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THE ACCOUNTING 1010 TRIBE

THE MAP

Fall 2021 Migration



David P. Kirch, PhD, CPA

Professor of Accounting

Ohio University

Susanne Freeland, MT, CPA

Christine E. Kirch, MBA, CPA

Published by the Ohio University Printing Services

Special thanks to Blaine Gabriel and Barbara Dane

The Learning Objectives

The real reason to study accounting

The Balance Sheet Basics of Recording Other

Assets Debit & Credit Ratios

Liabilities General Journal ROA

Owners’ Equity Journal Entries ROE

The P & L (Income Statement) General Ledger Current

Revenues Posting P/E

Expenses T-Accounts Debt/Equity

Cost of Goods Sold Closing Entry

Gross Margin

The Cash Flow Statement Rules of the game GAAP Managerial

Direct Method Going Concern Contribution Margin statements

Indirect Method Measure in $ Cost/Volume/Profit

Operating Activities Historical Cost Break-Even single and

Investing Activities The Matching Concept multi product lines

Financing Activities IFRS Capital Budgeting

Significant Non-Cash Transactions

The Statement of Owners’ Equity

BALANCE SHEET To Be Rich

Current Assets Current Liabilities Future Value

The Current Ratio Accounts Payable Compounding

The Acid Test Ratio Current Portion of Present Value

Accounts receivable Long-Term Debt Amortization Table

Allowance for doubtful accounts Calculate Payments Inventory Turnover Differential Interest Valuation

Turnover (Days Sales) Long-Term Debt

Inventory Valuation Debt-equity ratio

FIFO Bonds

LIFO What they are

Internal Control Covenants

Estimation Zero’s

Fixed Assets Owners’ Equity

Depreciation Forms of Organization

Straight-Line Sole Proprietorship

Partnership

Corporation

Other Assets Common Stock

Accounting for Goodwill Par Value

Intangibles Capital in Excess of Par

Retained Earnings

Dividends/Draws

Cash & Stock (and Splits)

Treasury Stock

The place where men meet to seek the truth is hallowed ground.

(From The Scent of a Woman)

THE ACCOUNTING 1010 TRIBE

THE MAP

Fall 2021 Migration

David P. Kirch, PhD, CPA

Professor of Accounting

Ohio University

Susanne Freeland, MT, CPA

Christine E. Kirch, MBA, CPA

Guide

Susanne C. Freeland, MT, CPA

Copeland 632

Office Phone: 597-1508

freeland@ohio.edu

Special motivators: Bella and Darby

|Examples of Balance Sheet Accounts: | |Italics = Heading | | | |

|Assets | |Liabilities | |Owners' Equity |

| |

| | | | | | | |

| |Fees | | |Oper| | |

| | | | |atin| | |

| | | | |g | | |

| | | | |Expe| | |

| | | | |nses| | |

| |

Table of Contents

Module 1: Introduction to the Course…..……………………...1

Module 2: Financial Statements and EPS…..…………..………21

Module 3: Basics of Debits and Credits…..………….………....43

Module 4: Continuing with those Debits and Credits…….…...68

Module 5: Time Value of Money…..………….…………..........91

Module 6: Annuities and Interest …..………….……………...108

Module 7: Annuities Continued…..……………...….………...114

Module 8: Cash Flows…………………...………….………...120

Module 9: Accounts Receivable and Forensic Accounting….138

Module 10: Bonds……………………..…..………….…..…...156

Module 11: Differential Interest……...…..………….………...168

Module 12: Rules, Leases and Goodwill……...…….………...184

Module 13: Owners’ Equity………….…..………….………...195

Module 14: Financial Statement Analysis..……...….………...206

Module 15: Financial Statement Analysis Part 2…..…….…...220

Module 16: Capital Budgeting……….…..………….………...222

Extra Stuff……………………………………………………..236

Your Stuff……………………………………………………..238

The Companies

Fluff

Year 1, 20X1……………..……………...……59

Year 2, 20X2………………..…………...……86

Year 3, 20X3…………………..………...……97

Year 4, 20X4……………..……………….…129

Chris’s Beamer

Year 1, 20X1……………..……………...……66

Year 2, 20X2……………..……………...……70

Year 3, 20X3……………..……………...……98

Year 4, 20X4……………..……………….…112

Fudge Business

Year 1, 20X0………………..……...…………86

Year 2, 20X1…………………..…………...…99

Section 1

Slow by Slow

Day by Day

The secret of your future lies hidden in your daily routine.

Mike Murdoch

He who lives without discipline, dies without honor.

Icelandic Proverb

Life should not be about finding yourself,

it should be about creating yourself.

(Sign outside Mr. Bila’s office)

Those who do the work, do the learning.

(sign on Dr. Esmond-kiger’s door)

[pic]

Learning Module #1

Learning Objective:

Introduction to the course

The Rules

Rules 2, 2A and 3!!!

Disrespect

If I even see a cell phone………………….

The Thursday Nights

Homework- highest 10 (15) count

If you are going to be absent, you may turn in homework before the class you are missing

While we are talking about homework…….. the dangers

Rule 4!!!!!! (6 Fall Semester)

One of the best in the country

“To Be Great”

Telephone,

If I forget ……….

Why are you taking this course? In College?

"We do not remember days, we remember moments."

