Explain how direct marketing differs from advertising, and identify the major forms of direct media. (1) Would an iPhone app that streams QVC or another shopping channel to mobile phones be an effective direct marketing medium? Why or why not? (2) If direct marketing has a better return on investment than other forms of promotion, why do companies bother with anything but direct marketing?
> Lorn Corporation purchased inventory from Dresser Corporation for $120,000 on September 20, 20X1, and resold 80 percent of the inventory to unaffiliated companies prior to December 31, 20X1, for $140,000. Dresser produced the inventory sold to Lorn for $
> Blue Company purchased 60 percent ownership of Kelly Corporation in 20X1. On May 10, 20X2, Kelly purchased inventory from Blue for $60,000. Kelly sold all of the inventory to an unaffiliated company for $86,000 on November 10, 20X2. Blue produced the inv
> Selected information from the separate and consolidated balance sheets and income statements of Power Inc. and its subsidiary, Spin Company, as of December 31, 20X8, and for the year then ended is as follows: Additional Information During 20X8, Power sol
> This case focuses on a governmental unit’s general fund. Required Using the CAFR for a governmental entity chosen by your instructor, answer the following questions that relate to the overall government and governmental funds: a. Find the budgetary compa
> Under its established rate structure, Dodge Hospital would have earned patient service revenue of $5,000,000 for the year ended December 31, 20X3. However, Dodge did not expect to collect this amount because of contractual adjustments of $500,000 to thir
> Refer to the data in exercise E16–8. During the liquidation process for the APB Partnership, the following events occurred: 1. During the first month of liquidation, noncash assets with a book value of $85,000 were sold for $65,000, and
> Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate, the balance sheet is as follows: Liquidation expenses are expected to be negligible. No interest accrues on loans with partner
> Nelson, Osman, Peters, and Quincy have decided to terminate their partnership because of recurrent arguments among the partners. The partnership’s balance sheet when they decide to wind up follows: During the winding-up of the partnersh
> On January 1, 20X7, the partners of Casey, Dithers, and Edwards, who share profits and losses in the ratio of 5:3:2, decided to liquidate their partnership. On this date, its condensed balance sheet was as follows: On January 15, 20X7, the first cash sal
> Leonard and Michelle have asked you to prepare their statement of changes in net worth for the year ended August 31, 20X3. They have prepared the following comparative statement of financial condition based on estimated current values as required by ASC
> On December 31, 20X7, Judy is a fully vested participant in a company-sponsored pension plan. According to the plan’s administrator, Judy has at that date the nonforfeitable right to receive a lump sum of $100,000 on December 28, 20X8.
> When Alice and Betty decided to incorporate their partnership, its trial balance was as follows: The partnership’s books will be closed, and new books will be used for A & B Corporation. The following additional information is avail
> Select the correct answer for each of the following questions. 1. If the assets are fairly valued on this balance sheet and the partnership wishes to admit Denise as a new one-sixth-interest partner without recording goodwill or bonus, Denise should cont
> Match the items in the left-hand column with the descriptions/explanations in the right-hand column.
> On June 10, 20X8, Private Corporation acquired 60 percent of Secret Company’s common stock. The fair value of the noncontrolling interest was $32,800 on that date. Summarized balance sheet data for the two companies immediately after th
> The partnership agreement of Angela and Dawn has the following provisions: 1. The partners are to earn 10 percent on the average capital. 2. Angela and Dawn are to earn salaries of $25,000 and $15,000, respectively. 3. Any remaining income or loss is to
> On May 1, 20X1, Cathy and Mort formed a partnership and agreed to share profits and losses in the ratio of 3:7, respectively. Cathy contributed a parcel of land that cost her $10,000. Mort contributed $40,000 cash. The land was sold for $18,000 immediate
> Which of the following statements concerning the prospectus required by the Securities Act of 1933 is correct? a. The prospectus is a part of the registration statement. b. The prospectus should enable the SEC to pass on the merits of the securities. c.
