QUESTION 1 (60) Much debate exists within the literature about leadership and management. Kotter (1990:103) argues that management and leadership are “two distinctive and complementary systems of action” and that the former involves coping with complexity, while the latter involves coping with change.
1.1 Discuss in detail, with the use of examples, the fundamental differences between the concept of leadership versus management. (20)
1.2 Evaluate in detail, with the use of practical examples, the advantages and disadvantages of a transformational leader. (20)
1.3 Discuss in detail, with the use of practical examples, FOUR (4) management styles and the potential impact each style may have on a business. (20)
In: Operations Management
1. If at the end of week three of a project you discover you that SV is negative but SPI is 1.06. What does this mean?
2. What is the difference between percent complete and percent complete with gates Earned value (EV) measurement rules? What advantage does the latter have over the former?
3. Cost Variance (CV) and Cost Performance Index (CPI) can both be used to determine whether a project is on budget, under budget, or over budget at a particular point in time. What should a PM look for when reviewing CV and CPI information? What additional EVM analyses/calculations are supported by CPI?
In: Finance
A Ltd specialises in the distribution of pharmaceutical products. It buys from pharmaceutical companies and re-sells to each of the three different distribution channels: (i) General supermarket chains, (ii) Drug store chains, and (iii) Individual chemist shops. The company plans to use activity-based costing for analysing the profitability of its distribution channels. The following data relates to the quarter ending March 2020. Particulars General supermarket chains Drug store chains Individual chemist shops Average sales per delivery $96,500 $32,450 $6,225 Average cost of goods sold per delivery $94,650, $31,800, $5,950 Number of deliveries 960 ,2,470, 8,570 Number of orders 1,000, 2,650, 9,500 Average number of cartons shipped per delivery 250 75 12 Average number of hours of shelf stocking per delivery 2, 0.5, 0.1 The following information is available in respect of operating costs (other than cost of goods sold) for the quarter ending March 2020. Activity areas Cost Cost driver Customer purchase order processing $591,750 Purchase orders by customers Customer store delivery $960,000 Number of deliveries Cartons dispatched to customer stores $792,135 Number of cartons dispatched to customer stores Shelf stocking at customer location $80,240 Hours of shelf stocking Required: (a) Calculate the activity cost driver rates for each of the activity areas. (b) Prepare an income statement showing details of each distribution channel for the quarter ending March 2020 using activity-based costing.
In: Accounting
Bonita Beauty Corporation manufactures cosmetic products that
are sold through a network of sales agents. The agents are paid a
commission of 19% of sales. The income statement for the
year ending December 31, 2020, is as follows.
|
BONITA BEAUTY CORPORATION |
||||
| Sales | $ 78,400,000 | |||
| Cost of goods sold | ||||
| Variable | $ 32,144,000 | |||
| Fixed | 9,000,000 | 41,144,000 | ||
| Gross margin | $ 37,256,000 | |||
| Selling and marketing expenses | ||||
| Commissions | $ 14,896,000 | |||
| Fixed costs | 10,528,000 | 25,424,000 | ||
| Operating income | $ 11,832,000 | |||
The company is considering hiring its own sales staff to replace
the network of agents. It will pay its salespeople a commission
of 9% and incur additional fixed costs of $
7,840,000.
(B) Calculate the company’s break-even point in sales dollars
for the year 2020 if it hires its own sales force to replace the
network of agents.
|
Break-even point $ (C) Calculate the degree of operating leverage at sales of $78,300,000 if (1) Bonita uses a sales agent and (2) Bonita employes its own sales staff. (1) Bonita uses sales agents (2) Bonita uses its own sales staff (D) Calculate the estimated sales volume in sales dollars that would generate an identical net income for the year ending 12/31/2017 regardless of whether Bonita Co. employs its own sales staff and pays them an 8% sales commission or continue to use the independent network of agents. Estimated Sales Volume $ |
In: Accounting
Gibco Limited has an October 31 year end. On October 1, 2020 Gibco had the following current liabilities
listed on its books:
Bank credit line ................................................ $23,250
Accounts payable ............................................. 100,500
CPP, EI and income tax payable ...................... 9,620
Unearned revenues ........................................... 12,000
During October 2020 Gibco engaged in the following transactions:
Oct 1 Paid $20,000 on the line of credit with their bank to replace the bank overdraft.
Oct 5 Sold goods worth $30,000 on which they had previously received a $12,000 deposit. The balance is due
in 30 days.
Oct 12 Bought $20,000 of inventory on credit, terms of 30 days.
