Welcome to Doug Barney's Home Page

I have added the following segment for authors that are submitting to our Journal of Business Disciplines

Syllabi for my Summer courses are located below. Click on the appropriate course to link to the syllabus.  These syllabi may be modified at any time, contact the instructor for the most recent copy.

Introduction to Managerial Accounting - A202

Intermediate Accounting 1 - A311

Advanced Taxation - A339 (taught in Spring)

Office: Hillside Hall, Room 012; 941-2532
Office Hours: 1:00-5:30 pm MTTh, 9:50-10:15 pm MTTh, and by appointment

Required:
Managerial Accounting - Garrison and Noreen (8th Edition)
Student Lecture Aid
solutions packet, in the IUS Bookstore

Gleim Objective Questions and Explanations - Managerial (In the IUS Bookstore, 1-800-87-Gleim, or in the library (Ask for Barney's Study Guide)),

Course Objective: The course objective is for the student to develop a further understanding of the principles of accounting and an initial understanding of the principles of managerial accounting. Specifically we will

1) define managerial accounting terms (chapters 1 and 2),
2)examine managerial accounting practices for manufacturing operations (job order and process costing),
3) explore cost behavior and cost/volume/profit relationships (chapters 6 and 7),
4) study management accounting techniques that enhance the planning, control, and decision-making processes in an organization (JIT, ABC, quality costing, budgeting, profit planning, variable costing, standard costs and other performance measures, profitability analysis, and capital budgeting),
5) identify relevant costs for decision-making (chapter 13 and Appendix), and
6) learn to analyze and evaluate financial statements, at an introductory level (chapter 18).

Determination of course grade:

Four Exams @75 points each 300 points
Comprehensive Final Exam 100
Total Points 400

Grading Scale:
Percent Percent

Students can determine their final grades by totaling the four regular examination scores and the comprehensive final examination. Do not miss the scheduled exams. There are no make-up exams.

 My teaching philosophy

is based on 1) motivating students to learn, both in this course and lifelong, 2) presenting a conceptual understanding of practical applications (as relevant as possible to the individuals' chosen professional careers), 3) continuous improvement, 4) an informative, challenging course, 5) effective presentations (regarding knowledge, preparation, and explanation), and 6) professionalism, including respect.

Adhering to the above philosophy, examinations in this course require much more than mere memorization and recall. You should understand the concepts and their application well enough to apply concepts to situations you have not previously encountered. Students should accept the responsibility and challenge to learn. Examinations in this course test your knowledge using questions over a range of difficulty. Tests may include some (less than 30 percent) recall questions, which will require recall of the information in the text. Most of the questions require an ability to think and make calculations based on concepts. Many of these questions are moderately difficult and will require a working knowledge of the concepts of the course. The most difficult questions will require the ability to apply the concepts to a vast array of new and different problems and to make evaluations. Therefore, mere memorization of the text will not likely earn you a passing grade. To pass the course requires a working knowledge of the course concepts and the ability to apply this knowledge. To do well in this course requires a thorough understanding of the concepts and the ability to apply this knowledge to different problems in different ways. The course will test students on all levels of Bloom's Learning Hierarchy. These levels include (progressively): Knowledge, Comprehension, Application, Analysis, Synthesis, and Appreciation/Evaluation. Students should practice applying these learning levels in new scenarios. (The Gleim book is one way to do this.)

Bloom's Learning Levels

Learning Level Action Verbs or Activities

Knowledge Name, list, define, what, who, when, how, how many, recall, identify, describe
Example: Describe the schedules which make up the master budget.

Comprehension Compare, contrast, restate, give an example, state most important idea, explain, differentiate
Example: Compare the information provided in the basic financial statements.

Thinking-Application Solve, calculate, find the answer, record, journalize, allocate, apply, perform, compute
Example: Journalize accounting transactions for a merchandising company.

Thinking-Analysis Analyze, estimate, decide, determine, identify method being used, give reasons for, conclusions supported by facts.
Example: Determine the stockholders associated with an ethical conflict.

Thinking-Synthesis Create a plan, develop a model, combine parts into new idea.
Example: Create a workshop for a statement of Cash Flows.

Appreciate/Evaluation Assess, recommend, evaluate, select best, express reasons.
Example: Evaluate the options of lease or purchase of a piece of equipment.

 Class Schedule - back to top

The above schedule results in allotting about one chapter per night of class. This course is somewhat rigorous and students should anticipate the course pace when planning. Prior to class students should study the chapter, attempt the homework (without looking at the answers), and check their homework results. Students should also study the Gleim questions and answers thoroughly. Please be aware that not all the Gleim questions in the specified sections relate to A202 material. When using Gleim (a suggested manual) students will need to cull unrelated questions. Previous A202 students suggest spending at least 3-4 hours studying material outside class for every hour in class. These students also suggest studying chapters at least 3 times each.

