Question 1
Now that you have completed the assignments repeat Assignment 1. Specifically, incorporate what you have learned about Eastvaco and the Charlotte facility to answer the following: (include what you learned from the financial statements and the assignments) Your answer should be well written and organized. 1. Refer to your initial analysis. Has your answer changed, and if so, how?,I tried attaching the file but it wouldn't, so i cut and pasted it. ASSIGNMENT1 CASE 2-48 (a) What are some of the general advantages of and the areas of concerns surrounding the linking of compensation to a Balanced Scorecard? Some of the general advantages of linking compensation to a Balanced Scorecard are; It ensures that incentives are linked with the Balanced Scorecard?s organizational goals. Incentives, particularly monetary incentives are very strong motivation for employees. Employees will work harder, delivering more quality and efficient output or work in order to reap the rewards. Though employees are extrinsically motivated by the Balance score card, they can also be Intrinsically motivated as they become more in tune with company?s goals and appreciate their importance in actualizing these goals. Employees who not only recognize their importance but are duly recognized and rewarded for their hard work, are key to making that particular company more successful. In regards to concerns surrounding the Balance score card, since an employee?s compensation relates to the score card, it is pertinent that the score cards truly and fairly reflects an employee?s output. Thus data collected should be accurate so that there is an accurate measure/analysis of performance can be arrived at. Executive/ upper management may not be certain whether mid managers are selecting factors that positively impact the scorecard. In order to decipher whether or not this is the case, this may require holding off on link compensation to the scorecard for some months. It?s given a trial run until it can be verified that the scorecard measures are realistic. Also it is extremely important that the varied measures reflected on the scorecard do not solely compensate short term goals, since employee output will run proportionally with rewards. It the extrinsic motivation disappear, then along it could be the employees zeal to do their best work. Another concern is management being able to assess and evaluate what goals/ objectives were completed and to what degree to accurately arrive at an appropriate incentive. So if objectives are not meet to a certain degree or beyond a certain degree would be determining factors whether an employee?s output is even to be rewarded. Another concern is whether a company is able to compensate employees if they are not profitable. The balance scorecard could also specify that if the company does not have an overall annual profit of 10%, then it would not be in the position to monetarily reward employees. Certainly this could be even more advantageous for the company, since the focus of employee performance would go beyond only a few localized groups performance, since the overall success of the company will affect all employees. Hence, it would motivate employees to all work equally hard. (b)Evaluate M&R?s approach to linking compensation to multiple measures (Balance Scorecard Measures) including its system of assigning degrees of difficulty to achieve targets. In your response, consider the process that is involved in developing the compensation scheme. M&R?S approach was developed around the Balance Scorecard. Each measurement has a fixed percentage which makes calculation easier and more straight forward when calculating bonuses/ rewards. Also creating levels of difficulty in completing objectives further not only increased possible rewards but motivated employees to push more to reach bigger goals. This created a healthy balance. If all objectives were easily accomplished, it would be clear that employees were not challenged and the company wasn?t reaching its full potential. Also assigning difficulty score to objectives reflect the degree of compensating an employee. Performance-related pay or monetary related pay schemes are is quiet attractive to employees and encourages them to meet then organization?s objectives. M&R ensured that their evaluative method was viewed and deemed fair by all. Management permitted to the entire employee populous review and get clarification on the scorecard before it Was implemented. All associates of M&R trusted the evaluation tools and found it to be fair. M&R has three levels of compensation, business unit, corporate and division. The previously mentioned allows employees to hone into their area or strength in the company whether in a more localized role departmentally or more broadly in a division. Since, employees benefit from the overall performance of their department or division, it foster more team working order to attain goals. Hence employees do not solely work on their tasks they contribute to the team objectives. Employees can easily become robotic and work just enough to successfully complete an objective in order to get a reward. Hence it is important that objectives aren?t always easily attainable. More importantly management must not negate the importance of going beyond extrinsically motivating their