...RE: Memorandum 1(a). Should Mr. Jones purchase the stock of Smith outright, leaving Smithon intact? What about issuing debt in his Johnson Services company to pay for the Smith Company – would that raise debt to equity issues? I would not suggest Mr. Jones to purchase the stock of Smith outright. a stock purchase has no effect on the tax basis of the Company’s assets. Instead, he will be taking a stepped up basis in the stock purchased equal to the amount he pays for the stock, and the taxable income inherent in the Company’s assets remains inherent in the assets. Johnsons Services is already showing losses. While issuing debts in JS may give a rise to debt to equity ratio, the company should be careful in considering equity financing not to trigger an ownership change under Section 382 which may lead to limitations of using NOLs. Also, with even higher liabilities, it may be difficult to meet the debt service agreements if the company doesn’t have enough cash flow from operations. 1(c) What potential income tax ramifications exist for Mr. Johnson personally if he purchases the stock of Smithon and converts it to an S corporation? If the Mr.Jones decides to convert Smithon to a subchapter S Corporation, it will enable the corporation itself to avoid paying taxes, but the profit and losses will be passed to shareholders as personal income and losses. Now we should consider the expected losses from the huge investment in equipment purchase. Net operating losses cannot...
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...The World of Fashions is located in Marina Mall and sells fashions and accessories from all over the world. The results of operations for the last quarter of 2011 are as follows: Sales AED 500,000 Cost of Sales 345,000 Gross Profit 155,000 Selling Expenses 55,000 General & Admin Expenses 20,000 Total Operating Expenses 75,000 Net Income AED 80,000 Additional Information: 1. Sales and Cost of Sales are expected to increase by 10 percent in each of the next two quarters 2. 80% of the sales are collected in the quarter of sales and the balance in the quarter following sales 3. The balance in Accounts Receivable at the end of fourth quarter of 2011 relates to the sales in the fourth quarter of 2011 4. Purchases in the fourth quarter of 2011 was AED 346,976 5. The balance in accounts payable at the end of 2011 refers to the purchases made during that quarter 6. Inventory at the end of 2011 was AED 17,000. The company plans to hold ending inventory equal to 5% of the subsequent quarters cost of sales 7. Selling expense is expected to increase by AED 18,000 due to salaries and advertising 8. Admin Expenses are expected to increase by AED 7,500 due to increase in rent 9. 75% of inventory purchases are paid in the quarter of purchase and the balance in the following quarter 10. Selling expense include AED 3,000 as depreciation of Store furniture and equipment with a book value (net of accumulated...
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...Communique Review Memo To: Herber Howard From: Nicolle Pack Subject: Communique Review Date: 03/03/14 The communications for Team B were to the Marketing manager, the Sales manager and the Accountant-Peer. These were all written as formal memos. After a review of these communications, I think that the information was presented in the correct communicational format. However, I do feel that some of the communiques could have included more information specific to the information they were to be presenting. The memo to the Marketing manager did not covey the intended message. I think that the information provided was too vague. The writer should have included more information related to the marketing aspect of the business and what would have to be done in order to successfully promote the business, if acquired, in these current market areas. For the purpose of this assignment I do not feel that another form of communication would have been better. If the Marketing manager was to base his decision, to acquire JJJ Company or not, solely upon the information in the memo, I think would be ethically incorrect. The information provided in this memo is not sufficient to derive any decisions as to the acquisition of JJJ Company. The memo to the Sales manager was written more clearly and effectively. The information presented was more related to the sales side of the business. However, I still feel that more sales specific information could have been presented. The writer did not...
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...Manufacturing's sales slumped badly in 2012. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 600,000 units of product: Net sales $2,400,000; total costs and expenses $2,540,000; and net loss $140,000. Costs and expenses consisted of the amounts shown below. | Total | Variable | Fixed | Cost of goods sold | $2,100,000 | $1,440,000 | $660,000 | Selling expenses | 240,000 | 72,000 | 168,000 | Administrative expenses | 200,000 | 48,000 | 152,000 | | $2,540,000 | $1,560,000 | $980,000 | | | Management is considering the following independent alternatives for 2013. | | 1. | Increase unit selling price 20% with no change in costs, expenses, and sales volume. | 2. | Change the compensation of salespersons from fixed annual salaries totaling $150,000 to total salaries of $60,000 plus a 3% commission on net sales. | 3. | Purchase new automated equipment that will change the proportion between variable and fixed cost of goods sold to 54% variable and 46% fixed. | | | Instructions (a) | Compute the break-even point in dollars for 2012. | (b) | Compute the break-even point in dollars under each of the alternative courses of action. (Round all ratios to nearest full percent.) Which course of action do you recommend? | CVP Case Study 2: [45 marks] Pittman Company is a small but growing manufacturer of telecommunication equipment. The company has no sales force...
