Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Sunshine Company had the following income, expense, and loss items for the current year: Sales $650,000 Corporate dividend (from 5% owned corporation) 60,000 Municipal bond interest 25,000 Long-term capital gain 0 Short-term capital loss (8,000) Cost of goods sold 320,000 Depreciation 65,000 Nondeductible fines 4,000 Advertising 7,000 Utilities 6,000 Rent 5,000 Furthermore, Sunshine’s liabilities (all recourse) increased from $0 on 1/1 to $300,000 on 12/31 of the current year. 1) Assume that Sunshine Company is owned by Alvin as a sole proprietorship. Alvin received $2,400 per month ($28,800 in total) from Sunshine Company as an owner’s draw. Additionally, Alvin took $55,000 out of Sunshine Company near the end of the year as a partial distribution of profits.

a) Calculate the net business income of Sunshine Company/Alvin that would be reported on Schedule C of Alvin’s Form 1040.

b) How much of the $2,400 per month ($28,800 total) and the $55,000 distribution would Alvin include as taxable income on his Form 1040?

c) What amount of Alvin’s income will be subject to self-employment tax?

d) Note that you do not need to complete Schedule C or other forms, but these form will be a useful guide in completing this portion of the assignment.

2) Assume that Sunshine Company is a c corporation. Alvin contributed $60,000 to purchase 60% of the stock while his wife’s best friend, Ann, contributed $40,000 to purchase the remaining 40% of the stock when the corporation was formed this year. Alvin received a $2,400 per month salary ($28,800 in total). Ann doesn’t work for the company so she received no salary. The company distributed some profits at the end of the year by paying out a $55,000 dividend.

a) Calculate Sunshine Corporation’s taxable income and income tax liability to be reported on Form 1120.

b) What amount and type of income must Alvin report on his individual Form 1040 tax return?

c) What amount of Alvin’s income will be subject to self-employment tax?

d) What is Alvin’s basis in his Sunshine stock at the end of this year?

e) Note that you do not need to complete Form 1120 but this form and related schedules will be a useful guide in completing this portion of the assignment

19) Boris, a sole proprietor, manufactures glass containers for beverages. Boris wants to convert his business to a corporation. Just before he completes the paperwork to incorporate, Boris renews the lease on his factory. Which of the following is true?

Select one:

a.
The lease contract is breached as soon as Boris’ business is incorporated.

b.
The new corporation is instantly liable on the lease as soon as it is incorporated.

c.
Boris remains personally liable on the lease unless the corporation adopts it through a novation.

d.
No one is liable: Boris’ sole proprietorship no longer exists and the corporation did not sign the lease.

20) A provision in the bylaws of Wells Fergo Corporation allows each shareholder to maintain his proportionate control by giving preference over prospective purchasers to purchase a pro-rated share of the new stock. This provision is called

Select one:

a. Cumulative voting.

b. Pro-rata rights.

c. Stock warrants.

d. Preemptive rights.

21) Steve Alan, a college student, founded a start-up company called Macrosoft. Steve wants to borrow money from Bank of Washington, which will give him the loan if Steve’s father cosigns. Steve’s father agrees. He is a

Select one:

a. A security.

b. A surety.

c. A guarntor.

d. A promisor.

22) Mieko is a shareholder of Natural Gas, Inc. Natural Gas uses cumulative voting to elect directors. This means that the number of Mieko’s votes is determined by the number of

Select one:

a. Shareholders present at the shareholders’ meeting.

b.
The number of shareholder meetings that Mieko has attended.

c.
Members of the board to be elected multiplied by the total number of voting shares that Mieko holds.

d. Years that Mieko has been a shareholder.

team 7 provide a  3-4 paragraph answer for the following questions

1-What are 4 key things you learned about the topic from reading their paper?

2-How does the topic relate to you and your current or past job?

3-Critique the paper in terms of the organization and quality.

In today’s technological age, employers have a plethora of options on how and where to find employees. Companies often choose between two different sources to find candidates: internal or external sources. The Internal sources that organizations use to acquire new hires include locations for walk-ins, career programs, website job listings, employee referral, internships, and pay for new hire services by career search websites. External sources can vary from job postings or job posting sites, to local recruiters, and career fairs. Often, the internal sources are the most effective method that employers have when it comes to finding employees.

Internal sources have three significant methods to successfully convert applicants to interviews. The first one is Website job listings. On the job listing the human resource department directly handles with every applicant, which is quickly evaluated, responds with acknowledgement for every application. The second one is career programs, it immediately has new hires for-go a training program that could be paid by the employer or educational grants or out of pocket. This career program would allow the new hires to be ready for joining the company. The last method is walk-in and career fairs. This means that new hires would be recruited in specific locations to directly apply with human resources.