> A major impact of the Foreign Corrupt Practices Act of 1977 is that registrants subject to the Securities Exchange Act of 1934 are required to: a. Keep records that reflect the transactions and dispositions of assets and maintain a system of internal acc
> Form 10-K is filed with the SEC to update the information a company supplied when filing a registration statement under the Securities and Exchange Act of 1934. Form 10-K is a report that is filed by a large accelerated filer. a. Annually within 60 days
> In the registration and sales of new securities issues, the SEC a. Endorses a security’s investment merit by allowing its registration to “go effective.” b. Provides a rating of the investment quality of the security. c. Disallows the registration to “go
> Two interesting and important topics concerning the SEC are the role it plays in the development of accounting principles and the impact it has had and will continue to have on the accounting profession and business in general. Which of the following sta
> Supra Inc. estimates total federal and state tax rates to be 40 percent. Expected annual pretax earnings from continuing operations are $1,200,000. Differences between tax income and financial statement income are expected to be the following: A business
> According to ASC 270 and ASC 740, income tax expense in an income statement for the first interim period of an enterprise’s fiscal year should be computed by applying the a. Estimated income tax rate for the full fiscal year to the pret
> Which of the following is an inherent difficulty in determining the results of operations on an interim basis? a. Cost of sales reflects only the amount of product expense allocable to revenue recognized as of the interim date. b. Depreciation on an inte
> One company may acquire another for a number of different reasons. The acquisition often has a significant impact on the financial statements. In 2017, AT&T Corporation acquired Time Warner. Obtain a copy of the AT&T 10-K filing for 2017. The 10-K report
> Select the correct answer for each of the following questions. 1. Barbee Corporation discloses supplementary operating segment information for its two reportable segments. Data for 20X5 are available as follows: Additional 20X5 expenses are as follows: I
> Assume that the exchange rates are as follows: The receivable from Popular Creek Corporation is denominated in Swiss francs. Popular Creek’s books show a $3,650 payable to SunTime. Assume the Swiss franc is the functional currency. Requ
> Match the items in the left-hand column with the descriptions/explanations in the right-hand column.
> Shames Company is located in London, England. The local currency is the British pound (£). On January 1, 20X8, Pit Company purchased an 80 percent interest in Shames for $400,000, which resulted in an excess of cost-over-book value of $48,00
> Pole Company sold inventory to South Ltd., an English subsidiary. The goods cost Pole $8,000 and were sold to South for $12,000 on November 27, payable in British pounds (£). The goods are still on hand at the end of the year on December 31.
> Stuff Company is a subsidiary of Pland Corporation and is located in Madrid, Spain, where the currency is the euro (€). Data on Stuff’s inventory and purchases are as follows: Inventory, January 1, 20X7 €220,000 Purchases during 20X7 846,000 Inventory, D
> Assume that the exchange rates are as follows: The receivable from Popular Creek is denominated in Swiss francs. Its books show a $3,650 payable to RoadTime. Assume that the U.S. dollar is the functional currency. Required: a. Prepare a schedule remeasur
> Select the correct answer for each of the following questions. 1. Dale Inc., a U.S. company, bought machine parts from a German company on March 1, 20X1, for €30,000, when the spot rate for euros was $0.4895. Dale’s yea
> Select the correct answer for each of the following questions. 1. Wagner, a holder of a $1,000,000 Palmer Inc. bond, collected the interest due on March 31, 20X8, and then sold the bond to Seal Inc. for $975,000. On that date, Palmer, a 75 percent owner
> The financial reports of governmental entities must provide footnote disclosure of the deposit and investment risks the entity faces. GASB 40 amended GASB 3. The GASB requires disclosures of (1) the nature of the deposits and of investment risks the gove
> The reporting treatment for investments in common stock depends on the level of ownership and the ability to influence the investee’s policies. The reporting treatment may even change over time as ownership levels or other factors change. When investees
> Describe the budgeting process, three major budgeting challenges, and the four major types of budgets. (1) What are some of the risks of failing to create and manage budgets? (2) How does zero-based budgeting help a company spend its cash in the most eff
> Identify three fundamental concepts that affect financial decisions, and identify the primary responsibilities of a financial manager. (1) What role does the company’s strategic plan play in the process of financial management? (2) Does it ever make sens
> Explain the purpose of ratio analysis, and list the four main categories of financial ratios. (1) Why is it so important to be aware of extraordinary items when analyzing a company’s finances? (2) Why is the quick ratio frequently a better indicator than
> Explain the purpose of the income statement and the statement of cash flows. (1) How could two companies with similar gross profit figures end up with dramatically different net operating income? (2) How might a statement of cash flows help a turnaround
> Identify the major financial statements, and explain how to read a balance sheet. (1) Why do analysts need to consider different factors when evaluating a company’s ability to repay short-term versus long-term debt? (2) Would the current amount of the ow
> Describe the accounting equation, and explain the purpose of double-entry bookkeeping and the matching principle. (1) How does double-entry bookkeeping help eliminate errors? (2) Why is accrual-based accounting considered more fraud-proof than cash-based
> Explain the impact of accounting standards such as GAAP and the Sarbanes-Oxley Act on corporate accounting. (1) Should U.S. public companies with no significant overseas business activity be forced to follow international accounting standards? Why or why
> Define accounting, and describe the roles of private and public accountants. (1) Why would a private accountant bother with becoming a CPA? (2) What effect can unreliable or uncertain accounting have on the economy?
