Complete the following problems: 1. For this problem, use the following randomly generated list of accounts, placing them in appropriate order to prepare an income statement. Accounts ($000,000) Depreciation 25 General and administrative expenses 22 Sales 345 Sales expenses 18 Cost of goods sold 255 Lease expense 4 Interest expense 3 The following randomly constructed table requires that as part of your Critical Thinking Assignment you arrange the accounts into a well-labeled income statement. Make sure you label and solve for gross profit, operating profit, and net profit before taxes. Using a 35% tax rate, calculate taxes paid and net profit after taxes. Assuming a dividend of $1.10 per share with 4.25 million shares outstanding, calculate EPS and additions to retained earnings. 2. Explain why the income statement can also be called a “profit-and-loss statement.” What exactly does the word balance mean in the title of the balance sheet? Why do we balance the two halves? 3. CS Industries, Inc. began 2016 with retained earnings of $25.32 million. During the year, it paid four quarterly dividends of $0.35 per share to 2.75 million common stockholders. Preferred stockholders, holding 500,000 shares, were paid two semiannual dividends of $0.75 per share. The firm had a net profit after taxes of $5.15 million. Prepare the statement of retained earnings for the year ended December 31, 2016. 4. Sky Metals, Inc. is a metal fabrication firm that manufactures prefabricated metal parts for customers in a variety of industries. The firm’s motto is “If you need it, we can make it.” The CEO of Sky Metals recently held a board meeting during which he extolled the virtues of the corporation. The company, he stated confidently, had the capability to build any product and could do so using a lean manufacturing model. The firm would soon be profitable, claimed the CEO, because the company used state-of-the-art technology to build a variety of products while keeping inventory levels low. As a business press reporter, you have calculated some ratios to analyze the financial health of the firm. Sky Metals' current ratios and quick ratios for the past 6 years are shown in the following table: 2010 2011 2012 2013 2014 2015 2015 Current ratio 1.2 1.4 1.3 1.6 1.8 2.2 2.2 Quick ratio 1.1 1.3 1.2 0.8 0.6 0.4 0.4 What do you think of the CEO’s claim that the firm is lean and soon to be profitable? 5. If we know that a firm has a net profit margin of 4.5%, total asset turnover of 0.72, and a financial leverage multiplier of 1.43, what is its ROE? What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity?

After reading the texts and mini-lectures in this module write a paper that completes the tasks below.

Read the following excerpts as if these characters were clients that you work with.

Write an example of the skills as if you were therapist/counselor. You may copy the excerpts and format (below) and paste into your own Word document to complete and submit.

EXCERPT 1

I have no place to turn. I am always alone ..I mean I have a lot of friends but I’m not sure they are real friends. We get together every weekend but sometimes when they don’t call I get all paranoid and feel like.... I don’t know. I just wish that sometimes I could be a fly on the wall, but I can’t so it makes me.... uh um.... uncomfortable. I guess.

Provide responses to this excerpt that demonstrates the following active listening skills:

Encouraging:

Restating:

Clarifying:

Reflecting Consumer’s Feelings:

Validating:

Summarizing:

EXCERPT 2

I have this problem. My family is crazy. My parents are like two big kids. I feel like I always have to tell them what the right thing to do is..... and then they get mad at me. I know I can’t take care of them but it's like they mess around and are irresponsible and then they want to complain to me about how everyone else is messed up. I feel like when I call them there is always some issue they are not telling me about. Is it me? Am I the one who’s crazy here?

Provide responses to this excerpt that demonstrates the following active listening skills:

Encouraging:

Restating:

Clarifying:

Reflecting Consumer’s Feelings:

Validating:

Summarizing:

EXCERPT 3

We have been married for just under a year. It is a second marriage for both of us. I have no children and she does and they are grown. Since I have been married I feel like I have to cater to her children. I can respect that I realize she’s their mother but come on already. I don’t want her to fight with her kids but I just can see how they take advantage of her. Then I get dragged into it. It upsets me to watch her give so much and get very little in return.

Provide responses to this excerpt that demonstrates the following active listening skills:

Encouraging:

Restating:

Clarifying:

Reflecting Consumer’s Feelings:

Validating:

Summarizing:

EXCERPT 4

(From a child) I don’t want to go on the bus anymore. How come my parents can’t drive me? I don’t like school. I just want to stay home.

