The comparative financial statements for Halley Company for 2018 and 2019 are presented below.

Other Information:

(a) All Sales to customers are made on credit.

(b) There have been no sales of Building and Equipment during 2019.

Question 2 (continued)

Bill Bailey, the CEO of Halley Company is most concerned. Although he has made a profit of $44,000 in 2019 his cash balance during the year has increased by only $1,000.

Required: [Show all workings where necessary]

(a) Determine the following amounts that relate to Halley’s Cash Flow from Operations for the 2019 financial year:

1. How much cash did Halley receive from its customers in 2019?

2. How much cash was paid to Halley’s suppliers of Inventory during 2019?

3. How much cash did Halley spend on Salaries and wages during 2019?

4. How much cash did Halley spend on Interest payments during 2019?

5. How much cash did Halley pay in Income taxes during 2019?

6. What was the Cash Flow from Operations for the 2019 financial year?

(b) What was the Cash Flow from Investing Activities for the 2019 financial year?

(c) What was the Cash Flow from Financing Activities for the 2019 financial year?

(d) Use your analysis in parts (a) (b) and (c) to explain to Bill how he has generated a profit of $44,000 yet has seen his cash balance only increase by $1,000. Do you think Bill should be concerned about this situation?

Ayayai Company prepares monthly cash budgets. Relevant data from operating budgets for 2017 are as follows:

All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,010 of depreciation per month.

Other data:

The company’s cash balance on January 1, 2017, is expected to be $60,600. The company wants to maintain a minimum cash balance of $50,500.

Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.

Logan Distributing Company of Atlanta sells fans and heaters to retail outlets throughout the Southeast. Joe Logan, the president of the company, is thinking about changing the firm's credit policy to attract customers away from competitors. The present policy calls for a 1/10, net 30 cash discount. The new policy would call for a 3/10, net 50 cash discount. Currently, 30 percent of Logan customers are taking the discount, and it is anticipated that this number would go up to 50 percent with the new discount policy. It is further anticipated that annual sales would increase from a level of $391,000 to $603,500 as a result of the change in the cash discount policy. The increased sales would also affect the inventory level. The average inventory carried by Logan is based on a determination of an EOQ. Assume sales of fans and heaters increase from 15,000 to 22,600 units. The ordering cost for each order is $201, and the carrying cost per unit is $1.45 (these values will not change with the discount). The average inventory is based on EOQ/2. Each unit in inventory has an average cost of $11. Cost of goods sold is equal to 65 percent of net sales; general and administrative expenses are 15 percent of net sales; and interest payments of 14 percent will only be necessary for the increase in the accounts receivable and inventory balances. Taxes will be 40 percent of before-tax income. For average collection period, assume the customer pays on the last day possible (if they are getting the discount, that is day 10; if not, that is day 30 with the original policy and day 50 with the proposed policy).

The maintenance manager at a trucking company wants to build a regression model to forecast the time (in years) until the first engine overhaul based on four explanatory variables: (1) annual miles driven (in 1,000s of miles), (2) average load weight (in tons), (3) average driving speed (in mph), and (4) oil change interval (in 1,000s of miles). Based on driver logs and onboard computers, data have been obtained for a sample of 25 trucks. A portion of the data is shown in the accompanying table.

a. For each explanatory variable, discuss whether it is likely to have a positive or negative causal effect on time until the first engine overhaul.

b. Estimate the regression model. (Negative values should be indicated by a minus sign. Round your answers to 4 decimal places.)

c. Based on part (a), are the signs of the regression coefficients logical?

d. What is the predicted time before the first engine overhaul for a particular truck driven 55,000 miles per year with an average load of 22 tons, an average driving speed of 55 mph, and 15,000 miles between oil changes. (Round coefficient estimates to at least 4 decimal places and final answer to 2 decimal places.)

Graphic rating scale is the evaluation of employees’ performance by comparing employees against certain “absolute” standards along a number of performance dimensions.

