What are the five main differences between a Income statement that is produced by a for-profit company versus a local government Statements of Revenue, Expenditures and Changes in Fund Balances?

Management Accounting Questions:

Grace Myer is the founder and CEO of Myer Sisters Apparel, a retailer of high?end women’s business apparel.  Earlier this year Grace opened her fourth retail store in Sydney’s Eastern Suburbs. While Grace has been pleased with the new store’s progress, she is concerned by the growing number of customer complaints and the low sales per square metre compared to some of her better?known competitors, such as Davie Laurie and HighChair Nine.  

When Grace had only one store that she individually owned and operated, she was able to control most of the details of the business. While she worked with a few employees, she always knew what they were doing. As the number of stores and the size of the stores increased, the number of employees also grew.  When Grace was running the one store, she rarely heard a customer complaint, and her sales per square metre were $500, compared to $400 today.  This concerned Grace greatly as her expansion plansfor Myer Sisters had to slow down because the stores were not producing the returns that she expected. T

he store managers were also complaining to Grace because of the high training costs of bringing on new employees. The turnover rate seemed to be very high and Grace could not understand why. She was paying one of the highest wages in the area to the sales clerks and store managers, yet they were leaving to work elsewhere. The customers were also complaining about the lack of helpfulness of the sales clerks. Even after extensive employee retraining, Grace was still hearing many complaints.  

Required:

1. Based on your understanding of the differences between intrinsic motivation and extrinsic motivation, discuss why paying good wages is not enough to elicit high performance in Myer Sisters.

2. Grace is considering implementing an alternative reward system for her staff: A “gain? sharing” plan, with a focus on generating sales revenue.  Specifically, 15% of any revenue in excess of the target sales level of $4 million per year will be placed in a “bonus pool” for distribution to allstores(last year’ssales were $3 million).  For example, if Myer Sisters as a group achieves total sales revenue of $4.5 million ($0.5 million more than the target level), then 15% of the additional $0.5 million in sales revenue will be distributed to employees.  All sales staff will receive a portion of the bonus pool, with store managers receiving a greater percentage compared to sales clerks.   Do you think this gain sharing plan is a good idea? Support your answer using

(a) Goal Setting Theory;

(b) Expectancy Theory and

(c) Agency Theory as appropriate (i.e., you do not need to refer to every part of every theory).

3. Based on your understanding of the various principles of incentive system/performance evaluation system design, make three suggestions as to how Myer Sisters’ performance measurement/incentive system could be improved.

Describe some bargaining interaction Airbus has with another entity (firms producing complementary or substitute products, upstream suppliers, or downstream customers), or between internal divisions within your firm. Describe the bargaining as strategic or nonstrategic interaction.

You may need to use the appropriate technology to answer this question.

In a regression analysis involving 27 observations, the following estimated regression equation was developed.

ŷ = 25.2 + 5.5x₁

For this estimated regression equation SST = 1,500 and SSE = 590.

(a)

At α = 0.05, test whether

x₁

is significant.

State the null and alternative hypotheses.

H₀: β₁ ≠ 0
H_a: β₁ = 0H₀: β₁ = 0
H_a: β₁ ≠ 0    H₀: β₀ ≠ 0
H_a: β₀ = 0H₀: β₀ = 0
H_a: β₀ ≠ 0

Find the value of the test statistic. (Round your answer to two decimal places.)

F =

Find the p-value. (Round your answer to three decimal places.)

p-value =

Is x₁ significant?

Do not reject H₀. We conclude that x₁ is not significant.Reject H₀. We conclude that x₁ is not significant.    Reject H₀. We conclude that x₁ is significant.Do not reject H₀. We conclude that x₁ is significant.

Suppose that variables

x₂ and x₃

are added to the model and the following regression equation is obtained.

ŷ = 16.3 + 2.3x₁ + 12.1x₂ − 5.8x₃

For this estimated regression equation SST = 1,500 and SSE = 100.

(b)

Use an F test and a 0.05 level of significance to determine whether

x₂ and x₃

contribute significantly to the model.

State the null and alternative hypotheses.

H₀: One or more of the parameters is not equal to zero.
H_a: β₂ = β₃ = 0H₀: β₂ = β₃ = 0
H_a: One or more of the parameters is not equal to zero.    H₀: β₁ ≠ 0
H_a: β₁ = 0H₀: β₁ = 0
H_a: β₁ ≠ 0

Find the value of the test statistic.

Find the p-value. (Round your answer to three decimal places.)

p-value =

Is the addition of x₂ and x₃ significant?

Do not reject H₀. We conclude that the addition of variables x₂ and x₃ is not significant.Reject H₀. We conclude that the addition of variables x₂ and x₃ is not significant.    Do not reject H₀. We conclude that the addition of variables x₂ and x₃ is significant.Reject H₀. We conclude that the addition of variables x₂ and x₃ is significant.

what is 3 3/4 ÷ 27/16=

Essay
27. Discuss the business judgment rule.

You have just been appointed as the financial accountant at Caulfield Warehouse Direct (CWD), an electrical company. CWD makes all sales under terms of Free On Board (FOB) shipping point. FOB shipping point specifies that the title and responsibility of goods transfer from the seller to the buyer when the goods are placed on the delivery vehicle. During your first week, you have been asked to conduct a review of all income items as the Australian Tax Office wants to know details of all income in the last financial year, which ended on 31 December. During your review, you became aware that CC had post-dated a significant sales transaction of $500,000 (goods were delivered on 27 December, but invoiced on 3 January). Post-dating the sales transaction would lower CWD’s taxable income. You approached the owner, Megan Simpson, and discussed about it. Megan asked you to ignore the finding because it is part of the company’s policy. After all, there was a difference of only one week between 27 December and 3 January.