Provide responses to this excerpt that demonstrates the following active listening skills:

Encouraging:

Restating:

Clarifying:

Reflecting Consumer’s Feelings:

Validating:

Summarizing:

1. For this problem, use the following randomly generated list of accounts, placing them in appropriate order to prepare an income statement.

1. The following randomly constructed table requires that as part of your Critical Thinking Assignment you arrange the accounts into a well-labeled income statement. Make sure you label and solve for gross profit, operating profit, and net profit before taxes.
2. Using a 35% tax rate, calculate taxes paid and net profit after taxes.
3. Assuming a dividend of $1.10 per share with 4.25 million shares outstanding, calculate EPS and additions to retained earnings.

2. Explain why the income statement can also be called a “profit-and-loss statement.” What exactly does the word balance mean in the title of the balance sheet? Why do we balance the two halves?

3. CS Industries, Inc. began 2016 with retained earnings of $25.32 million. During the year, it paid four quarterly dividends of $0.35 per share to 2.75 million common stockholders. Preferred stockholders, holding 500,000 shares, were paid two semiannual dividends of $0.75 per share. The firm had a net profit after taxes of $5.15 million. Prepare the statement of retained earnings for the year ended December 31, 2016.

4. Sky Metals, Inc. is a metal fabrication firm that manufactures prefabricated metal parts for customers in a variety of industries. The firm’s motto is “If you need it, we can make it.” The CEO of Sky Metals recently held a board meeting during which he extolled the virtues of the corporation. The company, he stated confidently, had the capability to build any product and could do so using a lean manufacturing model. The firm would soon be profitable, claimed the CEO, because the company used state-of-the-art technology to build a variety of products while keeping inventory levels low. As a business press reporter, you have calculated some ratios to analyze the financial health of the firm. Sky Metals' current ratios and quick ratios for the past 6 years are shown in the following table:

What do you think of the CEO’s claim that the firm is lean and soon to be profitable?

5. If we know that a firm has a net profit margin of 4.5%, total asset turnover of 0.72, and a financial leverage multiplier of 1.43, what is its ROE? What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity?

4. Given a linear programming optimization problem, with the choice of two products, we know in advance that a possible answer is to make only one product.

5. Cost minimization problems typically involve constraints which have the phrase “at least”.  

Please explain each answer in your own words

1. Please show what slack resources are graphically. You can draw a picture and scan it or take a picture and add it to the document.

2. Please given an example of a constraint for a cost minimization problem.

3. Give an example of an objective function not listed in the book.

4. Why is it important to have non-negative answers to linear programming problems?

5. What is meant by divisibility in linear programming? Explain in your own words and include an example.  

Note: You can use Excel and just paste the images of the output on to the Word document.

1. You are a hipster who has a workshop, which makes artisan cabinets out of Bocote wood. Specifically, you make chifforobes and pie safes. Each chifforobe you make earns $200 profit and each pie safe earns $150. Each chifforobes requires 150 board feet of bocote wood and 10 hours of labor. Each pie safe requires 100 board-feet of bocote wood and 15 hours of labor. Each month you have 3000 board-feet of bocote wood and 300 hours of labor.

a. How many chifforobes and pie safes should you make each month if you want to maximize your profits?

b. What if one month you run short on bocote wood and only have 1500 board-feet, how many chifforobes and pie safes should you make to maximize profits?

2. You have now tired of making artisan cabinets. You decide to use all the profits you made making cabinets to buy a farm and grow dragon carrots. Your dragon carrot farm requires an organic fertilizer mix that has at least 900 decigrams of nitrogen, 480 decigrams of phosphorus, and 15 decigrams of potassium. You have two choices of organic fertilizer: Blue Zippy and Harmonic Flash. Blue Zippy costs $20 a pound and each pound contains 50 decigrams of nitrogen, 50 decigrams of phosphorus, and 5 decigrams of potassium. Harmonic Flash $30 a pound and each pound contains 100 decigrams of nitrogen, 30 decigrams of phosphorus, and no potassium.

a. How much Blue Zippy and Harmonic Flash should you buy to meet your requirements, while minimizing cost?

b. If Harmonic Flash changed their mix to include 40 decigrams of phosphorus and 1 decigram of potassium, would you change your order? If so, how?

