1) Please describe the meaning of diversification. How does diversification reduce risk for the investor? 2) How do investors measure the risk of individual common stocks?
2) How do investors measure the risk of individual common stocks?
In: Finance
1. What are the six (6) advanced nursing practice roles? Discuss the occupation, education requirement, and dilemmas faced for each role.
2. How are hospitals liable for acts of individual nurses, even if no lawsuit is brought against the individual nurse?
In: Nursing
This question is worth 10 marks in total. This is a written calculation question, and you should perform the necessary calculations/working on paper to later be scanned and uploaded. Start a new page for this question. For dollar amounts, give your answer to the nearest cent. For interest rates, give our answer as a percentage rounded to 2 decimal places.
If any parts of the question use values from earlier parts, use the EXACT values from earlier parts.
QUESTION START
You want to buy a car which will cost you $10,000. You do not have sufficient funds to purchase the car. You do not expect the price of the car to change in the foreseeable future. You can either save money or borrow money to buy the car.
a) You will make regular deposits in your bank account at the start of each month for the next 2.5 years. Calculate the minimum required monthly savings to be deposited into the bank such that you would have sufficient funds to purchase the car in 2.5 years. (1 mark)
b) You will make regular deposits in your bank account at the start of each week for the next 2.5 years. Calculate the minimum required weekly savings to be deposited into the bank such that you would have sufficient funds to purchase the car in 2.5 years.
c) You will make regular deposits of $2,000 at the end of each year. Calculate how long will it take for you to have sufficient funds to purchase the car. (1 mark)
- Option 1: The first repayment will not start until you graduate from university. Therefore, no month-end-instalments will be made for the first 36 months. Then, commencing at the end of the 37th month, a total of 30 month-end-instalments of $X will be made over the life of the loan. The nominal interest rate is 6% per annum compounded monthly.
d) Calculate X. (2 mark)
e) Your parents agree to help you repay the loan by contributing a lump sum of $1,800 when you successfully graduate from university. Calculate the new value of X. (1 mark)
- Option 2: For the first 36 months (while you are still studying), you will be making month-end-instalments of $Y. Then, commencing at the end of the 37th month (when you graduate from university), you will double the amount of monthly repayment for the remaining 30 month-end-instalments. The nominal interest rate is 6% per annum compounded monthly.
f) Calculate the value of Y.
In: Finance
Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on which he had secured patents. Although the company has been fairly profitable, it is now experiencing a severe cash shortage. For this reason, it is requesting a $670,000 long-term loan from Gulfport State Bank, $185,000 of which will be used to bolster the Cash account and $485,000 of which will be used to modernize equipment. The company’s financial statements for the two most recent years follow:
| Sabin Electronics | ||||
| Comparative Balance Sheet | ||||
| This Year | Last Year | |||
| Assets | ||||
| Current assets: | ||||
| Cash | $ | 133,000 | $ | 320,000 |
| Marketable securities | 0 | 14,000 | ||
| Accounts receivable, net | 698,000 | 470,000 | ||
| Inventory | 1,115,000 | 765,000 | ||
| Prepaid expenses | 34,000 | 39,000 | ||
| Total current assets | 1,980,000 | 1,608,000 | ||
| Plant and equipment, net | 2,015,600 | 1,380,000 | ||
| Total assets | $ | 3,995,600 | $ | 2,988,000 |
| Liabilities and Stockholders Equity | ||||
| Liabilities: | ||||
| Current liabilities | $ | 885,000 | $ | 470,000 |
| Bonds payable, 12% | 750,000 | 750,000 | ||
| Total liabilities | 1,635,000 | 1,220,000 | ||
| Stockholders' equity: | ||||
| Common stock, $15 par | 860,000 | 860,000 | ||
| Retained earnings | 1,500,600 | 908,000 | ||
| Total stockholders’ equity | 2,360,600 | 1,768,000 | ||
| Total liabilities and stockholders' equity | $ | 3,995,600 | $ | 2,988,000 |
| Sabin Electronics | ||||
| Comparative Income Statement and Reconciliation | ||||
| This Year | Last Year | |||
| Sales | $ | 5,850,000 | $ | 4,860,000 |
| Cost of goods sold | 4,045,000 | 3,620,000 | ||
| Gross margin | 1,805,000 | 1,240,000 | ||
| Selling and administrative expenses | 687,000 | 582,000 | ||
| Net operating income | 1,118,000 | 658,000 | ||
| Interest expense | 90,000 | 90,000 | ||
| Net income before taxes | 1,028,000 | 568,000 | ||
| Income taxes (30%) | 308,400 | 170,400 | ||
| Net income | 719,600 | 397,600 | ||
| Common dividends | 127,000 | 106,000 | ||
| Net income retained | 592,600 | 291,600 | ||
| Beginning retained earnings | 908,000 | 616,400 | ||
| Ending retained earnings | $ | 1,500,600 | $ | 908,000 |
During the past year, the company introduced several new product lines and raised the selling prices on a number of old product lines in order to improve its profit margin. The company also hired a new sales manager, who has expanded sales into several new territories. Sales terms are 2/10, n/30. All sales are on account.
