Choose one of the following two assignment options to complete this week. Do not complete both
assignments. Identify your assignment choice in the title of your submission.
Note that while there are two options for this assignment, there is only one rubric. Review the rubric to
confirm that you are meeting all requirements of the assignment. Assignment Choice #1: Statement of Cash Flows and Balance Sheet
Lander Inc. had the following balance sheet at December 31, 2014: LANDER, INC.
Balance Sheet
December 31, 2014 Cash $45,300 Accounts
payable $33,800 Accounts
receivable $18,900 Bonds
payable $35,000 Investments $25,000 Common
stock $190,000 Plant assets
(net) $78,000 Retained
earnings $18,400 Land $110,000 Total Assets $277,200 Total
Liabilities &
Equity $277,200 During 2015, the following events occurred:
1. Lander liquidated its available-for-sale investment portfolio at a
loss of $6,500. 2. A tract of land was purchased for $31,000 cash. 3. An additional $20,000 in common stock was issued at par. 4. Dividends totalling $5,000 were declared and paid to
stockholders. 5. Net income for 2015 was $29,000, including $7,000 in
depreciation expense. 6. A second tract of land was purchased through the issuance of
$25,000 in additional bonds. 7. At December 31, 2015, cash was $72,650, accounts receivable
was $35,250, and accounts payable was $32,500. Prepare a statement of cash flows for the year 2015 for Lander. Prepare the balance sheet as it would appear as of December 31,
2015. In an Excel spreadsheet: Any written comments must be formatted according to the CSU-Global Guide to Writing and APA
Requirements. Insert comments, as needed, using Excel’s “Add a Comment” function. Assignment Choice #2: Limitations of Financial Statements
Recently, the field of accounting was attacked in an opinion article written by an economist. The article
specifically pointed out errors in financial statements.
The article charged that the balance sheet is outdated and useless, and cited as an example the
accounting practice of not recognizing many intangible assets. As a specific illustration, the article
claimed that the name recognition, reputation, and goodwill of the Coca-Cola trademark are worth over
$67 billion, but these assets are not reported on Coca-Cola’s balance sheet.
The article argued that for the income statement, different estimates and methods affect the net
income amount. For example, a company may be more optimistic than another, which will result in
different expense and net income amounts. An accountant may also choose the straight-line
depreciation method, while another chooses accelerated depreciation. These methods will yield
different net income amounts.
The article also pointed out a flaw in the statement of cash flows. It stated that comparability of
financial information is important in the accounting profession. However, interest paid is listed as an
operating activity, while dividends paid is listed as a financing activity. This makes comparability of the
performance of companies that make different financing choices (debt versus equity) difficult or even
impossible.
You must respond to this attack. Your well-written paper must be two to three pages in length, in
addition to the title and reference pages, and be formatted according to the CSU-Global Guide to
Writing and APA Requirements. Cite at least two peer-reviewed sources, in addition to the required
readings for this module.

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