Quality Assurance in Foundry

Quality Foundry was established in the mid 2000’s in a 300 square metre building with 10 people as a small family business to produce castings. In the 2000s as business grew, the company expanded its facilities and its capability to develop its own tooling patterns and eventually moved into a 4000 square metre building. Over this time period from 2000s to 2010s, the foundry industry
declined from more than 1200 companies to about 400.

With such a shrinking market, Quality Foundry began to listen more to its customers. They discovered that customers were not happy with the quality of the products supplied by them. In 2000, Quality Foundry made a commitment to quality by hiring a quality assurance manager Mr.Jim. Mr. Jim felt that the top management was committed to quality and saw an opportunity to change the company's culture. He also firmly believed in Deming's philosophy. The
first thing he did was to work with top management to develop a mission statement which reads as below: Our mission at Quality Foundry is to improve the return on investment. We can achieve this by changing attitudes and incorporating a quality team environment. This will improve the quality of our products, enhance our productivity and elevate our service and response level to our customers.

As we are in a low-growth, mature market arid the standards for competitive levels of quality and service are becoming more demanding, we must develop a strategy to improve quality and responsiveness in all areas of the company in order to improve our return on investment. We need to have all employees recognize the importance of product quality and service and move toward
more favorable pricing. We need to change thinking throughout the organization to get employees involved, to encourage team work, to develop a more flexible workforce and adaptable organization. We need to instill pride in the work place and the product.

Under Mr.Jim's direction, Quality Foundry made some substantial improvements in the quality of castings, particularly reducing scrap and reject rates. Mr.Jim worked closely with the factory workers directly responsible for the products, asking them what they needed to get the job done and ensuring management commitment to provide the necessary resources. Quality Foundry
invested in new control equipments for furnaces to control temperatures with digital read out. This helped the workers to adjust the process as needed. The success of this project led the company to empower employees to control many other aspects of the system.

Five years later, the chief executive officer (CEO) of Quality Foundry retired and the General Manager of a manufacturing company was appointed as the new CEO. The new CEO felt that the mission statement did not provide a clear direction. Consequently, he set up a new task for senior management (including Mr. Jim) to develop a new strategic vision.

Answer the following Questions with 150-200 words each.
1. Comment on the current mission statement of the company. Does it provide a strategic direction necessary for success for Quality Foundry?   

2. If you are Quality Assurance Manager, How can the mission statement be improved? Suggest a better statement of mission and vision.

1.) Doggo Co. Declares a $50,000 cash dividend to its common shareholders on January 2nd. The date of record is January 18th and the date of payment is January 31st. Make all necessary journal entries for this:

2.) Puppy Inc. declares $80,000 in dividends on July 5th 2020. The date of record will be July 18th, and the payment date will be July 20th. The company has 2,000 shares of 10%, $40 par cumulative preferred stock issued and outstanding. The company also has 20,000 shares of $2 par common stock. The company paid no dividends in 2019 Journalize all necessary entries for this.

InventBear Inc. is planning to establish a subsidiary in Australia to produce and sell gaming products locally. The project will end in three years and the subsidiary will be sold to an Australian firm for A$5 million at the end of the project. The salvage value is net of tax and will not be subject to withholding tax. InventBear estimates that, after paying for the income tax, the Australian subsidiary can remit A$5,450,000 to the parent every year for the next three years, starting at the end of the first year. The Australian subsidiary will require an initial investment of 7 million U.S. dollars (US$). The Australian government will impose a 25% withholding tax on the remitted funds. The subsidiary will remit all net cash flows to its parent at the end of each year. The company forecasts the exchange rate for the next three years using the current spot rate at US$0.91/A$. The parent’s required rate of return for the Australian subsidiary is 16%. If the U.S. government does not tax the A$ income, how much U.S. dollars will InventBear Inc. receive from the Australian subsidiary at the end of the third year?

a. US$4,268,859

b. US$3,719,625

c. US$8,269,625

d. US$8,715,980

Summary:

       The country focus explains that ‘offshoring’ has become a trend for white collar job positions. The expectancy of globalization has become a problem because the loss of jobs on our home country. The idea of labor positions or better referred as ‘blue-collar’ positions where more popular and helped free trade because it helped countries with low-wages. The more high-skilled and wage worthy ‘white-collar’ where traditionally performed in the U.S but due to the slow economy these had to be transferred to countries such as India, and the Philippines. The company’s spokespersons explain that the cost of performance is cheaper and allows for profit to be generated for the company. The IT specialists and drafting positions have been replaced in these developing countries because they are paid twenty-dollar an hour while at our country it would cost a hundred (Hill, 2011). The companies that have taken the steps to this transition are Bank of America, Fluor, and Procter and Gamble proving that offshoring helps increase profit but also increases unemployment rates in the U.S.