Websites like Indeed and Monster have great career builder tools for online applicants which is one of the reasons why external sources have become successful in finding candidates for employer. Some companies want more options to recruit new hires rather than official websites, walk-in, career programs, career fairs, and employee referrals so they usually have external sites like monster and indeed.com promote paid advertisements for positions. This is why external individual companies that have been paid to have certain positions advertised are considered an internal source. These types of sources end up giving the highest percent of interviews and hires. Human resource departments have been recruiting employees today in a much more specific way. They have utilize their incentives as tools to target quality employees in to staying with the company or recruit talent. These tools and incentives were not always available in the past, so some companies have been creative in utilizing these tools to widen their candidate pools and hire the individual that meets the qualifications of their ideal employee.

The way employers hire candidates is broken down to straight forward metrics from SilkRoad technology, a global provider of social talent management solutions that has been partnered up with over 700 of its customers to uncover which recruitment methods yield the most interviews and hires. SilkRoad collected data from OpenHire, an applicant tracking system, that measures the 222,308 job postings, 9.3 million applicants to the 147,440 interviews, ending up to the 94,155 hires, into a rate. These measurable rates would help optimize recruitment, advertising budgets, and new sources of hire. External online recruitment marketing sources hires are about half of all interviews and search engines, considered an external source, produced over 90% of interviews. Companies in today's industry are utilizing the internet and other mobile technologies for new hires which can lead to a quicker turnaround in finding quality employees.

Companies lean towards using online methods of hiring since more than half of the interviews are created by online applications. The external online recruitment market is a resource that companies can pay to have an internal process made to acquire new hires specific to their needs. Examples of these external recruitment markets are Monster, hcareers.com, and indeed.com. These companies supply several tools as online applications to successfully find new hires. I personally believe utilizing internal sources is the better choice because you are able to create a physical presence while meeting the HR department. Local recruiters like CERS and Octagon Technologies have added physical tools within communities to collect new hires. Career fairs also have a social dynamic as a physical location for getting local talent.
            Once a company knows what employee they are looking for and what sources they are utilizing to find them, they must research what benefits they will offer to entice the employee and create loyalty to the company. Companies normally implement standard employee benefits that include covering 50% of a universal Health insurance plan and providing 2-weeks paid vacation after the first year of joining the company. Then for more innovative employee incentive ideas for talent, companies tend to use 20% discounts and stay bonuses, also known as retention bonuses due to the fact that they attempt to reward the employee for staying with the company for different increments of time. Other employee incentives that companies use to promote an attractive program are referral bonuses after a new hire has past the a certain time mark with the company, onboarding or hiring bonuses where students can work to get loans and tax incentives to attract young talent, and remote work options which gives hires an advantage of today’s technologies allowing them to work at home. The option I believe is most popular with employees would be cash bonuses and company profit sharing.

Once companies find the employees they must also focus on retaining them. It cannot be underestimated how paramount it is to ensure that employees remain at the company they work for. There are many key factors on how to ensure employee retention is secured and why that is so. The cost effectiveness of employee retention is what is most important for human resource departments when discussing the post hiring stage of the company. This also plays in line with the immersion period for when employees begin their job at the company. Orientation and company culture is what is key.
            It is not cost effective at all when a company loses employees and has high turnover rate. Turnover is extremely expensive and this factor is what many human resource departments fear during the hiring process. Finding the qualified applicant is just as important as ensuring the applicant will stay with the company. Replacing an employee can cost up to 50-60% of the annual salary of a position. In addition to the cost of turnover, there are also unfilled position cost. With an unfilled position at a company productivity is down and soft costs and be exponentially increased.
            With new employment it must be noted that the anticipated results of a new employee are not immediate. Companies with too high of expectation during the orientation period may put too much pressure on an employee. It is better to take time and allow the new employee to immerse themselves into the company culture and truly understand how to do their job. This is otherwise known as the ‘learning period.’ Company culture is also something to be taken into consideration in regard to employee retention.
            Employee retention can easily be secured through a positive company culture. Cultures vary from one company to another however, hostile cultures that make employees feel uncomfortable and unwelcome will experience higher turnovers. Sexual harassment should be taken very seriously, and company culture should reflect that. As a new employee, one would want to feel welcome and feel part of a culture where they can be comfortable. There is enough stress getting used to a new job, if the company culture is accommodating then employee will want to stay. By implementing the company culture, team building, and employee engagement and ensuring that companies are invested in their employee’s workplace happiness, employees will invest in the company they work for and the company can decrease their turnover rates.

It is incredibly important when working for a company for all employees to have a positive mindset, which will result in a supportive environment. An enthusiastic surrounding will result in higher productivity, as well as an increase in the company’s success. When a person feels supported and accepted due to the cheerful surrounding at their job, that individual will want to see the business flourish by working harder, rather than an employee who feels discouraged about their negative work environment. Countless adults are at work more than they are at home, so why not make it worthwhile? There are five main tips that will improve a positive work environment: make a strong effort to connect with teammates, show appreciation and positivity towards peers, have open ears and listen to other people’s ideas, have trust in the coworkers around, and lastly to be spontaneous.

