On November 1, 2017, Larkspur, Inc. had the following account balances. The company uses the perpetual inventory method.

During November, the following summary transactions were completed.

Enter the November 1 balances in ledger T-accounts.

Cash
Accounts Receivable
Supplies
Equipment
Accumulated Depreciation─Equipment
Accounts Payabl

Unearned Service Revenue
Salaries and Wages Payable
Common Stock
Retained Earnings
     
     

The Thomas Supply Company Inc. is a distributor of gas-powered generators. As with any business, the length of time customers take to pay their invoices is important. Listed below, arranged from smallest to largest, is the time, in days, for a sample of the Thomas Supply Company Inc. invoices.

13 13 13 20 26 27 27 32 34 34 35 35 36 37 38 41 41 41 42 44 44 47 48 50 51 55 56 62 67 82

(Round your answers to 2 decimal places.)

Determine the first and third quartiles.

Determine the second decile and the eighth decile.

Determine the 67th Percdntile.

Scenario: Suppose you are a risk management professional working for risk managing firm which islocated in Dubai. risk managing firm provides consulting services to firms such as airlinecompanies and mining companies on their risk management. Mr. Abdul, the treasurer of goil Pte Ltd, approaches you today (assume it is now July 2020) to ask you for advice onthe financial risk management of his company. Goil (Dubai) Pte Ltd is a trading company which specializes in international trade of petrochemicals and petrochemical equipment. In recent years, Goil mainly deals in crudeoil, gasoil, diesel oil and fuel oil, with plans to increase its size and valuation over the next few years. Goil is a growth company that aims to a growing cash flow from expanding oiltrading operations. As a growth company, Gemoil’s revenue is positively related to oil priceand it aims to a growing cash flow from expanding oil trading operations and seeking to define up to 20 million gallons of jet fuel in December. The company’s profit and loss are subject to many risk factors, such as the price change of oiland foreign exchange rate fluctuations. As the market price of oil is quite volatile, thecompany is considering using some strategies to manage its risk exposure. One way to hedgethese exposures is to use futures contracts. For instance, the futures contracts traded in the NYMEX.

How many heating oil futures contracts should be traded in order to achieveoptimal hedging? (Assuming with tailing adjustment)3) Please devise a hedging strategy for Goil:

Case Study: Orpheus Financial Advisors

Orpheus was an extremely successful, and very well respected financial advisory firm with offices throughout the United States. Orpheus had a reputation for well-trained advisors and was known to be very selective in terms of the investment managers they would recommend to their clients. As a result, Orpheus clients tended to stay with the investment choices they were recommended for an average of ten years. The average for other platform managers was less than five year. As a result Orpheus was a very desirable platform for firms to get their funds placed on. Traditionally, Orpheus employed a commission based system to charge customers for its advisory services. That is, customers would be charged for specific securities transactions executed on their behalf. Mutual fund transactions would be paid by the fund family based on the initial sales charge of the fund in question. In 2005, Don Shipman, the Senior Vice President of sales convinced Orpheus management and board to also offer investment advisory services on an asset fee based system. Clients would be charged a fixed percentage of their assets under management no matter which or how many transaction they generated. Management and the board approved and the new program was rolled out late in 2005. The new program became immediately very profitable. Branch offices enrolled a large percentage of new customers in the fee-based rather than commission-based program and many existing commission-based accounts were converted to a fee-based compensation system. Shipman and Daryl Greene, the Chief Compliance Officer, agreed that this new business vehicle did not require any addition supervisory systems or written procedures. They continued to rely on their existing supervisory system, which was directed towards its commission-based business, nor did they monitor their fee-based accounts for transaction activity. In 2007, a client, Rose Garcia, seeing the fees applied to her account increase substantially complained to her Orpheus rep. He explained that her account was now being charged under the fee based system which the rep asserted was appropriate for her portfolio and investment profile. Rose was very conscientious and had all of her statements and activity reports for 2006 and 2007 and on reviewing them confirmed that she had made no trades during those years. She was a conservative, buy and hold investor.

1. Identify the principal actors

2. Identify the stakeholders

3. Determine if there have been ethical or regulatory breaches and what principles have been violated.

4. Determine if there has been material harm to any stakeholder and what steps are required to mitigate or correct it.

5. Discuss any other issues of ethics, compliance or good governance that extend beyond the immediate details of this case.

