July 2019 Transactions
Date Description of the Transaction
July 1 Borrow $35,000.00 from 1st Bank by signing a 24 month note.
(As an example of how to journalize and post a transaction -- this transaction has already been entered into the General Journal and posted to the General Ledger.)
July 1 Receive $66,900.00 cash from new investors, and issue $66,900.00 of Common Stock to them. July 1 Purchase $36,000.00 of new mowing equipment, paying cash to the mower dealer.
” July 1 Pay $500.00 cash for the July truck rental.
July 3 Invoice a new customer $3,560.00, for a completed mowing job — customer will pay in 10 days.
July 5 The Board of Directors declares a cash dividend. The total amount of the dividend is $26,000.00. The Date of Record is set as July 15. The Date of Payment is set as July31“
Jul 7. Pay the employees $6,500.00 for work performed during the 1st week of July.
_ July 10. Complete a mowing job for a new customer — customer pays $915.00 cash for the job.
July 12. Collect $3,500.00 cash from the golf course for special rush mowing job completed on May 31.
July 1.4 Pay the employees $5,000.00 for work performed during the 2nd week of July.
July 15 . Purchase $880.00 of supplies from the mower dealer. The supplies are consumed immediately.
Lenny’s will pay the mower dealer for the supplies in about 2 weeks.
July 15 Collect $3,560.00 on account. The cash that is received is from the new customer for the job
that was completed on July 3.
. July 17 One of the original mowers purchased in January of 2018 broke down and is repaired by the mower deaIer. The cost of the Mower Repair job is $895.00. Lenny’s will pay the mower dealer in 30 days.
July 19. Purchase for cash $31,000.00 of supplies. These supplies will be consumed over the next 12 months.
July 20 Collect $30,000.00 from the property management company for work performed in June.
July 21. Pay the employees $4,850.00 for work performed during the 3rd week of July.
July 23. Receive a $23,250.00 advance payment from the university. The advance payment is for 6 months of work which will be performed from August 1, 2019 to January 31,2020.
July 25. Complete a special mowing job for the golf course. The total price for the mowing job is $7,050.00. The golf course pays $1,000.00 cash on this date and will pay the remainder on August 25.
July 27. Complete a mowing job for a new customer — customer pays $400.00 cash for the job. July 27 Pay $880.00 cash to the mower dealer for the supplies purchased on account on July 15. July 28 Pay the employees $5,300.00 for work performed during the 4th week of July.
July 31. Invoice the property management company $25,500.00 for July mowing work. The property management company will pay the invoice on the 20th of next month.
July 31. Pay the cash dividend which was declared on July 5.
Additional Information
Equipment: The $48000.00 beginning balance in the Equipment account relates to the mowing equipment which”was purchased on January 2, 2018. For information related to this mowing equipment see Page 70 in the Solid Footing book. This equipment continues to be used and should be depreciated for the month of July.
The following information relates to the new equipment which was purchased on July 1, 2019:
- The new equipment was placed into service on July 1, 2019 and should be depreciated for the month of July.
-The estimated useful life of the new equipment is 5 years.
- At the end of 5 years, the new equipment will have no future value and will be scrapped. The new equipment will be depreciated using the straight-line method.
Supplies: At the end of July there are $28,150.00 supplies on-hand.
Mowing service at the University:
The monthly mowing service was provided to the university per the contract signed on April 1, 2019.
Wages due the Employees: The last wage payment was made to the employees on July 28, 2019. The employees worked on
July 29, 30, and 31. For these three days of work the employees earned $3,175.00 of wages. These three days of wages will be paid to the workers during the first week of August.
Bank Loan: The interest on the loan from 1st Bank will be paid every three months. The first interest payment
to the bank will be made on September 30, 2019. Lenny's calls the bank on July 31 and the bank indicates that the interest on the loan for July is $860.00.
I NEED A GENERAL JOURNAL FOR THIS INFORMATIONS.
