Jubail University College Department of Business Administration Semester 431 Assignment II Course Code: ACCT 313 Course Name: Intermediate Accounting II Section No: 201/202 Student ID Student Name 1 2 3 4 5 Topic: Intermediate Accounting Poster Presentation Instructors: Dr. Humera Shahid Submission Deadline: Week 11 Thursday Cover Page Instructions: This is a group assignment of poster presentation. Form a group of not more than 5 members and prepare an e-poster focussing on following points: a) 1. 2. 3. 4. The Assignment should cover the following contents: Introduction of topic (5 Marks) SWOT analysis or development of topic (15 marks) Application in Saudi Arabia (10 Marks) Conclusion (5 Marks) b) 1. 2. 3. 4. List of Topics Mergers and Acquisition REITs (real estate investment trusts) Franchising Leasing c) Appearance 1. Prepare visuals, diagrams or pictures to illustrate your learning. Be Creative!! 2. Posters must conform to the following requirements: a. Content: All the above Comparative criteria must be addressed. (mentioned in point a) b. Clarity: Font size must be readable from a distance. Grammar and spelling must be correct. c. Format and Submission: The soft copy of the poster should be submitted by only one team member to the Blackboard submission link d. Research and References: from relevant academic sources like research papers, journal articles and company websites is expected. Proper list of references is required on poster. e. Teamwork: Mention team names and IDs. Plagiarized work will be awarded zero marks. The Rubric ACCT 313 Intermediate Accounting II Poster Presentation Total Out of 50 10 Total Marks Content (As per the Comparati ve Criteria) Clarity Research and References Team work table 35 5 5 5 Marks obtained **********Wish you an enjoyable experience*********** 1 Principles of Capital Allocation Aim of capital allocation The major aim of capital allocation is maximizing profitability while sustaining organizational growth. Organizational chief executive officers consider some major factors and facets when allocating financial #1 invest in organic growth Investing excess cash back into the core business to expand One of art's most dominant elements, it is produced when is reflected straightforward formlight of capital allocation.back to the eye. It varies in hue, intensity, and This decision dependent on two factors: value. the current operations. It is the most simple and The Capacity: How much capital can be reinvested per unit of time this is before diminishing returns occur The Business Unit Profitability: this shows the return that can be expected on any reinvested capital resources to organizational tasks. #2 mergers & acquisitions M&A allow an organization to grow organically through long-term investments. It A mark created by connecting one point is a viable capital allocation strategy. However, mergers & acquisitions is a risky to another. Lines can have different capital allocation moves that corporate executives can make. weights and lengths, and can vary in An example of acquisitions is buying a business. An example of Mergers that a company’s management may choose to merge with another company. direction. #3 repayments of debt It is the most predictable capital allocation techniques employed by corporate executives. The return accomplished by debt pay down is known in advance and equal to the interest rate on the debt being paid down. #4 Paying Dividends #5 Share repurchases Share repurchases occur when aand company back its creates own shares, reducing the The distance between, around, withinbuys objects that the illusion numberSpace of shares outstanding. This has therhythm, beneficial of aimproving of depth. also creates a sense of order, andimpact light in important per-share financial metrics as piece earnings-per-share or book-valuecomposition, and is an important partsuch of any of art, per-share. Farah Al-harbi 381200201 Shahad Al- harbi 391200091 Shahad Al-shahrani 391200179 Reenad Al-turki 391200279 ACTI VI TYBASED COSTI NG w hat i sabc practi calexampleoftheus eofabc AB Cwase mpl o y e dbyXuJ i ,aCh i n e s ee l e c t r i c alf i r m, t oc apt u r edi r ec tc os t san d ABCi sac o s t i n gt e c h n i q u ewh e r e v ar i abl eo v e r h e adst h atwer emi s s i n gf r o mt h eSOE ' st ypi c al c os t i n gpr o c edu r e s . T h e a c t i v i t i e si na no r g a n i z a t i o na r et a g g e d ABCexperi e n c eh ash e l pe dt h emt os t an dar di z et h e i rwor k i n gpr o c edu r esan d pr o c e s s e s . S t an dar di z at i o nwasn o tapo pu l arc on c epti nCh i n es ec u l t u r e ,n o rwasi t wi t ht h e i rc o s t . i mpl e me n