Mark Zuckerberg can use Kotter's 8-step model for change management to effectively lead change in the organization.
Kotter's 8-step model provides a structured approach to managing and leading change. Mark Zuckerberg can apply this model by first establishing a sense of urgency, creating a guiding coalition of influential individuals, and developing a clear vision and strategy for the change. He should then communicate the vision, empower employees, and generate short-term wins to build momentum. Consolidating gains, anchoring the change in the culture, and continuously reinforcing the change will ensure its long-term success. By actively leading and supporting the change process, Zuckerberg can drive the organization's transformation and achieve the desired outcomes.
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On 1 January 2015, Telupid Bhd acquired a fabric design from a well-known fashion designer at RM2,000,000. The company had conducted a thorough product life-cycle analysis, and the results indicated that the design would be trending for the next 20 years. On 1 January 2020, due to unexpected changes in the fashion industry, the design that was initially estimated to have a total useful life of 20 years was revised to 10 years. As a result, the value-in-use was estimated to be RM900,000 on that date. In January 2022, the company incurred additional costs of RM1,500,000 to improve the old design and the improvement allows the useful life of the design to be extended for another 3 years. The company adopts the cost model for the intangible assets and the property plant and equipment. The depreciation and amortisation expenses are calculated on a straight-line method and charged to profit or loss on a yearly basis. The company closes its account on 31 December every year. Required: a. Discuss whether the fabric design acquired on 1 January 2015 to be treated under MFRS 116 Property, Plant and Equipment or MFRS 138 Intangible Assets. (4 marks) b. Explain the appropriate accounting treatment to account for the revision of the useful life of the design and the value-in-use of RM900,000 on 1 January 2020. Prepare relevant journal entries for the year ended 31 December 2020. (7 marks) c. Explain the appropriate accounting treatment for the additional cost incurred to improve the old design for the year ended 31 December 2022. (5 marks) d. Prepare an extract statement of financial position and statement of profit or loss and other comprehensive income for the year ended 31 December 2022 to reflect all the transactions related to the fabric design. (4 marks) (Total: 20 marks)
a. The fabric design acquired on 1 January 2015 would be treated as an intangible asset under MFRS 138 Intangible Assets.
b. Get ready to enter the impairment loss in the journal:
Impairment Loss (Expense) Dr. RM600,000
Accumulated Depreciation Cr. RM600,000
c. Prepare the journal entry to capitalize the improvement cost:
Intangible Asset (Fabric Design) Dr. RM1,500,000
Bank/Cash Cr. RM1,500,000
d. Depreciation Expense:
Fabric Design RM240,000 (RM2,400,000 / 10 years)
a. The fabric design acquired on 1 January 2015 would be treated as an intangible asset under MFRS 138 Intangible Assets. This is because an intangible asset is defined as an identifiable non-monetary asset without physical substance, and the fabric design fits this definition.
b. To account for the revision of the useful life and the value-in-use of the fabric design on 1 January 2020, the company needs to adjust the carrying amount of the intangible asset.
Determine the fabric design's carrying quantity as of January 1, 2020:
Original cost of fabric design = RM2,000,000
Accumulated depreciation (5 years straight-line) = (RM2,000,000 / 20 years) * 5 years = RM500,000
Original cost minus accumulated depreciation is the carrying amount.
= RM2,000,000 - RM500,000 = RM1,500,000
Calculate the revised carrying amount based on the value-in-use:
Revised carrying amount = Value-in-use
= RM900,000
Calculate the impairment loss:
Impairment loss = Carrying amount - Revised carrying amount = RM1,500,000 - RM900,000 = RM600,000
Get ready to enter the impairment loss in the journal:
Impairment Loss (Expense) Dr. RM600,000
Accumulated Depreciation Cr. RM600,000
c. The additional cost incurred to improve the old design in the year ended 31 December 2022 should be capitalized and added to the carrying amount of the fabric design. This cost extends the useful life of the asset.
Calculate the new carrying amount after the improvement cost:
Revised carrying amount = Carrying amount (before improvement) + Additional cost
Revised carrying amount = RM900,000 + RM1,500,000
= RM2,400,000
Prepare the journal entry to capitalize the improvement cost:
Intangible Asset (Fabric Design) Dr. RM1,500,000
Bank/Cash Cr. RM1,500,000
d. Extract Statement of Financial Position and Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2022:
Statement of Financial Position (extract):
Intangible Assets:
Fabric Design RM2,400,000
Excerpt from the Statement of Profit or Loss and Other Comprehensive Income:
Depreciation Expense:
Fabric Design RM240,000 (RM2,400,000 / 10 years)
The complete financial statements would include other relevant items not mentioned in the question. The above extracts only focus on the fabric design transactions.
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Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $827,000 cash. The land was appraised at $209,231 and the building at $741,819. Required. a. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. b. Would the company recognize a gain on the purchase? c. Record the purchase in a horizontal statements model. d. Record the purchase in general journal format.
a. To determine the amount of the purchase cost to allocate to the land and the building, we need to use the relative fair market values of each asset. We can calculate these values by dividing the appraised value of each asset by the total appraised value:
Relative FMV of land = $209,231 / ($209,231 + $741,819) = 0.2207
Relative FMV of building = $741,819 / ($209,231 + $741,819) = 0.7793
Next, we can apply these percentages to the total purchase cost to allocate the cost between the land and the building:
Cost allocated to land = $827,000 x 0.2207 = $182,401.69
Cost allocated to building = $827,000 x 0.7793 = $644,598.31
b. Based on the information provided, we cannot determine whether the company would recognize a gain on the purchase.
c. The horizontal statements model entry to record the purchase would be:
Assets
Land $182,401.69
Building $644,598.31
Total $827,000.00
d. The general journal format entry to record the purchase would be:
Land | $182,401.69 |
Building | $644,598.31 |
Cash | $827,000.00 |
(To record the purchase of a building and land for cash)
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In a Treasury auction of $2.1 billion par value 91-day T-bills, the following bids were submitted:
Bidder
Bid Amount
Price
1
$500 million
0.9940
2
$750 million
0.9901
3
$1.5 billion
0.9925
4
$1 billion
0.9936
5
$600 million
0.9939
If only these competitive bids are received, who will receive T-bills, in what quantity, and at what price?
If the Treasury also received $750 million in non-competitive bids, who will receive T-bills, in what
quantity, and at what price?
The bidder who submitted the non-competitive bid for $750 million will receive the full amount of T-bills at a price of 1.8333.
Based on the competitive bids, the Treasury will allocate T-bills to the bidders in the order of their bid prices, from lowest to highest. The lowest bid price indicates a higher demand for the T-bills.
Considering only the competitive bids, the allocation process would be as follows:
Bidder 2: $750 million at a price of 0.9901
Bidder 3: $1.5 billion at a price of 0.9925
Bidder 4: $1 billion at a price of 0.9936
Bidder 5: $600 million at a price of 0.9939
The total value of the competitive bids is $3.85 billion, which exceeds the par value of the T-bills ($2.1 billion).
Therefore, a proportional allocation will be done based on the bid amounts. To calculate the allocation, the individual bid amount is divided by the total value of the competitive bids, and then multiplied by the par value:
Bidder 2: (750 million / 3.85 billion) * 2.1 billion = $408.44 million
Bidder 3: (1.5 billion / 3.85 billion) * 2.1 billion = $817.53 million
Bidder 4: (1 billion / 3.85 billion) * 2.1 billion = $545.45 million
Bidder 5: (600 million / 3.85 billion) * 2.1 billion = $326.62 million
Hence, the bidders will receive T-bills in the quantities mentioned above at the corresponding bid prices.
If the Treasury also received $750 million in non-competitive bids, these bids are typically filled in full.
Therefore, the bidder who submitted the non-competitive bid for $750 million will receive the full amount of T-bills at the average price of the competitive bids.
In this case, the average price of the competitive bids can be calculated as the total value of the competitive bids divided by the total par value of the T-bills:
Total value of competitive bids = $3.85 billion
Total par value of T-bills = $2.1 billion
Average price = Total value of competitive bids / Total par value of T-bills = $3.85 billion / $2.1 billion = 1.8333
Therefore, the bidder who submitted the non-competitive bid for $750 million will receive the full amount of T-bills at a price of 1.8333.
