In 2006, the top ten nations with the highest HDI rating are listed below. Each observation shows a country and in parentheses the proportion of women in that country’s parliament and the HDI Score (% women, HDI Score). Norway (38, .94), Iceland (33, .90), Australia (28, .93) Ireland (14, .92), Sweden (45, .91), Canada (24, .91), Japan (11, .89), United States (15, .92), Switzerland (25, .93), Netherlands (34, .92). (i.e. the US had 15 percent of seats held by women and an HDI score of .92)

a) Calculate the mean and the standard deviation for the percentage of seats in parliament held by women in these states.

b) Calculate the mean and the standard deviation for HDI index and interpret your results.

c) Calculate the correlation between the HDI index score and the percentage of seats in the country’s parliament held by women.

d) Calculate the coefficient on the HDI score of a regression in which the HDI score is the independent variable and the proportion of seats held by women is the dependent variable.

e) Calculate the r2 from this simple regression model.

f) Input these observations into Stata and show (simply circle or highlight) where the answers to (c), (d), and (e) appear in the regression output. (Here it is ok to paste Stata output into your answer.)

Williams-Santana, Inc., is a manufacturer of high-tech industrial parts that was started in 2006 by two talented engineers with little business training. In 2018, the company was acquired by one of its major customers. As part of an internal audit, the following facts were discovered. The audit occurred during 2018 before any adjusting entries or closing entries were prepared. The income tax rate is 40% for all years.

A five-year casualty insurance policy was purchased at the beginning of 2016 for $35,000. The full amount was debited to insurance expense at the time.

Effective January 1, 2018, the company changed the salvage values used in calculating depreciation for its office building. The building cost $600,000 on December 29, 2007, and has been depreciated on a straigh-tline basis assuming a useful life of 40 years and a salvage value of $100,000. Declining real estate values in the area indicate that the salvage value will be no more than $25,000.

On December 31, 2017, merchandise inventory was overstated by $25,000 due to a mistake in the physical inventory count using the periodic inventory system.

The company changed inventory cost methods to FIFO from LIFO at the end of 2018 for both financial statement and income tax purposes. The change will cause a $960,000 increase in the beginning inventory at January 1, 2019.

At the end of 2017, the company failed to accrue $15,500 of sales commissions earned by employees during 2017. The expense was recorded when the commissions were paid in early 2018.

At the beginning of 2016, the company purchased a machine at a cost of $720,000. Its useful life was estimated to be ten years with no salvage value. The machine has been depreciated by the double-declining balance method. Its book value on December 31, 2017, was $460,800. On January 1, 2018, the company changed to the straight-line method.

Warranty expense is determined each year as 1% of sales. Actual payment experience of recent years indicates that 0.75% is a better indication of the actual cost. Management effects the change in 2018. Credit sales for 2018 are $4,000,000; in 2017 they were $3,700,000.

Required:
For each situation:
1. Identify whether it represents an accounting change or an error. If an accounting change, identify the type of change. For accounting errors, choose "Not applicable".
2. Prepare any journal entry necessary as a direct result of the change or error correction as well as any adjusting entry for 2018 related to the situation described. Any tax effects should be adjusted for through Income tax payable or Refund income tax.
  

Williams-Santana, Inc., is a manufacturer of high-tech industrial parts that was started in 2006 by two talented engineers with little business training. In 2018, the company was acquired by one of its major customers. As part of an internal audit, the following facts were discovered. The audit occurred during 2018 before any adjusting entries or closing entries were prepared. The income tax rate is 40% for all years.

Required: Prepare any journal entry necessary as a direct result of the change or error correction as well as any adjusting entry for 2018 related to the situation described. Any tax effects should be adjusted for through Income tax payable or Refund-income tax...

1. Effective January 1, 2018, the company changed the salvage values used in calculating depreciation for its office building. The building cost $604,000 on December 29, 2007, and has been depreciated on a straight-line basis assuming a useful life of 40 years and a salvage value of $120,000. Declining real estate values in the area indicate that the salvage value will be no more than $30,000.

