Fiscal reports Accounting Policies Case Report
Order ID |
53563633773 |
Type |
Essay |
Writer Level |
Masters |
Style |
APA |
Sources/References |
4 |
Perfect Number of Pages to Order |
5-10 Pages |
Description/Paper Instructions
Fiscal reports Accounting Policies Case Report
Case Question:
Winery Inc.
Winery Inc. (WI) is a private corporation formed in 2020. Prior to 2020, WI had been operating
as a partnership by the Verity family. Due to their success and desire to expand, they have made
the decision to incorporate so that they will have additional sources of financing. They are just
establishing their accounting policies for their first year
-end as a corporation. Their previous
financial statements as a partnership were used for filing their tax return
ns and management
purposes. They were not audited or reviewed. WI is considering adopting GAAP for public
companies to be comparable with its competitors.
WI grows grapes and produces wines in Ontario. The company also produces beer, spirits, and
juices.
It has a small store on the property where staff operate winery tours and sell wine. WI
incorporated to raise additional capital to expand the operations by planting additional vines and
expanding operations to produce organic wines.
In 2020, WI obtained a
bank loan with Big Bank. Previously, when WI operated as a partnership,
the bank had provided a line of credit, and the owners had provided personal guarantees. The
loan now has the personal guarantees removed, and instead the bank requires annual audited
financial statements and has a financial covenant that stipulates a minimum current ratio.
You have recently been hired to develop new accounting policies for WI’s 31 December year
–
end. Previously, the partnership used the cash basis of accounting. The owners know this will no
longer be suitable for their corporation. You have been asked by the owners to discuss
alternatives and provide recommendations on the appropriate accounting policies for events
below that have occurred during 2020.
1.
WI spent $500,000 expanding its operations by planting new vines that were purchased in
France. These vines are certified as being organic and will produce a red wine. The vines
will produce grapes indefinitely as long as they are properly taken care of during the
year.
2.
WI obtained a winery license during 2020
from the Ministry. This license allows WI to
distribute wine in Western Canada. The license does not have an expiry date.
3.
Wine can take over two years to mature. Premium wine is stored in oak casks to age.
4.
A c
customer can purchase WI’s wine in the store at the winery, at the LCBO, or starting in
2020 through WI’s new website. WI invested $70,000 in acquiring software for its
computer system. WI spent an additional $10,000 on the following costs to develop the
we
bite
—consulting fees to a website consultant, graphics design, and costs for training
employees on the use of a website and for the company’s web domain.
5.
A customer can become a member of WI’s new wine club. To join the club, a $200
annual fee is paid. In return, the member is shipped one bottle of red wine and one bottle
of white wine a month. If a member likes the wine, it can be ordered by the case through
the website at a 10% discount. As part of the annual fee members receive a free
subscription to
Wine Digest
, which could be purchased on its own.
6.
Early in 2020, WI’s winemaker in error added too much yeast to the wine in the vats
(Large containers that the juice ferments in to make the wine). Initial tasting of samples
from those vats indicates that the wine is spoiled. WI fired the winemaker, since the wine
had a market value of $1 million. The winemaker has sued WI for wrongful dismissal.
7.
Until the new vines are producing crops in 2021, WI entered into an agreement to
purchase grapes from Chile for production. To protect itself from foreign exchange
fluctuations, WI entered into a hedge. If hedge accounting was elected, this would be a
cash flow hedge.
8.
WI received a forgivable loan of $1 million. This loan is forgiven if WI hires five
additional employ
oyez for the next two years and produces a specified amount of organic
fruit each season for use in its organic wines.
Required:
Prepare the requested report.
Assume that WI will adopt accounting standards for public
enterprises
RUBRIC
QUALITY OF RESPONSE |
NO RESPONSE |
POOR / UNSATISFACTORY |
SATISFACTORY |
GOOD |
EXCELLENT |
Content (worth a maximum of 50% of the total points) |
Zero points: Student failed to submit the final paper. |
20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. |
30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. |
40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. |
50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. |
Use of Sources (worth a maximum of 20% of the total points). |
Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. |
5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. |
10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. |
15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. |
20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. |
Grammar (worth maximum of 20% of total points) |
Zero points: Student failed to submit the final paper. |
5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors |
10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors |
15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. |
20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. |
Structure of the Paper (worth 10% of total points) |
Zero points: Student failed to submit the final paper. |
3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. |
5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper |
7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. |
10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. |
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