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Elizabeth purchased stock valued at $30,000 in 2000. In 2005 , she sold the stock for $33,000. Elizabeth's capital gain, for tax purposes, is $____, which is a ___% gain on her investment. Over the period during which Elizabeth owned her stock, asset prices rose by 3% due to inflation. Thus Elizabeth's real capital gain is___ %, or___ $
Elizabeth's capital gain for tax purposes is $3,000, which is a 10% gain on her investment. Her real capital gain after accounting for inflation is 7%, or $2,100.
To calculate Elizabeth's capital gain, we need to subtract her initial investment from the selling price of the stock.
Capital gain = Selling price - Initial investment
Capital gain = $33,000 - $30,000
Capital gain = $3,000
To calculate the percentage gain on her investment, we can use the following formula:
Percentage gain = (Capital gain / Initial investment) x 100
Percentage gain = ($3,000 / $30,000) x 100
Percentage gain = 10%
Now, to calculate the real capital gain after accounting for inflation, we need to adjust for the 3% inflation rate over the period.
Real capital gain = Capital gain - (Inflation rate x Initial investment)
Real capital gain = $3,000 - (0.03 x $30,000)
Real capital gain = $3,000 - $900
Real capital gain = $2,100
To calculate the percentage real gain, we can use the formula mentioned earlier:
Percentage real gain = (Real capital gain / Initial investment) * 100
Percentage real gain = ($2,100 / $30,000) * 100
Percentage real gain = 7%
Therefore, Elizabeth's capital gain for tax purposes is $3,000, which is a 10% gain on her investment. Her real capital gain after accounting for inflation is 7%, or $2,100.
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ABC Ventures has raised their $100M fund, ABC Ventures I, with management fees computed based on committed capital. These fees are 2.5 percent per year for all 10 years. Given this description, what are the lifetime fees and investment capital for this fund?
Group of answer choices
lifetime fees = $35M; investment capital =$75M
lifetime fees = $25M; investment capital =$75M
lifetime fees = $25M; investment capital =$80M
lifetime fees = $20M; investment capital =$80M
“Given this description, what are the lifetime fees and investment capital for this fund?” is that lifetime fees = $25M and investment capital =$75M.
Given, ABC Ventures has raised their $100M fund, ABC Ventures I with management fees computed based on committed capital. These fees are 2.5 percent per year for all 10 years.
Therefore, lifetime fees of the company = management fees per year x number of years = 2.5% x 10 x $100M
= $25M
And, investment capital for this fund = Committed capital - Lifetime fees
= $100M - $25M
= $75M
Therefore, lifetime fees = $25M and investment capital =$75M.
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Business principle assignment.
Select a Company or an Organization of your choice: Describe the following
sections:
1.The introduction
2.Mission Statement
3.Vision Statement
4.Strengths and Weakness
5.Opportunities and Threats
Company/Organization: Tesla Inc.
Introduction:
Tesla Inc. is an American electric vehicle (EV) and clean energy company founded by entrepreneur Elon Musk in 2003. It is headquartered in Palo Alto, California, and operates globally. Tesla is known for its innovative approach to sustainable transportation and energy solutions. The company's primary focus is on designing, manufacturing, and selling electric vehicles, energy storage products, and renewable energy generation systems. Tesla has gained significant attention and popularity for its groundbreaking electric cars, such as the Tesla Model S, Model 3, Model X, and Model Y, as well as its commitment to accelerating the world's transition to sustainable energy.
Mission Statement:
Tesla's mission statement is "To accelerate the world's transition to sustainable energy." This mission reflects the company's core objective of driving the adoption of renewable energy sources and reducing dependence on fossil fuels. Tesla aims to achieve this by producing compelling electric vehicles, renewable energy generation, and storage products that outperform traditional alternatives. The mission highlights Tesla's commitment to addressing climate change and creating a sustainable future through technological innovation and clean energy solutions.
Vision Statement:
Tesla's vision statement is "To create the most compelling car company of the 21st century by driving the world's transition to electric vehicles." This vision emphasizes Tesla's aspiration to be at the forefront of the automotive industry by leading the transition from internal combustion engine vehicles to electric vehicles. Tesla envisions a future where electric vehicles become the norm, surpassing the performance and desirability of conventional cars. The vision statement aligns with Tesla's goal of revolutionizing transportation and promoting sustainable energy practices on a global scale.
Strengths and Weaknesses:
Tesla's strengths lie in several areas. Firstly, the company has established a strong brand reputation and a dedicated customer base that values sustainability and cutting-edge technology. Secondly, Tesla's advanced battery technology and electric drivetrain give its vehicles a competitive edge in terms of range, performance, and energy efficiency. Additionally, Tesla's Supercharger network provides convenient and fast charging infrastructure for its customers. However, Tesla also faces weaknesses, such as production challenges, supply chain vulnerabilities, and a relatively limited model lineup compared to traditional automakers. The company has struggled with meeting production targets and has experienced occasional quality control issues.
Opportunities and Threats:
Tesla operates in an evolving and highly competitive market, which presents both opportunities and threats. Opportunities for Tesla include the growing global demand for electric vehicles, increasing government support for renewable energy initiatives, and advancements in battery technology. The company has the potential to expand its market share and further disrupt the automotive industry. However, Tesla also faces threats such as competition from established automakers entering the electric vehicle market, potential regulatory changes, and supply chain disruptions. Additionally, technological advancements in rival electric vehicles and limitations in charging infrastructure pose challenges for Tesla's market dominance.
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The Company/Organization selected for the business principle assignment: Tesla Inc.
Introduction:
Tesla Inc. is an American electric vehicle (EV) and clean energy company founded by entrepreneur Elon Musk in 2003. It is headquartered in Palo Alto, California, and operates globally. Tesla is known for its innovative approach to sustainable transportation and energy solutions. The company's primary focus is on designing, manufacturing, and selling electric vehicles, energy storage products, and renewable energy generation systems. Tesla has gained significant attention and popularity for its groundbreaking electric cars, such as the Tesla Model S, Model 3, Model X, and Model Y, as well as its commitment to accelerating the world's transition to sustainable energy.
Mission Statement:
Tesla's mission statement is "To accelerate the world's transition to sustainable energy." This mission reflects the company's core objective of driving the adoption of renewable energy sources and reducing dependence on fossil fuels. Tesla aims to achieve this by producing compelling electric vehicles, renewable energy generation, and storage products that outperform traditional alternatives. The mission highlights Tesla's commitment to addressing climate change and creating a sustainable future through technological innovation and clean energy solutions.
Vision Statement:
Tesla's vision statement is "To create the most compelling car company of the 21st century by driving the world's transition to electric vehicles." This vision emphasizes Tesla's aspiration to be at the forefront of the automotive industry by leading the transition from internal combustion engine vehicles to electric vehicles. Tesla envisions a future where electric vehicles become the norm, surpassing the performance and desirability of conventional cars. The vision statement aligns with Tesla's goal of revolutionizing transportation and promoting sustainable energy practices on a global scale.
Strengths and Weaknesses:
Tesla's strengths lie in several areas. Firstly, the company has established a strong brand reputation and a dedicated customer base that values sustainability and cutting-edge technology. Secondly, Tesla's advanced battery technology and electric drivetrain give its vehicles a competitive edge in terms of range, performance, and energy efficiency. Additionally, Tesla's Supercharger network provides convenient and fast charging infrastructure for its customers. However, Tesla also faces weaknesses, such as production challenges, supply chain vulnerabilities, and a relatively limited model lineup compared to traditional automakers. The company has struggled with meeting production targets and has experienced occasional quality control issues.
Opportunities and Threats:
Tesla operates in an evolving and highly competitive market, which presents both opportunities and threats. Opportunities for Tesla include the growing global demand for electric vehicles, increasing government support for renewable energy initiatives, and advancements in battery technology. The company has the potential to expand its market share and further disrupt the automotive industry. However, Tesla also faces threats such as competition from established automakers entering the electric vehicle market, potential regulatory changes, and supply chain disruptions. Additionally, technological advancements in rival electric vehicles and limitations in charging infrastructure pose challenges for Tesla's market dominance.
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Question 21 5 points Please read the Following short Scenario and answer the two questions given at the end Juniper is among the world's largest manufacturer and supplier of networking equipment. The company supplies to many firms in the IT sector with equipment for creating internet, intranet, and extranet systems, and operates globally. The main users of the equipment are the engineers who set up and maintain the systems in the client companies. These engineers will encounter problems throughout the lifetime of the equipment- new uses for the systems will be needed, systems will crash occasionally, unforeseen circumstances will cause new problems or new challenges on a regular basis. Q-24.1 What Juniper can do to provide solutions about the problems to the buying organizations? Q-24.2 How does the concept of the buying center apply to the clients of Juniper?