The first pointer of a constructive work environment is to make a strong connection with teammates. When someone goes out of their way to interact with their peers, it shows a sense of consideration that they care for the business they represent, and that ends up radiating motivation to individuals in all sorts of ways. This is because unless that person is a one-man team, it is critical to work with the people around to make the company thrive and be successful. Also, anyone can send a message in an email, but that lacks getting to know that coworker face-to-face and will end in short messages and not-so connecting responses.

Another suggestion would be to show appreciation towards coworkers as much as possible when they accomplish a task for the business. This may seem like stating the obvious, but it is surprising how often a company is insufficient in awarding a workmate when they do a superior job. From my experience, one of the top complaints told by employees is that they feel like they do not matter to the company, and how all their hard work is not being appreciated enough. Without them, the company would not be where they are today, and to show gratitude managers can do a quick “great job” or a 5-minute appraisal out of the day. This will even make that coworker work harder than they already were because they feel invested in the work that they are doing. A business owner or manager will only gain by giving something as simple as a “thank you.”

To develop a positive work locality, it is significant to have open ears as well as an open mind when listening to other people’s ideas. It does not matter if it is the CEO or the janitor, everyone has their own personal ideas and first-hand experiences with the company. This goes along with trusting team members, which will also create a positive work environment. Nothing is more valuable than trust, whether it is work-related or something personal. Without trust, it is like a train with no tracks- the train will go nowhere. When delegating with peers, it is important for managers to try to let go of wanting to take control of everything, and allow them to help with the tasks needed to be complete. Trust is a very powerful word that can take years to build, yet seconds to break. If someone is incapable of trust, that individual will not be able to work well with others, and therefore will crumble in the business, which will negatively impact the workplace.

The last part of tips that will improve a positive work environment is being spontaneous. Employment does not always have to be so serious; it is okay to have some enjoyment at work. An average American works at least 45 hours a week, which ends up being a little less than 1/3 of the week; why not make the most of it by connecting well with the team and collaborate together to reach the same goal. When teams work nicely together, whether it is during downtime in the office or coming up with a last minute work party for the Super bowl, the outcome is incredible and will not only make anyone feel better about themselves, but create a pleasant work environment.

After discussing why having a positive work environment is so predominant when uncovering different ways of how to maintain a successful business, it is an appropriate transition into the next topic that will help properly acquire and retain employees: the importance of team building. Forbes described team building as having a bad rap, but it is actually one of the most important investments a manager or CEO can make for the company. Not only will team bonding increase collaboration, but it will also ease confrontation in the workplace. Team building has also been known to initiate trust, and engage the employees into wanting to work harder. This is fantastic for the company’s culture, which will plant a seed into impressive fortune.

A way of engaging in team building is to not make the employees feel like it is a typical day in the office. When taking time out of the day to generate team bonding, it is vital to spend time and get to know each other, as well as voice experiences that will aid in working towards a specific goal. This will result in a positive fellowship with one another, yet in a more organic way. Believe it or not, happiness and learning go hand in hand. Testing out different activities with the staff can generate a cheerful mood among employees, which will conveniently help the business itself.

When companies look to make their employees feel valued they must first look at how they approach employee engagement and how their employees are reacting to it. Do employees feel disengaged or feel included in their organization? To find this out companies are utilizing new resources to uncover the current state of their employee engagement. In 5 Tips for Measuring Employee Engagement, Saige Driver goes over 5 ways a company can approach seeing where their employee engagement at. The first step is to define what employee engagement actually means to the organization. Each individual member of a company may have a different idea of what employee engagement means to them and how they feel employee engagement should be approached, so by defining what employee engagement means to the organization as a whole it will better portray what their initiatives and plans are trying to achieve.

The number one way to measure engagement and how employees feel is through individual, anonymous surveys. With changes in technology companies are now able to utilize apps that send out frequent surveys regarding events that have happened throughout the year and get immediate answers about how employees feel this contributes to their engagement. Driver suggest sending “super-short surveys – one or two questions maximum. This makes it easier for managers to collect survey data regularly and drive timely action”, and “protecting employees by making the surveys anonymous encourages critically transparent feedback even if the feedback is negative” (Driver, 2017). By having these surveys, companies get data that they can utilize to formulate action plans for engagement that actually work. The most important part of these surveys to focus on is ensuring that they are asking the right questions. The article suggests using qualitative and quantitative questions to get well rounded feedback from employees. Questions should ask, What do we do to make you feel valued at work? and also ask, Why does this make you feel valued?

