Mr. Aqeem is a new accounting officer of MMA Bhd. During his early tenure in the company, one of the Mr. Aqeem’s tasks is to analyse and provide opinion on an issue pertaining to the company’s litigation risk. Below is some of the relevant information to be scrutinised by him. In the year 2019, MMA Bhd has introduced a new sport bike called MX-31 through a press conference in Kuala Lumpur. However, one of its competitors, Vroom Bhd claimed that the sport bike was identical to Vroom Bhd’s product. Thus, Vroom Bhd has filed a lawsuit of RM25M against MAA Bhd for patent infringement. Based on the recent development and evidences provided by Vroom Bhd, it seems that the probable outcome of the proceeding would be 95% unfavorable to MMA Bhd. Thus, the MMA Bhd’s legal team advised that the most likely result of the court case is that the company will lose the case and has to pay RM25 million.

The company accounting period ends on 31 December.

You are required to:

1.         Based on the above information, identify the probable issue faced by Mr.Aqeem            (Problem identification).

2.         Analyse the lawsuit case by referring to the MFRS 137 Provisions, Contingent Liabilities and Contingent Assets (Problem analysis).

3.         Advice Mr. Aqeem on the right accounting treatment that should be taken regarding      the lawsuit case for the year 2019 (provide justification(s)) (Generation of solution, evaluation and decision making).

National Foods Inc - Dilemma

Introduction

It was early afternoon Friday and Roger Abbott, Director of Logistics for the Canadian division of Natural Foods Inc. (NFI) had just returned from the monthly management meeting and luncheon, and after reviewing his telephone and e-mail messages decided to set aside the rest of the day to map out a plan for re-organization of the Canadian distribution system, something he had been formulating for some time, but it had recently moved to priority status after today’s meeting with the senior management team where it was announced that NFI needed was launching a 5 year program to improve efficiency and effectiveness of the organization. All areas and departments in the organization were to examine and present ways to achieve this.

Natural Foods Inc.

Natural Foods was a global manufacturer of pre-packaged cereal and other grain related products under the “Naturally Good” brand which were produced in numerous plants throughout the world including a plant in southern Ontario. Established over 100 years ago in the Midwest United States to provide nutritional products to growing families, starting with a single product, the company now a 14 billion dollar company operates under four divisions and company continues to research and develop additional grain related products. The four divisions are:

Convenience Breakfast Foods (5.2 billion)

Snack Foods (6.8 billion)

Specialty Foods (1.2 billion)

Frozen Foods (1 billion)

The sales distribution for the NFI products was varied, with the discount retailers like Walmart and Target accounting for over twenty five percent of the sales, with grocery chains accounting for another forty five percent of sales. The balance was distributed through various other channels such as foodservice, grocery distributors, agents etc.

The company products under over twenty different product banners, and produces over 200 different items in these banners and divisions. Not all the products were produced by each plant, and not all products were available in the Canadian marketplace. Currently the company sell products in over 150 countries around the globe. NFI employed over 30,000 people worldwide.

NFI has over 35,000,000 square feet of office, manufacturing and distribution space worldwide, with some facilities being created/constructed for specific manufacturing requirements. NFI as a general rule owns all the facilities included in this 35,000,000 million square feet, however they do lease warehousing and distribution facilities in the various countries they operate in.

In North America the company (including subsidiaries) operate plants in

California

Georgia

Illinois

Indiana

Kansas

Kentucky

Michigan

Nebraska

New Jersey

North Carolina

Ohio

Ontario

Pennsylvania

Tennessee

Utah

Washington

Outside North America the company (including subsidiaries) had additional manufacturing locations, some with warehousing facilities in

Australia

Belgium

Brazil

Colombia

Ecuador

Egypt

Germany

Great Britain

India

Japan

Mexico

Poland

Russia

South Africa

South Korea

Spain

Thailand

Venezuela

Since the beginning of the company it has been concerned with nutrition and promoted the nutritional value of its products, as well as working with grain producers to improve the quality of their crops. They were also involved with providing nutrition to the military during both the first and second World Wars, while also providing its products to the food service industry, particularly hotels and restaurants. Natural Foods was a leader in nutritional advancements and had nutritionists on staff to ensure that the products they were providing were as nutritional sound as they claimed.

They were also committed to assisting those less fortunate and created a philanthropic organization as the company grew and prospered. These beliefs are as sound today as they were when they were implemented. In addition to the philanthropic assistance, the company realized that it was also important to pay attention to the well-being of employees, so Natural Foods instituted plans to assist in the care of workers children and created innovative scheduling and pay levels to ensure employee’s basic needs were taken care of.