t e di nman yCh i n e s ebu s i n e s s e s . AB Cal s os er v e sasac at al y s tf o rXuJ i ' sI T Ev e r ya c t i v i t yh a p p e n i n gi nt h e i n i t i at i v e s , wh i c hi n c l u deac c ou n t i n gan do f f i c ec ompu t er i z at i o n ,aswe l l asE R P o r g a n i z a t i o ni sg i v e nas p e c i f i cc o s t i n s t al l at i o n . XuJ i u s edt ou s eat r adi t i on al Ch i n e s es t at e en t e r pr i s eac c ou n t i n gs y s t e mbef or et h e AB Cwasi n t r o du c e di n2001.F ol l o wi n gCh i n a' si n t r odu c t i o no ff r e emar k etc ompet i t i o n , XuJ i we n tt h r o u ghas u c c e s s i ono ff l ot at i on satt h i spe r i o d. XuJ i ' sabi l i t yt oc o mpe t eo npr i c i n gwass ev e r e l yh ampe r e dbyt h eu n r el i abi l i t yo f t r adi t i o n al c o s t i n gi n f o r mat i on .T h eABCs y s t em' st womai ndu t i eswer et ot r ac edi r e c t l abo re x pen s e sdi r e c t l yt opr o du c tan dc u s t o merc o n t r ac t s , aswe l l asas s i gn man u f ac t u r i n go v e r h e adsbas edonc u r r e n tdi r ec tl aborh ou r st oc on t r ac t s appli cati on ofabc 1 . I mp r o v i n ge f f i c i e n c y . 2 . Ma k i n gf i n a n c i a ls u s t a i n a b i l i t y d e c i s i o n s . 3 . Se t t i n gu pp r i c e s . 1 . i mprovi ng effi ci ency Thef unda me nt a lpur pos eofe mpl oyi nga c t i vi t yba s e dc os t i ngi st oi mpr ovea n or g a ni z a t i on' spr of i t a bi l i t ya ndove r a l lpe r f or ma nc e .Thi si sa c c ompl i s he dvi at heABC t e c hni que ,whi c hi de nt i f i e spr e c i s eove r he a de x pe ns e sa ndc os tdr i ve r s ,r e s ul t i ngi nmor e e f f i c i e ntc ompa nypr oc e s s e s . 2. maki ng fi nanci als us tai nabi li ty deci s i ons ABCi sat oolf orma ki ngs t r a t e g i cde c i s i ons .I tde t e r mi ne st hec os t sa s s oc i a t e d wi t he a c hc us t ome rbya s s e s s i ngt hee x pe ns e sa s s oc i a t e dwi t hc e r t a i na c t i vi t i e s a ndr e s our c e sa ndl i nki ngt hos ec os t st os pe c i f i ci nt e r na la nde x t e r na lc us t ome r s oft hehe a l t hc a r ee nt e r pr i s e( e . g . ,pa t i e nt s ,s e r vi c el i ne s ,a ndphys i c i a ng r oups ) . 3. s etti ng uppri ces I tpr ovi de sma na g e r swi t hmor epr e c i s epr oduc tc os tda t at ohe l pt he m ma kepr i c ede c i s i ons .I ta s s i s t sma na g e r si nc os tma na g e me ntdur i ng va l uee ng i ne e r i ngbyde t e r mi ni ngt hef i na nc i a li mpa c tofe l i mi na t i ng , de c r e a s i ng ,ormodi f yi ngs pe c i f i ca c t i vi t i e s . Concl us i on Ac t i v i t y bas edc os t i ngi sanewappr oac hof l ook i ngatac ompany ' sex pens esi nor dert omax i mi z epr ot mar gi ns . ABCc anpr ov i des i gnic antl ongt er m bene tt oanor gani z at i oni f i ti sappl i edwi t ht hec or r ec t under s t andi ngf ort hec or r ec tgoal . Ac t i v i t y bas edc os t i ngi samor epr ec i s eappr oac hof es t i mat i ngt hec os t of apr oduc tors er v i c e, r es ul t i ngi nmor eac c ur at epr i c i ngdec i s i ons . I ti mpr ov esmanager s ' under s t andi ng of ov er headsandc os tdr i v er sbyhi ghl i ght i ngc os t l yandnonv al ueaddi ngoper at i ons , al l owi ngt hem t obe r educ edorel i mi nat ed. Mobily SCANDAL (2014) Company Overview Mobily is a brand name for Saudi Arabian telecommunications services Etihad Etisalat Company. It is a public company serving Saudi Arabia in mobile phones, internet service providers, and fixed-line. It has its headquarters in Saudi Arabia. According to the 2016 books, Mobily has revenue of SAR 6.7 billion, an operating income of SAR 248 million, and a net income of SAR 35.4 million. The company was established in 2004 in the Saudi market and has had growth over the years. DESCRIPTION OF THE SCANDAL The accounting scandal came to light towards the end of the year 2014. The chief executive officer (CEO) Khalid Al-Kaf was suspended following accounting errors. Company audits were conducted which saw $380 million previous profits wiped out. Problems arose in November 2014 when Mobily had to restate its profits for 2013 and the first half of 2014. The firm described the restatements as accounting errors propagated by hast booking of revenue from mobile promotional campaigns and wholesale broadband leases. Consequences and Penalties The Mobily insider trading scandal led a huge financial impact on the company. Mobily was slapped with an $83 million penalty imposed by Saudi Arabian authorities. This was one of the kingdom’s largest punishments for a securities scandal. The scandal led to losses on the company's investment portfolio. The Capital Market Authority (CMA) stated that Mobily had