2. At the beginning of 2016, the company purchased a machine at a cost of $680,000. Its useful life was estimated to be ten years with no salvage value. The machine has been depreciated by the double-declining balance method. Its book value on December 31, 2017, was $435,200. On January 1, 2018, the company changed to the straight-line method. 3.Warranty expense is determined each year as 1% of sales. Actual payment experience of recent years indicates that 0.70% is a better indication of the actual cost. Management effects the change in 2018. Credit sales for 2018 are $3,600,000; in 2017 they were $3,300,000.

1. During the height of the real estate boom in 2006, brokers offered loans with
little concern about whether or not the borrowers could make the payments. The brokers were
then able to sell the loans to investors for a high fee. Which of the following best describes this
scenario?
A. The brokers were acting in their own self-interest and not in the interest of the investors.
This is an example of the moral hazard problem.
B. The brokers were acting in their own self-interest and not in the interest of the investors.
This is an example of the adverse selection problem.
C. The borrowers acted in their own self-interest and not in the interest of the brokers. This
is an example of the moral hazard problem.
D. The borrowers acted in their own self-interest and not in the interest of the brokers. This
is an example of the adverse selection problem.

2. According to the Consumer Financial Protection Bureau, millions of Americans
do not have credit enough credit history to create a credit score. These consumers often face
the worst credit terms. Which of the following best describes why?
A. Without a credit score, lenders cannot tell high risk borrowers from low risk borrowers.
Lenders treat all borrowers as high risk. This is an example of the moral hazard problem.
B. Without a credit score, lenders cannot tell high risk borrowers from low risk borrowers.
Lenders treat all borrowers as high-risk. This is an example of the adverse selection
problem.
C. When making loans to borrowers without a credit score, lenders act in their own self
interest and not the interest of the borrower. This is an example of the moral hazard
problem.
D. When making loans to borrowers without a credit score, lenders act in their own self
interest and not the interest of the borrower. This is an example of the adverse selection
problem.

3.
Which balance sheet item generates the most revenue for banks?
A. Loans
B. Treasury securities
C. Reserves held at the Federal Reserve
D. Vault cash
E. Equity Securities

4.) Sally takes $1000 in currency and deposits it in a savings account at First
National Bank. The value of the deposit is
A. an asset for First National Bank and a liability for Sally.
B. an asset for First National Bank and an asset for Sally.
C. a liability for First National Bank and an asset for Sally.
D. a liability for First National Bank and a liability for Sally.

5. If interest rates on all types of assets increase, the present value of a banks’
current portfolio of loans . At the same time, the profitability of future loans .
A. rises/rises
B. falls/falls
C. falls/rises
D. rises/falls

6. Bank runs were fairly common in the United States prior to the Great Depression.
Which of the following best describes why bank runs no longer occur?
A. Capital requirements have increased and banks are much less likely to fail.
B. The Federal Reserve will loan any bank that needs liquidity funds to satisfy withdrawal
requests.
C. The Federal Deposit Insurance Corporation (FDIC) insures all deposits below $250,000.
D. The Glass Steagall act separated commercial banks from investment banking and insurance
companies, making banks far less likely to fail.
E. The Riegle-Neal Interstate Banking act of 1994 allowed

15 years ago,

A. the top 10 biggest banks were larger and there were more banks in total.
B. the top 10 biggest banks were smaller and there were more banks in total.
C. the top 10 biggest banks were smaller and there were fewer banks in total.
D. the top 10 biggest banks were larger and there were fewer banks in total.

Williams-Santana, Inc., is a manufacturer of high-tech industrial parts that was started in 2006 by two talented engineers with little business training. In 2018, the company was acquired by one of its major customers. As part of an internal audit, the following facts were discovered. The audit occurred during 2018 before any adjusting entries or closing entries were prepared. The income tax rate is 40% for all years.

A five-year casualty insurance policy was purchased at the beginning of 2016 for $37,500. The full amount was debited to insurance expense at the time.

Effective January 1, 2018, the company changed the salvage values used in calculating depreciation for its office building. The building cost $640,000 on December 29, 2007, and has been depreciated on a straight-line basis assuming a useful life of 40 years and a salvage value of $120,000. Declining real estate values in the area indicate that the salvage value will be no more than $30,000.