> Explain the uses of social media in customer communication and the role of public relations. (1) If marketers are advised against blatantly promoting their products in social media, why should they bother using these media at all? (2) Why are press relat
> Define sales promotion, and identify the major categories of consumer and trade promotions. (1) If 99 percent of coupons are never used, why do companies keep printing so many? (2) If wholesalers and retailers can make money selling a manufacturer’s prod
> Explain the interaction between demand and supply. (1) How does the interaction of demand and supply keep a market in balance, at least approximately and temporarily? (2) If the prices of complementary products for a given product go up, what effect is t
> Describe consultative selling, and explain the personal-selling process. (1) Why is the canned approach inadequate for many selling situations? (2) Why should a salesperson take the time to qualify sales leads?
> Identify the major types of advertising, the most common advertising appeals, and the most important advertising media. (1) Do fragmented media make it easier or harder for marketers to engage in segmented or concentrated marketing? Explain your answer.
> Describe the three major tasks in crafting a communication strategy, and identify four important legal aspects of marketing communication. (1) Why do credit card companies target students even though most have little or no income? (2) Would it be wise fo
> Highlight the major components of physical distribution and logistics. (1) Given the huge volume of small packages that Amazon ships every year, should it consider starting its own transportation company instead of giving all that business to UPS and oth
> Identify five key attributes of distribution channel design and management. (1) Does exclusive distribution limit the potential size of a manufacturer’s market? Why or why not? (2) Is it ethical for one participant in a channel to have power over the mar
> Explain the strategic decisions that manufacturers must make when choosing distribution channels. (1) Would two manufacturers trying to reach the same customer segment with similar products use identical distribution mixes? Why or why not? (2) Is channel
> Identify the major retailing formats, and summarize six trends shaping the future of retailing. (1) Would it ever make sense for Amazon to open retail stores? Why or why not? (2) Moving into the future, what effect is online retailing likely to have on t
> Identify the major types of wholesalers, and summarize four trends shaping the future of wholesaling. (1) Why does McKesson promote itself as a health-care services company, rather than as a logistics company? (2) Why might a manufacturer choose to hire
> Explain the role of marketing intermediaries in contemporary business, and list the eight primary functions that intermediaries can perform. (1) Why wouldn’t a computer manufacturer do all the work of customizing systems and thereby keep all the business
> Differentiate among the major types of economic systems. (1) Why are no economies truly free, in the sense of having no controls or restrictions? (2) What are some possible risks of privatizing basic services such as the transportation infrastructure?
> Identify nine common pricing methods. (1) What steps could a company take to determine the perceived value of its products in its target markets? (2) How can patterns of temporary price discounts “train” consumers to stop buying at full price?
> List the factors that influence pricing decisions, and explain break-even analysis. (1) Why wouldn’t a firm just drop any product that isn’t selling in high enough volume to reach its break-even point? (2) Is “9” style pricing ethical? Why or why not?
> Identify four ways of expanding a product line, and discuss two risks that product-line extensions pose. (1) If McDonald’s had been relatively unknown to French diners when the company entered that market in 1972, would it have made more sense to use a d
> Define brand, and explain the concepts of brand equity and brand loyalty. (1) Can a brand with a bad reputation be rescued? Would a company be wiser to just drop a “bad brand” and start fresh with something new? (2) Is staying with the same product only
> Describe six stages in the product development process. (1) Apple claims to never do any marketing research for new product ideas but instead creates products that Apple employees themselves would be excited to have. What are the risks of this approach?
> Identify the main types of consumer and organizational products, and describe the four stages in the life cycle of a product. (1) Do manufacturers have a responsibility to create safe products even if customers don’t care and don’t want to pay for safety
> Describe the four main components of the marketing mix. (1) Why is price sometimes referred to as captured value? (2) Why do companies that embrace relationship marketing focus on “customer communication” rather than “promotion?”
> Identify the four steps in crafting a marketing strategy. (1) Would two companies interested in the same group of customers automatically use the same target market approach (such as differentiated or concentrated)? Why or why not? (2) Why aren’t markete
> Define strategic marketing planning, and identify the four basic options for pursuing new marketing opportunities. (1) Why is it important to analyze past performance before assessing market opportunities and setting objectives? (2) Why is diversificatio
> Differentiate between consumer buying behavior and organizational buying behavior. (1) Can business-to-business marketers take advantage of new insights into consumer buying behavior? Why or why not? (2) How could families and individual consumers benefi
> Define economics, and explain why scarcity is central to economic decision making. (1) Why is entrepreneurship considered a factor of production? (2) If you had an unlimited amount of money, would you ever need to make trade-offs again? Why or why not?
