Power Train, Ltd.
We have smashing systems for reporting, tracking, and controlling costs on design projects. Our planning of projects is better than any I have seen at other companies. Our scheduling seemed to serve us well when we were small and we had only a few projects. Now that we have many more projects and schedule using multiproject software, there are too many occasions when the right people are not assigned to the projects deemed important to our success. This situation is costing us big money, headaches, and stress!
Claude Jones, VP, Design and Operations
Page 293
HISTORY
Power Train, Ltd. (PT), was founded in 1970 by Daniel Gage, a skilled mechanical engineer and machinist. Prior to founding PT he worked for three years as design engineer for a company that designed and built transmissions for military tanks and trucks. It was a natural transition for Dan to start a company designing and building power trains for farm tractor companies. Today, Dan is no longer active in the management of PT but is still revered as its founder. He and his family still own 25 percent of the company, which went public in 1998. PT has been growing at a 6 percent clip for the last five years but expects industry growth to level off as supply exceeds demand.
Today, PT continues its proud tradition of designing and building the best-quality power trains for manufacturers of farm tractors and equipment. The company employs 178 design engineers and has about 1,800 production and support staff. Contract design projects for tractor manufacturers represent a major portion of PT’s revenue. At any given time, about 45 to 60 design projects are going on concurrently. A small portion of their design work is for military vehicles. PT only accepts military contracts that involve very advanced, new technology and are cost plus.
A new phenomenon has attracted management of PT to look into a larger market. Last year a large Swedish truck manufacturer approached PT to consider designing power trains for its trucks. As the industry consolidates, the opportunities for PT should increase because these large firms are moving to more outsourcing to cut infrastructure costs and stay very flexible. Only last week a PT design engineer spoke to a German truck manufacturing manager at a conference. The German manager was already exploring outsourcing of drive trains to Porsche and was very pleased to be reminded of PT’s expertise in the area. A meeting is set up for next month.
CLAUDE JONES
Claude Jones joined PT in 1999 as a new MBA from the University of Edinburgh. He worked as a mechanical engineer for U.K. Hydraulics for five years prior to returning to school for the MBA. “I just wanted to be part of the management team and where the action is.” Jones moved quickly through the ranks. Today he is the vice president of design and operations. Sitting at his desk, Jones is pondering the conflicts and confusion that seem to be increasing in scheduling people to projects. He gets a real rush at the thought of designing power trains for large trucks; however, given their current project scheduling problems, a large increase in business would only compound their problems. Somehow these conflicts in scheduling have to be resolved before any serious thought can be given to expanding into design of power transmissions for truck manufacturers.
Jones is thinking of the problems PT had in the last year. The MF project is the first to come to mind. The project was not terribly complex and did not require their best design engineers. Unfortunately, the scheduling software assigned one of the most creative and expensive engineers to the MF project. A similar situation, but reversed, happened on the Deer project. This project involved a big customer and new hydrostatic technology for small tractors. In this project the scheduling software assigned engineers who were not familiar with small tractor transmissions. Somehow, thinks Jones, the right people need to be scheduled to the right projects. Upon reflection, this problem with scheduling has been increasing since PT went to multiproject scheduling. Maybe a project office is needed to keep on top of these problems.
A meeting with the information technology team and software vendors was positive but not very helpful because these people are not really into detailed scheduling problems. The vendors provided all sorts of evidence suggesting the heuristics used—least Page 294slack, shortest duration, and identification number—are absolutely efficient in scheduling people and minimizing project delays. One project software vendor, Lauren, kept saying their software would allow PT to customize the scheduling of projects and people to almost any variation selected. Lauren repeated over and over, “If the standard heuristics do not meet your requirements, create your own heuristics that do.” Lauren even volunteered to assist in setting up the system. But she is not willing to spend time on the problem until PT can describe to her exactly what criteria will be used (and their sequence) to select and schedule people to projects.
QUESTION: After reading the case, analyze the scheduling problem that is happening at Power Train and develop a set of descriptive rules and/or processes that Power Train can adopt so that it is well positioned to handle its expansion into the truck power train business.*********
In: Operations Management
It is estimated that 30% of university students are taking five
or more classes this semester (let us call them full-load
students). Among the full-load students, 20% are working part-time.
On the other hand, among the non-full-load students, 60% are
working part-time.
a) When a university student is randomly selected, what is the probability that one is a full-load student and working part-time? [2]
Define event A as: university students taking five or more classes (or being full-load students).
Define event B as: university students working
part-time.
b) When a university student is randomly selected, what is the probability that one is working part-time but not taking full-load? [2]
In: Statistics and Probability
John files a return as a single taxpayer. In 2019, he had the following items: ∙ Salary of $30,000. ∙ Loss of $65,000 on the sale of Section 1244 stock acquired two years ago. ∙ Interest income of $6,000. In 2020, John again files a return as a single taxpayer and had the following items: Salary of $114,000 Loss of $55,000 on the sale of Section 1244 stock acquired three years ago. Capital gain of $22,000 on the sale of publicly traded stock purchased one year ago. Determine John’s AGI for 2019 and 2020 (assume these are the only transactions, no other carryovers etc...)