Oct 15 Paid amounts due the Government of Canada for the payroll amounts outstanding from September 30.
Oct 20 Paid $87,000 owing to a supplier.
Oct 21 Received $5,000 from a client for work that will be performed in January 2021.
Oct 21 Sold $56,000 of goods half for cash, half on credit.
Oct 30 Paid the monthly payroll amounts to employees. The gross payroll was $16,200. Amounts withheld
from the employees' cheques were as follows:
Canada pension plan premiums (CPP) $802
Employment insurance premiums (EI) $259
Income tax $2,800
At this time, the company also recorded their liability for amounts due to the government for CPP and
EI.
Oct 31 Declared $5,000 of dividends payable next year.
Instructions
a) Prepare all of the journal entries required as a result of the above transactions.
b) Prepare the current liabilities section of the statement of balance sheet at October 31, 2020.
In: Accounting
Pharma Save Ltd specialises in the distribution of pharmaceutical products. It buys from pharmaceutical companies and re-sells to each of the three different distribution channels: (i) General supermarket chains, (ii) Drug store chains, and (iii) Individual chemist shops. The company plans to use activity-based costing for analysing the profitability of its distribution channels. The following data relates to the quarter ending March 2020.
|
General |
Drug store |
Individual |
||
|
Particulars |
supermarket |
chemist |
||
|
chains |
||||
|
chains |
shops |
|||
|
Average sales per delivery |
$96,500 |
$32,450 |
$6,225 |
|
|
Average cost of goods sold per delivery |
$94,650 |
$31,800 |
$5,950 |
|
|
Number of deliveries |
960 |
2,470 |
8,570 |
|
|
Number of orders |
1,000 |
2,650 |
9,500 |
|
|
Average number of cartons shipped per |
||||
|
delivery |
250 |
75 |
12 |
|
|
Average number of hours of shelf stocking |
||||
|
per delivery |
2 |
0.5 |
0.1 |
The following information is available in respect of operating costs (other than cost of goods sold) for the quarter ending March 2020.
|
Activity areas |
Cost |
Cost driver |
|
Customer purchase order processing |
$591,750 |
Purchase orders by customers |
|
Customer store delivery |
$960,000 |
Number of deliveries |
|
Number of cartons dispatched to |
||
|
Cartons dispatched to customer stores |
$792,135 |
customer stores |
|
Shelf stocking at customer location |
$80,240 |
Hours of shelf stocking |
Required:
In: Accounting
Pina Colada Corporation had net sales revenue of $5,860,000 and investment revenue of $220,000 for the year ended December 31, 2020. Other items pertaining to 2020 were as follows:
| Cost of goods sold | $4,610,000 | ||
| Salaries and wages expense (sales) | 450,000 | ||
| Advertising expense | 122,000 | ||
| Entertainment expense | 81,000 | ||
| Selling expenses | 653,000 | ||
| Salaries and wages expense (administrative) | 297,000 | ||
| Rent expense | 100,000 | ||
| Utilities expense | 45,000 | ||
| Administrative expenses | 442,000 | ||
| Increase in value of company reputation | 70,000 | ||
| Unrealized gain on value of patents | 35,000 | ||
| Interest expense | 153,000 | ||
| Income tax expense | 87,000 |
Pina Colada has 100,000 common shares outstanding throughout the
year.
Prepare a multiple-step income statement for Pina Colada Corporation, showing expenses by function. Include calculation of EPS. (Round per share answer to 2 decimal places, e.g. 52.75.)
|
Pina Colada Corporation Income Statement For the Year Ended December 31, 2020December 31, 2020 |
||||
|---|---|---|---|---|
| $enter a dollar amount | ||||
| enter a dollar amount | ||||
| enter a total amount for the first part | ||||
| $enter a dollar amount | ||||
| enter a dollar amount | ||||
| enter a subtotal of the two previous amounts | ||||
| enter a total amount for the second part | ||||
|
enter an income statement item |
enter a dollar amount | |||
| enter a subtotal of the two previous amounts | ||||
| enter a dollar amount | ||||
| enter a total amount for all three parts | ||||
| enter a dollar amount | ||||
| $enter a total net income or loss amount | ||||
| $enter a dollar amount | ||||
In: Accounting
The comparative balance sheets for Cullumber Corporation show
the following information.
