The previous problem demonstrates that removing individual differences can substantially reduce variance and lower the standard error. However, this benefit only occurs if the individual differences are consistent across treatment conditions. In problem 21, for example, the participants with the highest scores in the more-sleep condition also had the highest scores in the less-sleep condition. Similarly, participants with the lowest scores in the first condition also had the lowest scores in the second condition. To construct the following data, we started with the scores in problem 21 and scrambled the scores in treatment 1 to eliminate the consistency of the individual differences.

Number of Academic Problems

Student                  Above Average Sleep          Below Average Sleep

A                                             10                                            13

B                                              8                                              14

C                                              5                                              13

D                                             5                                              5

E                                              4                                              9

F                                              10                                            6

G                                             11                                            6

H                                             3                                              6

a. Treat the data as if the scores are from an independent-measures study using two separate samples, each with n = 8 participants. Compute the pooled variance, the estimated standard error for the mean difference, and the independent-measures t statistic. Using a two-tailed test with α = .05, is there a significant difference between the two sets of scores? Note: The scores in each treatment are the same as in Problem 21. Nothing has changed.

b. Now assume that the data are from a repeated measures study using the same sample of n = 8 participants in both treatment conditions. Compute the variance for the sample of difference scores, the estimated standard error for the mean difference and the repeated-measures t statistic. Using a two-tailed test with α = .05, is there a significant difference between the two sets of scores? (You should find that removing the individual differences with a repeated-measures t no longer reduces the variance because there are no consistent individual differences.)

Ratios:

Current Ratio: 3.6093

Quick Ratio:                           2.1799

Times Interest Earned: 9.9143

ROE                                        16.48%

ROA                                        12.01%

Equity Multiplier                    1.3714

Inventory Turnover 1.3489

The DuPont Identity helps us to better understand why a firm might have a poor ROE (Return on Equity).  We can write the DuPont Identity as follows:

ROE = (Net Income / Sales)(Sales / Assets)(Assets / Owner's Equity)

Based on this, which of the following statements are true?

Select one:

a. If Sales remained constant but Net Income fell, the ROE would rise, ceteris paribus (all else remaining equal)

b. If Sales remained constant but the firm sold off half of its Assets, the ROE would rise, ceteris paribus (Assume that the Equity Multiplier remains constant)

c. If Assets remain constant but Owner’s Equity goes up, the ROE would rise, ceteris paribus.

d. All of the above statements are true

e. None of the above statements are true.

Assignment: You are the audit senior in charge of field work for the 2017 audit of Curl Up and Dye, Inc., a chain of women’s beauty parlors. Substantive tests reveal that CU&D’s Accounts Receivable account as of December 31, 2017 includes $184,900 due from officers. Minutes indicate that the Board of Directors approved those loans. A member of the audit committee gives you copies of the “demand notes” which appear to be properly signed and dated by the officers who borrowed from the company. You ask the CEO, an officer who owes approximately half of $184,900 due to the company, whether the company will require officers to repay these loans. He replies that officers might someday repay the loans, but it is possible that the Board of Directors will eventually forgive the loans as part of officers’ annual bonuses. $184,900 is a material amount for this audit.

1) What other questions, if any, would you ask for information, if any, would you like to obtain for the existence and valuation assertions?

2) What disclosure is necessary in the company’s financial statements, including notes to the financial statements? Search FASB Acccounting Standards Codification for required disclosure (See below for search method). Cite the Code section(s) that you think is (are) relevant.

3) What journal entry(ies), if any, would you propose?

Legal and Ethical Issues:Case Study Cathy Smith, an eighty-eight-year-old woman, was admitted to the emergency room from the nursing facility with acute respiratory distress. Although Smith does not have a living will, her daughter Rose, a health care professional, has the power of attorney (POA) to make her mother's health decisions. Smith suffers from end-stage Alzheimer's disease and recently experienced congestive heart failure. Her condition is alarming. The doctors want to place her on life-support equipment, including a ventilator. Smith's son, Andrew, agrees with the doctor's decision. However, Rose states her mother would never want to be placed on life-support machines to prolong her life. Analyze the scenario and answer the following questions: What are the autonomy-beneficial conflicts between Rose and Andrew related to placing their mother on life support in this case? Who has the right to make the decision on behalf of the client? Why? What are the ethical issues related to the competency and decision-making capacity of the client while making the health care decisions? Do these issues impact the services offered in long-term care? How? What are some of the critical issues related to informed consent? Who has the right to assume this responsibility? Why? To support your work, use your course and textbook readings and also use the South University Online Library. As in all assignments, cite your sources in your work and provide references for the citations in APA format. Your initial posting should be addressed at 150-300 words. Post your response to the Discussion Area by the due date assigned. Respond to at least two posts by the end of the week. Be sure to cite your sources using APA format.

The University of Pittsburgh Medical (UPMS) School grades each class in the following manner:

All students whose score is plus or minus two standard deviations from the mean course score receive a grade of “Pass.”

Students whose score is above two standard deviations from the course mean receive a grade of “Pass with Distinction.”

And, students whose score is below two standard deviations from the course mean receive a grade of “Fail.” Course scores are always assumed to be normally distributed.

Approximately what percentage of medical students in each class receives a “Pass with Distinction”?

Case 3-6 Full Disclosure: The Case of the Morally Challenged AP Clerk

(a GVV case)

John Stanton, CPA, is a seasoned accountant who left his Big-4 CPA firm Senior Manager position to become the CFO of a highly successful hundred-million-dollar privately held manufacturer of solar panels. The company wanted John’s expertise in the renewable energy sector and his pedigree from working for one of the Big-4 firms. The company plans to go public later this year and wants John to lead the effort. Everything went well for the first two months until the controller, Diane Hopkins, who is also a CPA, came to John with a problem. She discovered that one of her accounts payable clerks has been embezzling money from the company by processing and approving fictitious invoices from shell companies for fictitious purchases that the AP clerk had created. Diane estimated that the clerk had been able to steal approximately $250,000 over the year and a half they worked at the company. Diane and John agreed to fire the clerk immediately and did so. They also agreed that John would report the matter to the police.