Required:
1. To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year:
a. The amount of working capital.
b. The current ratio.
c. The acid-test ratio.
d. The average collection period. (The accounts receivable at the beginning of last year totaled $420,000.)
e. The average sale period. (The inventory at the beginning of last year totaled $670,000.)
f. The operating cycle.
g. The total asset turnover. (The total assets at the beginning of last year were $2,948,000.)
h. The debt-to-equity ratio.
i. The times interest earned ratio.
j. The equity multiplier. (The total stockholders’ equity at the beginning of last year totaled $1,758,000.)
2. For both this year and last year:
a. Present the balance sheet in common-size format.
b. Present the income statement in common-size format down through net income.
Show less
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In: Accounting
MERMED Inc. is a medical device manufacturer.
The company’s headquarters is located in Houston, Texas. It is a
global leader in developing, manufacturing, selling and servicing
diagnostic imaging and therapeutic medical devices used to diagnose
and treat cardiovascular and other diseases. MERMED earned $300
million of revenue in 2015, while employing more than 10,000 people
worldwide. One of it’s manufacturing plants is located in Dingle,
Co. Kerry, Ireland. Tom Jones is the plant manager at the Dingle
facility.
The Dingle site runs 12 hour shifts, 7 days a week. It has 1000
employees. It manufactures a variety of of medical devices
(including Class III devices). A number of it's products are sold
in the US and European markets. The facility has a Quality
Management System in place. Their Quality Management System is in
compliance with ISO 13485:2016 and 21 CFR 820. Their facility is
frequently audited by Notified Bodies and the FDA.
The site was recently audited by corporate. The corporate auditing team were checking the site's compliance with ISO 13485:2016 and 21 CFR 820. The auditors found a number of potential non-conformances to ISO 13485:2016 and 21 CFR 820.
You must complete 4 tasks (for each of the 5 incidents/questions):
1. Review each of these potential non-conformances (5 incidents in total)
2. Determine if they are non-conformances against the requirements of the ISO13485:2016 AND 21 CFR 820.
3. If they are non-compliances, write down the specific clause numbers in ISO 13485:2016 AND specific section number of 21 CFR 820 which is applicable (write down the main clause/section in each regulation that the non-compliance is against).
4. Briefly EXPLAIN your decision.
The company has not established a sampling plan for the evaluation of products during incoming inspection of Component ID Z2906.
In: Operations Management
Question 2
Great Eastern Holdings Limited is a leading insurance company in
Singapore, Malaysia, and other Asian countries.
