[问答题]1 The scientists in the research laboratories of Swan Hill Company (SHC, a public listed company) recently made a veryimportant discovery about the process that manufactured its major product. The scientific director, Dr Sonja Rainbow,informed the board that the breakthrough was called the ‘sink method’. She explained that the sink method wouldenable SHC to produce its major product at a lower unit cost and in much higher volumes than the current process.It would also produce lower unit environmental emissions and would substantially improve product quality comparedto its current process and indeed compared to all of the other competitors in the industry.SHC currently has 30% of the global market with its nearest competitor having 25% and the other twelve producerssharing the remainder. The company, based in the town of Swan Hill, has a paternalistic management approach andhas always valued its relationship with the local community. Its website says that SHC has always sought to maximisethe benefit to the workforce and community in all of its business decisions and feels a great sense of loyalty to theSwan Hill locality which is where it started in 1900 and has been based ever since.As the board considered the implications of the discovery of the sink method, chief executive Nelson Cobar askedwhether Sonja Rainbow was certain that SHC was the only company in the industry that had made the discovery andshe said that she was. She also said that she was certain that the competitors were ‘some years’ behind SHC in theirresearch.It quickly became clear that the discovery of the sink method was so important and far reaching that it had thepotential to give SHC an unassailable competitive advantage in its industry. Chief executive Nelson Cobar told boardcolleagues that they should clearly understand that the discovery had the potential to put all of SHC’s competitors outof business and make SHC the single global supplier. He said that as the board considered the options, membersshould bear in mind the seriousness of the implications upon the rest of the industry.Mr Cobar said there were two strategic options. Option one was to press ahead with the huge investment of new plantnecessary to introduce the sink method into the factory whilst, as far as possible, keeping the nature of the sinktechnology secret from competitors (the ‘secrecy option’). A patent disclosing the nature of the technology would notbe filed so as to keep the technology secret within SHC. Option two was to file a patent and then offer the use of thediscovery to competitors under a licensing arrangement where SHC would receive substantial royalties for the twentyyearlegal lifetime of the patent (the ‘licensing option’). This would also involve new investment but at a slower pacein line with competitors. The licence contract would, Mr Cobar explained, include an ‘improvement sharing’requirement where licensees would be required to inform. SHC of any improvements discovered that made the sinkmethod more efficient or effective.The sales director, Edwin Kiama, argued strongly in favour of the secrecy option. He said that the board owed it toSHC’s shareholders to take the option that would maximise shareholder value. He argued that business strategy wasall about gaining competitive advantage and this was a chance to do exactly that. Accordingly, he argued, the sinkmethod should not be licensed to competitors and should be pursued as fast as possible. The operations director saidthat to gain the full benefits of the sink method with either option would require a complete refitting of the factory andthe largest capital investment that SHC had ever undertaken.The financial director, Sean Nyngan, advised the board that pressing ahead with investment under the secrecy optionwas not without risks. First, he said, he would have to finance the investment, probably initially through debt, andsecond, there were risks associated with any large investment. He also informed the board that the licensing optionwould, over many years, involve the inflow of ‘massive’ funds in royalty payments from competitors using the SHC’spatented sink method. By pursuing the licensing option, Sean Nyngan said that they could retain their marketleadership in the short term without incurring risk, whilst increasing their industry dominance in the future throughcareful investment of the royalty payments.The non-executive chairman, Alison Manilla, said that she was looking at the issue from an ethical perspective. Sheasked whether SHC had the right, even if it had the ability, to put competitors out of business.Required:(a) Assess the secrecy option using Tucker’s model for decision-making. (10 marks)
[问答题](c) Explain what ‘fiduciary responsibility’ means and construct the case for broadening the football club board’sfiduciary responsibility in this case. (7 marks)
[问答题](b) Compare and contrast Gray, Owen and Adams’s ‘pristine capitalist’ position with the ‘social contractarian’position. Explain how these positions would affect responses to stakeholder concerns in the new stadiumproject. (8 marks)
[问答题]4 When a prominent football club, whose shares were listed, announced that it was to build a new stadium on landnear to its old stadium, opinion was divided. Many of the club’s fans thought it a good idea because it would be morecomfortable for them when watching games. A number of problems arose, however, when it was pointed out that theconstruction of the new stadium and its car parking would have a number of local implications. The local governmentauthority said that building the stadium would involve diverting roads and changing local traffic flow, but that it wouldgrant permission to build the stadium if those issues could be successfully addressed. A number of nearby residentscomplained that the new stadium would be too near their homes and that it would destroy the view from their gardens.Helen Yusri, who spoke on behalf of the local residents, said that the residents would fight the planning applicationthrough legal means if necessary. A nearby local inner-city wildlife reservation centre said that the stadium’sconstruction might impact on local water levels and therefore upset the delicate balance of animals and plants in thewildlife centre. A local school, whose pupils often visited the wildlife centre, joined in the opposition, saying that whilstthe school supported the building of a new stadium in principle, it had concerns about disruption to the wildlife centre.The football club’s board was alarmed by the opposition to its planned new stadium as it had assumed that it wouldbe welcomed because the club had always considered itself a part of the local community. The club chairman saidthat he wanted to maintain good relations with all local people if possible, but at the same time he owed it to the fansand the club’s investors to proceed with the building of the new stadium despite local concerns.Required:(a) Define ‘stakeholder’ and explain the importance of identifying all the stakeholders in the stadium project.(10 marks)
[问答题](c) Critically evaluate Vincent Viola’s view that corporate governance provisions should vary by country.(8 marks)
[问答题](b) Assess the benefits of the separation of the roles of chief executive and chairman that Alliya Yongvanichargued for and explain her belief that ‘accountability to shareholders’ is increased by the separation of theseroles. (12 marks)
[问答题]3 At a recent international meeting of business leaders, Seamus O’Brien said that multi-jurisdictional attempts toregulate corporate governance were futile because of differences in national culture. He drew particular attention tothe Organisation for Economic Co-operation and Development (OECD) and International Corporate GovernanceNetwork (ICGN) codes, saying that they were, ‘silly attempts to harmonise practice’. He said that in some countries,for example, there were ‘family reasons’ for making the chairman and chief executive the same person. In othercountries, he said, the separation of these roles seemed to work. Another delegate, Alliya Yongvanich, said that theroles of chief executive and chairman should always be separated because of what she called ‘accountability toshareholders’.One delegate, Vincent Viola, said that the right approach was to allow each country to set up its own corporategovernance provisions. He said that it was suitable for some countries to produce and abide by their own ‘verystructured’ corporate governance provisions, but in some other parts of the world, the local culture was to allow whathe called, ‘local interpretation of the rules’. He said that some cultures valued highly structured governance systemswhile others do not care as much.Required:(a) Explain the roles of the chairman in corporate governance. (5 marks)
[问答题](c) Explain the benefits of performance-related pay in rewarding directors and critically evaluate the implicationsof the package offered to Choo Wang. (8 marks)
[问答题](b) Explain the meaning of Stephanie’s comment: ‘I would like to get risk awareness embedded in the cultureat the Southland factory.’ (5 marks)
