You are an assistant in the accounting department of Thunderduck Shoes, a small retailer. The company has a loan that requires the company to maintain a minimum cash balance of $75,000, as reported on its year-end balance sheet. The cash balance in the general ledger was $80,000 prior to recording payroll for salaries of $15,000 that were earned in the current month.
Your supervisor says the only way Thunderduck Shoes can meet its loan requirement is to delay recording the December payroll journal entryl until January of the next year. This would be pretending as if the payroll checks were not issued until after year-end.
You questioned whether this would be ethical. The supervisor’s reply was, “Well, we don't really have a choice. Either we do this, or we violate the terms of the loan agreement and possibly be forced to repay the loan immediately. That could put us out of business. Think of all the people who would lose their jobs! Just wait to record the December payroll journal entry until January —probably before many of our employees even get the checks we have written to them.”
Required:
Write a 1-2 page technical business memo addressed to your mentor at work discussing the ethical decision you must make. Be sure to consider and discuss the following questions.
Criteria:
Your business memo should briefly summarize the issue to your mentor at the company that works in a different department. The memo should discuss in detail the ethical considerations as you make your decision. Be sure to use your own words to paraphrase the information.
In: Accounting
Determining the Optimal Product Mix with One Constrained Resource and a Sales Constraint
Comfy Fit Company manufactures two types of university sweatshirts, the Swoop and the Rufus, with unit contribution margins of $5 and $15, respectively. Regardless of type, each sweatshirt must be fed through a stitching machine to affix the appropriate university logo. The firm leases seven machines that each provides 1,000 hours of machine time per year. Each Swoop sweatshirt requires 6 minutes of machine time, and each Rufus sweatshirt requires 20 minutes of machine time.
Assume that a maximum of 40,000 units of each sweatshirt can be sold.
Required:
1. What is the contribution margin per hour of machine time for each type of sweatshirt? When computing your answers, round machine time per unit to two decimal places. Round your final answers to the nearest dollar.
| Contribution Margin | |
| Swoop | $ |
| Rufus | $ |
2. What is the optimal mix of sweatshirts? When computing your answers, round machine time per unit to two decimal places. Round your final answers to the nearest whole unit.
| Optimal Mix | |
| Swoop | units |
| Rufus | units |
3. What is the total contribution margin earned
for the optimal mix?
$
In: Accounting
Unions represent under 7% of the private sector work force, perhaps 1/3d of public sector employees, down from a peak of union representation in the 1950’s. Some argue that unions are necessary, and the decline of unionization is a root cause of the economic decline in the US middle class for several decades. Have unions outlived their usefulness in the US economy, should be shut down as a right of employees to bargain with their employers? Or do unions have an important role in the economy, ensuring that the economic pie is shared among everyone who helps “bake” that pie? What public policies would you advocate, based on your view of the future role of unions in the US?
In: Operations Management
Trinidad is saturated with business schools; however, you want
to launch a new and private business school in the same market.
Traditionally, the existing business schools have not always
considered marketing and branding their schools because they are of
the firm belief that their institutions are already known and
nothing else needs to be done to attract new students.
Essentially, the existing business schools are not distinguishing
themselves from each other. There is competition where a lot of new
business schools are coming to the market, a lot of MBA degrees are
being offered by minor business schools, the market is less and
less clear, and there appears to be a brand proliferation and
business schools proliferation. Additionally, in conducting your
competitor research, you found that many of the existing schools
have weak brands and there is a clear danger of bringing down the
value of the MBA degree itself. Your continued research has found
that the majority of the existing business schools have been
plagued by low enrollment over the past five years. The reasons for
this predicament range from prospective students not being
interested in furthering their studies to financial challenges and
poor quality programmes. Moreover, the pricing structure for the
majority of the current business schools is extremely high, given
the present economic challenges facing the country. As a
consequence of these harsh realities, having an MBA degree will not
be the important thing; rather the importance now lies in the
school you got your MBA from.
Notwithstanding these challenges, you are determined to launch your
new business school by the next academic year (September 2017).
Your chief intention is to make a difference with your new business
school. In constructing your mini marketing plan for this scenario,
you can create a name for your business school and choose your own
location in Trinidad to set up your learning institution.
Construct your mini marketing plan around the following
elements:
Market-oriented Mission
Statement
Marketing Goals
Target Market
Product
Competition
Threats & Opportunities Analysis
Marketing Strategies/Promotions
Pricing, Positioning & Branding
Controls/Evaluation
In: Economics
an unlimited maternal deduction applies when there is an outright Bisquick I'm stuck to a longtime companion US citizen spouse surviving spouse who was a non US citizen or all of the above
In: Accounting
Martin Inc., a U.S. multinational, began operations in 2016. Martin had pretax U.S. source income and foreign source income as follows:
Income earned in the US $900,000
Income earned in Country E 200,000
Total global
income
$1,100,000
Martin paid $135,000 income tax to Country E.