In: Accounting
Case:
Forty years ago, Starbucks was a single store in Seattle’s Pike Place Market selling premium roasted coffee. Today, it is a global roaster and retailer of coffee with some 21,536 stores, 43 percent of which are in 63 countries outside the United States. China (1,716 stores), Canada (1,330 stores),
Japan (1,079 stores), and the United Kingdom (808 stores) are large markets internationally for Starbucks. Starbucks set out on its current course in the 1980s when the company’s director of marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz, who later became CEO, persuaded the company’s owners to experiment with the coffeehouse format—and the Starbucks experience was born. The strategy was to sell the company’s own premium roasted coffee and freshly brewed espressostyle coffee beverages, along with a variety of pastries, coffee accessories, teas, and other products, in a tastefully designed coffeehouse setting. From the outset, the company focused on selling “a third place experience,” rather than just the coffee. The formula led to spectacular success in the United States, where Starbucks went from obscurity to one of the best-known brands in the country in a decade. Thanks to Starbucks, coffee stores became places for relaxation, chatting with friends, reading the newspaper, holding business meetings, or (more recently) browsing the web. In 1995, with 700 stores across the United States, Starbucks began exploring foreign market opportunities. The first target market was Japan. The company established a joint venture with a local retailer, Sazaby Inc. Each company held a 50 percent stake in the venture, Starbucks Coffee of Japan. Starbucks initially invested $10 million in this venture, its first foreign direct investment. The Starbucks format was then licensed to the venture, which was charged with taking over responsibility for growing Starbucks’ presence in Japan.
To make sure the Japanese operations replicated the “Starbucks experience” in North America, Starbucks transferred some employees to the Japanese operation. The licensing agreement required all Japanese store managers and employees to attend training classes similar to those given to U.S. employees. The agreement also required that stores adhere to the design parameters established in the United States. In 2001, the company introduced a stock option plan for all Japanese employees, making it the first company in Japan to do so. Skeptics doubted that Starbucks would be able to replicate its North American success overseas, but by June 2015, Starbucks had some 1,079 stores and a profitable business in Japan. After Japan, the company embarked on an aggressive foreign investment program. In 1998, it purchased Seattle Coffee, a British coffee chain with 60 retail stores, for $84 million. An American couple originally from Seattle had started Seattle Coffee with the intention of establishing a Starbucks-like chain in Britain. In the late 1990s, Starbucks opened stores in Taiwan, Singapore, Thailand, New Zealand, South Korea, Malaysia, and—most significantly— China. In Asia, Starbucks’ most common strategy was to license its format to a local operator in return for initial licensing fees and royalties on store revenues. As in Japan, Starbucks insisted on an intensive employee-training program and strict specifications regarding the format and layout of the store. By 2002, Starbucks was pursuing an aggressive expansion in mainland Europe. As its first entry point, Starbucks chose Switzerland. Drawing on its experience in Asia, the company entered into a joint venture with a Swiss company, Bon Appetit Group, Switzerland’s largest food service company. Bon Appetit was to hold a majority stake in the venture, and Starbucks would license its format to the Swiss company using a similar agreement to those it had used successfully in Asia. This was followed by a joint venture in other countries. The United Kingdom leads the charge in Europe with 808 Starbucks stores. By 2014, Starbucks emphasized the rapid growth of its operations in China, where it had 1,716 stores and planned to roll out another 500 in three years. The success of Starbucks in China has been attributed to a smart partnering strategy. China is not one homogeneous market; the culture of northern China is very different from that of the east, and consumer spending power inland is not on par with that of the big coastal cities. To deal with this complexity, Starbucks entered into three different joint ventures: in the north with Beijong Mei Da coffee, in the east with Taiwan-based UniPresident, and in the south with Hong Kong-based Maxim’s Caterers. Each partner brought different strengths and local expertise that helped the company gain insights into the tastes and preferences of local Chinese customers, and to adapt accordingly. Starbucks now believes that China will become its second-largest market after the United States by 2020.
Question:
2. Many would argue that Starbucks coffee is expensive, and yet customers get “value” for their money. How do you think Starbucks has been able to transfer this business model and value proposition to international markets?
In: Economics
Case:
Forty years ago, Starbucks was a single store in Seattle’s Pike Place Market selling premium roasted coffee. Today, it is a global roaster and retailer of coffee with some 21,536 stores, 43 percent of which are in 63 countries outside the United States. China (1,716 stores), Canada (1,330 stores),
Japan (1,079 stores), and the United Kingdom (808 stores) are large markets internationally for Starbucks. Starbucks set out on its current course in the 1980s when the company’s director of marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz, who later became CEO, persuaded the company’s owners to experiment with the coffeehouse format—and the Starbucks experience was born. The strategy was to sell the company’s own premium roasted coffee and freshly brewed espressostyle coffee beverages, along with a variety of pastries, coffee accessories, teas, and other products, in a tastefully designed coffeehouse setting. From the outset, the company focused on selling “a third place experience,” rather than just the coffee. The formula led to spectacular success in the United States, where Starbucks went from obscurity to one of the best-known brands in the country in a decade. Thanks to Starbucks, coffee stores became places for relaxation, chatting with friends, reading the newspaper, holding business meetings, or (more recently) browsing the web. In 1995, with 700 stores across the United States, Starbucks began exploring foreign market opportunities. The first target market was Japan. The company established a joint venture with a local retailer, Sazaby Inc. Each company held a 50 percent stake in the venture, Starbucks Coffee of Japan. Starbucks initially invested $10 million in this venture, its first foreign direct investment. The Starbucks format was then licensed to the venture, which was charged with taking over responsibility for growing Starbucks’ presence in Japan.