[问答题]2 The risk committee at Southern Continents Company (SCC) met to discuss a report by its risk manager, StephanieField. The report focused on a number of risks that applied to a chemicals factory recently acquired by SCC in anothercountry, Southland. She explained that the new risks related to the security of the factory in Southland in respect ofburglary, to the supply of one of the key raw materials that experienced fluctuations in world supply and also anenvironmental risk. The environmental risk, Stephanie explained, was to do with the possibility of poisonousemissions from the Southland factory.The SCC chief executive, Choo Wang, who chaired the risk committee, said that the Southland factory was importantto him for two reasons. First, he said it was strategically important to the company. Second, it was important becausehis own bonuses depended upon it. He said that because he had personally negotiated the purchase of the Southlandfactory, the remunerations committee had included a performance bonus on his salary based on the success of theSouthland investment. He told Stephanie that a performance-related bonus was payable when and if the factoryachieved a certain level of output that Choo considered to be ambitious. ‘I don’t get any bonus at all until we reacha high level of output from the factory,’ he said. ‘So I don’t care what the risks are, we will have to manage them.’Stephanie explained that one of her main concerns arose because the employees at the factory in Southland were notaware of the importance of risk management to SCC. She said that the former owner of the factory paid less attentionto risk issues and so the staff were not as aware of risk as Stephanie would like them to be. ‘I would like to get riskawareness embedded in the culture at the Southland factory,’ she said.Choo Wang said that he knew from Stephanie’s report what the risks were, but that he wanted somebody to explainto him what strategies SCC could use to manage the risks.Required:(a) Describe four strategies that can be used to manage risk and identify, with reasons, an appropriate strategyfor each of the three risks mentioned in the case. (12 marks)
[问答题](d) Draft a letter for Tim Blake to send to WM’s investors to include the following:(i) why you believe robust internal controls to be important; and(ii) proposals on how internal systems might be improved in the light of the overestimation of mallerite atWM.Note: four professional marks are available within the marks allocated to requirement (d) for the structure,content, style. and layout of the letter.(16 marks)
[问答题](c) Critically discuss FOUR principal roles of non-executive directors and explain the potential tensions betweenthese roles that WM’s non-executive directors may experience in advising on the disclosure of theoverestimation of the mallerite reserve. (12 marks)
[问答题](b) Explain Kohlberg’s three levels of moral development and identify the levels of moral developmentdemonstrated by the contributions of Gary Howells, Vanda Monroe and Martin Chan. (12 marks)
[问答题]1 The board of Worldwide Minerals (WM) was meeting for the last monthly meeting before the publication of the yearendresults. There were two points of discussion on the agenda. First was the discussion of the year-end results;second was the crucial latest minerals reserves report.WM is a large listed multinational company that deals with natural minerals that are extracted from the ground,processed and sold to a wide range of industrial and construction companies. In order to maintain a consistent supplyof minerals into its principal markets, an essential part of WM’s business strategy is the seeking out of new sourcesand the measurement of known reserves. Investment analysts have often pointed out that WM’s value rests principallyupon the accuracy of its reserve reports as these are the best indicators of future cash flows and earnings. In order tosupport this key part of its strategy, WM has a large and well-funded geological survey department which, accordingto the company website, contains ‘some of the world’s best geologists and minerals scientists’. In its investor relationsliterature, the company claims that:‘our experts search the earth for mineral reserves and once located, they are carefully measured so that the companycan always report on known reserves. This knowledge underpins market confidence and keeps our customerssupplied with the inventory they need. You can trust our reserve reports – our reputation depends on it!’At the board meeting, the head of the geological survey department, Ranjana Tyler, reported that there was a problemwith the latest report because one of the major reserve figures had recently been found to be wrong. The mineral inquestion, mallerite, was WM’s largest mineral in volume terms and Ranjana explained that the mallerite reserves ina deep mine in a certain part of the world had been significantly overestimated. She explained that, based on theinterim minerals report, the stock market analysts were expecting WM to announce known mallerite reserves of4·8 billion tonnes. The actual figure was closer to 2·4 billion tonnes. It was agreed that this difference was sufficientto affect WM’s market value, despite the otherwise good results for the past year. Vanda Monroe, the finance director,said that the share price reflects market confidence in future earnings. She said that an announcement of an incorrectestimation like that for mallerite would cause a reduction in share value. More importantly for WM itself, however, itcould undermine confidence in the geological survey department. All agreed that as this was strategically importantfor the company, it was a top priority to deal with this problem.Ranjana explained how the situation had arisen. The major mallerite mine was in a country new to WM’s operations.The WM engineer at the mine said it was difficult to deal with some local people because, according to the engineer,‘they didn’t like to give us bad news’. The engineer explained that when the mine was found to be smaller thanoriginally thought, he was not told until it was too late to reduce the price paid for the mine. This was embarrassingand it was agreed that it would affect market confidence in WM if it was made public.The board discussed the options open to it. The chairman, who was also a qualified accountant, was Tim Blake. Hebegan by expressing serious concern about the overestimation and then invited the board to express views freely. GaryHowells, the operations director, said that because disclosing the error to the market would be so damaging, it mightbe best to keep it a secret and hope that new reserves can be found in the near future that will make up for theshortfall. He said that it was unlikely that this concealment would be found out as shareholders trusted WM and theyhad many years of good investor relations to draw on. Vanda Monroe, the finance director, reminded the board thatthe company was bound to certain standards of truthfulness and transparency by its stock market listing. She pointedout that they were constrained by codes of governance and ethics by the stock market and that colleagues should beaware that WM would be in technical breach of these if the incorrect estimation was concealed from investors. Finally,Martin Chan, the human resources director, said that the error should be disclosed to the investors because he wouldnot want to be deceived if he were an outside investor in the company. He argued that whatever the governance codessaid and whatever the cost in terms of reputation and market value, WM should admit its error and cope withwhatever consequences arose. The WM board contains three non-executive directors and their views were alsoinvited.At the preliminary results presentation some time later, one analyst, Christina Gonzales, who had become aware ofthe mallerite problem, asked about internal audit and control systems, and whether they were adequate in such areserve-sensitive industry. WM’s chairman, Tim Blake, said that he intended to write a letter to all investors andanalysts in the light of the mallerite problem which he hoped would address some of the issues that Miss Gonzaleshad raised.Required:(a) Define ‘transparency’ and evaluate its importance as an underlying principle in corporate governance and inrelevant and reliable financial reporting. Your answer should refer to the case as appropriate. (10 marks)
[问答题](d) Combining all reserves into a single figure. (2 marks)
[问答题](c) Increasing the revaluation reserve to $300,000 by revaluing goodwill from $800,000 to $1,000,000.(1 mark)
[问答题](b) Paying a dividend of 10c per share (1 mark)
[问答题](c) State one advantage to a business of keeping its working capital cycle as short as possible.(2 Marks)
[问答题]4 (a) Explain the meaning of the term ‘working capital cycle’ for a trading company. (4 marks)
[问答题](ii) Receivables, showing separately the deduction of the allowance for receivables.
[问答题](b) Show how the adjustments affect:(i) Closing inventory;
[问答题]2 The draft financial statements of Rampion, a limited liability company, for the year ended 31 December 2005included the following figures:$Profit 684,000Closing inventory 116,800Trade receivables 248,000Allowance for receivables 10,000No adjustments have yet been made for the following matters:(1) The company’s inventory count was carried out on 3 January 2006 leading to the figure shown above. Salesbetween the close of business on 31 December 2005 and the inventory count totalled $36,000. There were nodeliveries from suppliers in that period. The company fixes selling prices to produce a 40% gross profit on sales.The $36,000 sales were included in the sales records in January 2006.(2) $10,000 of goods supplied on sale or return terms in December 2005 have been included as sales andreceivables. They had cost $6,000. On 10 January 2006 the customer returned the goods in good condition.(3) Goods included in inventory at cost $18,000 were sold in January 2006 for $13,500. Selling expenses were$500.(4) $8,000 of trade receivables are to be written off.(5) The allowance for receivables is to be adjusted to the equivalent of 5% of the trade receivables after allowing forthe above matters, based on past experience.Required:(a) Prepare a statement showing the effect of the adjustments on the company’s net profit for the year ended31 December 2005. (5 marks)
[问答题](c) In August 2004 it was discovered that the inventory at 31 December 2003 had been overstated by $100,000.(4 marks)Required:Advise the directors on the correct treatment of these matters, stating the relevant accounting standard whichjustifies your answer in each case.NOTE: The mark allocation is shown against each of the three matters.