Compute the amount that Martin would owe the U.S. Federal government for 2016 if it takes the foreign tax credit.
Assume that Martin's U.S. tax rate is 37% for 2016.
* make sure you read LO 13-5 before answering this question.
|
$272,000 |
||
|
$333,000 |
||
|
$407,000 |
||
|
$398,000 |
In: Finance
Gravity Payments
In April 2015, Dan Price, the 30-year-old chief executive officer (CEO), and founder of Gravity Payments, announced an increase in every employee’s wage to US$70,000. Every employee, including the lowest-paid clerk and newly hired staff, would receive a minimum annual salary of $70,000 over the next three years. The announcement stunned the employees and triggered a wave of high-fiving and clapping. With this decision, one young entrepreneur in Seattle, Washington, became an instant hero when he issued a direct and adventurous challenge to the long-standing problem of U.S. income inequality. However, at the same time, he was experiencing unexpected challenges from different people only a few months after his bold move.
Income inequality has been racing in the wrong direction. I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.
COMPANY OVERVIEW
Gravity Payments was a private credit card processing and financial services company. It was founded in February 2004 by brothers, Dan and Lucas Price.
Gravity Payments provided a variety of processing and financial services, including credit card processing, POS (point of Sales) systems, mobile payments, working capital financing, and gift and loyalty cards. The company’s customers were mostly small and medium-sized businesses. By 2009, the company became the largest credit card processor in the state of Washington, serving more than 15 percent of small businesses in the Seattle area. The company’s success was mainly due to its low-cost strategy and word of mouth publicity. The company charged less than half of the industry-average processing rate.
Gravity Payments had had a philanthropic mandate since its beginning, and launched the “Gravity Gives” program in March, 2008. Through this program, 2 percent of the company’s revenue had been donated to charities, including World Vision, the Fred Hutchinson Cancer Research Center and Northwest Harvest. Price believed strongly in fighting poverty on both a global and locale scale.
THE DECISION
It was the right thing to do. I want everybody that I’m partnered with at Gravity to really live the fullest, best life they can… I think that’s the [income level] where you can start to check off those life’s goal boxes – saving for college, buying a home, some of the basics, starting a family. I want everyone to have those basic opportunities.
Announcement of the $70,000 Minimum Salary
In April 2015, Price set a new minimum salary of $70,000 for all of his 120 employees at Gravity Payments. The idea struck him when one of his friends shared her worries about trying to pay her bills and student loans on an annual income of $40,000. Some of Price’s own employees earned that amount or less.
Price decided upon the amount of $70,000 based upon a 2010 study conducted at Princeton University by economist, Angus Deaton and psychologist, Daniel Kahneman, a Nobel Laureate. According to the study, those who made less that $75,000 were likely to experience emotional pain and job dissatisfaction. However, even if people made more than $75,000, they did not feel any greater level of happiness. Simply put, the study suggested that emotional well-being increased with economic compensation, but only up to the amount of about $75,000. The study concluded that “low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone. We conclude that high income buys life satisfaction but not happiness, and that low income is associated with both with low life evaluation and low emotional well-being.”
Before Price initiated the salary increase, the average salary at Gravity Payments was about $48,000, with the lowest salary at around $34,000. Due to Price’s decision, about 30 employees had their paycheques nearly double overnight, and others also received raises to reach the $70,000 level. Ryan Pirkle, the spokesman for Gravity Payments, mentioned that this new minimum wage policy would increase the salary of about 70 employees. The ground-breaking move was met with applause and shouts of joy by many employees. Kevin, a customer operations associate, said in an interview with the media, “I was there at the meeting… honestly, I could not believe what I heard, and I think that’s what a lot of people felt. I kind of felt that we needed to get that repeated.” Phillip Akhavan, a staff member in the merchant relations team, who earned an annual salary of $43,000, also said, “My jaw just dropped… This is going to make a difference to everyone around me.” Jaime June, in the marking department, said, “Dan is just an incredible man in general. He has a really amazing moral compass.”
The new salary would change employees’ lives. Maria Harley, vice-president of operations said, “I’ve heard things from, ‘I can finally afford to move out of my parent’s home,’ [to] ‘I can finally afford to have a baby,’ we have some people that are parents and really want a good education for their children and feel like they can finally afford that.”
