Question 1
hello, can you help me with these problems please? Case Incident 3.2 Tardy Tom On September 30, 2007, a large national automobile-leasing firm in Columbus, Ohio, hired Tom Holland as a mechanic. Tom, the only mechanic employed by the firm in Columbus, was to do routine preventive maintenance on the cars. When he first began his job, he was scheduled to punch in on the time clock at 7 AM. On October 30, 2007, Tom's supervisor, Russ Brown, called him to his office and said, "Tom I've noticed during October that you've been late for work seven times. What can I do to help you get here on time?" - Tom replied, "It would be awfully nice if I could start work at 8 AM instead of 7 AM." - Russ then stated, "Tom I'm very pleased with your overall work performance, so it's OK with me if your workday begins at 8 AM." During the month of November 2007, Tom was late eight times. Another conversation occurred similar to the one at the end of October. As a result of it, Tom's starting time was changed to 9 AM. On January 11,2008, Russ Brown posted the following notice on the bulletin board: Any employee late for work more than two times in any one particular pay period is subject to termination. On January 20, 2008, Russ called Tom into his office and gave him a letter that read, "During this pay period, you have been late for work more than two times. If this behavior continues, you are subject to termination." Tom signed the letter to acknowledge that he had received it. During February 2008, Tom was late eight times and between March 1 and March 11, five times. On March 11, 2008, Russ notified Tom that he had been fired for his tardiness. On March 12, 2008, Tom came in with his union representative and demanded that he get his job back. Tom alleged that there was another employee in the company who had been late as many times as he had, or more. Tom further charged that Russ was punching the time clock for this employee because Russ was having an affair with her. The union representative stated that three other people in the company had agreed to testify, under oath, to these facts. The union representative then said, "Russ, rules are for everyone. You can't let one person break a rule and penalize someone else for breaking the same rule. Therefore, Tom should have his job back." Questions 1. Was the manager communicating a message to Tom? What was the message the manager communicated to Tom? 2. Should Tom get his job back? 3. What would you do if you were an arbitrator in this dispute? Case Incident 4.2 Going Abroad You supervise 12 engineers. Their formal training and work experience are very similar, so you can use them interchangeably on projects. Yesterday, your manager informed you that an overseas affiliate has requested four engineers to go abroad on extended loan for six to eight months. For a number of reasons, he argued, and you agreed, this request should be met from your group. All your engineers are capable of handling this assignment; from the standpoint of present and future projects, there is no special reason any one engineer should be retained over any other. Somewhat complicating the situation is the fact that the overseas assignment is in a generally undesirable location. Questions: 1. How would you select who should go abroad on extended loan? 2. What are some major factors that would influence your decision process? Discussion Should a manager be concerned with the grapevine within his or her organization? Why or why not? How does the grapevine develop? Is the grapevine a valid communication process? Should it be controlled, used, tolerated, or ignored? What are the positives and negatives involved?
