a) What is considered insider trading?

Multiple Choice

• All of the other statements describe insider trading.

• Marlene, an individual investor, buys shares in a company because her financial analysis of the company suggests that it is undervalued.

• Bill buys shares after the company's earnings announcement because he personally knows the auditor who audited the company's earnings announcement / press release.

• Chris, a hedge fund manager, purchases a 5% stake in a company because he wants to install his colleagues on to the company's board of directors.

• Karen sells shares in a company before the earnings announcement because her brother-in-law, who's the CEO, said that EPS will fall short of market expectations.

b).

Which of the following statements is true about the classified income statement?

Multiple Choice

• Income tax expense is subtracted from operating income to obtain pre-tax income.

• Net income is computed by subtracting operating expenses from gross profit.

• Cost of goods sold is the difference between net sales revenue and gross profit.

• Gross sales revenue is the first line of the income statement; contra-revenues is the second line; and net sales revenue is the third line.

• Dividend expense is classified as a non-operating (other) item on the income statement.

Life Symphony Enterprises (LSE) produces health and beauty products with manufacturing and distribution facilities all over the UK. The company currently employs 1,000 employees with an annual turnover of £30m. Sally Mason is the Group Management Accountant of the firm and her primary role includes supporting other staff working in various divisions in making decisions on cost management; divisional performance evaluation and operational priorities. This week, she has received several queries from various offices. You, as a promising intern, has been appointed to assist her in various investigations. In your interview for this position, you had demonstrated your knowledge in various management accounting issues, for instance, cost classifications, behavioural analysis, cost reporting under marginal and variable costing, traditional costing system, Activity-based costing system and variance analysis. Sally is really looking forward to working with you and on your fifth day in the job, she has handed you email trails, notes and conversation with her colleagues. You have arranged all materials in order and found the following:

1. On 10^th February, 2020 John Beecroft from the group’s Hull Division sent her an email asking for some clarification on cost calculation. The division estimates overhead costs as £12 per machine hour. John observed that in the last few months, the estimated overhead costs could not predict the product cost well. John sent the following 8 occurrences as evidence:

Sally’s note suggests that counting overheads as a variable cost probably cause the inaccurate estimates though she put several interrogative signs (???) suggesting further investigation.

Write an email/ note on behalf of Sally to John explaining the possible causes of distorted overhead cost per machine hour by exhibiting an application of any management accounting technique that may provide a better result.  

Pasti Berhad values advertise and sell residential property on behalf of its customers. The company has been in business for only a short time and is preparing a cash budget for the first four months of the year 2020. The expected sales of residential properties are as follows.

The average price of each property is RM180,000 and Pasti Berhad charges a fee of 3% of the value of each property sold. Pasti Berhad receives 1% in the month of sale and the remaining 2% in the month after sale. The company has ten employees who are paid monthly. The average salary per employee is RM36,000 per year. If more than 20 properties are sold each month, each employee will be paid in that month a bonus of RM1,500 for each additional property sold.

Variable expenses are incurred at the rate of 50% of the value of each property sold and these expenses are paid in the month of sale. Fixed overheads of RM44,300 per month are paid in the month in which they arise. Pasti Berhad pays interest every three months on a loan of RM200,000 at a rate of 6% per year. The last interest payment in each year is paid in December.

Outstanding tax liability of RM95,800 is due to be paid in April. In the same month, Pasti Berhad intends to dispose of surplus vehicles, with a net book value of RM15,000, for RM20,000. The cash balance at the start of January 2020 is expected to be a deficit of RM40,000.

Required:
a) Prepare a monthly cash budget for the period from January to April. Your budget must clearly indicate each item of income and expenditure, and the opening and closing monthly cash balances.
b) Discuss the factors to be considered by Pasti Berhad in planning ways to invest any cash surplus forecast by its cash budgets.
c) Discuss the TWO (2) advantages and TWO (2) disadvantages to Pasti Berhad of using overdraft finance to fund any cash shortages forecast by its cash budgets.

Interviewing is part of a process for internal auditing and successful interviews are a
result of a certain procedure. Discuss this procedure.

Please relate this to internal auditing and not the normal interview process. The mark allocation is 14

Describe one of the most recent disease outbreaks, and the role of epidemiologists (descriptive and/or analytical) in addressing it. What questions would you ask an epidemiologist, if you had the chance to interview one?

Describe one of the most recent disease outbreaks, and the role of epidemiologists (descriptive and/or analytical) in addressing it. What questions would you ask an epidemiologist, if you had the chance to interview one?