After graduating from college with your MBA, you decide to take your grandma’s secret cinnamon roll recipe and open up a bakery. You grew up devouring your grandma’s rolls, and you have convinced her to give you the secret. You are confident that your bakery will be the next big hit in the fast-food business. You take out a business loan for the maximum amount your bank will give you, hire several employees, and open a beautiful store that is designed to look like your grandma’s home. After eight months of hard work and diligence, you are crushed when you realize that your store manager has been stealing from you. One of your recent hires tells you that during her last shift, the manager, Stephanie, voided a sale of two-dozen cinnamon rolls, stamped the receipt as a return, and pocketed the money. Stephanie warned the new hire not to say anything and told her she deserved the money because she didn’t get paid enough. Encouraged by your open- door policy, the employee confides in you.

1. Identify what symptoms this fraud will generate. In addition, identify how this fraud will directly affect your revenue and inventory accounts.

2. Explain the steps you should take to search for each symptom you identified in part (1). In particular, describe the computer queries and transactions that should be searched to find this fraud.

3. After you have identified several symptoms, do you have enough evidence to prove that she is guilty? What other evidence is required or useful in this case?

4. Besides searching for symptoms of the fraud, what other investigative steps can be taken to elicit a confession or otherwise prove the fraud?

5. What steps could have been taken to prevent this fraud from occurring in the first place?

Sheila Goodman recently received her MBA from the Harvard Business School. She has joined the family business, Goodman Software Products Inc., as Vice-President of Finance. She believes in adjusting projects for risk. Her father is somewhat skeptical but agrees to go along with her. Her approach is somewhat different than the risk-adjusted discount rate approach, but achieves the same objective. She suggests that the inflows for each year of a project be adjusted downward for lack of certainty and then be discounted back at a risk-free rate. The theory is that the adjustment penalty makes the inflows the equivalent of riskless inflows, and therefore a risk-free rate is justified.

A table showing the possible coefficient of variation for an inflow and the associated adjustment factor is shown next:
  

Assume a $125,000 project provides the following inflows with the associated coefficients of variation for each year.
  

  
Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

a. Fill in the table below: (Do not round intermediate calculations. Round "Adjustment Factor" answers to 2 decimal places and other answers to the nearest whole dollar.)
  

  
b-1. If the risk-free rate is 6 percent, compute the net present value of the adjusted inflows. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
  

Sheila Goodman recently received her MBA from the Harvard Business School. She has joined the family business, Goodman Software Products Inc., as Vice-President of Finance. She believes in adjusting projects for risk. Her father is somewhat skeptical but agrees to go along with her. Her approach is somewhat different than the risk-adjusted discount rate approach, but achieves the same objective. She suggests that the inflows for each year of a project be adjusted downward for lack of certainty and then be discounted back at a risk-free rate. The theory is that the adjustment penalty makes the inflows the equivalent of riskless inflows, and therefore a risk-free rate is justified.

A table showing the possible coefficient of variation for an inflow and the associated adjustment factor is shown next:
  

Assume a $185,000 project provides the following inflows with the associated coefficients of variation for each year.
  

  
Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

a. Fill in the table below: (Do not round intermediate calculations. Round "Adjustment Factor" answers to 2 decimal places and other answers to the nearest whole dollar.)
  

  
b-1. If the risk-free rate is 7 percent, compute the net present value of the adjusted inflows. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
  

  
b-2. Should this project be accepted?
  

• Yes

• No

Sheila Goodman recently received her MBA from the Harvard Business School. She has joined the family business, Goodman Software Products Inc., as Vice-President of Finance. She believes in adjusting projects for risk. Her father is somewhat skeptical but agrees to go along with her. Her approach is somewhat different than the risk-adjusted discount rate approach, but achieves the same objective. She suggests that the inflows for each year of a project be adjusted downward for lack of certainty and then be discounted back at a risk-free rate. The theory is that the adjustment penalty makes the inflows the equivalent of riskless inflows, and therefore a risk-free rate is justified.