In 2011, two Brown University seniors, Walker Williams and Evan Stites-Clayton, were sad that their favorite bar in Providence, Rhode Island was closing. To commemorate the closing, the two friends decided to print T-shirts, but they were struck by the upfront costs, and the need to estimate how many of each size they would need to order. Williams built a website to take orders and measure demand, and also posted a link to the site on Facebook. By morning, hundreds of orders were received, along with a few e-mails requesting that he create similar websites for the T-shirt ideas of other people. The Aha Moment arrived for Williams, and he immediately knew that he had hit upon a commercially viable idea. The company Teespring soon followed.

Today Teespring is one of the top T-shirt vendors in the United States, and prints approximately 7 million shirts annually, with annual revenues estimated at $100 million. T-shirts have been shipped to more than eighty countries worldwide. The company has grown to over 300 employees. The business model is that individuals create Internet campaigns to sell custom T-shirts and related clothing on the Teespring website. Campaign creators are required to design and market the product themselves, but they are not required to invest money upfront, paying only when they have secured orders for their T-shirts.

Teespring’s role is to fulfill order for campaigns that have attained their sale goals, and then ships the T-shirts to the buyers. T-shirts are printed on demand, thereby avoiding the problem of inventory accumulation. Teespring does all the T-shirt manufacturing and shipping for the designer, whereas the designer creates the idea and helps market the T-shirt through social media and word-of-mouth. However, the company also contributes to advertising on Facebook.

Tools on the Teespring website enable the T-shirt designer to upload their ideas and slogans. The designers can select which quality and type of shirt (traditional hoodie, or tank top) they choose to print on, and many different fonts and icons are possible. The designer then chooses how many T-shirts he or she aspires to sell, and sets a sales goal. If a minimum of five T-shirts are preordered, Teespring produces the items and ships them directly to customers, charging the designed about $9 per T-shirt. The T-shirt designer sets the retail price per item.

The Teespring model has been so successful that the founders built a printing facility in Kentucky, where all the shirts can be produced and shipped efficiently. An example of a Teespring success story is restaurant manager Benny Hsu, who earned more than $120,000 in one year with a Tee-shirt bearing the slogan, “Keep calm and let the radiation therapist take care of it.”

What is your evaluation of the prospects of Teespring being sustainable in the sense of lasting a long time as a business?

imagine you are a business consultant to ExxonMobil and you have been asked to analyze, advise,and create recommendations on how the firm can ensure its future success in it's current market.
prepare a minimum of 1050 word analysis of economic data and business data to explain how the core economic principles impact the sustainability of the firm and what actions the firm can take to ensure success. address the following:
•identify the market structure of ExxonMobil operates in, analyze its market share, and identify the firms local and global competitors. Analyze the barriers to entry in this market to illustrate the potential for new competition and its impact on ExxonMobil future in the market.
•identify and explain trends in current macroeconomic indicators for last three years including:
1. current stage of business cycle
2. real gross domestic product
3. inflation as measured by the consumer price index
4. unemployment rate
5. federal funds rate
6. current rate for borrowing funds such as the so called prime rate.
7. evaluate trend in demand over last three years and explain their impacts on industry and the firm.include quarterly (last two quarters) and annual sales (last three years) figures for the product that ExxonMobil sells. create business strategies by analyzing information and data related to the demand for supply of ExxonMobil products to support your recommendation for the firms actions. include graphical representation of the data and information.
8. examine available current data and information such as pricing and the available of substitutes and explain how you can determine the price of elasticity of demand for ExxonMobil products. assess how the price of elasticity of demand impacts ExxonMobil pricing decisions and revenue growth.
9. apply the concepts of variable and fixed costs to ExxonMobil for informing its output decisions, for instance analyze how different kinds costs,( labor, research and development, raw materials) affect the firms level of output.
10. based on the data gathered and analysis performed for this report write a conclusion in which you:
• create business strategies includingprice and non price strategies based on your market structure to ensure the market share and potential market expansions and explore global opportunities for your business in dynamic business environment and provide reccomendations.
•develop a recommendation for how ExxonMobil can manage its future by synthesizing the macroeconomic and microeconomic data presented.
•propose how the firms position within the market and among its competitors will allow it to take your recommended action.
•reccomend strategies for ExxonMobil to sustain its success going forward by evaluating the findings from demand trends,price elasticity,current stage of business cycle, and government policies.

cited three peer reviewed references and a minimum of two government economic data sources/references