 Course Schedule - back to top

Chapter 1 Managerial Accounting, 26 pages of text.
Objective 1 - describe what managers do and why they need accounting information
2 - compare financial and managerial accounting Q6
3 - describe JIT Q11
4 - describe TQM
5 - describe TOC
6 - describe process reengineering P8
7 - international competition
8 - the controller in a decentralized business
9 - ethics P5
10 - key terms (for each chapter)

We will also work through questions similar to what you will see on the exams.

Chapter 2 Cost Terms, Concepts, and Classifications, 24 pages
1 - three manufacturing cost elements
2 - product and period costs E4
3 - manufacturing financial statements
4 - schedule of cost of goods manufactured P13
5 - flow of manufacturing costs P18
6 - variable and fixed costs P14
7 - (in)direct, (non)controllable, differentiable, opportunity, and sunk costs

Chapter 3 Job-Order Costing, 28 pages
1 - process and job-order costing
2 - job-order cost documents
3 - predetermined overhead rates E2
4 - journal entries for manufacturing costs
5 - overhead application to work-in-process
6 - T-accounts for cost flows E11
7 - under- or over-applied overhead E7, P12
8 - many firms need multiple overhead rates P25

Chapter 4 Process Costing, 17 pages
1 - compare job-order and process costing
2 - journal entries to record flows E7
3 - compute EUP with weighted average (WA) method
4 - quantity schedule with WA
5 - costs with WA
6 - cost reconciliation with WA
7 - production report with WA P15, P21
8 - operations costing

Chapter 5 Systems Design - ABC and QM, 32 pages
1 - explain need for new accounting methods
2 - describe activity based costing (ABC)
3 - Identify 4 steps in ABC
4 - costing with ABC E3, P11
5 - benefits and limits of ABC
6 - define quality
7 - 4 types of quality costs
8 - quality cost report P12

Chapter 6 Cost Behavior: Analysis and Use, 21 pages
1 - Variable Costs
2 - Relevant Range
3 - Fixed costs P16
4 - committed and discretionary costs
5 - mixed costs: hi/lo, scatter graph, LS E1, E2, E9, P12, P19
6 - Contribution IS E10

Chapter 7 Cost-Volume-Profit Relationships, 26 pages
1 - Contribution Margin and Net Income
2 - CM ratio and NI
3 - CM effects from costs and sales changes
4 - BE from equation and contribution methods P10
5 - CVP graph P11
6 - CVP and target NI E3
7 - margin of safety
8 - operating leverage E1
9 - sales mix and break-even P19

Chapter 8 Variable Costing, 6 pages
1 - variable and absorption costing E3
2 - absorption costing defers fixed OH costs

Chapter 9 Profit Planning, 27 pages
1 - Budgeting, planning, and control
2 - advantages of budgeting P14
3 - master budget
4 - sales budget
5 - production and purchases budgets E3, P9
6 - direct materials budget
7 - manufacturing overhead and S & A budgets
8 - cash budget
9 - budgeted IS and BS P11
10 - JIT purchasing

Chapter 10 Standard Costs and operating performance measures, 29 pages
1 - ideal and practical standards
2 - DM and DL standards
3 - advantages and disadvantages of standard costs
4 - DM price and quantity variances
5 - DL rate and efficiency variances E1
6 - variable OH spending and efficiency variances P11
7 - Management By Exception E4
8 - operating performance measures
10 - delivery cycle and throughput times, MCE P15

Chapter 11 Flexible Budgets and Overhead Analysis, 18 pages
1 - flexible budgets
2 - flexible budgets and spending variance
3 - flexible budgets and spending and efficiency variance
4 - flexible budget with variable and fixed costs P17, P19
5 - flexible budgets and ABC

Chapter 12 Segment Reporting, Profitability Analysis, Decentralization, 29 pages
1 - Three business practices hindering cost assignment
2 - Segmented contribution IS E2, P14
3 - Customer Profitability
4 - Decentralization and responsibility accounting
5 - cost, profit, and investment centers
6 - Return on Investment (ROI)
7 - ROI and sales, expenses, and assets
8 - residual income E8, P18

Chapter 13 Relevant Costs for Decision Making, 25 pages
1 - relevant and irrelevant costs
2 - sunk costs E2
3 - drop or retain product line
4 - Make or Buy decision P14
5 - Special orders
6 - Using scarce resources E7
7 - Joint products - sell or process further
8 - ABC and relevant cost analysis P13

Appendix - Pricing Products and Services, 9 pages
1 - cost plus pricing - absorption and contribution
2 - market-up percentage for target ROI
3 - target costing and new products
4 - time and material pricing P8
Chapter 14 Capital Budgeting Decisions, 27 pages
1 - screening and preference decisions
2 - NPV project acceptability
3 - NPV cash flows E2, P14
4 - time-adjusted rate of return project evaluation
5 - cost of capital as screening tool
6 - compare investments using NPV
7 - capital budgeting analysis of automated equipment P15
8 - payback method
9 - simple rate of return P22
10 - Appendix H: present values