Another way to measure employee engagement that also makes employees feel valued is by having individual, informal, and candid conversations with employees. Surveys are a great way to get data for a plan, but when speaking directly with the source of the surveys, managers are able to acquire more details about answers given. Driver also discusses how exit interviews are a great way to find out why an employee is leaving and what changes should be made to ensure more employees do not leave, but that conducting interviews with employees that choose to stay and grow with the company may be even more insightful because they will discuss why they are staying and this will show a company what part of their employee engagement plan is actually working. Personally, I work for a company that has defined employee engagement and has presented workshops on what it is, but does nothing to actually promote employee engagement into the company. Many employees rely on myself as a manager to make them feel valued which in turns exhausts the management team because we do not have anyone above us do the same.

There should be a balance of engagement all down the line of a company from the top to the bottom, each tier being motivated and made to feel valued. The way I make my employees feel valued is by being there for them and not shying away from my responsibilities to them. If they have a table the is angry I will do my best to turn their experience around not for the guest, but to ensure that they guest does not take their anger out on my employee. The other way I attempt to make employees feel engaged is by thanking them. When I see them doing something good, or something that goes above and beyond I recognize them with a free crew meal, tickets for a drawing, or just a simple thank you. I also like to write encouraging messages and quotes on the mirrors at work so employees are reminded daily and throughout the day that I appreciate them.

The final step to ensuring companies find the best way to make employees feel engaged is by ensuring that surveys or individual conversations are conducted frequently throughout the year. My suggestion would be to have surveys sent out right after engagement events happen to see how employees are feeling about the event, and employee conversations should be planned in advance so they have time to have questions to ask managers and have solutions for issues they may be facing every day. Making employees feel valued does not always take an large amount of money to accomplish, but it will take time to find the right balance that works for the employees currently working in the company and for future employees. Not every idea will work for everyone, but by having an action plan in place, companies are more likely to find a good mix to ensure that their employees are staying loyal and are contributing to the success of the company for years to come.

Throughout the paper we described different methods of finding, acquiring, and retaining employees. It started with the research that went into these effective methods and covered the advantages that new hires can take advantage of in order to qualify for certain or additional incentives, standard incentives that most full-time companies should use. These included dynamic incentives that some companies offer and cash incentives that directly create a positive impact. We focused on why retaining employees is just as important as finding the right candidate for a company, and team building was discussed which we learned is a more recent trend for companies to focus on to ensure that they have employees that work together to make the company successful. We also looked into making work more “fun” or “enjoyable” since the average employee spends majority of their week at work. We explored employee engagement, what it means, and how companies can implement it into their human resources plan. All of these topics are crucial in finding a workforce that contributes directly and continuously to the success of the organization's mission. It is not without its difficulty to find the best mix of what works for a company and its employees, but once a company finds that balance they are guaranteed a happy workforce that will lead to their company’s success

Consider the utility functions of three individuals: u(x) = x^1/2, v(x) = ln x, and h(x) = x – 0.01 x², where x represents wealth.

Consider also the following lotteries: X = (w₀ + x₁, w₀ + x_2, w₀ + x_{3; ¼, ½, ¼ )} = (4, 16, 25; ¼, ½, ¼), where w₀ = $2, and lottery Y in which w₁ = $10, so that Y = (12, 24, 33; ¼, ½, ¼). Note that Y = X + (10; 1)

1. Tell whether u(x), v(x) and h(x) are risk averse, risk neutral or risk lovers individuals.

2. Compare individuals u(x) and v(x) with respect to their degree of risk aversion. Tell who is more risk averse.

3. Calculate the risk premium of individuals u(x) and v(x) with respect to lottery X. Did you obtain that the risk premium of v((x) is larger than that of u(x)? Is that result expected? Why?

4. Compare the risk premium of individual u(x) with respect to lotteries X and Y. Did you obtain that the risk premium with respect to lottery X is larger than that with respect to Y? Is that result expected? Why?

5. Compare the risk premium of individual h(x) with respect to lotteries X and Y. Did you obtain that the risk premium with respect to lottery X is larger than that with respect to Y? Is that result expected? Why?

1. Sexual orientation and gender can best be described as examples of which of the following?

a. Group of answer choices

b. Individual characteristics that are not influenced by social factors

c. Identity categories that have personal and group meaning but can also be used for demographic research

d. Agents of socialization that allow developing individuals to understand their culture

e. Social categorizations imposed by researchers

2. An individual's social class is LEAST likely to be affected by…

a. Group of answer choices

b. Inheriting a large sum of money

c. Attaining a higher level of education

d. Starting volunteer work in a homeless shelter

e. Being elected to state legislature

3. Which of the following characteristics are associated with classical conditioning?

1. Reward and punishment
2. Reinforcement schedules
3. Conditioned and unconditioned responses

Group of answer choices:

a. 3 only

b. 1 and 2 only

c. 1, 2, and 3

d. only

4. According to Erikson’s psychosocial stages of development, an individual who does not successfully resolve his issue of identity likely experiences…a.