Huge publicity from all major national media had generated clear public-relations benefits for the company. After Gravity Payments became a front-page media story, it received more than 5,000 resumes in just one day. Before the announcement, Gravity Payments added 200 clients per month on average. In June 2015, the number grew to 350.
The Downside of the $70,000 Minimum Salary Plan
There’s no perfect way to do this and no way to handle complex workplace issues that doesn’t have any downsides or trade-offs. I came up with the best solution I could… I know the decision to pay everyone a living wage is controversial.
The implementation of this wage increase was not easy. In order to pay for the increases in employees’ salaries, Price cut his own remuneration from $1 million to $70,000. Also, about 75 to 80 percent of the company’s $2.2 million profits had to be uses.
Many questions were raised. Was this a social experiment? Was it a public relations stunt? Or was Price just a nice guy? In addition, not everyone was pleased with his move. Other local business owners and some entrepreneurial CEOs in the same, close-knit, entrepreneurial network complained that his decision made them look stingy. Steve Duffield, CEO of DACO Corp., who had met Price through the Entrepreneurs’ Organization in the Seattle area, said, “I worry how that’s going to impact other businesses. We can’t afford to do that. For most businesses, employees are the biggest expense and they need to manage those costs in order to survive.”
Some customers were against the “socialist” gesture and stopped their business with Gravity Payments. Others customers withdrew their business due to an anticipation of a fee increase, in spite of the repeated assurances from the company that this would not happen.
Complaints even came from Price’s own employees. While 30 or so employees would see their pay nearly double overnight, and about 70 employees also go raises, the remaining 50 were already paid more than $70,000. In fact, according to the New York Times, the company’s two best employees left the company because of Price’s decision. For example, Maisey McMaster, who joined Gravity Payments five years earlier and had worked long hours that left little time for her family, was one of them. She said, “He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump.” McMaster talked to Price after contemplating a fairer proposal. From her view, a fairer proposal was offering small raises with the opportunity to gain a future increase with more experience. “He treated me as if I was being selfish and only thinking about myself,” she said. “That really hurt me. I was talking about not only me, but about everyone in my position.”
Grant Moral, a web developer whose salary increased from $41,000 to $50,000 (due to the first stage of pay increase), also expressed concerns, even though he would receive a substantial pay increase from this plan. He opted to leave the company. “I had a lot of mixed emotions. Now the people who were just clocking in and out were making the same as me. It shackles high performers to less motivated team members.” He added, “I was kind of uncomfortable and didn’t like having my wage advertised so publicly and so blatantly. It changed perspectives and expectations of you, whether it’s the amount you tip on a cup of coffee that day or family and friends now calling you for a loan.” From McMaster and Moran’s points of view, it was not fair to double the paycheque of someone with the lowest skills, while the longest-serving and highest-skilled employees received a small or no salary increase.
Furthermore, even employees who were exhilarated by the raises had new concerns and indicated they were facing a lot of pressure. “Am I doing my job well enough to deserve this? I didn’t earn it,” said Stephanie Brooks, 23, who joined the company as an administrative assistant two months before the decision.
Question:
In: Operations Management
Gravity Payments
In April 2015, Dan Price, the 30-year-old chief executive officer (CEO), and founder of Gravity Payments, announced an increase in every employee’s wage to US$70,000. Every employee, including the lowest-paid clerk and newly hired staff, would receive a minimum annual salary of $70,000 over the next three years. The announcement stunned the employees and triggered a wave of high-fiving and clapping. With this decision, one young entrepreneur in Seattle, Washington, became an instant hero when he issued a direct and adventurous challenge to the long-standing problem of U.S. income inequality. However, at the same time, he was experiencing unexpected challenges from different people only a few months after his bold move.
Income inequality has been racing in the wrong direction. I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.
COMPANY OVERVIEW
Gravity Payments was a private credit card processing and financial services company. It was founded in February 2004 by brothers, Dan and Lucas Price.
Gravity Payments provided a variety of processing and financial services, including credit card processing, POS (point of Sales) systems, mobile payments, working capital financing, and gift and loyalty cards. The company’s customers were mostly small and medium-sized businesses. By 2009, the company became the largest credit card processor in the state of Washington, serving more than 15 percent of small businesses in the Seattle area. The company’s success was mainly due to its low-cost strategy and word of mouth publicity. The company charged less than half of the industry-average processing rate.
Gravity Payments had had a philanthropic mandate since its beginning, and launched the “Gravity Gives” program in March, 2008. Through this program, 2 percent of the company’s revenue had been donated to charities, including World Vision, the Fred Hutchinson Cancer Research Center and Northwest Harvest. Price believed strongly in fighting poverty on both a global and locale scale.