Question 2
ACC 206 Week 4 Assignment: Chapter 6 and 7 Problems Please complete the following exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button. Chapter 6 Problem 3 1. Comprehensive budgeting The balance sheet of Watson Company as of December 31, 20X1, follows. WATSON COMPANY Balance Sheet December 31, 12X1 Assets Cash $4,595 Accounts receivable 10,000 Finished goods (575 units x $7.00) 4,025 Direct materials (2,760 units x $0.50) 1,380 Plant & equipment $50,000 Less: Accumulated depreciation 10,000 40,000 Total assets $60,000 Liabilities & Stockholders' Equity Accounts payable to suppliers $14,000 Common stock $25,000 Retained earnings 21,000 46,000 Total liabilities &. stockholders' equity $60,000 The following information has been extracted from the firm's accounting records: 1. All sales are made on account at $20 per unit. Sixty percent of the sales are collected in the month of sale; the remaining 40% are collected in the following month. Forecasted sales for the first five months of 20X2 are: January, 1,500 units,- February, 1,600 units; March, 1,800 units; April, 2,000 units; May, 2,100 units. 2. Management wants to maintain the finished goods inventory at 30% of the following month's sales. 3. Watson uses four units of direct material in each finished unit. The direct material price has been stable and is expected to remain so over the next six months. Management wants to maintain the ending direct materials inventory at 60% of the following month's production needs. 4. Seventy percent of all purchases are paid in the month of purchase; the remaining 30% are paid in the subsequent month. 5. Watson's product requires 30 minutes of direct labor time. Each hour of direct labor costs $7. Instructions: a. Rounding computations to the nearest dollar, prepare the following for January through March: 1) Sales budget 2) Schedule of cash collections 3) Production budget 4) Direct material purchases budget 5) Schedule of cash disbursements for material purchases 6) Direct labor budget b. Determine the balances in the following accounts as of March 31: 1) Accounts Receivable 2) Direct Materials 3) Accounts Payable Chapter 7 Problem 1 2. Basic flexible budgeting Centron, Inc., has the following budgeted production costs: Direct materials $0.40 per unit Direct labor 1.80 per unit Variable factory overhead 2.20 per unit Fixed factory overhead Supervision $24,000 Maintenance 18,000 Other 12,000 The company normally manufactures between 20,000 and 25,000 units each quarter. Should output exceed 25,000 units, maintenance and other fixed costs are expected to increase by $6,000 and $4,500, respectively. During the recent quarter ended March 31, Centron produced 25,500 units and incurred the following costs: Direct Materials $10,710 Direct Labor 47,175 Variable factory overhead 51,940 Fixed factory overhead Supervision 24,500 Maintenance 23,700 Other 16,800 Total production costs $174,825 Instructions: a. Prepare a flexible budget for 20,000, 22,500, and 25,000 units of activity. b. Was Centron's experience in the quarter cited better or worse than anticipated? Prepare an appropriate performance report and explain your answer. c. Explain the benefit of using flexible budgets (as opposed to static budgets) in the measurement of performance. Chapter 7 Problem 5 3. Straightforward variance analysis Arrow Enterprises uses a standard costing system. The standard cost sheet for product no. 549 follows. Direct materials: 4 units @ $6.50 $26.00 Direct labor: 8 hours @ $8.50 68 Variable factory overhead: 8 hours @ $7.00 56 Fixed factory overhead: 8 hours @ 2.5 20 Total standard cost per unit $170.00 The following information pertains to activity for December: 1. Direct materials acquired during the month amounted to 26,350 units at $6.40 per unit. All materials were consumed in operations. 2. Arrow incurred an average wage rate of $8.75 for 51,400 hours of activity. 3. Total overhead incurred amounted to $508,400. Budgeted fixed overhead totals $1.8 million and is spread evenly throughout the year. 4. Actual production amounted to 6,500 completed units. Instructions: a. Compute Arrow's direct material variances. b. Compute Arrow's direct labor variances. c. Compute Arrow's variances for factory overhead.
Question 3
(13-5) You are given the following forecasted information for the year 2014: sales = $300,000,000, operating profitability (OP) = 6% capital requirement (CR) = 43%, growth (g) = 5% and the weight average cost of capital (WACC) = 9.8%. If these values remain constant, what is the horizon value (i.e., the 2014 value of operations)? (15-8) The Rivoli Company has no debt outstanding, and its financial position is given by the following data: Assets (book =market) $300,000 EBIT $500,000 Cost of equity, rs $10% Stock price, P0 $15 Shares outstanding, no $200,000 Tax rate, T (federal-plus-state) 40% The firm is considering selling bonds and simultaneously repurchasing some its stock. If it moves to a capital structure with 30% debt based on market values, its cost of equality, rs, will increase to 11% to reflect the increased risk. Bonds can be sold at cost, rd, of 7%. Rivoli is a no-growth firm. Hence, all it?s earning are paid out as dividends. Earning are expected to be constant over time. A What effect would this use of leverage have on the value of the firm? B What would be the price of Ravioli?s stock? C What is happens to the firms earning per share after the recapitalization? D The $500,000 EBIT given previously is actually the expected value from the following probability distribution. Probability EBIT 0.10 ($100,000) 020 200,000 0.40 500,000 0.20 800,000 010 1,100,000 Determine the times-interest earned ratio for each probability. What is the probability of not covering the interest payment at the $30% debt level?