A table showing the possible coefficient of variation for an inflow and the associated adjustment factor is shown next:
  

Assume a $125,000 project provides the following inflows with the associated coefficients of variation for each year.
  

  
Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

a. Fill in the table below: (Do not round intermediate calculations. Round your dollar answers to the nearest whole dollar.)

Year Adjustment Factor Adjusted Inflow

1

2

3

4

5

  
b-1. If the risk-free rate is 6 percent, compute the net present value of the adjusted inflows. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
  

  
b-2. Should this project be accepted?
  

Journalize the selected transactions for the month of April in good form and identify each by the date. You do not need to list explanations. Please be sure to skip a line between each transaction. Use only the accounts from the list provided: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Prepaid Rent, Equipment, Building, Land, Accounts Payable, Wages Payable, Notes Payable, Unearned Rent, Agnus Evans, Capital, Agnus Evans, Drawing, Fees Earned, Supplies Expense, Rent Expense, Wages Expense, Utilities Expense, and Miscellaneous Expense.

April 1     Invested $350,000 in the company.

April 3     Purchased equipment for $55,000, paying $10,000 in cash and giving a note payable for the remainder.

April 4     Paid $1,000 for rent for the month.

April 5     Purchased $8,500 of supplies on account.

April 6     Recorded $7,500 of fees earned on account.

April 7     Paid $1200 to creditors on account.

Apjril 7     Received $9,000 from customers on account.

April 8     The owner withdrew $3,000 for personal use.

April 11     Paid wages of $8,890.

April 14      Received $29,300 in cash for fees earned.

Commericals dealing with controversial public issues such as gun control or abortion are called advertorials or advocacy advertising. Should broadcasters be required to accept advocacy advertising, or should they be allowed to refuse it?

Briefly discuss an example of publicity on the part of a company or individual that you recall seeing.

How does advertising differ from public relations?

Imagine the following scenario at a company where you are the computer specialist: Your company recently installed high-speed Internet access at the office where you work. There are 50 workstations connected to the network and the Internet. Within a week, half the computers in the office were down because of a virus that was contracted by a screen saver. In addition, network personnel from a university in England contacted the company, claiming that your computer systems were being used as a part of a DDoS attack on their Web site. By the time the damage was repaired, your company had lost about 500 work hours when employees could not use their computers. The company also lost approximately $10,000 in potential revenue by not being able to respond to purchase requests, and narrowly averted a lawsuit from the university. Take steps to prevent this from happening again: • Research the price of at least three antivirus and firewall packages on the Internet and determine the most cost-effective package for the company to implement on 50 workstations. • Draft a memo to the CEO with your recommendations. Include the following in your memo: o A list of the antivirus and firewall packages you researched. You should research and list at least three different antivirus and firewall packages. o The antivirus and firewall package you recommend and your reasons for recommending it over the other two packages. o An explanation of how the antivirus and firewall products that you recommend would prevent future problems with viruses and with DDoS attacks from your computers on web sites belonging to other organizations. o If you need help with creating a memo, please click How to Create a Memo to download the instructions. • Compile a list strategies for avoiding virus infections and incorporate this list into a document to be sent to all employees. • Use the Networks and Security thread in the Experts Exchange class forum if you need some help, or if you are knowledgeable about computer security and can help others identify antivirus and firewall software.

Compute and Interpret Liquidity, Solvency and Coverage Ratios
Selected balance sheet and income statement information from Verizon Communications follows.

(a) Compute the current ratio for each year and discuss any trend in liquidity. (Round your answers to two decimal places.)
2005 current ratio = Answer

2004 current ratio = Answer

What additional information about the numbers used to compute this ratio might be useful in helping you assess liquidity? (Select all that apply)
Answeryesno The maturity schedule of current liabilities
Answeryesno The average stock price for the industry
Answeryesno The average current ratio for the industry
Answeryesno The amount of current assets that is concentrated in relatively illiquid inventories

(b) Compute times interest earned, total liabilities-to-equity, and net cash from operating activities to total debt ratios for each year. (Round your answers to two decimal places.)
2005 times interest earned = Answer
2004 times interest earned = Answer

2005 total liabilities-to-equity = Answer
2004 total liabilities-to-equity = Answer

2005 net operating cash flow to total debt = Answer
2004 net operating cash flow to total debt = Answer

Which of the following best describes the extent of Verizon's financial leverage and the company's ability to meet interest obligations?