Question 26 options:

Question 27 (2.5 points)

If an applicant takes a test today and then retakes it a week from now, we expect the scores to be similar. This correlation between the scores means there is ______.

Question 27 options:

Question 28 (2.5 points)

Which of the following is an acceptable interview question?

Question 28 options:

Question 29 (2.5 points)

A company that places a high value on learning is also known as a(n) ______.

Question 29 options:

Question 30 (2.5 points)

Selection bias is the extent to which a selection method measures what it is supposed to measure and how well it does so.

Question 30 options:

Shoes Plus Information: A Winning Formula

Skechers USA, Inc., a $2-billion-a-ycar company, describes itself as "an award-winning global leader in the lifestyle footwear industry, [and] designs, develops and markets lifestyle footwear that appeals to men, women, and children of all ages.... With more than 3,000 styles, Skechers meets the needs of male and female consumers across every age and demographic " Any shoe company could say something similar. What separates one from another? Increasingly, it isn't the shoes. It's the information.

Information systems are woven into every part of Skechers's business. Its recent investment in Oracle applications, including cloud computing (introduced in the "Telecommunications, Networks, and the Internet" section of this chapter) demonstrates the company's commitment to information systems. Mark Bravo, Skechers senior vice president of finance, says, "As we manage growth, we are establishing a business structure that lowers costs and creates more value and flexibility across the business. The ... cloud services help us to lighten our lT overhead and enable us to respond more quickly to market opportunities." Therefore, it was natural that Skechers would turn to information systems to help with customer retention. In a fast-moving consumer product category like shoes, using information to understand, attract, and retain customers is even more important than having the latest technology. Many companies use loyalty programs to help retain customers. A pizza shop might give its customers a card that is punched every time they buy a pizza. When the card has 10 punches, the customer can order a free medium pizza with two toppings. Loyalty programs reduce the chances of a regular customer switching suppliers even if another shop sells pizza for less during a promotion or offers a different advantage. After Skechers decided to offer a loyalty program, their challenge was this: How to design the program for greatest

sales impact? The company had to balance ease of earning rewards, the value of the rewards, and other factors so they gave away as little as possible while retaining as many loyal customers as possible. In the pizza shop, a free pizza after buying five might cost too much revenue; a free pia after twenty might put the rewards too far out in the future to be attractive. Ten is a good middle ground. The loyalty program that Skechers designed, planned jointly by their marketing and information systems departments, is called Skechers Elite. Members earn free merchandise ($10 credit for every $150 spent), get free shipping, and enjoy special promotions. In addition, Gold members (who spend at least $750 on Skechers shoes in a calendar year) and Platinum members ($1,000) get higher merchandise credits, sneak peeks at future products, and earn other higher benefits. Skechers couldn't operate Skechers Elite without information systems. The system that supports this loyalty program records information about members, their purchases, and the rewards they're entitled to, so members can track their participation online. In addition, the system provides Skechers's management with information about the purchase patterns of regular customers, such as shoe designs that appeal to them. The system also lets Skechers send targeted promotional materials to its best customers. Does this use of information technology pay off? According to analyst Peter Chu, it does. He found on November 2, 2011, that Skechers (SKX) stock performance outpaced that of the other shoe manufacturers he tracked. He considers that performance "a bullish sign of underlying fundamental and technical strength

."

Discussion Questions 1. Which information systems applications described in the case are unique to Skechers and would not benefit other shoe manufacturers? Which aspects of their loy- alty program could other firms duplicate and quickly benefit from? Which would take competitors longer to use or offer?

2 What kind of information does the Skechers Elite pro- gram use? Aside from its direct benefit in increasing customer loyalty, what other benefits might the pro- ram have? How could Skechers use the information in its planning and sales activities?