On December 31, 2017, merchandise inventory was overstated by $27,500 due to a mistake in the physical inventory count using the periodic inventory system.

The company changed inventory cost methods to FIFO from LIFO at the end of 2018 for both financial statement and income tax purposes. The change will cause a $985,000 increase in the beginning inventory at January 1, 2019.

At the end of 2017, the company failed to accrue $16,000 of sales commissions earned by employees during 2017. The expense was recorded when the commissions were paid in early 2018.

At the beginning of 2016, the company purchased a machine at a cost of $770,000. Its useful life was estimated to be ten years with no salvage value. The machine has been depreciated by the double-declining balance method. Its book value on December 31, 2017, was $492,800. On January 1, 2018, the company changed to the straight-line method.

Warranty expense is determined each year as 1% of sales. Actual payment experience of recent years indicates that 0.70% is a better indication of the actual cost. Management effects the change in 2018. Credit sales for 2018 are $4,500,000; in 2017 they were $4,200,000.

Required:
For each situation:
1. Identify whether it represents an accounting change or an error. If an accounting change, identify the type of change. For accounting errors, choose "Not applicable".
2. Prepare any journal entry necessary as a direct result of the change or error correction as well as any adjusting entry for 2018 related to the situation described. Any tax effects should be adjusted for through Income tax payable or Refund income tax.

Williams-Santana, Inc., is a manufacturer of high-tech industrial parts that was started in 2006 by two talented engineers with little business training. In 2018, the company was acquired by one of its major customers. As part of an internal audit, the following facts were discovered. The audit occurred during 2018 before any adjusting entries or closing entries were prepared. The income tax rate is 40% for all years.

1. A five-year casualty insurance policy was purchased at the beginning of 2016 for $38,000. The full amount was debited to insurance expense at the time.
2. Effective January 1, 2018, the company changed the salvage values used in calculating depreciation for its office building. The building cost $624,000 on December 29, 2007, and has been depreciated on a straight-line basis assuming a useful life of 40 years and a salvage value of $100,000. Declining real estate values in the area indicate that the salvage value will be no more than $25,000.
3. On December 31, 2017, merchandise inventory was overstated by $28,000 due to a mistake in the physical inventory count using the periodic inventory system.
4. The company changed inventory cost methods to FIFO from LIFO at the end of 2018 for both financial statement and income tax purposes. The change will cause a $990,000 increase in the beginning inventory at January 1, 2019.
5. At the end of 2017, the company failed to accrue $16,100 of sales commissions earned by employees during 2017. The expense was recorded when the commissions were paid in early 2018.
6. At the beginning of 2016, the company purchased a machine at a cost of $780,000. Its useful life was estimated to be ten years with no salvage value. The machine has been depreciated by the double-declining balance method. Its book value on December 31, 2017, was $499,200. On January 1, 2018, the company changed to the straight-line method.
7. Warranty expense is determined each year as 1% of sales. Actual payment experience of recent years indicates that 0.75% is a better indication of the actual cost. Management effects the change in 2018. Credit sales for 2018 are $4,600,000; in 2017 they were $4,300,000.

Required:
For each situation:
1. Identify whether it represents an accounting change or an error. If an accounting change, identify the type of change. For accounting errors, choose "Not applicable".
2. Prepare any journal entry necessary as a direct result of the change or error correction as well as any adjusting entry for 2018 related to the situation described. Any tax effects should be adjusted for through Income tax payable or Refund income tax.

Strayer, D. L., Drews, F. A., & Crouch, D. J. (2006). A comparison of the cell phone driver and the drunk driver. Human factors, 48(2), 381-391.

Identify the independent and dependent variable(s) studied. State the research hypothesis(es) concerning the variables that were studied. Identify the participants. Include any subject characteristics that were used as variables. State the major results of the study in terms of the hypothesis(es) and the conclusions drawn by the researcher(s). Paraphrase, using your own words; avoid using direct quotes. You don’t need to include all the statistics, just key results information. State your opinion of the study. Do you think the study was well-designed and conducted?

