SeattleUniversity

AlbersSchool of Business & Economics

Financial Accounting (ACCT 503)

Fall Quarter 2004--2005

Instructor:Niranjan “Chips” Chipalkatti, Ph.D., ACA, AIBA

Website:

Office
Office Hours Classes / Pigott 512
TTh,12:15-1:30 PM;W 3-5.30
W 6 – 8:40 pm Pigott 202 / Phone Fax
e-mail / (206) 296-5764
(206) 296-2464

Mission:

In the spirit of the Jesuit tradition of academic excellence, student development, service to the community and promotion of justice, the Department of Accounting of the Albers School of Business and Economics will provide high-quality accounting education programs, scholarship and service that are responsive to the needs of students, faculty and the accounting community

Course Description:

Concepts and principles underlying financial accounting, with emphasis on interpreting the content of published financial reports. Introduction and examination of the balance sheet, income statement, statement of cash flows, basic accounting model, accounting cycle, underlying assumptions and conventions.

Prerequisite: None

Course Objectives:

The primary objectives of this course is to help you gain an understanding of (a) the basic principles of financial accounting, (b) the mechanics and concepts behind the preparation of financial statements, and (c) basics of financial statement analysis. On completion, you will become a competent reader and interpreter of financial statements.

Texts and Material:

Required / Stice, Stice & Diamond: Financial Accounting: Reporting & Analysis, 6th Edition, South-Western.
Supplemental / Student resources at textbook’s website
Suggested / Wall Street Journal, Fortune, Business Week

Examination and Grades:

Your course grade will be determined by your performance in class as follows:

Midterm 1 / 100 / 20%
Take Home / 100 / 20%
Final (Comprehensive) / 150 / 30%
Group Project / 150 / 30%
TOTAL / 500 / 100%

The final grade will be assigned according to the following fixed scale :

A / 90-100 %
B / 80-89
C / 70-79
D / 60-69
F / 0-59

Class Format:

Class Sessions

I will use a mix of teaching techniques but rely primarily on a lecture format followed by a discussion session with an in-class problem review. For in-class problem solving sessions, I encourage you to actively participate. We all can benefit from your questions.

Examinations will test your knowledge and understanding of the chapter material covered in class and assigned as homework. Exams may consist of multiple choice questions, other objective items, short problems and/or short essays. Both quantitative and conceptual knowledge will be tested. No make-up midterm will be given without prior permission from me. There is one take home exam on Chapters 3 and 7. The same will be handed out on completion of Chapter 7 and is due the beginning of the next class. This exam has to be done independently. You are allowed to refer to your book while doing the exam.

Class participationin class is welcome as it makes the class interesting and you get an opportunity to interact with me. It is my job to facilitate your learning process and also to challenge you. Please feel free to share your professional experiences that relate to the topic at hand.

Project

Details are provided after the Course Schedule section.

Attendance

This class moves fairly quickly. You are expected to attend the class on time and be prepared for each class session. This is a rigorous and time-consuming class. It also tends to be cumulative which means that if you fall behind it is very difficult to catch up. In case of a planned absence, please notify the instructor. Also, please read the chapter on your own, go through the chapter notes and attempt the problems. Do not hesitate to contact me if you have specific questions about the material.

Homework assignments are listed in the class schedule. It is usually not possible to go over all of the homework problems in class. I will post the solutions on my website after the HW due date. You need to contact me if you are stuck with these problems. You will benefit tremendously by doing the HW on a timely basis. HW is also useful in that it helps to provide structure in case you need to meet me with your difficulties.

Some suggestions for better learning and grades

1. Understand and solve numerical examples given in the chapter.

2. Do all assigned homework problems as soon as lecture is completed.

3. If you need additional practice of multiple-choice questions, exercises, etc. come to me for suggestions.

4. If possible, work in teams. If you cannot answer a question or solve a problem, discuss it with your teammate and/or check the written solution with me.

5. Do not hesitate to ask questions in class.

Academic Honesty:

Recently approved new University Academic Honesty Policy will be strictly followed. This policy is now included in the on-line Academic Policy Manual maintained by the Registrar's Office, and can be found at It is also included in the on-line Student Handbook.

Students with Disabilities:

The university provides supplemental support services through the Disabilities Services office. Please contact this office if you need any accommodation.

Class Schedule: This schedule is subject to change as we go along. Please attend regularly for the same reason.

Month / Date / Chapter: Topic / HW
September / 22 / Introduction & Ch 1: Nature & Purpose / E3,5 & IFS
22 / Ch 2: Overview of Financial Statements / E5,6,11,14; P26
September / 29 / Ch 4; Working Capital, Current & Debt ratios / E4,5,10,11,13; P23
Ch 5 / E2,13,14; P 23
October / 6 / Ch 5: Transaction Analysis / P27, E19, P28,E19
Ch 3: Financial Statement Analysis / P 26,27
13 / Ch 3
Ch 6 / E10,12,13,14,16
20 / Exam 1: Chapters 1,2,4,5,6
27 / Chapter 7: The AIS / E2,5-11;P20,23
Take Home Exam on Ch. 3 & 7: Hand Out
3 / Chapter 8: Revenue Cycle / E3,6,9,10,12,13,15,18; P 23
Chapter 9: COGS & Inventory
Take Home Exam: Due / E3,5,6,10,15,17,18
10 / Chapter 11: Operating Assets / E1,2,7,11,16,19; P33
17 / Chapter 10: Expenditure Cycle / E1,2,4,7,9,10,13-14,16; P21,24,27
November / 1 / Chapter 14: / To be announced
Final Exam: Chapters 8,9,11,10,14

Project:

Please form groups of two for this project. You are required to conduct a financial statement analysis for any two US companies in the retail industry. Analyze the performance of the two companies using the ratios you have learnt in Chapter 3. Compare the two companies. To do all this you will need to obtain the latest annual reports of these companies from their websites.

Write a report on your observations. Your report should include brief sections on:

(a)The retail industry: Players, market share, external factors, etc.

(b)The two companies: History, segments targeted, locations, etc.

(c)Ratio analysis with the numbers used to do your computations clearly laid out

(d)Your opinion about which companyis doing better. Justify your response.

Please include the 4 financial statements as an appendix to your report.

I will take the following factors into account to evaluate the reports:

(a) Quality of write-up and presentation: Grammar, presentation, clarity, flow, etc.

(b) Quality of ratio analysis: Computational accuracy, Correct interpretation, Correct judgment about which company is better, Recognition of some underlying patterns in the ratios.

(c) Logic behind your conclusions: Do your conclusions flow from your ratio analysis section?

I will randomly pick a group member to informally present their group’s results to the class on the last day.

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