Question 4
P10-2 (Classification of Acquisition Costs) Selected accounts included in the property, plant, and equipment section of Lobo Corporation's balance sheet at December 31, 2009, had the following balances. Land $ 300,000 Land improvements 140,000 Buildings 1,100,000 Machinery and equipment 960,000 During 2010 the following transactions occurred. 1. A tract of land was acquired for $150,000 as a potential future building site. 2. A plant facility consisting of land and building was acquired from Mendota Company in exchange for 20,000 shares of Lobo's common stock. On the acquisition date, Lobo's stock had a closing market price of $37 per share on a national stock exchange. The plant facility was carried on Mendota's books at $110,000 for land and $320,000 for the building at the exchange date. Current appraised values for the land and building, respectively, are $230,000 and $690,000. 3. Items of machinery and equipment were purchased at a total cost of $400,000. Additional costs were incurred as follows. Freight and unloading $13,000 Sales taxes 20,000 Installation 26,000 4. Expenditures totaling $95,000 were made for new parking lots, streets, and sidewalks at the corporation's various plant locations. These expenditures had an estimated useful life of 15 years. 5. A machine costing $80,000 on January 1, 2002, was scrapped on June 30, 2010. Double-declining-balance depreciation has been recorded on the basis of a 10-year life. 6. A machine was sold for $20,000 on July 1, 2010. Original cost of the machine was $44,000 on January 1, 2007, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a salvage value of $2,000 Instructions (a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010. Land Land improvements Buildings Machinery and equipment (Hint: Disregard the related accumulated depreciation accounts.) (b) List the items in the fact situation that were not used to determine the answer to (a), showing the pertinent amounts and supporting computations in good form for each item. In addition, indicate where, or if, these items should be included in Lobo's financial statements.
Question 5
Cash Debit 132348 Taxes Recievable Debit 47220 Allowance for uncollectible taxes Credit 500 Supplies Debit 660 Budgetary fund balance reserve for encumbrances Credit 4800 deferred Property taxes credit 22000 Wages Payable credit 970 Fund Balance Credit 151958 Totals 180228 180228 during 2012 Jefferson experiaenced the following transactions: 1. The budget was passed by the county commission, providing estimated revenues of 250000 and appropriations of 180000 and estimated other financing uses of 40000. classify expenditures in the general fund as either general government or capital outlay. make entries directly to these and the individual revenue accounts; do not use subsidiary ledgers. 2. The encumbrances outstanding at Dec 31 2011 were reestablished. 3. The deferred revenue at Dec 31 2011 is recognized as revenue in the current period. 4. Property Taxes in the amount of 260000 were levied by the county. It was estimated 0.5% will be uncollectible. 5. Property tax collections totaled 247000. Accounts totaling 950 were written off as uncollectible. 6. Encumbrances were issued for supplies in the amount of 36000 7. supplies in the amount of 39800 were received. Jefferson county records supplies as an asset when aquired . The related encumbrances for these items totaled 40000 and included the 4800 encumbered last year. The county paid 35650 on accounts payable during the year. 8. the county contracted to have alarm systems (capital assets) installed in the administration building at a cost of 46600. The systems were installed and the amount was paid. 9. Paid wages totaling 131970 including the amount payable at the end of 2011.(there were for general government operations.) 10. Paid other general government operating items of 7600. 11. The general fund transferred 38500 to the debt service fund in anticipation of bond interest and principle payments. 12. Wages earned but unpaid at the end of the year amounted to 2200 13. supplies of 250 were on hand at the end of the year (Supplies are used for general government operations. 14. A review of property taxes received indicates that 17500 of the outstanding balances would likely be collected more than 60 days after year-end and should be deferred.