To make sure the Japanese operations replicated the “Starbucks experience” in North America, Starbucks transferred some employees to the Japanese operation. The licensing agreement required all Japanese store managers and employees to attend training classes similar to those given to U.S. employees. The agreement also required that stores adhere to the design parameters established in the United States. In 2001, the company introduced a stock option plan for all Japanese employees, making it the first company in Japan to do so. Skeptics doubted that Starbucks would be able to replicate its North American success overseas, but by June 2015, Starbucks had some 1,079 stores and a profitable business in Japan. After Japan, the company embarked on an aggressive foreign investment program. In 1998, it purchased Seattle Coffee, a British coffee chain with 60 retail stores, for $84 million. An American couple originally from Seattle had started Seattle Coffee with the intention of establishing a Starbucks-like chain in Britain. In the late 1990s, Starbucks opened stores in Taiwan, Singapore, Thailand, New Zealand, South Korea, Malaysia, and—most significantly— China. In Asia, Starbucks’ most common strategy was to license its format to a local operator in return for initial licensing fees and royalties on store revenues. As in Japan, Starbucks insisted on an intensive employee-training program and strict specifications regarding the format and layout of the store. By 2002, Starbucks was pursuing an aggressive expansion in mainland Europe. As its first entry point, Starbucks chose Switzerland. Drawing on its experience in Asia, the company entered into a joint venture with a Swiss company, Bon Appetit Group, Switzerland’s largest food service company. Bon Appetit was to hold a majority stake in the venture, and Starbucks would license its format to the Swiss company using a similar agreement to those it had used successfully in Asia. This was followed by a joint venture in other countries. The United Kingdom leads the charge in Europe with 808 Starbucks stores. By 2014, Starbucks emphasized the rapid growth of its operations in China, where it had 1,716 stores and planned to roll out another 500 in three years. The success of Starbucks in China has been attributed to a smart partnering strategy. China is not one homogeneous market; the culture of northern China is very different from that of the east, and consumer spending power inland is not on par with that of the big coastal cities. To deal with this complexity, Starbucks entered into three different joint ventures: in the north with Beijong Mei Da coffee, in the east with Taiwan-based UniPresident, and in the south with Hong Kong-based Maxim’s Caterers. Each partner brought different strengths and local expertise that helped the company gain insights into the tastes and preferences of local Chinese customers, and to adapt accordingly. Starbucks now believes that China will become its second-largest market after the United States by 2020.
Question:
1. Starbucks prefers a combination approach to foreign market entry: the use of joint ventures and licensing. Do you agree with this approach? Why or why not?
In: Operations Management
President Store Corporate operated around 300 Starbucks coffee outlets in Taiwan under a joint venture arrangement in 2013. It also ran over 2,000 of its own City Cafe outlets across Taiwan. Both enjoyed good market share and there appeared to be little cannibalization. What could be the reason for this in the competitive coffee landscape in Taiwan?
STARBUCKS
Starbucks was founded in the U.S. in 1971 and its main product was Arabica coffee beans. In 1987, Howard Schultz took over Starbucks and introduced the roasting technologies and ambience of the Italian cafe. By May 2014, Starbucks had over 23,180 stores worldwide in 64 countries. Starbucks outlets primarily sell coffee, but also offer other hot and cold beverages, pastries, sandwiches, and snacks. Starbucks introduced low calorie coffee in 2008 and instant coffee in 2009. In 2010, Starbucks started selling beer and wine in some outlets in the U.S. In 2011, Starbucks introduced the Trenta, a 31-ounce cup of coffee. Starbucks ventured into the juice bar business in 2013.
In January 1, 1988, the President Starbucks Coffee Corporation in Taiwan was officially founded as a joint venture between Starbucks Coffee International, Uni-President Enterprise Corporation, and the President Chain Store Corporation. Many people have suggested that Starbucks, as an international brand, has basically transplanted the American coffee culture into Taiwan. The concept appears to be good quality coffee at high prices to be enjoyed in a leisurely manner with friends. Coffee on offer includes cafe latte, vanilla latte, hazelnut latte, caramel macchiato, cafe mocha, and cappuccino with a price range of NT$75 (US$2.46) to NT$155 (US$5.08). However, subtle differences can be observed. The pastry cases look similar but their contents are different and include offerings such as curry chicken cannoli. There are numerous tea options including rose fancy tea, green tea, jinxuan oolong, bi luo chun, and oriental beauty (the latter three are specialty Taiwanese teas).