Cesare Pavese

And what it takes to be successful in this class (and in life)

Always F________, E________

Operating Above The Line

(Urban Meyer)

Treat the class like you would treat your girlfriend or boyfriend,

give it a little a___________________________________.

Your actions are your real priorities.

James Cleary

Rome wasn’t built in a day, but they were laying bricks every hour.

James Cleary

Don’t cheat the grind or skip steps because it will catch up to you.

Michael Thomas WR NO Saintes

Increased difficulty, increased struggle during practice actually leads to

both more learning and greater structural change in the brain.

Dr. Lara Boyd

That was talking, this is doing. Doing is different than talking.

Curly Sue

Ohhhh -about asking questions---

Neils Bohr

The Website

Tutoring

We start……….

Accounting Equation:

Assets = Liabilities + Owners’ Equity

It is January 1, 20X1 and we are going to start a corporation to sell hot dogs in a cart on the corner of Court and Union. We form a corporation, Hot Dogs, Inc. and you and everyone in the class invests $100 and we each get one share of stock for that $100. Assume there are 90 of us. We elect a Board of Directors, a COO and start to do business. In January we borrow $10,000 from the bank. Next, we buy a new cart from which to sell the dogs for $12,000. Next, we buy 1,000 dogs and 1,000 buns. Dogs cost .15 and buns are .05 each. For our first month, we sell 900 dogs for $2 each. We pay our worker $600 and our other expenses are $300. How did we do for January? Are we rich yet? Was it a good investment?

It is January 1, 20X1 and we are going to start a corporation to sell hot dogs in a cart on the corner of Court and Union. We form a corporation, Hot Dogs, Inc. and you and everyone in the class invests $100 and we each get one share of stock for that $100. Assume there are 90 of us. We elect a Board of Directors, a COO and start to do business. In January we borrow $10,000 from the bank. Next we buy a new cart from which to sell the dogs for $12,000. Next we buy 1,000 dogs and 1,000 buns. Dogs cost .15 and buns are .05 each. For our first month, we sell 900 dogs for $2 each. We pay our worker $600 and our other expenses are $300. How did we do for January? Are we rich yet? Was it a good investment?

| | | |

|1 |Cash |9,000 |  |

| | Common Stock |  |9,000 |

| |To record set up of business. |  |  |

| |  |  |  |

|2 |Cash |10,000 |  |

| | Loan Payable |  |10,000 |

| |Borrowed money |  |  |

| | |  |  |

|3 |Cart |12,000 |  |

| | Cash |  |12,000 |

| |purchased cart |  |  |

| |  |  |  |

|4 |Inventory |200 |  |

| | Cash |  |200 |

| |To record purchase of 1,000 hot dogs |  |  |

| |and buns (1,000 x .15 + 1,000 x .05). |  |  |

| |  |  |  |

|5 |Cash |1,800 |  |

| | Sales |  |1,800 |

| |To record sale of 900 hot dogs ( 900 x $2). |  |  |

| | |  |  |

|6 |Cost of Goods Sold |180 |  |

| | Inventory |  |180 |

| |To record cost of inventory sold. |  |  |

| |(900 x .15 + 900 x .05) |  |  |

| |  |  |  |

|7 |Wage Expense |600 |  |

| | Cash |  |600 |

| |To record payment of advertising. |  |  |

| | |  |  |

|8 |Other Expenses |300 |  |

| | Cash |  |300 |

| |To record payment of interest on note. |  |  |

| |  |  |  |

|9 |Sales |1,800 |  |

| | Cost of Goods Sold |  |180 |

| | Wage Expense |  |600 |

| | Other Expense |  |300 |

| | Retained Earnings |  |720 |

|  |To close books |  |  |

Hot Dog January

|ASSETS |= |LIABILITIES |+ |OWNER'S EQUITY | | |(REVENUE |- |EXPENSES) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash | | | | | |Common Stock | | | Sales | | |Cost of Goods Sold | |BB |0 |  | | | |  | | |  |0 |BB | | |1,800 |5 |6 |180 |  | |1 |9,000 |12,000 |3 | | |  | | | |9,000 |1 | |  |  | | |  |  | |2 |10,000 |200 |4 | | |  | | |  |  | | |  | | | |  | | |5 |1,800 |600 |7 | | | | | |  |9,000 | | | | | | | | | | |  |300 |8 | | Loan Payable | | | | | | | | | | | | | | |  | | | | |0 |BB | | | | | | | | | | | | | |20,800 |11,100 | | | |10,000 |2 | | Retained Earnings | | | | | | |Wage Expense | | |9,700 | | | | |  | | |  |0 |BB | | | | |7 |600 |  | | | | | | | | | | | |  | | | | | | |  |  | | | | | | | | | | | | | | | | | | |  | | | | | | | | | | | | | | | | | | | | | | | | Inventory | | | | | | | | | | | | | |Other Expense | |BB |0 |  | | | | | | | | | | | | | |8 |300 | | |4 |200 |180 |6 | | | | | | | | | | | | | |  |  | | |200 |180 | | | | | | | | | | | | | | | | | | |20 |  | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |Cart | | | | | | | | | | | | | | | | |4 |12,000 |  | | | | | | | | | | | | | | | | | | | |  | | | | | | | | | | | | | | | | | | | |  | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

[pic]

Winston Churchill

Wishes change nothing, decisions change everything.

There is nothing more scary, or dangerous, than ignorance in action.

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