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Management 60000 Accounting for Managers, Fall 2015

Professor Lin Nan


765-496-0551

RAWL 4043

lnan@purdue.edu

Textbooks for course:


1. Financial & Managerial Accounting for Decision Makers, 2nd edition,
Dyckman, Magee, Pfeiffer, Hartgraves, and Morse, ISBN 978-1-61853106-3.
eBook option:
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2. Chapters 2, 3, and 14 of Managerial Accounting, 9th edition, Ronald W.


Hilton (Hilton). (You do not need to purchase this book.)
3. Course packet: All the case studies, class exercises, and supplementary
reading are included in the course packet.
Meeting time:
Section 2
Section 3
Section 1

MWR 8:00-9:30 AM
MWR 11:30AM-1:00PM
MWR 1:10-2:40 PM

RAWL 3058
RAWL 3058
RAWL 3058

Office hour:
Mondays 4:00-5:00pm, Thursdays 4:00-5:00pm.
Course Objectives
Accounting is a representation of business activity. The objective for the course is to not
only give you the knowledge to be able to learn something or get information from any
set of financial statements but to also appreciate what you are not getting from the
financial statements. We plan on achieving this grand objective through some more
measurable objectives which are to (1) understand the concepts and measurements that
underlie corporate financial statements, (2) begin to develop the skills needed to analyze

financial statements effectively, and (3) gain an understanding of the choices firms make
in reporting the results of business activities.
Accounting is the Language of business. Sometime in your career you will be
evaluated based on accounting information and you most certainly will need or want to
use accounting information to make decisions. Therefore, accounting knowledge is
useful. It will make you a better student in other courses but, more importantly, the better
you understand accounting the more likely you will be able to differentiate yourself as an
employee and a manager. One of the reasons you take this course first is so that you can
apply your knowledge in later classes. Accounting has an underlying mathematical logic
combined with the nuances, complexity, and shortcomings similar to legal statutes.
These facets make it appealing but challenging.
We assume little knowledge of accounting for this course; however, you do need to know
how to apply present value concepts. The course moves quickly and covers a lot of
material.
The first portion of the course emphasizes the measurement concepts and the mechanics
of moving from business transactions to the principal financial statements: balance sheet,
income statement, and statement of cash flows. This provides the framework for the
second section of the course.
The next portion focuses on generally accepted accounting principles (GAAP) for
particular topics, such as accounts receivable and inventory valuation, and measuring the
amount and cost of debt financing, with an emphasis on how management's choices
among alternative GAAP affect the quality of earnings and financial position. We add
depth to our understanding and framework from the first portion of the course. While we
focus on U.S. GAAP, we also touch on international financial reporting standards (IFRS)
as the world pushes forward to the adoption of global accounting standards.
Finally, we will introduce managerial accounting concepts or internal accounting
methods. Internal accounting reports provide information for managerial decisionmaking, planning, and performance evaluation. Unlike financial accounting, managerial
accounting is not constrained by externally imposed rules or regulations; however, a
widely accepted set of frameworks exist.
Throughout the course, students with little or no background in business must not only
learn about accounting, but are also being introduced to general business concepts.
Although this is clearly valuable, it adds another dimension of possible difficulty for this
group of students.
The objectives of the course are achieved through a combination of lectures, discussion,
problem solving, reading, and cases.
Accounting is like the piano, you cant play if you dont practice on your own!
Website
We will use the Blackboard website to conduct most of our class administration. Class
announcements, homework assignments, class notes, solutions, and other information will be
posted.

Overall Course Score


Homework: 16%

Mid-term 1: 20% Mid-term 2: 20%

Final: 40% Participation: 4%

Homework
There are 4 homework assignments. The homework assignments are due at the beginning of
the class on their due days. The due days are available in the schedule of the class at the end of
this syllabus. Missed homework or late homework will be graded zero. Solutions to the
assignments will be available at the Blackboard afterwards.
Each homework assignment includes two parts: a case study and problems. We usually discuss
the case in class right upon or soon after the due day of the homework assignment. Therefore it is
important to submit your homework at the beginning of the class before we discuss the case. (You
may want to keep a copy of your case study answers for class discussion.) The cases are available
in our class packet.
It takes time to complete the homework. DO start early and DO NOT wait until the night
before the due day.
Each student must complete the homework on his/her own. Copying others homework
answers is regarded as cheating. Homework answers should be written or typed neatly. Nonreadable answers are not acceptable and will be graded as wrong answers.
Each homework assignment takes 4% in your overall score.

Exams
We have two in-class mid-terms and one final exam. No make-up exam will be given. A missed
exam without valid excuse will be graded zero. You may take the exam early if you cannot make
it for the scheduled exam date. Midterm 1 is close-book, close-notes. Midterm 2 and final exam
allow you to bring a cheat sheet of size A4 (one side). You should bring a non-programming
calculator with you for the exams. Cell phones are not allowed to be used as calculator during
exams. University rules concerning student conducts will be strictly enforced.

Participation
We will have several cases during this course. We also have class discussions from time to time
regarding the lecture material. You are expected to participate the discussions actively. I may
make cold calls during the class. Anyone who is obviously not prepared for the discussion or
absent (either physically or mentally) when called will lose all points for participation if that
has happened for three times during the module. Participation takes 4% of your overall score.

Pre-Class Readings and Problems for Self-study


I have assigned pre-class readings and self-study problems for each lecture. For the readings, I
dont expect you to fully understand everything in the readings prior to class, but you should at
least scan them before you come to class.
I have also assigned problems for self-study before each lecture. Working through these problems
is essential to help you understand the material we cover in class. They are also good exercises if
you want to do them again after class, and they are helpful for your homework assignments too.