Arden and Plomin (2006) published a study reporting that IQ scores for boys are more variable than IQ scores for girls. A researcher would like to know whether this same phenomenon applies to other measures of cognitive ability. A standard cognitive skills test is given to a sample of n = 15 adolescent boys and a sample of n = 15 adolescent girls, and resulted in the following scores. Boys Girls 9 5 3 9 7 6 5 4 6 7 5 2 4 8 8 6 4 7 6 8 7 4 9 7 3 5 7 8 6 5 1) Calculate the mean and the standard deviation for each group. Boys: Girls: 2) Based on the means and the standard deviations, describe the differences in intelligence scores for boys and girls. A- The girl's mean intelligence score is HIGHER THAN, LOWER THAN, OR THE SAME AS that the boy's scores. B- The boys’ scores are AS VARIABLE AS, LESS VARIABLE THAN, OR MORE VARIABLE THAN the girls’ scores?

In July, 2006, a member of the audit team auditing Belhaven University’s annual report was carrying his laptop while walking to his car parked in the street. He was mugged and his wallet and laptop was stolen. The laptop contained audit documentation with sensitive personal information about employees, including their social security numbers. According to Belhaven’s president, Roger Parrott, the stolen computer had “several sophisticated levels of security” and it was unlikely that the thief would be able to extract any information. (1) Do you think that the auditors violated GAAS by allowing the information to be stolen? Why or why not? (2) Since a laptop might get stolen (or simply crash), what steps do you think an auditor should take to prevent losing the information in it?

1. The Cases:

Starbucks Global Quest in 2006: Is the Best Yet to Come?

Since 1987, Starbucks had transformed itself from a modest 9-store operation in the Pacific Northwest into a powerhouse multinational enterprise with 10,241 store locations, including some 2,900+ stores in 30 foreign countries. During Starbucks early years when coffee was a 50-cent morning habit at local diners and fast food establishments, skeptics had ridiculed the notion of $3 coffee as a yuppie fad. But the popularity of Starbucks’ Italian-style coffees, espresso beverages, teas, pastries and confections had made Starbucks one of the great retailing stories of recent history and the world’s biggest specialty coffee chain. In 2003, Starbucks made the Fortune 500, prompting CEO Howard Schultz to remark, “It would be arrogant to sit here and say that 10 years ago we thought we would be on the Fortune 500. But we dreamed from day one and we dreamed big.”

Starbucks reported revenues in fiscal 2005 of $ 6.4 billion, up 205% from $2.1 billion in fiscal 2000; after-tax profits in 2005 were $494.5 million, an increase of 423% from fiscal 2000 net earnings of $94.6 million.

Having positioned Starbucks as the dominant retailer, roaster, and brand of specialty coffees and coffee drinks in North America and spawned the creation of the specialty coffee industry, management’s long-term objective was now to establish Starbucks as the most recognized and respected brand in the world. In 2005, new stores were being opened at the rate of roughly 32 per week and management expected to have 15,000 Starbucks stores open worldwide going into 2006. Believing that the scope of Starbucks long-term opportunity had been underestimated, Schultz had recently increased the targeted number of stores from 25,000 to 30,000 worldwide by 2013, at least half of which were to be outside the United States. He noted that Starbucks only had an overall 7% share of the coffee drinking market in the United States and perhaps a 1% share internationally. According to Schultz, “85that still leaves lots of room for growth. Internationally, we are still in our infancy.” Although coffee consumption worldwide was standing, coffee was still the second most consumed beverage in the world, trailing only water.

In fiscal 2006, Starbucks planned to open 1,800 net new stores globally. Top management believed that it could grow revenues by about 20 percent annually and net earnings by 20-25 percent annually for the next 3 to 5 years. Howard Schultz and CEO Jim Donald viewed China as a huge market opportunity, along with Brazil, India, and Russia. To sustain the company’s growth and make Starbucks one of the world’s preeminent global brands, Howard Schultz believed that the company had to challenge the status quo, be innovative, take risks, and adapt its vision of who it was, what it did, and where it was headed. If the challenge of executing the company’s strategy was met successfully, in all likelihood the company’s best years lay on the strategic road ahead.

Questions

Part I: Multiple Choice Questions. Having read the above case, now please answer the following Multiple Choice Questions. You need to write justification of your answer briefly.