Chapter 15 Further Aspects of Investment Decisions, 8 pages
1 - after-tax costs and benefits
Exhibit 15-3
5 - Rank investment projects

Chapter 18 Financial Statement Analysis, 22 pages
1 - needs and limits of financial statement analysis
2 - comparative financial statements
3 - common-size IS and BS E1, E2
4 - stockholder ratios
5 - financial leverage
6 - short-term creditor ratios
7 - long-term creditor ratios P15

Office: HH012 (Hillside Hall) 941-2532
Office Hours: 1:00-5:50 pm MW, 8:45-9:15 pm MW, and by appointment

Objective: This course includes an extension of the material in an introductory course in accounting. Therefore, students need a basic knowledge of accounting concepts and generally accepted accounting principles as a necessary prerequisite for taking this course. The course includes financial accounting theory, concepts, principles, procedures, presentation, and interpretation of financial data as applied to the income statement, statement of retained earnings, balance sheet, and statement of cash flows.

Specific objectives. Students will develop competence in gaap financial accounting. During the semester we will:
1. examine the components of the gaap conceptual framework,
2. restudy the accounting cycle,
3. develop the four basic gaap financial statements (IS, SORE, BS, SOCF),
4. discuss the time value of money (especially as it applies to accounting items),
5. learn the gaap rules for current asset items, including cash, accounts receivable, and inventory,
6. learn the gaap rules for acquisition, depreciation, and disposition of long-term assets, including intangible assets;
and students will develop competence in each of these areas (Please see the Teaching Philosophy section for a further explanation of expectations).

Texts:
Intermediate Accounting, Kieso and Weygandt, 9th edition.

Lands' End Annual Reports

Objective Questions and Explanations - Financial, Gleim Publishing, available at the Bookstore or by calling 1-800-87-GLEIM. Use this book as a study guide. Also on reserve at the IUS library (Ask for Professor Barney's Study Guide.)

Granite Bay Jet Ski, Inc. Practice Set, Irwin Publishing

Solutions Packet - On closed reserve in the IUS library or already copied at the IUS Bookstore. This packet contains the solutions for the assignments in the syllabus.

Ready Notes packet - On closed reserve in the IUS library or already copied at the IUS Bookstore. This packet contains copies of overheads and non-text examples used in class.
Suggested Texts:

Wiley CPA Examination Review, by Patrick R. Delaney, Wiley Publishing
or
CPA Review - Financial, Gleim Publishing
or
CPA Comprehensive Exam Review, Nathan Bisk, Bisk Publishing Company

The Wiley and Bisk reviews are available in the library's reference section. The Gleim CPA Review and Bisk Review are also on closed reserve in the library. The Gleim Financial Accounting Objective Questions and Explanations, available for purchase in the IUS Bookstore, provides references to the specific relevant sections of the Keiso/Weygandt textbook, but does not provide text, as the other three manuals do.

Grades:
Your final grade in this course is based on a total 520 points.

Four Exams @ 75 points each 300 points
Comprehensive Final Exam 100
Interview 10
Practice Set 60
Professional Meetings (2) 10
Papers (2) 40
520

Grades are determined using the following percentages:

Assignments (general): - back to top

Quality is expected in all assignments. Assignments are due in class. Late assignments are unacceptable and will receive a zero score. This course is a preliminary course for those selecting careers in accounting. A311 students should display potential (in class participation and preparation and in assignments) for successful careers as accounting professionals.
Assigned homework helps illustrate the material covered. The solutions for assigned exercises and problems are on closed reserve in the library or for sale in the IUS Bookstore. We will try to work the problems in bold on the syllabus in class. Students should work additional problems to increase understanding -- the Gleim book or three suggested texts provide good examples of A311-type exam questions. The chapter assignments include appendices, unless the professor states otherwise.

Practice Set: Students will work a practice set during the early part of the semester. In the practice set students work through an entire accounting cycle for a company. This practice set is both a refresher for previous accounting studies and lets the students see the entire accounting cycle and how it ties together. As part of the practice set, students will work a homework problem requiring completion of a Statement of Cash Flows.

Regular Journal Entries 15
Adjusting Journal Entries 10
Closing Entries 5
Computer Financial Statements 10 (Your name must be computer-printed.)
Statement of Cash Flows (P24-6) 20
60 points

As this class has no research case, the practice set will substitute for a research case to some degree. Therefore, the professor will not answer questions regarding the practice set.

Papers:
Two papers are due during the semester. Papers will be graded heavily on both grammar and punctuation and on presentation and knowledge of the subject. To receive a passing grade (or superior grade) on the papers requires quality in both content and presentation.
Students should do their own work. Plagiarism (copying the works of others, including problem information, and representing it as your own work) is a serious offense. This applies to the assigned papers and the extra credit possibility.
In Paper 1 define CMA and what it takes to be a CMA. Discuss the three E's. Include a discussion of where you might find CMAs working and who might be a CMA. Use the internet in your discussion. (You might try the IMA's page.) Provide copies of any items you reference (and include a bibliography if necessary). I expect such coverage would require a minimum of two pages of text. The paper need not be limited to the above items.
In Paper 2 complete writing Assignment 2 in Chapter 24, on page 1339. Compare the usefulness of each of the financial statements, discuss the importance of the Statement of Cash Flows (Thinking's position), and take a position opposing Thinking (i.e., the importance of the IS and BS). Again, I would expect such a paper would require a minimum of two pages of text.

Interview:
You are to prepare for and conduct an interview with Professor Barney. Your goal in the interview is to convince Professor Barney that you will add positive value to A311, IUS, and the accounting profession, and should be allowed to remain in the course. Be Proactive. The purpose of this interview process is to improve your professional presentation style. You are your own greatest asset; and you must be able to "market yourself"in professional settings. Professional attire and a resume are required. The interview should last at most 5 minutes. The grade is pass/fail for all the points, and you may repeat the interview until you receive a passing grade. The interview period is April 1-17.

Professional meetings:
Students should attend up to two professional meetings during the semester at 5 points each. The IUS Accounting Club meetings do no count as professional meetings. Students may wish to attend the IMA meetings the third T evening of each month. These are at Masterson's Restaurant in Louisville. Submit a one page summary of the meeting to me within one week after the meeting.

Extra Credit Possibility:
Students may write an extra credit paper on an accounting topic. Papers should address a topic of current interest, from a new perspective. The student must discuss the topic with the professor before writing the paper. Failure to do so will result in no credit. The paper grade depends on originality of the idea, current importance of the topic, grammar, and content. Papers must be the result of individual work. Article summaries are unacceptable. Provide the professor with copies of all articles used for reference. Papers will add points to students' grades for any paper grade above a "C." (A "C" paper earns its author no extra credit points.) A maximum of 5% of the course grade is available through the extra credit paper. (e.g. "B" papers will earn, on average, 2.5% of the course points.) Extra credit points will not change an "F" or a "D" to a higher grade. Students who wish may turn the extra credit paper in early and receive comments toward improvement of the final submission. Submitting a revised paper does not assure a higher grade. (i.e., Most research papers must undergo numerous revisions before they are ready for submission for publication.) The professor will announce the paper due dates. Students should submit two copies of the final paper.

Teaching Philosophy

My teaching philosophy is based on 1) motivating students to learn, both in this course and lifelong, 2) presenting a conceptual understanding of practical applications (as relevant as possible to the individuals' chosen professional careers), 3) continuous improvement, 4) an informative, challenging course, 5) effective presentations (regarding knowledge, preparation, and explanation), 6) professionalism, including respect, and 7) critically evaluating the importance of accounting information and procedures.

Adhering to the above philosophy, examinations in this course require much more than mere memorization and recall. You should understand the concepts and their application well enough to apply concepts to situations you have not previously encountered. Examinations in this course test your knowledge using questions over a range of difficulty. Tests may include some (less than 30 percent) recall questions, which will require recall of the information in the text. Most of the questions require an ability to think and make calculations based on concepts. Many of these questions are moderately difficult and will require a working knowledge of the concepts of the course. The most difficult questions will require the ability to apply the concepts to a vast array of problems previously unencountered and to make evaluations. Therefore, mere memorization of the text will not likely earn you a passing grade. To pass the course requires a working knowledge of the course concepts and the ability to apply this knowledge. To do well in this course requires a thorough understanding of the concepts and the ability to apply this knowledge to different problems in different ways. The course will test students on all levels of Bloom's Learning Hierarchy. These levels include (progressively): Knowledge, Comprehension, Application, Analysis, Synthesis, and Appreciation/Evaluation. Students should practice applying these learning levels in new scenarios. (The Gleim book is one way to do this.)

Bloom's Learning Levels

Learning Level Action Verbs or Activities

Knowledge Name, list, define, what, who, when, how, how many, recall, identify, describe
Example: Describe the schedules which make up the master budget.

Comprehension Compare, contrast, restate, give an example, state most important idea, explain, differentiate
Example: Compare the information provided in the basic financial statements.

Thinking-Application Solve, calculate, find the answer, record, journalize, allocate, apply, perform, compute
Example: Journalize accounting transactions for a merchandising company.

Thinking-Analysis Analyze, estimate, decide, determine, identify method being used, give reasons for, conclusions supported by facts.
Example: Determine the stockholders associated with an ethical conflict.

Thinking-Synthesis Create a plan, develop a model, combine parts into new idea.
Example: Create a workshop for a statement of Cash Flows.

Appreciate/Evaluation Assess, recommend, evaluate, select best, express reasons.
Example: Evaluate the options of lease or purchase of a piece of equipment.

 Class Schedule* - back to top

Week of:

Jan 12 Introduction, Chapters 1 and 2
19 No Class M, Chapter 3; Practice Set regular journal entries due in class on W
26 5; Practice Set adjusting journal entries due in class on W

Feb 2 Exam 1 on M; Chapter 4 on W
9 4; Practice Set closing entries and computer-generated financial statements due in class on W
16 24; Paper 1 due in class on W
23 Exam 2 on M; 6 on W

Mar 2 7
9 8; Statement of Cash Flows (P24-6) due in class on W
16 Exam 3 on W; March 20 is last day to withdraw!
23 SPRING BREAK!!!
30 9; Extra credit topic due in class on M; Paper 2 due in class on W

Apr 6 10
13 11
20 Exam 4 on M, Review and 12
27 12

Final Examination at 5:45-7:35 pm M, May 4.

*We will also cover Professional Issues, the Lands' End Annual Reports, and make a field trip to a CPA firm during the year. These items are also testable material. Failure to attend the CPA firm field trip in business attire will result in the loss of 20 points.

The above schedule results in allotting about one chapter per week (plus other course material). This course is quite rigorous and students should anticipate the course pace when planning. Prior to class students should study the chapter, attempt the homework (without looking at the answer), and check their homework results. Students should also study the Gleim questions and answers thoroughly. Previous A311 students suggest spending at least 5-6 hours studying material outside class for every hour in class. These students also suggest studying chapters at least 3 times. We will cover all appendices, unless explicitly excluded. Students are expected to monitor their network accounts for opportunities for extra credit, hints, or syllabus changes.

Course Material - back to top

Chapter 1: Financial Accounting and Accounting Standards - 20 pages
Nature and Environment of Financial Accounting
Parties Involved in Standard Setting
GAAP
Ethics C4,6,8,12,13,15,17
[Assignments in bold are designated for the class room. The others are suggested for your study.]

Chapter 2: Conceptual Framework - 29 pages
Basic Objectives
Qualitative Characteristics and Basic Elements
Recognition and Measurement
Assumptions, Principles, and Constraints C2-4bc,5 E2,3,5

Chapter 3: Review of the Accounting Process - 69 pages
The Accounting Cycle
Identifying Accounting Transactions
Journalize
Post to the General Ledger
Unadjusted Trial Balance
Adjustments (and using a Worksheet)
Prepaid Expenses, Unearned Revenue
Accrued Liabilities, Expenses, Assets, Revenues
Estimated Items
Adjusted Trial Balance
Financial Statements
Income Statement
Statement of Retained Earnings
Balance Sheet
Statement of Cash Flows
Closing Entries
Post-Closing Trial Balance
Reversing Entries P3-6,9, Financial Reporting Problem
Appendix 3-A Cash vs. Accrual Accounting
Conversion
Theoretical Weaknesses of Cash Method E3-24
Appendix 3-B Specialized Journals and Methods
Subsidiary Journals and Ledgers

Chapter 5: Balance Sheet - 20 pages
Usefulness and Limitations of the Balance Sheet
Classification of Items
(5 continued)
Additional Information
Contingencies, Valuations and Accounting Policies,
Subsequent Events
Techniques of Disclosure
Parenthetical Explanations, Notes, Schedules Q11,18 C6 E9 P3,4
Appendix: Specimen Financial Statements

Chapter 4: Income Statement - 22 pages
Single-Step vs Multi-Step Income Statements
Comparison
Irregular Items
Discontinued Operations
Extraordinary Items
Cumulative Effect of Change in Accounting Principle
Unusual Gains and Losses
Change in Estimate
Intraperiod Tax Allocation
EPS
Statement of Retained Earnings Q28 C8 P1,3,4
Appendix: Accounting for Discontinued Operations E18

Chapter 24: Statement of Cash Flows - 44 pages (several illustrations)
Purpose of the SOCF
Format of SOCF
Operating, Investing, and Financing Sections
Indirect vs Direct Methods
Worksheet
The T-Account Approach Q20 E11,12 P4

Chapter 6: The Time Value of Money - 29 pages
Concept of Time Value of Money
Definitions
Applications Q1 E4,5,6,7 P6-1,2,10,11,15

Chapter 7: Receivables - 30 pages
Cash
Receivables
Valuing and Reporting
Disposition with and without Recourse E2,12,18 P1,4
App7-A: Cash Control
Petty Cash, Bank Reconciliation
App7-B: Four Column Bank Reconciliation E22, P17

Chapter 8: Inventories - 31 pages
Goods Included in Inventory
Goods in Transit, Special Sale
Costs included in Inventory
Costs Necessary
Effect of Inventory Errors
Perpetual vs Periodic System
Cost Flow Assumptions
Specific Identification, LIFO, FIFO, Average Cost
LIFO Special Issues
Liquidation, Dollar-Value, LIFO Conformity Rule
Initial Adoption, Reserve, Interim Reporting E6,9,12,16,26,27 P1,11

Chapter 9: Additional Inventory Issues - 25 pages
Lower of Cost or Market
Gross Profit Estimation Method
Retail Inventory Estimation Method
Appendix 9-A LIFO Retail Methods C6 E3,14,18,20,22,26 P2,14