Natural Foods was also an innovator in promoting their pre-packaged cereals and other products by offering prizes in the packages as well as opportunities for children and families to obtain additional items through the collection of points and coupons that could be redeemed.

Corporately, NFI had a set of values that they ran their business by, these included –

We act with integrity and show respect

We are all accountable

We are passionate about our business, our brands and our food

We have the humility and hunger to learn

We strive for simplicity

We love success.

These values were important to the organization and had helped them grow into the company they are today. In addition the company had a strong belief in sustainability, as outlined in this brief statement:

As a company, and as individuals, we are passionate about enriching and delighting the world through foods and brands that matter. We care passionately about how our foods are grown and produced.

NFI has taken bold steps throughout their history to become a transparent and responsible corporate citizen, in all the countries they operate. These included such initiatives as:

Reduction of waste materials in packaging

Introducing “fresh keep” packaging

Support local growers through grants and introduction of new ideas for crop improvement

Conservation of natural resources in all countries in which they operate, by working with suppliers

Support growth of minority producers and retailers

Support international climate initiatives

The Canadian Operations

Natural Foods plant in Canada, the first outside of the United States produced products originally for the growing Canadian market as well as for export to countries accessible only to member countries of the British Commonwealth. This allowed the Canadian division to grow and opened the idea for Natural Foods to open additional plants in other parts of the world, particularly British Commonwealth countries.

Natural Foods had distribution agreements with all the major retailers of cereal products across the country and also distributed product to distributors specializing in the smaller convenience and local grocery stores that wanted to sell the Natural foods brands. This arrangement seemed to be working well, but as Abbott was considering his plan to improve efficiency and effectiveness he wondered if there was a better method of achieving the market reach for its brands.

They have a number of distribution centres in their supply chain and in Canada have a centralized facility in the Greater Toronto which receives, stores and distributes products from the Ontario plant and others in the system. Some of the Natural Food plants specialize in specific cereals and supply the world market for the company, which includes shipping products to the Canadian Distribution Centre. They also ship from the Ontario plant products to other distribution centres worldwide. Not all the products manufactured by NFI are available in Canada.

The company was structured like many manufacturing businesses, with traditional departments such as

Accounting

Administration

Human Resources

Marketing

Materials Management

Procurement

Production

Transportation

Abbott as Director of Logistics was responsible for the Procurement, Transportation, Materials Management/Inventory and Production operations of the Canadian division. He also was a member of the senior management team in Canada and as such was responsible for the budgetary needs of his operating areas. Abbott worked closely with Human Resources and Accounting to ensure that costs were contained and within budget every year.

The functional areas of the Canadian division were responsible for the sourcing and procurement of raw materials, packaging and all non-production related materials used by the organization. They had contracts for many of the products purchased, but due to the nature of the market for grains they negotiated yearly with local providers for these commodities. Transportation, was all out-sourced as it a number of years ago determined not to be a core competency, and all the contracts although administered by the Procurement group, were handled by the Transportation group within the portfolio.

Production was a highly structured group and used extensively the information provided by the Head Office in the US as well as market information form the Canadian Marketing department to forecast and schedule production of the various products manufactured in Canada.

The Materials management/Inventory group probably had the most difficult component of the portfolio, as the needed to be conscience of the needs of production regarding having raw materials available, which had been a minor issue over the past few years due to poor growing seasons locally and the trend towards utilization of the imported products. Storage space within the plant was at a premium, and the inventory manager had been pressuring Roger Abbott to outsourced storage for imported products, which was being met with resistance as Roger was very budget conscience.

The good news was that the various functional areas worked well together, yes they had their differences, but they worked well together to ensure that the needs of all areas were met and the customers were getting product as required. This was becoming more complex in today’s changing Supply Chain environment and the pressure being applied by the customers to reduce their own inventories.

As he began to consider what areas of his responsibility should be examined he decided to create a list of things that this portfolio was responsible for, so he could present it to the management team that reported to him. He quickly realized that there were many things to review and consider, including the delivery schedules, distribution channels and inventory requirements for the imported products, inventory overall, procurement capabilities etc.

As he was considering all the things, he was interrupted by a recent graduate of a Supply Chain program from the local college, who was providing him with information regarding a major customer that Roger had asked for. He remembered that NFI had hired a recent graduate from the Supply Chain program at the local college, which he thought would be a good opportunity for the new employee to assist him in putting together the potential areas to review, and also to provide suggestions at some of the changes in the profession that might be applicable.

