Gorman and Morton form a partnership on May 1, 2019. Gorman contributes cash of $59,000; Morton conveys title to the following properties to the partnership:

The partners agree to start their partnership with equal capital balances. No goodwill is to be recognized.

According to the articles of partnership written by the partners, profits and losses are allocated based on the following formula:

• Gorman receives a compensation allowance of $900 per month.
• All remaining profits and losses are split 30:70 between Gorman and Morton, respectively.
• Each partner can make annual cash drawings of $7,000 beginning in 2020.

Net income of $15,500 is earned by the business during 2019.

Steele is invited to join the partnership on January 1, 2020. Because of her business reputation and financial expertise, she is given a 40 percent interest for $63,000 cash. The bonus approach is used to record this investment, made directly to the business. The articles of partnership are amended to give Steele a $3,000 compensation allowance per month and an annual cash drawing of $14,000. Remaining profits are now allocated:

All drawings are taken by the partners during 2020. At year-end, the partnership reports net income of $102,000.

On January 1, 2021, Frank (previously a partnership employee) is admitted into the partnership. Each partner transfers 10 percent to Frank, who makes the following payments directly to the partners:

Once again, the articles of partnership must be amended to allow for the entrance of the new partner. This change entitles Frank to a compensation allowance of $700 per month and an annual drawing of $6,000. Profits and losses are now assigned as follows:

For the year of 2021, the partnership earned a profit of $49,900, and each partner withdrew the allowed amount of cash.

Prepare schedules that determine the capital balances for the individual partners as of the end of each year 2019 through 2021.

A Meritorious Plan?

There are many ways that organizations can organize their pay plans; indeed, pay policies have been found to be one of the biggest differences between organizations. While it is usually a good idea to link pay and performance in some way, there are different approaches that can achieve this goal. Some companies prefer to link compensation strongly to individual performance, while others rely more heavily on team rewards.

In this exercise, please read the following min-case and answer the questions that follow.

Compu-Globo is an online marketing strategy company in Beachwood, Ohio. Three years after its founding, President Nick Morlan is ready to start hiring staff, as the company has expanded past the point where its two founders can keep up with customer demand. As a result, it will need to hire two marketing consultants and a graphic designer. Because Compu-Globo has never hired employees before, it is starting from scratch with regard to its pay policies. In college, Nick learned about various types of pay-for-performance schemes and is interested in developing one for use in his business. He knows about merit pay, which increases each employee's salary based on his or her individual performance. He also has experience with profit sharing from a previous job, in which employees receive bonuses based on the company's financial results.

While business has been good, cash is still tight and he is concerned with his company's ability to pay large salaries if market conditions affect demand. He is also unsure of his abilities to set up a well-developed performance system. The new staff will be required to work together on projects; the graphic designer in particular will have to cooperate with both the new hires and the founders of the company on a regular basis. Nick expects that the new hires will become an integral part of the company; he is more than doubling the staff and it will still only consist of five people total. The performance of each employee will have a substantial impact on the business's overall results.

While Nick can (and will) use multiple kinds of incentive pay, he will need to choose one to emphasize as he interviews, selects, and negotiates with new staff.

16.

value:
2.00 points

Which of these policies is most likely to lead to individual competition among Compu-Globo's new hires?

Profit sharing

Merit pay

Skill based

Gainsharing

References

Multiple ChoiceLearning Objective: 12-02 Describe the fundamental pay programs for recognizing employees' contributions to the organization's success.

Difficulty: 2 MediumLearning Objective: 12-03 List the advantages and disadvantages of the pay programs.

17.

value:
2.00 points

What will happen to the cost of a merit pay plan if Compu-Globo's business suffers?

He will still have to increase salaries if individual performance is good

It depends on the value of the company at that time

Payments will be reduced along with sales

18.

value:
2.00 points

Why is it important for Nick to have a well-developed performance appraisal system if merit pay is a substantial component of compensation?

Federal law has enacted legislation that requires employers to provide it

Merit pay increases are based on assessments of individual performance; the stakes of the appraisal are high with this system

Because individual appraisals and merit increases determine profit sharing outcomes

19.

value:
2.00 points

Which of these is a reason that Compu-Globo's employees might not be motivated by a profit-sharing plan?