Krannert Grading Policy


The target grade distribution for all core courses is 35-40% A/A-, 50-55% B+/Bs, 5-10% B-s,
0-5% C+ or below resulting in approximately an average Grade Point Average (GPA) of 3.35 for
each core course where the GPA is calculated as A = 4, A- = 3.70, B+ = 3.30, B = 3.00, B- = 2.70,
C+ = 2.30, C = 2.00, C- = 1.70, D = 1.00 and F = 0.00. (GRADING POLICY FOR THE
MBA/MSF/MSHRM/MSIA PROGRAMS, approved by the Management Policy Committee August
2009)

TA and TA Office Hour


Our TA is ______________. TAs office hours are _____________ and_________________.

Class Schedule

Week 1
8/22 M
Class 1

8/24 W
Class 2

8/25 R
Class 3

Week 2
8/29 M
Class 4

Topics

Pre-class assignments

Introduction to
Financial Accounting

Reading: Ch. 1: Demand for Accounting


Information; Financial Statements; Financial
Reporting Environment.

Balance Sheet, Dual


Effects, Journal
Entries

Income Statement,
Revenue
Recognition,
Adjustments
Income Statement,
Revenue
Recognition, and
Adjustments

8/31 W
Class 5

Statement of Cash
Flows

9/1 R
Class 6

Statement of Cash
Flows-continued;
Financial Statement
Analysis
Review for midterm1

Week 3
9/5 M
9/7 W
Class 7
9/8 R
Class 8
Week 4
9/12 M
Class 9

HW due days
and exam days

Self-exercise: Mid-chapter Review (Pg16)


Reading: Ch. 2: Reporting Financial Condition;

Reporting on Equity; Journalizing and Posting


Transactions.
Blades (We will do the exercise in class.)
Self-exercise: Mid-chapter Review 1(Pg47); Midchapter Review 2(Pg51)
Reading: Ch. 2: Reporting Financial
Performance. Ch. 3.
Blades-continued
Self-exercise: Mid-chapter Review 3,Part 1(Pg59)
Reading: Ch. 3 (continued).
Blades-continued
Read and Prepare for discussion: Reporting Income
for Dot-coms (no written report required for this
case study)
Self-exercise: Chapter-end Review (Pg71) (financial
statements effect template not required); Mid-chapter
Review (Pg113); Chapter-end Review (1,3,4, Pg122)
Reading: Ch. 4
Supplementary Reading in the course packet:
Understanding the Statement of Cash Flows
Case discussion: Gap Inc.
Self-exercise: Mid-chapter Review 1(Pg158)
Reading: Ch. 4 (continued): indirect method. Ch. 5:
ROE, ROA, Disaggregating ROA.
Self-exercise: Mid-chapter Review 3(Pg170)

HW#1 due

Labor Day, no class


Midterm Exam 1 (in
class)
Financial Statement
Analysis-continued
Accounts Receivable

close-book, close-notes

Midterm 1

Reading: Ch. 5: ROE, ROA, Disaggregating ROA.


Self-exercise: Mid-chapter Review 3 (1,2,Pg229)
Readings: Ch. 6: Reporting Accounts Receivable.
Case Discussion: Gap and American Eagle
Outfitters

HW#2 due

9/14 W
Class 10

Inventory

9/15 R
Class 11
Week 5
9/19 M
Class 12

Long-lived Assets
(PPE)

9/21 W
Class 13

Long-term
Liabilities: Bonds;
Review for Midterm
2
Long-term
Liabilities: Bondscontinued

9/22 R
Class 14
Week 6
9/26 M
Class 15
9/28 W
Class 16
9/29 R
Class 17

Week 7
10/3 M
Class 18

10/5 W
Class 19
10/6 R
Class 20
Week of
10/1014

Intangible Assets

Self-exercise: Mid-chapter Review 3 (Pg284)


Readings: Ch. 7: Inventory Costing Methods;
Financial Statement Effects and Disclosure
(Perpetual and periodic inventory systems not
included in the book)
Self-exercise: Mid-chapter Review (Pg330)
Readings: Ch. 8: PPE
Self-exercise: Mid-chapter Review (Pg380)
Readings: Ch. 8: Intangible Assets
Case Discussion: Merrimack Tractors and Mowers
Inc.
Readings: Ch. 9: Long-term Liabilities

HW#3 due

Readings: Ch. 9 (continued)


Self-exercise: Chapter-end Review (Pg433)

Midterm Exam 2 (in


class)
Long-term
Liabilities: Leases;
Shareholders Equity
Shareholders Equitycontinued; Income
Tax; Investment in
other Corporations

a cheat sheet of size A4 (one side)

Introduction to
Managerial
Accounting: Basic
Cost Management
Concepts
Introduction to
Managerial
Accounting: Decision
Making
Review for final
exam
Final Exam
(detailed schedule
pending)

Reading: Hilton Ch. 2: basic cost management


concepts; Hilton Ch. 3: flow of costs in
manufacturing firms (Pg. 83-85)
Case Discussion: Harnishfeger

Midterm 2

Readings: Ch. 10: Leases; Ch. 11


Self-exercise: Mid-chapter Review 1, Part A (Pg466)
Readings: Ch.11 (continued); Ch. 10: Income Taxes;
Ch. 12
Self-exercise: Mid-chapter Review 3(Pg520); Midchapter Review 1(Pg567); Mid-chapter Review 2
(Pg572)

Reading: Hilton Ch. 14: decision making: relevant


costs and benefits

cumulative exam
a cheat sheet of size A4 (one side)

HW#4 due