employees. It is essential that employees feel personally invested and a part of the company, that each and everyone contribute to the company?s success. Initial Analysis of Eastvaco and the Charlotte Facility: Read the financial statements and supplemental information provided by the 10-K submission and the Charlotte facility schedules. Attempt to gain some insight into how the company and its Charlotte plant are doing. Specifically, answer the following: Required: 1. What do you see as Eastvaco?s strengths and weaknesses? Eastvaco Corporation was founded in 1899 in Delaware. The company was a West Virginia Pulp and Paper Company, and was a major paper producer. Along with it production of paper Eastvaco converts paper and paperboard into a variety of bi products such as specialty chemicals, lumber, timber. The company also and is involved in land development. It has Plants worldwide in such places as Brazil, Czechoslovakia and the U.S. However, its primary marketplace was in the U.S and 24 percent of its other customers were from other countries. Eastvaco produced a substantial amount of products at the Charlotte facility. In order to The Charlotte Plant had the capability to output a large amount and variation of products and thus had full support of Eastvaco. This gave them the ability to access money to support their green operation. This plant was quiet productive and had an annual production capacity of 3,143,000 tons which progressively increased. Another major strength was that Eastvaco owned most of their plants and other facilities and thus had hardly any liabilities Eastvaco Go green Campaign was admirable to both customers and the general public. It was one of the major aspects of the company that set it apart from the competition. In reviewing the Charlotte facility financial data, it was apparent that in 2007-2008 the company had a surplus of inventory that was not sold, which could be indicative of over production and need to reassess market demand. Charlotte?s retained profits had also dipped. Looking back it was noted that this had been happening for some time (2005). This resulted in the Plant needing more monetary support to support operations. This was an obvious weakness for the Charlotte plant as this chronic issue persisted for years. Decision makers should have recognized and implemented changes. The plant became more expensive to run; there was a surplus of inventory and thus obvious poor forecast in sales which negatively affected the bottom-line. Losses in profit were over a million dollars. Eastvaco had great potential to correct their wrong and take advantage of new opportunities. Simply going back to the drawing board and examining how much they are spending on operations and production, comparing it to sale trends over the last ten years, will likely put them in the position to get a realistic picture of their weaknesses and give them a stronger footing in the market place as they increase their bottom line. With monthly assessment of their financial reports Eastvaco will make real recognize and remedy mistakes before it hurts them. It appears that Eastvaco is satisfactorily meeting the Needs of their US market and thus should look further into permeating the international marketplace further. Eastvaco has proven itself to be quiet innovative as evidence by the variation and marketability of the goods it produces. It would be smart for the company to align themselves with international buyers where they have established concrete contracts. .This would enable them to know what their costs of operations and demands will be. More importantly they can sell the excess inventory and start to reeling in the profits The threats that the Charlotte Facility will have to consider is the chronic decline in returns, excess in inventory and increased expenses on the plant. In addition to poor financial and inventory management, Charlotte plant has been involved in quiet a few litigations. This not only impacted their image but put them in a position to be responsible for any environmental hazards or damages to communities in the proximity of their plant Financial vs. Managerial Accounting: Terry Thompson, the treasure, has a dilemma, two of his supervisors are leaving, Jeff, supervisor of the management accounting function and Fred, supervisor of the financial accounting department. Terry?s background is finance and has only a basic understanding of accounting. He comes to you and asks, ?I need to either hire someone from the outside or promote internally. What qualifications should I seek in each of the positions and what role do these positions play in strategic planning?? Required: 1. Answer each of the two questions asked by Terry. Your answer should be in the form of a well prepared memo. Memo To: Terry Thompson From: Ramone Reid- Felix Date: 9/13/2011 Re: Hiring Management and Financial Accountants Message Dear Mr. Thompson, You department has lost two essential employees at the same time and I understand your urgency to find the right persons to replace them. You wanted to know what qualifications you should seek in each of the positions and what role do these positions play in strategic planning? Though both areas are complimentary, there job requirements and functions are quite different. Financial Accountant is usually responsible for