You are the president of Duke Company and are leading the company through the process of incorporation. The next step is determining the type of stock the company should offer. You are relying on feedback from several key executives at Duke to help you assess the wisdom in this decision. Prepare a memo to your executive team outlining the differences between common stock and
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- As a future Chartered Accountant, member of a board of director or shareholder, you will ensure that the company you are working for/ own applies good corporate governance principles, which includes responsible and ethical practices. As a current Financial Accounting 132 student, what responsible and ethical practices can you implement within your personal life and within your academic studies? Give four examples.arrow_forwardYou are an accountant with a client that wants to set up a new company. She has come to you to ask what type of company to form. She is trying to decide between a corporation, an LLC, or a sole proprietorship. Taking into account the ability to raise capital, liability protections, taxation issues, ability to transfer ownership, and any other aspects you can discover discuss the pros and cons of the various entity forms. You can use your textbook but you should consult other courses as well. (It depends on what kind of company your client is opening and what they want to accomplish. The best you can do is give the client some information to think about. This post should cover the general aspects of the various type of business entities.)arrow_forwardAssume that you have finished your MBA program and have applied for a position in the Financial Accounting Department of a large multinational company. The company is struggling with its accounting reporting matters and several accounting reports are under regulatory scrutiny. In the interview board, the recruitment committee members have asked you the following questions. What have you learnt in the BUS 505 course relating to financial accounting? How you can contribute the Financial Accounting Department of this company if you are recruited?arrow_forward
- A friend who knows you study accounting approaches you to discuss share market investment strategies. They believe deciding which shares to invest in should be based solely on understanding the business model and reading analyst forecasts regarding the company. Is this strategy sound? Why or why not? What other approaches or tools would you recommend to assist in making investment decisions? Discuss.arrow_forwardThe annual reports of public corporations normally include a section on Management Discussion and Analysis (MD&A). Please examine the MD&A section of your selected company and let us know about any comments included regarding management's assessment of the company's liquidity and the availability of capital to the company. Also, please select one of the profitability ratios and calculate or find it for your company. Please let us know what this profitability ratio indicates about the financial health of your company.arrow_forwardIn Chapter 2 of the textbook (pages 90-91), there is a set of financial statements for the hypothetical firm, Cheesy Chuck’s Classic Corn. Suppose you have been approached with an offer to invest in shares of the firm. Based on the accounting information provided, would you invest? Why...or why not? Please explain in detail.arrow_forward
- You are a consultant for several emerging, high-growth technology firms that were started locally and have been a part of a business incubator in your area. These firms start out as sole proprietorships but quickly realize the need for more capital and often incorporate. One of the common questions you are asked is about stockholders equity. Explain the characteristics and functions of the retained earnings account and how the account is different from contributed capital.arrow_forwardCommunication Todd Johnson is the Vice President of Finance for Boz Zeppelin Industries Inc. At a recent finance meeting, Todd made the following statement: The managers of a company should use the same information as the shareholders of the firm. When managers use the same information to guide their internal operations as shareholders use in evaluating their investments, the managers will be aligned with the stockholders profit objectives. Prepare a one-half page memo to Todd discussing any concerns you might have with his statement.arrow_forwardUse the internet to find a publicly-held companys annual report. Locate the section reporting Stockholders Equity. Assume that you work for a consulting firm that has recently taken on this firm as a client, and it is your job to brief your boss on the financial health of the company. Write a short memo noting what insights you gather by looking at the Stockholders Equity section of the financial reports.arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub