INTERMEDIATE ACCOUNTING II CLASS Paper #1 Instructions Completion instructions · Address all of the bullet points in the ‘Description and questions’ section below. · Limit the


INTERMEDIATE ACCOUNTING II CLASS

Paper #1 Instructions         

Completion instructions

·         Address all of the bullet points in the ‘Description and questions’ minority underneath.

·         Limit the rumor to 5 pages or fewer, barring references and exhibits.

·         Your yielding must be a sepaadmonish Microsoft Word muniment (.doc or .docx).

·         If you use sources other than those supposing, select them. Any customary bibliography or footnote format is delectable.

·         All of the appropriate materials are rooted.

- Is required to use accounting terminology and clear-up on administrative kind.

Description and questions

Automatic Data Processing, Inc. (ADP) and Bill.com Holdings, Inc. (Bill.com) furnish back-office services to trade. Although their emanation oblations and customer bases disagree in some ways, the key drivers of their achievement are amply the corresponding. The extrinsic for this article is to explain how the companies’ financial statements expose those key drivers.

Access ADP’s 2019 10-K and Bill.com’s judicious open oblation compendium rooted. You may use attached sources of notice if you approve.

1)      Briefly picture the companies’ pristine emanation oblations. Use the trade denomination minoritys and management’s argument and partition minoritys, as well-behaved-behaved as the companies’ disclosures environing segments.

2)      Picture ADP’s dividends and divide repurchases.

a)      How plenteous did ADP pay in dividends in fiscal 2019, in sum and per divide?

b)      How plenteous capital did ADP repurchase, in dollars, divides, and as a percentage of divides unappropriated at the foundation of the year?

c)      ADP was founded in 1949. Suppose ADP continues to produce for another 70 years and its allowance admonish is 3.5%. If ADP pays the corresponding wholeity in dividends and repurchases to investors as it did in fiscal 2019 entire year for the proximate 70 years, what is the offer appraise of those payments? Compare this offer appraise to the dispense appraise of the beggarly capital methodic on the denomination page of the 10-K.

3)      Picture Bill.com’s judicious open oblation.

a)      How plenteous did capital did Bill.com consequence in divides and dollars, in sum and as compared to the wholeity of unappropriated?

b)      How does the posse cunning to use the pay from the sale of capital?

c)      Based on the capital appraisement at the judicious open oblation, the dispense appraise of Bill.com’s beggarly capital was approximately $1.56 billion. Suppose Bill.com continues to produce for the proximate 70 years and its allowance admonish is 3.5%. If Bill.com pays the corresponding wholeity in dividends and repurchases to investors entire year for the proximate 70 years, how plenteous must it pay investors each year to excuse this valuation of the beggarly capital?

4)      ADP’s largest burden is its “Client capitals obligations.”

a)      What is this burden? To whom is the burden appropriate? How does the burden get created and how does the posse pay off this burden?

b)      How does having this burden service ADP?

c)      What are the risks of having this burden and what does ADP do to subject those risks?

5)      Bill.com’s largest burden is its “Customer capital deposits.”

a)      What is this burden? To whom is the burden appropriate? How does the burden get created and how does the posse pay off this burden?

b)      How does having this burden service Bill.com?

c)      What are the risks of having this burden and what does Bill.com do to subject those risks?

6)      Based on your analyses of ADP’s “Client capitals obligations” and Bill.com’s “Customer capital deposits”, what must these companies do achievementfully in adjust to endure in trade for the proximate 70 years and pay constant dividends aggravate that duration?