Q-24.1: To solve buying organizations' problems, Juniper can offer comprehensive technical support, proactive communication, and invest in R&D for better equipment functionality.
Q-24.2: The buying center concept applies to Juniper's clients, involving multiple individuals and departments in the purchasing decision.
Q-24.1 To provide solutions to the problems faced by buying organizations, Juniper can implement several strategies.
First, Juniper can offer comprehensive technical support and customer service to address any issues that arise with the equipment. This can include a dedicated support team, 24/7 helpline, online resources, and troubleshooting guides.
Second, Juniper can engage in proactive communication with its clients to understand their specific needs and challenges. By maintaining regular contact and building strong relationships, Juniper can identify potential problems in advance and provide tailored solutions.
Additionally, Juniper can invest in research and development to continuously improve the functionality and reliability of its equipment. By staying at the forefront of technological advancements, Juniper can anticipate future challenges and provide innovative solutions to its clients.
Q-24.2 The concept of the buying center applies to the clients of Juniper as they typically involve multiple individuals or departments in the purchasing decision. The buying center represents the group of people within an organization who are involved in the buying process and have varying roles and interests.
In the case of Juniper's clients, the buying center may include IT managers, engineers, procurement professionals, and decision-makers from different departments. Each member of the buying center may have different priorities, requirements, and concerns when it comes to selecting and implementing networking equipment.
Understanding the dynamics of the buying center is crucial for Juniper to effectively market and sell its products. By identifying key stakeholders, building relationships, and addressing the specific needs of each member, Juniper can tailor its marketing strategies and communication to appeal to the buying center as a whole. This approach ensures that Juniper can meet the diverse needs of its clients and successfully navigate the complex buying process within organizations.
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Parramore Corp has $20 million of sales, $3 million of inventories, $3.25 million of receivables, and $1 million of payables. Its cost of goods sold is 85% of sales, and it finances working capital with bank loans at a 6% rate. Assume 365 days in year for your calculations. 1. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places. days 2. If Parramore cold lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold, what would be the new CCC? Do not round intermediate calculations. Round your answer to two decimal places. days 3. How much cash would be freed up, if Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold? Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar. $ X 4. By how much would pretax profits change, if Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold? Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar. X $
The cash conversion cycle (CCC) can be calculated using the formula: CCC = Days Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) - Days Payables Outstanding (DPO).
Given:
Sales = $20 million
Inventories = $3 million
Receivables = $3.25 million
Payables = $1 million
Cost of Goods Sold (COGS) = 85% of sales
First, we calculate DIO:
DIO = (Inventories / COGS) * 365
DIO = ($3 million / ($20 million * 0.85)) * 365
DIO ≈ 19.47 days
Next, we calculate DSO:
DSO = (Receivables / Sales) * 365
DSO = ($3.25 million / $20 million) * 365
DSO ≈ 59.56 days
Lastly, we calculate DPO:
DPO = (Payables / COGS) * 365
DPO = ($1 million / ($20 million * 0.85)) * 365
DPO ≈ 7.09 days
Now we can calculate the CCC:
CCC = DIO + DSO - DPO
CCC ≈ 19.47 days + 59.56 days - 7.09 days
CCC ≈ 72.94 days (rounded to two decimal places)
2. If Parramore could lower its inventories and receivables by 9% each and increase its payables by 9% without affecting sales or cost of goods sold, we need to recalculate the CCC.
New Inventories = $3 million - (0.09 * $3 million) = $2,730,000
New Receivables = $3.25 million - (0.09 * $3.25 million) = $2,962,750
New Payables = $1 million + (0.09 * $1 million) = $1,090,000
Using the same formula, we can calculate the new CCC:
New DIO = (New Inventories / COGS) * 365
New DIO ≈ ($2,730,000 / ($20 million * 0.85)) * 365
New DIO ≈ 17.88 days
New DSO = (New Receivables / Sales) * 365
New DSO ≈ ($2,962,750 / $20 million) * 365
New DSO ≈ 57.51 days
New DPO = (New Payables / COGS) * 365
New DPO ≈ ($1,090,000 / ($20 million * 0.85)) * 365
New DPO ≈ 8.13 days
New CCC = New DIO + New DSO - New DPO
New CCC ≈ 17.88 days + 57.51 days - 8.13 days
New CCC ≈ 67.26 days (rounded to two decimal places)
3. To calculate the amount of cash freed up, we need to compare the change in inventories, receivables, and payables before and after the 9% adjustment.
Change in Inventories = $3 million - $2,730,000 = $270,000
Change in Receivables = $3.25 million - $2,962,750 = $287,250
Change in Payables = $1 million - $1,090,000 = -$90,000 (since it increased)
The cash freed up is the sum of these changes:
Cash Freed Up = Change in Inventories +
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Low Customer Service
A company produces and sells nearly 50 SKUs of different chocolate brands following a make-to-stock strategy. The total shelf-life ranges between 7-12 months.
The demand on these chocolate brands is fast growing, and the company is having a hard time to keep up with this growth. Their customer service level over the last 6 months has been constantly below target due to continuous stockouts. These stockouts are the result of the fast growth in demand, and the company’s limited capacity to produce the required quantities when needed. What is affecting their capacity is the available warehouse space that limits their ability to store larger production quantities. Their demand plan accuracy is not good either, which is aggravating the situation. What makes their position even harder is the short shelf life of their products, in which case producing too much may lead to expiries and write-offs, and this is also a problem as the company is trying to eliminate wastage and reduce cost.
As a result of this situation, customer orders are being shorted frequently to an extent that cannot be tolerated anymore, and this is leading to increased customer frustration, loss of sales opportunity, and heavy customer fines.
You have been assigned the task of looking into this challenge and suggesting solutions that could lead to desired improvements. Write a proposal to the company’s management explaining your plan to address all the mentioned issues using tools, methods, recommendations, etc. to tackle every aspect and improve their inventory levels. Use your creativity, experience and understanding of the material (forecasting techniques, capacity planning, inventory cost, ABC classification, etc.) to create a feasible solution that could result in tangible benefits over the short and long term.
The mentioned issues and improve inventory levels, I propose implementing a combination of demand forecasting techniques, capacity planning, inventory optimization, and ABC classification.
By improving demand planning accuracy, implementing efficient production and replenishment strategies, optimizing inventory levels based on product categorization, and leveraging technology solutions, the company can reduce stockouts, increase customer service levels, minimize wastage, and optimize cost.
To address the challenges and improve inventory levels, the following steps can be taken:
1. Demand Forecasting: Implement advanced demand forecasting techniques, such as statistical forecasting models and collaborative forecasting with key customers, to improve demand plan accuracy.
2. Capacity Planning: Develop a capacity planning strategy that considers production lead times, shelf life, and demand variability to produce the required quantities when needed without excessive stockouts or wastage.
3. Inventory Optimization: Implement inventory optimization techniques like safety stock calculations and reorder point optimization to prevent stockouts while minimizing inventory carrying costs.
4. Technology Solutions: Invest in an integrated inventory management system that provides real-time visibility into stock levels, demand patterns, and production schedules.
5. Supplier Collaboration: Collaborate closely with suppliers to enhance supply chain visibility and responsiveness. Implement vendor-managed inventory (VMI) or consignment inventory agreements to ensure timely replenishment and reduce stockouts.
By implementing these strategies, the company can improve demand forecasting accuracy, optimize production and replenishment, reduce stockouts, minimize wastage, and enhance customer service levels.
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Explain the relationship between investors’ required return on
investment and market risk.
Identify the basic characteristics of common stocks and
preferred stocks.
Value common stocks and preferred
The relationship between investors' required return on investment and market risk can be understood through the concept of the risk-return tradeoff. Investors generally expect to earn a higher return on their investments when taking on greater levels of risk.
Market risk, also known as systematic risk, refers to the risk that is inherent in the overall market or economy. It cannot be eliminated through diversification because it affects all investments to some extent. Examples of market risk include economic recessions, political instability, interest rate fluctuations, and market volatility.
Investors demand a higher required return on their investments to compensate for the level of market risk they are exposed to. This required return serves as a premium for taking on the uncertainty associated with market fluctuations. The relationship is such that investments with higher market risk should offer higher expected returns to attract investors.