By 2013, Starbucks had almost 300 outlets. Over the past three years, Starbucks in Taiwan has opened 20 to 30 new stores each year, and all stores have achieved their revenue targets and contributed to 10 percent sales growth over the last few years. A research study has concluded that Western culture adoration was an important dimension in coffee consumption for Taiwanese customers at Starbucks. Overall, Starbucks engages in experiential marketing, with the consumer associating the brand with specific smells, tastes, visual elements, and sounds.
CITY CAFE
In 1986, the President Chain Store Corporation launched Cafe Americano through its 7-Eleven chain stores. In 2004, the company began to shift from the American style Americano concept to the new 24-hour Italian City Cafe concept without closing the Americano outlets already in the 7-Eleven outlets. By 2005, there were 500 CITY CAFE outlets, 1,000 in 2007, and 2,000 in 2009. Television advertising was used to build brand awareness and image. The theme used was, “The entire city is my coffee shop;” targeted at students and workers aged between 20 and 40. The concept appears to be a local coffee brand offering low priced coffee anytime and anywhere. Coffee on offer includes latte, cappuccino, and City blend, with prices from NT$25 (US$0.82) to NT$45 (US$1.48).
CITY CAFE started a Music Conservatory in the Hankyu Department Store outlet in Taipei where aspiring local singers and performers can showcase their talents. Performers in March 2014 included Taipei Soul Brothers, featuring five musicians from three different generations, and Lin Ling, a local Taiwanese girl who has been performing since the age of five.
The success of the CITY CAFE coffee bar concept has resulted in many convenience chain stores and fast food chain stores near schools, offices, hospitals, subway stations, and train stations duplicating the idea. Examples of concepts by convenience stores include Mr. Brown Coffee of Family Mart and OK Cafe of OK Mart. McDonalds also launched the McCafe.
According to a review, the coffee scene in Taiwan can be categorized accordingly:
I. Foreign Cafe Chain
This group is currently dominated by Starbucks. They offer mainly espresso coffee at very high prices of NT$90 (US$2.95) to NT$180 (US$5.90).
2. Specialist Cafe
This group offers excellent coffee with a large variety of beans. They have varied origins, create their own blends, and roast their own coffee. They sell beans and offer a mix of espresso and brewed coffee. The baristas are experts and know their coffee in a passionate way. Prices of their coffee range from NT$60 (US$1.97) to NT$150 (US$4.92). Examples of such cafes are Orsir and Mojo Coffee in Taichung.
3. Specialist Cafe Chain
This group offers excellent coffee but with a more limited range. They sell beans and offer mainly espresso, though they do have limited brewed coffee options. They have trained baristas, and the price range is NT$30 (US$0.98) to NT$70 (US$2.30). Examples of such cafes include Wilbeck in Taipei and Cama Cafe across Taiwan.
4. Taiwanese Cafe
This group serves a variety of coffee from different regions in Taiwan. The cafes are operated by single owner and they roast in small batches. They are often in business for a long time (over 15 years) and they have a small group of loyal customers. They offer mainly brewed coffee, but they have espresso as well. The price range is from NT$70 (US$2.30) to NT$120 (US$3.93).
5. Taiwanese Cafe Chain
This group serves a single unannounced blend of coffee with no other options. They serve mainly espresso though some may offer drip or brewed coffee. Some baristas may receive training but quality is uneven. The prices range from NT$35 (US$1.15) to NT$75 (US$2.46). Examples are 8S°C and Bakery.
6. Convenience Store Coffee
This group offers bean to cup machine coffee. They use cheap Taiwanese roasts of unannounced origin. Prices range from NT$25 (US$0.82) to NT$60 (US$1.97). Examples of coffee entities in this group are City Cafe by 7-Eleven and Mr. Brown Coffee by Family Mart.
Three main groups have been identified:
Coffee Connoisseur
It is primarily interested in discovering new, high quality brews of coffee. He is very price insensitive and would frequent specialty cafes with baristas who are experts and know their coffee in a passionate way.
Café Hangout
The Café Hangout Coffee drinker values his coffee as an aspirational drink, to be drunk with a group of friends or to be seen consuming the beverage by others. He is relatively price insensitive, valuing the brand of the Café over the coffee type. The ambience and mood of the café is important to him. He would prefer to have food options available with his coffee as well. This group is a mix of students, who visit cafes as a place to hangout or study at, and working professionals, who value the café as an informal place to relax.