a. Inferiority

b. Mistrust

c. Role Confusion

d. Guilt

5. A new server notice that all the other new servers wear their aprons united, so she decides to leave her own apron untied. Which of the following phenomena does this situation best demonstrate?

a. Assimilation

b. Obedience

c. Compliance

d. Conformity

Hardee Transportation

Hardee’s line-haul tractors currently are equipped with the Qualcomm Satellite system. This allows Hardee to maintain real-time visibility of its tractors while they are either in motion or at rest. Trailer visibility is only available when it is hooked to a tractor. Hardee does not currently have electronic visibility of manifest/bill of landing (BOL) data in its trailers. In other words, Hardee’s satellite system will tell it that tractor #3235 is currently hooked to trailer #13145. What the system does not tell it is who the driver is, what the vehicle weight is, or which BOLs are on the trailer. To this point, Hardee’s system has served them well.

Hardee services many large manufacturers in the consumer goods industry whose main customers are large discount and specialty retailers. A current movement in this industry is the adoption of radio frequency identification (FRID) tags for full, real-time, visibility of inventory in the supply chain. Most of these efforts have taken place in manufacturing facilities, distribution centers, and retail stores. Some initiatives have placed RFID tags on pallets, cases, and individual consumer units. On of the disadvantages of these tags is the cost. Because of current low demand of these tags, each one can cost anywhere from $0.5 to $1. This cost could be prohibitive for large-volume customers.

One of Jim O’Brien’s large customers (a manufacturer of consumer products) has begun a major initiative with one of its retailers to place RFID tags on their pallets. A future pilot program will start placing these tags on each individual shipping case. Jim’s customer wants Hardee to become part of the pallet pilot because of the strategic role the carrier plays in this retail supply chain.

Jim knows little about RFID technology. What he does know is that the tags are expensive, require special receivers, and have a limited transmission distance (5 to 10 feet for passive tags). Hardee would need to develop the technology to track these pallets not only while sitting in Hardee’s yard or on its dock but also while they are in transit. Jim is really not sure what this will mean for Hardee and how it will change its technology requirements.

What would you tell Jim about RFID? How will this technology impact his carrier’s operations? How will he implement it while not incurring a huge expense? What will happen when the tags are placed on individual case?

Summary and Thoughts about this article (please, without copying it from another article, resource or whatever, your own words). (It doesn't have to be long, at least 4 paragraphs).

People in Economics

Man with a Mission

Hyun-Sung Khang profiles Princeton’s Atif Mian, who sees the fight against inequality as a moral imperative

Everyone knows someone who buys more than he or she can afford. This has been characterized mockingly as millennials spending beyond their means on avocado toast and expensive lattes, often borrowing to fund those wants. But in the modern era, dependence on credit isn’t a sign of profligacy, according to Atif Mian, a Princeton professor of economics, public policy, and finance. Rather, he argues, excessive borrowing is evidence of an economic system that has become distorted by widening income inequality.

“It’s almost as though the modern economy has become addicted to credit,” Mian says. “We need to understand how, and why, that happened.”

The 44-year-old Pakistani-American has done much to shed fresh light on our modern-day addiction to debt, and in the process, to proffer a new thesis for the greatest economic downturn in more than half a century. He and coauthor Amir Sufi, a University of Chicago finance professor, offer a novel take on the Great Recession in their 2014 book, House of Debt. The book helped land Mian on that year’s list of the world’s 25 most influential young economists, compiled by the IMF.

The authors parse vast amounts of data to show that a dramatic rise in household debt among borrowers least able to repay helped precipitate the greatest global financial crisis since the Great Depression. In their book, they argue that policymakers erred by focusing excessively on the banking system and in bailing out banks, not borrowers.

Sufi says their research has helped put household debt much more prominently on the radar of the IMF, the Federal Reserve, the Bank of England, and central banks of Australia, China, and Israel.

In the five years since the book’s publication, Mian and Sufi have broadened the scope of their research, focusing on household debt and economic inequality. Their more recent work links the worsening of household debt since 1980 to the rise of the
superrich. They connect increased income inequality to the concentration of vast amounts of wealth, which has flooded the economic system with easy credit that fuels consumption, rather than contributing to economic growth through real investment.

Passion for efficiency

In broadcast interviews and in the presence of his coauthor, Mian’s quieter, more reserved style is overshadowed by his fluent, fast-talking writing partner. But in person, and away from the camera, Mian’s mildness comes across as kind, thoughtful, and charming. He brings an easily overlooked passion to the dismal science and is attracted by the allure of the greater efficiencies it promises.

“The reason I get so excited about economics is—and this is my definition of economics: how can we better organize ourselves to do something where the sum is bigger than the parts?” says Mian. “I think economics is the unique field that exactly focuses on those kinds of questions.”

Mian’s wife of almost 20 years, Ayesha, jokes that the pursuit of efficiency prevails even in his personal life, manifesting itself in an obsession with “space utilization around the house,” during frequent evenings hosting guests.