1. What are the key elements of Starbucks’ strategy as of 2006? And what does it reflect?

a. Expand the number of Starbucks stores domestically and this reflects the clear mission, vision and strategy

b. Continue the drive to make Starbucks a global brand by opening stores in an increasing number of foreign locations which reflects corporate level plan and the process of its strategy

c. Multiple store formats/designs that are attractive, visible, and appealing and this reflects the management process

d. All of the above are applicable

Jus

2. Starbucks management viewed each store as a billboard for the company and as a contributor to building the company’s brand and image. Each detail was inspected to improve the mood and ambience of the store, to make sure everything signaled “best-of-class” and reflected the personality of the community and the neighborhood. The thesis was “everything mattered.” The company went to great lengths to make sure the store fixtures, the merchandise displays, the colors, the artwork, the banners, the music, and the aromas all blended to create a consistent, inviting, stimulating environment that evoked the romance of coffee, that signaled the company’s passion for coffee, and that rewarded customers with ceremony, stories, and surprise. This reflects:

a. business level and functional level strategies

b. corporate level strategies

c. mission and vision

d. standing plans

Justi

3. Which of the following is true about Starbucks?

a. A big emphasis on store ambience the idea was to heighten the “third place” Starbucks experience for customers.

b. To try to keep the coffee aromas in the stores pure, smoking was banned and employees were asked to refrain from wearing perfumes or colognes

c. Prepared foods were kept covered so customers would smell coffee only

d. All of the above are true and applicable

J

4. Colorful banners and posters were used to keep the look of Starbucks stores fresh and in keeping with seasons and holidays. Company designers came up with artwork for commuter mugs and T-shirts in different cities that were in keeping with each city’s personality. If we were to look at the link with the theories of management, this would be in line with:

a. Scientific management

b. the theory of Bureaucracy

c. the Open Systems View

d. Management Science Theory

Justific------

5. Another strategy by Starbucks is to provide Internet access and digital entertainment. The objective was to heighten the “third place” Starbucks experience, attract customers into perhaps buying a second latte or espresso while they caught up on email, listened to digital music, put the finishing touches on a presentation, or accessed their corporate intranet. This reflects that Starbucks is also applying:

a. Dynamic Capabilities Theory

b. Theory X and Theory Y

c. Contingency Theory

d. The Gilbreths

Justi

6. Which of the following statements are true and why? Link it to topics you have covered

a. Starbucks is a company that definitely places a high strategic priority on building and strengthening the Starbucks brand name—and it uses every tactic it can to polish its image and extend its name by entering new market niches and geographic markets.

b. Howard Schultz has long made it clear that making Starbucks one of the top brand names worldwide is high on his strategic agenda.

c. Howard Schultz deserves a solid A or A– for his performance as CEO and Chairman.

d. All of the above are true

-----

7. Schultz has been in the forefront of arranging the company’s strategy implementation / execution effort. His notable achievements here include:

a. Building an organization capable of sustaining rapid growth while still preserving and enhancing the quality/image of Starbucks products.

b. Hiring key executives/building a strong top management team and making sure the company has the requisite support systems/corporate infrastructure

c. Leading the effort to design/redesign the company’s stores as well as instituting motivational incentives aimed a making Starbucks a great place to work

d. All of the above are applicable

8. Which of the following issues could face Starbucks as of 2005?

a. How to sustain the company’s rapid growth

b. Will the domestic market for stores soon become saturated (will the U.S. market support 15,000 retail stores—which is about double the number at the end of fiscal year 2005?)

c. Will the company need to open company-owned stores in foreign countries rather than continuing with the present strategy of licensing so many (which generates royalty revenues and perhaps some profits from supplying coffee to foreign licensees)?

d. All of the above issues are applicable

Ju

9. How can Starbucks establish motivational incentives aimed at making Starbucks a great place to work? All of the following can be considered EXCEPT:

a. Extend health-care benefits to part-time workers

b. Cooperating with the government

c. An attractive additional benefit program  

d. Functioning as cultural and spiritual leader

10. The following are considered as core values of Starbucks EXCEPT:

a. Making Starbucks a great place to work

b. Operating the business in an ethical and socially responsible manner

c. High technology

d. Dedication to product quality