[问答题](b) During the inventory count on 31 December, some goods which had cost $80,000 were found to be damaged.In February 2005 the damaged goods were sold for $85,000 by an agent who received a 10% commission outof the sale proceeds. (2 marks)Required:Advise the directors on the correct treatment of these matters, stating the relevant accounting standard whichjustifies your answer in each case.NOTE: The mark allocation is shown against each of the three matters.
[问答题]5 The directors of Quapaw, a limited liability company, are reviewing the company’s draft financial statements for theyear ended 31 December 2004.The following material matters are under discussion:(a) During the year the company has begun selling a product with a one-year warranty under which manufacturingdefects are remedied without charge. Some claims have already arisen under the warranty. (2 marks)Required:Advise the directors on the correct treatment of these matters, stating the relevant accounting standard whichjustifies your answer in each case.NOTE: The mark allocation is shown against each of the three matters
[问答题](b) Ratio analysis in general can be useful in comparing the performance of two companies, but it has its limitations.Required:State and briefly explain three factors which can cause accounting ratios to be misleading when used forsuch comparison. (6 marks)
[问答题]4 (a) A company may choose to finance its activities mainly by equity capital, with low borrowings (low gearing) or byrelying on high borrowings with relatively low equity capital (high gearing).Required:Explain why a highly geared company is generally more risky from an investor’s point of view than a companywith low gearing. (3 marks)
[问答题]2 The draft financial statements of Choctaw, a limited liability company, for the year ended 31 December 2004 showeda profit of $86,400. The trial balance did not balance, and a suspense account with a credit balance of $3,310 wasincluded in the balance sheet.In subsequent checking the following errors were found:(a) Depreciation of motor vehicles at 25 per cent was calculated for the year ended 31 December 2004 on thereducing balance basis, and should have been calculated on the straight-line basis at 25 per cent.Relevant figures:Cost of motor vehicles $120,000, net book value at 1 January 2004, $88,000(b) Rent received from subletting part of the office accommodation $1,200 had been put into the petty cash box.No receivable balance had been recognised when the rent fell due and no entries had been made in the pettycash book or elsewhere for it. The petty cash float in the trial balance is the amount according to the records,which is $1,200 less than the actual balance in the box.(c) Bad debts totalling $8,400 are to be written off.(d) The opening accrual on the motor repairs account of $3,400, representing repair bills due but not paid at31 December 2003, had not been brought down at 1 January 2004.(e) The cash discount totals for December 2004 had not been posted to the discount accounts in the nominal ledger.The figures were:$Discount allowed 380Discount received 290After the necessary entries, the suspense account balanced.Required:Prepare journal entries, with narratives, to correct the errors found, and prepare a statement showing thenecessary adjustments to the profit.(10 marks)
[问答题](b) Discuss the relative costs to the preparer and benefits to the users of financial statements of increaseddisclosure of information in financial statements. (14 marks)Quality of discussion and reasoning. (2 marks)
[问答题]4 Whilst acknowledging the importance of high quality corporate reporting, the recommendations to improve it aresometimes questioned on the basis that the marketplace for capital can determine the nature and quality of corporatereporting. It could be argued that additional accounting and disclosure standards would only distort a marketmechanism that already works well and would add costs to the reporting mechanism, with no apparent benefit. Itcould be said that accounting standards create costly, inefficient, and unnecessary regulation. It could be argued thatincreased disclosure reduces risks and offers a degree of protection to users. However, increased disclosure has severalcosts to the preparer of financial statements.Required:(a) Explain why accounting standards are needed to help the market mechanism work effectively for the benefitof preparers and users of corporate reports. (9 marks)
[问答题]Discuss the principles and practices which should be used in the financial year to 30 November 2008 to accountfor:(c) the purchase of handsets and the recognition of revenue from customers and dealers. (8 marks)Appropriateness and quality of discussion. (2 marks)
[问答题]Required:Discuss the principles and practices which should be used in the financial year to 30 November 2008 to accountfor:(b) the costs incurred in extending the network; (7 marks)
[问答题]3 Johan, a public limited company, operates in the telecommunications industry. The industry is capital intensive withheavy investment in licences and network infrastructure. Competition in the sector is fierce and technologicaladvances are a characteristic of the industry. Johan has responded to these factors by offering incentives to customersand, in an attempt to acquire and retain them, Johan purchased a telecom licence on 1 December 2006 for$120 million. The licence has a term of six years and cannot be used until the network assets and infrastructure areready for use. The related network assets and infrastructure became ready for use on 1 December 2007. Johan couldnot operate in the country without the licence and is not permitted to sell the licence. Johan expects its subscriberbase to grow over the period of the licence but is disappointed with its market share for the year to 30 November2008. The licence agreement does not deal with the renewal of the licence but there is an expectation that theregulator will grant a single renewal for the same period of time as long as certain criteria regarding network buildquality and service quality are met. Johan has no experience of the charge that will be made by the regulator for therenewal but other licences have been renewed at a nominal cost. The licence is currently stated at its original cost of$120 million in the statement of financial position under non-current assets.Johan is considering extending its network and has carried out a feasibility study during the year to 30 November2008. The design and planning department of Johan identified five possible geographical areas for the extension ofits network. The internal costs of this study were $150,000 and the external costs were $100,000 during the yearto 30 November 2008. Following the feasibility study, Johan chose a geographical area where it was going to installa base station for the telephone network. The location of the base station was dependent upon getting planningpermission. A further independent study has been carried out by third party consultants in an attempt to provide apreferred location in the area, as there is a need for the optimal operation of the network in terms of signal qualityand coverage. Johan proposes to build a base station on the recommended site on which planning permission hasbeen obtained. The third party consultants have charged $50,000 for the study. Additionally Johan has paid$300,000 as a single payment together with $60,000 a month to the government of the region for access to the landupon which the base station will be situated. The contract with the government is for a period of 12 years andcommenced on 1 November 2008. There is no right of renewal of the contract and legal title to the land remains withthe government.Johan purchases telephone handsets from a manufacturer for $200 each, and sells the handsets direct to customersfor $150 if they purchase call credit (call card) in advance on what is called a prepaid phone. The costs of selling thehandset are estimated at $1 per set. The customers using a prepaid phone pay $21 for each call card at the purchasedate. Call cards expire six months from the date of first sale. There is an average unused call credit of $3 per cardafter six months and the card is activated when sold.Johan also sells handsets to dealers for $150 and invoices the dealers for those handsets. The dealer can return thehandset up to a service contract being signed by a customer. When the customer signs a service contract, thecustomer receives the handset free of charge. Johan allows the dealer a commission of $280 on the connection of acustomer and the transaction with the dealer is settled net by a payment of $130 by Johan to the dealer being thecost of the handset to the dealer ($150) deducted from the commission ($280). The handset cannot be soldseparately by the dealer and the service contract lasts for a 12 month period. Dealers do not sell prepaid phones, andJohan receives monthly revenue from the service contract.The chief operating officer, a non-accountant, has asked for an explanation of the accounting principles and practiceswhich should be used to account for the above events.Required:Discuss the principles and practices which should be used in the financial year to 30 November 2008 to accountfor:(a) the licences; (8 marks)
[问答题](c) Discuss the ethical responsibility of the company accountant in ensuring that manipulation of the statementof cash flows, such as that suggested by the directors, does not occur. (5 marks)Note: requirements (b) and (c) include 2 professional marks in total for the quality of the discussion.
