ACC 302

 

Textbook: Intermediate Accounting by Skousen, Stice and Stice, 15e.

 

     Welcome to Acc 302.  Intermediate Accounting II is a continuation of Intermediate Accounting I. The course is a cornerstone of the accounting curriculum.  If one learns well, one will have a strong foundation for other accounting subject and gain a vital segment of the expertise required to ensure a promising career as a professional accountant. 

 

     Although practical accounting and reporting have become increasingly "rule oriented" and detailed, I will provide a solid theoretical foundation so the specific material which reflects applications of the rules of generally accepted accounting principles can be understood and viewed in perspective.  I believe that students who complete most or all of the materials in this course should have an adequate preparation for the financial accounting and reporting section of the Uniform CPA Exam.

 

     My teaching philosophy is that an educated person is one who can explain complex ideas simply and accurately and who can think critically.  Therefore I shall promote productive thinking rather than rote memorization.  Productive thinking involves a logical progression from general concepts and principles to specific applications.  The resulting experience should be insightful and it is reasonable to believe that insightful learning should be long lasting.   To be successful, you should (1) comprehend the assigned reading material (2) attend class, (3) ask questions when you don't understand the material, (4) treat the small group in-class exercises as a learning experience, (5) jointly work on the homework assignments. 

 

obituary from your local newspaper that I can verify the authenticity.  You may feel that I am insensitive.  However, too many students have lied in the past.  I have no choice but tightening the screw.

  


 

Specific Learning Objectives

 

Chapter 11: Equity Financing

 

After studying this chapter, you should be able to:

  1. Explain the key components of stockholders' equity.
  2. Describe the characteristics of the corporate form of organization.
  3. Apply the accounting procedures for issuing shares of stock.
  4. Apply the cost and par-value methods of accounting for treasury stock transactions.
  5. Describe the major features of preferred stock.
  6. Distinguish between debt and preferred stock.
  7. Describe the classification of additional capital items.
  8. Identify the various forms of dividend distributions.
  9. Explain the accounting for small and large stock dividends.
  10. Distinguish between stock dividends and stock splits.
  11. Identify the reasons for appropriating retained earnings.
  12. Explain accounting and reporting for appropriated retained earnings.

 

Chapter 12: Investment in Noncurrent Operating Assets-Acquisitions

 

After studying this chapter, you should be able to:

  1. Determine the acquisition costs of tangible and nontangible assets.
  2. Account for basket purchase, deferred payments.
  3. Account for the exchange of nonmonetary assets.
  4. Determine the costs of self-constructed assets.
  5. Identify the goodwill and negative goodwill in acquisition of an entire company.
  6. Distinguish between the capital expenditure and revenue expenditure.
  7. Comprehend the FASB No. 2: Accounting for Research and Development Cost.
  8. Comprehend the FASB No. 86: Accounting for the Costs of Computer Software.
  9. Understand the full cost method and the successful efforts method for oil and gas exploration.

 

Chapter 13: Investment in Noncurrent Operating Assets: Utilization and Retirement

 

After studying this chapter, you should be able to:

  1. Apply the straight-line, productive output, double declining balance, sum-of-the-years'-digit and group depreciation methods to calculate the annual depreciation expenses.
  2. Apply the productive output method to the depletion of natural resources.
  3. Understand changes in estimates of cost allocation variables.
  4. Understand the issue of impairment.
  5. Account for asset retirements.
  6. Calculate the depreciation for partial period.
  1.    7. Distinguish the difference between the accounting depreciation and income tax depreciation.

 

Chapter 14: Investments in Debt and Equity Securities

 

After studying this chapter, you should be able to:

   1. Describe the accounting for the purchase of debt and equity securities.

   2. Apply the cost and equity methods for long-term investments.    

   3. Apply the accounting procedures for change in value of securities.

   4. Understand special issues related to investments.

   5. Identify and explain the accounting for funds.

   6. Account for cash surrender value of life insurance.

   5. Explain accounting for impairment of a loan.

 

Chapter 15: Leases

 

After studying this chapter, you should be able to:

   1. Understand the nature, economic substance, and advantages of lease transactions.

   2. Describe the accounting criteria and procedures for capitalizing leases by the lessee.

   3. Apply the operating and capitalizing methods for lease transactions.

   4. Explain disclosure requirements for leases.

   5. Account for sale-leaseback transactions.

   6. Explain the criteria for classifying real estate leases.   

 

Chapter 16: Accounting for Income Taxes

 

After studying this chapter, you should be able to:

   1. Distinguish the taxable amounts and deferred income taxes.

   2. Explain the temporary and permanent differences.

   3. Compute the annual deferred tax liabilities and assets.

   4. Account for carryback and carryforward of operating losses.

   5. Explain the effect of future tax rate changes on deferred income taxes.

   6. Explain the presentation of deferred income taxes in financial statements.

   7. Describe the intraperiod income tax allocation. 

 

Chapter 17: Employee Compensation-Payroll, Pension and Other Compensation Issues

 

After studying this chapter, you should be able to:

 

   1. Account for payroll and payroll taxes.

   2. Understand the criteria for compensated absences

   3. Compute the performance bonuses and recognize the issues associate with post employment benefits.

   4. Comprehend the nature and characteristics of employer pension plans.

   5. Determine the funding of defined benefit plans.

   6. Understand the prepaid and accrued pension costs.

   7. Disclose the pension costs in the financial statements.

   8. Explain the differences in accounting for pensions and postretirement benefits other than pensions.

 

Chapter 18: Additional Disclosures: Derivatives, Contingencies, Business Segments, and Interim Reports.

 

   1. Understand the business and accounting concepts connected with derivatives and hedging activities.

   2. Identify the different types of risk faced by a business.

   3. Comprehend a variety of derivatives: swaps, forward futures, and options.

   4. Define hedging and outline the difference between a fair value hedge and a cash flow hedge.

   5. Account for a variety of derivatives and hedging relationships and prepare the necessary disclosures.

   6. Identify the criteria used to account for and disclose contingent liabilities.

   7. Prepare the necessary supplemental disclosures of financial information by product line and by geographic area.

   8. Recognize the importance of interim reports and outline the difficulties encountered when preparing those reports.

 

Chapter 19: Earning Per Share

 

After studying this chapter, you should be able to:

   1. Distinguish between the simple and complex capital structure.

   2. Compute basic earning per share.

   3. Explain the accounting for convertible securities.

   4. Explain the accounting for stock warrants.

   5. Explain the accounting for incentive stock options.

   6. Compute the fully diluted earning per share.

  

Chapter 20: Accounting Changes and Error Corrections

 

After studying this chapter, you should be able to:

   1. Identify the types and justifications for accounting changes.

   2. Describe the accounting changes in accounting estimate.

   3. Describe the accounting changes in accounting principle.

   4. Identify changes in reporting entity.

   5. Account for correction of errors.

 

Chapter 21: Analysis of Financial Statements

 

After studying this chapter, you should be able to:

   1. Prepare common-size financial statements.

   2. Apply various ratio analyses.

   3. Report the effects of change prices.

   4. Apply the constant dollar accounting.

   5. Apply the current cost accounting.

   6. Translate foreign currency financial statements into dollar based financial statements.