However, it's important to note that individual investors may have different risk preferences and investment goals. Some investors may be more risk-averse and prefer lower-risk investments, even if they offer lower returns. Others may be willing to take on more market risk in pursuit of potentially higher returns.
Moving on to the characteristics of common stocks and preferred stocks:
Common Stocks:
- Represent ownership in a company and give shareholders voting rights.
- Offer potential for capital appreciation and dividends.
- Holders have residual claim on the company's assets and earnings.
- Have higher risk and volatility compared to preferred stocks.
Preferred Stocks:
- Represent ownership in a company but generally do not provide voting rights.
- Offer fixed dividends, typically with a higher priority over common stock dividends.
- Holders have a preference over common stockholders in case of liquidation.
- Have lower risk and volatility compared to common stocks.
Valuing common stocks and preferred stocks involves determining their intrinsic value, which is the present value of their expected future cash flows. This valuation process considers factors such as expected dividends, growth prospects, interest rates, and the risk associated with the investment. Various valuation models, such as the dividend discount model (DDM) or discounted cash flow (DCF) analysis, can be used to estimate the value of these stocks.
It's important to note that the valuation of stocks is subject to market conditions, investor sentiment, and individual assessments of the company's prospects. Therefore, stock valuation is an ongoing process that requires continuous evaluation and adjustment based on changing market dynamics.
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Transcribed image text: Question 3 - Planning and Plans Former US President and Commander of Allied Forces in World War II, Dwight Eisenhower, once said "Plans are useless, but planning is indispensable." Using the material discussed in class, outline what Eisenhower meant and why he may be right. (10 marks, 400 words)
Dwight Eisenhower was a former US President and Commander of the Allied Forces in World War II who once said "Plans are useless, but planning is indispensable."In his quote, he intended to convey that a plan is a static document that cannot keep up with ever-changing circumstances, but planning, on the other hand, is a continual process that keeps up with the changing environment in which one operates.
It means that the ability to adapt to change and unpredictable conditions is far more critical than simply creating a plan. In the context of Allied forces, Eisenhower's quote made a lot of sense. During World War II, the Allied forces faced a dynamic battlefield that made it difficult to rely on static plans. With the ever-changing situation, it was nearly impossible to predict what was going to happen in the next few minutes, let alone the next day or week. Therefore, instead of solely relying on plans, the Allied forces had to practice continual planning to adjust their strategies and tactics as per the constantly changing situation. They had to remain flexible and willing to change in order to succeed in the battlefield. In essence, the Allies could not have won the war solely through static planning; they needed planning as an ongoing process to keep up with the changing circumstances.
Furthermore, Eisenhower also argued that it's essential to have a plan to start with, but that plan will likely require modification as you progress. A plan is necessary because it provides direction and goals to follow, but it is only as good as the assumptions made and the information available at the time it was created. It is essential to recognize that circumstances change, and we must be prepared to modify the plan to achieve our objectives. Therefore, the real value of planning is in the ability to adapt to change and to adjust the plan as required.Finally, Eisenhower's quote is still applicable today, as it highlights the need to practice continual planning. In the business world, planning is critical, but it is not enough to create a plan and assume that everything will work out as anticipated. Continual planning is required to keep up with the changing marketplace and technological advances. Companies that do not adjust and adapt their plans run the risk of becoming obsolete. Therefore, planning is essential, but continual planning is indispensable.
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Sally, Sam and Sophia who were independent sole traders decided to form a partnership, SSS Trading, as from 1 January 2021. The agreement set out the following basic arrangements:
Sally will contribute $12,500 in cash, and to act as managing partner at a salary of $7,000 per year.
Sam will contribute motor vehicle valued at $16,000, computers of $6,000 and $15,000 in cash. He also brought a bank loan of $4,500.
Sophia to contribute furniture valued at $11,200 and equipment of $12,000.
Interest to be allowed at 10% p.a. on the capital contribution by each partner.
Residual profits or losses to be shared among Sally, Sam and Sophia in the proportion of 2:1:1 respectively.
Required
a) Prepare the journal entries necessary to open the records of the partnership. (5 Marks)
b) Assuming in the first year that the partnership makes a profit of $42,000, prepare the journal entries to record the allocation of profit distribution to Sally, Sam, and Sophia, for the year ended 31 December 2021 using Method 2. (3 Marks)
Narrations are NOT required.
The interest on capital is calculated at a rate of 10% per annum, and the residual profit is divided according to the sharing proportions (2:1:1) among Sally, Sam, and Sophia.
a) Journal Entries to Open Partnership Records:
1. Sally's capital contribution:
Cash 12,500
Sally's Capital Account 12,500
2. Sam's capital contribution:
Motor Vehicle 16,000
Computers 6,000
Cash 15,000
Bank Loan 4,500
Sam's Capital Account 33,500
3. Sophia's capital contribution:
Furniture 11,200
Equipment 12,000
Sophia's Capital Account 23,200
b) Journal Entries for Profit Allocation (Method 2):
1. Calculate Interest on Capital:
Sally's Capital Account:
Interest Expense (10% * $12,500) 1,250
Sally's Capital Account 1,250
Sam's Capital Account:
Interest Expense (10% * $33,500) 3,350
Sam's Capital Account 3,350
Sophia's Capital Account:
Interest Expense (10% * $23,200) 2,320
Sophia's Capital Account 2,320
2. Allocate Residual Profit:
Profit and Loss (Net Profit) 42,000
Sally's Capital Account (2/4 * 42,000) 21,000
Sam's Capital Account (1/4 * 42,000) 10,500
Sophia's Capital Account (1/4 * 42,000)10,500
The above journal entries record the initial capital contributions of each partner and allocate the profit distribution for the year based on the agreed sharing ratio. The interest on capital is calculated at a rate of 10% per annum, and the residual profit is divided according to the sharing proportions (2:1:1) among Sally, Sam, and Sophia. These entries establish the partnership's financial records and reflect the partners' contributions and entitlements.
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Describe some differences in the backgrounds, temperaments, and
interests of Gauss and Cauchy.
Gauss and Cauchy were both prominent mathematicians who made significant contributions to the field. While they shared a passion for mathematics, there were differences in their backgrounds, temperaments, and interests.
1. Backgrounds:
- Carl Friedrich Gauss: Gauss was born in Germany in 1777 and showed exceptional mathematical talent from a young age. He made groundbreaking contributions to various fields of mathematics, including number theory, geometry, and physics. Gauss had a strong academic background and received formal education in mathematics and science.
- Augustin-Louis Cauchy: Cauchy was born in France in 1789 and came from a wealthy, aristocratic family. He displayed his mathematical skills early on and received his education at the École Polytechnique in Paris. Cauchy focused on analysis and is known for his foundational work in calculus and mathematical analysis.
2. Temperaments:
- Gauss: Gauss was known for his quiet and reserved nature. He had a methodical approach to his work and was highly focused and meticulous in his calculations. Gauss was often described as introverted and private, preferring solitude and intellectual pursuits.
- Cauchy: Cauchy, on the other hand, was known for his extroverted and passionate temperament. He was highly energetic and enthusiastic about mathematics. Cauchy was known to be more social, engaging in debates and discussions with his contemporaries.
3. Interests:
- Gauss: Gauss had a wide range of mathematical interests and made significant contributions to various branches of mathematics. He worked on number theory, differential geometry, celestial mechanics, and physics, among other areas. Gauss was interested in both theoretical and applied mathematics.
- Cauchy: Cauchy had a particular interest in mathematical analysis and focused on rigor and foundations. He made significant contributions to the theory of functions, complex analysis, and calculus. Cauchy emphasized the importance of rigorous proofs and is credited with introducing the concept of Cauchy sequences.
While both Gauss and Cauchy were exceptional mathematicians, their backgrounds, temperaments, and specific mathematical interests differed. Gauss was known for his quiet genius and broad range of interests, while Cauchy was known for his passionate nature and focus on mathematical analysis.
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What is the expected after-tax cash flow from selling a piece of
equipment if XYZ purchases the equipment today for $88,500.00, the
tax rate is 21.00%, the equipment is sold in 2 years for
$20,000.00,
The expected after-tax cash flow from selling the equipment is $32,285.00.
To calculate the expected after-tax cash flow from selling a piece of equipment, we need to consider the tax implications.
Equipment purchase price = $88,500.00
Tax rate = 21%
Equipment selling price = $20,000.00
Time period = 2 years
To calculate the expected after-tax cash flow, we need to determine the taxable gain or loss from the equipment sale. The taxable gain or loss is the difference between the selling price and the adjusted cost basis of the equipment.