In: Accounting
In: Finance
Matt and Meg Comer are married and file a joint tax return. They do not have any children. Matt works as a history professor at a local university and earns a salary of $68,200. Meg works part time at the same university. She earns $33,200 a year. The couple does not itemize deductions. Other than salary, the Comers’ only other source of income is from the disposition of various capital assets (mostly stocks).
a. What is the Comers’ tax liability for 2020 if they report the following capital gains and losses for the year?
| Short-term capital gains | $ | 9,200 | |
| Short-term capital losses | (2,200) | ||
| Long-term capital gains | 15,200 | ||
| Long-term capital losses | (6,200) | ||
B. What is the Comers’ tax liability for 2020 if they report the
following capital gains and losses for the year?
| Short-term capital gains | $ | 1,500 | |
| Short-term capital losses | 0 | ||
| Long-term capital gains | 13,200 | ||
| Long-term capital losses | (10,200) | ||
In: Accounting
Matt and Meg Comer are married and file a joint tax return. They do not have any children. Matt works as a history professor at a local university and earns a salary of $68,400. Meg works part time at the same university. She earns $33,400 a year. The couple does not itemize deductions. Other than salary, the Comers’ only other source of income is from the disposition of various capital assets (mostly stocks).
a. What is the Comers’ tax liability for 2020 if they report the following capital gains and losses for the year?
| Short-term capital gains | $ | 9,400 | |
| Short-term capital losses | (2,400 | ) | |
| Long-term capital gains | 15,400 | ||
| Long-term capital losses | (6,400 | ) | |
|
Total tax liability |
|||
b. What is the Comers’ tax liability for 2020 if they report the following capital gains and losses for the year?
| Short-term capital gains | $ | 1,500 | |
| Short-term capital losses | 0 | ||
| Long-term capital gains | 13,400 | ||
| Long-term capital losses | (10,400 | ) | |
|
Total tax liability |
|||
In: Accounting
Problem 21-12
Please explain how you come to the answers, I'm hoping to learn how to do them. Thank you!!
You have been assigned to examine the financial statements of Picard Corporation for the year ended December 31, 2020, as prepared following IFRS. Picard uses a periodic inventory system. You discover the following situations:
| 1. | The physical inventory count on December 31, 2019, improperly excluded merchandise costing $27,700 that had been temporarily stored in a public warehouse. | ||||||||||||||||
| 2. | The physical inventory count on December 31, 2020, improperly included merchandise with a cost of $16,000 that had been recorded as a sale on December 27, 2020, and was being held for the customer to pick up on January 4, 2021. | ||||||||||||||||
| 3. | A collection of $7,700 on account from a customer received on December 31, 2020, was not recorded in 2020. | ||||||||||||||||
| 4. | Depreciation of $5,250 for 2020 on delivery trucks was not recorded. | ||||||||||||||||
| 5. | In 2020, the company received $3,750 on a sale of fully depreciated equipment that originally cost $25,300. The company credited the proceeds from the sale to the Equipment account. | ||||||||||||||||
| 6. | During November 2020, a competitor company filed a patent infringement suit against Picard, claiming damages of $621,000. Picard’s legal counsel has indicated that an unfavourable verdict is probable and a reasonable estimate of the court’s award to the competitor is $460,000. Picard has not reflected or disclosed this situation in the financial statements. | ||||||||||||||||
| 7. | A large piece of equipment was purchased on January 3, 2020, for $43,160 and was charged in error to Repairs and Maintenance Expense. The equipment is estimated to have a service life of eight years and no residual value. Picard normally uses the straight-line depreciation method for this type of equipment. | ||||||||||||||||
| 8. | Picard has a portfolio of temporary trading investments reported at fair value. No adjusting entry has been made yet in 2020. Information on carrying amount and fair value is as follows: | ||||||||||||||||
|
|||||||||||||||||
| 9. | At December 31, 2020, an analysis of payroll information showed accrued salaries of $11,600. The Salaries and Wages Payable account had a balance of $17,300 at December 31, 2020, which was unchanged from its balance at December 31, 2019. | ||||||||||||||||
| 10. | An $21,000 insurance premium paid on July 1, 2019, for a policy that expires on June 30, 2022 was charged to insurance expense. | ||||||||||||||||
| 11. | A trademark was acquired at the beginning of 2019 for $37,560. Through an oversight, no amortization has been recorded since its acquisition. Picard expected the trademark to benefit the company for a total of approximately 12 years with no residual value. |
Assume that the trial balance has been prepared, the ending
inventory has not yet been recorded, and the books have not been
closed for 2020. Assuming also that all amounts are material,
prepare journal entries showing the adjustments that are required.
