Henrietta’s Pine Bakery

Background

You are an Analyst for the professional service firm, BUSI 1043 LLP. Your firm specializes in providing a wide variety of internal business solutions for different clients. Given the outstanding feedback you received on your first engagement working for Big Spenders Inc., a Senior Manager in the Financial Advisory group requested your support on a compilation engagement.

Additional Information

Henrietta’s was established in 1963 when it first opened its doors in Dwight, Muskoka on highway 60. Over the past 50 years, there have been four owners and is currently owned by Carine & Geoff Harris who incorporated and took over the store on January 1, 2013. Their sons, Kyle and Nicholas have been an intricate part of the business from dishwashing to head bakers. Henrietta's has grown over the years with the addition of new items all the time, but the "Sticky Buns and Clouds" remain the most popular items amongst the 150 varieties of breads and pastries.

Henrietta’s runs out of 90 square meters (1,000 share feet) of space. It has one entrance into the bakery and doors leading out to highway 60. Henrietta’s pays $5,000 per month for the rental of the space. Carine and Geoff were able to negotiate with the landlord and were not required to pay the first month’s rend in advance. All of the rental payments are current and up to date. For the last two years, Henrietta’s has had a very reliable accountant prepare its year-end financial statements and everything has been correct. This year, Henrietta’s accountant retired and Geoff did the best he could recording his own financial information. For the information he was not sure about, he kept all of the required supporting documentation. Geoff hired your firm, BUSI 1043 LLP to prepare his financial statements for the year. Geoff supplied you with his unadjusted trial balance and the information in Exhibit I to assist you.

Supplementary Information

The amount currently sitting in prepaids arose due the insurance policy last year. Geoff didn’t know how to correct it, so he left it. This year’s insurance policy was purchased on November 1 for $9,000. The policy runs from November 1 to October 31 of each year.

Geoff has a note that he owed $900 in wages to his employees for the period ending December 31st.

The loan was incurred when the bakery was opened. The loan carried an interest rate of 8%. The interest is payable two months after year end and the principal is due in 2019.

Henrietta’s will sometimes book special events with small organizations that are allowed to pay after the event has taken place. On December 29th, a small company had a gathering at the bakery. The company was billed $1,089 and has 30 days to pay it. Geoff has not yet recorded this in his financial records.

Henrietta’s declared a dividend of $5,000 on December 30th.

Geoff didn’t know how to record amortization for the year and so left it for you to record. Amortization for all assets is charged using a straight-line method by taking the cost of the asset and dividing it by its expected useful life. The assets have expected useful lives as follows:

Computer: 5 years

Bakery equipment: 10 years

Furniture and fixtures: 20 years

The information shows that Henrietta’s owes $400 for a telephone bill and $400 for electricity for December. These amounts have not been recorded yet.

Henrietta's Pine Bakery

Unadjusted Trial Balance

December 31, 2015

Based on the information you have prepare the adjusting journal entries, an adjusting trial balance, the statement of earnings (income statement), statement of financial position (balance sheet), and statement of retained earnings. After you have completed the statements, prepare the closing journal entries and the posting closing trial balance. Ensure you show all of your work, and prepare proper journal entries and properly formatted financial statements.

Note to you: Issues are hidden within the case. It is your responsibility to read the case facts and identify the critical issues required for discussion and analysis.

With a growing aging population, the demand for hip replacement surgery in Canada has been increased in the last decade. The following table gives the distribution of the waiting time (in months) for hip replacement surgery in Ontario in 2013:

Percentage of patients/ Waiting time

10%/ 4 months
18%/ 5 months
53%/ 6 months
12%/ 7 months
7%/8 months

1. What is the probability that a randomly chosen patient who needs a hip replacement has to wait more than the average waiting time for this op- eration?

2. What is the standard deviation of two times the waiting time for this operation.

3. Find and graph the cumulative distribution function of the waiting time of a randomly chosen patient.

4. If the waiting time of a randomly chosen patient is at most 7 months, what is the probability that the waiting time falls between 4 and 6 months?

1:)

The dataset shows 15 observations of the relationship between cricket chirps (measured in chirps per second) and outside ground temperature (in Fahrenheit).

A. Create a scatterplot by putting chirps on the vertical axis and temperature on the horizontal axis. Be sure to properly label the scatterplot with a title, axes titles, and the proper units of the variables.

B. Estimate the following relationship: ?h????=?0+?1???????????(Chirps) ̂=b_0+b_1 Temperature.

C. Interpret the slope in the context of the problem.

D. Interpret the R-square in the context of the problem.

E. Predict the number of cricket chirps when the outside ground temperature is 80 degrees F.   Round your answer to one decimal place.

Data set:

The city of Laguna Beach operates two public parking lots. The one on Ocean Drive can accommodate up to 125 cars and the one on Rio Rancho can accommodate up to 130 cars. City planners are considering both increasing the size of the lots and changing the fee structure. To begin, the Planning Office would like some information on the number of cars in the lots at various times of the day. A junior planner officer is assigned the task of visiting the two lots at random times of the day and evening and counting the number of cars in the lot. The study lasted over a period of one month. Below is the number of cars in the lots for 25 visits of the Ocean Drive lot and 28 visits of the Rio Rancho lot. Assume the population standard deviation is equal and use an alpha value of 0.01 to determine if it is reasonable to conclude that there is a difference in the mean number of cars in the two lots? Use this information to solve the following questions.