Adjusted cost basis = Purchase price - Accumulated depreciation
Since we don't have information about the accumulated depreciation, let's assume that the accumulated depreciation after 2 years is $10,000.00. Therefore, the adjusted cost basis would be:
Adjusted cost basis = $88,500.00 - $10,000.00 = $78,500.00
Next, we calculate the taxable gain or loss:
Taxable gain/loss = Selling price - Adjusted cost basis
Taxable gain/loss = $20,000.00 - $78,500.00 = -$58,500.00
Since the taxable gain is negative, it means there is a loss on the sale. In this case, we won't have any taxable income. However, we can still calculate the after-tax cash flow.
Expected after-tax cash flow = Selling price - Tax on gain/loss
Tax on gain/loss = Tax rate * Taxable gain/loss
Tax on gain/loss = 0.21 * (-$58,500.00) = -$12,285.00
Expected after-tax cash flow = $20,000.00 - (-$12,285.00) = $32,285.00
Therefore, the expected after-tax cash flow from selling the equipment is $32,285.00.
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Question (1): Based on your studies in quantitative analysis, read the following definitions and wright the concept that reflects the meaning of each . No. term Definition 1 A specific case of LP concerned with scheduling shipments from source to destination so the total transportation costs are minimized. 2 The decision-making environment is called uncertainty if the probabilities are 3 In decision theory, payoffs resulting from each possible combination of alternatives and outcomes are called
1 A transportation problem is a specific case of LP concerned with scheduling shipments from source to destination so the total transportation costs are minimized.
2 The decision-making environment is called uncertainty if the probabilities are not known.
3 In decision theory, payoffs resulting from each possible combination of alternatives and outcomes are called payoffs.
Based on your studies in quantitative analysis, the concept that reflects the meaning of each term are as follows:
1. A transportation problem is a specific case of LP (linear programming) concerned with scheduling shipments from source to destination so the total transportation costs are minimized. The transportation problem has the following characteristics: there are sources of supply, destinations, supply levels at each source, demand levels at each destination, and a cost per unit of transportation.
2. The decision-making environment is called uncertainty if the probabilities are not known. In other words, when decision-makers are not sure about the likelihood of the events or their outcomes, they are said to be uncertain. Under uncertainty, probabilities are not known, but their range is known.
3. In decision theory, payoffs resulting from each possible combination of alternatives and outcomes are called payoffs. A payoff matrix is a table of payoffs for each decision outcome combination.
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Variable SG& A is treated as a period cost.
a. Absorption Costing b. Both Variable and Absorption Costing c. Variable Costing
d. Dependes on the situation
Variable SG&A is treated as a period cost in Variable Costing.
Is Variable SG&A considered a period cost in Variable Costing?In Variable Costing, Variable SG&A is considered a period cost.
Variable Costing is a costing method that separates costs into fixed and variable components.
In this method, variable manufacturing costs are assigned to units produced, while fixed manufacturing costs are treated as period costs and expensed in the period incurred.
Similarly, variable selling, general, and administrative (SG&A) costs, which vary with the level of production or sales, are also treated as period costs and expensed in the period they are incurred.
Treating variable SG&A costs as period costs allows for a more accurate reflection of the costs incurred in a specific period, regardless of the level of production or sales.
This approach aligns with the matching principle, which aims to match expenses with the revenues they help generate.
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Blossom Chrome Bumpers bought two acres of land with an old office building on it that was deemed unusable. The cost was $489,600 of which Blossom Chrome paid $81,600 in cash as a down payment and signed a 7% mortgage for the remainder. Blossom Chrome immediately had the old building razed at a total cost of $8,830 and sold the salvaged materials for $2,200. Attorneys were paid $1,100 in connection with the purchase. The architect's fee for drawing building plans for the new building cost $6,980. Blossom Chrome paid $3,140 in connection with permits and zoning variances necessary prior to construction of the new building. Blossom Chrome paid the contractor $1,448,400 for construction of the new building, along with $42,840 for a parking lot and necessary walkways and driveways. Answer the following question. (a) Your answer is incorrect. At what amount should the land be recorded?
The amount at which the land should be recorded is $404,580. Blossom Chrome Bumpers purchased two acres of land with an old office building on it that was deemed unusable for a cost of $489,600. The old building was demolished by Blossom Chrome at a cost of $8,830, and the salvage materials were sold for $2,200.
Attorneys were paid $1,100 in connection with the purchase, while the architect's fee for drawing building plans for the new building cost $6,980. Blossom Chrome spent $3,140 in connection with permits and zoning variances required prior to building the new building.
Finally, Blossom Chrome paid the contractor $1,448,400 for the construction of the new building, as well as $42,840 for a parking lot and necessary walkways and driveways.
Therefore, the land is recorded at $404,580, which is calculated by adding the down payment of $81,600 to the cost of the building's demolition of $8,830, the cost of the architect's fee of $6,980, and the cost of the permits and zoning variances of $3,140. The sum of these costs is $100,550.
The total sum of the purchase price and these costs is $590,990. Deducting the $2,200 revenue received from the sale of the salvage materials from the overall sum results in $588,790. Subtracting the mortgage balance of $184,210 from this amount results in a final cost of $404,580.
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Part 3: IT Governance [32 points] Hint: COBIT 2019 is available in D2L Content/Cobit/ COBIT 2019 Framework and Management Objectives Question 1 [18 points]: APO08 Managed Relationships has different Key Management Practices. In your own words, describe briefly the 1,3, and 4 1) what each is 2) why it is important, and 3) a key output (one point each). APO08.1: Summarized Description: Why is it important A key output APO08.3: Summarized Description: Why is it important A key output APO08.4: Summarized Description: Why is it important A key output
APO08 Managed Relationships has different key management practices. These are explained below;APO08.1: Summarized Description:APO08. 1 deals with aligning IT service delivery with the business requirements. It includes identifying the needs of the business, developing strategies, and determining the right technologies.
The primary purpose is to ensure that the service delivery goals are in line with the business requirements. IT teams should collaborate with the business teams to achieve this. It is important because it ensures that IT services meet the needs of the business, improves customer satisfaction, and helps reduce operational costs. A key output Key outputs of APO08.1 are the alignment of IT goals with business goals, identification of IT service needs, and effective collaboration between IT and business teams.APO08.3: Summarized Description:This key practice is about ensuring that IT teams understand and comply with the laws, regulations, and contractual requirements. They need to ensure that their services meet the legal requirements and contractual obligations that are in place.
It is important because non-compliance can lead to fines, legal issues, and other legal consequences. Therefore, it is essential to understand these requirements and to ensure that they are met. A key output Key outputs of APO08.3 are identification and compliance with legal and contractual requirements, identification of risks, and mitigation of risks.APO08.4: Summarized Description:APO08.4 deals with developing and maintaining positive relationships with customers and other stakeholders. IT teams need to maintain effective communication with customers, stakeholders, and other teams. It is important because it helps to establish trust, enhances customer satisfaction, and helps improve the quality of IT services. Additionally, it helps to maintain a positive reputation of the organization. A key output Key outputs of APO08.4 are the development of communication channels, the establishment of relationships with customers and stakeholders, and effective management of customer feedback.
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E18.20 (LO 3) (Sales with Returns) Organic Growth Company is presently testing a number of new agricultural seed planters that it has recently developed. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Organic Growth estimates returns of 20%. Organic Growth sells these planters on account for $1,500,000 (cost $750,000) on January 2, 2022. Customers are required to pay the full amount due by March 15, 2022. Instructions a. Prepare the journal entry for Organic Growth at January 2, 2022. b. Assume that one customer returns the planters on March 1, 2022, due to unsatisfactory performance. Prepare the journal entry to record this transaction, assuming this customer purchased $100,000 of planters from Organic Growth. The other receivables are collected. c. Assume Organic Growth prepares financial statements quarterly. Prepare the necessary entries (if any) to adjust Organic Growth's financial results for the above transactions on March 31, 2022, assuming remaining expected returns of $200,000.
a. Prepare the journal entry for Organic Growth on January 2, 2022.DateAccount/DescriptionDebitCreditJanuary 2, 2022Accounts Receivable $1,500,000Sales Revenue $1,500,000Cost of Goods Sold $750,000Inventory $750,000b. Assume that one customer returns the planters on March 1, 2022, due to unsatisfactory performance. Prepare the journal entry to record this transaction, assuming this customer purchased $100,000 of planters from Organic Growth.