Reread the Country Focus “Moving U.S. White-Collar Jobs Offshore.”

b)Will developed nations like the United States suffer from the loss of high-skilled and high-paying jobs?

Crain Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment for U.S. consumers. The manufacturing subsidiary has total manufacturing costs of $1,600,000, plus general and administrative expenses of $360,000. The manufacturing unit sells the equipment for $2,600,000 to the U.S. marketing subsidiary, which sells it to the final consumer for an aggregate of $3,600,000. The sales subsidiary has total marketing, general, and administrative costs of $210,000. Assume that Singapore has a corporate tax rate of 33% and that the U.S. tax rate is 46%. Assume that no tax treaties or other special tax treatments apply.

Required: What is the effect on Crain Company’s total corporate-level taxes if the manufacturing subsidiary raises its price to the sales subsidiary by 20%? (Do not round intermediate calculations. Input all amounts as positive values.)

J/E's Total from subsidiaries

income prior to increase in transfer price

revenues

direct cost

other cost

profit cost

profit before tax

tax

profit after tax

income after increase in transfer price

revenue

direct coast

other cost

profit before tax

Xi ~ Uniform [USD 0, USD 40,000] Population is equally distributed between robust (good health people) and frail people (low health people). Robust population do not demand this insurance contract as they expect to have their health care costs lower than the premium amount P= USD 20,000. On the other hand, Frail population decide to purchase this insurance deal as they expect their health care costs greater than the premium amount P= USD 20,000.

• Please define and explain the market situation that insurance company ABC is exposed to in 2019. Please draw a figure with a uniform distribution and clearly show the regions defining market demand for insurance. Summarize insurance company ABC’s financial statement and find expected profit or loss per customer on average. [Hint: Find receivables from customers and payables to customers for health care].

• You are a consultant and you suggest insurance company ABC to raise its insurance premiums to P= USD 30,000 for 2020. Does this new premium save the insurance company’s cash flow when each custumer’s health care costs is USD 30,000 to an insurance company? Please draw a figure with a uniform distribution and clearly show the regions defining market demand for insurance with the new premium. Summarize insurance company ABC’s financial statement and find expected profit or loss per customer on average. [Hint: Find receivables from customers and payables to customers for health care]. Please define and explain the market situation that insurance company ABC is exposed to in 2020 with the new premium.

For the year ended Dec 31, 2021, Arndt Inc. reported pretax accounting income of $700 million. Select information is listed below: 1) The company begins selling one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 were $530 million. Subscriptions included in 2021 for financial reporting revenues were $470 million. 2) In 2020, the company purchased a piece of equipment with a cost of $500 million. For financial reporting purposes, the company used the straight-line method over a 5-year service life with no residual value expected. For tax purposes, the equipment was scheduled to be depreciated by $180 million, $150 million, $100 million, $50 million and $20 million in years 2020 through 2024, respectively. 3) During 2021, the company prepaid an insurance for year 2022 in the amount of $60 million. The insurance payment is tax deductible in 2021. 4) In 2021, the company paid $100 million fines to settle trading misconduct allegations brought by the US government. The fines are non tax deductible. Arndt Inc.’s income tax rate is 30%. At January 1, 2021, the company had a deferred tax liability of $24 million and no deferred tax asset.

Required: a) What is taxable income for 2021?

b) What is the ending balance of DTL on 12/31/2021?

c) What is the ending balance of DTA on 12/31/2021?

d) Prepare journal entries to record income taxes in 2021.

e) What are current income tax expense and total income tax expense for year 2021?

On January 1, 2020, Oriole Company makes the two following acquisitions.

The company has to pay 11% interest for funds from its bank.

(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

PLEASE PROVIDE STEPS WITH EXPLANATION AND ANSWERS. THANK YOU!

On January 1, 2020, M Company makes the two following acquisitions.

The company has to pay 10% interest for funds from its bank.

(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)