Chapter 10: Acquisition and Disposition of PPE - 23 pages
Cost of PPE
Necessary Costs
Interest Cost During Construction
Valuation
Costs Subsequent to Acquisition
Disposition of PPE Q10 E1,3,8,18,20 P6,8

Chapter 11: Depreciation and Depletion - 25 pages
Depreciation Methods
SL, SOYD, Declining Balance, Activity Methods
Depletion
Activity Method applied to Natural Resources C1 E4,8,12,15,20 P9

Chapter 12: Intangible Assets - 29 pages
Specifically Identifiable Intangible Assets
Patents, Copyrights, Trademarks, Leaseholds,...
Goodwill
Research and Development Costs
Amortization
App13-A Accounting for Computer Software Costs
Appendix 12-B Valuing Goodwill Q27 C3 E1,3,13,18,21 P8

Office: Hillside Hall, Room 012; Office Phone: 941-2532
Office Hours: 1:00-5:30 pm MTTh, 9:50-10:15 pm MTTh, and by appointment

Texts Required:
West's Federal Taxation: Comprehensive Volume, by Willis, Hoffman, Maloney, and Raabe (1997 Edition)

West's Internal Revenue Code of 1986 and Treasury Regulations: Annotated and Selected by Smith (1997 Edition)

Practice Set

Solutions packet and ready notes

Texts Suggested:
Bisk, Wiley, or Gleim CPA Examination Review, on library reserve (ask for Barney Study Guide), or in the library reference section.
or
Objective Questions and Explanations - Tax, Gleim Publishing, most recent edition (available by calling 1-800-87Gleim, from the bookstore, or on reserve in the library)

Course Objective:
To provide students with a more complete introduction to Federal Taxation. After completion of this course, students should be familiar with the Federal income tax laws and concepts and be able to complete basic Federal and state tax returns.

Determination of Course Grade:
Four exams @ 75 points each 300
Comprehensive Final 120
CPA firm office visit 20
Client Interaction 30
2 Tax Return Sets 80
Total 550

Grading Scale:

Tax Returns will include: (Returns are computer-generated.)

1. Federal and state (IN and KY) returns for the partnership in the Prentice Hall Practice Set

2. Federal and state (IN and KY) corporate returns for Golfpro Corporation in the text.

Assume the business is located in New Albany, Indiana and has the following business results:

New Albany, Louisville,
Indiana Kentucky
Sales 50% 40% (Remainder in Ohio)
Property 60% 40%
Payroll 40% 60%

Disregard AMT considerations. Students may work in pairs. The pair should hand in one return with both students' names on it. Students are responsible to police their own pairs to ensure both members contribute. While you may use computer software, students are responsible for the accuracy of the returns. Please state any assumptions on a separate page with each return set. I place special attention on Federal Form 1120 (or the ‘summary' page of the return) and Schedule M-1. These two forms provide an initial indication of preparer effort and knowledge. You can get tax forms on the internet at:

http://www.IRS.USTREAS.gov
http://www.ai.org/dor/
http://www.state.ky.us/agencies/revenue/revhome.htm

You might use PDF format with the Adobe Acrobat Reader.  Download the Adobe Acrobat Reader at their website: http://www.usjersey.com/dev/readstep.html

Client Interaction:
The students will prepare a letter responding to a client's tax question and present this response to the client. Plan on no more than 5 minutes of presentation. Students may use either Research Problem 43 or 44 (Chapter 16). These are on page 28-51 of the text. Students must schedule an appointment with the professor (posing as the client) to discuss this tax issue. Casual attire is acceptable for this appointment. Assume this is the first meeting with your client.

CPA Firm Visit
Do not miss this office visit! The visit will count 20 points for students attending in professional accounting attire and participating. Participating means asking questions, shaking hands, and generally looking proactive and positive (i.e. smiling is a good place to start). As the partner in charge of recruiting will be there you may wish to bring a resume and learn about the firm before the visit.

Extra Credit Possibility:  - back to top

Students may write an extra credit paper on an accounting topic. The student must discuss the topic with the professor before writing the paper. Failure to do so will result in no credit. The paper grade depends on originality of the idea, current importance of the topic, grammar, and content. Papers must be the result of individual work. Papers will add points to students' grades for any paper grade above a "C." (A "C" paper earns its author no extra credit points.) A maximum of 5% of the course grade is available through extra credit points. ("B" papers will earn, on average, 2.5% of the course points.) Extra credit points will not improve a course grade of an "F" or a "D." (Only course grades which are already "C" or better will improve through this extra credit paper.) Students must turn the extra credit project in early and receive comments toward improvement of the final submission. The professor will announce due dates for the extra credit paper. Revision of the paper does not ensure a grade above C. Students should take every precaution to ensure that the work is their original work, except where properly cited. Final papers should be of at least superior quality. Mere article summaries are unacceptable. Students should discuss the paper length and information content with the professor. Students must make all of the due dates (topic approval, first draft, and final copy). Students should submit two copies of the final paper.

