Write clearly and concisely about intermediate accounting using proper writing mechanics.

Assignment 1: Exxon versus Chevron Due Week 8 and worth 200 points According to the textbook, the income statement measures the success of a company’s operations for a given period. The income statement is important to investors and creditors, because it determines the profitability, investment value, and creditworthiness of a company. Specifically, the income statement helps investors and creditors predict the amounts, timing, and uncertainty of future cash. Income statement preparers can make such informed predictions by analyzing a company’s financial statements, calculating the price-earnings ratio, and reviewing notes to the financial statements on the income statement. In order to complete this assignment, use the Internet to research and review financial statements for Exxon and Chevron for the years 2012 and 2013. Write a five to six (5-6) page paper in which you: 1. Compare and contrast the limitations and usefulness of the single-step income statement and the multi-step income statement. 2. Analyze the gross profit, operating profits, and net income of both Exxon and Chevron for 2012 and 2013. Of the two (2) companies, speculate on the main reasons why one (1) company may have been more profitable than the other company. 3. Compute each company’s price-earnings (P / E) ratio and price-to-sales ratio (PSR). Identify primary estimates or assumptions that could result in overstated earnings, and use the ratio data to compare the quality of each company’s earnings. 4. Review notes to both Exxon’s and Chevron’s financial statements. Next, identify at least two (2) notes pertaining to the income statement, and explain the main way in which the notes in question could influence your decision to invest in each of the companies. Provide a rationale to justify your decision. 5. Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources. Your assignment must follow these formatting requirements: • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length. The specific course learning outcomes associated with this assignment are: • Analyze the functions and the main sections of the four (4) primary financial accounting statements: the income statement, the statement of retained earnings, the balance sheet, and the statement of cash flows. • Prepare the main sections of the four (4) primary financial accounting statements: the income statement, the statement of retained earnings, the balance sheet, and the statement of cash flows. • Use technology and information resources to research issues in intermediate accounting • Write clearly and concisely about intermediate accounting using proper writing mechanics. Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and writing skills, using the following rubric. Points: 200 Assignment 1: Exxon versus Chevron Criteria Unacceptable Below 60% F Meets Minimum Expectations 60-69% D Fair 70-79% C Proficient 80-89% B Exemplary 90-100% A 1. Compare and contrast the limitations and usefulness of the single-step income statement and the multi-step income statement. Weight: 15% Did not submit or incompletely compared and contrasted the limitations and usefulness of the single-step income statement and the multi-step income statement. Insufficiently compared and contrasted the limitations and usefulness of the single-step income statement and the multi-step income statement. Partially compared and contrasted the limitations and usefulness of the single-step income statement and the multi-step income statement. Satisfactorily compared and contrasted the limitations and usefulness of the single-step income statement and the multi-step income statement. Thoroughly compared and contrasted the limitations and usefulness of the single-step income statement and the multi-step income statement. 2. Analyze the gross profit, operating profits, and net income of both Exxon and Chevron for 2012 and 2013. Of the two (2) companies, speculate on the main reasons why one (1) company may have been more profitable than the other company. Weight: 20% Did not submit or incompletely analyzed the gross profit, operating profits, and net income of both Exxon and Chevron for 2012 and 2013. Did not submit or incompletely speculated on the main reasons why one (1) company may have been more profitable than the other company, of the two (2) companies. Insufficiently analyzed the gross profit, operating profits, and net income of both Exxon and Chevron for 2012 and 2013. Insufficiently speculated on the main reasons why one (1) company may have been more profitable than the other company, of the two (2) companies. Partially analyzed the gross profit, operating profits, and net income of both Exxon and Chevron for 2012 and 2013. Partially speculated on the main reasons why one (1) company may have been more profitable than the other company, of the two (2) companies. Satisfactorily analyzed the gross profit, operating profits, and net income of both Exxon and Chevron for 2012 and 2013. Satisfactorily speculated on the main reasons why one (1) company may have been more profitable than the other company, of the two (2) companies. Thoroughly analyzed the gross profit, operating profits, and net income of both Exxon and Chevron for 2012 and 2013. Thoroughly speculated on the main reasons why one (1) company may have been more profitable than the other company, of the two (2) companies. 