Coffee Fix
The Coffee Fix Coffee drinker values his coffee as his daily sustenance, requiring the energy boost which caffeine from the coffee provides. He may drink up to several cups a day and is not overly concerned with the quality of the coffee. He is also price sensitive as he is not after a premium product.
A survey found that the Taiwanese drink coffee in the following frequencies per day: one cup-46 percent, two cups-13 percent, and various frequencies depending on day and occasions-36 percent. The most frequently consumed coffee is: latte-48 percent, Americano-19 percent, cappuccino-17 percent, cafe mocha-4 percent, others-12 percent. Their favorite coffee venue is: Starbucks-29.1 percent and City Cafe-29.1 percent. Areas in which Starbucks must improve: prices-68.1 percent, promotional offers-15.3 percent, charity activities-9.2 percent, quality-6.9 percent, and refreshments- 6.1 percent. Areas in which City Cafe must improve: quality-29.4percent, refreshments- I4.7percent, promotional offers-14.0 percent, store ambience-13.3 percent, and peripheral merchandize-9.8 percent.
Question 1 What variables should be used to segment the coffee market in Taiwan?
(please answer the question with the case study)
In: Operations Management
There are two reflective essays from MED students during their third year internal medicine clerkship. One student sees each connection to a patient as like the individual brush strokes of an artist and the other sees gratitude in a patient with an incurable illness and is moved to gratitude in her own life. (WORD COUNT 500)
Reflect on both essays and then choose one and describe how the student grew from the experience.
Then explain what you learned as a result of your reflection and how the lesson(s) will influence your future patient physician relationships.
Reflection #1
Georges Seurat’s A Sunday on La Grande Jatte is one of the most iconic paintings of the nineteenth century. His chromoluminarism and pointillist technique is lost from the distance; only when you look closely can the details of each brush stroke be admired. I caught myself admiring this work when visiting The Art Institute of Chicago just prior to the start of our clinical years. The excitement, perspective, and chaos of the various exhibits foreshadowed what the upcoming year would bring. Early into my medicine clerkship, I was assigned to follow Miss Jones, the patient in room 601. While she had a history of leaving against medical advice (AMA) on prior admissions, these three letters were not limited to her discharge summary. She was found to have a positive antimitochondrial antibody in the workup of her abdominal pain and pruritus. On my first day of meeting Miss Jones, her room was as chaotic as the art exhibit. The interview seemed never-ending--filled with interruptions from consults to vital checks to breakfast orders. While both our general appearances would be deemed as “mild distress” for various reasons, we each took a sigh of relief as we made it to the conclusion of the interview. I was disappointed in myself, having felt like I did not truly connect with this patient. When she mentioned her dog in passing, I got excited and asked his name. “Let’s just get on with it,” she replied. Certainly not the patient-physician relationship I was hoping to foster. Day-by-day, her labs started to come back, providing us with more pieces of the puzzle to solve her case. Cholestatic liver patterns, elevated cholesterol, and a +AMA found in a fortysomething year old female? This classic test question was now being played out in real life. UWorld prepared me for recognizing patterns in labs; but it does not tell you how it will change the world of the patient with the diagnosis. Each new result or team update was a chance to solve the puzzle of getting to know Miss Jones. No longer was she “the patient with suspected PBC,” she was the tea-drinking, yoga-loving bookworm who happened to have been diagnosed with primary biliary cholangitis. When our team officially told the news, she nodded her head and we parted ways to finish rounds. When I went back to see her, she was scared, tearful, and frustrated. I re-explained our findings and plan. We tried the teach-back method but she remained overwhelmed and confused. One could argue that a 50,000 foot view of medicine is pattern recognition of illness scripts; but I believe it's the details that keep people’s passion sustained despite years of practicing. It is understanding your patient in the context of their disease. Just as Seurat thoughtfully juxtaposed dabs of color to create his optical masterpiece, we as physicians must learn to carefully juxtapose the art and science--the patient and the disease--to truly appreciate the wonders of our craft. Seraut believed in dividing colors into its components-- a concept called chromoluminarism. The thought being you can never perfectly recreate the same shade of purple by mixing red and blue. In medicine, the same principle holds true- despite the same disease process, no two hospital stays are alike. The explanation given to Miss Jones about her diagnosis might have been acceptable to the next patient but it did not accommodate her learning style. That night I pondered about how to convey what was going on. No longer did I feel like a student- I was the teacher. The next day I went to 601 with markers and paper in hand. I started drawing pictures of the anatomy of the biliary system. Her face lit up as she conveyed to me that she was a visual learner. Miss Jones and I spent the afternoon going over everything from the different measurements in a liver function panel to the metabolism of bilirubin. Finally, the day came when my progress note read “disposition: home.” As I entered room 601 for the final time, I saw my friend Miss Jones. She took my hand-- thanking me for everything I had done, which pales in comparison to how much she did for me. We discussed her relief after months of pain and uncertainty of not having a diagnosis. Instinctively I said, “You’re a trooper.” “Trooper,” she paused and smiled. With a glisten in her eyes, looked up, and said, “Trooper--that’s my dog’s name.”
