Business Basics - Assignment 2

GLOBUS ENTERPRISES YEAR END BALANCES

Assignment

Using the data in the table above, create a balance sheet for Globus’s operations as of yearend (December 31, 200X)

Using the data in the table above, create an income statement for the year being examined.

Analyze the financial statements using the following analytical tools:

Current ratio (What does this ratio tell us about Globus?)

Net working capital (What does net working capital tell us about Globus?)

Note: Net working capital is the difference between current assets and current liabilities.

Debt to equity ratio (What does this ratio tell us about Globus?) Note: To compute owners’ equity from the data supplied here, remember the fundamental accounting equation:

Assets = Liabilities + Owners’ equity

Leverage ratio (What does this ratio tell us about Globus?)

Return on equity (What does this ratio tell us about Globus?)

A large direct health and insurance medical provider needed an enterprise information management system to enable enterprisewide information management and to support the effective use of data for critical cross-functional decision making. In addition, the company needed to resolve issues related to data redundancy, inconsistency, and unnecessary expenditure. The company faced several information challenges: The company data resided in multiple locations, the data were developed for department-specific use, and there was limited enterprise access. In addition, data definitions were created by individual departments and were not standardized, and data were being managed by multiple departments within the company.

• Given the situation, What solution would you propose for this company?
• Discuss the role that data modelling would play in a project to solve this problem.
• Support or Oppose the above statements with arguments

without handwriting please, thank you.

The company A generates revenue primarily through the following means:

Software license fees: typically licenses its software for periods of up to 60 months. Licensees are normally given the following payment options:

Under the first payment option, the company collects the entire license fee at inception. This is categorized as a Paid-Up-Front (PUF) contract. Under a PUF arrangement, company A typically charges a one-time, paid-up- front fee for perpetual usage and the customer does not have the ability to cancel the contract.

Under the second payment option, the licensee pays a portion of the total software license fees at the beginning of the term (initial license fee [ILF]), and the remainder over the license term (ongoing monthly license fee [MLF] for month-to-month usage). In certain arrangements, the customer is contractually committed to making MLF payments for a minimum number of months even when the customer prematurely cancels the contract.

Under either payment option, the company is not obligated to refund any payments received from the customer.

Maintenance fees: These contracts oblige the company to provide post- contract customer support (PCS) to the client over a specified time period. PCS includes a right to periodic upgrades and technical support. The term for PCS is generally shorter than the term of the licensing agreement and is renewable for the duration of the license period.

Services: Other professional services provided by company A include training, installation, and consulting.

Assume that company A entered into a contract with client TDS Inc. for €230,000 on January 1, Year 1, to transfer a software license and an additional €15,000 for installation of the software. The license entitles TDS Inc. to use the software in its current form over an unlimited period and does not include updates. Two years of customer support come free with the license. In recent stand-alone contracts with other customers for the same software, company A has charged €200,000 for the software license, €60,000 for two-year customer support, and €40,000 for installation. The software is usable without customer support from company A and it can be installed by other vendors. The installation is expected to take 250 hours of which 150 hours will be required in Year 1 and the remainder in Year 2. The entire fee of €245,000 is collected on the contract date Based on the five-step revenue recognition process described by the recent revenue recognition rules (IFRS 15 / US GAAP ASC 606),

a. Determine the number of performance obligations, and the contract price to be allocated to each, in the following situations:

i. The installation service does not modify the software.

ii. Installation involves customizing the software to work seamlessly with other software used by the customer. As before, the installation can be performed by other firms as well.

b. Explain if (and if so, why) your responses in i) and ii) above differ, referring to IFRS 15 or to the equivalent US GAAP ASC 606.

c. How much revenue will be booked in Years 1 and 2 from the contract in each case? Assume that all conditions for revenue recognition other than those specified have been met in the situations above.

51% of students entering four-year colleges receive a degree within six years. Is this percent different from for students who play intramural sports? 120 of the 230 students who played intramural sports received a degree within six years. What can be concluded at the level of significance of αα = 0.05?

