CASE STUDY SCENARIO 1

GEOLEN VENTURES

GEOLEN VENTURES, a local administrative authority, provides a range of services to individuals, including the provision of welfare. GEOLEN has a total workforce of 1,900.

In the welfare department, GEOLEN employs 30 staff who visits individuals to assess their welfare needs. This job means visiting individuals, who are normally poorly-paid or facing difficult family circumstances, to find out whether they should receive financial assistance (sometimes termed ‘benefits’) from GEOLEN.  

The area covered by GEOLEN has a very low population density. Staff may have to travel many kilometres between each appointment and may not return to their central office for days at a time.

Rules which determine whether people are entitled to financial assistance are complicated, with over 6,500 separate rules and 170 different forms to complete. These rules change frequently, usually three per week. Consistent application of rules is difficult because of benefit fraud, human error, constant changing of rules and time delays inherent in the system itself. Staff retention is low because of poor morale.

The existing IT system is a minicomputer which consists of a central processor supported by a number of peripherals located at the headquarters of GEOLEN. The minicomputer contains a database and other related software showing which benefits are due to which individuals. A list of the benefits due is printed out weekly; and benefits are paid out according to the information on this list. The database is accessed and updated from ten terminals located in the computer room itself. Staff normally updates the database when they return from their visits to individuals requiring benefits.

GEOLEN has decided to establish a decision support system to assist its staff in the application of benefit rules to the situations of individuals. GEOLEN requires that staff have access to the decision support system at any time during their working day.

QUESTIONS 1 RELATES TO  THE CASE STUDY SCENARIO 1 ABOVE.

QUESTIONS 1

1. Identify and describe the existing system of GEOLEN which is a minicomputer which consists of a central processor supported by a number of peripherals located at the headquarters. [10 marks]

2. Discuss the merits and demerits of such a system. [4 marks]

3 . A consultant of GEOLEN to the company that the organization can be more efficient in terms of information delivery if a Client/Server system is used instead of the current minicomputer. Discuss the suggestions of the consultant.   

  [6 marks]

The consultant is requesting the IT manager of GEOLEN to consider using some current Networking Operating Systems (NOS) for the Client/Server system.

4. Suggest with reasons two (2) current NOS that the IT manager of GEOLEN could deploy to support its operations.

[10 marks]

b. Discuss the main features of such two (2) Network Operating Systems. [10 marks]

5. Suggest with a diagram and reasons the type of topology that will be suitable for Client/Server system for GEOLEN.

[10 marks]

b. Discuss the merits and demerits of such a topology. [10 marks]

XYZ stock price and dividend history are as follows:

An investor buys four shares of XYZ at the beginning of 2015, buys another two shares at the beginning of 2016, sells one share at the beginning of 2017, and sells all five remaining shares at the beginning of 2018.

a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2015, to January 1, 2018.

4. Paul and Libby White (both are age 66) are married and together have AGI of $105,000 in 2018. They have two dependents and file a joint return. During the year, they paid $8,000 for medical insurance, $15,000 in doctor bills and hospital expenses, and $1,000 for prescribed medicine and drugs.

(A) In December 2018, the Whites received an insurance reimbursement of $3,500 for hospitalization expenses. Determine the deduction allowable for medical expenses paid during the year.

(B) Assume instead that the Whites received the $3,500 insurance reimbursement in February 2019. Determine the deduction allowable for medical expenses incurred in 2018.

(C) Assume that the Whites received the $3,500 insurance reimbursement in February 2019. Discuss whether the reimbursement will be included in their gross income for 2019.

4. Paul and Libby White (both are age 66) are married and together have AGI of $105,000 in 2018. They have two dependents and file a joint return. During the year, they paid $8,000 for medical insurance, $15,000 in doctor bills and hospital expenses, and $1,000 for prescribed medicine and drugs.

(A) In December 2018, the Whites received an insurance reimbursement of $3,500 for hospitalization expenses. Determine the deduction allowable for medical expenses paid during the year.

(B) Assume instead that the Whites received the $3,500 insurance reimbursement in February 2019. Determine the deduction allowable for medical expenses incurred in 2018.

(C) Assume that the Whites received the $3,500 insurance reimbursement in February 2019. Discuss whether the reimbursement will be included in their gross income for 2019.

Martinez, Inc. acquired a patent on January 1, 2017 for $41,300 cash. The patent was estimated to have a useful life of 10 years with no residual value. On December 31, 2018, before any adjustments were recorded for the year, management determined that the remaining useful life was 7 years (with that new estimate being effective as of January 1, 2018). On June 30, 2019, the patent was sold for $26,300.

Required:

1. Prepare the journal entry to record the acquisition of the patent on January 1, 2017.
2. Prepare the journal entry to record the annual amortization for 2017.
3. Compute the amount of amortization that would be recorded in 2018.
4. Determine the gain (loss) on sale on June 30, 2019.
5. Prepare the journal entry to record the sale of the patent on June 30, 2019.

The following data from Lyre Ltd's accounts relates to two assets at 30 June 2018:

At 30 June 2018 Lyre Ltd decides to adopt the revaluation model for both these assets. On this date land has a fair value of $2,018,000 and plant and equipment has a fair value of $294,000. On 30 June 2019 Lyre Ltd reviews the value of its assets. The fair value of land is reassessed as $2,080,000. Plant and equipment has no change in value on that date.

Prepare the journal entries required to revalue the assets for the year ended 30 June 2018 and the 30 June 2019.

The following data from Lyre Ltd's accounts relates to two assets at 30 June 2018:

At 30 June 2018 Lyre Ltd decides to adopt the revaluation model for both these assets. On this date land has a fair value of $2,018,000 and plant and equipment has a fair value of $294,000. On 30 June 2019 Lyre Ltd reviews the value of its assets. The fair value of land is reassessed as $2,080,000. Plant and equipment has no change in value on that date.

Prepare the journal entries required to revalue the assets for the year ended 30 June 2018 and the 30 June 2019.

1. [7 marks]

   1. (a) Public health authorities want to estimate the proportion of Australians aged 18-65 who caught the flu during winter 2018. If the true proportion is thought to be about 24%, how large a sample will be needed if we want to be 95% sure that our estimate will be within 0.02 of the true value? [3]

   2. (b) Due to a change in the available funding, the sample actually used for estimating the prevalence of flu included 1,712 randomly-selected Australians aged 18-65. Of these, 367 reported having a “flu-like illness” during winter 2018. Use these data to calculate a 90% confidence interval for the proportion of Australians aged 18-65 who had a flu-like illness during winter 2018. [4]

FinanceCo lent $8 million to Corbin Construction on January 1, 2018, to construct a playground. Corbin signed a three-year, 6% installment note to be paid in three equal payments at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for FinanceCo’s lending the funds on January 1, 2018. 2. Prepare an amortization schedule for the three-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2018. 4. Prepare the journal entry for the third installment payment on December 31, 2020.

Consider the following account balances (in thousands) for the Canseco companies:

1. Prepare a schedule for the cost of goods manufactured for 2018.
2. Revenues (in thousands) for 2018 were $7,500,000. Prepare the income statement for 2018