The company operates through Life Assurance, General Assurance, and
Shareholders segments. The Life Assurance segment provides life,
long-term health and accident, annuity, and unit-linked insurance
products. The General Assurance segment offers short term property
and casualty products, including fire or burglary insurance
contracts and/or business interruption contracts, and public
liability insurance contracts; and short term medical and personal
accident general insurance products. This segment distributes its
products through bancassurance, agents, brokers, financial
advisors, and direct channels. The Shareholders segment provides
fund management services for various products, such as the Asia
Pacific equities, and Asian and global fixed income securities
portfolios for Singapore statutory boards, government-linked
corporations, public and private companies, insurance companies,
and charity organizations. The company is also involved in the
asset management, and property investment.[1]
In its 2017 Annual Report, the Chairman and Group CEO stated that
they were glad to announce a set of sterling results that showed
improvement in profitability. This clearly showed that the company
has been able to deliver values for their shareholders and
customers based on clear and consistent strategies and the
harnessing of technology to further improve overall productivity
and operational efficiency without accompanying increased in
costs.[2]
In an article issued by McKinsey & Company, “Successfully
reducing insurance operating costs”, it was observed that “costs at
the bottom-quartile players can be more than double of that of top
performers”.[3]
Source:
[1]
http://www.sgx.com/wps/portal/sgxweb/home/company_disclosure/great_eastern_holding
[2] Great Eastern Holdings Limited, Annual Report 2017
[3] McKinsey & Company, “Successfully reducing insurance
operating costs - Insights from McKinsey’s Insurance 360º
benchmarking”
ACC203e Tutor-Marked Assignment
SINGAPORE UNIVERSITY OF SOCIAL SCIENCES (SUSS) Page 4 of 5
Required:
(a) Define costs and in the context of an insurance company like
Great Eastern Holdings Limited, give four examples of costs.
(b) Explain why in the study of management accounting, so much
attention is focused on costs and efficiency.
(c) Define cost objects. Give four examples of cost objects from
the case above. Explain why managers might be interested in knowing
the costs?
In: Accounting
JAPANESE CASE STUDY #1
This case study is a composite of actual situations. Marianne, who is American, and Ken Shimizu, who is Japanese, have worked in Tokyo for over 30 years as Methodist missionaries. They have annual furloughs and occasional sabbaticals, during which they visit relatives and sponsoring organizations and engage in continuing education in the United States. They met as college students in the United States, and their three grown children have established their own careers in the United States.
Ken’s 98-year-old mother resides with Marianne and Ken. She is not Christian but has always been extremely supportive of Ken and Marianne’s work. Ken teaches at a large Christian university, whereas Marianne has served in various church-related positions over the years. As missionaries, they live in subsidized post–World War II housing near Ken’s university. Marianne has been a frugal housewife, preparing local foods in the Japanese style for her family.
Ken, who is nearly 60, recently learned that he has glaucoma. By the time it was discovered, he had lost a significant amount of peripheral vision. Although Marianne delivered all three children at a Christian hospital in Tokyo, she gets her annual physical examination when visiting relatives in the United States. She has never believed that the Japanese health system is as proactive as that in the United States. On her most recent visit to the United States, Marianne learned that she has hypertension. Her physician prescribed a medication that is readily available in Japan, but the physician was concerned about the level of stress in Marianne’s life. Mother Shimizu is quite confused and requires considerable care, but it is unthinkable for Ken, the only child, to put his mother in a long-term-care facility. Even if he would, the
quality of facilities in Japan leaves much to be desired. Most of the responsibility for Mother Shimizu falls on Marianne, in addition to her work. Marianne’s relatives are urging her to consider placing Mother Shimizu in a church-related life-care community near Marianne’s family in the United States, where Marianne and Ken would like to retire. Marianne’s own parents lived in this facility at the end of their lives. She is considering these issues as she returns to Tokyo.
1. In what ways might you consider Ken to be countercultural as a Japanese man?
2. What social pressures might Marianne have faced, given some of her choices, as a housewife in Japan?
3. What pressures will Ken likely experience as he considers how to meet the needs of both his mother and his wife?
9. Compare and contrast the fertility and mortality rates of Japan and the United States.
10. Do the traditional Japanese maintain sustained eye contact with strangers? Why or why not?
11. To which drugs might Japanese people have greater sensitivity than that of white ethnic populations?
12. How do most Japanese people meet their need for calcium?
In: Nursing
Employee Attitudes and Turnover Are Issues at Yahoo!
Marissa Mayer, former vice president of Google Product Search, left the company to become CEO of Yahoo! in October 2012. At that time, Yahoo’s stock was selling for $15.74. In January 2016, it was selling for $29.77, after reaching a high of $52.28 in 2014. Investors were not happy with the drop in revenue—and market share—from 2014 to 2016. Some felt the company’s strategies were lacking and that new leadership was needed. Hedge fund investor Starboard Value LP demanded that the board fire Mayer.81
Let’s take a more detailed look at what happened at Yahoo!