A. What is the null hypothesis statement for this problem?

B. What is the alternative hypothesis statement for this problem?

C. What is alpha for this analysis?

D. What is the most appropriate test for this problem? (choose one of the following)

a. t-Test: Paired Two

b. t-Test: Two-Sampled Assuming Equal Variances

c. t-Test: Two-Sample Assuming Unequal Variances

d. z-Test: Two Sample for Means

E. What is the value of the test statistic for the most appropriate analysis?

F. What is the lower bound value of the critical statistic? If one does not exist (i.e. is not applicable for this type analysis), document N/A as your response.

G. What is the upper bound value of the critical statistic? If one does not exist (i.e. is not applicable for this type analysis), document N/A as your response.

H. It is reasonable to conclude that there is a difference in the mean number of cars in the two lots? (choose one of the following)

a. Yes

b. No

I. What is the p-value for this analysis? (Hint: Use this value to double check your conclusion)

Show all work with all formulas.

In what follows use any of the following tests: Regression, multiple regression, one- sided t-test, or two-sided t-test. All conclusions should be based on 5% P-value threshold.

Choose the best fitting answer.

Open TV_Restaurants data. SETUP: The data represents weekly profit (in thousands) for each of the 20 restaurants. 10 restaurants were equipped with new TV sets while the remaining 10 were not. Management wants to see if there is any difference in the profit. Given the data, your job is to perform the appropriate statistical test or procedure and help management with their decision.

5. What test did you perform?

• a. Regression
• b. ​​Multiple regression
• c. One-sided t-test
• d. ​​Two-sided t-test

6. What is the P-value?

• a. 0.037055
• b. 0.074111
• c. 0.008986
• d. 0.660867
• e. None of these

7. What is the Statistical interpretation?

• a. Since P-value is very small we can conclude that new TV increased the profit.
• b. Since P-value is too large we cannot conclude that new TV increased the profit.
• c. Since P-value is too large we cannot conclude that more the TVs we have the higher the profit.
• d. None of these.

8. What is the conclusion?

• a. Test is inconclusive; we cannot tell that the profits are different.
• b. Test is conclusive; the profits are different.
• c. Test is inconclusive; we cannot claim that new TV sets increased the sale.
• d. None of these.

TV_Restaurants data

NO TV   Yes TV
7       8
13      5
5       7
12      7
11      10
9       8
12      10
8       7
11      4
7       9

A two-stage rocket has a total initial mass with the fuel of 4.5x10⁶ kg is docked at rest at a space station. A total of 2.3x10⁶ kg of fuel is on board. The mission for the ship is to reach a planet that is located at a distance of 7.5x10¹⁰m away. The fuel is used at a constant rate of 800kg/s for both stages of the rocket. The exhaust velocity for the rocket's engines is 7500m/s (stage1) and 5000m/s (stage2). The mass of stage 1 (bottom half) is 0.75x10⁶kg without fuel after stage 1 is complete, stage 2 the ignites and accelerates the rocket until the fuel runs out. Assume all the motion takes place in one dimension and the gravitational force can be neglected.

1. The fuel allocated for the 1st stage is 1.5x10⁶kg but only 1.25x10⁶ kg is used. The rest remains on stage1. The fuel for the second stage is 0.8x10⁶kg. What is the speed of the rocket when stage 2 is complete?

2. How much faster or slower would you be going if you use all 2.3x10⁶kg of the rocket's fuel during stage 1 and didn't use the second stage?

3. Some fuel was left on stage 1 which is used to alter its velocity so that it can return to the space station. If you were to rotate stage 1 so that the exhaust point in the opposite direction, do you have enough fuel to return stage1 to the space station? What is the final velocity of the rocket? If not, what would the minimum exhaust velocity of stage one need to be adjusted to in order for the rocker to make it back?

The research firm LL Research collected data from 200 client businesses. They want to determine how the businesses compare among four variables:

2015 Profit in millions of dollars
2016 Profit in millions of dollars
2015-2016 Two-Year Change in Daily Average Customer Visits
Two-Year Average Number of Employees

Data collected for the sample of 200 businesses is contained in the file named Businesses, linked at the bottom of the page. Use all 200 data points.

Managerial Report
Prepare a report (see below) using the numerical methods of descriptive statistics presented in this module to learn how each of the variables contributes to the success of a client business. Be sure to include the following three items in your report.

Find descriptive sample statistics (mean, median, two quartiles Q1 and Q3, minimum, maximum, range, sample standard deviation, and coefficient of variation) for each of the four variables along with an explanation of what the descriptive statistics tell us about the client businesses.

Compute the percent change in profit from 2015 to 2016 for each business. Then use the z-score to determine which businesses were outliers with respect to percent change in profit.

Compute the sample correlation coefficient, showing the relationship between percent change in profit and each of the other two variables (2015-2016 Two-Year Change in Daily Average Customer Visits and Two-Year Average Number of Employees). Explain what the correlation coefficients tell us about the three pairs of relationships. Use tables, charts, or graphs to support your conclusions.