed are from the Set A Problems, not the Set B problems.
All Additional Perspective (AP) assignments are in last homework section at the end of chapter.
Class Contribution: All students are expected to regularly participate in the class discussions. By volunteering
in class and also addressing issues when cold-called upon, you can raise your overall course average by
anywhere from 1-3 points.
Attendance: DO NOT COME TO CLASS IF YOU ARE ILL! If you are not ill, make every effort to
attend class. Each class aims to feature “added value,” insights that expand upon or extend those contained in
the textbook and course-packet readings.
Exams: Two challenging, closed-book, unit exams will be given during class. The final exam, closed book,
will be given as scheduled during the finals period. The exams will usually include a mix of computational,
short-discussion, and multiple-choice questions.
Make-up exams: Students who miss an exam and do not make it up will receive a zero on that exam. To
qualify to take a make-up exam, you must have a good reason for missing the scheduled exam and notify me
prior to the time of the exam you will miss.
Course Grade: Each of the first two exams is worth 32.5% of your grade and the final exam is worth 35%.
ECON 127 – Prof. Gosman
Spring 2014
2
ASSIGNMENT SHEET
Written Assignment__________________________
Reading Assignment ___
Text_____________________
Date
Text Chapter
CP
Questions_
1/23
1 (3-20)
1-3
10, 15, 16, 20
Exercises
Set A Prob.
Addt.Pers.
Handouts
6, 8
______________________________________________________________________________________
1/28
1 (21-27; 31)
21, 24 25, 31
18, 20
2 (55-62)
4-6
1, 4
2, 3
Blackboard
______________________________________________________________________________________
1/30
2 (63-68)
7-8
1, 2
3 (107-112M)
9
3, 5, 7
1, 2
______________________________________________________________________________________
2/4
3 (112M-119)
10-13
22
Theater Group
______________________________________________________________________________________
2/6
3 (129-130)
14-16
21
16 (1&3)
Hamden News
_______________________________________________________________________________________
5 (213-218M;
19-21
3, 5, 8, 12
10 (1&3)
1
219M-224; 228)
18
_______________________________________________________________________________________
2/13
5 (231M-232M;
22
21, 22, 23
5
5
Apparel
237-239M)
______________________________________________________________________________________
2/18
6 (261-273)
23-26
1, 4, 6, 7
4
1 (2-4)
5
8, 9, 12
_______________________________________________________________________________________
2/20
6 (274-275; 288-290)
27-30
19, 20
7 (Set B) 3(1-6) Wall St. Reaction
2/11
8 (Set B)
12 (583M-585)
23
14
______________________________________________________________________________________
2/25
Unit 1 Exam
______________________________________________________________________________________
2/27
7 (319-326-332)
31 1, 2, 10, 11, 15
1, 8
____________________________________________________________________________________
3/4
7 (330-341M)
32-33
20, 21, 22, 23
11
5
______________________________________________________________________________________
8 (369-371M; 378M- 34-37
2, 3, 4, 11
9 (1-2)
Short-Term
379M; 386-389M)
21, 22
Liquidity
Written Assignment_____________________
Reading Assignment
Text_____________________
3/6
3
Date
3/25
Text Chapter
8 (389M-390)
CP
Questions
Exercises
Set A Prob.
38-40
Addt.Pers.
Handouts
9(3)
_______________________________________________________________________________________
3/27
4/1
6
41-45
7(Set B, 1&3)
_________________________________________________________________________
9 (411-413; 432M436M; 437M-438)
10 (457-464M; 466;
468M-469M;
471M-472; 484
1
1, 2, 19, 20
46
12, 14, 21
4 (165-176)
17
1, 2, 5, 6, 14, 16
1
___________________________________ _________________________________________________
4/3
4/8
4 (184M-187M)
17-18
27
14, 15
11 (507-517M)
47-49
1, 9, 10, 13
1
8
____________________________________________________________________________________
Unit 2 Exam
____________________________________________________________________________________
FROM COURSE PACKET:
4/10
pp. 50-55:
ClearOne Communications, Article by Flitter, Article by Kahn
4/15
pp. 56-58:
Who Should Pay for Lunch? Andy Frain (text pp. 341M-343M will help you)
4/17
pp. 59-64:
Interpreting Firms’ Gross Profit; Target vs. Kohl’s; Interpreting Quarterly Results
4/22
pp. 65-69:
Argenti Corporation Case: Evaluating Credit Risk
4/24
pp. 70-84:
The Leslie Fay Companies Case
4/29
pp. 85-87:
Analysis of Financial Measures for “Financially Challenged” Retailers
5/1
pp. 88-89:
Using Balance Sheet Clues to Discover Firms’ Identities
5/6
pp. 90-95
Analysis of Data Gleaned from Firms’ Proxy Statements
Final Exam: Thursday, May 15, 2:00-5:00 pm.
4