[问答题](b) Discuss the key issues which the statement of cash flows highlights regarding the cash flow of the company.(10 marks)
[问答题](b) Discuss how management’s judgement and the financial reporting infrastructure of a country can have asignificant impact on financial statements prepared under IFRS. (6 marks)Appropriateness and quality of discussion. (2 marks)
[问答题]4 The transition to International Financial Reporting Standards (IFRSs) involves major change for companies as IFRSsintroduce significant changes in accounting practices that were often not required by national generally acceptedaccounting practice. It is important that the interpretation and application of IFRSs is consistent from country tocountry. IFRSs are partly based on rules, and partly on principles and management’s judgement. Judgement is morelikely to be better used when it is based on experience of IFRSs within a sound financial reporting infrastructure. It ishoped that national differences in accounting will be eliminated and financial statements will be consistent andcomparable worldwide.Required:(a) Discuss how the changes in accounting practices on transition to IFRSs and choice in the application ofindividual IFRSs could lead to inconsistency between the financial statements of companies. (17 marks)
[问答题](d) Sirus raised a loan with a bank of $2 million on 1 May 2007. The market interest rate of 8% per annum is tobe paid annually in arrears and the principal is to be repaid in 10 years time. The terms of the loan allow Sirusto redeem the loan after seven years by paying the full amount of the interest to be charged over the ten yearperiod, plus a penalty of $200,000 and the principal of $2 million. The effective interest rate of the repaymentoption is 9·1%. The directors of Sirus are currently restructuring the funding of the company and are in initialdiscussions with the bank about the possibility of repaying the loan within the next financial year. Sirus isuncertain about the accounting treatment for the current loan agreement and whether the loan can be shown asa current liability because of the discussions with the bank. (6 marks)Appropriateness of the format and presentation of the report and quality of discussion (2 marks)Required:Draft a report to the directors of Sirus which discusses the principles and nature of the accounting treatment ofthe above elements under International Financial Reporting Standards in the financial statements for the yearended 30 April 2008.
[问答题](c) On 1 May 2007 Sirus acquired another company, Marne plc. The directors of Marne, who were the onlyshareholders, were offered an increased profit share in the enlarged business for a period of two years after thedate of acquisition as an incentive to accept the purchase offer. After this period, normal remuneration levels willbe resumed. Sirus estimated that this would cost them $5 million at 30 April 2008, and a further $6 million at30 April 2009. These amounts will be paid in cash shortly after the respective year ends. (5 marks)Required:Draft a report to the directors of Sirus which discusses the principles and nature of the accounting treatment ofthe above elements under International Financial Reporting Standards in the financial statements for the yearended 30 April 2008.
[问答题](b) When a director retires, amounts become payable to the director as a form. of retirement benefit as an annuity.These amounts are not based on salaries paid to the director under an employment contract. Sirus hascontractual or constructive obligations to make payments to former directors as at 30 April 2008 as follows:(i) certain former directors are paid a fixed annual amount for a fixed term beginning on the first anniversary ofthe director’s retirement. If the director dies, an amount representing the present value of the future paymentis paid to the director’s estate.(ii) in the case of other former directors, they are paid a fixed annual amount which ceases on death.The rights to the annuities are determined by the length of service of the former directors and are set out in theformer directors’ service contracts. (6 marks)Required:Draft a report to the directors of Sirus which discusses the principles and nature of the accounting treatment ofthe above elements under International Financial Reporting Standards in the financial statements for the yearended 30 April 2008.
[问答题](b) One of the hotels owned by Norman is a hotel complex which includes a theme park, a casino and a golf course,as well as a hotel. The theme park, casino, and hotel were sold in the year ended 31 May 2008 to Conquest, apublic limited company, for $200 million but the sale agreement stated that Norman would continue to operateand manage the three businesses for their remaining useful life of 15 years. The residual interest in the businessreverts back to Norman after the 15 year period. Norman would receive 75% of the net profit of the businessesas operator fees and Conquest would receive the remaining 25%. Norman has guaranteed to Conquest that thenet minimum profit paid to Conquest would not be less than $15 million. (4 marks)Norman has recently started issuing vouchers to customers when they stay in its hotels. The vouchers entitle thecustomers to a $30 discount on a subsequent room booking within three months of their stay. Historicalexperience has shown that only one in five vouchers are redeemed by the customer. At the company’s year endof 31 May 2008, it is estimated that there are vouchers worth $20 million which are eligible for discount. Theincome from room sales for the year is $300 million and Norman is unsure how to report the income from roomsales in the financial statements. (4 marks)Norman has obtained a significant amount of grant income for the development of hotels in Europe. The grantshave been received from government bodies and relate to the size of the hotel which has been built by the grantassistance. The intention of the grant income was to create jobs in areas where there was significantunemployment. The grants received of $70 million will have to be repaid if the cost of building the hotels is lessthan $500 million. (4 marks)Appropriateness and quality of discussion (2 marks)Required:Discuss how the above income would be treated in the financial statements of Norman for the year ended31 May 2008.
[问答题](c) Discuss how the manipulation of financial statements by company accountants is inconsistent with theirresponsibilities as members of the accounting profession setting out the distinguishing features of aprofession and the privileges that society gives to a profession. (Your answer should include reference to theabove scenario.) (7 marks)Note: requirement (c) includes 2 marks for the quality of the discussion.
[问答题](b) Prepare a consolidated statement of financial position of the Ribby Group at 31 May 2008 in accordancewith International Financial Reporting Standards. (35 marks)
[问答题](b) Discuss the key issues which will need to be addressed in determining the basic components of aninternationally agreed conceptual framework. (10 marks)Appropriateness and quality of discussion. (2 marks)
[问答题]4 The International Accounting Standards Board (IASB) has begun a joint project to revisit its conceptual framework forfinancial accounting and reporting. The goals of the project are to build on the existing frameworks and converge theminto a common framework.Required:(a) Discuss why there is a need to develop an agreed international conceptual framework and the extent to whichan agreed international conceptual framework can be used to resolve practical accounting issues.(13 marks)
[问答题](b) (i) Discusses the principles involved in accounting for claims made under the above warranty provision.(6 marks)(ii) Shows the accounting treatment for the above warranty provision under IAS37 ‘Provisions, ContingentLiabilities and Contingent Assets’ for the year ended 31 October 2007. (3 marks)Appropriateness of the format and presentation of the report and communication of advice. (2 marks)
[问答题](c) Discuss the ethical and social responsibilities of the Beth Group and whether a change in the ethical andsocial attitudes of the management could improve business performance. (7 marks)Note: requirement (c) includes 2 professional marks for development of the discussion of the ethical and socialresponsibilities of the Beth Group.