1. Explain the ethical issue (or dilemma) that you face.
2. Identify four (4) parties (stakeholders) that may be harmed.
3. Discuss three (3) specific interests that are in conflict [HINT: For each, you must identify pairs of stakeholders whose interests might be in conflict and explain why].
4. What are your options and the consequences of each option? Specify two (2) options, and for each option, explain the impact of that option on the stakeholders.

Based on the information below create the year end income statement, balance sheet, and cash flow statement.

On January 2, 2003, Alexander, together with a number of relatives and friends, established Chemalite, Inc.; 500,000 shares were issued, of which Alexander received 125,000 in exchange for his patent, and the remainder were sold to the other investors at $1 per share. During the period January 2, 2003, through June 30, 2003, Chemalite, Inc., made the following expenditures:

• January 15—Paid $7,500 in legal fees, charter costs, and printing expenses associated with the incorporation of the company.
• June 15—Spent $62,500 building the machinery that would be used to produce the first commercial models of the Chemalite.
• June 24—Purchased $75,000 worth of plastics and chemicals for use in the production of commercial Chemalites. ‘

Between January 2 and June 30, the company’s bank balance had fallen from $375,000 to $230,000.

During the last half of 2003, Chemalite, Inc., did indeed go into full operation. To prepare for the shareholders’ meeting in early January 2004, Bill Murray, the firm’s recently hired bookkeeper, produced the following data:

1. In early July 2003, a consulting engineer delivered the prototypes of the Chemalite that he had been developing, and he was paid a total of $23,750.
2. During the six months from July to December 2003, Chemalite sold $754,500 of its product. The largest single purchaser, the auto parts distributor with whom Peterson had negotiated, still owed Chemalite, Inc., $69,500. All other customers’ accounts were paid in full by year- end.
3. Additional chemicals and plastics were purchased for a total of $175,000. All of these purchases were paid for in cash.
4. Chemalite, Inc., spent $22,500 on television and trade journal advertising to introduce the product.
5. During the six months ended December 31, 2003, the company expended $350,000 on direct manufacturing labor and on manufacturing-related overhead (rent, utilities, supervisory labor). An additional $80,000 was spent on corporate salaries and other corporate expenses.
6. In early July, a further $150,000 was spent on machinery to be used in the production of Chemalites.
7. During the period, the company had borrowed $50,000 for a short time and repaid the loan by year-end. The interest paid on the loan amounted to $750.

In preparing his state-of-the-corporation report, Alexander noted with some anxiety that the company’s bank balance had fallen a further $117,000 from the $230,000 reported in June to only $113,000. It bothered him because he believed that the company was really doing quite well, and he failed to understand why the bank account did not appear to reflect this condition. In surveying the cash outflows incurred by Chemalite, Inc., over the entire year, he noted the following:

1. The machinery used in the production of the Chemalites was general purpose machinery, not restricted to Chemalite production, that might reasonably be expected to last for 10 years—six months of which had already passed.
2. There was still a stock at December 31 of $55,000 worth of plastics and chemicals in the warehouse; however, there were no finished or partially finished Chemalites at yearend.
3. Although the patent that the company had acquired from Alexander had a legal life of 20 years, he expected competitors to develop equivalent products that did not use the patented technique in about five years.
4. Alexander was quite confused by the worth of the prototypes. They had directly resulted in the development of the product the company was presently selling, so perhaps their value had actually increased over the last six months of 2003.
5. The committee organizing The Olympic Games, Athens 2004, had placed a firm order with the company for 60,000 Chemalites at a price of $1.50 each. It was their intention to give a Chemalite to each person at the opening ceremony of the 2004 Olympic Games and to have athletes and fans light their Chemalites, symbolic of the Olympic flame.

In a new restaurant Jake’s offers three different burgers that is open 40 hours per week. Each
product requires the following processing times (in minutes) in each of three station.
Burger Max Burger Special Mega Burger
Grill 2 2 1
Preparation 3 4 6
Packaging 4 6 5
Each station must be run by one of 19 cross-trained workers who are each available 35 hours per week. The plant has 10 grills, 6 preparation stations, and 8 packaging machines available. The three products contribute $0.90, $1.20, and $1.50, respectively, in marginal profits per unit produced.
a) (4 Points) Formulate an LP model for this problem.
b) (1 Point) Can this problem be solved graphically? Argue your point.
c) (8 Points) What is the optimal solution?
d) (2 Points) Assume that the number of available workers is fluctuating. Describe two ways
how it can be tested whether these fluctuations lead to changes in the production plan.

Schedule of Cash Collections of Accounts Receivable

OfficeMart Inc. has "cash and carry" customers and credit customers. OfficeMart estimates that 30% of monthly sales are to cash customers, while the remaining sales are to credit customers. Of the credit customers, 20% pay their accounts in the month of sale, while the remaining 80% pay their accounts in the month following the month of sale. Projected sales for the next three months are as follows:

The Accounts Receivable balance on September 30 was $76,000.

Prepare a schedule of cash collections from sales for October, November, and December. Round all calculations to the nearest whole dollar.

Ace Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for July for the two rackets is as follows:

Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows:

The direct labor rate for each department is as follows:

Prepare the direct labor cost budget for July.