Ignore income tax considerations. (Credit account
titles are automatically indented when the amount is entered. Do
not indent manually. If no entry is required, select "No Entry" for
the account titles and enter 0 for the amounts.)
In: Accounting
1a. Can COVID-19 induced fall in oil prices act to break the global carbon lock-in?
b. Oil prices have become 'evermore' volatile. Ranging from as high as US$160/barrel, oil prices went low and with the impact of COVID-19, WTI crude sold for below US$0/barrel on 20th April 2020. Based on the case of one oil producing country in Africa and one from any other region, discuss the differentiated impacts of oil price volatilities on economies.
In: Accounting
The company provides some details for the period 2020 for preparing necessary budgets:
(a) Sales Details
The Company estimates that it can get maximum profits if it charges $ 200 (selling price) for one of its products. The marketing manager of the company had indicated that at $ 200 selling price, the company would be able to sell 1,000 units in the first quarter of 2020. The company also expects that sales would go up by 100 units over previous quarter sales (like 1000, 1100 and so on….) Selling price is expected to be same throughout the year.
(b) Inventory details
Alwyn Industries maintains at the end of each quarter an inventory of 10% of the next quarter’s sales. This allows the company to better meet its customers’ needs in case the customers experience a sudden surge in demand. The opening inventory for first quarter 2020 has been estimated to be 200 units
(c) Divisional Performance
Alwyn Industries has to divisions (A & B) working within the company. The CEO of the company is wondering whether divisional performance evaluation will be fruitful for them since the company has two divisions operating with certain targets. The head of those divisions report the following results for the quarter ending 2019, which is given below:
|
Particulars |
Division A |
Division B |
|
Operating Income |
900,000 |
1,951,600 |
|
Average Total Assets |
2,500,000 |
6,500,000 |
|
Net Sales |
7,500,000 |
5,243,600 |
Question : Evaluate the divisional performance (A & B) using ROI for the quarter ending 2019 stating which product is better and why
In: Accounting
Parsons Company acquired 90% of the outstanding common stock of Shea Company on June 30, 2019, for $426,000. On that date, Shea Company had retained earnings in the amount of $60,000, and the fair value of its recorded assets and liabilities was equal to their book value. The excess of implied over the fair value of the recorded net assets was attributed to an unrecorded manufacturing formula held by Shea Company, which had an expected remaining useful life of five years from June 30, 2019.
Financial data for 2021 are presented here:
|
Parsons Company |
Shea Company |
|
|
Sales |
$2,555,500 |
$1,120,000 |
|
Dividend Income |
54,000 |
|
|
Total Revenue |
2,609,500 |
1,120,000 |
|
Cost of Goods Sold |
1,730,000 |
690,500 |
|
Expenses |
654,500 |
251,000 |
|
Total Cost and Expense |
2,384,500 |
941,500 |
|
Net Income |
$ 225,000 |
$ 178,500 |
|
1/1 Retained Earnings |
$ 595,000 |
$ 139,500 |
|
Net Income |
225,000 |
178,500 |
|
Dividends Declared |
(100,000) |
(60,000) |
|
12/31 Retained Earnings |
$ 720,000 |
$ 258,000 |
|
Cash |
$ 119,500 |
$ 132,500 |
|
Accounts Receivable |
342,000 |
125,000 |
|
Inventory |
362,000 |
201,000 |
|
Other Current Assets |
40,500 |
13,000 |
|
Land |
150,000 |
|
|
Investment in Shea Company |
426,000 |
|
|
Property and Equipment |
825,000 |
241,000 |
|
Accumulated Depreciation |
(207,000) |
(53,500) |
|
Total Assets |
$2,058,000 |
$ 659,000 |
|
Accounts Payable |
$ 295,000 |
$32,000 |
|
Other Liabilities |
43,000 |
19,000 |
|
Capital Stock |
1,000,000 |
300,000 |
|
Additional Paid‐in Capital |
50,000 |
|
|
Retained Earnings |
720,000 |
258,000 |
|
Total Liabilities and Equity |
$2,058,000 |
$ 659,000 |
On December 31, 2019, Parsons Company sold equipment (with an original cost of $100,000 and accumulated depreciation of $50,000) to Shea Company for $97,500. This equipment has since been depreciated at an annual rate of 20% of the purchase price. During 2020 Shea Company sold land to Parsons Company at a profit of $15,000.
The inventory of Parsons Company on December 31, 2020, included goods purchased from Shea Company on which Shea Company recognized a profit of $7,500. During 2021, Shea Company sold goods to Parsons Company for $375,000, of which $60,000 was unpaid on December 31, 2021. The December 31, 2021, inventory of Parsons Company included goods acquired from Shea Company on which Shea Company recognized a profit of $10,500.
Required:
In: Accounting