[问答题](b) Describe to the Beth Group the possible advantages of producing a separate environmental report.(8 marks)
[问答题](b) Discuss the view that fair value is a more relevant measure to use in corporate reporting than historical cost.(12 marks)
[问答题]5 Financial statements have seen an increasing move towards the use of fair values in accounting. Advocates of ‘fairvalue accounting’ believe that fair value is the most relevant measure for financial reporting whilst others believe thathistorical cost provides a more useful measure.Issues have been raised over the reliability and measurement of fair values, and over the nature of the current levelof disclosure in financial statements in this area.Required:(a) Discuss the problems associated with the reliability and measurement of fair values and the nature of anyadditional disclosures which may be required if fair value accounting is to be used exclusively in corporatereporting. (13 marks)
[问答题](d) Additionally Router purchased 60% of the ordinary shares of a radio station, Playtime, a public limited company,on 31 May 2007. The remaining 40% of the ordinary shares are owned by a competitor company who owns asubstantial number of warrants issued by Playtime which are currently exercisable. If these warrants areexercised, they will result in Router only owning 35% of the voting shares of Playtime. (4 marks)Required:Discuss how the above items should be dealt with in the group financial statements of Router for the year ended31 May 2007.
[问答题](c) At 1 June 2006, Router held a 25% shareholding in a film distribution company, Wireless, a public limitedcompany. On 1 January 2007, Router sold a 15% holding in Wireless thus reducing its investment to a 10%holding. Router no longer exercises significant influence over Wireless. Before the sale of the shares the net assetvalue of Wireless on 1 January 2007 was $200 million and goodwill relating to the acquisition of Wireless was$5 million. Router received $40 million for its sale of the 15% holding in Wireless. At 1 January 2007, the fairvalue of the remaining investment in Wireless was $23 million and at 31 May 2007 the fair value was$26 million. (6 marks)Required:Discuss how the above items should be dealt with in the group financial statements of Router for the year ended31 May 2007.Required:Discuss how the above items should be dealt with in the group financial statements of Router for the year ended31 May 2007.
[问答题](b) Router has a number of film studios and office buildings. The office buildings are in prestigious areas whereasthe film studios are located in ‘out of town’ locations. The management of Router wish to apply the ‘revaluationmodel’ to the office buildings and the ‘cost model’ to the film studios in the year ended 31 May 2007. At presentboth types of buildings are valued using the ‘revaluation model’. One of the film studios has been converted to atheme park. In this case only, the land and buildings on the park are leased on a single lease from a third party.The lease term was 30 years in 1990. The lease of the land and buildings was classified as a finance lease eventhough the financial statements purport to comply with IAS 17 ‘Leases’.The terms of the lease were changed on 31 May 2007. Router is now going to terminate the lease early in 2015in exchange for a payment of $10 million on 31 May 2007 and a reduction in the monthly lease payments.Router intends to move from the site in 2015. The revised lease terms have not resulted in a change ofclassification of the lease in the financial statements of Router. (10 marks)Required:Discuss how the above items should be dealt with in the group financial statements of Router for the year ended31 May 2007.
[问答题]4 (a) Router, a public limited company operates in the entertainment industry. It recently agreed with a televisioncompany to make a film which will be broadcast on the television company’s network. The fee agreed for thefilm was $5 million with a further $100,000 to be paid every time the film is shown on the television company’schannels. It is hoped that it will be shown on four occasions. The film was completed at a cost of $4 million anddelivered to the television company on 1 April 2007. The television company paid the fee of $5 million on30 April 2007 but indicated that the film needed substantial editing before they were prepared to broadcast it,the costs of which would be deducted from any future payments to Router. The directors of Router wish torecognise the anticipated future income of $400,000 in the financial statements for the year ended 31 May2007. (5 marks)Required:Discuss how the above items should be dealt with in the group financial statements of Router for the year ended31 May 2007.
[问答题](b) On 31 May 2007, Leigh purchased property, plant and equipment for $4 million. The supplier has agreed toaccept payment for the property, plant and equipment either in cash or in shares. The supplier can either choose1·5 million shares of the company to be issued in six months time or to receive a cash payment in three monthstime equivalent to the market value of 1·3 million shares. It is estimated that the share price will be $3·50 inthree months time and $4 in six months time.Additionally, at 31 May 2007, one of the directors recently appointed to the board has been granted the right tochoose either 50,000 shares of Leigh or receive a cash payment equal to the current value of 40,000 shares atthe settlement date. This right has been granted because of the performance of the director during the year andis unconditional at 31 May 2007. The settlement date is 1 July 2008 and the company estimates the fair valueof the share alternative is $2·50 per share at 31 May 2007. The share price of Leigh at 31 May 2007 is $3 pershare, and if the director chooses the share alternative, they must be kept for a period of four years. (9 marks)Required:Discuss with suitable computations how the above share based transactions should be accounted for in thefinancial statements of Leigh for the year ended 31 May 2007.
[问答题]3 (a) Leigh, a public limited company, purchased the whole of the share capital of Hash, a limited company, on 1 June2006. The whole of the share capital of Hash was formerly owned by the five directors of Hash and under theterms of the purchase agreement, the five directors were to receive a total of three million ordinary shares of $1of Leigh on 1 June 2006 (market value $6 million) and a further 5,000 shares per director on 31 May 2007,if they were still employed by Leigh on that date. All of the directors were still employed by Leigh at 31 May2007.Leigh granted and issued fully paid shares to its own employees on 31 May 2007. Normally share options issuedto employees would vest over a three year period, but these shares were given as a bonus because of thecompany’s exceptional performance over the period. The shares in Leigh had a market value of $3 million(one million ordinary shares of $1 at $3 per share) on 31 May 2007 and an average fair value of$2·5 million (one million ordinary shares of $1 at $2·50 per share) for the year ended 31 May 2007. It isexpected that Leigh’s share price will rise to $6 per share over the next three years. (10 marks)Required:Discuss with suitable computations how the above share based transactions should be accounted for in thefinancial statements of Leigh for the year ended 31 May 2007.
[问答题](c) Wader is reviewing the accounting treatment of its buildings. The company uses the ‘revaluation model’ for itsbuildings. The buildings had originally cost $10 million on 1 June 2005 and had a useful economic life of20 years. They are being depreciated on a straight line basis to a nil residual value. The buildings were revalueddownwards on 31 May 2006 to $8 million which was the buildings’ recoverable amount. At 31 May 2007 thevalue of the buildings had risen to $11 million which is to be included in the financial statements. The companyis unsure how to treat the above events. (7 marks)Required:Discuss the accounting treatments of the above items in the financial statements for the year ended 31 May2007.Note: a discount rate of 5% should be used where necessary. Candidates should show suitable calculations wherenecessary.