According to a Dow Jones reporter, “Yahoo’s expenses have risen while revenue has declined in the three-and-a-half years since Mayer took the reins. In the first nine months of 2015, operating expenses totaled $3.9 billion, up 20 percent from the same period in 2014. During that same time, revenue excluding commissions paid to search partners dropped 4 percent to $3.09 billion.” Yahoo! also has been cutting costs via layoffs. The head count in 2016 was 10,700, down from a peak of 14,000 before Mayer arrived.82
It is estimated that 33 percent of the workforce left the company in 2015. A CNBC reporter noted that Mayer’s concern about brain drain led her to approve “hefty retention packages—in some cases, millions of dollars—to persuade people to reject job offers from other companies. But those bonuses have had the side effects of creating resentment among other Yahoo! employees who have stayed loyal and not sought jobs elsewhere.”83
Even more troubling is the manner in which some of these layoffs were executed. In 2014, “managers called in a handful of employees each week and fired them,” recalled one reporter. “No one knew who would be next, and the constant fear paralyzed the company, according to people who watched the process.” In March 2015, the situation got worse. “Mayer told the staff at an all-hands meeting that the bloodletting was finally over. Shortly thereafter, she changed her mind and demanded more cuts.”84
In January 2016, Mayer jokingly told employees at a company meeting that “there are going to be no layoffs ‘this week.’” Insiders say these types of comments are eroding employee morale and leading to the exodus of key employees.85
Key human resource decisions and policies likely contributed to poor employee work attitudes and turnover. The first was the company’s decision that employees could no longer telecommute. The head of human resources at the time, Jackie Reses, said, “We need to be one Yahoo!, and that starts with physically being together.” She defended the decision by stating, “Some of the best decisions and insights come from hallway and cafeteria discussion, meeting new people, and impromptu team meetings.” Reses believed that telecommuting hurt the company. “Speed and quality are often sacrificed when we work from home,” she said.86 But the decision also created bad press for the company.
A reporter noted, “The new rule didn’t just frustrate Yahoo employees who were directly affected, it also set off a fair amount of debate and criticism on Twitter from entrepreneurs, tech company employees and journalists who cover the industry.”87 This in turn likely created a negative impact on Yahoo!’s ability to recruit highly talented employees.
The second human resource decision was Mayer’s implementation of the quarterly performance review (QPR) system. This process allegedly led to the firings of more than 600 people in 2013. The system works by first having managers rank their employees into five categories, each with a quota: greatly exceeds expectations (10 percent of employees), exceeds (25 percent), achieves (50 percent), occasionally misses (10 percent), and misses (5 percent). Two “misses” ratings in recent quarters can result in termination. Many managers see this system as a forced curve, though Mayer contends the rankings instead serve as guidelines.
Anonymous postings on an internal message board suggested that managers did not agree with Mayer. Here is what one manager had to say:
“I was forced to give an employee an occasionally misses, [and] was very uncomfortable with it. Now I have to have a discussion about it when I have my QPR meetings. I feel so uncomfortable because in order to meet the bell curve, I have to tell the employee that they missed when I truly don’t believe it to be the case. I understand we want to weed out mis-hires/people not meeting their goals, but this practice is concerning. I don’t want to lose the person mentally. How do we justify?”88
Other employees felt the system was vulnerable to human bias and was not fairly applied across levels of management. One commented:
“Will the ‘occasionally misses’ classification apply to L2 and L3 execs also? At every goals meeting, we find Page 76senior staff who missed even the 70 percent goals. Thus, by definition, they should be classified as ‘occasionally misses.’ Two such classifications, and that person should be let go, amiright? How about we set an example for the rest of the company and can a few of the top execs who miss (or who sandbag their goals to make sure they ‘meet’)?”89
Employees have become even more fearful of the process given the number of layoffs.
Sadly, employee morale does not appear to be improving. Surveys conducted by Glassdoor revealed that “only 34 percent of Yahoo!’s current employees foresee the company’s fortunes improving. That compares to 61 percent at tanking, scandal-struck Twitter and 77 percent at Google.”90
Another issue that may be causing feelings of inequity involves Mayer’s compensation package. “Executive pay at Yahoo! is essentially based on Alibaba’s stock price,” which is outside her control: Yahoo! has a 15 percent stake in Chinese web giant Alibaba, valued at $25.7 billion. “Of Mayer’s $365 million pay over five years, only 3.3 percent will actually be affected by her performance.”91 This policy goes against the common managerial practice of paying people for their performance.
