BAC-234: Equity Accounting

School
Business, Entrepreneurship, and Professional Development
Division
Business & Economics
Department
Accounting
Academic Level
Undergraduate
Course Subject
Business Accounting
Course Number
234
Course Title
Equity Accounting
Credit Hours
4.00
Instructor Contact Hours Per Semester
62.00 (for 15-week classes)
Student Contact Hours Per Semester
62.00 (for 15-week classes)
Grading Method
A-E
Pre-requisites
BAC-231 with a C grade or better OR Instructor Permission
Catalog Course Description

Offers a detailed study of specialized phases of equity accounting such as the treatment, disclosure, and analysis of debts, income-tax deferrals, treasury stock, revenues, earnings, dividends, leases, investments, and changes in financial position.

Goals, Topics, and Objectives

Core Course Topics
  1. Current Liabilities and Contingencies
    1. Discuss the nature, type, and valuation of current liabilities.
    2. Identify criteria used to account for and disclose gain and loss contingencies.
    3. Analyze liabilities.
  2. Long-Term Liabilities
    1. Prepare journal entries for the issuance of bonds.
    2. Apply the methods of bond discount and premium amortization.
    3. Prepare journal entries for the extinguishment of debt.
    4. Explain accounting for long-term notes payable.
    5. Prepare an amortization schedule.
  3. Stockholder's Equity
    1. Identify key components of stockholder's equity.
    2. Prepare journal entries for purchasing and reissuing treasury stock.
    3. Distinguish between preferred and common stock.
    4. Prepare journal entries for declaration and distribution of cash and stock dividends.
  4. Dilutive Securities and Earnings Per Share
    1. Prepare journal entries for issuance, conversion, and retirement of convertible securities.
    2. Describe the accounting for stock warrants and stock compensation plans under GAAP.
    3. Compute earnings per share of simple and complex capital structures.
  5. Investments
    1. Compare and contrast the reporting of the three categories of debt securities.
    2. Compare and contrast the reporting of the two categories of equity securities.
    3. Distinguish between the equity and fair value methods of recording and reporting equity securities.
  6. Revenue Recognition
    1. Describe the five-step process of recognizing revenue, including: Identifying the contract, Identifying separate performance obligations, Determining the transaction price, Allocating the transaction price to separate performance obligations, and Recognizing revenue when (or as) each performance obligation is satisfied.
  7. Income Taxes
    1. Differentiate pre-tax financial income and taxable income.
    2. Distinguish between temporary and permanent differences.
    3. Calculate deferred tax assets and deferred tax liabilities.
    4. Apply accounting procedures for loss carryback and loss carryforward.
  8. Leases
    1. Explain the nature, economic substance, and advantages of lease transactions.
    2. Describe the accounting criteria and procedures for capitalizing leases by the lessee and lessor.
    3. Contrast operating and capital leases.
  9. Accounting Changes
    1. Explain when to account for changes retrospectively and prospectively.
    2. Distinguish between changes in accounting principles and changes in accounting estimates.
  10. Statement of Cash Flows
    1. Identify major classifications of cash flows.
    2. Prepare a cash flow statement using indirect and direct methods.
  11. Full Disclosure in Financial Reporting
    1. Discuss the full disclosure principle.
    2. Explain disclosure requirements for post-financial statement date events and major business segments.

Assessment and Requirements

Assessment of Academic Achievement

Student will be assessed through tests, quizzes, in-class activities, outside assignments using an online homework management system, and/or class participation.

Effective Term
Fall 2020