|
December 31 |
||||
|
2020 |
2019 |
|||
| Cash |
$33,600 |
$12,900 |
||
| Accounts receivable |
12,300 |
10,100 |
||
| Inventory |
12,200 |
8,900 |
||
| Available-for-sale debt investments |
–0– |
3,000 |
||
| Buildings |
–0– |
29,600 |
||
| Equipment |
45,200 |
19,900 |
||
| Patents |
5,100 |
6,200 |
||
|
$108,400 |
$90,600 |
|||
| Allowance for doubtful accounts |
$2,900 |
$4,400 |
||
| Accumulated depreciation—equipment |
2,000 |
4,500 |
||
| Accumulated depreciation—building |
–0– |
6,100 |
||
| Accounts payable |
5,100 |
3,000 |
||
| Dividends payable |
–0– |
4,900 |
||
| Notes payable, short-term (nontrade) |
2,900 |
4,000 |
||
| Long-term notes payable |
31,000 |
25,000 |
||
| Common stock |
43,000 |
33,000 |
||
| Retained earnings |
21,500 |
5,700 |
||
|
$108,400 |
$90,600 |
|||
Additional data related to 2020 are as follows.
| 1. | Equipment that had cost $11,100 and was 40% depreciated at time of disposal was sold for $2,500. | |
| 2. | $10,000 of the long-term note payable was paid by issuing common stock. | |
| 3. | Cash dividends paid were $4,900. | |
| 4. | On January 1, 2020, the building was completely destroyed by a flood. Insurance proceeds on the building were $30,100 (net of $2,000 taxes). | |
| 5. | Debt investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past. | |
| 6. | Cash was paid for the acquisition of equipment. | |
| 7. | A long-term note for $16,000 was issued for the acquisition of equipment. | |
| 8. | Interest of $2,000 and income taxes of $6,400 were paid in cash. |
Prepare a statement of cash flows using the indirect method.
In: Accounting
WQ2: (Question 2C) Assume Riddler Ltd (lessee) has entered into a leasing arrangement with Joker Ltd (lessor) for some land. The terms are as follows:
• The lease is for 7 years and commences on the 1 July 2020 The first payment of $85,000 is payable on 1 July 2020.
• There are 6 further payments of $85,000 payable on 1 July each year commencing from 1 July 2021.
? Assume as an incentive to enter in the lease the lessor agrees to pay for signage costs (i.e. costs to prepare and erect Riddlers Ltd signs with company details) of $22,000. These costs were paid by the lessor at the commencement on the lease on 1 July 2020. Assume that Riddler Ltd would expense signage costs when incurred.
• The fair value of the land was $2 million.
• The land is expected to appreciate in value and to have a fair value of $3.5 million at the end of the lease.
• The lessee’s incremental borrowing rate is 7%. • The lessee will vacate the land at the end of the lease. There is no option to purchase the land.
2 Required: (a) Determine the lease term.
(b) Calculate the present value of the lease payments. Show your calculations and basis for these.
(c) Determine the amount of the lease asset and liability initial recognised at the start of the lease. Show your calculations and basis for these.
(d) Prepare a schedule for the lease liability.
(e) Prepare the journal entries required by the lessee for the years ending: 30 June 2021 and 30 June 2022. Show any related calculations.
(f) Calculate the amounts for lease liability shown as non-current (and current) at 30 June 2024.
In: Accounting
Before the audit report was signed, the audit team encountered the following situation. Treat each situation independently and assume the remaining financial statements are fine.
1) A property owned by Cook’s Furniture Ltd was sold to Lidia Preston, the wife of Howard Cook in June 2020. The property has a market value of four million and was sold at 3.2 million. Management did not disclose this in the financial statement because they believed this was a private matter. The disposal of this asset has been appropriately accounted for on the financial statements (e.g. the asset was removed from PPE and the loss of disposal was correctly recognised as an expense).
2) The subsequent selling price of the ready-made furniture range suggests the inventory valuation as at 30 June 2020 should be written down by $48,000 but management only wrote $38,000 off as per the financial statements because they were confident that they can increase the selling price again in 2021 after people settling back to normality.
3) Carl Cook decided to retire in 2021 due to health reasons, Carl is willing to sell his shareholding to the remaining shareholders. However, the BoD decided to explore the potential of selling the business. By the time to sign the 2020 financial statements, the company has not commenced a negotiation with any potential buyer. The BoD said to the auditor that they may not sell the business if they cannot get a good deal. Carl’s retirement decision is disclosed on the financial statements, but not the intention to sell the business.
REQUIRED: For each of the above situation:
a) Discuss the audit procedure that the auditor needs to perform in relation to each situation.
b) Explain which audit opinion is appropriate for each situation.
In: Accounting