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...Higher Level Analysis | Memo To: Compare Market From: Melissa Lopez CC: Professor Sue Winfield Date: 12/9/2012 Re: Revenue Assessment Thank you for the opportunity to assess your sales data in order to provide recommendations for increasing your sales. The analysis and recommendations below are based on the data you provided, which covers a period from May 2004 through June 2006. The analysis below is based on this data alone. ANALYSIS 1 Salesperson Performance Analysis Analysis Data was analyzed by each salesperson that has the highest and lowest sales. The highest salesperson is Margaret with total sales of $232,890.85 and the lowest is Steven with total sales of $68,792.28. Graphic Recommendation Based on the Salesperson Performance, a goal and a baseline, needs to be established. If over the goal, the Salesperson could win a prize or a day off from work. If under baseline, Salesperson will be put on an action plan to save their job or be demoted. This could help in boosting sales and motivation. ANALYSIS 2 Category Sales Analysis Category Sales were analyzed to what is selling the most and least. Beverages were selling the most with the total of $267,868.18, and Grains/Cereals were selling the least with the total of $95,744.59. Graphic Recommendation Based on the Category Sales data, increasing the unit price or decreasing the discount level would help improve sales revenue. By decreasing the discount level could...
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...in the case? How serious are these problems? The cause of Problem in Nordstrom is misaligned Compensation system. The Compensation is not vertically aligned with the Strategy of the company. Nordstrom depended on its sales employee for customer care and selling the products. However, the compensation structure was not adequately aligned to reward those behaviours which forced employees to work off-hours without getting Compensated for it. The problems were very serious as is evident from the case; the company came under a barrage of national class action suits which made a huge dent into the brand of the company. They had to make a $15 million fund which wasn’t enough. More importantly, it broke the numero Uno position and aura that Nordstrom was enjoying vis-à-vis their competitors. 2. Are Nordstrom employees pressured inappropriately by the sales-per-hour system? By management? Yes, Nordstrom employees are pressured quite inappropriately by the SHP ( Sales Hour Performance) system. In this system, employees were assigned a given SHP and if they go above the SHP , then they would be eligible for commission otherwise they will just get the base price. Now, the employees worked “off hours” for doing everything from writing Thank You letters to sales meetings etc. but if they add the “off hours” then the SHP will go below the stipulated figure and they will not eligible for commission and without the overtime hours their salary reduced substantially. So, it was...
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...profit. Retailers attempt to draw maximum attention to their most profitable products Assignment #2 Retail Display Assignment #2 Retail Display Gurpreet Singh Gill gsgill@sfu.ca 301111216 BUS 237-3 E100 Tutorial E101 ALEX MASON Gurpreet Singh Gill gsgill@sfu.ca 301111216 BUS 237-3 E100 Tutorial E101 ALEX MASON MEMO TO: Alex Mason From: Gurpreet Singh Gill Date: November 20, 2015 Subject: Analysis and Design of Retail Display For the design of the Retail Display of the summer 2015 sales a detailed analysis of the Data from the years 2012-2014 was required. The resulting data was adequate to project the aggregated sales of all the items in the inventory in the fall of the aforementioned years. This data was then used to calculate their profit contribution which is a product of an items Gross Margin and its Overall (aggregated) sale. Thus resulting in $34,626,149.46 of sales and $14,431,599.66 of profit resulting in a total Gross Margin of 41.68%. From the calculated data I was able to determine the top most products with the highest profit contribution. A table and associated Chart of which can be found at the end of the Memo. Filtering out one product from all the categories in the inventory along with some other items with the maximum Profit Contribution I was able to determine an appropriate theme for the Display area. Only the top fourteen items are included in the design with given priority to items with the maximum profit. The theme that I...
