Dr. Mohammed Juma Al Hinai working as a Branch Manager in Oman Arab Bank, Ibri, Oman from the period 2014 onwards. During the period, he got a request from a student in Ibri College of Technology, Ibri to pursue her OJT for a period of two months starting from 1^st May 2020 to 30^th June 2020 in Forex Management domain. But, Dr. Mohammed Juma Al Hinai is very skeptical about the student knowledge level and technical background in the subject Forex Management. In order to understand the student caliber, Dr. Mohammed Juma Al Hinai wishes to conduct a basic examination with certain terms associated to Forex Management and the details are given bellow.

You are required to calculate the following information from the above details:

1. What will be the Direct Quote for the OMR from the period starting from 20^th April 2020 to 23^rd April 2020?                                                                                               
2. What will be the Bid Rate displayed in the OMR market for the period 20^th April 2020 to 23^rd April 2020 from the above Indirect Quote?
3. Determine the spread rate from 20^th April 2020 to 23^rd April 2020 from the above Indirect Quote?                                                                                                               
4. If Dr. Mohammed Juma Al Hinai wish to buy spot OMR on 22^nd April 2020. How much you will pay in PHP?                                                                                                
5. In case Dr. Mohammed Juma Al Hinai wanted to purchase spot PHP. How much would you have to pay in OMR?                                                                                        
6. The Ask rate on 21^st April 2020 is PHP 131.9766/OMR. The price of PHP is expected to appreciate by 2¾ after 20 days. What will be new exchange rate after 20 days?

Please don not copy solutions in the text book .

At December 31, 2020, Bouvier Corp. has assets of $10 million, liabilities of $6 million, common shares of $2 million (representing 2 million common shares of $1.00 par), and retained earnings of $2 million. Net sales for the year 2020 were $18 million, and net income was $800,000. As one of the auditors of this company, you are making a review of subsequent events on February 13, 2021, and you find the following.

1)

On February 3, 2021, one of Bouvier's customers declared bankruptcy. At December 31, 2020, this company owed Bouvier $300,000, of which $40,000 was paid in January 2021.

2

On January 18, 2021, one of the client's three major plants burned. Bouvier has fire insurance coverage.

3

On January 23, 2021, a strike was called at one of Bouvier's largest plants and it halted 30% of production. As of today (February 13), the strike has not been settled.

4)

A major electronics enterprise has introduced a line of products that would compete directly with Bouvier's primary line, now being produced in a specially designed new plant. Because of manufacturing innovations, the competitor has been able to achieve quality similar to that of Bouvier's products, but at a price 30% lower. Bouvier officials say they will meet the lower prices, which are barely high enough to cover variable and fixed manufacturing and selling costs.

5)

Merchandise traded in the open market is recorded in the company's records at $1.40 per unit on December 31, 2020. This price held for two weeks after the release of an official market report that predicted vastly excessive supplies; however, no purchases were made at $1.40. The price throughout the preceding year had been about $2.00, which was the level experienced over several years. On January 18, 2021, the price returned to $2.00 after public disclosure of an error in the official calculations of the prior December—the correction erased the expectations of excessive supplies. Inventory at December 31, 2020, was on a lower of cost and net realizable value basis.

6)

On February 1, 2021, the board of directors adopted a resolution to accept the offer of an investment banker to guarantee the marketing of $1.2 million of preferred shares. The company owns equity investments classified as current assets accounted for using the fair value through net income model. The investments have been adjusted to fair value as at December 31, 2020.

7

On January 21, 2021, the annual report of one of the investment companies has been issued for its year ended November 30, 2020. The investee company did not meet its earnings forecasts and the market price of the investment dropped from $49 per share at December 31, 2020, to $27 per share on January 21, 2021

Instructions

For each event, state how it will affect the 2020 financial statements, if at all. The company follows IFRS

Futures and Options

2. You have to make a 90,000,000 payment in Japanese Yen on close of business day, Friday, September 11th. You decide to hedge your risk with the futures contracts. Assume you that you enter into the futures position at a close of day on Tuesday, September 8th. Futures and spot data are provided in the file HW1_data.doc. Contract size is 12,500,000 yen.

1. Describe the position you decide to enter (long or short).

2. Describe the contract (what month, and what quantity).

3. Document the gain or loss due to marking to market every day that your position is open.

4. What is the total cost in US$ after you have closed out your futures positions, and made your payment?

5. What would have been the total cost in US$, if you had not hedged? Did you benefit from hedging?

6. Repeat steps a) – e) assuming that you expect a payment of 900,000 British pounds on close of business day, Friday, September 11th. Assume you that you enter into the futures position at a close of day on Tuesday, September 8th. Futures and spot data are provided in the file HW1_data.doc. Contract size is 62,500 British pounds.