Roger decided to talk to the student’s supervisor and request that the student be assigned to Roger for the duration of this efficiency and effectiveness review. He then started to think about what he wanted the student to look at and compile information on. Roger also felt that this would be an ideal opportunity for the student to make a report and possibly a presentation to the management team under his responsibility.

Assignment:

Taking the role of the student, create a report that could be used as a strategy that Roger Abbott could take to the senior management team to show how the Logistics portfolio was going to improve efficiency and therefore be more effective.

Variances

In early 2014, JAX Inc. had budgeted for the production and sales of 6,000 units at a sales price of

$20 per unit. The following information is available regarding the standards for each unit:

Direct Materials:   2 pounds @ $3.00 per pound

Direct Labor:   30 minutes of assembly @ $0.25 per minute

Actual results for 2014 were determined to be: Number of units produced and sold:   6,800

Sales Revenue:   $149,600 ($22 / unit)

Direct Materials   $43,384 (14,960 lbs purchased and used at $2.90 / lb.)

Direct Labor:   $59,024 (210,800 minutes at $0.28 / minute)

What was JAX Inc.’s direct materials price variance for 2014?

What was JAX Inc.’s direct materials usage (efficiency) variance for 2014?

What was JAX Inc.’s direct labor rate (price) variance for 2014?

What was JAX Inc.’s direct labor efficiency variance for 2014?

****Please explain how you got the numbers and why it is unfavorable and favorable.

Researchers are interested in conducting an observational study investigating the relationship between hepatitis C and early mortality in HIV positive patients. The following table represents the findings from the study after a follow-up time period of 15 years.

• 1)   What is the mortality rate in the exposed group and unexposed group?

  		Exposed: 0.5475; unexposed: 0.3414
  		None of the other choices represents a suitable response
  		Exposed: 0.4976; unexposed: 0.2034
  		Exposed: 0.4525; unexposed: 0.6586
  		Exposed: 0.2090; unexposed: 0.2010

• 2) Is mortality a measure of incidence or prevalence?

• 		Incidence
  		Prevalence

Connor, Ali, Madison, and Sam recognize an important early step in creating GC is to agree on a business organizational form and clarify their roles because each has different priorities and interests about what they expect and want from the business. Businesses are created in one of several organizational structures, or forms. Choosing a business structure involves several factors, including which structure is most favorable for the business and its owners. The goal for GC is to minimize legal risks and liabilities, as well as tax liabilities, for the owners and the business. The owners understand a business organizational structure can achieve this goal, and can define their managerial roles and responsibilities clearly to satisfy their interests and maximize their areas of expertise. Connor, Ali, Madison, and Sam agree that weighing and balancing advantages and disadvantages for the company and its owners is the heart of the process of choosing a business structure. The owners have met privately to discuss their decision. They are now ready to meet with TLG for further analysis, negotiation, and a decision regarding the Green Clean business structure. Instructions:

To assist in this process, Winnie and Ralph asked you to assess several business structures and their characteristics, advantages and disadvantages for Green Clean. Those structures are: General Partnership

Limited Partnership

Limited Liability Partnertship

General Corporation

Limited Liability Company

Evaluate and synthesize this information, and do the following. ( Label all parts.)

A. Create a comparison matrix that shows the 5 types of business structures and compares and contrasts type of structure. You may use the chart format in the hyperlink above, or create a similar chart, or create an excel chart.

B. Write a memo to Winnie and Ralph to be discussed with GC owners:

1. recommending a business structure for GC that best minimizes tax and personal liability for the new business and its owners

2. explaining and justifying your recommendation, specifically and in detail.

Format: Memorandum TO: Winnie James, Ralph Anders

FROM: (your name)

RE: Green Clean Business Structure

DATE: 1. 2.

The early diagnosis and prompt treatment of diseases before the disease becomes advanced and disability becomes severe is __________.

Question 13 options:

How might data from the National Health Care Survey be used in public health?

