BUAD 2100 Final Exam Summary Study Information PDF

BUAD2100 --- Weber **[Summary Study Information for the Final Exam]** Overall comment: - To prepare for the cumulative Final Exam: - Review the PowerPoints and do an examples provided in the PowerPoints - Review all Handouts and their solution - Review all Class Exercises and their...

BUAD2100 --- Weber **[Summary Study Information for the Final Exam]** Overall comment: - To prepare for the cumulative Final Exam: - Review the PowerPoints and do an examples provided in the PowerPoints - Review all Handouts and their solution - Review all Class Exercises and their solution - Review the material in the textbooks - Review the homework problems in Wiley Plus - Do Chapter Practices in D2L for Kimmel and Wiley Plus for Parrino **[Finance- Parrino]** **[Chapter 5P and Chapter 6P]** - Understand the concept of compounding/discounting - Understand the time value of money equation - (for example, how a change in interest rate affects present value, how a change in number of payment periods affects future value, how the periodic payment amount affects the time to pay off loans, etc.) - Define lump sum, annuity, ordinary annuity, and perpetuity. - Calculate any variable of the time value of money equation - (N, I, present value, payment, future value) for different cash flow streams (lump sum, uneven cash flow stream, ordinary annuity, perpetuity) - Various scenarios with present value, future values, annuities, etc. - Understand an amortization table and it works with a loan. Be able to calculate a loan payment. - Calculate APR and EAR and know how to convert from APR to EAR and vice versa **[Chapter 10P:]** - Types of projects (independent, mutually exclusive and contingent) - Capital budget methods -- definitions, concepts, decision-making criteria, pros and cons and calculations - Capital Rationing - Know how to calculate: - Payback - Net Present Value (NPV) - Internal Rate of Return (IRR) - PI - Compare different methods **[Chapter 13P:]** - Risk and Return --(Beta) - Concept and calculation of WACC - How WACC is used to evaluate new projects - Calculate component costs -- (**debt (bonds), preferred stock equity, common stock equity**) - Adjust for after-tax (bonds only) - What is a bond? - Key components of a bond - Compare and contrast: common stock, preferred stock, bonds **[Finance- Parrino]** **[Chapters 1P & 2P]** - Financial markets: primary vs secondary - Forms of business: compare and contrast - (corporation, partnership, sole proprietorship) - Functions and goals of financial management - Agency issue (conflict): What is it? Why does it exist? How to fix it? - Ethics and Social Responsibility **[Managerial Accounting -- Kimmel]** **Ch 11K -- Managerial Accounting** - Financial accounting vs managerial accounting - Purpose of managerial accounting -- timing, relevance, level of detail - Manufacturing Costs (Product Costs)-- direct labor, direct materials, manufacturing overhead (be able to identify) - Period Costs -- selling and administrative expenses (non manufacturing costs) (be able to identify) - Understand the definitions of Cost of Goods Sold and Cost of Goods Manufactured **Ch 13K -- Cost-Volume-Profit** - Definitions & concepts & identification - Fixed cost -- For changes in activity level - Total costs constant, Per Unit changes - Variable cost -- For changes in activity level -- Total increase with an increase in activity level, Per unit stays constant with changes in activity level - Mixed cost - Product cost -- manufacturing costs - Period costs -- selling and administrative - Margin of safety - Break-even point -- no loss or gain in income. At breakeven total contribution margin equals fixed costs. - **Calculate** - Break-even point - Contribution margin - Target income - Contribution Format Income statement **Ch 14K -- Incremental Analysis** - Incremental analysis -- concept & examples - Costs -- sunk, opportunity, incremental, relevant (be able to identify) - **CALCULATIONS** -- - Special order -- - (fixed costs not relevant - is their idle capacity, need to cover costs (variable and any special equipment needed) - Buy vs build (Make or Buy) - (determine which costs would really be eliminated if you bought the part from a supplier) Does all the fixed costs go away or do some remain with the company? - Sell or Process further - (does the incremental revenues gotten from processing the product after split off greater than the incremental expenses needed to process the part further) - - Eliminate an unprofitable segment - **CH 15K -- Budgets** - Purpose of budgeting - Types of budgets (sales, production, DL, DM, MOH, cash, selling and administrative, capital expenditure budgets, budgeted income statement and budgeted balance sheet) - Cash Receipts from Sales schedule - Cash Disbursements to pay for material schedule - Sections of a Cash Budget - Know the order in which they are completed - Sections of a Cash Budget - **CALCULATE** the following budgets - Production (remember inventory policy) - Direct Material (remember inventory policy) - Cash collections -- (how and when your customers will pay you) - Cash disbursements -- (how and when you will pay your direct material or cost of goods sold needs) -- and Accounts Payable balance at the end of the period, - Cash Budget -- 3 main parts (cash available, cash disbursements and financing), how to determine amount of financing needed. - Know formula to calculate purchases, production, ending inventory - Start (Sales Units -- Production Budget), Production Units -- DM material (converted to material needs) - Add Ending Inventory amount based on inventory policy - Total Needed before adjusting for beginning inventory - Less Beginning Inventory amount (ending inventory of one time period becomes the beginning inventory of the next time period) - Amount Needed (Production units, DM material pounds and dollars(\$)) **Ch 17K -- Standard Costs** - Standard costs - Normal vs. ideal standards - Variances -- concept, causes of types of variances - Who is responsible for types of variances -- Purchasing is responsible for the Material Price Variance, Production is responsible for the Material Quantity Variance and both Labor Variances - Balanced scorecard -- concept and what is contained in the balanced scorecard - **Calculate** - Material Price Variance, Material Quantity Variance - Labor Variance, Labor Quantity Variance **[Financial Accounting -- Kimmel]** **Introduction and Chapter 1K** - Forms of business organization (sole proprietorship, partnership, corporation) - Advantages - Disadvantages - Financial Statements including headings, format, ***calculations***, and relationships - Income Statement - Retained Earnings Statement - Balance Sheet - Sarbanes-Oxley including new regulations (concepts) **Chapter 3K (Accounting Information System)** - Assumptions in financial reporting - Principles and Assumptions in financial reporting - Basic accounting equation - **Transactions -- recording into accounts** - Accounts - Both sides must equal - Assets = Liabilities + Stockholder's Equity - *(Expenses and dividends REDUCE the Retained Earnings of a company; therefore, they are subtracted)\]* **Chapter 4K (Accrual Accounting Concepts)** - Revenue and Expense Recognition Principles - Adjustment transactions - impact on balance sheet - examples (including depreciation) - ***Calculations:*** Record Adjustments transactions(how it affect the account or the accounting equation -- based on question) **Chapter 5K (Fraud and Internal Controls)** - Internal controls - Types - Purpose - Examples - Six Principles of Internal Control (i.e. Separation of Duties, etc) - Sarbanes-Oxley **Chapter 6K (Merchandising Operations)** - Merchandising vs service company - Transactions to purchase, return and sale merchandise (perpetual method -- use inventory account) - COGS (Cost of Good Sold) **Chapter 7K (Recording and Analyzing Inventory and Receivables)** - Inventory - Determine ownership - Periodic systems -- - FIFO - LIFO - Weighted Average - Specific Identification - Concepts for Accounting for Sales and Accounts Receivable -- Allowance for Doubtful Account **Chapter 8K (Reporting and Analyzing Long-Lived Assets)** - Depreciation - Concept -- allocate costs over the life of the asset - Factors to calculate depreciation expense - Cost - Useful life (e.g., \# years or miles driven) - Salvage value - Methods - Straight line (concept and ***[calculation]*** including partial year - Declining balance (concept only -- more tax savings in early years) - Units of activity (concept and calculation) - Depreciation Expense vs Accumulated Depreciation - Accumulated Depreciation and Book Value - Sale / discard / retire plant assets - book value at time or removal - gain or loss on sale **Chapter 9K -- Liabilities & Stockholder Equity** - Liabilities - Current Liabilities - Bonds -- premium, discount, pricing - Common stock -- par value & paid in capital in excess of par - Treasury stock - Dividend dates (3 dates) **Appendix DK -- Double-entry Accounting** - No Questions on Appendix D **Chapter 4P - Parrino** - No Questions on Ch 4P