The other receivables are collected.DateAccount/DescriptionDebitCreditMarch 1, 2022Sales Returns and Allowances $100,000Accounts Receivable $100,000Cost of Goods Sold $50,000Inventory $50,000c. Assume Organic Growth prepares financial statements quarterly. Prepare the necessary entries (if any) to adjust Organic Growth's financial results for the above transactions on March 31, 2022, assuming remaining expected returns of $200,000.
DateAccount/DescriptionDebitCreditMarch 31, 2022Estimated Returns Inventory $200,000Cost of Goods Sold $200,000The estimated returns inventory account should be updated at the end of each accounting period to reflect the most recent estimation of returns by Organic Growth Company. The calculation of the estimated returns inventory account is as follows:Sales Price - Cost of Goods Sold = Gross Profit $1,500,000 - $750,000 = $750,000Returns x Gross Profit Rate = Estimated Returns $200,000 x 0.5 = $100,000Closing balance of the estimated returns inventory account on March 31, 2022:
Opening Balance + Estimated Returns - Actual Returns = Closing Balance$0 + $200,000 - $100,000 = $100,000The estimated returns are debited to Cost of Goods Sold, and the same amount is credited to the estimated returns inventory account.
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Global Economy and Trade Use your knowledge of international business to answer the following questions. The global economy is dominated by three mature market systems, which include North America, Europe, and Which country could best be described as a high-potential/high-growth economy? Saudi Arabia Germany India Japan What is the primary mission of the World Trade Organization? Promote sustainability initiatives globally Promote trade among nations Reduce international human trafficking Improve the quality of life globally
India can be described as a high-potential/high-growth economy in the global economy, and the primary mission of the World Trade Organization is to promote trade among nations.
The global economy is dominated by three mature market systems: North America, Europe, and Asia. Out of the given options, the country that could best be described as a high-potential/high-growth economy is India. India has experienced rapid economic growth in recent years and has a large consumer market with immense potential.
The primary mission of the World Trade Organization (WTO) is to promote trade among nations. The WTO's main objective is to facilitate the smooth flow of goods and services across borders by ensuring that trade barriers, such as tariffs and quotas, are reduced or eliminated.
It aims to create a more open and predictable international trading system, thus contributing to global economic growth and development. The WTO also provides a platform for negotiation, dispute settlement, and the establishment of trade rules to promote fairness and transparency in international trade.
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Present Value for Various Compounding Periods
Find the present value of $675 due in the future under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent.
12% nominal rate, semiannual compounding, discounted back 5 years.
$
12% nominal rate, quarterly compounding, discounted back 5 years.
$
12% nominal rate, monthly compounding, discounted back 1 year.
$
Present value calculations for various compounding periods:
12% nominal rate, semiannual compounding, discounted back 5 years:
The present value is $393.92.
12% nominal rate, quarterly compounding, discounted back 5 years:
The present value is $393.03.
12% nominal rate, monthly compounding, discounted back 1 year:
The present value is $617.35.
For semiannual compounding, we use the formula: PV = FV / (1 + r/n)^(n*t), where FV is the future value, r is the nominal rate, n is the number of compounding periods per year, and t is the number of years. Plugging in the values, the present value is calculated as $393.92.
For quarterly compounding, we use the same formula as above but with n = 4 (since there are 4 quarters in a year). Plugging in the values, the present value is calculated as $393.03.
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Revise the following to make the tone conversational yet professional. The undersigned respectfully reminds affected individuals that employees desirous of changing their health plans must do so before December 30.
To make the tone conversational yet professional tone the undersigned respectfully reminds affected individuals that employees desirous of changing their health plans must do so before December 30 is written like below.
Hey there! Just a friendly reminder to those who may be affected - if you're thinking about changing your health plan, be sure to do it before December 30th. It's important to take advantage of this opportunity to make any necessary adjustments to your coverage.
So, please keep in mind that time is running out and be sure to act quickly! If you have any questions or concerns, feel free to reach out to us for assistance. Thank you!
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D
Question 6
12.5 pts
During this year, board of directors at Munoz Company authorizes repurchase of 100 shares of the company's own common stock with $2 par value for $10 per share. Which of the following journal entries is recorded correctly?
O DR: Treasury Stock $1,000: CR: Cash $1,000
O DR: Cash $1,000; CR: Treasury Stock $1,000
O DR: Cash $1,000; CR: Common Stock $200 and Additional Paid-In Capital from Common Stock $800
O DR: Treasury Stock $800 and Additional Paid-in Capital from Treasury Stock $200: CR: Cash $1,000
O DR: Common Stock $1,000; CR: Cash $1,000
D
Question 7
12.5 pts
On April 1, Kang Corporation purchased back 250 shares of $1 par value common stock for $20 per share. Two months later on June 1, Kang Corporation reissued 100 shares of the treasury stock for $25 per share. Which of the following journal entries is recorded for June 1?
O DR: Cash $2,500; CR: Treasury Stock $2,000 and Additional Paid-in Capital from Treasury Stock $500
O DR: Cash $2,500; CR: Treasury Stock $2,500
O DR: Cash $2,500, CR: Common Stock $2,000 and Additional Paid-in Capital from Common Stock $500
O DR: Cash $6,250; CR: Treasury Stock $5,000 and Additional Paid-in Capital from Treasury Stock $1,250
O DR: Cash $2,500; CR: Common Stock $2.500
The correct journal entry is DR: Treasury Stock $1,000, and CR: Cash $1,000. Thus, option A is correct. The correct journal entry is DR: Cash $2,500, CR: Treasury Stock $2,000, and CR: Additional Paid-in Capital from Treasury Stock $500. Thus, option A is correct.
The correct journal entry to record the repurchase of 100 shares of the company's own common stock with $2 par value for $10 per share would be:
DR: Treasury Stock $1,000
CR: Cash $1,000
This entry correctly reflects the transaction by debiting the Treasury Stock account for the cost of repurchasing the shares, which is 100 shares * $10 per share, equaling $1,000. The Cash account is credited for the same amount, representing the cash outflow from the company to repurchase the shares.
Therefore, option A is correct. The correct journal entry is:
DR: Treasury Stock $1,000
CR: Cash $1,000
The correct journal entry to record the reissuance of 100 shares of treasury stock for $25 per share would be:
DR: Cash $2,500
CR: Treasury Stock $2,000
CR: Additional Paid-in Capital from Treasury Stock $500
This entry correctly reflects the transaction by debiting the Cash account for the cash inflow from the reissuance of the shares, which is 100 shares * $25 per share, totaling $2,500.
The Treasury Stock account is credited for the cost of the treasury stock being reissued, which is 100 shares * $20 per share, amounting to $2,000.
The Additional Paid-in Capital from Treasury Stock account is credited for the excess amount received over the cost of the treasury stock, which is $500 ($2,500 cash received - $2,000 cost of the treasury stock).
Therefore, option A is correct. The correct journal entry is:
DR: Cash $2,500
CR: Treasury Stock $2,000
CR: Additional Paid-in Capital from Treasury Stock $500
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In this assignment, think about a team you have been or are currently involved with. Address some of the common variables of team work. Using the following questions to help guide your response.
1. What was the purpose of the team?
2. How were the team members determined for the team?
3. Did it take longer to complete tasks with this team or was it quicker?
4. Were there resistors to teamwork on the team? If so, how was that addressed
5. How was conflict addressed on the team?
6. What made the team successful? If the team was not successful, what could have been done differently?
The purpose of the team was to plan and execute an annual community charity event to raise funds for disadvantaged children.
Members were chosen based on their expertise, skill set, and availability to volunteer.3. Did it take longer to complete tasks with this team or was it quicker?It took a longer time to complete tasks because some team members had difficulty keeping up with the workload.4. Were there resistors to teamwork on the team? If so, how was that addressed?Yes, there were resistors to teamwork, this was addressed through open communication.5. How was conflict addressed on the team?Conflict was addressed through a structured process of conflict resolution which helped resolve issues quickly and effectively.
The team's success was due to our clear communication, proper delegation, and effective conflict resolution.
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Classify the following pairs of goods and services as substitutes in production, complements in production, or neither. a. Lumber and sawdust b. Condominiums and bungalows c. Cheeseburger and fries d. Cars and gasoline e. Cappuccino and latte 11. When a farmer uses raw milk to produce skim milk, he also produces cream which is used to make butter. I a. Explain how a rise in the price of cream influences the supply of skim milk. b. Explain how a rise in the price of cream influences the supply of butter..