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...required by law Profit and Loss statement. Each company code represents an independent accounting unit. Several company codes can use the same chart of account. Assignment Company code to company Company code to Credit control area Company code to Controlling area Company code to financial management area • (An FM Area is organizational unit which Plans, Controls and Monitors funds and commitment budgets) Controlling area to financial management area Controlling area to Operating Concern. Sales Organization • The highest-level of organizational unit in SD is Sales Organization. • Responsible for Distributing goods and services, Negociation sales conditions, Product liability and other customer rights of recourse. • Sales organization is also used to take for example a regional, national or international. • A sales organization assigned to a company code. Distribution Channel • Distribution Channel represents strategies to distribute goods and services to customer. • DC is assigned to a sales organization. The assignment is not unique. • You can share Customer, Material and Condition master data by maintaining a reference/common DC. Division • A Division is used to group material and services. A material can have only one Division. Abhishek Parihar SAP SD Certified Consultant E-Mail: abhishekparihar@rediffmail.com SAP SD IMP NOTES • • • • • We can make Customer- specific agreements for each Division, for example regarding partial deliveries or pricing within Division. (In...
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...| Consolidated Disposal | Memo To: Gus Sanchez Operations Site Manager From: Angelo Meleandez Assistant Operations Site Manager CC: James Castro Regional Operations Manager Date: [ 7/9/2012 ] Re: Operational gap with in organization and Business development Purpose This memo is being forwarded to you in regards to addressing a potential operational gap and limitation of growth with in our organization that needs to be addressed. There is a need to add an outside sales representative to develop and improve existing account possibilities. Summary In an attempt to analyze current market trends and possible business growth with in the solid waste industry, I have found that our current business model has been out grown by our current business needs. Currently, the Assistant Operations Manager develops and establishes new accounts, services existing customer’s accounts, provides the safety training and regulation implementation, and manages the work force outside of the office. The in-house sales representative position has not been able to meet all of our customers needs completely with all of the office duties associated with the position, in addition to developing new cliental. This indicates that there are a number of possible business opportunities with in our region that are not being addressed and possibly lost by our organization. When the business was acquired 15 years ago, by our conglomerate the current business model satisfied the business’ needs....
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...| Memo To: Northwind Traders From: CC: Date: 10/13/2013 Re: Revenue Assessment Thank you for the opportunity to assess your sales data in order to provide recommendations for increasing your sales. The analysis and recommendations below are based on the data you provided, which covers a period from May 2004 through June 2006. The analysis below is based on this data alone. Therefore, our recommendations should be tempered by your knowledge of business realities and your market. Please let us know if we can answer any questions concerning the analysis or the recommendations provided. ANALYSIS 1 Category Performance Analysis Analysis This analysis compared each category based on the final selling price of the product within the category. The final price was determined by multiplying the selling price by the quantity and subtracting the discount given. This method uses the net dollars gained by sales whereas using the non-discounted price or quantities sold would give a false reading as to the revenue gained. Graphic Recommendation While this analysis provides an insight as to the category performance over the past few years, it provides an easy to understand overview of how the categories are performing in comparison to each other. Given the low volume of sales in the produce and condiments categories, it is my recommendation that inventory levels be reduces and the monies saved be applied inventory for the dairy and beverages categories. ANALYSIS 2 ...
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...short reports such as email, formal short report, and memo. The communication within all reports conveyed the results of JJJ financials, instability of JJJ and recommending not moving forward with the acquisition. Also conveyed the status of due diligence investigation of JJJ Company. A more appropriate type of communication would be a report with graphs showing William, CEO of Riordan, the profits Riordan would gain or loss by investing with JJJ Company. Another graph showing stockholders dividend. William wanted John’s advise for accounting oversight details and by using graphs, the CEO would see where JJJ’s financials stand. William, CEO, would be able to make a better choice of moving forward with the acquisition or not. Week four learning team communiqués were written to the appropriate audience. John, Accounting Manager, communicated JJJ Company’s instability and advised William that moving forward on the acquisition with JJJ could burden Riordan Manufacturing. Beth advised Mark, Sales Manager, that Riordan could increase their sale goals by joining JJJ, which is what Mark, was focused on accomplishing. When it came to communicating to Dana, Marketing Manager, Beth did very well with pointing out that JJJ was not financially stable at that time. However, Beth and John would reconsider merging with JJJ if they collect on the sales that are pending. Beth also suggested having Dana work with JJJ on increasing their sales and progress. Beth communicated very well with her...