Reflection #2
Gratitude is an interesting thing – just as lighting a candle from another previously lit one gives rise to a second bright flame without diminishing the original one, gratitude is an emotion – no an attitude towards life – that seems to give a person the capacity to continually pour from their cup while also simultaneously filling it. This is quite paradoxical. And yet, as future doctors, it is the quintessential question for us – how can we give and give to others while continuing to draw meaning and becoming recharged through our interactions without burning out? Just this last week, I had a patient, let’s call her Mrs. Smith. She is an 82 year old female, very thin and frail in appearance who was diagnosed with acute myeloid leukemia. This was a lifechanging diagnosis our team presented all treatment option. She listened intently, asking all the pertinent questions about prognosis, treatment, and recovery. Finally after explaining that she and her husband had talked about these kinds of issues she said, “I’m 82 years old and I just want to enjoy what time has been given to me with my family… “If I make it through the holidays, then great. If my time is up sooner, then I will still be grateful for all that I’ve been blessed with in this life – my husband, my beautiful children, and a lifetime of teaching little kids not only math but that they have the potential to do whatever they set their mind to.” The team wrapped up the conversation appropriately and left, but I lingered to talk more with her. I was astounded by the grace with which this woman just accepted a terminal diagnosis and the fact that she only had weeks to live. The longer I spoke with her, the more I realized that her acceptance came not from denial or shock but from the knowledge that she had lived life to the fullest, loved and been loved deeply, and made a positive impact in the world around her. As her husband crumpled with the weight of this news and I listened to her bolster his spirits, I realized that she poured from a very full cup of gratitude. It wasn’t that she had an easy life by any means; it’s just that she chose to be grateful for the positive people, events, and opportunities that she had along the way. As I walked home after that conversation, deliberately taking a roundabout route to process what had just happened, I realized a few things: What a sacred privilege we have been afforded to glimpse into the most intimate corners of our patient’s lives. How fortunate are we that through our chosen profession, we have the opportunity to help when we can medically, comfort them when we reach the end of our rope, and through it all be humbled by the strength and wisdom that many show in the face of something insurmountable. And finally, that while grades and test scores matter to some extent, ultimately, we are all on a path to be healers and caretakers in our society with all the position and ability to be the positive change we want to see in this world. I think Mrs. Smith answers that quintessential question for us. We give and give to others without burning out by first filling our own cup, to the brim with gratitude for all the opportunities, support, friendship, and love we have been fortunate to receive. It is this mindset that then allows us to pour freely – pour time, attention, and kindness into patient care and our community, simply because we have already acknowledged what a rich store we have in our personal vault. The beautiful thing about such an attitude is that this personal store is eternally refilled by family and friends who love us, at times by strangers who are kind to us, and by the knowledge that “yes, we are doing something meaningful.” So, I just want to end by expressing gratitude. Gratitude to Mrs. Smith and all the patients like her who imparted such wisdom in our interactions. Gratitude to family that loves unconditionally even when we are not the best versions of ourselves; to mentors who believe in us and help us find our way, even when we stumble and don’t believe in ourselves. Gratitude to the classmates who share the super-efficient pre-rounding data sheet they spent hours creating and friends who bring you a home-cooked meal when coming up to Jacksonville because they know you’ve been there for three weeks and there is only so much dining hall food anyone can handle. And finally, gratitude to this crazy, challenging, rewarding, hilarious, and unique journey that is medical school, for equipping us to be people who can spend our lives serving others. As one of my other patients remarked to me this week: “There are a lot of smart doctors out there who just treat the disease in the body, and then there are those who treat not just our disease but are also are like ministers who heal our soul. It’s these ones who truly care and have compassion for us that end up meaning the most.” Here is to always striving to be the latter.
In: Nursing
Question 1: Roger Harkel, CEO of Bestafer, Inc. seeks to raise $2 million in a private placement of equity in his early stage venture. Harkel conservatively projects net income of $5 million in year 5 and knows that comparable companies trade at a price earnings ratio of 20X.
