Kingbird Hardware takes pride as the “shop around the corner” that can compete with the big-box home improvement stores by providing good service from knowledgeable sales associates (many of whom are retired local handymen). Kingbird has developed the following two revenue arrangements to enhance its relationships with customers and increase its bottom line.

1. Kingbird sells a specialty portable winch that is popular with many of the local customers for use at their lake homes (putting docks in and out, launching boats, etc.). The Kingbird winch is a standard manufacture winch that Kingbird modifies so the winch can be used for a variety of tasks. Kingbird sold 60 of these winches during 2017 at a total price of $19,200, with a warranty guarantee that the product was free of any defects. The cost of winches sold is $17,200. The assurance warranties extend for a 3-year period with an estimated cost of $1,800. In addition, Kingbird sold extended warranties related to 20 Kingbird winches for 2 years beyond the 3-year period for $430 each.

2. To bolster its already strong customer base, Kingbird implemented a customer loyalty program that rewards a customer with 1 loyalty point for every $10 of purchases on a select group of Kingbird products. Each point is redeemable for a $1 discount on any purchases of Kingbird merchandise in the following 2 years. During 2017, customers purchased select group products for $91,000 (all products are sold to provide a 45% gross profit) and earned 9,100 points redeemable for future purchases. The standalone selling price of the purchased products is $91,000. Based on prior experience with incentives programs like this, Kingbird expects 8,500 points to be redeemed related to these sales (Kingbird appropriately uses this experience to estimate the value of future consideration related to bonus points).

Prepare the journal entries for Kingbird related to the sales of Kingbird winches with warranties.

(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. Do not round intermediate calculations. Round final answers to 0 decimal places.)

Account Titles and Explanation

Debit Credit

(To record sales)

(To record cost of goods sold)

Prepare the journal entries for the bonus point sales for Kingbird in 2017.

(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. Do not round intermediate calculations. Round final answers to 0 decimal places.)

Account Titles and Explanation Debit Credit

(To record sales)

(To record cost of goods sold)

How much additional sales revenue is recognized by Kingbird in 2018, assuming 3,900 bonus points are redeemed? (Do not round intermediate calculations. Round final answers to 0 decimal places.)

Additional Sales Revenue $

What are the adjusting entries for the following?

These are the orginial events that took place, and their journal entries

There are no opening balances

1)

A company sells soccer goals to customers over the Internet. History shows that 2% of the company’s goals will need repair under the warranty program. For the year, the company has sold 4,100 goals and 48 have been repaired. If the estimated cost to repair a goal is $140, what would be the Warranty Liability at the end of the year?

2)

On January 23, a company purchases inventory for $100. On February 12, the inventory is sold for $150 on account. Which of the following is recorded on February 12?

3)

On January 23, a company purchases inventory for $100. On February 12, the inventory is sold for $150 on account. Which of the following is recorded on February 12?

Question 3

A union can influence the demand for labor by:

requiring union fees.

raising union fees.

effective advertising that convinces customers to buy the "union label."

all of these.

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Question 4

The supply curve that monopsonists face is different from the supply curves that firms in competitive labor markets face because with a monopsony,

d and e.

the supply curve of labor is relatively flat.

offering a wage lower than the market wage means having no workers.

the employer faces the market supply curve.

the firm does not take the wage as given.

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Question 8

Marginal revenue product of labor measures the extra revenue generated to the firm from the employment of an additional worker.

True

False

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Question 11

Suppose there are 100 identical firms producing package delivery services. One of the firms finds that when it has to pay a wage rate of $7, it hires 20 delivery people. The firm charges an average price of $10 to deliver a package. From this information, we know that the package delivery industry is hiring a total of:

100 workers.

200 workers.

700 workers.

2,000 workers.

10,000 workers.

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Raphael Ltd. is a small engineering business that has annual credit sales revenue of $2.4 million. In recent years, the business has experienced credit control problems. The average collection period for sales has risen to 50 days even though the stated policy of the business is for payment to be made within 30 days. In addition, 1.5% of sales are written off as bad debts each year. The accounts receivable are currently financed through a bank overdraft, which has an interest rate of 12% a year.

The business has recently communicated with a factor that is prepared to make an advance to the business equivalent to 80% of receivables, based on the assumption that customers will, in future, adhere to a 30-day payment period. The interest rate for the advance will be 11% a year. The factor will take over the credit control procedures of the business and this will result in a saving to the business of $18,000 a year; however, the factor will charge 2% of sales revenue for this service. The use of the factoring service is expected to eliminate the bad debts incurred by the business.

Required:

Calculate the net cost of the factor agreement to the business and state whether the business should take advantage of the opportunity to factor its accounts receivables.

Masters Ltd has just realised that it has a problem with sales data as its sales order system records sales to customers that subsequently fail a credit check. a) What decisions made during the revenue cycle would be affected by this data problem? How can the problem be corrected? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ b) How would this data problem affect the performance of the revenue cycle? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ Question 3 continued next page Practice Questions Accounting Systems and Information Assurance - ACCT20072 Page 5 of 7 Question 3 continued Griffith Ltd has just realised that it has a timeliness problem with its general ledger data. It updates daily transactional data from subsidiary systems to the general ledger weekly; however, general ledger reports are available on an unrestricted basis. The CFO recently realised that some users do not know that they need to wait until after the Sunday night update to run their month-end reports. c) What decisions made during the general ledger and financial reporting cycle would potentially be affected by this data problem? ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ d) How would this data problem affect the reported results of the organisation?