Reserve Materials in the IUS library include:
solutions packet ready notes
West CD-ROM Tax service List of most applicable IRC sections
Solutions manual Effective Writing: A Handbook for Accountants
Taxpayer Bill of Rights AICPA Statements on Responsibilities in Tax Practice
Treasury Circular 230 West's Corporate Tax book
CPA Review manuals - Gleim, Delaney, and Bisk

Teaching Philosophy:

My teaching philosophy is based on 1) motivating students to learn, both in this course and lifelong, 2) presenting a conceptual understanding of practical applications (as relevant as possible to the individuals' chosen professional careers), 3) continuous improvement, 4) an informative, challenging course, 5) effective presentations (regarding knowledge, preparation, and explanation), 6) professionalism, including respect, and 7) critically evaluating the importance of accounting information and procedures.

Adhering to the above philosophy, examinations in this course require much more than mere memorization and recall. Examinations in this course test your knowledge using questions over a range of difficulty. Tests may include some (fewer than 30 percent) recall questions, which will require recall of the information in the text. Most of the questions require an ability to think and make calculations based on concepts. Many of these questions are moderately difficult and will require a working knowledge of the concepts of the course. The most difficult questions will require the ability to apply the concepts to a vast array of problems previously unencountered. Therefore, mere memorization of the text will not likely earn you a passing grade. To pass the course requires a working knowledge of the course concepts and the ability to apply this knowledge. To do well in this course requires a thorough understanding of the concepts and the ability to apply this knowledge to different problems in different ways. The course will test students on all levels of Bloom's Learning Hierarchy. These levels include (progressively): Knowledge, Comprehension, Application, Analysis, Synthesis, and Appreciation/Evaluation. Students should practice applying these learning levels in new scenarios. (The Gleim book is one way to do this.)

Bloom's Learning Levels

Learning Level Action Verbs or Activities

Knowledge Name, list, define, what, who, when, how, how many, recall, identify, describe
Example: Describe the schedules which make up the master budget.

Comprehension Compare, contrast, restate, give an example, state most important idea, explain, differentiate
Example: Compare the information provided in the basic financial statements.

Thinking-Application Solve, calculate, find the answer, record, journalize, allocate, apply, perform, compute
Example: Journalize accounting transactions for a merchandising company.

Thinking-Analysis Analyze, estimate, decide, determine, identify method being used, give reasons for, conclusions supported by facts.
Example: Determine the stockholders associated with an ethical conflict.

Thinking-Synthesis Create a plan, develop a model, combine parts into new idea.
Example: Create a workshop for a statement of Cash Flows.

Appreciate/Evaluation Assess, recommend, evaluate, select best, express reasons.
Example: Evaluate the options of lease or purchase of a piece of equipment.

Class Schedule - back to top

July 6 Introduction, Comparison of Business Forms - An Overview
7 16 C Corporations
9 Corporate AMT, Consolidated Returns, Corporate Multistate Tax issues

13 Exam 1
14 21 S Corporations
16 22 Partnerships

20 Partnerships and LLCs
21 Exam 2
23 17 Corporate Organization

27 18 Corporate Distributions not in complete liquidation
28 19 Tax Free Reorganizations, 20 Corporate Accumulations, July 30 is the last day to withdraw, C Corporation tax return due
30 Exam 3

Aug 3 23 Exempt Entities
4 25 Tax Administration and Practice
6 26 Gift and Estate Taxes, Partnership tax return due

10 Exam 4
11 Office visit to Deming, Malone, Livesay, & Ostroff, class starts at 8:15 at their office and ends at 9:25
13 Final Exam

The above schedule results in about one chapter per class night. This course is rigorous and students should anticipate the course pace when planning. Prior to class students should study the chapter, attempt the homework (without looking at the answer), and check their homework results. Previous A339 students suggest spending at least 3-4 hours studying material outside class for every hour in class. These students also suggest studying chapters at least 3 times. Students are also responsible for monitoring their email accounts in a timely manner for information about syllabus changes, hints, or extra credit possibilities.

The course may include concepts and ethics discussions, as time allows. This syllabus lists only the major applicable IRC sections. For a more complete list of IRC sections, consult the list on reserve in the library. Students may also refer to Treasury Regulations for further clarification. Students are responsible for all applicable IRC sections and Treasury Regulations.

 Course Schedule - back to top

Chapter 16 - Corporations: Introduction, Operating Rules, Related Corporations - 34 pages

1 - Tax Treatment of Various Business Forms
2 - What is a Corporation
Characteristics of a corporation 29, 31
"Check the Box" regulation
3 - An Intro to the Income Taxation of Corporations
§§1245,1250 Depreciation Recapture 34, 39
§291 Additional Corporate recapture 35, 36
§243 dividends received deduction 41
§248 organizational expenses 42
§1563 Controlled Groups defined 46
§1561 Limitation on tax benefits of controlled groups
4 - Determining the Corporate Income Tax Liability 49
Schedule M-1 48
(Tax Planning Considerations are incorporated throughout each chapter.)