avoided losses through illicit trading hence the penalty was to cover. Again four individuals of the company, including the chairman Abdulaziz Al Saghyir amounts ranging from 100,000 to 200,000 riyals for insider information trading. The company’s profits were cut off by 1.76 billion on restatements which led to a plunge in its shares. Zerban, A. M. (2017). Enron of Saudi Arabia: Corporate accounting and auditing failures. Open Journal of Accounting, 7(01), 1. https://www.scirp.org/html/1-2670119_80434.htm Jubail University College Department of Business Administration Semester 431 Assignment II Course Code: ACCT 313 Course Name: Intermediate Accounting II Section No: 201/202 Student ID Student Name 1 2 3 4 5 Topic: Intermediate Accounting Poster Presentation Instructors: Dr. Humera Shahid Submission Deadline: Week 11 Thursday Cover Page Instructions: This is a group assignment of poster presentation. Form a group of not more than 5 members and prepare an e-poster focussing on following points: a) 1. 2. 3. 4. The Assignment should cover the following contents: Introduction of topic (5 Marks) SWOT analysis or development of topic (15 marks) Application in Saudi Arabia (10 Marks) Conclusion (5 Marks) b) 1. 2. 3. 4. List of Topics Mergers and Acquisition REITs (real estate investment trusts) Franchising Leasing c) Appearance 1. Prepare visuals, diagrams or pictures to illustrate your learning. Be Creative!! 2. Posters must conform to the following requirements: a. Content: All the above Comparative criteria must be addressed. (mentioned in point a) b. Clarity: Font size must be readable from a distance. Grammar and spelling must be correct. c. Format and Submission: The soft copy of the poster should be submitted by only one team member to the Blackboard submission link d. Research and References: from relevant academic sources like research papers, journal articles and company websites is expected. Proper list of references is required on poster. e. Teamwork: Mention team names and IDs. Plagiarized work will be awarded zero marks. The Rubric ACCT 313 Intermediate Accounting II Poster Presentation Total Out of 50 10 Total Marks Content (As per the Comparati ve Criteria) Clarity Research and References Team work table 35 5 5 5 Marks obtained **********Wish you an enjoyable experience*********** 1 JUBAIL UNIVERSITY COLLEGE ACTIVITY BASED COSTING WHAT IS ABC? APPLICATION OF ABC ABC is a costing technique where activities in an organization are tagged with their cost. Every activity happening in the organization is given a specific cost. 1. Improving efficiency. 2. Making financial sustainability decisions. 3. Setting up prices. 1. IMPROVING EFFICIENCY The fundamental purpose of employing activity-based costing is to improve an organization's profitability and overall performance. 2. MAKING FINANCIAL SUSTAINABILITY DECISIONS ABC is a tool for making strategic decisions. It determines the costs associated with each customer by assessing the expenses associated with certain activities and resources and linking those costs together. 3. SETTING UP PRICES It provides managers with more precise product cost data to help them make price decisions. It assists managers in cost management during value engineering by determining the financial cost of each production process. PRACTICAL EXAMPLE OF THE USE OF ABC ABC was employed by Xu Ji, a Chinese electrical firm, to capture direct costs and variable overheads that were missing from the SOE's typical costing procedures. The ABC experience has helped them to standardize their working procedures and processes. Xu Ji's ability to compete on pricing was severely hampered by the unreliability of traditional costing information. The ABC system's two main duties were to trace direct labor expenses directly to product and customer contracts, as well as assign manufacturing overheads based on current direct labor hours to contracts. CONCLUSION ABC is a new approach to looking at a company's expenses in order to maximize profit margins. It is a more precise approach to estimating the cost of a product or service, resulting in more. ABC can provide significant long-term benefit to an organization if it is applied with the correct understanding of the correct goal. NAMES AND IDS Nouf Al-anzi Shahad Al-shahrani Shahad Al-harbi Ghaida Al-enezi Layan Al-oufi 391200307 391200179 391200091 391200073 391200214 REFERENCE Sec: 201 Blocher, E J., Stout, D. E., Juras, P. E., &Smith, S. (2019). Cost Management (A Strategic Emphasis) 8e. McGraw-Hill Education. Drury, C. (2018). Cost and management accounting. Cengage Learning.
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