If they feel that they have no impact on the overall results

If they pay out during the current time period, instead of being deferred

If it requires them to behave like owners, by doing what it takes to make the organization more effective

20.

value:
2.00 points

Which of these is most amenable to incentive pay, if Nick decides to go that route?

Jobs with significant interdependence on other employees

Jobs that are peripheral to the mission of the organization

Jobs in which performance can be measured as individual output, productivity, and sales

From research, it is known that the opinions of US parents on whether a college education is worth the expense is the following: strongly agree 55%, somewhat agree 30%, neither agree nor disagree 5%, somewhat disagree 6% strongly disagree 4%. An economist claims that the distribution of the opinions of the opinions of US teenagers is different from the distribution opinions of US parents. To test the economist randomly selected 200 US teenagers and asked each whether a college education is worth the expense. The table shows the results. At level of significance of 5%, is there enough evidence to support the economist’s claim?

The dividends paid by a corporation

An EEGGrrQq individual is mated with an EeGgRrQq individual. What is a likelihood that their one offspring has genotype EeGgRrqq?

The following balance sheet has been prepared by the accountant for Limestone Company as of June 3, 2017, the date on which the company is to file a voluntary petition of bankruptcy:

Additional Information

• If the company is liquidated, administrative expenses are estimated at $27,000.
• The accounts payable figure includes $19,000 in wages earned by the company's 12 employees during May. No one earned more than $3,100.
• Liabilities do not include taxes of $23,000 owed to the U.S. government.
• Company officials estimate that 35 percent of the accounts receivable will be collected in a liquidation and that the inventory disposal will bring $89,000. The land and buildings will be sold together for approximately $328,000; the equipment should bring $139,000 at auction.

• Prepare a statement of financial affairs for Limestone Company as of June 3, 2017.

A motivational speaker is interested in the demographics of their shows’ attendees. A random sample of 1051 adults who attended their last show was taken and the gender and US Census region in which they lived were recorded and summarized in the table below:

(a) Suppose the speaker is going to ignore gender and is interested in whether people attending the events are equally likely to be from the four regions of the USA. What is the appropriate hypothesis test the researcher could use?

i. Chi Squared Test for Independence

ii. Chi Squared Test for goodness of fit (where we know the contents of the box)

iii. Two Sample Z test for difference in proportions

iv. One Sample Z test for proportions

(b) Calculate the test statistic, degrees of freedom (if relevant), and p value for the test of whether people attending the events are equally likely to be from the four regions of the USA.

(c) Suppose the speaker is also interested in whether Gender and US Census region are independent. What would be the appropriate expected count under the null of independence for the cell: Females and South?

Bank X’s bid rate on euros is US$1.10 and its ask rate is US$1.128.

1. (a) Calculate the bid/ask spread of euros (in %).

2. (b) Calculate the amount of euros that you can get from selling US$200,000.

3. (c) Explain how the following factors affects sizes of bid-ask spreads:

   1. (i) Inventory costs

   2. (ii) Competition with other banks

a) Saha have two investment alternatives from which he need to choose one. If the current market interest rate is 8%, which alternative would saha choose and why?

Alternative 1: Receive $ 280 semi-annually for the next 12 years

Alternative 2: Receive $ 12000 lumpsum at the end of 12 years

b) During the four years of saha's University life, saha have received the following amounts of money at the end of each year for outstanding performance from the university fund. He deposited his money in a savings account paying 10 percent rate of interest per annum. How much money will he have on the graduation day at the end of four years?

The following is a cross-tabulation of the variables gender and units (the number of units in which a student has enrolled) from a recent class survey. Number of Units Gender 1 2 3 4 5 female 4 11 60 191 3 male 2 10 28 86 1 Note that χ 2 tests require all expected frequencies to be at least 5. To ensure this you may need to combine columns in a way that makes sense in the context of a test for association. That is, you could combine columns 1 and 2, but not columns 1 and 4. Assuming the data come from randomly-selected Murdoch University students, test for an association between gender and unit load in the Murdoch University student population. If you find an association, describe it.