1. For this study, we should use Select an answer t-test for a population mean z-test for a population proportion
2. The null and alternative hypotheses would be:
   Ho: ? μ p  Select an answer ≠ > < =   (please enter a decimal)   
   H₁: ? μ p  Select an answer > = ≠ <   (Please enter a decimal)

3. The test statistic ? z t  =  (please show your answer to 3 decimal places.)
4. The p-value =  (Please show your answer to 4 decimal places.)
5. The p-value is ? ≤ >  αα
6. Based on this, we should Select an answer accept reject fail to reject  the null hypothesis.
7. Thus, the final conclusion is that ...
   • The data suggest the populaton proportion is significantly different from 51% at αα = 0.05, so there is sufficient evidence to conclude that the population proportion of students who played intramural sports who received a degree within six years is different from 51%
   • The data suggest the population proportion is not significantly different from 51% at αα = 0.05, so there is sufficient evidence to conclude that the population proportion of students who played intramural sports who received a degree within six years is equal to 51%.
   • The data suggest the population proportion is not significantly different from 51% at αα = 0.05, so there is not sufficient evidence to conclude that the population proportion of students who played intramural sports who received a degree within six years is different from 51%.
8. Interpret the p-value in the context of the study.
   • If the population proportion of students who played intramural sports who received a degree within six years is 51% and if another 230 students who played intramural sports are surveyed then there would be a 72.18% chance that either more than 52% of the 230 studetns surveyed received a degree within six years or fewer than 50% of the 230 students surveyed received a degree within six years.
   • If the sample proportion of students who played intramural sports who received a degree within six years is 52% and if another 230 voters are surveyed then there would be a 72.18% chance that we would conclude either fewer than 51% of all students who played intramural sports received a degree within six years or more than 51% of all students who played intramural sports received a degree within six years.
   • There is a 72.18% chance that the percent of all students who played intramural sports who received a degree within six years differs from 51%.
   • There is a 72.18% chance of a Type I error.
9. Interpret the level of significance in the context of the study.
   • If the population proportion of students who played intramural sports who received a degree within six years is 51% and if another 230 students who played intramural sports are surveyed then there would be a 5% chance that we would end up falsely concluding that the proportion of all students who played intramural sports who received a degree within six years is different from 51%
   • There is a 5% chance that the proportion of all students who played intramural sports who received a degree within six years is different from 51%.
   • If the population proportion of students who played intramural sports who received a degree within six years is different from 51% and if another 230 students who played intramural sports are surveyed then there would be a 5% chance that we would end up falsely concluding that the proportion of all students who played intramural sports who received a degree within six years is equal to 51%.
   • There is a 5% chance that aliens have secretly taken over the earth and have cleverly disguised themselves as the presidents of each of the countries on earth.

1) Answer T or F for the following

a) Medical expenses for the year are to be reduced by any insurance reimbursement that is expected to be received in the future in order to arrive at the current deduction.

b) The full-cost of home-related capital expenditures paid to enable a physically disabled individual to live independently qualifies as a medical expense, but is still subject to the 10% of AGI floor limitation.

c) Appraisal costs associated with determining the increase in value of a residence due to capital expenditures undertaken for medical reasons are deductible as a medical expense.

d) If the seller of a residence during the year pays more than her prorate share of the real estate taxes, the buyer must increase his basis in the home by the "excess".

e) When arriving at the taxpayer's net investment income in calculating the deduction for investment interest expense for the year, miscellaneous "investment expenses" are disallowed before any non-investment expenses when applying the 2% of AGI floor.

f) points paid to refinance an existing home mortgage are fully deductible in the year of payment.

g) A taxpayer who gives cash directly to a needy individual will be able to claim a charitable contribution, subject to AGI limits.

h) No deduction is allowed for the value of one's services contributed to a charity.

Simmons Company has the following information about its ending inventory. It values its inventory on an individual-item basis. Determine the value of the ending inventory. Show your work.

Let’s start with a product everyone is familiar with. If you were going to purchase a new car, walk us through the steps you would go through in your purchase process. How does your process differ from the process detailed in the text? How does it differ from others in this thread?