“If there’s a three-seater [sofa], he wants three people to sit on it,” she says with a laugh. “But if there are two people sitting comfortably on it, he sees it as inefficient. Small things like that, he cannot get out of his head.”

And if a third person fails to fill the allotted slot? “You can see the pain on his face.”

Mian came to economics by accident. Born into a solidly upper-middle-class family in Pakistan as the only son of government physicians, Mian typically would have been expected to become either a doctor or an engineer, he says. As he had no interest in medicine, he chose engineering. Such was the value the family attached to education that Mian’s mother moved to Lahore, Pakistan’s second largest city, for the children’s education while his father remained posted a couple of hundred miles away.

At the age of 17, encouraged by his father, the young Mian applied to a handful of US schools and won a full scholarship to study electrical engineering at the Massachusetts Institute of Technology. He describes receiving MIT’s letter of acceptance as “one of the happiest (and luckiest) moments of my life.”

MIT was Mian’s first real exposure to life outside Pakistan and his first experience of independent living. Although he was a diligent student, engineering didn’t inspire him. Mian switched to mathematics and computer science and stumbled across economics while fulfilling his humanities requirement.

He saw in economics a field of study where he could address the big sociopolitical questions growing out of his childhood in 1980s Pakistan, a nation emerging from dictatorship, riven by violence, extremism, and internal sectarian tensions.

“You’re sort of wondering, like, is this really how the world is supposed to work in terms of the violence, in terms of the way the society seems to be splitting apart, and can one do better?” Mian says. “That was something that always resonated with me, that I wanted to do something about.”

After completing his undergraduate degree in mathematics and computer science with a perfect grade-point average and following a short sojourn at Princeton, Mian opted to return to MIT for his PhD. He earned his degree in 2001 with a dissertation on banking and governance. He then served as an assistant and associate finance professor at the University of Chicago business school until 2009 and as a professor of economics, finance, and international business at the University of California, Berkeley, until 2012, before coming to Princeton.

Research partnership

The partnership with Sufi, a Pakistani-American born in Detroit and reared in Topeka, Kansas, emerged from an introduction by a mutual friend, who suggested they had similar interests. According to Sufi, that interest was in “using applied microeconomic techniques to answer important questions at the intersection of finance and macroeconomics.”

It is this use of micro, or granular, data to answer macroeconomic questions that the authors view as their special contribution to economics. “This empirical approach has really taken off since our early work on the 2008 recession,” says Mian.

From that shared interest grew their book, which was short-listed for the Financial Times 2014 Business Book of the Year, although Thomas Piketty’s Capital in the Twenty-First Century ultimately won.

Former US Treasury Secretary Larry Summers suggested that the work “could be the most important book to come out of the 2008 Financial Crisis and subsequent Great Recession.” In a review, Summers expresses some sympathy for the authors’ assertion that there should have been greater consideration given to households during the Great Recession.

In discussions with Mian, there is almost a sense of a philosophical underpinning to his work, a belief that the well-being of a community or society depends on all individuals thriving. “When we talk about stuff like the Great Recession, you know, it really matters that we are able to absorb each other’s shocks, that we realize how we’re all ultimately connected to each other,” he says.

Summers agrees that all future work on financial crises will have to consider household balance sheets. At the same time, he defends the policymakers of the day.

“Mian and Sufi’s error is a common one among academic economists, many of whom are unwilling to try to understand policy choices that arise from considerations outside simple models,” Summers writes.

“This is exactly the kind of political timidity and failure to understand the gravity of the situation that has led to these kinds of problems,” retorts Mian.

Mian and Sufi write that policymakers could have done a better job of managing the financial crisis if they had facilitated bailouts for indebted households. The authors are sharply critical of the determination to rescue banks at the expense of households that were underwater.

“You could have said to the banks: ‘We, the central bank and the Treasury, we are giving you free money. You must pass that on to the borrower,’” Mian says. In addition, the government could have ordered a moratorium on house foreclosures. “There was no one to absorb the 4 million homes that were actually put on the market by banks.” Mian knows that because the data tell him so.

Data is always king, wife Ayesha says, but Mian is open to reasoned argument. When their two young daughters resisted attending a private school on the grounds that it was elitist, they spoke to their father and explained their views.

His response, according to Ayesha, was “There’s no way we are sending the girls there. As long as they give me a good reason, I’m OK with any decision they make.”

The two have known each other from a young age. They married in Lahore after Mian visited Pakistan to propose. Ayesha describes her husband as very serious and straightforward. Even as a student in his early 20s, “it was like talking to a 40–45-year-old.” She describes their early relationship as “practical” and “pragmatic.” “The romance came later,” she says.

Late last year, their 14- and 12-year-old daughters were joined by a brother. According to Ayesha, with the security of tenure and a major publication under his belt, Mian is relishing this third experience of fatherhood.