What share of the company would a venture capitalist require today if her required rate of return was 50%?
What if her required rate of return was only 30%?
If the company had 1M shares outstanding before the private placement, how many shares should the venture capitalist purchase?
What price per share should she agree to pay if her required rate of return was 50%? 30%?
(Note: Assume investment is in standard preferred stock with no dividends and a conversion rate to common of 1:1)
Roger feels that he may need as much as $12M in total outside financing to launch his new product. If he sought to raise the full amount in this round, how much of his company would he have to give up?
What price per share would the venture capitalist be willing to pay if her required rate of return was 50%? 30%?
Question 2: Benedicta Jones of Gorsam Capital likes Harkel’s plan, but thinks it is naïve in one respect: to recruit a senior management team, she believes Harkel will have to grant generous stock options in addition to the salaries projected in his business plan. From past experience, she thinks management should have the ability to own at least 15% share of the company by the end of year 5.
Given her beliefs, what share of the company should Benedicta insist on today if her required rate of return is 50%? 30%?
In: Accounting
Alisha and Diva are the directors and shareholders in Flowers First Pty Ltd. They have been having cash flow problems with respect to acquiring a third vehicle (with equipment) to expand their business. They approach Ali to invest in Flowers First Pty Ltd. Ali has offered to invest $100,000 into Flowers First Pty Ltd on the basis that he will be issued with 50 Ordinary shares in the company (equating to 20% of the Company). At a general meeting of shareholders Ali is appointed non-executive director of the company.
Flowers First Pty Ltd’s cash flow position has improved as a result of the investment from Ali, and substantial profits are earned in the following two years. Ali becomes aware that Alisha and Diva have increased their salaries as executive directors (CEO and CFO) and have also declared bonuses to themselves. Ali becomes concerned that no dividends have been declared and at the next board meeting raises his concerns including his objection to the increase in directors’ salary. Alisha and Diva took offence to this an actioned the following:
Ali comes to you with the following questions. You are required to answer:
a) Can Ali bring a personal or derivative action against Alisha and Diva, and what should Ali consider in making this decision?
b) If Ali brings a personal action, should he bring it under the general law or make an oppression claim under s 232 Corporations Act 2001 (CTH)?
c) What remedies should Ali seek?
In: Accounting
Alisha and Diva are the directors and shareholders in Flowers First Pty Ltd. They have been having cash flow problems with respect to acquiring a third vehicle (with equipment) to expand their business. They approach Ali to invest in Flowers First Pty Ltd. Ali has offered to invest $100,000 into Flowers First Pty Ltd on the basis that he will be issued with 50 Ordinary shares in the company (equating to 20% of the Company). At a general meeting of shareholders Ali is appointed non-executive director of the company.
Flowers First Pty Ltd’s cash flow position has improved as a result of the investment from Ali, and substantial profits are earned in the following two years. Ali becomes aware that Alisha and Diva have increased their salaries as executive directors (CEO and CFO) and have also declared bonuses to themselves. Ali becomes concerned that no dividends have been declared and at the next board meeting raises his concerns including his objection to the increase in directors’ salary. Alisha and Diva took offence to this an actioned the following:
Ali comes to you with the following questions. You are required to answer:
a) Can Ali bring a personal or derivative action against Alisha and Diva, and what should Ali consider in making this decision?
b) If Ali brings a personal action, should he bring it under the general law or make an oppression claim under s 232 Corporations Act 2001 (CTH)?
c) What remedies should Ali seek?
In: Accounting
1. The author compares the current economic crisis to an event that has taken place in the United States in its history. What is the event? Why does he compare the COVID-19 pandemic to that crisis? 2. Identify two tools typically used by economists to combat economic downturns. Why are these tools unlikely to help in the current situation? 3. The near-collapse of the US economy has made it very difficult for economists to predict what will likely happen to the economy as it begins to re-open. Identify two reasons that are given that make it hard to predict what will happen to the US economy as the pandemic control measures are lifted. A. B.
Subject: Economics
Read this to answer questions:
The numbers evoke the worst economic nightmares in American history. But White House economic adviser Kevin Hassett freely admits he can't map the path out.
"A lot of it depends on things I have no expertise in," Hassett, previously a CNN contributor, said in an interview this past week with Poppy Harlow.
That's the surreal reality facing President Donald Trump's economic team as growth turns into contraction and 30 million Americans have lost their jobs. It is a Great Depression-level economic crisis that has everything to do with public health -- but, unlike the 2008 financial collapse, very little to do with anything wrong in the underlying economy.