Japanese Yen Data

Daily Settlements for Japanese Yen Future (FINAL)Trade Date: Wednesday, 09/09/2020

Daily Settlements for Japanese Yen Futures (FINAL)Trade Date: Friday, 09/11/2020

Spot data:

Question 1. Impact on the Accounting Equation and Journal Entries Following are events related to Dinky Donky Limited (the “Company”) for the current month (that is May). Assume all transactions relate to this month

. Determine the impact on the accounting equation of the following transactions, and write the relevant journal entry for each:

1) The owner of the company placed $250,000 into the company at the start of the month by way of half in cash and the rest in transfer of two vehicles of equal value.

2) The company bought an apartment building from Diamond Limited worth $20,000,000 by issuing $5,000,000 of bond debt, taking out a bank loan of $8,000,000 and remainder by issuing shares.

3) The company received the gas bill at the end of the month amounting to $80,000. The company has 3 months to pay.

4) At the end of this month the wages had yet to be paid. On last day of month, the company paid half of monthly wage in cash and said they would pay the balance in two weeks. Monthly wages are $600,000.

5) The company paid the outstanding electricity bill for last month. The bill was received by the company 14 days ago and recorded then. The value of the bill was $85,000.

6) The company paid $100,000 in cash for administrative supplies required during the month. All supplies will be used in the month.

7) The company recognized that $500,000 of its long-term debt is actually due to be paid in next 3 months.

8) The company sold inventory to a customer. The customer paid $560,000 by paying 75% in cash and the rest by credit. The inventory originally cost the company $320,000.

9) The company purchased inventory valued at $400,000. Half of the inventory was paid in cash, and the remainder was acquired on credit.

10) The company bought a new factory paying $300,000 in cash and transferring a block of land valued at $500,000 to the old owner of the factory.

11) The company paid a dividend of $200,000 at the end of the month to the owner of the company.

12) The owner of the company paid $40,000 for his family to attend the Champion’s League Final (May 31, 2020) between Barcelona and Liverpool that Liverpool won 25 – 0. The owner used his wife’s credit card to make the purchase. Required:

Analyse how each transaction above impacts the accounting equation. Each transaction is to be treated independently. Then, record the journal entries for the transactions noted above.

Consider each of the following independent and material situations. In each case: • the balance date is 30 June 2020. • the fieldwork was completed on 25 August 2020. • the financial report and audit report were signed on 28 August 2020. • the financial report and audit report were mailed to the members on 1 September 2020. (i) Your client, Central Mining, owns a mineral exploration licence in Central Australia. At 30 June 2020 this licence was valued by an independent expert at $50,000,000. This valuation is reflected in the financial report. On 8 September 2020 Central Mining received notice that a claim was being lodged under the Native Titles Act for land which included that subject to the exploration licence. If the claim is successful the exploration licence will be worthless. (ii) Your client, Bird Pty Limited, derives approximately 10% of revenues from selling aviary supplies to city-based bird breeders. A draft copy of a government report, leaked to the press and reported in the media on 11 September, recommends that strict limits be placed on the number of birds that are allowed to be kept in suburban areas. Bird Pty Limited estimates that if the recommendations are enacted, about 70% of its customers will have to cut their flocks by 50% or more. This would affect not only future sales but also their ability to pay existing debts. No further information, other than the draft report, is available as at 15 September. (iii) Your client, Gem Pty Limited, made an out of court settlement on 1 August 2020 of $300,000. The settlement related to a litigation case dating back 4 years. A provision of $150,000 was recorded in the 30 June 2020 financial report. Ans; Since the settlement was done before the closing the Financial Statements so balance of $150000 (300000-150000) should be provided in the current year Financials. (iv) On 14 September 20X7, you discover that a debtor of your client, Galaxy Ltd, was placed in provisional liquidation on 8 September. The debtor owed $600,000 as at 30 June 2020; at this date the amount had been considered collectable by the company. (v) A flood occurred in the warehouse of your client SuperSpring Ltd on 21 September 2020. Inventory valued at $2m was destroyed. The directors believe only half of this value will be recovered from the insurers. Required: For each of the above events (i) to (v), state the appropriate action that the auditor would need to carry out in order to find out about the above and what the company would need to do for each of the above

A financial service company is aware that customers are being charged fees for receiving financial advice that will not be given. This is in breach of the company’s own code of conduct and consumer law. Senior management delay remediation in an effort to meet their own sales targets. Complaints by customers and whistleblowers are ignored at all levels in the company.