3. Compute each company’s price-earnings (P / E) ratio and price-to-sales ratio (PSR). Identify primary estimates or assumptions that could result in overstated earnings, and use the ratio data to compare the quality of each company’s earnings. Weight: 20% Did not submit or incompletely computed each company’s price-earnings (P / E) ratio and price-to-sales ratio (PSR). Did not submit or incompletely identified primary estimates or assumptions that could result in overstated earnings; did not submit or incompletely used the ratio data to compare the quality of each company’s earnings. Insufficiently computed each company’s price-earnings (P / E) ratio and price-to-sales ratio (PSR). Insufficiently identified primary estimates or assumptions that could result in overstated earnings; insufficiently used the ratio data to compare the quality of each company’s earnings. Partially computed each company’s price-earnings (P / E) ratio and price-to-sales ratio (PSR). Partially identified primary estimates or assumptions that could result in overstated earnings; partially used the ratio data to compare the quality of each company’s earnings. Satisfactorily computed each company’s price-earnings (P / E) ratio and price-to-sales ratio (PSR). Satisfactorily identified primary estimates or assumptions that could result in overstated earnings; satisfactorily used the ratio data to compare the quality of each company’s earnings. Thoroughly computed each company’s price-earnings (P / E) ratio and price-to-sales ratio (PSR). Thoroughly identified primary estimates or assumptions that could result in overstated earnings; thoroughly used the ratio data to compare the quality of each company’s earnings. 4. Review notes to both Exxon’s and Chevron’s financial statements. Next, identify at least two (2) notes pertaining to the income statement, and explain the main way in which the notes in question could influence your decision to invest in each of the companies. Provide a rationale to justify your decision. Weight: 20% Did not submit or incompletely identified at least two (2) notes pertaining to the income statement; did not submit or incompletely explained the main way in which the notes in question could influence your decision to invest in each of the companies. Did not submit or incompletely provided a rationale to justify your decision. Insufficiently identified at least two (2) notes pertaining to the income statement; insufficiently explained the main way in which the notes in question could influence your decision to invest in each of the companies. Insufficiently provided a rationale to justify your decision. Partially identified at least two (2) notes pertaining to the income statement; partially explained the main way in which the notes in question could influence your decision to invest in each of the companies. Partially provided a rationale to justify your decision. Satisfactorily identified at least two (2) notes pertaining to the income statement; satisfactorily explained the main way in which the notes in question could influence your decision to invest in each of the companies. Satisfactorily provided a rationale to justify your decision. Thoroughly identified at least two (2) notes pertaining to the income statement; thoroughly explained the main way in which the notes in question could influence your decision to invest in each of the companies. Thoroughly provided a rationale to justify your decision. 5. 3 references (or number in the assignment) Weight: 5% No references provided Does not meet the required number of references, and / or references are of poor quality. Meets the required number of references; some or all references poor quality choices. Meets number of required references; all references high quality choices. Exceeds number of required references; all references high quality choices. 6. Writing Mechanics, Grammar, and Formatting Weight: 15% Serious and persistent errors in grammar, spelling, punctuation, or formatting. Numerous errors in grammar, spelling, and punctuation. Partially free of errors in grammar, spelling, punctuation, or formatting. Mostly free of errors in grammar, spelling, punctuation, or formatting. Error free or almost error free grammar, spelling, punctuation, or formatting. 7. Appropriate use of APA in-text citations, reference section and format Weight: 5% Lack of in-text citations and / or lack of reference section. In-text citations and references are given, but not in APA format. In-text citations and references are provided, but they are only partially formatted correctly in APA style. Most in-text citations and references are provided, and they are generally formatted correctly in APA style. In-text citations and references are error free or almost error free and consistently formatted correctly in APA style.

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