Contributing to the development and implementation of the departmental accounting systems, procedures and policies. Financial account is required to: ? Be capable of supporting the company through the collection, processing, recording, reconciliation and reporting of financial data. This is inclusive of basic reporting requirements of profitability, liquidity, solvency and stability. ? Have Financial reports be readily accessible to internal and external person such as banks, creditors and shareholders. ? Be highly organized with a proven track record of accounting managerial duties. Management accountant plays a more internal role within the organization. This person is required to supply both managers and non managers with financial and non financial information to enable associates to make more informed and sound decisions by not only with current information but management accounting forecasts. By this means associates can be more strategic in attaining organizational goals. Management Accountant is required to : ? Produce timely and reliable management information reports on a monthly basis. ? Investigate variances against budgets and provide analysis of differences. ? Assist in the preparation of annual budgets and cash flow forecasts. ? Have monthly meetings with management to discuss organizational budgetary status and help with implementing corrective measures if necessary ? Ensure that accounts are effectively managed. This person should have demonstrable experience of working in management accounting or financial management and have good knowledge of budgeting and forecasting issues and techniques. Reports generated by this person will be used exclusively for executive management. Statistical tools are used to generate more accurate and readable data which gives clear monetary figures which enables easier decision making. Strategically, both accountants should be able to work independently and collaboratively with the team and each other to create crystal clear insight into the company?s financial status. Attaining the most optimal financial outcome is key, but intercepting the slightest financial weaknesses is even more critical. If you need further advice and assistance in choosing the right candidate, do not hesitate to let me know. Regards Ramone Reid-Felix 2. In your own words, what is the difference between a financial and managerial accountant? A Financial Accountant produces statements for both internal and external reviews by shareholders, creditors and the government. Financial accounting primarily focuses on the past and does historical evaluations of a company?s performance. Reports generated have to be meticulously done to say the least, and be accurate. Whereas, a Management Accountant does more internal financial reports that are generated exclusively for executive management and employees. The data supplied is conclusive findings of accounting and other relevant statistics that enables both management and employees to understand the financial standing of the organization as well as use that data to provide a departmental and generalized look at how the company is performing. It focuses on forward moving analysis and forecasts such as implementation of budgets based on financial reports. .,ok
Question 2
GRM 697 The Research Process TEST THREE Multiple Choice Questions (Enter your answers on the enclosed answer sheet) 1. What is the correct order of steps in testing a hypothesis? a. statement of null hypothesis, setting level of risk, selection of test statistic b. statement of null hypothesis, computation of test statistic, selection of test statistic c. selection of test statistic, comparison of obtained value to critical value, computation of test statistic d. selection of test statistic, computation of test statistic, statement of null hypothesis 2. What is the statistical test for examining the significant difference between two means from two unrelated groups? a. t-test for dependent means b. MANOVA c. t-test for independent means d. factor analysis 3. If the two groups you are comparing are related to each other, what test should you use? a. factor analysis b. MANOVA c. t-test for independent means d. t-test for dependent means 4. When examining whether group differences occur on more than one dependent variable, what should be used? a. factor analysis b. MANOVA c. t-test for independent means d. t-test for dependent means 5. When examining the significance of the relationship between two variables, what test should you use? a. t-test for dependent means b. t-test for independent means c. t-test for the correlation coefficient d. analysis of variance Unit 3 Examination 138 GRM 697 The Research Process 6. If Helen mistakenly accepts her null hypothesis when it should be rejected, what has occurred? a. Type I error b. Type II error c. researcher bias d. None of the above. 