Chapter 14 - Alternative Minimum Tax for Corporations - 4 pages
2 - Corporate AMT 64,65,66

Consolidated Corporate Tax returns - from Chapter in West's Corporate Taxation book (on reserve in library) and handout.

MultiState Corporate Taxation - from Chapter in West's Corporate Taxation book (on reserve in library) and handout.

Chapter 21 - S Corporations - 36 pages
1 - General Considerations
2 - Qualification for S Corporation Status 31
§1361 S Corporation defined
§1362 S corporation election
3 - Operational Rules 12, 25
§1367 Adjustment to basis of shareholder stock 21
§1368 Distributions 13, 14, 19, 20
§1374 Tax imposed on certain built-in gains 27
§1375,Reg§1.1375-1 Excess net passive investment income 28

Chapter 22 - Partnerships - 53 pages
1 - Overview of Partnership Taxation
§701 Partner, not partnership, subject to taxation
§705 Determination of partner interest
2 - Formation of Partnership: Tax Effects 13,14,17,19,31
3 - Operations of the Partnership 22,28,34
4 - Transactions Between Partners and Partnerships
§707 transactions between partners and partnership 26,37
5 - Distributions from the Partnership
§731 Extent of G/L recognition on distribution
§751 Unrealized receivables and inventory items 20,39,40, 41
6 - Sale of a Partnership Interest
§705 Determination of basis of partner's interest 42,43

Limited Liability Companies - Indiana and Kentucky documents on reserve in library and handout

Chapter 17 - Corporations: Organization and Capital Structure - 20 pages
1 - Organization of and Transfers to Controlled Corporations
§351,1.351-1 Transfer to controlled corporation
§357 Assumption of liability 21,22,26,27,28
2 - Capital Structure of a Corporation 33,37

Chapter 18 - Corporations: Distributions Not in Complete Liquidation 27 pages
1 - Taxable Dividends - In General
§316 Dividend defined
2 - Earnings and Profits
§312 Effect on E&P 28,29,32,34
3 - Property Dividends - In General
§301 Distributions of property 41,42
4 - Constructive Dividends 40
5 - Stock Dividends and Stock Rights
§305 Stock dividends 44
6 - Stock Redemptions 48,49,50
7 - Other Corporate Distributions

Chapter 19 - Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations - 5 pages
5 - Corporate Reorganizations
§368 Corporate Reorganizations 29,30,31

Chapter 20 - Corporate Accumulations - 26 pages
1 - Penalty Tax on Unreasonable Accumulations
§531 Accumulated Earnings Tax
§535 Accumulated Taxable income
§537,Reg.§1.537-1,2,3 Reasonable needs of the business 20,22,23,26
2 - Personal Holding Company Penalty Tax
§542 Definition of PHC
§543 PHC income
§545 Undistributed PHC income
§§547,561,562,563,564,565 Dividends 30,32,34,36
3 - Comparison of §§ 531 and 541 33

Chapter 25 - Tax Administration and Practice - 29 pages
1 - Tax Administration
§6200s,6500s,6600s,6700s,7200s,7400s Numerous rules 16,17,21,27
2 - Tax Practice, on reserve in library:
Treasury Circular 230
AICPA Statements on Responsibilities in Tax Practice
Taxpayer Bill of Rights 30,33,34,36
Chapter 26 - The Federal Gift and Estate Taxes - 40 pages
1 - Transfer Taxes - In General
§2010 Unified credit
2 - The Federal Gift Tax
§2012 gift tax credit
§2501 Imposition of gift tax
§2502 rate of tax
§2503 taxable gifts defined
§2505 unified credit
§2514 Power of appointment
§2523 Gift to spouse 31,36
3 - The Federal Estate Tax
§2001 Imposition and rate of estate tax
§2011 Credit for state death taxes
§2031 Definition of gross estate
§2032 Alternate valuation
§2033 Property in which decedent had an interest
§2035 Three year rule
§2013 Credit for tax on prior transfers
§§2031-2056 various sections and topics 33,37,39,41,43,46,47,48
4 - The Generation-Skipping Transfer Tax

Chapter 23 - Exempt Entities - 30 pages
1 - General Considerations
2 - Types of Exempt Organizations
§501 Exempt organizations
3 - Requirements for Exempt Status
§503 Requirements for exemption
4 - Tax Consequences of Exempt Status: General
§4912 Tax on excess legislative expenditures 26,27
5 - Private Foundations
§509 Private Foundation defined 29,31
6 - Unrelated Business Income Tax
§512 Unrelated business taxable income
§513 Unrelated trade or business
§514 Unrelated debt-financed income 36,38,40
7 - Reporting Requirements 41

Chapter 27 - Income Taxation of Trusts and Estates - 7 pages
1 - An Overview of Subchapter J
2 - Nature of Trust and Estate Taxation

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