Application Amount % of Total ApplicationF. Notes to the Financial StatementCentral Washington UniversityDepartment of AccountingAccounting 350 – Winter 2010Annual Report ProjectNAME The purpose of this project is to allow you to examine the effects of various accounting practices and reporting procedures first hand. You will select an annual report of a major corporation for a fiscal period beginning in 2008 or 2009. This report will be turned in accompanied by the annual report no later than March 10, 2010.Company Name Date of Annual Report2Annual Report SECTION I - Financial Statements A. General Information:1. Describe the principal business activity(ies) of the firm.2. Where is the corporate headquarters located?3. Over what stock exchange is the firm's stock traded? 4. Complete the following table:Closing Market Price/ Dividends Price ofEarnings*Date E.P.S. Per Share Common Stock Ratio12/31/0712/31/0812/31/09*Adjust dates if company's fiscal year is not the calendar year.5. The Auditor's Reporta) Audit firm ____________________________b) Audit opinion ______ Unqualified ______ Qualifed______ Adverse______ Disclaimerc) If the opinion is not unqualified, describe reason for opinion given.d) Was a change in auditors evident? Was reason for change disclosed?.B. Income Statement 1. Title used _________________________________3 2. Report format (multiple step, single step, other )4C. Balance Sheet1.Title used ___________________________________2. Report format (report, account, other) D. Retained EarningsHow was the change in Retained Earnings presented?__________ Separate statement__________ Part of Income Statement__________ Other (please describe)E. Statement of Cash Flows1. What was the net change in cash during the year? $ ________________________2. What was the net change in working capital during theyear?$ ________________________3. What approach (direct or indirect)was used to compute cash from operations?Cash from/used by:Operations $ ________________________Investing $ ________________________Financing$ ________________________4. Identify the three largest sources of cash andcompute the following:Source Amount % of Total Sources5. Identify the three largest uses of cash and complete the following:Use orApplication Amount % of Total Application5F. Notes to the Financial StatementList, in order presented in the annual report, the title used to describe each footnote1.2.3.4.5.6.7.8.9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.6Section II. - Specific Accounting IssuesA. Accounts and Notes Receivable: Prior Current Year Year1. Current accounts receivable. ____________ ___________2. Estimated uncollectible accounts. ____________ ___________3. Net current accounts receivable. ____________ ___________4. Net sales. ____________ ___________5. # of days' sales in receivables. ____________ ___________6. Receivable Turnover . ____________ ___________7. Describe (summarize) the accounting principles used by the firm to account for receivables.B. Inventory1. Summarize the valuation method(s) used by the firm to account for inventory.2. Complete the following table: Prior Year Current Year Amount Amount Beginning Inventory _______________ _______________Ending Inventory _______________ _______________Net Sales _______________ _______________Cost of Goods Sold _______________ _______________Inventory turnover _______________ _______________Replacement cost or current value _______________ _______________7C. Investments1. Summarize the accounting principles used by the firm to account for marketable equity securities.2. Complete the following table: Marketable Securities Prior Year Current YearCost ______________ ______________Market value ______________ ______________Book value ______________ ______________4. Complete the following table: Prior Year Current Year Book value of long-term investments in MS ____________ ____________Book value of equity investments ____________ ____________ Market value of equity investments ____________ ____________(use year-end stock prices)Income reported for equity investments. ____________ ____________D. Property, Plant and Equipment:1. Summarize the accounting principles used by the firm to account for property, plant and equipment.8 2. Complete the following table: Prior Year Current Year Depreciable fixed assets __________________________Non-depreciable fixed assets __________________________Depreciation expense __________________________Total assets _____________ _____________Percent of total fixed assetsto total assets __________________________E. Intangible Assets:1. Does the annual report balance sheet indicate an amount assignable to intangible assets or assets that you know to be intangible in nature?If yes, complete the following items.2. Complete the following table. Break out the intangibles by type. Be sure to provide totals.Intangible Method of Prior Year Additions/ Current Year Item Amortization Dollar Amount Reductions Dollar Amount93. What is the percentage of intangible assets to total assets? ________________F. Long-Term Liabilities1.Does the annual report balance sheet indicate that the firm has long-term obligations?If yes, complete the following items.102. Complete the following table for the five largest long- term obligations.Description of Is the Debt Identify Interest --- Amount ---Obligation Secured Collateral Rate Beg/Yr End/YrG. Income Taxes1. What was the effective average tax rate, given thereported tax expense, on corporate earnings:For the current year? ___________For the prior year? ___________If the difference between last year and this year's effective average taxrate was > 5 percentage points(say 50% to 45%), provide an explanationof the difference.2. What was the effective average tax rate, given taxes paid, on corporate earnings For the current year? __________For the last year? __________3. In comparing the taxes paid with tax expense for both last year and this year, a difference would suggest that taxable income was notequal to financial statement income. Report the following: LastYear This YearCurrent taxes (per income statement) __________