7. How can Type II errors be reduced? a. decreasing sample size b. homogeneous population c. increasing sample size d. heterogeneous population 8. The level of significance is similar to which of the following? a. a Type I error b. a Type II error c. a bell curve d. the null hypothesis 9. What does the central limit theorem enable researchers to do? a. compare means from two independent samples b. generalize the results from a sample to a population without knowing the exact nature of the population?s distribution c. compute the significance of a relationship between two variables d. reduce the possibility that chance accounts for variability in the variable of interest 10. What is the second step in developing an interview? a. state the purpose of the interview b. select an appropriate sample c. develop questions d. train the interviewers 11. When conducting an interview, what should you be careful NOT to do? a. begin the interview cold b. be direct c. dress appropriately d. use a tape recorder Unit 3 Examination 139 GRM 697 The Research Process 12. Which is the weakest correlation? a. + 0.76 b. + 0.21 c. - 0.01 d. - 0.88 13. What would a correlation of .35 be called? a. moderate b. weak c. very strong d. very weak 14. If your research does NOT include a treatment or control group, what type of research are you conducting? a. experimental research b. causal-comparative research c. descriptive research d. quasi-experimental research 15. Which interview question is open-ended? a. Do you smoke? b. Are you married? c. How old are you? d. How do you feel about tests? 16. What is the third step of developing an interview? a. selecting a sample b. developing the questions c. training the interviewers d. stating the purpose of the interview 17. Which of the following is NOT an advantage of interviews? a. You may obtain additional helpful information from the interviewee?s nonverbal be havior or the environment. b. They are relatively inexpensive as they do not require much time. c. You can use rapport to help put the interviewee at ease. d. You can schedule the interviews at times that are convenient to you. Unit 3 Examination 140 GRM 697 The Research Process 18. What type of research is sometimes called ?research without the numbers?? a. quantitative b. qualitative c. experimental d. correlational 19. Which would NOT be considered a source of information for qualitative research? a. tests b. records c. observation d. interviews 20. The fifth step in conducting historical research is _______________. a. evaluating authenticity and accuracy of evidence b. formulating a hypothesis c. defining a topic or problem d. integrating data 21. What is data that is derived from sources at least once removed from the original event? a. secondary sources b. global sources c. primary sources d. informal sources 22. What is the criteria of authenticity also known as? a. validity checks b. external criticism c. internal criticism d. accuracy 23. What is another term for accuracy? a. authenticity b. secondary c. internal criticism d. validity Unit 3 Examination 141 GRM 697 The Research Process 24. Which of the following is NOT a characteristic of participant observation? a. It is time-consuming. b. There is a risk of interfering with the natural process. c. It is a primary method used in historical research. d. It is a primary method used in ethnography. 25. Which of the following is NOT a qualitative computer research tool? a. N6 b. SPSS c. NVivo d. HyperSEARCH
Question 3
The Guillermo Furniture Store Scenario ? Write a paper of at least 1,500 words that focuses on the different alternatives available to Guillermo. ? Prepare an Income Statement for each of the alternatives from the data provided. Compare the results of the two new alternatives to the existing operations and explain the causes for the differences (contribution margins, volumes, leverage, fixed costs, sensitivity analysis, etc.) Assume for the Hi-Tech alternative the new equipment can be leased from the manufacturer for five years at a monthly cost of $23,000 and treated as an operating lease. ? Determine the weighted average cost of capital for the existing operations and each of the two alternatives. Assume the equity (market) value of the company is 0.70 sales and the market value of the debt is equal to the balance sheet value. Compute the required rate of return on equity using the CAPM formula: the risk free rate is 3%, the market rate is 12%, the beta for existing operations is 1.5, the beta for the hi tech alternative is 1.8 and the beta for the broker alternative is 1.2. The cost of debt and the tax rate are as given in the data provided. ? Discuss the factors that affect the risk of a typical project (Chapter 8) and how they might influence a project?s risk (discount rate) versus the firm?s risk (WACC).,Chapter 8- Cost of Capital from Corporate Financial Management-Emery,Finnerty & Stowe (2007)3rd ed.,when can I expect an answer
Question 4
Journal Entries?Various Funds The following transactions represent practical situations frequently encountered in accounting for municipal governments. Each transaction is independent of the others. 1. The City Council of Bernardville adopted a budget for the general operations of the government during the new fiscal year. Revenues were estimated at $695,000. Legal authorizations for budgeted expenditures were $650,000. 2. Taxes of $160,000 were levied for the special revenue fund of Millstown. One percent was estimated to be uncollectible. 3. (a) On July 25, 2009, office supplies estimated to cost $2,390 were ordered for the city manager?s office of Bullersville. Bullersville, which operates on the calendar year, does not maintain an inventory of such supplies. (b) The supplies ordered July 25 were received on August 9, 2009, accompanied by an invoice for $2,500. 