Written Assignment Section 1. FASB Codification REQUIRED Listed below are 3 case scenarios involving accounting issues. For each one, you are to use the Accounting Standards Codification (ASC) database (https://asc.fasb.org/Home) to determine the precise reference representing the most specific authoritative guidance in US GAAP. Your answers for each part should indicate one specific ASC reference. (See syllabus for the FASB ASC login information.) Example: Your Company has asked you to prepare the footnotes for its 2023 annual report. Identify the authoritative guidance that indicates what information the footnote on accounting policies should present. The appropriate ASC Reference is 235-10-50-3. Case A: Your Company has purchased an equipment. You are considering declining -balance method of depreciation. Identify the authoritative guidance discusses declining -balance method of depreciation under GAAP. Case B: Your Company speculates with small investments in other companies' equity securities and classifies them as trading securities. Identify the authoritative guidance that indicates unrealized holding gains for trading securities should be included in earnings. Case C: Your Company purchased a patent. The company is determining whether to amortize the patent or not. It has a definite life of 20 years. Identify the authoritative guidance that indicates how your Company should report this amortization income statement. Section 1 Format: Specify the reference number for each case. Explain why you chose the particular reference number. Your report should be less than or equal to one page. Section 2. Research Report Based on Financial Analysis Insight concerning the performance and financial condition of a company often comes from evaluating its financial data compared to other firms in the same industry. Assume that you are an analyst who is writing a research report on firms for general investors. Prepare a typed report based on your analyses of the following. Required: Obtain the most recent annual reports from three corporations in the same primary industry (e.g.. healthcare, technology, real estate) and respond to the following questions: 1. How do earnings (net income and income from operations) trends compare in terms of both the direction (increase/decrease) and stability of income? a. Which corporation has higher income from operations? b. Describe why it may be important to consider income from operations in addition to net income. (Hint: You can create the trends using three most recent years of income information. All this information should be available in the same most recent year of annual report. This is because GAAP requires companies to provide income statement information for the past two years along with the most recent year for comparison purposes) 2. Compare the three firms in terms of their current ratio. (Hint: Current ratio is calculated as current assets + current liabilities. Read through the appendix 4B, summary of financial ratios, of chapter 4). Which of the three firms had the greatest liquidity (i.e. highest current ratio)? 3. Compare the three firms in terms of their accounts receivable turnover. (Hint: accounts receivable turnover is calculated as net sales average net accounts receivable. Read through the appendix 4B, summary of financial ratios, of chapter 4). Which firm has the best liquidity of receivables? 4. Compare the three firms in terms of their asset turnover. (Hint: asset turnover is calculated as net sales+ average total assets. Read through the appendix 4B, summary of financial ratios, of chapter 4). Which firm has the best utilization of resources? 5. Compare the three firms in terms of their return on assets (ROA). (Hint: ROA is calculated as Net income or Income from continuing operations average total assets. Read through the appendix 4B, summary of financial ratios, of chapter 4). Which of the three firms had the greatest earnings relative to resources available (i.e. highest ROA)? 6. Which one(s) of the three firms would you recommend investing in based on the above analysis? Note: You can obtain electronic copies of annual reports from EDGAR (Electronic Data Gathering, Analysis, and Retrieval; http://www.sec.gov/edgar/searchedgar/company search.html). EDGAR performs automated collection, validation, indexing, and forwarding of submissions by companies and others required by law to file forms with the SEC. All publicly-traded domestic companies use EDGAR to make the majority of their filings. Form 10-K, which includes the annual report, is required to be filed on EDGAR and the SEC makes this information available on the Internet. You can also obtain electronic copies of annual reports from company websites (usually under "Investor Relations"). Do not use quarterly reports (i.e.. Form 10- Q). - You can use industry identification based on SIC code (https://www.sec.gov/info/edgar/siccodes.htm). Format and Length Guidelines: - The written assignment consists of a report of no more than two typed pages (double spaced, with 12 point Times New Roman font and a minimum of 1" margin from all sides) conveying your recommendation for the case issues and an explanation/justification for the recommendation. - You can attach as exhibits any figures, tables, computations, or other analyses used to resolve case issues (but you must refer to these in your report); exhibits will not count toward the two- page length. 1. The research report must be written in proper format. This format is outlined as follows: Introduction Explain the purpose of the report and provide set-up for the remainder of the paper, including a brief overview of contents. Discussion Written Assignment Section 1. FASB Codification Section 2. Research Report Based on Financial Analysis Elaborate major points and provide analysis of various alternatives. This is the main part of the paper. O Good transitions between points are essential here if the argument is to appear forceful Visual aids such as charts/tables/graphs may be referenced here but should be included at the end of the paper as attachments. Briefly restate your findings or important points/findings here. 2. Use the following headings for this assignment between the introductory and concluding paragraphs: Conclusion Eamings trends; Liquidity analyses Activity (turnover) analyses; Profitability analyses; Investment recommendation based on profitability, liquidity, and activity