accounting exam
BCO 123 ACCOUNTING II Final Task brief & rubrics
Background
Spark Inc is a relatively new company and you have been recruited to assist the management with advice and getting to the correct
financial figures.
The Final assignment will focus on and consolidate your knowledge developed in the second half of the course. It should give you an
opportunity to demonstrate FULLY your knowledge and understanding.
Task
You are required to do a report. This is an individual task
The assignment consists of a case study which is attached below
The task will cover the contents from week 5 to week 8.
Please ensure your address all the points are covered in your responses
Format to be submitted: A word document
Include a Cover, Table of Contents, References
Formalities:
Wordcount: 1000 – 1500 words, excluding bibliography
Cover, Table of Contents, References and Appendix are excluded of the total wordcount.
Font: Arial 12,5 pts.
Text alignment: Justified.
The in-text References and the Bibliography have to be in Harvards citation style.
Submission: Week 8 Via Moodle (Turnitin). 20 September 23:59 CEST
Weight: This task is 60% of your total grade for this subject.
Tips to achieve the highest success
The answers should be clear and well presented
There should be no mathematical errors, you have adequate time to do this properly.
Show real understanding in any open questions.
There are marks for presentation
This task assesses the following learning outcomes:
Income and changes in retained earnings : Stock splits
Dividends
Statement of cash flow
Income statement
Rubrics
Exceptional
90-100
Good
80-89
Fair
70-79
Marginal fail
60-69
Fail
<60
Knowledge
(30%)
Student correctly
defines and describes
the topics of each at
all levels
demonstrating a full
understanding of the
essay theme.
Student defines and
describes the topics of
each key stage,
demonstrating a good
understanding of the essay
theme (may lack a key
aspect).
Student makes a fair
attempt at defining and
describing the topics
however details regarding
the business in question
are missing.
Student makes an
attempt at defining
and describing the
topics, however
important details
regarding analysis of
the business in
question are missing
Student fails to correctly define
or describe the key elements of
the business in question,
demonstrating a lack of
understanding of the topic.
Critical
evaluation
(30%)
There is very good
evidence of critical
appraisal of ideas and
concepts, the insights
are outstanding.
Evidence of critical
appraisal of ideas and
evaluation is good.
There is some evidence of
critical appraisal of ideas
and concepts, but the
analysis and insights are
rudimentary for this level
of study.
There is limited
evidence of critical
appraisal of ideas and
concepts and/or those
that are offered are
weak
There is no critical appraisal of
ideas and concepts and/or those
that are offered are weak
Application
(30%)
Applies knowledge
and skills in familiar
contexts with a high
degree of
effectiveness,
providing relevant
examples that support
points.
Applies knowledge and
skills in familiar contexts
with considerable
effectiveness, providing
some relevant examples
that make a good attempt
at supporting points.
Applies knowledge and
skills in familiar contexts
with limited effectiveness,
few/ irrelevant examples
provided.
Applies knowledge,
but does so incorrectly
with very weak
examples.
No application of knowledge. No
examples are provided.
Communication
(10%)
Uses conventions,
vocabulary, and
terminology of the
discipline with a high
effectiveness.
Uses conventions,
vocabulary, and
terminology of the
discipline with
considerable
effectiveness.
Uses conventions,
vocabulary, and
terminology of the
discipline with some
effectiveness.
Uses conventions,
vocabulary, and
terminology of the
discipline with limited
effectiveness.
Work is poorly written and/or
difficult to understand.
QUESTION 1 (Points: 5)
1. Distinguish between a stock split and a stock dividend. Is there any reason for the difference in accounting treatment of these two
events?
QUESTION 2 (Points: 10)
2. Assume that when you were in high school you saved $1,000 to invest for your college education. You purchased 200 shares of Smiley
Incorporated, a small but growing company. Over the three years that you have owned the stock, the corporation's board of directors has taken
the following actions:
Declared a 2-for-1 stock split.
Declared a 20 percent stock dividend.
Declared a 3-for-1 stock split.
The current price of the stock is $12 per share.
2.1. Calculate the current number of shares and the market value of your investment.
2.2. Explain the likely reason the board of directors of the company has not declared a cash dividend.
QUESTION 3 (Points 15)
3. Spark INC., had retained earnings at the beginning of the current year of $460,000. During the year the company earned net income of $250,000
and declared dividends as follows:
$1 per share for the current-year dividend on the 10,000 shares of preferred stock outstanding.
$1 per share for the dividend in arrears for one year on the 10,000 shares of preferred stock outstanding.
$0.50 per share for the current-year dividend on the 200,000 shares of common stock outstanding.
In addition, the company discovered an overstatement in the prior year's net income of $65,000 and corrected that error in the current year.
3.1. Prepare a statement of retained earnings for the year ended 2019 and also Write a short report on your findings.
QUESTION 4 (Points 10)
4. At the beginning of the current year, Spark INC. had dividends payable of $1,600,000. During the current year, the company declared cash
dividends of $4,500,000, of which $970,000 appeared as a liability at year-end.
4.1. Determine the amount of cash dividends paid during this year.
QUESTION 5 (Points 30)
5. The accounting staff of Sparks INC has assembled the following information for the year ended December 31, 2019:
5.1. Prepare a statement of cash flows in the format Example below (Allison corporation) Place brackets around amounts representing cash
outflows. Use the direct method of reporting cash flows from operating activities.
5.2. Some of the items above will be listed in your statement without change. However, you will have to combine certain given information to
compute the amounts of
5.2.1. collections from customers,
5.2.2. cash paid to suppliers and employees, and
5.2.3. proceeds from sales of plant assets.
(Hint: Not every item listed is used in preparing a statement of cash flows.)
Example of a statement of cash flow format:
QUESTION 6 (Points 30)
6. Comparative balance sheets report average total assets for the year of $2,575,000 and average total equity of $1,917,000 (dollar amounts in
thousands, except earnings per share).
Sparks INC
STATEMENT OF EARNINGS
FOR THE YEAR ENDING DECEMBER 31, 2019
Net Sales $4,395,253
Costs and expenses:
Costs of goods sold (2,821,455)
Operating expenses (1,004,396)
Interest revenue 15,797
Earnings before income tax $585,199
Income tax expense (204,820)
Net earnings $380,379
Earnings per share $1.70
6.1. Prepare an income statement for the year in a multiple-step format.
Compute the following:
6.2. Gross profit rate,
6.3. Net income as a percentage of net sales,
6.4. Return on assets, and
6.5. Return on equity for the year.
(Round computations to the nearest one-tenth of 1 percent.)
6.6. Explain why interest revenue is not included in the company's gross profit computation.
..END.