John picked up the phone and called the CEO, David Laskey, who was also the majority shareholder, to give him a heads up on what had transpired. Laskey asked John to come to his office the next day to discuss the need to report the matter to the police. Laskey shared with John that he did not think it was a good idea to report it to the police as he was fearful of the effect on taking the company public and the initial public offering share price.

After the call, John reflected on what it would mean to not report the matter to the police and whether there were others he needed to inform about the matter.

Questions

1. To whom do John Stanton and David Laskey owe their ultimate responsibility? Explain.

2. If Stanton were to agree not to report this embezzlement to the police or disclose it in the annual report and prospectus, would he be violating the integrity or due care rule in the AICPA Code of Professional Conduct? What about acts discreditable?

3. AssumeStantonispreparingforthemeetingwithLaskey.Considerthefollowingindecidingwhatheshoulddo.

   • What can he say to Laskey to counteract the reasons Laskey provided not to notify the police?

   • Who can Stanton rely on for support in this matter? What might he say to that person(s) to encourage their support?

   • What levers can Stanton use to convince Laskey as to the correct course of action given the company’s impending IPO?

   • What should Stanton do next if Laskey orders him to drop the matter?

"Correlation/Regression QA"

Use the following information to answer the following 15 questions.
A researcher wants to determine the relationship between Number of Cigarettes Smoked (X) and Lung Function (Y). The researcher asks participants how many cigarettes they average smoking per day and measures their lung function. The data are presented below.
Number of Cigarettes:   
0,     0,    0,     0.     5,     5,     5,    10,   10,   10,   13,   20,   20,   30,   30,   30,   40,   60
Lung Function:            
100,   88,   98,   97,   94,   84,   88,   80,   86,   80,   82,   70,   78,   82,   55,   57,   54,   67

5)What is the value of the observed test statistic (t) used to determine whether, in the population, this relationship is significantly different from zero (Round to two decimal places)?  

11) If appropriate, calculate the proportion of variation in Lung Function that is not accounted for by Number of Cigarettes Smoked (Round to two decimal places). If it is not appropriate to calculate this, input 999.

12) If appropriate, calculate the slope of the regression equation for predicting Lung Function from Number of Cigarettes smoked (Round to three decimal places). If it is not appropriate to calculate, input 999.

13)If appropriate, calculate the y-intercept of the regression equation for predicting Lung Function from Number of Cigarettes smoked (Round to three decimal places). If it is not appropriate to calculate, input 999.

14) If appropriate to calculate, what would you predict for the Lung Function of an individual that smoked 80 cigarettes per day (Round to three decimal places)? If not appropriate to calculate, input 999.

15) Only calculate if it is appropriate to calculate this. In the data presented above, one individual who smokes zero cigarettes per day has a perfect lung function score of 100. What would you predict that their lung function score should be (Round to three decimal places)? If not appropriate to calculate this, input 999.

**Review the following passages for sentence fragments, comma splices, and run on sentences.

**Correct all errors where necessary, and bold each correction.

• “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of the noisiest authorities insisted on its being received, for good or evil, in the superlative degree of comparison only.”

• “I believe that today more than ever a book should be sought after even if it has only one great page in it. We must search for fragments, splinters, toenails, anything that has ore in it, anything that is capable of resuscitating the body and the soul.”

• “I went to sleep with gum in my mouth and now there's gum in my hair and when I got out of bed this morning I tripped on the skateboard and by mistake I dropped my sweater in the sink while the water was running and I could tell it was going to be a terrible, horrible, no good, very bad day.”

• “We are such stuff as dreams are made on; and our little life is rounded with a sleep.”

• “For in a swift radiance of illumination he saw a glimpse of human struggle and of valor. Of the endless fluid passage of humanity through endless time. And of those who labor and of those who--one word--love. His soul expanded. But for a moment only.”

• “The lamp on the rocks on the side of the hill was little more than a mote of light and after a while they walked back. Everything too wet to make a fire.”

• “Then, slowly, the shining dwindled until it, too, was gone, and there was nothing but stars and starlight. No shadows. No fear. Only the stars and the clear darkness of space, quite different from the fearful darkness of the Thing.”

Review the following passages for sentence fragments, comma splices, and run on sentences. Correct all errors where necessary, and bold each correction.

• “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of the noisiest authorities insisted on its being received, for good or evil, in the superlative degree of comparison only.”

• “I believe that today more than ever a book should be sought after even if it has only one great page in it. We must search for fragments, splinters, toenails, anything that has ore in it, anything that is capable of resuscitating the body and the soul.”

• “I went to sleep with gum in my mouth and now there's gum in my hair and when I got out of bed this morning I tripped on the skateboard and by mistake I dropped my sweater in the sink while the water was running and I could tell it was going to be a terrible, horrible, no good, very bad day.”

• “We are such stuff as dreams are made on; and our little life is rounded with a sleep.”

• “For in a swift radiance of illumination he saw a glimpse of human struggle and of valor. Of the endless fluid passage of humanity through endless time. And of those who labor and of those who--one word--love. His soul expanded. But for a moment only.”

• “The lamp on the rocks on the side of the hill was little more than a mote of light and after a while they walked back. Everything too wet to make a fire.”

• “Then, slowly, the shining dwindled until it, too, was gone, and there was nothing but stars and starlight. No shadows. No fear. Only the stars and the clear darkness of space, quite different from the fearful darkness of the Thing.”