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...Week 1 Memo Assignment University of Phoenix InterClean, Inc. MEMO To: InterClean First Level Managers From: Jenifer Wilson, Sales Manager CC: David Spencer, Janet Durham and Tom Jennings Date: September 14, 2009 Re: Merger of InterClean, Inc and EnviroTech ________________________________________________________________ As I am sure you all have heard, InterClean, Inc. has decided to merge with EnviroTech in an attempt to increase the company’s global presence. In addition, we will now be able to position ourselves to gain a larger share of the marketplace. In light of this incredibly exciting news and the numerous recent changes, there is some information that is necessary to communicate with you. The first point that I would like to touch upon has to do with the management team’s behavior. Managers must understand how imperative it is that their behavior can have both positive and negative impacts on the productivity of the sales force. As you may have heard, our sales representatives will now be grouped into multifunctional teams. In order for the reps to provide outstanding service, they will be going though some very extensive training. In turn, to ensure that managers are leading by example, they will go through the same extensive training. Please refrain from speaking negatively about the organization or the merger. Equally important is the fact that all managers show that the merger is a good thing for both companies. Your behavior should...
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...the outstanding Carlin Corporation 5-year bonds on January 1st, 2010 The face value of the bond equals $2,400,000. To figure out the proceeds from the sale of the bond, we multiply $2,400,000 (original issued) by the discounted price of $0.95 which equates to $2,280,000. We then subtract $2,280,000 from the original issued value of $2,400,000 which gives us the discount on bonds payable amount of $120,000. We then take that $120,000 and divide by the five years equating to a bond discount amortization per year of $24,000. The next steps involves subtracting the 2 years of amortization (January 2008 through January 2010) of $48,000 from the original discount on bonds payable amount of $120,000 which gives us a total of $72,000. Lastly, we subtract this final number subtracted from the original issued value of $2,400,000 giving us the total carrying value of the bonds at a value of $2,328,000. (b) The Journal entry to retire the 5-year bond is Debit Credit Bonds Payable $2,400,000 Discount on Bonds Payable $72,000 Gain on Bond Redemption $328,000 Cash $2,000,000 (To record redemption of 8% bonds) The Journal entry to issue the new 10-year bonds is Cash $2,000,000 Bonds Payable $2,000,000 (To record sale of 10-year, 11% bonds at par) (c) Short Memo to the president listing the economic factors that I believe should be considered for her repurchase proposal. TO: Andrea Carlin, President FROM: Deanna...
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...to the Case-in-Case). Why did Frey’s strategy of more sales fail to improve OSP’s cash flow? [pic] The cash difficulties described between Josh Frey and Dave Burnett stated that if you have accounts payable due $3,000,000 and your accounts receivable is $5,000,000 but not for 30 days you have some big problems. Frey’s strategy failed for more sales to try to improve OSP’s cash flow is because of the reason stated previously. If you keep selling, which is a good thing but you do not request a percentage down from your customer you will be in the hole due to insufficient funds on hand to order the merchandise you need to fulfill your sales order that you have taken as well as payroll and other company related costs. This alone can bring a company down and keep it from ever being successful. #2 Discuss OSP’s “replicable sales process.” Why is this issue so important to OSP’s success? OSP’s replicable sales process is based upon how he runs his business. As he stated, “when OSP did accrue more cash, it was plowed into growth.” He knows how to sale and he has a good staff that he has trained very successfully. His theory is that there is an equation to sales, first phone calls, then emails and meetings leads to prospects then to sales. He is known for having such a replicable sales process, which is why he remains in business today. #3 Draw a diagram of the “sales equation” that Frey describes in his memo. Estimate the numbers at each step. Artemis Bid |Need:...
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... employment team Memo-compensation pay From Interclean management To sales team employee Goals for organization and employees 1. Building confidence in employee and achieving team progress. 2. Motivating the sales team 3. Making sure top sales employee are compensated for good perfromance The structure for the formation of the compensation plan is based on the needs of Interclean and the sales team. The compensation for employees will be based on base pay + commission. This seems to me to be the best method of obtaining maximum performance from the sales team. Management Jim Martin- experienced and knowledgeable/take care of their customer/meet and exceed sales plan/try new ideas/75,000 YR head manager of sales Tom Gonzalez- leadership abilities and ability to develop solutions/long-term relationship with customers and being customer friendly to solve problems/ 60,000 Yr sales manager Outside sales rep Eric Bolden-team leader on several projects/14 years of experience/keeps up on the latest product developments and compliance laws/45 ,000 yr...
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