Besserbrau AG is a German beer producer headquartered in Ergersheim, Bavaria. The company, which was founded in 1842 by brothers Hans and Franz Besser, is publicly traded, with shares listed on the Frankfurt Stock Exchange. Manufactur- ing in strict accordance with the almost 500-year-old German Beer Purity Law, Besserbrau uses only four ingredients in making its products: malt, hops, yeast, and water. While the other ingredients are obtained locally, Besserbrau imports hops from a company located in the Czech Republic. Czech hops are considered to be among the world’s finest. Historically, Besserbrau’s products were marketed exclusively in Germany. To take advantage of a potentially enormous market for its products and expand sales, Besserbrau began making sales in the People’s Republic of China three years ago. The company established a wholly owned sub- sidiary in China (BB Pijio) to handle the distribution of Besserbrau products in that country. In the most recent year, sales to BB Pijio accounted for 20 percent of Besserbrau’s sales, and BB Pijio’s sales to customers in China accounted for 10 per- cent of the Besserbrau Group’s total profits. In fact, sales of Besserbrau products in China have expanded so rapidly and the potential for continued sales growth is so great that the company recently broke ground on the construction of a brewery in Shanghai, China. To finance construction of the new facility, Besserbrau negotiated a listing of its shares on the London Stock Exchange to facilitate an initial public offering of new shares of stock.

Required: Discuss the various international accounting issues confronted by Besserbrau AG.

When the stock market is going up over a long period of time, investors can become complacent about the risks of being a stockholder. After the significant decline of the stock market in 2008, people have begun to rethink the risk involved in owning stock. What kinds of risks do the owners of publicly-traded companies face? What could you do, as an investor, to continue to invest in the market but minimize your risk

When the stock market is going up over a long period of time, investors can become complacent about the risks of being a stockholder. After the significant decline of the stock market in 2008, people have begun to rethink the risk involved in owning stock.

What kinds of risks do the owners of publicly-traded companies face?

What could you do, as an investor, to continue to invest in the market but minimize your risk?

When the stock market is going up over a long period of time, investors can become complacent about the risks of being a stockholder. After the significant decline of the stock market in 2008, people have begun to rethink the risk involved in owning stock. What kinds of risks do the owners of publicly-traded companies face? What could you do, as an investor, to continue to invest in the market but minimize your risk?

Budget Variance Analysis

Hertzler Corporation uses customers served as its measure of activity. During November, the company budgeted for 23,000 customers, but actually served 25,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:

Revenue: $7.25q
Wages and salaries: $30,500 + $2.30q
Supplies: $0.80q
Insurance: $6,200
Miscellaneous: $8,750 + $0.30q
The company reported the following actual results for November:

  

Required:

Prepare a net income report showing the company's revenue and spending variances for November. Label each variance as favorable (F) or unfavorable (U). Make sure it is formatted based on an income statement and show the actual and the budgeted side by side. (2 questions in 1 – Create Budget, then Compare Budget with Actual results, which will allow to figure the amount of variance and if it is Favorable or Unfavorable)

BACKGROUND Apply audit risk and materiality concepts to address the following circumstances regarding Able & Baker LLP’s audits of the financial statements of Foster Engineering, Inc. 1. Able & Baker LLP auditors are beginning their audit of Foster’s 2017 financial statements. Because of changes in the market and increased competition, Foster changed the terms of its sales at the beginning of 2017. Previously, Foster’s customers had to pay for maintenance of the Foster products at the time such maintenance was performed. Beginning in 2017, Foster included 3 years of maintenance as a part of the sales price. This requires Foster to defer a portion of revenue from sales of the product and recognize it in future periods. Accordingly, Foster’s accounting staff must estimate the amount to defer based on Foster’s future involvement with the products sold. This change resulted in Foster showing the following unaudited results: a lower gross profit margin, but significantly increased sales, which increased Foster’s overall net profit as compared to 2016. Questions: How do each of the changes described above affect the amount of audit evidence the Able & Baker LLP auditors will need to obtain about the occurrence and accuracy of the recorded revenue, as compared to the previous year, and why? 2. Because of its overall good results in 2017, Foster has become recognized as one of the leading private companies in its industry. Because of this and other factors, Foster’s shareholders and board of directors voted in 2018 to have an initial public offering of its common stock and to become a publicly traded company by the middle of 2019. Questions: Does the plan to become a pubic company affect the overall amount of audit evidence the Able & Baker LLP auditors will obtain in its audit of Foster’s 2018 financial statements, as compared to 2017? Why or why not? 3. In past audits, the Able & Baker LLP auditors found few, if any, errors in its substantive audit procedures for the existence of Foster’s accounts receivable. During the 2017 audit, Able & Baker LLP decided to change its audit strategy for the existence of accounts receivable by reducing assessed control risk. In the past, Able & Baker LLP assumed control risk was high. After performing the necessary tests, the auditors concluded that the controls were designed and operated effectively. Additionally, the auditors did not discover any errors in connection with their substantive tests of details of balances. Questions: a. What effects did the change in strategy have on the planned nature and extent of auditing procedures performed regarding the existence of Foster’s accounts receivable as compared to the 2016 audit and why? b. What do the results of the substantive tests of details of balances indicate, how should the auditors respond, and why?

2. The following shows the information of a government bond traded in the secondary market.

Type of Bond Government bond

Issue Date May 16, 2006

Maturity Date May 16, 2016

Face Value $100

Redemption Value $108

Coupon Rate 5% payable semiannually

Yield Rate 8% convertible semiannually

Construct the bond amortization schedule for year 5 and year 6 (i.e., for the 9th coupon through the 12th coupon).

The accompanying data table lists the weights of male college students in kilograms. Test the claim that male college students have a mean weight that is less than the 84 kg mean weight of males in the general population. Use a 0.05 significance level. Identify the null​ hypothesis, alternative​ hypothesis, test​ statistic, P-value, and conclusion for the test. Assume this is a simple random sample.

Person Weight

1 75

2 97

3 74

4 93

5 59

6 71

7 67

8 92

9 67

10 69

11 87

12 81

13 60

14 70

15 68

16 68

17 80

18 64

19 54

20 73

21 77

22 74

23 74

24 63

25 64

26 64

27 66

28 71

29 65

30 75

31 74

32 94

(Covering concepts for Chapter 3 and 8)

The following attached file presents the annual returns for two mutual funds offered by the investment giant Fidelity. The Fidelity Select Automotive Fund invests primarily in companies engaged in the manufacturing, marketing, or sales of automobiles, trucks, specialty vehicles, parts, tires and related services. The Fidelity Gold Fund invests primarily in companies engaged in exploration, mining, processing, or dealing in gold and, to a lesser degree, in other precious metals and minerals.

In a report, use the above information and attached file to

1. Calculate descriptive statistics to compare the returns of the mutual funds using the Data Analysis Descriptive Box.
2. Compare and interpret the mean, median and skewness of Fidelity Select Automotive Fund and Fidelity Select Gold Funds.

3. Compare and interpret the range and the standard deviation of Fidelity Select Automotive Fund and Fidelity Gold Funds.
4. Discuss the range of each funds returns? Is the range the best descriptive measure? Why or Why not?
5. Assess reward by constructing and interpreting 95% confidence intervals for the population mean return. What assumption did you make for interval estimates?

Example p. 314/ Note Use standard deviation as a measure of risk!