Question 12 options:

1. In early March 2020, a pair of activist investors purchased over 10% of shares outstanding in Big Lots Inc., a discount retailer which has recently experienced weak returns. The investors hire you to advise on executive compensation and governance practices. Describe the conflict of interest which often arises between owners and management and suggest how this may be addressed via executive compensation

Since the early 1970s, the world oil market has been buffeted by the OPEC cartel and by political turmoil in the Persian Gulf. In 1974, by collectively restraining output, OPEC (the Organization of Petroleum Exporting Countries) pushed world oil prices well above what they would have been in a competitive market. OPEC could do this because it accounted for much of world oil production. During 1979-1980, oil prices shot up again, as the Iranian revolution and the outbreak of the Iran-Iraq war sharply reduced Iranian and Iraqi production. During the 1980s, the price gradually declined, as demand fell and competitive (i.e., non-OPEC) supply rose in response to price. Prices remained relatively stable during 1988-2001, except for a temporary spike in 1990 following the Iraqi invasion of Kuwait. Prices spiked again in 2002-2003 as a result of a strike in Venezuela and then the war with Iraq in the spring of 2003. Figure bellow shows the world price of oil from 1970 to 2003, in both nominal and real terms.

The Persian Gulf is one of the less stable regions of the world-a fact that has led to

later fell as supply and demand adjusted.
concern over the possibility of new oil supply disruptions and sharp increases in oil prices.

What would happen to oil prices-in both the short run and longer run-if a war or

The Persian Gulf is one of the less stable regions of the world-a fact that has
revolution in the Persian Gulf caused a sharp cut-back in oil production? Let's see how

led to concern over the possibility of new oil supply disruptions and sharp

simple supply and demand curves (can be used to predict the outcome of such an event.

increases in oil prices. What would happen to oil prices-in both the short run Because this example is set in 1997, all prices are measured in 1997 dollars.

and longer run-if a war or revolution in the Persian Gulf caused a sharp cut- back in oil production? Let's see how simple supply and demand curves (:anbe

used to predict the outcome of such an event.

Here are some rough figures:

Because this example is set in 1997, all prices are measured in 1997 dollars.

• 1997 world price = $18 per barrel Here are some rough figures:

• World demand and total supply = 23 billion barrels per year (bb/yr) • 1997 world price = $18 per barrel ~

• 1997 OPEC supply = 10 bb/yr
• Worlddemandandtotalsupply=23billionbarrelsperyear(bb/yr)

• Competitive (non-OPEC) supply = 13 bb/yr • 1997 OPEC supply = 10 bb/yr

• Competitive (non-OPEC) supply = 13 bb/yr15

The following table gives price elasticity estimates for oil supply and demand:16

15Non-OPEC supply includes the production of China and the former Soviet republics.

The following table gives price elasticity estimates for oil supply and demand:

Short-Run Long-Run

World demand: -0.05 -0.40

Competitive supply: 0.10 0.40

a) Using the estimated elasticities, calculate demand, competitive supply in the short run and Total short-run supply. Verify that the quantity demanded and the total quantity supplied are equal at an equilibrium price of $18 per barrel.

b) Using the estimated elasticities, calculate demand, competitive supply in the long run and Total long-run supply. Again, verify that the quantity demanded and the total quantity supplied are equal at an equilibrium price of $18 per barrel.

c) Saudi Arabia is one of the world's largest oil producers, accounting for roughly 3 bb/yr, which is nearly one third of OPEC production and about 13 percent of total world production. What would happen to the price of oil in short-run if, because of war or political upheaval, Saudi Arabia stopped producing oil? How would you answer this question from long-run perspective?

TRUE or FALSE

1. Objective of engineering risk management is early and continuous identification, management, and resolution of risks such that engineering a system is accomplished within cost, delivered on time, and meets performance requirements.

2. A risk is an event that, if it occurs, adversely affects the ability of an engineering system project to achieve its outcome objectives.

3. An event is uncertain if there is indefiniteness about its outcome.

4. Epistemic uncertainty refers to uncertainty about an event due to incomplete knowledge.

5. A system’s elements may include people, cultures, organizations, policies, services, techniques, technologies, information/data, facilities, products, procedures, processes, and other human-made (or natural) entities.

6. General systems theory is a philosophy that considers how to view and pursue scientific inquiry.

7. Daniel Bernoulli formed the idea that valuing monetary loss or gain from a gamble or lottery should be measured in the context of a player’s personal circumstance and existing wealth.

8. Risk management always involves “cost-benefit-risk” tradeoff and analyses.

In early January 2017, NewTech purchases computer equipment for $264,000 to use in operating activities for the next four years. It estimates the equipment’s salvage value at $28,000.

Exercise 8-8 Double-declining-balance depreciation LO P1

Prepare a table showing depreciation and book value for each of the four years assuming double­declining­balance depreciation. (Enter all amounts positive values.)