“He’s always been a phenomenal father, but now he’s lightened up more and is much more accessible,” she says.

Inequality and household debt

Mian’s and Sufi’s work on debt focuses on the reasons for and consequences of the steady and continued rise in debt relative to GDP. At the beginning of the 1980s, debt to GDP in the United States was about 30 percent. Since then, the figure has ballooned to more than 100 percent, a pattern duplicated in countries around the world.

The metanarrative the researchers are now exploring is the notion that the wealthiest in societies around the world make more money than they can possibly spend consuming. Rather than funding investment, the surplus is channeled through financial markets for lending to fuel consumption, Mian says.

“We’ve become a global economy dependent on credit creation to generate sufficient demand for growth,” he says.

With ever-increasing credit flowing through the system, to encourage more borrowing, interest rates are driven lower and lower, Mian suggests. But with interest rates at record low levels, there is a limit to how much further they can fall, creating the current liquidity trap, with low growth bedeviling countries around the globe. Mian suggests ominously that this credit “supercycle” is nearing an end.

From this thesis flow dismaying sociopolitical repercussions, including growing inequality, widespread discontent, and angry populism around the world, Mian says.

“You now have a relatively struggling global economy, against the background of more inequalities and inequities,” he says. “And so that raises political tensions. There’s something wrong. People sense that, and they want answers.”

Mian identifies unequal growth as the “fundamental disease” behind this credit supercycle, leading to a sense of disenfranchisement from society. The social costs are high and far-reaching. He cites examples ranging from child hunger in the United States, to high incarceration rates among black men, to low public investment in infrastructure.

“If you were to come from Mars and look at this situation, you would say, ‘What? Are these people crazy?’” Mian says.“‘They are forgetting millions of their population who have huge potential to make a difference; they are literally throwing them off the curbside.’ To the extent people like me matter, I see our role as trying to convey what is happening and why it’s happening.”

Inclusive prosperity

While pondering these questions, Mian became embroiled in a bitter, personal controversy in his native country. Last September, Pakistan’s newly elected Prime Minister Imran Khan named Mian to the Economic Advisory Council. Though widely praised internationally, Mian’s nomination was vehemently attacked by the religious right in Pakistan because of his membership in the minority Ahmadi religious community. After three days of street protests, the government reversed its decision. It was a bitter disappointment to Mian, who was looking forward to being of service to a country he loves.

Mian’s research, fueled by moral conviction, has led him to passionate advocacy for the fruits of growth to be shared more widely because, he says, economics shows us that our fortunes are linked.

Earlier this year, he added his name as one of 11 founding members of “Economics for Inclusive Prosperity,” a network of economists pledged to come up with policy solutions that will generate prosperity for all.

“While prosperity is the traditional concern of economists, the ‘inclusive’ modifier demands both that we consider the interest of all people, not simply the average person, and that we consider prosperity broadly, including nonpecuniary sources of well-being, from health to climate change to political rights,” the group’s website declares.

The reason for his support of the group? “Because we are all in it together,” Mian says. “Whatever ‘it’ is, we are all in it together.”

Prepare the necessary adjusting entries at December 31, 2018, for the Microchip Company for each of the following situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded.

1.On October 1, 2018, Microchip lent $90,000 to another company. A note was signed with principal and 6% interest to be paid on September 30, 2019.

2.On November 1, 2018, the company paid its landlord $9,300 representing rent for the months of November through January. Prepaid rent was debited.

3.On August 1, 2018, collected $15,300 in advance rent from another company that is renting a portion of Microchip’s factory. The $15,300 represents one year’s rent and the entire amount was credited to rent revenue.

4.Depreciation on office equipment is $5,600 for the year.

5.Vacation pay for the year that had been earned by employees but not paid to them or recorded is $9,100. The company records vacation pay as salaries expense.

6.Microchip began the year with $3,100 in its asset account, supplies. During the year, $7,600 in supplies were purchased and debited to supplies. At year-end, supplies costing $3,800 remain on hand.

Required: 2-a. If Microchip’s accountant employed reversing entries for prepaid expenses, prepare the original transactions creating the prepayments for only those entries that would be reversed.

2-b. If Microchip’s accountant employed reversing entries for prepaid expenses, prepare the adjusting entries at the end of 2018 for only those entries that would be reversed.

3. Prepare the appropriate reversing entries at the beginning of 2019

If no entry is required for a transaction/event, select "No journal entry required" in the first account field, and i want to know why it is no journal entry required or required. detail please

College students nationwide crave and rave about the sandwiches served up at their campus Jimmy John's Gourmet Sandwiches, but what they likely don't know is that the restaurant's founder was merely a fresh-faced high school graduate when he opened the chain's first location.

Using a loan of $25,000 from his father, Jimmy John Liautaud planned to open a Chicago-style hot dog stand in Charleston, Ill. But when he realized the equipment involved exceeded his budget, the 19-year-old turned his attention to dell-style sandwiches, opening the first Jimmy John's outlet in 1983 on the campus of Eastern Illinois University in Charleston.

