1)

A manager’s position in the organization, ability to give out rewards, and other factors give the manager ________ , which is the potential to impact the behavior of other people.

a) power

b) influence

2)By virtue of being the CEO of McKesson, a medical and scientific supplies company, John Hammergren has __________ .

a)expert power

b) legitmate power

c) reward power

d) referent power

3)

Factory Closing Decision

The Dough Knot Corporation bakes breads, pastries, cookies and every other baked good imaginable. The company has a number of factories around the world, including the LACC Cookie Factory, which makes... cookies.

Michael Schrute is the factory manager of the LACC Cookie Factory but also serves as the regional production manager for the company. His budget as the regional manager is charged to the LACC Cookie Factory.

Schrute has just heard that The Dough Knot has received a bid from an outside vendor to supply the equivalent of the entire annual output of the LACC Cookie Factory for $34 million. Schrute was astonished at the low outside bid because the budget for the LACC Cookie Factory’s operating costs for the upcoming year was set at $50.3 million. If this bid is accepted, the LACC Cookie Factory will be closed down.

The budget for LACC Cover’s operating costs for the coming year is presented below.

*Fixed corporate expenses allocated to factories and other operating units based on total budgeted wage and salary costs.

Additional facts regarding the factory’s operations are as follows:

A. Due to LACC Cookie’s commitment to use high-quality ingredients in all of its products, the Purchasing Department was instructed to place blanket purchase orders with major suppliers to ensure the receipt of sufficient materials for the coming year. If these orders are canceled as a consequence of the factory closing, termination charges would amount to 25% of the cost of direct materials.

B. Approximately 400 factory employees will lose their jobs if the factory is closed. This includes all of the direct laborers and supervisors as well as the plumbers, electricians, and other skilled workers classified as indirect factory workers. Some would be able to find new jobs while many others would have difficulty. All employees would have difficulty matching LACC Cookie’s base pay of $18.80 per hour, which is the highest in the area. A clause in LACC Cookie’s contract with the union may help some employees; the company must provide employment assistance to its former employees for 12 months after a factory closing. The estimated cost to administer this service would be $1.6 million for the year.

C. Some employees would probably choose early retirement because The Dough Knot has an excellent pension plan. In fact, $2.5 million of the annual pension expense would continue whether LACC Cookie is open or not.

D. Schrute and his staff would not be affected by the closing of LACC Cover. They would still be responsible for administering three other area factories.

E. If the LACC Cookie Factory were closed, the company would realize about $3.3 million salvage value for the equipment and building. If the factory remains open, there are no plans to make any significant investments in new equipment or buildings. The old equipment is adequate and should last indefinitely.

Required:

The Dough Knot Corporation plans to prepare a financial analysis that will be used in deciding whether or not to close the LACC Cookie Factory. Management has asked you to identify:

1. Without regard to costs, identify the advantages to Dough Knot Corporation of continuing to operate LACC Cookie Factory (200 word minimum).

2. The annual budgeted costs that are relevant to the decision regarding closing the factory.

3. The annual budgeted costs that are not relevant to the decision regarding closing the factory.

4. Any nonrecurring costs that would arise due to the closing of the factory. Looking at the data you have prepared above,

5. Calculate the financial advantage (disadvantage) of closing the factory.

6. Should the factory be closed? Explain your calculations and support your argument. It’s your job to convince the CEO of your decision (500 words minimum).

(Part of your score will be based on your ability to argue your strategy. You may come to the correct numerical calculation, but if you cannot convey your message your recommendation will fall flat with the CEO. The word minimums refer to #1 and #6. For questions 2-5, you should show your calculations and support your argument, as if you were making a presentation to management.)

Question One:

The following data extracted from the trial balance of ABC Company on Dec 31^st 2020:

Additional Information that was not included in the trial balance:

• The number of ordinary shares is 10,000,000 shares authorized, 4,250,000 issued and 3,850,000 outstanding.
• There are 10 KD par, (10%), 200,000 authorized, issued and outstanding preference shares.
• 10% of the account receivables will be collected in 2022.
• The insurance policy was purchased on Jan 1^st 2020 for 160,000 KD and covers 4 years. One fourth of the amount was expensed as insurance expense during 2020 and the rest 120,000 will be expensed over the coming three years.
• 50,000 KD of the mortgage payable due during next year.
• 200,000 KD of the dividends declared foe preference shares
• 150,000 KD of the notes receivables due next year
• Salaries and wages expenses are 60% sales and 40% offices
• Depreciation expenses are 20% sales and 80% offices.
• Ending inventories was evaluated at 1,225,000 KD on Dec 31^st 2020
• 400,000 KD of the leasing liabilities due next year.
• Utilities expenses are 30% sales and 70% offices.
• 490,000 KD of the notes payable due next year.
• Fair value of trading securities on Dec 31^st 2020 is 1,615,000 KD
• Fair value of non-trading securities on Dec 31^st 2020 is 6,450,000 KD
• Goodwill was revalued during the period at 4,000,000 KD.
• Patent was impaired by 260,000 but it has not been recognized.
• The company is subject to 30% income tax on all items.

Required:

1. Prepare trial balance for ABC Company on Dec 31^st 2020 and calculate retained earnings beginning balance?
2. Prepare statement of comprehensive income, retained earnings statement and statement of financial position for ABC Company in good format and according to the requirements of IAS 1?

Dreamland Security Services Inc. had the following account balances as of January 1, 2020:

* Terms: Notes Payable with Trust Bank - $15,000 - 1 yr. at 6% int. rate began on 10/1/19.