In your own words, critique the following statement by the CEO:

“ ... this is our normal business practice, everyone else in the industry is doing the same, and our company has a policy of being socially responsible at all times. Our risk culture is exemplary and supports our growth strategy.”

Answer ALL of the following questions in your own words:

1. Explain whether this company, in your opinion, has a sound risk culture.
2. Describe what consequences could arise for this company from its compliance failure.
3. Discuss what actions management could take in order to improve compliance risk.

Scenario for Final Paper.

Amanda Smiley became president and CEO of Purest Medical about two months ago. Prior to that, she was vice-president of marketing and sales at Ferraro Products, a smaller medical products company. Amanda has a PhD in chemistry and an MBA with a specialty in marketing. She and her husband Dustin do not have children. Dustin is a professor of philosophy at the U of M and the author of several books on philosophy of mind. In their spare time, they play a little golf, travel to Italy, and participate in road rallies. Amanda is honest, open, demanding, and fair. She is a good coach and is always offering encouragement. When you are talking with Amanda, as soon as she senses that you have not done your research and thinking, she cuts off the discussion and sends you on your way. You don’t want to come unprepared a second time.  

Purest Medical is a company that designs and sells a variety of medical products. Performance at Purest has slipped the last two years, mostly due to the prolonged ill health of the founder, Dr. Nathan Dooley. The Board hired Ms. Smiley and she has replaced 75% of the senior management team, most of whom were very close to, or past, retirement age, and had lost motivation. The situation: sales have increased only 2 – 4 % per year over the past three years, below industry average. Manufacturing waste has also lagged behind industry averages. Inventory levels of raw materials and finished products are too high, tying up much needed capital. The company has to become much more efficient and effective. Manufacturing technology is a strength. On the employee side, job stress levels seem to be climbing, based on a recent employee satisfaction survey taken just before Ms. Smiley’s arrival. However, employee turnover is still at a low level.  

Amanda (she demands everyone call her by her first name) has set some aggressive goals to improve the overall performance of the 305-person firm. Her goals:

• Increase sales by 15% this year and at least 20% next year

• Reduce manufacturing waste by 20% this year and an additional 20% next year

• Increase the number of viable ideas in the product pipeline by 66%

• Improve order response rate by at least 85%

• Improve communication across the company to convey a sense of urgency

You were hired as Purest’s HRD specialist two weeks ago. You are learning a lot quickly about the company, but there is much more to learn, since this is the first time you’ve worked in the medical products (or any health-related) field. You recently completed your BS at Saint Mary’s University of Minnesota, and after a short vacation to Europe, you were able to land this job. You haven’t even had the time to join a professional association yet, although you have that as a goal for this month. You did keep your Human Resource Development textbook.

Just the other day you and your boss, Genna Hamilton, the vice-president of HR, had an informal discussion with Amanda over pizza in her office. Amanda asked you to help her put in place a training program to improve performance across all areas of the company. She knows something has to be done. She expects you to lead this critical project. She mentioned that she feels some across-the-board training for all supervisory positions, including herself, needs to be a part of the program. She even wondered if the senior management team needs some extra attention. Further, Amanda is concerned about getting people to change their behaviors after training – she expressed that this has frustrated her throughout her managerial life. Amanda also emphasized that she always wants to see a strong business justification for any investment of people and money. She asked Genna if it is easy to calculate ROI for a comprehensive HRD program, and Genna didn’t know. You didn’t want to show up your boss in front of Amanda, so you simply said yes; later you explained it in detail to Genna. Amanda also suggested that one of your recommendations be a thorough communication plan, detailing exactly what she and others in supervisory positions need to do to encourage all employees to participate with passion and urgency in this program. As you were leaving her office, Amanda said that getting something done very quickly was an absolute necessity. She asked for a plan to achieve her goals through training, and she added that maybe training isn’t always the solution. She hinted strongly that maybe there are other types of HRD interventions. In any case, she expects a prioritized list of activities. And then she said: “Let’s meet next Monday at 9:00 a.m. to review your plan and suggestions. I don’t expect you to cover every detail, especially with the ROI, and I assume you have some kind of process that we’ll need to follow. I’m really excited about getting started on this pronto. See you then. By the way, I hope you’re settling in here. Genna has spoken well of you and I have high expectations. Let me know if you need anything. You can’t do this alone.”