Liautaud worked open to dose, usually by himself, in what was then a single-unit restaurant serving four sandwiches and 25-cent sodas. He has since grown the Champaign, Ill.-based brand into the second fastest-growing sandwich chain in the United States based on percentage growth in systemwide sales, according to Nation's Restaurant News' Top 200 census. In 2011 systemwide sales reached $1.01 billion, a 30-percent increase from the prior year.

The company currently has 26 corporate units and 1,415 franchised locations, and it continues to expand, opening approximately one new store every day.

Liautaud, who refers to himself as "a 30-year overnight success," didn't have a business plan when he started, and he claims he still doesn't. He attributes the brand's success to keeping it simple and staying informed.

"I didn't have a business philosophy or plan," he said. "What I did do was balance the checkbook every day and keep a bank balance. I was very keen on understanding what drove that balance up and down."

He grew that understanding by listening to Jamie Coulter, then a Pizza Hut franchisee who would go on to lead Lone Star Steakhouse. In 1987, after opening his second and third Jimmy John's units on the campus of Western Illinois University, Liautaud began attending monthly operations-review meetings that Coulter was holding for Pizza Hut franchisees.

"I told him to take notes and not ask any questions," said Coulter, chief executive and chairman of Coulter Enterprises Inc. "After the fourth meeting he did ask me some questions and showed me a financial statement. I was impressed with his numbers. He left with a lot of confidence, and he has just grown into a giant."

As he continued to expand the brand, Liautaud sold the first Jimmy John's franchise in 1994 and made a point to put his time and energy into developing a strong system of franchisees, which he maintains to this day with an intense hands-on approach.

"From my experience, Jimmy's attention to detail is without comparison," said Peter Fox, a Jimmy John's franchisee and part owner of the company, which he bought into when Liautaud sold a 33-percent stake to private equity firm Weston Presidio in 2007.

Fox, who was formerly a Wendy's franchisee and partner at Bear Steams, explained that corporate officials audit each franchised unit every 28 days. That audit includes the findings of a full day spent in the store rating and evaluating every detail. It is a process that Fox cited as drastically different and more involved than the one at Wendy's, and one that Liautaud himself continues to take part in because of mistakes made early in his career.

"I didn't lead by example and set people up to fail," he said. "I thought the definition of a good employee was someone that you didn't have to tell what to do and they just did it. Now I realize a good employee does exactly what you tell them to do."

Meticulous standards outlining how restaurants appear and are managed have helped Liautaud move closer to his goal of having every outlet, regardless of location, provide the same experience, environment and product.

"I really want them to be the same all the time, and I really want to be good at what I do," he said.

For this reason he sticks to a core menu and follows his guiding principles no matter what his competition is doing. While the product line has grown beyond the four original sandwiches--the cold-cut deli sandwich and sub remain the chain's bread and butter--Liautaud has resisted the temptation to add items such as hot sandwiches to better compete with brands like Potbelly Sandwich Shop and Subway.
"He's never deviated from trying to keep it simple," Fox said.

In line with its slogan, "Subs so fast you'll freak," Jimmy John's has also differentiated itself from competitors in the sandwich segment by investing time, training and money in its POS system to make sure that delivery is as quick and efficient as possible.

Liautaud claims to not know how he stands out from his competitors, who he says "are all great." He said he does not spend a lot of time thinking about what others in the business are doing. However, the difference is evident to those around him.

"I talk to Jimmy several times a week," Coulter said. "He just seems to have acquired more knowledge about the restaurant business than most of his competitors, and he executes his concept."

In addition to finance, Liautaud said he learned from Coulter that surrounding himself with good people was as important as anything else. That lesson has prompted Liautaud to eschew large development deals and big money and instead to focus on growing intelligently.

"I have no interest in being the biggest; I want to be the best," he said. "I'm going to focus on the people, focus on the team and focus on the franchisees being successful."

The company, which expanded outside of college campuses in the late 1990s, currently has more than 2,000 units in development. Despite that apparent success, however, Liautaud said he remains focused on keeping his business simple and developing strong business relationships.

"It's kind of old school, and it's not sexy," Liautaud said. "I wish I had a big, macro, super Harvard-Stanford-Yale plan to tell you about, but I just don't have one."

This case is about Jimmy John Liautaud, the founder and CEO of Jimmy John’s Gourmet Sandwiches and the evolution of his business. He began in 1983 with a single store. During the 1980s, the number of company owned stores grew, and in 1994, he began franchising. He shares how he built a strong brand so the in-store experience is consistent.

Answer the following questions: When he started his business, did Jimmy have a business plan? What was his focus to ensure success in the beginning? How has Jimmy built such a strong brand such that the customer experience is consistent regardless of location? What types of control are evident in the company’s franchise system?