THE DECISION
It was the right thing to do. I want everybody that I’m partnered with at Gravity to really live the fullest, best life they can… I think that’s the [income level] where you can start to check off those life’s goal boxes – saving for college, buying a home, some of the basics, starting a family. I want everyone to have those basic opportunities.
Announcement of the $70,000 Minimum Salary
In April 2015, Price set a new minimum salary of $70,000 for all of his 120 employees at Gravity Payments. The idea struck him when one of his friends shared her worries about trying to pay her bills and student loans on an annual income of $40,000. Some of Price’s own employees earned that amount or less.
Price decided upon the amount of $70,000 based upon a 2010 study conducted at Princeton University by economist, Angus Deaton and psychologist, Daniel Kahneman, a Nobel Laureate. According to the study, those who made less that $75,000 were likely to experience emotional pain and job dissatisfaction. However, even if people made more than $75,000, they did not feel any greater level of happiness. Simply put, the study suggested that emotional well-being increased with economic compensation, but only up to the amount of about $75,000. The study concluded that “low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone. We conclude that high income buys life satisfaction but not happiness, and that low income is associated with both with low life evaluation and low emotional well-being.”
Before Price initiated the salary increase, the average salary at Gravity Payments was about $48,000, with the lowest salary at around $34,000. Due to Price’s decision, about 30 employees had their paycheques nearly double overnight, and others also received raises to reach the $70,000 level. Ryan Pirkle, the spokesman for Gravity Payments, mentioned that this new minimum wage policy would increase the salary of about 70 employees. The ground-breaking move was met with applause and shouts of joy by many employees. Kevin, a customer operations associate, said in an interview with the media, “I was there at the meeting… honestly, I could not believe what I heard, and I think that’s what a lot of people felt. I kind of felt that we needed to get that repeated.” Phillip Akhavan, a staff member in the merchant relations team, who earned an annual salary of $43,000, also said, “My jaw just dropped… This is going to make a difference to everyone around me.” Jaime June, in the marking department, said, “Dan is just an incredible man in general. He has a really amazing moral compass.”
The new salary would change employees’ lives. Maria Harley, vice-president of operations said, “I’ve heard things from, ‘I can finally afford to move out of my parent’s home,’ [to] ‘I can finally afford to have a baby,’ we have some people that are parents and really want a good education for their children and feel like they can finally afford that.”
Huge publicity from all major national media had generated clear public-relations benefits for the company. After Gravity Payments became a front-page media story, it received more than 5,000 resumes in just one day. Before the announcement, Gravity Payments added 200 clients per month on average. In June 2015, the number grew to 350.
The Downside of the $70,000 Minimum Salary Plan
There’s no perfect way to do this and no way to handle complex workplace issues that doesn’t have any downsides or trade-offs. I came up with the best solution I could… I know the decision to pay everyone a living wage is controversial.
The implementation of this wage increase was not easy. In order to pay for the increases in employees’ salaries, Price cut his own remuneration from $1 million to $70,000. Also, about 75 to 80 percent of the company’s $2.2 million profits had to be uses.
Many questions were raised. Was this a social experiment? Was it a public relations stunt? Or was Price just a nice guy? In addition, not everyone was pleased with his move. Other local business owners and some entrepreneurial CEOs in the same, close-knit, entrepreneurial network complained that his decision made them look stingy. Steve Duffield, CEO of DACO Corp., who had met Price through the Entrepreneurs’ Organization in the Seattle area, said, “I worry how that’s going to impact other businesses. We can’t afford to do that. For most businesses, employees are the biggest expense and they need to manage those costs in order to survive.”
Some customers were against the “socialist” gesture and stopped their business with Gravity Payments. Others customers withdrew their business due to an anticipation of a fee increase, in spite of the repeated assurances from the company that this would not happen.
Complaints even came from Price’s own employees. While 30 or so employees would see their pay nearly double overnight, and about 70 employees also go raises, the remaining 50 were already paid more than $70,000. In fact, according to the New York Times, the company’s two best employees left the company because of Price’s decision. For example, Maisey McMaster, who joined Gravity Payments five years earlier and had worked long hours that left little time for her family, was one of them. She said, “He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump.” McMaster talked to Price after contemplating a fairer proposal. From her view, a fairer proposal was offering small raises with the opportunity to gain a future increase with more experience. “He treated me as if I was being selfish and only thinking about myself,” she said. “That really hurt me. I was talking about not only me, but about everyone in my position.”