Verizon's times interest earned ratio has decreased, total liabilities-to-equity has increased, and net operating cash flow to total debt ratio has remained the same, which suggests the company will meet its obligations.

Verizon's times interest earned ratio has increased, total liabilities-to-equity has increased, and net operating cash flow to total debt ratio has decreased, which suggests the company will not meet its obligations.

Verizon's times interest earned ratio has increased, total liabilities-to-equity has decreased, and net operating cash flow to total debt ratio has remained the same, which suggests the company will meet its obligations.

Verizon's times interest earned ratio has increased, total liabilities-to-equity has decreased, and net operating cash flow to total debt ratio has decreased, which suggests the company will not meet its obligations.

(c)Verizon's capital expenditures are expected to increase substantially as it seeks to respond to competitive pressures to upgrade the quality of its communications infrastructure. Which of the following best describes Verizon's liquidity and solvency in light of this strategic direction?

The company's profitability and operating cash flow are fairly strong, both are particularly high in relation to the company's liabilities and interest costs. The capital expenditures can be made with no borrowing or additional equity.

The company's profitability and operating cash flow are fairly weak, both are very low in relation to the company's liabilities and interest costs. The company is on the verge of bankruptcy.

The company's profitability and operating cash flow are fairly weak, both are very low in relation to the company's liabilities and interest costs. The company cannot fund any capital expenditures.

The company's profitability and operating cash flow are fairly strong, neither is particularly high in relation to the company's liabilities and interest costs. The capital expenditures may have to be funded with higher-cost equity.

Lucky Traders is a subsidiary of United Traders, a US based trading company with a 31
December year end, and it is involved in the buying and selling of electronic accessories. Most of
the inventories that Lucky Traders sells are imported from the parent company that is based in
America.
Given the nature of the business, Mr. Luckiness expresses his concern on the fact that the
company is trading with companies that are not local companies. The company has been
experiencing losses, because of this; Mr. Luckiness is concerned that the company’s functional
currency is US Dollars as the invoices that they receive are quoted in US Dollars.
The consultant company for Lucky Traders have recommended that the company should enter a
Foreword Exchange contract to hedge for the risk of the exchange rate.
On 1 December 2019 Lucky Traders entered into the contract with Take A Little an American
based company to supply to them 15 000 boxes of accessories when the exchange rate was $ 1:
NAD14.00 and each of the box worth US$ 1 589. The stock was shipped FOB on the 10th
December 2019 when the exchange rate was $1: NAD13.00.
Due to the delay in the customs and clearance of the orders stock only arrived at the premises of
Lucky Traders on 15 December 2019 when the exchange rate was $1:NAD16.00 the debt was
not settled as at 31 December 2019 and the final payment was only made on the 31 January
2020. When the exchange rate was $1: NAD 17.50 at 31 December 2019
The company entered the FEC contract with Capelex Bank to fix the rate on the 31 January 2020
at $1:NAD15.50. Due to the outbreak of Covid-19 US Dollar has strengthen and Namibian dollar
has declined and the rate moved to $1: NAD 18.00.

The Forward Exchange Contract had the rates below:
Date $:NAD
01/12/19 -
31/12/19 1:17.00
31/01/2020 1:21.00

Required:


2.3 Calculate total loss/gain made foreign exchange on the transaction above for the
year ended 31 December 2019

2.4 Prepare the journal entry on 31 January when the transaction was fully settled.

From your readings in the Special Module on foreign currency translation adjustments, summarize U.S. GAAP and IFRS differences on this topic and from the example in that module of one item that goes in Accumulated Other Comprehensive Income can you find such treatment in a company's equity section, either a US parent company or a foreign parent company?

I know the differences between GAAP and IFRS, Can anybody give an example that goes in Accumulated other comprehensive income? and find such treatment in a company's equity section?