So where does this leave Mayer and Yahoo! as a whole? Broadly speaking, threats of layoffs continue. The company, which lost $4.4 billion in the last quarter of 2015, announced it would lay off 15 percent of its workforce in 2016.92 Under pressure from investors such as Starboard Value LP, Yahoo sold its core business to Verizon Communications Inc. for $4.83 billion in 2016. The sale included Yahoo’s e-mail business, websites dedicated to news, finance, and sports; advertising tools; real estate; and some patents. It does not include “Yahoo’s cash or its shares in Alibaba Group and Yahoo Japan. After the deal closes, these assets will become a publicly traded investment company with a new name.”93
APPY THE 3-STEP PROBLEM-SOLVING APPROACH TO OB
Step 1: Define the problem.
Step 2: Identify causes of the problem
Step 3: Make recommendations for solving the problem. Consider whether you want to resolve it, solve it, or dissolve it, Which recommendation is desirable and feasible?
In: Operations Management
|
December 1: Anne made an investment in Byte of Accounting, Inc., by purchasing 2,000 shares of its common stock paying $48,000.00 in cash. The par value of the common stock was $22.00 per share. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
December 3: Purchased a Ricoh Color copier for $5,200.00. The invoice number was 61298. We paid 10% and signed a 3 year note for the remaining balance. Interest at a rate of 6% a year will be paid semiannually. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 3: Check # 6001 for $2,600.00 was paid for rent of the office space for December. Rent is journalized to the prepaid rent account. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 3: In response to requests from our customers we have decided to purchase and install Super Toners at our clients locations. We received 19 Super Toners for resale to our customers at a cost of $21.00 per toner. The Invoice number was 7249, and we will pay them within 30 days. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 10: Sold 13 Super toners to a customer on account for $53.00 each. The Sales order number was 12100, record the Sales Revenue. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 10: Sold 13 Super toners to a customer on account for $53.00 each. The Sales order number was 12100, record the Cost of Goods Sold, using FIFO. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 11: Check # 6002 was used to pay salaries of $2,250.00 to equipment operators. Ignore payroll taxes. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 14: Check # 6003 was used to purchase a one-year insurance policy covering its computer equipment for $6,504.00 from Seth's Insurance. The effective date of the policy was December 16 and the invoice number was 2387. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 15: Lauryn paid $2,276.00 for airline tickets to send the kids to Grandma Ellen's for the holiday. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 16: Received 5 Super Toners for resale to our customers. The cost was $23.00 per toner. The Invoice number was 7359, and we will pay them within 30 days. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 17: We were informed that Mr. Madoff who has an account with us will never pay the $674.00 he owes us. Record the transaction to write off Mr. Madoff's accounts receivable account using the allowance method. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 17: We were informed that Mr. Madoff who has an account with us will never pay the $674.00 he owes us. Record the transaction to write off Mr. Madoff's accounts receivable account using the allowance method. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 17: Received invoice number 26354 in the amount of $750.00 from the local newspaper for advertising. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 18: Check # 6004 was used to pay Accounts Payable in the amount of $1,020.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 19: Sold 7 Super toners to a customer on account for $53.00 each. The Sales order number was 12100, record the Sales Revenue. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 19: Sold 7 Super toners to a customer on account for $53.00 each. The Sales order number was 12100, record the Cost of Goods Sold, using FIFO. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 21: Record the cost of computers for various customers on account, $6,100.00. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 21: Billed various miscellaneous local customers $12,200.00 for computers that cost us $6,100.00, record the Sales Revenue. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 21: Billed various miscellaneous local customers $12,200.00 for computers that cost us $6,100.00, record the Cost of Goods Sold. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 22: Check # 6005 was used to pay salaries of $2,250.00 to equipment operators. Ignore payroll taxes. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 22: Received a bill for $1,265.00 from Computer Parts and Repair Co. for repairs to the computer equipment. The invoice number was 43254. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 22: Check # 6006 was used to pay the advertising bill that was previously received and recorded from the local newspaper for advertising, invoice number 26354. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 22: Received 12 Super Toners for resale to our customers. The cost was $25.00 per toner. The Invoice number was 7988, and we will pay them within 30 days. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 23: Cash from customers in the amount of $21,225.00 was received on billings. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 23: Record the cost of computers for various customers on account, $7,350.00. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 28: Billed various miscellaneous local customers $14,700.00 for computers that cost us $7,350.00, record the Sales Revenue. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 28: Billed various miscellaneous local customers $14,700.00 for computers that cost us $7,350.00, record the Cost of Goods Sold. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 28: Paid the bill that was previously received and recorded from Computer Parts and Repairs Co with Check # 6007 . The invoice number was 43254. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 29: Cash from customers in the amount of $14,375.00 was received on billings. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 29: Received a bill for the amount of $630.00 from AT&T for the telephone. The invoice number was 784537. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 30: Check # 6008 was used to pay salaries of $2,250.00 to equipment operators. Ignore payroll taxes. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 30: Check # 6009 was used to pay was used to pay for a cash dividend of $.20 per share to Lauryn, a shareholder of Byte. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 30: Check # was used to pay was used to pay for a cash dividend of $.20 per share to Anne, a shareholder of Byte. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 30: Received a $7,965.00 check from Le Corporation for merchandise ordered which will be delived January 16th. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Please note: The bookkeeper that we had before you arrived was not very good. He never created a Trial Balance and after he left we realized that he neglected to record the issuances of the bond issued on January 1 of this year and the recording of the interest payment on June 30. Since we do not make entries into "closed" periods record the entries as of December 31st. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ` | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31: On January 1, Byte received $193,390.20 when they issued a $180,000.00, 7%, 10 year bond. Interest is to be paid semiannually on June 30 and December 31. The market rate was 6%. This entry was never recorded. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31: Please record the timely interest payment for the bond using the straight line method that was made on June 30th, with check # 5367. This entry was never recorded.. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
December 31: Please record the timely interest payment for the bond using the straight line method that was made on December 31st, with check # 6010. I need help journalizing these entries! The accounts given to me are:
|
In: Accounting
Use this case study to answer the questions below.
CASE CHAPTER 1: INTRODUCTION TO RESEARCH THE LAROCHE CANDY COMPANY
In 1864 Henricus Laroche started making high-quality chocolate in his kitchen in Ooigem, Belgium. Henricus learned his trade at a famous chocolate shop in Paris, and he and his wife began to make chocolate in bars, wafers and other shapes soon after Henricus had returned to Belgium to start his own business. The Belgian people loved Laroche’s chocolate and the immediate success soon caused him to increase his production facilities. Henricus decided to build a chocolate factory in Kortrijk, a nearby city in the Flemish province West Flanders. With mass-production, the company was able to lower the per-unit costs and to make chocolate, once a luxury item, affordable to everybody. The Laroche Candy Company flourished, expanded its product lines and acquired related companies during the following decades. Within a century the company had become Belgium’s leading candy-manufacturer employing over 2,500 people. Today, The Laroche Candy Company is one of the biggest manufacturers of chocolate and non-chocolate confectionery products in Europe. Under the present leadership of Luc Laroche the company has become truly innovative. What’s more, the company has adopted a very proactive approach to marketing planning and is therefore a fierce competitor in an increasingly global marketplace. The number of products the company produces and markets has increased dramatically; at this moment there are more than 250 Laroche Candy items distributed internationally in bulk, bags, and boxes. Luc Laroche, born in 1946, is the fifth generation of his family to lead The Laroche Candy Company. He is the great-great-grandson of company founder Henricus Laroche and the current Chairman and CEO of the company. But Luc is nearing retirement. He has planned to stop working in two to three years. Whereas stepping back from power is a very difficult thing to do for a lot of people, it is an easy thing to do for Luc: He is looking forward to spending time with his grand-children and to driving his Harley Davidson across Europe. What’s more, he has never found the time to play golf, and he is planning to