4. On October 10, 2009, the general fund of Washingtonville repaid to the utility fund a loan of $1,000 plus $40 interest. The loan had been made earlier in the fiscal year. 5. A prominent citizen died and left 10 acres of undeveloped land to Harper City for a future school site. The donor?s cost of the land was $55,000. The fair value of the land was $85,000. 6. (a) On March 6, 2009, Dahlstrom City supervised the issue of 6% special assessment bonds payable March 6, 2014, at face value of $90,000. Interest is payable annually. Dahlstrom City, which operates on the calendar year, will supervise the use of the proceeds to finance a curbing project. The City has made no commitments and has not obligated itself in any manner with respect to the payment of principal and interest on the debt. (b) On October 26, 2009, the full $84,000 cost of the completed curbing project was recorded. Also, appropriate closing entries were made with regard to the project. 7. (a) Conrad Thamm, a citizen of Basking Knoll, donated common stock valued at $22,000 to the City under a trust agreement. Under the terms of the agreement, the principal amount is to be kept intact; use of revenue from the stock is restricted to financing college scholarships for needy students. (b) On December 14, 2009, dividends of $1,100 were received on the stock donated by Mr. Thamm. 8. (a) On February 23, 2009, the Town of Lincoln, which operates on the calendar year, issued 5% general obligation bonds with a face value of $300,000 payable February 23, 2019, to finance the construction of an addition to the City Hall. Total proceeds were $308,000. 922 Chapter 18 Introduction to Accounting for State and Local Governmental Units LO2 LO8 Jeter_int_Ch18_851-927hr.qxd 16-11-2009 9:05 Page 922 Problems 923 (b) On December 31, 2009, the addition to the City Hall was officially approved, the full cost of $297,000 was paid to the contractor, and appropriate closing entries were made with regard to the project. (Assume that no entries have been made with regard to the project since February 23, 2009.) Required: For each transaction, prepare the necessary journal entries for all the funds involved. No explanation of the journal entries is required. Use the following headings for your workpaper. Transaction Journal Number Entries Dr. Cr. Fund In the far right column, indicate in which fund each entry is to be made, using the coding below: Funds General G Special revenue SR Capital projects CP Debt service DS Enterprise E Internal service IS Permanent fund P
Question 5
The following trial balance is for the Florida Sales Company, a home improvement retailer, at January 1, 2010: Debit Credit Cash $49,950 Accounts Receivable 14,000 Allowance for Doubtful Accounts $2,600 Merchandise Inventory 20,200 Land 50,000 Buildings 81,000 Accumulated Depreciation ? Buildings 37,850 Equipment 45,000 Accumulated Depreciation ? Equipment 17,650 Accounts Payable 3,750 Notes Payable 38,500 Common Stock, $10 par 40,000 Retained Earnings 158,300 $260,150 $260,150 Part 1 Journalize the appropriate entries for the following transactions for the period January 1, 2010 to December 31, 2010. The company uses a perpetual inventory system. February 1 Paid $3,750 accounts payable balance due to a supplier. March 15 Received $2,500 partial payment on a $5,000 accounts receivable balance. Wrote off the rest of the account as uncollectible. April 1 April 5 Purchased on account $53,700 merchandise for resale, with 2/10, n/30 terms. Paid the invoice for April 1 purchase October 10 Sold merchandise for cash of $28,000. Cost of the merchandise sold was $12,200. November 1 Borrowed $20,000 at 6% interest for 5 years with annual payments of principal and interest on October 31. Used the loan proceeds to purchase a $20,000 delivery truck. December 5 Sold merchandise on account for $91,500. Cost of the merchandise sold was $40,500. Payment terms on the invoice were 1/10, n/30. December 7 Of the merchandise sold on December 5, $2,000 was returned. Cost of the merchandise was $1,100. December 15 Paid $3,000 for rent of a warehouse facility. The payment covers rent for December and January. December 15 Declared a $1/share cash dividend, payable January 14 to shareholders of record on January 3. December 18 Purchased office supplies of $1,600 on account. December 31 Recorded depreciation for the year Buildings have a 30-year life, a $5,000 residual value and use straight-line depreciation Equipment has a 5-year life, no residual value and use double-declining balance depreciation Vehicles have a 5-year life, no residual value and use straight-line depreciation December 31 The allowance for doubtful accounts balance is estimated as follows: 2% of current balances are estimated as uncollectible 20% of past-due balances are estimated as uncollectible. December 31 A count of office supplies shows $550 still on hand on December 31. January 2, 2011 Paid salaries of $24,500 for the pay period December 31 through January 4. Salaries are earned evenly during the pay period. Part 2 Prepare a trial balance as of December 31, 2010. Part 3 Prepare a December 31, 2010 Balance Sheet and Income Statement Part 4 Calculate and analyze the appropriate financial ratios to determine the profitability, liquidity and solvency of Florida Sales Company.