Grant Moral, a web developer whose salary increased from $41,000 to $50,000 (due to the first stage of pay increase), also expressed concerns, even though he would receive a substantial pay increase from this plan. He opted to leave the company. “I had a lot of mixed emotions. Now the people who were just clocking in and out were making the same as me. It shackles high performers to less motivated team members.” He added, “I was kind of uncomfortable and didn’t like having my wage advertised so publicly and so blatantly. It changed perspectives and expectations of you, whether it’s the amount you tip on a cup of coffee that day or family and friends now calling you for a loan.” From McMaster and Moran’s points of view, it was not fair to double the paycheque of someone with the lowest skills, while the longest-serving and highest-skilled employees received a small or no salary increase.
Furthermore, even employees who were exhilarated by the raises had new concerns and indicated they were facing a lot of pressure. “Am I doing my job well enough to deserve this? I didn’t earn it,” said Stephanie Brooks, 23, who joined the company as an administrative assistant two months before the decision.
Questions
In: Operations Management
On April 1, 2017, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month.
| April | 1 | Nozomi invested $40,000 cash and computer equipment worth $30,000 in the company. | ||
| 2 | The company rented furnished office space by paying $2,700 cash for the first month’s (April) rent. | |||
| 3 | The company purchased $1,700 of office supplies for cash. | |||
| 10 | The company paid $2,300 cash for the premium on a 12-month insurance policy. Coverage begins on April 11. | |||
| 14 | The company paid $900 cash for two weeks' salaries earned by employees. | |||
| 24 | The company collected $24,000 cash on commissions from airlines on tickets obtained for customers. | |||
| 28 | The company paid $900 cash for two weeks' salaries earned by employees. | |||
| 29 | The company paid $400 cash for minor repairs to the company's computer. | |||
| 30 | The company paid $850 cash for this month's telephone bill. | |||
| 30 | Nozomi withdrew $2,000 cash from the company for personal use. |
The company's chart of accounts follows:
| 101 | Cash | 405 | Commissions Earned |
| 106 | Accounts Receivable | 612 | Depreciation Expense—Computer Equip. |
| 124 | Office Supplies | 622 | Salaries Expense |
| 128 | Prepaid Insurance | 637 | Insurance Expense |
| 167 | Computer Equipment | 640 | Rent Expense |
| 168 | Accumulated Depreciation—Computer Equip. | 650 | Office Supplies Expense |
| 209 | Salaries Payable | 684 | Repairs Expense |
| 301 | J. Nozomi, Capital | 688 | Telephone Expense |
| 302 | J. Nozomi, Withdrawals | 901 | Income Summary |
Use the following information:
Required:
4. Journalize the adjusting entries for the month
and prepare the adjusted trial balance.
5a. Prepare the income statement for the month of
April 30, 2017.
5b. Prepare the statement of owner's equity for
the month of April 30, 2017.
5c. Prepare the balance sheet at April 30,
2017.
In: Accounting
On July 1, 2017, Keti S. created a new self-storage business, Shenakhuli Co. The following transactions occurred during the company's first month.
July 1 Keti invested $30,000 cash and building worth $150,000 in the company.
2 The company rented equipment by paying $2,000 cash for the first month's (July) rent.
5 The company purchased $2,400 of office supplies for cash.
10 The company paid $7,200 cash for the premium on a 12-month insurance policy. Coverage begins on July 11.
14 The company paid an employee $1,000 cash for two weeks' salaries earned.
24 The company collected $9,800 cash for storage fees from customers.
28 The company paid $1,000 cash for two weeks' salaries earned by employees.
29 The company paid $950 cash for minor repairs to a leaking roof.
30 The company paid $400 cash for this month's telephone bill.
31 Keti withdrew $2,000 cash from the company for personal use.
Here are the company's accounts:
Cash Accumulated Depreciation - Building Depreciation Expense Repairs Expense
Account Receivables Salaries Payable Salaries Expense Telephone Expense
Office Supplies Keti S., Capital Insurance Expense Income Summary
Prepaid Insurance Keti S., Withdrawal Rent Expense
Buildings Storage Fees Earned Office supplies Expense
Required:
1.Prepare journal entries to record the transactions for July.
2. Prepare an unadjusted trial balance as of July 31.
3. Use the following information to journalize adjusting entries for the month:
a. Two-thirds of one month's insurance coverage has expired.
b. At the end of the month, $1,525 of office supplies are still available.
c. This month's depreciation on the buildings is $1,500
d. An employee earned $100 of unpaid and unrecorded salaries as of month-end.
e. The company earned $1,150 of commissions that are not yet billed at month-end.
4. Prepare an adjusted trial balance as of July 31.
5. Prepare Income Statement and Balance Sheet for the period.
6. Prepare journal entries to close the temporary accounts.
I need the answer of the 6th question thanks in advance
In: Accounting