During 2020 Dreamland Security Services experienced the following transactions:

1. On January 1, 2020, Dreamland purchased land for $10,000 and a building for $90,000. The land was paid for with cash. The building was paid for with $5,000 cash and the remainder was financed with a 10-year notes payable.

2. Paid the accounts payable balance from 2019.

3. Purchase $500 of supplies on account.

4. Purchased 100 alarm systems (inventory) on account at a cost of $200 each.

5. Paid $6,000 of advertising expense during the year.

6. Sold 95 alarm systems for $400 each. All sales were on account. (Note - Be sure to compute cost of goods sold using the FIFO cost flow method.)

7. Paid $7,500 of utilities expense for the year.

8. Billed $65,000 of monitoring services on account for the year.

9. Replenished the petty cash fund on June 30. The fund had $25 cash remaining and receipts of $90 for yard mowing and $35 for postage.

10. After numerous attempts to collect from customers, the company wrote off $650 of uncollectible accounts receivable.

11. Collected $83,000 of accounts receivable during the year.

12. On July 1, 2020, issued $25,000 of 5 percent, five year bonds. The bonds were issued at 98.

13. On October 1, 2020, paid the note and interest owed to Trust Bank (See Beg. Balance in Notes Payable). (Note - Record Interest Expense for January-September)

14. Paid employees a total of $20,000 for salaries for the year. Federal income taxes withheld amounted to $2,200. The net amount of salaries was paid in cash. (Note - $20,000 is the gross salary amount and the actual amount paid in cash will be less due to the federal income taxes withheld. Ignore employer taxes.)

15. Paid the Federal Income Taxes withheld from salaries.

16. Paid the annual installment on the note used to finance the purchase of the building. The note had an interest rate of 5 percent and annual payments of $11,008.

17. Paid a dividend of $10,000 to the shareholders.

Adjustments:

18. There was $275 of supplies on hand at the end of the year.

19. Recognized the expired rent for the office building for the year.

20. Recognized the uncollectible accounts expense for the year using the allowance method. Dreamland estimates that 2 percent of sales on account will not be collected.

21. Recognized depreciation expense on the equipment. The equipment has a six-year life and a $2,500 salvage value. The company uses straight-line depreciation for the equipment. The equipment was purchased in 2018 and a full year of depreciation was taken in 2018 and in 2019. (Only record 2020 depreciation.)

22. Recognized depreciation expense on the service truck. The service truck has a five-year life and an $8,000 salvage value. The company uses double-declining-balance for the service truck. The truck was purchased in 2018 and a full year of depreciation was taken in 2018 and in 2019. (Only record 2020 depreciation.)

23. Recognized depreciation expense on the building. The building has a 40-year life and a $50,000 salvage value. The company uses straight-line depreciation for the building.

Required:

a. Record the above transactions in general journal form. Round all amounts to nearest whole dollar.

b. Prepare a trial balance.

CH8

Suppose an economy produces three final products. Use the following table to calculate GDP and economic growth rate.

Fill in the blanks of the next table. Numbers only without thousand separator.

An economy has four final products, A, B, C, and D. Please use the output and price information to complete the following table and answer questions. Do NOT use thousand separators and ignore decimals (e.g., two thousand as 2000).

The real GDP growth rate in 2017 =   % (e.g., 7%)

Michigan based GM's production of Buicks in China is part of ________ GDP and part of _______ GNP; Japan's Honda's production of Accords in Kentucky is part of ______ GDP and part of _________ GNP, respectively.

• A. China's; the U.S.; the U.S.; Japan's.

• B. China's; the U.S.; the U.S.; the U.S..

• C. U.S.; the U.S.; the U.S.; Japan's.

• D. China's; the U.S.; Japan's; the U.S..

quiz 7

Bonobo’s Balloons Inc. purchased the $60,000 par value bonds of Gnomes R Us on January 1, 2020. The coupon rate is 8% and the bonds mature in 5 years. The market rate of interest is 12%. The bonds pay interest semi-annually every June 30 and December 31. The bonds were purchased for $51,167.90 and were classified as available-for-sale. Bonobo’s Balloons uses the effective-interest rate method to amortize bond discounts and premiums. At December 31, 2020, the market value of the bonds was $65,000. Bonobo’s Balloons sold the bonds on January 1, 2021, for $65,000.

Instructions

1. Compute the carrying value of the investment at December 31, 2020.
2. Compute the amount of interest revenue earned on this investment at June 30, 2020.
3. Compute the amount of unrealized gain or loss recognized on December 31, 2020. In which financial statement should this amount be reported?
4. Compute the amount of gain or loss recognized on the sale of the investment at January 1, 2021. In which financial statement should this amount be reported?
5. If this investment was instead classified as held-to-maturity, how would this have affected the amount of unrealized gain or loss on December 31, 2020, and how would this have affected its reporting?

Computations:

Carrying value at December 31, 2020:

Interest revenue at June 30, 2020:

Unrealized gain/loss at December 31, 2020:

Gain or loss at January 1, 2021:

Requirement 5:

Use the amounts you calculated for the 2020 income statement as needed.

1.What is the Cash from Operating Activities in 2020 ($millions)?

2.What is the Cash from Investing Activities in 2020 ($millions)?

3.What are the Dividends in 2020 ($millions)?

4.What is the Net Change in Cash in 2020 ($millions)?

5.Calculate the Free Cash Flow. What is the Change in Net Operating Working Capital in 2020 ($millions)?

6.What is the Free Cash Flow in 2020 ($millions)?

Here are closing share prices (adjusted to include dividends) of 5 companies with past12 months of data and adjusted closing prices for the ASX200 index. Calculate, present and discuss the main summary statistics of monthly returns for each REIT and the overall market index. How does the risk and return characteristics of each REIT compare to the overall market index? Show your analysis process.