A government researcher is analyzing the relationship between retail sales (in $ millions) and the gross national product (GNP in $ billions). He also wonders whether there are significant differences in retail sales related to the quarters of the year. He collects 10 years of quarterly data. A portion is shown in the accompanying table. Retail sales (in millions) GNP (in billions) d1 d2 d3 2000 1 696048 9740.5 1 0 0 2 753211 9983.5 0 1 0 3 746875 10048.0 0 0 1 4 792622 10184.9 0 0 0 2001 1 704757 10206.2 1 0 0 2 779011 10350.9 0 1 0 3 756128 10332.2 0 0 1 4 827829 10463.1 0 0 0 2002 1 717302 10549.7 1 0 0 2 790486 10634.7 0 1 0 3 792657 10749.1 0 0 1 4 833877 10832.2 0 0 0 2003 1 741233 10940.2 1 0 0 2 819940 11073.6 0 1 0 3 831222 11321.2 0 0 1 4 875437 11508.3 0 0 0 2004 1 795916 11707.8 1 0 0 2 871970 11864.2 0 1 0 3 873695 12047.3 0 0 1 4 938213 12216.6 0 0 0 2005 1 836952 12486.3 1 0 0 2 932713 12613.0 0 1 0 3 940880 12848.7 0 0 1 4 987085 12994.1 0 0 0 2006 1 897180 13264.0 1 0 0 2 987406 13423.3 0 1 0 3 978211 13514.8 0 0 1 4 1018775 13683.2 0 0 0 2007 1 923997 13859.8 1 0 0 2 1016136 14087.6 0 1 0 3 1002312 14302.9 0 0 1 4 1062803 14489.9 0 0 0 2008 1 953358 14520.7 1 0 0 2 1032919 14647.3 0 1 0 3 1006551 14689.2 0 0 1 4 966329 14317.2 0 0 0 2009 1 839625 14172.2 1 0 0 2 919646 14164.2 0 1 0 3 926265 14281.9 0 0 1 4 985649 14442.8 0 0 0

a. Estimate y = β0 + β1x + β2d1 + β3d2 + β4d3 where y is retail sales, x is GNP, d1 is a dummy variable that equals 1 if quarter 1 and 0 otherwise, d2 is a dummy variable that equals 1 if quarter 2 and 0 otherwise, and d3 is a dummy variable that equals 1 if quarter 3 and 0 otherwise. Here the reference category is quarter 4. (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)

d-1. Reformulate the model to determine, at the 5% significance level, if sales differ between quarter 2 and quarter 3. Your model must account for all quarters. Use quarter 3 as the reference category. (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)

What is a law? What is a theory? What is a hypothesis? What are the differences between these three? ​

Do you agree or disagree with the selected aspects for an organization? Explain

The three key aspects that a company must consider when developing a successful loyalty and reward program complete satisfaction of the customer needs, give the customer ultimate pleasure in buying the services or products with their loyalty program; in addition, if the consumer spends more genuinely they get more back on their loyalty or reward program, which they will want to focus on the same loyalty program that offers them savings. Customers frown upon any changes to their loyalty program that is not totally benefiting the consumer. “Loyalty program managers are frequently asked to find ways to tighten down budgets within their programs; it is also the case that senior executives do not always have data demonstrating the importance of their program as it contributes to return on investment or ROI. Consequently, programs are often cut or changed in ways that may negatively influence consumers”. Many customers just love their reward program with their vendors; furthermore, it makes the customer spend more with the vendor as well. For instance, I truly love Steven Madden shoes, they have a rewards program that is amazingly great; moreover, you get points for just signing up for the rewards program. All companies are gearing for customers to have a death do us apart relationship with their services or products based on their loyalty program.

     When developing any time of advertising strategy to lure consumers to buy their product or services; consequently, you will have a deal with cost or decrease in the value of the company in order to maintain the loyalty or reward program. For example, “Restaurant chain Chart House program, the Aloha Club, offered free around the world trips to any member who ate in all 65 Chart House restaurants. Unfortunately, the company underestimated the zeal of its 300,000 members. Forty-one members qualified, costing the company a considerable sum of money” (Winer, 2016 pg. 429). Many consumers think they are getting great deals; in addition, at low cost too. Customers and the companies tend to try to get over each other in this marketing structure. “Reward programs are incentives designed to create loyalty among customers with the idea that they can provide the best rewards to the “best” customers. Loyal customers are, by definition, less price-sensitive customers. However, managers frequently question the value of their reward programs and wonder what, if any, incrementality is gained from offering rewards for customer patronage. Consequently, managers are frequently challenged to think of ways to manage their loyalty programs that reward high patronage without creating “deal” seeking customers and without further discounting price”. Consumers only want the deals; consequently, the company wants the long-term shopper, without a return of investments

Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The following information relates to its budgeted operations for the current year.

The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more profitable given that the installations of window coverings are less complex for residential customers. In addition, the residential client base resides in close proximity to the company office, so travel costs are not as expensive on a per client visit for residential customers. As a result, she has decided to take a closer look at the overhead costs assigned to the two product lines to determine whether a more accurate product costing model can be developed. Here are the three activity cost pools and related information she developed:

1. Compute the activity-based overhead rates for each of the three cost pools

2. Determine the overhead cost assigned to each product line.

3. Compute the operating income for each product line, using the activity based overhead rates.