Between 2000 and 2012, Gap, Inc. (Gap) ceded its world leadership position in specialty fashion retailing to Inditex of Spain and H&M of Sweden. These two companies, each less than a quarter of Gap’s size in 2000, were now setting the pace in the global mass fashion market, and Gap appeared to be falling ever further behind. In the intervening twelve years, three CEOs had struggled to turn around the fading brand. While several temporary profit boosts appeared to herald a recovery, a sustained rally remained elusive. Mickey Drexler, Gap’s CEO since 1983, who had been responsible for Gap’s rise to global prominence, was fired in 2002 after two years of double digit, same-store sales declines and a 75% drop in the stock price. 1 His successor, Paul Pressler, appeared to have engineered a remarkable recovery, but was fired in 2007 after disappointing sales and another slump in profits. His replacement, Glenn Murphy, fresh from a successful turnaround at a Canadian drug-store chain, promised tighter price controls, lower administrative costs, and a leaner, more aggressive Gap. He cut costs and drove up earnings per share, but sales continued to decline. After four years of troubles, Murphy brought in former J. Crew President, Tracy Gardner, to consult with the Gap brand and he began a bold program to close one fifth of Gap’s North American store base. In 2012, sales had lifted 8%, same-store sales were strongly positive for all of Gap’s domestic sub-brands, and the company’s share price had lifted nearly 50% from the prior year. After 12 years of poor performance, had Glenn Murphy finally discovered the answers to Gap’s problems?  Mickey Drexler: 2000-2002 After Gap, Inc. “misjudged fashion trends in 2000,” its sales growth rate slowed to 18%, below the historical average, and operating profits fell 20% to $1.4 billion.3 CEO Mickey Drexler, was confident that this stumble was a short term problem, but 2001 results suggested otherwise. Sales lifted only 1%, operating profits plunged anther 70% to $426 million and the company made a net loss. 2002 saw sales rise 4% and operating profits recover to $1.0 billion, but comparable stores sales continued to fall. Gap’s stock price decreased from a high of $53.75 in February 2000 to $14 in May 2002.4 Several top designers and senior executives left the company “disillusioned with how bureaucratic the organization had become.” Analysts noted that, while Gap had made “button-down shirts, chinos and basic cotton T-shirts the boomer uniform,” it was struggling to resonate as well with some members of Generation Y (those born in the late 1970s to early 1990s) who were “looking for individuality, not conformity.”6Chairman Don Fisher had had enough. The night before the Gap board meeting on May 22, 2002, Steve Jobs, a board member, called Mickey Drexler to warn him that the board was planning to fire him the next morning. Drexler entered the board meeting aggressively and a board member later described it as “a very emotional scene.”Despite his shock and disappointment, Drexler quickly recovered. In 2003, he became the CEO of J. Crew, a quality basic clothing chain which was incurring heavy losses. Within two years, he had returned it to profitability and, within five, he had more than doubled sales. Paul Pressler: 2002-2007 Paul S. Pressler replaced Drexler as the CEO of Gap, Inc. Pressler had spent 15 years with The Walt Disney Company and ended his tenure there as the chairman of Walt Disney Parks and Resorts. The press noted the difference in the two men’s leadership styles: whereas Drexler “flew by the seat of his khakis,” relying on his honed intuition to direct apparel development, Pressler was researchoriented and left decisions about apparel to Gap, Inc.’s designers. 8 Pressler stated, “I had to demonstrate to everyone that the general manager is here to lead the people—not pick the buttons.”9 Pressler moved quickly to close 200 underperforming stores, slow the rate of new openings, and reduce excess inventory, 10 resulting in a “spectacular turnaround” in 2003. 11 Between 2002 and 2003, operating profits rose 87% to $1.8 billion, marginally beating the all-time record set in 1999. Gap Brand Pressler hired Canadian Pina Ferlisi as executive vice president of product design in March 2003 to define the division’s style aesthetic. Before joining Gap, Inc., Ferlisi worked at Perry Ellis, Tommy Hilfiger, and Theory; she also helped launch the successful Marc by Marc Jacobs line. Her Gap design team was located in New York City and included Vice President of Women’s Design Louise Trotter, who formerly worked at Calvin Klein, and Vice President of Accessories Design Emma Hill, who previously held a similar post at Marc Jacobs. Both Trotter and Hill hailed from the U.K. Scores of consumer and employee insights indicated that female Gap customers felt that the brand’s offerings were too androgynous and boxy. Hence, Ferlisi made the women’s lines more feminine and focused on fabric and fit. Banana Republic For years, Banana Republic had a reputation of being “a purveyor of chic basics—casual office wear in black or beige”27—i.e., an upscale Gap. However, under the direction of President Marka Hansen, the division focused on making its product assortment more fashionable and trendy, minimizing the overlap between Gap and Banana, and catering to 25- to 30-year-old professionals . Hansen explained, “What’s the hook or differentiation? . . . It’s an affordable, covetable luxury . . . . We’re bringing fashion to a wider audience. Old Navy Under President Jenny Ming, Old Navy continued its focus on families, rolling out underwear, maternity, and infant lines to raise margins.32 The division expanded to Canada in Pressler’s first year as CEO and it targeted Hispanics with its first Spanish television spot at the end of 2003. The company’s localization