[问答题](iii) How items not dealt with by an IFRS for SMEs should be treated. (5 marks)
[问答题](ii) How existing standards could be modified to meet the needs of SMEs. (6 marks
[问答题](b) Discuss the nature of the following issues in developing IFRSs for SMEs.(i) The purpose of the standards and the type of entity to whom they should apply. (7 marks)
[问答题]5 International Financial Reporting Standards (IFRSs) are primarily designed for use by publicly listed companies andin many countries the majority of companies using IFRSs are listed companies. In other countries IFRSs are used asnational Generally Accepted Accounting Practices (GAAP) for all companies including unlisted entities. It has beenargued that the same IFRSs should be used by all entities or alternatively a different body of standards should applyto small and medium entities (SMEs).Required:(a) Discuss whether there is a need to develop a set of IFRSs specifically for SMEs. (7 marks)
[问答题](b) Describe with suitable calculations how the goodwill arising on the acquisition of Briars will be dealt with inthe group financial statements and how the loan to Briars should be treated in the financial statements ofBriars for the year ended 31 May 2006. (9 marks)
[问答题](iv) Tyre recently undertook a sales campaign whereby customers can obtain free car accessories, by presenting acoupon, which has been included in an advertisement in a national newspaper, on the purchase of a vehicle.The offer is valid for a limited time period from 1 January 2006 until 31 July 2006. The management are unsureas to how to treat this offer in the financial statements for the year ended 31 May 2006.(5 marks)Required:Advise the directors of Tyre on how to treat the above items in the financial statements for the year ended31 May 2006.(The mark allocation is shown against each of the above items)
[问答题](iii) Tyre has entered into two new long lease property agreements for two major retail outlets. Annual rentals are paidunder these agreements. Tyre has had to pay a premium to enter into these agreements because of the outlets’location. Tyre feels that the premiums paid are justifiable because of the increase in revenue that will occurbecause of the outlets’ location. Tyre has analysed the leases and has decided that one is a finance lease andone is an operating lease but the company is unsure as to how to treat this premium. (5 marks)Required:Advise the directors of Tyre on how to treat the above items in the financial statements for the year ended31 May 2006.(The mark allocation is shown against each of the above items)
[问答题](ii) The property of the former administrative centre of Tyre is owned by the company. Tyre had decided in the yearthat the property was surplus to requirements and demolished the building on 10 June 2006. After demolition,the company will have to carry out remedial environmental work, which is a legal requirement resulting from thedemolition. It was intended that the land would be sold after the remedial work had been carried out. However,land prices are currently increasing in value and, therefore, the company has decided that it will not sell the landimmediately. Tyres uses the ‘cost model’ in IAS16 ‘Property, plant and equipment’ and has owned the propertyfor many years. (7 marks)Required:Advise the directors of Tyre on how to treat the above items in the financial statements for the year ended31 May 2006.(The mark allocation is shown against each of the above items)
[问答题]2 Tyre, a public limited company, operates in the vehicle retailing sector. The company is currently preparing its financialstatements for the year ended 31 May 2006 and has asked for advice on how to deal with the following items:(i) Tyre requires customers to pay a deposit of 20% of the purchase price when placing an order for a vehicle. If thecustomer cancels the order, the deposit is not refundable and Tyre retains it. If the order cannot be fulfilled byTyre, the company repays the full amount of the deposit to the customer. The balance of the purchase pricebecomes payable on the delivery of the vehicle when the title to the goods passes. Tyre proposes to recognisethe revenue from the deposits immediately and the balance of the purchase price when the goods are deliveredto the customer. The cost of sales for the vehicle is recognised when the balance of the purchase price is paid.Additionally, Tyre had sold a fleet of cars to Hub and gave Hub a discount of 30% of the retail price on thetransaction. The discount given is normal for this type of transaction. Tyre has given Hub a buyback option whichentitles Hub to require Tyre to repurchase the vehicles after three years for 40% of the purchase price. The normaleconomic life of the vehicles is five years and the buyback option is expected to be exercised. (8 marks)Required:Advise the directors of Tyre on how to treat the above items in the financial statements for the year ended31 May 2006.(The mark allocation is shown against each of the above items)
[问答题](ii) the strategy of the business regarding its treasury policies. (3 marks)(Marks will be awarded in part (b) for the identification and discussion of relevant points and for the style. of thereport.)
[问答题](b) Draft a report suitable for inclusion in a Management Commentary for Jones and Cousin which deals with:(i) the key risks and relationships of the business (9 marks)
[问答题]5 Jones and Cousin, a public quoted company, operate in twenty seven different countries and earn revenue and incurcosts in several currencies. The group develops, manufactures and markets products in the medical sector. The growthof the group has been achieved by investment and acquisition. It is organised into three global business units whichmanage their sales in international markets, and take full responsibility for strategy and business performance. Onlyfive per cent of the business is in the country of incorporation. Competition in the sector is quite fierce.The group competes across a wide range of geographic and product markets and encourages its subsidiaries toenhance local communities by reinvestment of profits in local educational projects. The group’s share of revenue in amarket sector is often determined by government policy. The markets contain a number of different competitorsincluding specialised and large international corporations. At present the group is awaiting regulatory approval for arange of new products to grow its market share. The group lodges its patents for products and enters into legalproceedings where necessary to protect patents. The products are sourced from a wide range of suppliers, who, onceapproved both from a qualitative and ethical perspective, are generally given a long term contract for the supply ofgoods. Obsolete products are disposed of with concern for the environment and the health of its customers, withreusable materials normally being used. The industry is highly regulated in terms of medical and environmental lawsand regulations. The products normally carry a low health risk.The Group has developed a set of corporate and social responsibility principles during the period which is theresponsibility of the Board of Directors. The Managing Director manages the risks arising from corporate and socialresponsibility issues. The group wishes to retain and attract employees and follows policies which ensure equalopportunity for all the employees. Employees are informed of management policies, and regularly receive in-housetraining.The Group enters into contracts for fixed rate currency swaps and uses floating to fixed rate interest rate swaps. Thecash flow effects of these swaps match the cash flows on the underlying financial instruments. All financialinstruments are accounted for as cash flow hedges. A significant amount of trading activity is denominated in theDinar and the Euro. The dollar is its functional currency.Required:(a) Describe the principles behind the Management Commentary discussing whether the commentary should bemandatory or whether directors should be free to use their judgement as to what should be included in sucha commentary. (13 marks)
[问答题](b) Prepare the balance sheet of York at 31 October 2006, using International Financial Reporting Standards,discussing the nature of the accounting treatments selected, the adjustments made and the values placedon the items in the balance sheet. (20 marks)
[问答题](d) Player tradingAnother proposal is for the club to sell its two valuable players, Aldo and Steel. It is thought that it will receive atotal of $16 million for both players. The players are to be offered for sale at the end of the current football seasonon 1 May 2007. (5 marks)Required:Discuss how the above proposals would be dealt with in the financial statements of Seejoy for the year ending31 December 2007, setting out their accounting treatment and appropriateness in helping the football club’scash flow problems.(Candidates do not need knowledge of the football finance sector to answer this question.)
[问答题](c) Issue of bondThe club proposes to issue a 7% bond with a face value of $50 million on 1 January 2007 at a discount of 5%that will be secured on income from future ticket sales and corporate hospitality receipts, which are approximately$20 million per annum. Under the agreement the club cannot use the first $6 million received from corporatehospitality sales and reserved tickets (season tickets) as this will be used to repay the bond. The money from thebond will be used to pay for ground improvements and to pay the wages of players.The bond will be repayable, both capital and interest, over 15 years with the first payment of $6 million due on31 December 2007. It has an effective interest rate of 7·7%. There will be no active market for the bond andthe company does not wish to use valuation models to value the bond. (6 marks)Required:Discuss how the above proposals would be dealt with in the financial statements of Seejoy for the year ending31 December 2007, setting out their accounting treatment and appropriateness in helping the football club’scash flow problems.(Candidates do not need knowledge of the football finance sector to answer this question.)