> Identify three trends that help define contemporary marketing. (1) How can technology help companies replicate the community feel of a small neighborhood business on a global scale? (2) Why do some critics consider stealth marketing to be unethical?
> Define marketing, and explain its role in society. (1) Should every company seek long-term relationships with customers as vitally important? Why or why not? (2) Would a company that already dominates its markets ever care about the marketing concept? Wh
> Characterize the ongoing conflict over union organizing efforts. (1) What evidence would you need to reach a solid conclusion about why union membership has declined in the private sector over the past 50 years? (2) Why do you suppose different surveys g
> Explain the procedures for addressing employee grievances and arbitrating disputes. (1) Is it in a union’s best interest for its members to comply with all the terms of a CBA? Why or why not? (2) What risks do unions and employers take in deciding to use
> Describe the collective bargaining process. (1) Given the history of union-management relations, why do you think mediation tends to be so successful at resolving bargaining impasses? (2) Why would an employer resort to a lockout?
> Explain how unions are structured, and describe the organizing process. (1) Why does the concept of an agency shop exist, since employees in such facilities aren’t required to join the union? (2) Why do union organizers usually gather authorization cards
> Identify the three most important pieces of labor relations legislation in the 20th century. (1) Why are disputes between labor and management often more complicated than just matters of money? (2) Would you agree that the struggle between labor and mana
> Explain the role of labor unions, and contrast the perspectives of employees and employers on the issue of unionization. (1) Why is it so difficult to come up with a single conclusive answer about the effects of unionization on business productivity? (2)
> Identify the most significant categories of employee benefits and services. (1) Why are stock options a controversial employee benefit, particularly for top executives? (2) What are the risks of investing in an ESOP?
> Describe the major elements of employee compensation. (1) What are some potential risks or limitations of performance-based pay systems? (2) How does equity theory explain the anger some employees feel about the compensation packages their company CEOs r
> Identify seven components of professionalism. How much loyalty do employees owe to their employers? Explain your answer.
> Explain the steps used to develop and evaluate employees. (1) How can employers balance the need to provide objective appraisals that can be compared across the company’s entire workforce with the desire to evaluate each employee on an individual basis?
> Describe the three phases involved in managing the employment life cycle. (1) Why would a company spend money on outplacement counseling and other services for laid-off employees? (2) Why would a company spend money to induce retirement-age employees to
> Discuss the challenges and advantages of a diverse workforce, and identify five major dimensions of workforce diversity. (1) How could a company benefit by investing in assistive technologies for its workers? (2) How might socioeconomic diversity in a co
> Identify four contemporary staffing challenges, and explain the process of planning for a company’s staffing needs. (1) How can alternative work arrangements also help companies reduce costs and their impact on the environment? (2) How can electronic com
> List five managerial strategies that are vital to maintaining a motivated workforce. (1) Referring to the job characteristics model, how does micromanaging destroy motivation? (2) Annual performance reviews are common in many companies; how might this ta
> Should banks that have become “too big to fail” (meaning their collapse would significantly damage the economy) be subject to stricter regulations than smaller banks? Why or why not?
> If accepting risk is part of being an entrepreneur or running a business, should the government, taxpayers, or any other entity ever bail out a company that took risks and failed? Explain your answer.
> Assume you are trying to save money for a down payment on a house, and your goal is to have enough within three years. The stock market is raging and has been for nearly four years. Should you invest your current savings in the stock market with an eye t
> What are two key reasons investors choose index funds over actively managed mutual funds or individual stocks?
> What is the fundamental difference in the way businesses approach debt and the way consumers approach it?
> Summarize seven of the most important business professions. (1) Why are communication skills essential in all seven of the functional areas discussed in this section? (2) Why would financial managers be in a good position to rise up the company ladder?
> How does the role of a financial manager different from the role of an accountant?
> Do all companies have an R&D function? Explain your answer.
> What are four ways that business can benefit society?
> What is moral hazard?
> What is a business model?
> What types of investments and expenditures are typically considered in the capital budgeting process?
> What is the primary goal of financial management?
> Review the definitions of current and fixed assets. Why would a potential lender be interested in these two classes of assets when reviewing the balance sheet of a company applying for a long-term loan?
> Assuming the interest rates are roughly the same, would you prefer to finance your new company by getting cash advances on your credit cards or by taking out a second mortgage on your house? Why?