The following selected transactions were completed by Capers Company during October of the current year:

Journalize the entries to record the transactions of Capers Company for October. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

Business Ethics, book Velasquez 7th edition, pg.113

People in West African countries, among the poorest in the world, survive on $ 1 a day and have a life expectancy of 46 years. But in 2004, Equatorial Guinea had a GDP ( Gross Domestic Product) of $ 4,472 per person, the highest in West Africa. In 1995, Equatorial Guinea found oil off its coast, and by 2004 ExxonMobil, Amerada Hess, and Marathon Oil all U. S. oil companies were helping that West African country produce $ 4 billion of oil revenues a year. Equatorial Guineas inexperienced government agreed to give 80 percent of these revenues to the oil companies that drilled the oil for them, although oil companies in developing nations usually take about 50 percent of revenues from oil projects. The oil companies channel through Riggs Bank, a 2004 Senate report revealed hundreds of millions of dollars to Equatorial Guineas president, T. Nguema, and his family for land purchases, security services, and office leases. A Department of Energy report says that because Nguema and his family run the government, the 20 percent of oil revenues that go to the government are spent on lavish personal expenditures, and so most oil money is concentrated in the hands of top government officials while the majority of the population remains poor. If Nguema had not been paid, of course, the Equatorial Guinea government would never have approved the oil project. ExxonMobil says it has spent $ 4 million and Marathon Oil and Amerado Hess claim to have invested millions of dollars on schools, libraries, programs for malaria, polio, and AIDS, health clinics, bridges, waterways, and electricity. A U. S. human rights report says Equatorial Guineas government violates citizens rights of free speech, of the press, of assembly, of due process, of association, of religion, and of movement and uses torture, beatings, and other physical abuse against political opponents.

1. What would utilitarianism, rights theory, and justice say about ExxonMobil, Amerada Hess, and Marathon Oil activities in Equatorial Guinea?

What would utilitarianism, rights theory, and justice say about these activities of Exxon Mobile, Amerada Hess, and Marathon Oil in Equatorial Guinea?

Scenario:

You’ve just secured a new client in your accounting practice, the Rawls Repair Corporation, (RRC) a brand new small business specializing in bicycle repair. The owner, Rob Rawls, is a terrific cyclist and bike repair specialist, but definitely not an accountant. Your job is to help Rob put his affairs in order. Luckily Rob has only been in operation for a month and things have not gotten too out of hand yet! Rob has to submit his financial statements to his investors and doesn’t know where to begin. It’s your job to go through the complete Accounting cycle to prepare the financial statements for the RRC.

1. Complete requirements 1-3 on the journal entries. General ledger and trial balance worksheets

2. Put work into worksheets

The restaurant owner Lobster Jack wants to find out what the peak demand periods are, during the hours of operation, in order to be better prepared to serve his customers. He thinks that, on average, 60% of the daily customers come between 6:00pm and 8:59pm (equally distributed in that time) and the remaining 40% of customers come at other times during the operating hours (again equally distributed). He wants to verify if that is true or not, so he asked his staff to write down during one week the number of customers that come into the restaurant at a given hour each day. His staff gave him the following data:

Help the manager figure out if his instincts are correct or not. Use a Chi-Squared test to see if the observed distribution is similar to the expected. Use the average demand for a given time as your observed value.

Part 1:

What is the p-value of your Chi-Square test?

Parts 2:

The owner now wants you to help him analyze his sales data. The restaurant is famous for its Lobo lobster roll. You were given some information based on which you deduced that the demand for the lobster roll was normally distributed with a mean of 220 and standard deviation of 50. You also know that the lobster supplier can provide lobster at a rate that mimics a uniform distribution between 170 and 300. One Lobster is used per roll and the lobsters need to be fresh (i.e. the restaurant can only use the lobsters that are delivered that day).

You decide to run 200 simulations of 1000 days each.

1. Calculate the expected sales of Lobster roll per day based on your simulation results. I solved

201

2. Use the expected sales from each of your 200 simulations to create a confidence interval for the average expected sales. What is the 95% confidence interval, L (Your confidence interval is mean +/- L), for this estimate?