[问答题]3 Seejoy is a famous football club but has significant cash flow problems. The directors and shareholders wish to takesteps to improve the club’s financial position. The following proposals had been drafted in an attempt to improve thecash flow of the club. However, the directors need advice upon their implications.(a) Sale and leaseback of football stadium (excluding the land element)The football stadium is currently accounted for using the cost model in IAS16, ‘Property, Plant, and Equipment’.The carrying value of the stadium will be $12 million at 31 December 2006. The stadium will have a remaininglife of 20 years at 31 December 2006, and the club uses straight line depreciation. It is proposed to sell thestadium to a third party institution on 1 January 2007 and lease it back under a 20 year finance lease. The saleprice and fair value are $15 million which is the present value of the minimum lease payments. The agreementtransfers the title of the stadium back to the football club at the end of the lease at nil cost. The rental is$1·2 million per annum in advance commencing on 1 January 2007. The directors do not wish to treat thistransaction as the raising of a secured loan. The implicit interest rate on the finance in the lease is 5·6%.(9 marks)Required:Discuss how the above proposals would be dealt with in the financial statements of Seejoy for the year ending31 December 2007, setting out their accounting treatment and appropriateness in helping the football club’scash flow problems.(Candidates do not need knowledge of the football finance sector to answer this question.)
[问答题](b) Misson has purchased goods from a foreign supplier for 8 million euros on 31 July 2006. At 31 October 2006,the trade payable was still outstanding and the goods were still held by Misson. Similarly Misson has sold goodsto a foreign customer for 4 million euros on 31 July 2006 and it received payment for the goods in euros on31 October 2006. Additionally Misson had purchased an investment property on 1 November 2005 for28 million euros. At 31 October 2006, the investment property had a fair value of 24 million euros. The companyuses the fair value model in accounting for investment properties.Misson would like advice on how to treat these transactions in the financial statements for the year ended 31October 2006. (7 marks)Required:Discuss the accounting treatment of the above transactions in accordance with the advice required by thedirectors.(Candidates should show detailed workings as well as a discussion of the accounting treatment used.)
[问答题]2 Misson, a public limited company, has carried out transactions denominated in foreign currency during the financialyear ended 31 October 2006 and has conducted foreign operations through a foreign entity. Its functional andpresentation currency is the dollar. A summary of the foreign currency activities is set out below:(a) Misson has a 100% owned foreign subsidiary, Chong, which was formed on 1 November 2004 with a sharecapital of 100 million euros which has been taken as the cost of the investment. The total shareholders’ equityof the subsidiary as at 31 October 2005 and 31 October 2006 was 140 million euros and 160 million eurosrespectively. Chong has not paid any dividends to Misson and has no other reserves than retained earnings in itsfinancial statements. The subsidiary was sold on 31 October 2006 for 195 million euros.Misson would like to know how to treat the sale of the subsidiary in the parent and group accounts for the yearended 31 October 2006. (8 marks)Required:Discuss the accounting treatment of the above transactions in accordance with the advice required by thedirectors.(Candidates should show detailed workings as well as a discussion of the accounting treatment used.)
[问答题](ii) Discuss whether gains and losses that have been reported initially in one section of the performancestatement should be ‘recycled’ in a later period in another section and whether only ‘realised’ gains andlosses should be included in such a statement. (9 marks)
[问答题](b) (i) Discuss the main factors that should be taken into account when determining how to treat gains andlosses arising on tangible non-current assets in a single statement of financial performance. (8 marks)
[问答题]5 The International Accounting Standards Board (IASB) is currently in a joint project with the Accounting StandardsBoard (ASB) in the UK and the Financial Accounting Standards Board (FASB) in the USA in the area of reportingfinancial performance/comprehensive income. The main focus of the project is the development of a single statementof comprehensive income to replace the income statement and statement of changes in equity. The objective is toanalyse all income and expenses and categorise them in a way that increases users’ understanding of the results ofan entity and assists in forming expectations of future income and expenditure. There seems to be some consensusthat the performance statement should be divided into three components being the results of operating activities,financing and treasury activities, and other gains and losses.Required:(a) Describe the reasons why the three accounting standards boards have decided to cooperate and produce asingle statement of financial performance. (8 marks)
[问答题](c) the deferred tax implications (with suitable calculations) for the company which arise from the recognitionof a remuneration expense for the directors’ share options. (7 marks)
[问答题](b) a discussion (with suitable calculations) as to how the directors’ share options would be accounted for in thefinancial statements for the year ended 31 May 2005 including the adjustment to opening balances;(9 marks)
[问答题](ii) Explain the accounting treatment under IAS39 of the loan to Bromwich in the financial statements ofAmbush for the year ended 30 November 2005. (4 marks)
[问答题](b) Ambush loaned $200,000 to Bromwich on 1 December 2003. The effective and stated interest rate for thisloan was 8 per cent. Interest is payable by Bromwich at the end of each year and the loan is repayable on30 November 2007. At 30 November 2005, the directors of Ambush have heard that Bromwich is in financialdifficulties and is undergoing a financial reorganisation. The directors feel that it is likely that they will onlyreceive $100,000 on 30 November 2007 and no future interest payment. Interest for the year ended30 November 2005 had been received. The financial year end of Ambush is 30 November 2005.Required:(i) Outline the requirements of IAS 39 as regards the impairment of financial assets. (6 marks)
[问答题](ii) why the ‘fair value option’ was initially introduced and why it has caused such concern. (5 marks)
[问答题]5 Ambush, a public limited company, is assessing the impact of implementing the revised IAS39 ‘Financial Instruments:Recognition and Measurement’. The directors realise that significant changes may occur in their accounting treatmentof financial instruments and they understand that on initial recognition any financial asset or liability can bedesignated as one to be measured at fair value through profit or loss (the fair value option). However, there are certainissues that they wish to have explained and these are set out below.Required:(a) Outline in a report to the directors of Ambush the following information:(i) how financial assets and liabilities are measured and classified, briefly setting out the accountingmethod used for each category. (Hedging relationships can be ignored.) (10 marks)
[问答题]Additionally the directors wish to know how the provision for deferred taxation would be calculated in the followingsituations under IAS12 ‘Income Taxes’:(i) On 1 November 2003, the company had granted ten million share options worth $40 million subject to a twoyear vesting period. Local tax law allows a tax deduction at the exercise date of the intrinsic value of the options.The intrinsic value of the ten million share options at 31 October 2004 was $16 million and at 31 October 2005was $46 million. The increase in the share price in the year to 31 October 2005 could not be foreseen at31 October 2004. The options were exercised at 31 October 2005. The directors are unsure how to accountfor deferred taxation on this transaction for the years ended 31 October 2004 and 31 October 2005.(ii) Panel is leasing plant under a finance lease over a five year period. The asset was recorded at the present valueof the minimum lease payments of $12 million at the inception of the lease which was 1 November 2004. Theasset is depreciated on a straight line basis over the five years and has no residual value. The annual leasepayments are $3 million payable in arrears on 31 October and the effective interest rate is 8% per annum. Thedirectors have not leased an asset under a finance lease before and are unsure as to its treatment for deferredtaxation. The company can claim a tax deduction for the annual rental payment as the finance lease does notqualify for tax relief.(iii) A wholly owned overseas subsidiary, Pins, a limited liability company, sold goods costing $7 million to Panel on1 September 2005, and these goods had not been sold by Panel before the year end. Panel had paid $9 millionfor these goods. The directors do not understand how this transaction should be dealt with in the financialstatements of the subsidiary and the group for taxation purposes. Pins pays tax locally at 30%.(iv) Nails, a limited liability company, is a wholly owned subsidiary of Panel, and is a cash generating unit in its ownright. The value of the property, plant and equipment of Nails at 31 October 2005 was $6 million and purchasedgoodwill was $1 million before any impairment loss. The company had no other assets or liabilities. Animpairment loss of $1·8 million had occurred at 31 October 2005. The tax base of the property, plant andequipment of Nails was $4 million as at 31 October 2005. The directors wish to know how the impairment losswill affect the deferred tax provision for the year. Impairment losses are not an allowable expense for taxationpurposes.Assume a tax rate of 30%.Required:(b) Discuss, with suitable computations, how the situations (i) to (iv) above will impact on the accounting fordeferred tax under IAS12 ‘Income Taxes’ in the group financial statements of Panel. (16 marks)(The situations in (i) to (iv) above carry equal marks)