spend “three whole summers learning it” if necessary. And yet, even though ‘letting go’ is not a problem for Luc, he still has his worries about his imminent retirement. As in most family businesses, Luc’s two children spent their share of summers working for the company. Luc’s oldest son Davy has repeatedly worked for the accounting department whereas Davy’s younger brother Robert has infrequently worked in the field. However, they have never shown a serious interest in the business. Davy, who is 35, currently works as an associate professor of management accounting at a reputable university in Belgium. Robert, aged 32, lives in Paris and has been working as a photographer for the last ten years. About twelve years ago, Robert told his dad, "I know you'd like me to come in the business, but I've got my own path to travel." Luc recalls responding that he respects that and that he does not want Robert to feel constrained; “I just want you to be happy” is what he has told Robert on that particular occasion. Ever since this conversation with Robert, Luc has put his hopes on Davy. A few days ago, Luc has invited Davy to have dinner at the famous restaurant “In de Wulf” in Dranouter, Belgium to discuss the future of the Laroche Candy Company. He wants to talk about his retirement and a succession plan for the company with Davy, who has serious doubts about taking over the company. Davy knows that for his dad the company is his life and like his dad, he wants the company to be successful in the future; but he just does not know whether it is a good idea to take over from his father. In an effort to maintain a balanced perspective on the issue, Davy has done some research on it. Hence, he has become very familiar with statistics about the failure rate of family transitions. These statistics have triggered numerous concerns and fears about taking over the company from his father. Luc and Davy discuss the future of the company during a memorable dinner in Dranouter. Luc tells Davy that he wants his son to take over the company, but Davy explains that he has qualms. He brings up his doubts and fears and alternatives such as going public, selling to a strategic acquirer or investor, or selling to employees through an employee stock ownership plan. Luc hardly listens to Davy’s concerns and strikes a blow for family business. “History is full of examples of spectacular ascents of family business,” he said after the waiter has refilled his glass for the fourth time in just over an hour, “the Rothschilds, the Murdochs, the Waltons, and the Vanderbilts, to name only a few. The Rothschilds, for instance, not only accumulated the largest amount of private wealth the Western world has ever seen, they also changed the course of history by financing kings and monarchs. Did you know that they supported Wellington’s armies, which ultimately led to the defeat of Napoleon at Waterloo? I bet you didn’t.” Davy raised an eyebrow. “I didn’t. But what I do know”, he replied, “is that only fifty years after the death of Cornelius Vanderbilt, who created a fortune in railroads and shipping, several of his direct descendants were flat broke. Apparently the Vanderbilts had both a talent for acquiring and spending money in unmatched numbers.” Davy leaned in closer toward his father. “Seriously dad, I do believe that strong family values are very important but I also feel that they may place restraints on the development of the company. It is commonly known that familism in Southern Italy is one of the main reasons for the slower economic development of the south relative to the north.” Luc sighed and looked at his son. “So, what does this all mean?” “Well, I think that the key question is whether family firms evolve as an efficient response to the institutional and market environment, or whether they are an outcome of cultural norms that might be harmful for corporate decisions and economic outcomes”, Davy replied with a gentle smile. “Don’t you think so?” “I … um … I guess I do.” Luc smiled back at his son. “I am not sure that I understand what you mean, but it sounds great. Let’s throw some money at it and hire a consultant who knows something about this. I’ll call McKinsey first thing tomorrow morning. Cheers.” “Cheers dad”, Davy echoed lifting his glass. Two weeks later, Paul Thomas Anderson, a senior McKinsey consultant, put forward the following problem statement in a meeting with Luc Laroche: What are the implications of family control for the governance, financing, and overall performance of the Laroche Candy Company?
QUESTIONS
1. What is business research?
2. Why is the project that Paul Thomas Anderson is doing for The Laroche Candy Company a research project?
3. Which steps will Paul take now that he has clearly defined the problem that needs attention?
4. Luc Laroche has decided to hire an external consultant to investigate the problem. Do you think that this is a wise decision or would it have been better to ask his son Davy or an internal consultant to do the research project?
5. What can (or should) Luc do to assist Paul to yield valuable research results?
6. How can basic or fundamental research help Paul to solve the specific problem of The Laroche Candy Company?
7. Try to find relevant books, articles, research reports and this issue. Use, among others, electronic resources of your library and/or the internet.
In: Operations Management