What are your recommendations and plans to address all the goals of Amanda’s

1. What will you do to measure the success of your recommendations?
2. What alternatives may be necessary if the recommendation does not work?  
3. How will you know that the desired result has been achieved? Include ROI or equivalent.
4. What questions or concerns do you have at this time?

In the scenario below, What assumptions will you need to make, what is your strategy and how will you structure your solution as proposed. Finally, describe what needs to be done and who in the organization is to do it and when.

The scenario for Final Paper.

Amanda Smiley became president and CEO of Purest Medical about two months ago. Prior to that, she was vice-president of marketing and sales at Ferraro Products, a smaller medical products company. Amanda has a Ph.D. in chemistry and an MBA with a specialty in marketing. She and her husband Dustin do not have children. Dustin is a professor of philosophy at the U of M and the author of several books on the philosophy of mind. In their spare time, they play a little golf, travel to Italy, and participate in road rallies. Amanda is honest, open, demanding, and fair. She is a good coach and is always offering encouragement. When you are talking with Amanda, as soon as she senses that you have not done your research and thinking, she cuts off the discussion and sends you on your way. You don’t want to come unprepared a second time.  

Purest Medical is a company that designs and sells a variety of medical products. Performance at Purest has slipped the last two years, mostly due to the prolonged ill health of the founder, Dr. Nathan Dooley. The Board hired Ms. Smiley and she has replaced 75% of the senior management team, most of whom were very close to, or past, retirement age, and had lost motivation. The situation: sales have increased only 2 – 4 % per year over the past three years, below the industry average. Manufacturing waste has also lagged behind industry averages. Inventory levels of raw materials and finished products are too high, tying up much-needed capital. The company has to become much more efficient and effective. Manufacturing technology is strength. On the employee side, job stress levels seem to be climbing, based on a recent employee satisfaction survey taken just before Ms. Smiley’s arrival. However, employee turnover is still at a low level.  

Amanda (she demands everyone call her by her first name) has set some aggressive goals to improve the overall performance of the 305-person firm. Her goals:

Increase sales by 15% this year and at least 20% next year

Reduce manufacturing waste by 20% this year and an additional 20% next year

Increase the number of viable ideas in the product pipeline by 66%

Improve order response rate by at least 85%

Improve communication across the company to convey a sense of urgency

You were hired as Purest’s HRD specialist two weeks ago. You are learning a lot quickly about the company, but there is much more to learn since this is the first time you’ve worked in the medical products (or any health-related) field. You recently completed your BS at Saint Mary’s University of Minnesota, and after a short vacation to Europe, you were able to land this job. You haven’t even had the time to join a professional association yet, although you have that as a goal for this month. You did keep your Human Resource Development textbook.

Just the other day you and your boss, Genna Hamilton, the vice-president of HR, had an informal discussion with Amanda over pizza in her office. Amanda asked you to help her put in place a training program to improve performance across all areas of the company. She knows something has to be done. She expects you to lead this critical project. She mentioned that she feels some across-the-board training for all supervisory positions, including herself, needs to be a part of the program. She even wondered if the senior management team needs some extra attention. Further, Amanda is concerned about getting people to change their behaviors after training – she expressed that this has frustrated her throughout her managerial life. Amanda also emphasized that she always wants to see a strong business justification for any investment of people and money. She asked Genna if it is easy to calculate ROI for a comprehensive HRD program, and Genna didn’t know. You didn’t want to show up your boss in front of Amanda, so you simply said yes; later you explained it in detail to Genna. Amanda also suggested that one of your recommendations be a thorough communication plan, detailing exactly what she and others in supervisory positions need to do to encourage all employees to participate with passion and urgency in this program. As you were leaving her office, Amanda said that getting something done very quickly was an absolute necessity. She asked for a plan to achieve her goals through training, and she added that maybe training isn’t always the solution. She hinted strongly that maybe there are other types of HRD interventions. In any case, she expects a prioritized list of activities. And then she said: “Let’s meet next Monday at 9:00 a.m. to review your plan and suggestions. I don’t expect you to cover every detail, especially with the ROI, and I assume you have some kind of process that we’ll need to follow. I’m really excited about getting started on this pronto. See you then. By the way, I hope you’re settling in here. Genna has spoken well of you and I have high expectations. Let me know if you need anything. You can’t do this alone.”

What are your recommendations and plans to address all the goals of Amanda’s