strategy was tested in select Old Navy stores in 2004, and the company planned to extend the program to all Old Navy outlets in 2005. Forth & Towne Gap, Inc. established five test stores for Forth & Towne in Chicago and New York by fall 2005. Under Gary Muto’s leadership, the firm positioned Forth & Towne to appeal to women aged 35– 50. Gap Online Toby Lenk, a 1987 Harvard MBA, headed the company’s online division, Gap, Inc. Direct. In 2004, Gap, Inc. was the largest U.S. online apparel retailer with sales of over $500 million. It was “redesign[ing] and rebuild[ing] all of [its] websites from the ground up” to enhance visitors’ online shopping and to improve online and in-store integration.47 Lenk noted that 35% of the company’s Web site visitors were pre-shoppers preparing for store visits, and 13% of those who entered a Gap, Inc. store had visited the store’s online site beforehand. The firm’s new e-commerce platform would allow the sites to take back orders and preorders. Lenk explained, “This means we will never have to walk a sale on a basic item, and at the same time it will allow us to run our basic inventory much tighter.”48 The company planned to have most of the Web site enhancements completed by the 2005 holiday season. Marketing Along with reworking Gap’s main brands, Pressler also overhauled Gap’s public image and publically positioned its divisions as lifestyle brands. The CEO remarked, “We need to bring more theatrics, storytelling and consistency [to retail]. If you can’t tell me what a Gap dinner party, Banana Republic car or Old Navy vacation looks like, then we haven’t built our stories.”49 Pressler had also been focused on differentiating the brands and “upgrading the marketing functions at all of Gap’s brands, including the hires of new head marketers at all three units.”50 Recent Gap-brand TV advertising featured actors and singers. The company paid 40-year-old actress Sarah Jessica Parker, former Sex and the City star, $38 million to appear in television and print ads for three seasons during 2004–2005. It replaced Parker with 17-year-old British soul singer Joss Stone as its Gap spokes-model in the summer of 2005.51 In an effort to tout its “vastly expanded variety of fits” in jeans, the company planned to use more nontraditional types of advertising—i.e., “guerrilla marketing and grassroots tactics,” according to Jeff Jones, executive vice president of marketing at Gap. After lackluster results in 2005 and six consecutive quarters of declining same-store sales, Pressler pointed to 2006 as a key year to prove Gap’s recovery and justify his rebranding efforts.60 Pressler noted, “We are acting with a tremendous sense of urgency to win back customers.”61 Pressler also increased the annual cash dividend 78% for 2006 and the board authorized a further $500 million for a share repurchase program, $250 of which would be repurchased in Q1 and Q2 of 2006. Fisher: Interim CEO, 2007 Although Fisher was interim CEO for less than a year, he made a number of moves that undid much of Pressler’s previous work. Less than a week after firing Pressler, he cut many of Pressler’s hires from Disney. Cynthia Harriss, the president of Gap U.S., was replaced by Marka Hansen, the previous president of Banana Republic and an employee since 1987. Fisher also closed all Forth & Towne stores by the end of June, taking a pretax charge of $40 million.67 Although Forth & Towne has been open since 2005, financials were never disclosed for the brand. Fisher also began to reduce Gap’s workforce to bring down expenses, cutting a “relatively small percentage” of the 150,000 workers. Glenn Murphy: 2007-2012 On July 26, 2007, Gap appointed Glen Murphy, as the new CEO. Since 2001, he had been the CEO of Shoppers Drug Mart, a Canadian drugstore chain. Murphy’s first major move as CEO was to cut expenses and control inventory discounting. Quarter three profit for 2007 lifted 26% due to lower marketing spending and better product margins. In 2008, Spain’s Inditex overtook Gap, Inc. as the world’s largest specialty apparel retailer, reaching $3.3 billion in sales for the first quarter of 2008 compared to Gap’s $3.25 billion.86 With over 200 designers and rapid supply chains that could produce and stock hot items within weeks. Problems returned in 2011. Sales remained steady at $14.5 billion, but operating profits fell 27% to $1.4 billion. Murphy hired former J. Crew President, Tracy Gardner, to consult with the Gap brand. Gap announced plans to shut more than one fifth of its North American stores over the next two years and aimed to shrink the U.S. store base to 700 by the end of 2013.91 Murphy noted that China was Gap’s biggest market for further growth. However, by the end of 2012, Murphy’s strategy appeared to be working. Sales lifted 8% to $15.6 billion, a six-year high, and operating profit recovered to $1.9 billion. Store closings lifted sales per store in the North American Gap to $3.7 million (from a low of $3.3 million in 2009) and comparable store sales were strongly positive for all of Gap’s North American divisions. Gap had also made significant steps toward streamlining its production and engaging more closely with trending fashions. By 2012, Gap had cut its lead time from more than nine months in the early 2000s to less than four months for key items.96 Across all lines, production time had been cut by nearly one third. 97 In January Gap acquired Intermix Inc. for $130 million, which promised expansion into the luxury market as well as greater access to of-the-moment fashion pieces. Although Intermix didn’t manufacture its own clothing, it has established relationships with a variety of high street designers. What else could Murphy do to restore Gap’s leading position in fashion retailing? Would Murphy’s international and online focus be enough to sustain this turnaround?