Case Study 2: A New Incentive System at Lane Automotive

You've been hired by Lane Automotive, a relatively large local automobile dealer to design a new compensation and incentive system for several positions that make up the bulk of the firm’s workforce. These positions are:

• 15 administrative positions: These positions involve the day-to-day operational facets of running the dealership—answering phones, working at the customer service desk, filing paperwork, pulling records on cars, and so forth. These employees are currently paid on an hourly basis. The turnover rate is about 35% for these positions. There have been several complaints about the courtesy and helpfulness of employees occupying these positions. Currently, these employees receive annual bonuses if the dealership exceeds its goals and merit pay increases once each year.
• 15 sales positions: The employees occupying these positions are primarily focused on selling cars and are paid entirely on commission. The turnover among these employees is high (about 80% leave each year), although a few of the sales staff have been with the dealership for a number of years.
• 17 service positions (mechanics): The mechanics occupying these positions are paid on a standard hour plan (i.e., their pay is based on how much time it should take to perform each repair). These employees regularly repair cars in less time than allowed under the standard hour plan. The turnover among these employees is very low. As in any other dealership, there have been some complaints about the quality of the service the firm’s mechanics have delivered. A number of customers have had to bring their vehicles in several times before their auto problems were properly repaired.

The goals of the dealership are primarily to make money on the sale of new and used cars, but most of the money is made through the service department. There are several challenges you must consider before you make your recommendations:

• The dealership’s profitability is fundamentally influenced by the number of cars service and the quality of that service. In addition, the dealership’s profitability is enhanced by (1) repeat business and (2) the company’s reputation. Historically, repeat customers represent a sizable amount of business; the dealership gets to sell their used cars they traded in and sells them new cars. Moreover, customer loyalty matters a lot because word-of-mouth advertising generates business.
• Service quality in terms of the sales process, as well as the service department (mechanics), is a critical component of customer satisfaction and affects the amount of repeat business.
• The income salespeople earn is directly related to the profitability of each car they sell. The prices on the cars are somewhat negotiable. Under the current system, the sales staff and the dealership split the profits from every transaction 50-50.

Questions

1. What are the major problems that exist in this case?
2. For each problem you have identified, explain how incentive may be a contributing factor to the problem or a solution to the problem.
3. What changes would you make to the incentive system in place for these three groups of employees?

Case Study Pink Lady Apple Orchard is a small family run orchard in Red Hill, Victoria. Jacinta and Pete own the property, which includes 50 hectares of apple plantings. As the market price of apples sold to supermarkets and fruit shops has decreased in the past few years, causing business to stagnate, Pete and Jacinta have decided to use some of their apple supply to produce their own range of apple based products. They have set up a small market stall at the orchard where they sell products directly to the public. They also have a regular stand at local markets. The number of customers is growing as word of mouth spreads. In an effort to further expand they have negotiated with a number of small retailers to stock their products. Recently they also employed a systems developer, who set up a website which enables them to market their products online and sell directly to the public. In a further effort to expand sales Jacinta organised to have their products advertised on a number of ‘shopping deal’ sites. Each site charged an upfront fee of $500.00. The Pink Lady Apple Orchard’s ‘deal was advertised throughout February. The orchard offered 30% off any sale made through the deal site. After deducting a further 5% commission on sales the ‘deal’ site passed the order and the payment onto the organisation. Jacinta then processed the order and delivered the products to the customer. Jacinta hoped that by offering this deal more customers would be attracted to their products. Jacinta and Pete have always delivered goods free of charge to their wholesale customers. However, with increased sales they are concerned about the increased courier charges. Pete has decided that by charging 15% delivery charge on each retail order he can recoup all the delivery charges. As Jacinta and Pete are already busy attending to the apple orchard they have employed Ruby, a local resident, two mornings a week (8 hours) to attend to all online orders. Although the number of orders is increasing, Jacinta is concerned that maybe not all products sell well enough to continue production. She has been experimenting with different flavours and products, including a new recipe for “Spicy Apple Chips”. Maybe she should change products or delete some products. She does not want unwanted stock accumulating in the storage sheds. She believes that the ‘special deals’ she has advertised for January/February will certainly help sales, but is concerned that she has made a bad decision with regard to profitability. QUESTION:at least two clear recommendations that Jacinta and Pete can adopt. These recommendations must be drawn from the analysis that you have carried out, and must have been discussed in the body of your report.