The supply of skim milk could decrease due to the increased focus on cream production.
a. Lumber and sawdust: Lumber and sawdust are generally considered complements in production. Lumber is used to produce various wood products, while sawdust is a byproduct of the cutting and shaping of lumber. Sawdust is often used in the production of composite wood products, as well as for fuel or animal bedding. The production of lumber and sawdust typically occurs together, making them complementary goods in the production process.
b. Condominiums and bungalows: Condominiums and bungalows are neither substitutes nor complements in production. They are different types of housing units that can be produced independently of each other. The production of one does not rely on the production of the other, nor do they directly contribute to each other's production.
c. Cheeseburger and fries: Cheeseburger and fries are generally considered complements in production. They are often served together in fast food restaurants or other food establishments. The production of a cheeseburger typically involves the production of fries as a complementary side dish, and vice versa. They are commonly consumed together, leading to a complementary relationship in their production.
d. Cars and gasoline: Cars and gasoline are typically considered complements in production. Cars require gasoline as a fuel to operate, and gasoline is needed for cars to function effectively. The production of cars and gasoline is interconnected, as an increase in the production of cars would lead to an increased demand for gasoline, and vice versa.
e. Cappuccino and latte: Cappuccino and latte are generally considered substitutes in production. They are both types of coffee beverages that involve similar ingredients and preparation methods. In a coffee shop, the production process for cappuccino and latte is often similar, with variations in the ratio of espresso, steamed milk, and frothed milk. Therefore, they can be easily substituted for each other in the production process.
a. A rise in the price of cream would influence the supply of skim milk by potentially reducing it. When a farmer produces skim milk, cream is a byproduct. If the price of cream increases, the farmer may have an incentive to allocate more resources to producing cream rather than skim milk. As a result, the supply of skim milk could decrease due to the increased focus on cream production.
b. A rise in the price of cream would influence the supply of butter by potentially increasing it. Since cream is used to make butter, an increase in the price of cream makes butter production more profitable. Farmers may allocate more resources to producing cream in response to the higher price, leading to an increase in the supply of butter as a byproduct of increased cream production.
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The supply of skim milk could decrease due to the increased focus on cream production. An increase in the price of cream makes butter production more profitable.
a. Lumber and sawdust: Lumber and sawdust are generally considered complements in production. Lumber is used to produce various wood products, while sawdust is a byproduct of the cutting and shaping of lumber. Sawdust is often used in the production of composite wood products, as well as for fuel or animal bedding. The production of lumber and sawdust typically occurs together, making them complementary goods in the production process.
b. Condominiums and bungalows: Condominiums and bungalows are neither substitutes nor complements in production. They are different types of housing units that can be produced independently of each other. The production of one does not rely on the production of the other, nor do they directly contribute to each other's production.
c. Cheeseburger and fries: Cheeseburger and fries are generally considered complements in production. They are often served together in fast food restaurants or other food establishments. The production of a cheeseburger typically involves the production of fries as a complementary side dish, and vice versa. They are commonly consumed together, leading to a complementary relationship in their production.
d. Cars and gasoline: Cars and gasoline are typically considered complements in production. Cars require gasoline as a fuel to operate, and gasoline is needed for cars to function effectively. The production of cars and gasoline is interconnected, as an increase in the production of cars would lead to an increased demand for gasoline, and vice versa.
e. Cappuccino and latte: Cappuccino and latte are generally considered substitutes in production. They are both types of coffee beverages that involve similar ingredients and preparation methods. In a coffee shop, the production process for cappuccino and latte is often similar, with variations in the ratio of espresso, steamed milk, and frothed milk. Therefore, they can be easily substituted for each other in the production process.
a. A rise in the price of cream would influence the supply of skim milk by potentially reducing it. When a farmer produces skim milk, cream is a byproduct. If the price of cream increases, the farmer may have an incentive to allocate more resources to producing cream rather than skim milk. As a result, the supply of skim milk could decrease due to the increased focus on cream production.
b. A rise in the price of cream would influence the supply of butter by potentially increasing it. Since cream is used to make butter, an increase in the price of cream makes butter production more profitable. Farmers may allocate more resources to producing cream in response to the higher price, leading to an increase in the supply of butter as a byproduct of increased cream production.
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What is the mix of activities that Song (Delta Airlines) delivers the advantage?
Answer:
Explanation:
As mentioned before, Song was a subsidiary airline of Delta Air Lines that operated from 2003 to 2006. The specific activities and advantages delivered by Song during its operation can be summarized as follows:
1. Differentiated Customer Experience: Song aimed to provide a unique and enhanced travel experience for leisure travelers. It offered features such as all-leather seats, live onboard satellite television, and an in-flight entertainment system with a wide range of options. These features were designed to differentiate Song from other airlines and provide a more enjoyable and engaging experience for passengers.
2. Cost Efficiency: While delivering an enhanced customer experience, Song also focused on cost efficiency. It implemented measures to optimize operations, reduce costs, and enhance profitability. By streamlining processes and focusing on cost-effective strategies, Song aimed to provide a balance between customer satisfaction and financial performance.
3. Targeting the Leisure Travel Segment: Song primarily targeted the leisure travel segment, which included vacationers and price-sensitive customers. By focusing on this specific market segment, Song aimed to capture a niche market and tailor its services to meet the needs and preferences of leisure travelers.
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As mentioned before, Song was a subsidiary airline of Delta Air Lines that operated from 2003 to 2006. The specific activities and advantages delivered by Song during its operation can be summarized as follows:
1. Differentiated Customer Experience: Song aimed to provide a unique and enhanced travel experience for leisure travelers. It offered features such as all-leather seats, live onboard satellite television, and an in-flight entertainment system with a wide range of options. These features were designed to differentiate Song from other airlines and provide a more enjoyable and engaging experience for passengers.
2. Cost Efficiency: While delivering an enhanced customer experience, Song also focused on cost efficiency. It implemented measures to optimize operations, reduce costs, and enhance profitability. By streamlining processes and focusing on cost-effective strategies, Song aimed to provide a balance between customer satisfaction and financial performance.
3. Targeting the Leisure Travel Segment: Song primarily targeted the leisure travel segment, which included vacationers and price-sensitive customers. By focusing on this specific market segment, Song aimed to capture a niche market and tailor its services to meet the needs and preferences of leisure travelers.
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Stock "A" has a level of systematic risk, Beta_A =1.5, and statistics show that the expected return on the market portfolio is 12% and the risk-free rate is 4%. "A" has an observed rate of return of 12%. Which of the following statements are true regarding A I Its Treynor ratio is lower than Treynor's ratio for M II It will be sold in the "market" to restore equilibrium III It will have a lower Sharpe ratio than M a. I only b.ll only c. I, II, and III d.I and II only e. III only Stock " A " has a level of systematic risk, Beta A=1.5, and statistics show that the expected return on the market porffolio is 12% and the risk-free rate is 4%. If Stock " A " has a disequilibrium rate of return equal to 12%, you would a. Conclude that it is over-priced b. Conclude that it is under-priced c. Expect stock "A" to be sold in the market to restore equilibrium d. Both a and c e. Not enough information to tell Stock "A" has a level of systematic risk, Beta_A =1.5, and statistics show that the expected return on the market portfolio is 12% and the risk-free rate is 4%. The equilibrium rate of return for A is, A. 4% B. 10% C. 12% D. 16% E. 20%
The correct answer is E. 20% is not the equilibrium rate of return for Stock A.
Regarding the first question, the correct answer is c. I, II, and III.
Explanation:
I. The Treynor ratio measures the risk-adjusted return of a stock relative to its systematic risk. Since Stock A has a higher systematic risk (Beta_A = 1.5) than the market, its Treynor ratio will be lower than the Treynor ratio for the market.
II. The question does not provide any information indicating that Stock A will be sold in the market to restore equilibrium. Therefore, this statement is false.
III. The Sharpe ratio measures the risk-adjusted return of a stock relative to its total risk. Since Stock A has a higher systematic risk (Beta_A = 1.5) than the market, it will have a higher total risk, resulting in a lower Sharpe ratio than the market.
Regarding the second question, the correct answer is e. Not enough information to tell.
Explanation:
The question does not provide any information about the expected rate of return for Stock A. Therefore, we cannot conclude whether it is overpriced, underpriced, or expect it to be sold in the market to restore equilibrium.