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What is the case about?

What are the important events that occurred in the case?

What can we learn from reading the case?

What advice do you have for the leaders in the case and/or company in the case?

Suppose x has a distribution with μ = 27 and σ = 24. (a) If a random sample of size n = 50 is drawn, find μx, σ x and P(27 ≤ x ≤ 29). (Round σx to two decimal places and the probability to four decimal places.) μx = σ x = P(27 ≤ x ≤ 29) = (b) If a random sample of size n = 74 is drawn, find μx, σ x and P(27 ≤ x ≤ 29). (Round σ x to two decimal places and the probability to four decimal places.) μx = σ x = P(27 ≤ x ≤ 29) = (c) Why should you expect the probability of part (b) to be higher than that of part (a)? (Hint: Consider the standard deviations in parts (a) and (b).) The standard deviation of part (b) is ---Select--- part (a) because of the ---Select--- sample size. Therefore, the distribution about μx is ---Select--- .

A survey found that 25% of consumers from a Country A are more likely to buy stock in a company based in Country​ A, or shop at its​ stores, if it is making an effort to publicly talk about how it is becoming more sustainable. Suppose you select a sample of 200 respondents from Country A. Complete parts​ (a) through​ (d) below.

1. ​ What is the probability that in the​ sample, fewer than 25% are more likely to buy stock in a company based in Country​ A, or shop at its​ stores, if it is making an effort to publicly talk about how it is becoming more​ sustainable?

The probability is __%?

(Round to two decimal places as needed)

2. What is the probability that in the​ sample, between 20​% and 30​% are more likely to buy stock in a company based in Country​ A, or shop at its​ stores, if it is making an effort to publicly talk about how it is becoming more​ sustainable?

The probability is __%?

(Round to two decimal places as needed)

3. What is the probability that in the​ sample more than 20​% are more likely to buy stock in a company based in Country​ A, or shop at its​ stores, if it is making an effort to publicly talk about how it is becoming more​ sustainable?

The probability is __%?

(Round to two decimal places as needed)

4. If a sample of 800 is taken, how does this change you answers to (a) through (c)

If a sample of 800 is taken, what is the probability that in the​ sample, fewer than 25% are more likely to buy stock in a company based in Country​ A, or shop at its​ stores, if it is making an effort to publicly talk about how it is becoming more​ sustainable?

The probability is __%?

(Round to two decimal places as needed)

If a sample of 800 is taken, what is the probability that in the​ sample, between 20​% and 30​% are more likely to buy stock in a company based in Country​ A, or shop at its​ stores, if it is making an effort to publicly talk about how it is becoming more​ sustainable?

The probability is __%?

(Round to two decimal places as needed)

If a sample of 800 is taken, what is the probability that in the​ sample more than 20​% are more likely to buy stock in a company based in Country​ A, or shop at its​ stores, if it is making an effort to publicly talk about how it is becoming more​ sustainable?

The probability is __%?

(Round to two decimal places as needed)

The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Dux Company. Additional information from Dux’s accounting records is provided also.

Additional information from the accounting records:

1. A building that originally cost $116,000, and which was three-fourths depreciated, was sold for $24,000.
2. The common stock of Byrd Corporation was purchased for $24,000 as a long-term investment.
3. Property was acquired by issuing a 10%, seven-year, $74,000 note payable to the seller.
4. New equipment was purchased for $34,000 cash.
5. On January 1, 2018, bonds were sold at their $44,000 face value.
6. On January 19, Dux issued a 4% stock dividend (1,000 shares). The market price of the $10 par value common stock was $13 per share at that time.
7. Cash dividends of $68,000 were paid to shareholders.
8. On November 54,000 shares of common stock were repurchased as treasury stock at a cost of $27,000.

Required:
Prepare the statement of cash flows for Dux Company using the indirect method. (Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands. (i.e., 10,000 should be entered as 10).))

A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee of $216. Customers prepay their subscriptions and receive 260 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $210 for an annual subscription that also would include a coupon to receive a 40% discount on a one-hour ride through Central Park in a horse-drawn carriage. The list price of a carriage ride is $200 per hour. The company estimates that approximately 30% of the coupons will be redeemed. Required: 1. How much revenue should Manhattan Today recognize upon receipt of the $210 subscription price? 2. How many performance obligations exist in this contract? 3. Prepare the journal entry to recognize sale of 15 new subscriptions, clearly identifying the revenue or deferred revenue associated with each performance obligation.