1. What evidence does Chesnut offer to support her allegation about interracial sexual relations between owners and enslaved women. What value judgements does she make? Why does she call slavery “ a monstrous system”?

Answers should contain material quoted from the document and/or the course textbook and provide analysis/explanation of how the quoted material supports your response.
Mary Boykin Chesnut, A Confederate Lady's Diary (1861)

I wonder if it be a sin to think slavery a curse to any land. Sumner said not one word of this hated institution which is not true. Men & women are punished when their masters & mistresses are brutes & not when they do wrong-& then we live surrounded by prostitutes. An abandoned woman is sent out of any decent house elsewhere. Who thinks any worse of a Negro or Mulatto woman for being a thing we can't name. God forgive us, but ours is a monstrous system & wrong & iniquity. Perhaps the rest of the world is as bad. This is only what I see: like the patriarchs of old, our men live all in one house with their wives & their concubines, & the Mulattos one sees in every family exactly resemble the white children-& every lady tells you who is the father of all the Mulatto children in everybody's household, but those in her own, she seems to think drop from the clouds or pretends so to think-. Good women we have, but they talk of nastiness tho they never do wrong; they talk day & night of -. My disgust sometimes is boiling over-but they are, I believe, in conduct the purest women God ever made. Thank God for my countrywomen-alas for the men! No worse than men everywhere, but the lower their mistresses, the more degraded they must be.

My mother-in-law told me when I was first married not to send my female servants in the street on errands. They were there tempted, led astray-& then she said placidly, "So they told me when I came here-& I was very particular, but you see with what result." Mr. Harris said it was so patriarchal. So it is-flocks & herds & slaves-& wife Leah does not suffice. Rachel must be added, if not married & all the time they seem to think themselves patterns-models of husbands & fathers.

Mrs. Davis told me "everybody described my husband's father as an odd character, a Millionaire who did nothing for his son whatever, left him to struggle with poverty," &c. I replied, "Mr. Chesnut Senior thinks himself the best of fathers-& his son thinks likewise. I have nothing to say-but it is true, he has no money but what he makes as a lawyer," &c. Again I say, my countrywomen are as pure as angels-tho surrounded by another race who are-the social evil!

Learning Objectives:

Identify taxable or nontaxable income, calculate taxable income, identify tax planning strategies

Background:

Sam and Ricci are a happily married young couple. They work hard and save diligently. Here comes the tax season and they plan on filing their joined tax report. They hope they can get some tax refund. They would also like to find out ways to save their tax payments in the future, so that they can raise children and prepare for their education fund.

Sam has a full-time job and makes $4,200 each month after taxes. He is also a teacher and last year he earn $700 out of a teaching job. Sam’s student loan balance is $22,000, he pays $250 each month. The interest payment he made on his student loan in last year is $1,800. Besides that Sam also has a car loan of $12,200 and credit card balance of $3,000. Sam’s withheld federal income tax is $10,000. (Let’s ignore state and local tax amount)

Ricci just graduated from college and has been working part time. Her workplace pays her $2,000 a month after taxes. Due to her excellent job performance and superior customer feedback, her boss gave her a total of $3,700 bonus last year. Her savings account has earned $20 in last year. Last year she graduated from her undergraduate program, and she paid $7,900 in tuition (she also qualified for the American Opportunity Credit). Ricci doesn’t have student loans. Ricci’s withheld federal income tax is $4,800. (Ignore state and local tax amount)

Sam and Ricci both have IRA accounts. Sam contributes $2000 a year and Ricci contributes $1000 to her account in each year. They bought a house a few years ago. Their mortgage payment per month is $1500. Last year, they made a total of $5,400 interest payment on their mortgage. Their property tax payment last year is $4,000

Your Tasks: (for calculations, You MUST show your work to earn credit)

1. Help the couple to calculate: (hint: some of the information provided may not be relevant to the tax report)

• Their total gross income
• AGI (adjusted gross income)
• Total Itemized deductions

2. If the standard deduction is $23,000 for their tax year, is the couple better off using the standard deduction or itemizing? Why?
3. What is the couple’s taxable income?
4. Suppose the income tax rate for their filing status is 20%, will they get tax refund or need to pay more tax that the amount withheld?
5. Is there anything that they could do to shield more of their income from taxes? Identify 2 to 3 tax planning strategies that are applicable to their situation.
6. Submit your work in WORD file to DropBox folder prior to its deadline.