As a result, the tools economists typically use for adjusting supply and demand -- targeted spending, tax cuts, changes to trade and regulatory policy -- hold little power. The restoration of American prosperity lies more in the hands of the public health officials, epidemiologists and scientists racing to develop a coronavirus vaccine.
"The No. 1 rule of virus economics is, go stop the virus if you want to fix the economy," says Austan Goolsbee, a former economic adviser to President Barack Obama. He suggested that White House economists pore over state-by-state data to identify the best ways to halt epidemic spread.
Success would preserve the possibility of the rapid "V-shaped" recovery that the Trump administration has embraced as its objective. The quest to achieve it has led Trump to allow federal guidelines to expire and goad governors into re-opening their states for business despite warnings from public health officials of resurgent infections.
The Congressional Budget Office, which rarely tracks administration optimism, also envisions a solid rebound as economic activity resumes. After plummeting at a 40% annual rate during April, May and June, the CBO forecasts, output will grow at a 17% rate in the second half of 2020.
But all forecasts for this unprecedented situation depend on factors no economist can confidently anticipate. How many businesses will have preserved enough of their workforces and customers to profitably re-open when governors flash the green light? If
infections spike again, can advances in testing and treatments contain them? Or could renewed shutdowns throw the economic engine back into reverse this fall?
The mix of public fear, financial hardship and business uncertainty creates enormous doubt -- which is Kryptonite to corporate planners and consumers alike.
"This isn't going to be a V, let's face it," concludes former CBO director Doug Holtz-Eakin. The job for Trump's economic team, Holtz-Eakin says, is identifying "the right set of policies to support the economy in this new world we're in." That could include regulatory changes that help businesses adapt workplaces to accommodate health concerns, or expansion of broadband infrastructure to meet increased demand for telehealth and other services provided at a distance.
The pandemic threatens permanent damage to sectors requiring close-quarters contact among large groups, such as the cruise ship industry. Shuttered malls, which for years have lost market share to online retailers, may never recover.
Yet the most urgent immediate economic task is simply preserving connections among businesses, their workers, and their customers so they can restore familiar patterns when health conditions permit.
"Try to reduce the permanent destruction," says Betsey Stevenson, another former Obama economist. "Every single day, there's a little bit of crumbling going on."
Too much crumbling would transform a short-term coronavirus shutdown into long-term economic blight. Business failures turn sound bank loans into defaults, which in turn could create a self-perpetuating financial crisis.
To stave that off, the Federal Reserve and Congress alike have thrown a lifeline of cash at the entire American economy. Instead of altering the economy's path, the goal is simply to keep its head above water until the pandemic storm has passed.
"We're just going to have to keep doing it," says Andrew Metrick, who directs the Yale University Program on Financial Stability. "Traditional economic policy things -- that's not what we need right now."
But that's easier to sustain for the independent Fed through its credit facilities than for a divided Congress and President through direct spending decisions. As the trillions mount and aid priorities widen, the Republican President and Senate have begun to balk.
"The liquidity and cash phase is coming to an end," White House National Economic Council director Larry Kudlow cautioned in recent days. He signaled a return to the president's pre-pandemic agenda, including tax-cuts and infrastructure investment.
With Trump now trailing in crucial battleground states, election-year pressures threaten to create new risks. After other White House aides suggested punishing Beijing over the coronavirus by defaulting on Chinese-held US debt -- a step certain to raise borrowing costs and damage the nation's financial pre-eminence - Trump's economic team rushed to publicly quash the idea.
The turn toward recriminations and traditional priorities signals confidence among some advisers -- if not those responsible for public health - that progress against the virus has opened the door to economic resurgence. "We're on the other side of the medical aspect of this," the president's son-in-law Jared Kushner said last week. Hassett sounded less sure. "Opening up will be a significant positive event," he cautioned, "but only if opening up does not lead to a renewal of this terrible contagion."
In: Economics
A $10 000 bond with 5% interest payable quarterly, redeemable at par on November 15, 2030, was bought on July 2, 2014, to yield 9% compounded quarterly. If the bond sells at 92.75 on September 10, 2020, what would the gain or loss on the sale be?
Face value = 10 000.00; b = 1.25%
Principal = 10 000.00; i = 2.25%
Interest dates are November 15, February 15, May 15, and August 15.
The interest date preceding the date of sale is August 15, 2020.
The time period August 15, 2020, to November 15, 2030, is 10.25 years: n = 41.
b < i → discount
The interest payment interval August 15, 2020, to November 15, 2020, is 92 days
The interest period August 15, 2020, to September 10, 2020, is 26 days.
In: Finance