Regarding the third question, the correct answer is e. 20%.
Explanation:
The equilibrium rate of return for Stock A can be calculated using the Capital Asset Pricing Model (CAPM) as follows:
Equilibrium rate of return = Risk-free rate + Beta_A * (Expected return on the market portfolio - Risk-free rate)
= 4% + 1.5 * (12% - 4%)
= 4% + 1.5 * 8%
= 4% + 12%
= 16%
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Effect of accounts receivable and accounts payable transactions on financial statements LO 2-1, 2-2, 2-3, 2-4 The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period 1. Performed $67,000 of services for clients on account 2. Performed $42.000 of services for cash. 3. Incurred $32.000 of other operating expenses on account 4. Paid $16,000 cash to an employee for salary 5. Colected $50,000 cash from accounts receivable 6. Paid $17,000 cash on accounts payable. 7. Paid an $5,000 cash dividend to the stockholders 8. Accrued salaries were $2.400 at the end of Year! Required a. Show the effects of the events on the financial statements using the following horizontal statements model in the Statement of Cash Flows column, use OA to designate operating activity. IA for investment activity, FA for financing activity, and NC for net change in cash. The first event is recorded as an example. b. What is the amount of total assets at the end of Year 1? c. What is the balance of accounts receivable at the end of Year 1? d. What is the balance of accounts payable at the end of Yeart? f. What is net income for Year 1? 9. What is the amount of net cash flow from operating activities for Year 12 Complete this question by entering your answers in the tabs below. ReqA Red BtG b. What is the amount of total assets at the end of Year 1 What is the balance of accounts receivable at the end of Year 17 d. What is the balance of accounts payable at the end of Year 1? What is net income for Year 17 Q. What is the amount of net cash flow from operating activities for Year 1? Show less 5 Totalasses Accounts receivable d Accounts payable Net income o Net cash low from operating activities for Year 1 Yeart 54,000 17,000 32.000 90,6001 54,000 $ 5 5 < RA Exercise 2-9A (Algo) Effect of accounts receivable and accounts payable transactions on financial statements LO 2-1, 2-2, 2-3, 2-4 The following events apply to Lewis and Harper, a public accounting firm, for the Year f accounting period 1. Performed $67,000 of services for clients on account. 2. Performed $42.000 of services for cash 3. Incurred $32,000 of other operating expenses on account 4. Paid $16,000 cash to an employee for salary 5. Collected $50,000 cash from accounts receivable 6. Paid $17.000 cash on accounts payable 7. Paid an $5,000 cash dividend to the stockholders 8. Accrued salaries were $2.400 at the end of Yeart Required a. Show the effects of the events on the financial statements using the following horizontal statements model in the Statement of Cash Flows column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for not change in cash. The first event is recorded as an example. b. What's the amount of total assets at the end of Yeart? c. What is the balance of accounts receivable at the end of Yeart? d. What is the balance of accounts payable at the end of Yeart? f. What is net income for Year 1? g. What is the amount of net cash flow from operating activities for Year 12 Complete this question by entering your answers in the tabs below. Req Rea BG Show the effects of the events on the financial statements using the following horizontal statements model. In the Cash Flow column, use o to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. The first event is recorded as an example. (Enter any decreases to account balances with a minus sign. Not all cells in the Statement of Cash Flows column may require an input leave cells blank there is no corresponding input needed) Show A Assets Event Statement of Cash Flows Cash LEWIS AND HARPER Horizontal Financial Statement Model For Accounting Yeart Stockholders Liabilities Equity Income Statement Accounts Salaries Retained Payable Payable Revenue Earning Expense - Net Income 67,000 67,000 67,000 + 42.000 42.000 42.000 32,000 (32.000) 32,000 + (16.000 16.000 (16,000) Accounts Receivable 67,000 1 42.000 42,000 ОА 2 3 + 4 (16,000 50,000 5 (50.000) (15.000) 50.000 (17.000) 15,000 OA OA OA FA 6 7. (17,000) (5,000) + 2400 8 Totals 15.000) 12.4001 53,600 2.400 50.400 (2.400 90,600 54,000+ 17 000 32.000 2.4001 109.000 54,000 Reto G >
Effects on Financial Statements:
Event: Performed $67,000 of services for clients on account.
Income Statement: Revenue +$67,000
Balance Sheet: Accounts Receivable +$67,000
What is the amount of total assets at the end of Year 1?The total assets at the end of Year 1 can be determined by summing up all the relevant asset accounts on the balance sheet. In this case, we need to consider the effects of various transactions on assets.
Given the information provided, the relevant asset accounts affected by the events are:
Accounts Receivable: Increased by $67,000 from services performed on account.
Cash: Increased by $42,000 from services performed for cash and $50,000 collected from accounts receivable.
Accrued Salaries: Not specified, so we assume it does not affect total assets.
Other operating expenses on account: Not specified, so we assume it does not affect total assets.
To calculate the total assets, we sum up the balances of these asset accounts:
Total Assets = Accounts Receivable + Cash + Accrued Salaries + Other assets (not provided)
Since the balances of Accrued Salaries and Other assets are not given, we cannot determine their impact on total assets. Therefore, we can only calculate the total assets based on the information provided:
Total Assets = Accounts Receivable + Cash
Substituting the values:
Total Assets = $67,000 + $42,000 + $50,000 (collected from accounts receivable)
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Wheeler's Bike Company manufactures custom racing bicycles. The company uses a job order cost system to determine the cost of each bike. Estimated costs and expenses for the coming year follow:
Bike parts $345,800
Factory machinery depreciation 60,500
Factory supervisor salaries 138,500
Factory direct labor 203,685
Factory supplies 42,400
Factory property tax 25,750
Advertising cost 23,500
Administrative salaries 51,000
Administrative-related depreciation 17,700
Total expected costs $908,835
1. Calculate the predetermined overhead rate per direct labor hour if the average direct labor rate is $11.01 per hour.
2. Determine the amount of applied overhead if 18,800 actual hours are worked in the upcoming year.
Divide the projected factory overhead expenses by the estimated factory direct labour hours to find the predefined overhead rate per direct labour hour:
Costs for estimated factory overhead are $345,800, $60,500, $138,500, $42,400, and $25,750, for a total of $613,950. Calculated factory direct labour hours are calculated as follows: Factory direct labour costs / direct labour rate. Cost of factory direct labour: $203,685 The average hourly direct labour rate is $11.01 Hours of direct manufacturing labour estimated: $203,685 / $11.01 = 18,500 hours Estimated factory overhead expenses / anticipated factory direct labour hours equals the predetermined overhead rate per direct labour hour. Predetermined overhead rate divided by 18,500 hours of direct labour equals $613,950. Multiply the actual direct labour hours worked by the specified overhead rate to get the imposed overhead amount.
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Suppose that a consumer in a two-good world has a well-behaved, differentiable homothetic utility function U(x,y). If goodX is normal, then good Y may be either normal or inferior
In a two-good world with a well-behaved, differentiable homothetic utility function U(x,y), if goodX is normal, then good Y may be either normal or inferior.
In economics, a normal good is one for which demand increases as income increases, while an inferior good is one for which demand decreases as income increases. In the given scenario, if goodX is normal, it means that as the consumer's income increases, the demand for goodX also increases.
For good Y, it can be either normal or inferior. This implies that the consumer's demand for good Y may either increase (normal) or decrease (inferior) as income increases.
The specific nature of good Y as either normal or inferior would depend on the shape and properties of the utility function U(x,y), as well as the consumer's preferences and behavior. The homothetic property of the utility function implies that the consumer's preferences are unaffected by changes in the scale or proportion of their consumption bundle, which allows for analysis of income effects on demand.
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In a two-good world with a well-behaved, differentiable homothetic utility function U(x,y), if goodX is normal, then good Y may be either normal or inferior.
In economics, a normal good is one for which demand increases as income increases, while an inferior good is one for which demand decreases as income increases. In the given scenario, if goodX is normal, it means that as the consumer's income increases, the demand for goodX also increases.
For good Y, it can be either normal or inferior. This implies that the consumer's demand for good Y may either increase (normal) or decrease (inferior) as income increases.
The specific nature of good Y as either normal or inferior would depend on the shape and properties of the utility function U(x,y), as well as the consumer's preferences and behavior. The homothetic property of the utility function implies that the consumer's preferences are unaffected by changes in the scale or proportion of their consumption bundle, which allows for analysis of income effects on demand.
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