Arab Open University
BE210: TMA Summer 2014
Cut-Off Date: August 10, 2014
About TMA:
The TMA covers the financial accounting concepts and practices in the businesses. It is marked out of 100 and is worth 20% of the overall assessment component. It is intended to assess students understanding of some of the learning points within chapters 1 to 4. This TMA requires you to apply the course concepts.
The TMA is intended to:
ØIncrease the students knowledge about the reality of the accounting as a profession.
ØAssess students understanding of key learning points within chapters 1 to 4.
ØDevelop the ability to understand and interact with the nature of the financial statements in reality.
ØDevelop students communication skills, such as memo writing, essay writing, analysis and presentation of material.
ØDevelop basic ICT skills such as using the internet.
The TMA:
The TMA requires you to:
1- Review various study chapters (from Chapter 1 to 4) of Financial and Managerial Accounting Book and apply some of the concepts within it.
2- Conduct a simple information search using the internet.
3- Present your findings in not more than 1,200 words. The word count excludes headings, references, title page, and diagrams.
4- You should use a Microsoft Office Word and Times New Roman Font of 14 points.
5- You should read and follow the instructions below carefully. Each part of the process will carry marks for the assignment.
Criteria for Grade Distribution:
Criteria
Content
Referencing
Structure and Presentation of ideas
Total marks
Financial Reporting on the Internet (Precision Castparts Corp.)
Marks
90
5
5
100
The TMA Questions
Financial Reporting on the Internet
(Precision Castparts Corp.)
The internet is a good place to get information that is useful to you in your study of accounting. For example, you can find information about current events, professional accounting organizations, and specific companies that may support your study.
Precision Castparts Corp. (PCC), a worldwide manufacturer of complex metal components and products, provides high-quality investment castings, forgings, fasteners/fastener systems and aerostructures for critical aerospace and power applications. The company manufactures complex metal components and products in three principal business segments: Investment Cast Products, Forged Products and Airframe Products. Precision Castparts Corp. is one of the worlds largest and most diversified producer of high-performance, nickel-based alloys, supplying more than 5,000 customers.
Access the Precision Castparts Corp. web page at: www.precast.com, From Precision Castparts home page, choose Investor Relations, then SEC Filings, followed by clicking on Annual Filings from Filter Results to download 2014 annual report on Form 10-K PDF and/or Form 10-K Word. The annual report provides a comprehensive overview of the company for the past year, 2014.
Instructions:
Use the annual report to answer the following questions:
1- For Precision Castparts Corp., in brief, what is meant by Form 10-K. Who is responsible for the preparation of the financial statements and related information that are presented in each report? (Hint: some research is required here.)
[10 marks]
2- Why is it important that Precision Castparts Corp. follows a standard set of accounting policies (Called Generally Accepted Accounting Principles GAAP), e.g. Revenue Recognition and the Cost Principle, in the preparation of financial statements?
[10 marks]
3- Precision Castparts Corp. financial statements are followed by a series of explanatory notes. Why those notes are important for the users? What are some of the subjects covered by those notes?
[10 marks]
4- For the two most recent years (2014 and 2013), list the amounts reported for Total Assets, Total Liabilities, and Total (Owners or Shareholders) Equity. Does the accounting equation hold true for Precision Castparts Corp.?
[10 marks]
5- Describe andgive examples of intangible assetsfrom Precision Castparts Corp.s 2014 annual report. Support your answer with suitable figures from the Precisions 2014 annual report.
[8 marks]
6- Continue paging through the annual report until you find the Consolidated Statements of Income. For the three most recent years, list the amounts reported for Net Sales Revenue and Net Income. Is Precision Castparts Corp. growing and expanding? Is Precision Castparts Corp. a profitable company? Comment whether the three years trend of revenues is favorable or unfavorable. Support your answer with suitable figures from the Precisions 2014 annual report.
[12 marks]
7- Does Precision Castparts net income represent a supply of cash that could be distributed to stockholders in the form of dividends? Substantiate your answer by suitable figures from the annual report.
[8 marks]
8- Does the Precision Castparts Corp. use cash-basis or accrual-basis accounting? How can you tell? Which gives a more accurate picture of the profitability of Precision Castparts Corp.? Explain and support your answer by suitable figures from the Precisions 2014 annual report.
[10 marks]
9- In reviewingPrecisionsConsolidated Statements of Cash Flows:
a- What journal entry did Precision Castparts Corp. make in 2014 to record:
a.1. Common stock issued
a. 2. Depreciation and amortization
a. 3. Cash dividends
b- What are the primary sources and uses of cash fromPrecisions investing activities? Did investing activities causePrecisions cash to increase or decrease?
[12 marks]
In your answer, you should explain each point or inquire separately. Use the following headings (below) to make up the different sections of your answer:
PT3 form (Cover)
Available on LMS
Contents
Title and contents page
TMA
Financial Reporting on the Internet (Precision Castparts Corp.)
Reference list
Recorded according to the Harvard style – Available on LMS
Good Luck!
Dr. Helal Afify