[问答题](ii) Describe the basis for the calculation of the provision for deferred taxation on first time adoption of IFRSincluding the provision in the opening IFRS balance sheet. (4 marks)
[问答题]3 The directors of Panel, a public limited company, are reviewing the procedures for the calculation of the deferred taxprovision for their company. They are quite surprised at the impact on the provision caused by changes in accountingstandards such as IFRS1 ‘First time adoption of International Financial Reporting Standards’ and IFRS2 ‘Share-basedPayment’. Panel is adopting International Financial Reporting Standards for the first time as at 31 October 2005 andthe directors are unsure how the deferred tax provision will be calculated in its financial statements ended on thatdate including the opening provision at 1 November 2003.Required:(a) (i) Explain how changes in accounting standards are likely to have an impact on the provision for deferredtaxation under IAS12 ‘Income Taxes’. (5 marks)
[问答题](b) Explain how the non-payment of contributions and the change in the pension benefits should be treated inthe financial statements of Savage for the year ended 31 October 2005. (4 marks)
[问答题](b) Prepare a consolidated balance sheet as at 31 October 2005 for the Lateral Group in accordance withInternational Financial Reporting Standards. (21 marks)
[问答题](b) How could pursuing a corporate environmental strategy both add to CFS’s competitive advantage and besocially responsible? (5 marks)
[问答题]4 Graham Smith is Operations Director of Catering Food Services (CFS) a £1·5 billion UK based distributor of foods toprofessional catering organisations. It has 30 trading units spread across the country from which it can supply acomplete range of fresh, chilled and frozen food products. Its customers range from major fast food chains, cateringservices for the armed forces down to individual restaurants and cafes. Wholesale food distribution is very much aprice driven service, in which it is very difficult to differentiate CFS’s service from its competitors.Graham is very aware of the Government’s growing interest in promoting good corporate environmental practices andencouraging companies to achieve the international quality standard for environmentally responsible operations. CFSoperates a fleet of 1,000 lorries and each lorry produces the equivalent of its own weight in pollutants over the courseof a year without the installation of expensive pollution control systems. Graham is also aware that his largercustomers are looking to their distributors to become more environmentally responsible and the ‘greening’ of theirsupply chain is becoming a real issue. Unfortunately his concern with developing a company-wide environmentalmanagement strategy is not shared by his fellow managers responsible for the key distribution functions includingpurchasing, logistics, warehousing and transportation. They argued that time spent on corporate responsibility issueswas time wasted and simply added to costs.Graham has decided to propose the appointment of a project manager to develop and implement a companyenvironmental strategy including the achievement of the international quality standard. The person appointed musthave the necessary project management skills to see the project through to successful conclusion.You have been appointed project manager for CFS’s ‘environmentally aware’ project.Required:(a) What are the key project management skills that are necessary in achieving company-wide commitment inCFS to achieve the desired environmental strategy? (15 marks)
[问答题](b) What research techniques could Mark use to get an accurate assessment of staff attitudes to the proposedchanges? (8 marks)
[问答题]3 Mark Howe, Managing Director of Auto Direct, is a victim of his own success. Mark has created an innovative wayof selling cars to the public which takes advantage of the greater freedom given to independent car distributors tomarket cars more aggressively within the European Union. This reduces the traditional control and interference of theautomobile manufacturers, some of whom own their distributors. He has opened a number of showrooms in theLondon region and by 2004 Auto Direct had 20 outlets in and around London. The concept is deceptively simple;Mark buys cars from wherever he can source them most cheaply and has access to all of the leading volume carmodels. He then concentrates on selling the cars to the public, leaving servicing and repair work to other specialistgarages. He offers a classic high volume/low margin business model.Mark now wants to develop this business model onto a national and eventually an international basis. His immediateplans are to grow the number of outlets by 50% each year for the next three years. Such growth will placeconsiderable strain on the existing organisation and staff. Each showroom has its own management team, salespersonnel and administration. Currently the 20 showrooms are grouped into a Northern and Southern Sales Divisionwith a small head office team for each division. Auto Direct now employs 250 people.Mark now needs to communicate the next three-year phase of the company’s ambitious growth plans to staff and isanxious to get an understanding of staff attitudes towards the company and its growth plans. He is aware that youare a consultant used to advising firms on the changes associated with rapid growth and the way to generate positivestaff attitudes to change.Required:(a) Using appropriate strategies for managing change provide Mark with a brief report on how he can best createa positive staff response to the proposed growth plans. (12 marks)
[问答题](b) How might the marketing mix vary between the three channels Helen is considering using? (8 marks)
[问答题]2 Helen Bradshaw, a recent graduate with a degree in catering management, has spotted a market opportunity duringher first job with a large supermarket chain. She knows there is a growing market for distinctive, quality cakes in thebakery sections of the supermarket chains, as well as in supplying independent individual premium cake shops, andalso for catering wholesalers supplying restaurants and hotels.Helen is very determined to set up her own business under the brand name of ‘Helen’s cakes’, and has bought someequipment – industrial food mixers, ovens, cake moulds – and also rented a small industrial unit to make the cakes.Helen has created three sets of recipes – one for the premium cake shop market, one for the supermarkets and onefor the catering wholesalers but is uncertain which market to enter first. Each channel of distribution offers a differentset of challenges. The premium cake shop market consists of a large number of independent cake shops spreadthrough the region, each looking for daily deliveries, a wide product range and low volumes. The supermarkets aredemanding good quality, competitive prices and early development of a product range under their own brand name.The catering wholesalers require large volumes, medium quality and low prices.Helen has learnt that you are a consultant specialising in start-up enterprises and is looking to you for advice.Required:(a) Acting as a consultant, prepare a short report for Helen advising her on the advantages and disadvantageseach channel offers and the implications for a successful start-up. (12 marks)
[问答题](d) What criteria would you use to assess whether Universal is an ‘excellent’ company? (5 marks)
[问答题](b) Using the information provided in the case scenario, strategically evaluate the performance of the companyup to 2004, indicating any areas of particular concern. (20 marks)
[问答题](b) Assess the likely strategic impact of the new customer delivery system on Supaserve’s activities and its abilityto differentiate itself from its competitors. (10 marks)
[问答题]4 Chris Jones is Managing Director of Supaserve, a medium-sized supermarket chain faced with intense competitionfrom larger competitors in their core food and drink markets. They are also finding it hard to respond to thesecompetitors moving into the sale of clothing and household goods. Supaserve has a reputation for friendly customercare and is looking at the feasibility of introducing an online shopping service, from which customers can order goodsfrom the comfort of their home and have them delivered, for a small charge, to their home.Chris recognises that the move to develop an online shopping service will require significant investment in newtechnology and support systems. He hopes a significant proportion of existing and most importantly, new customers,will be attracted to the new service.Required:(a) What bases for segmenting this new market would you recommend and what criteria will help determinewhether this segment is sufficiently attractive to commit to the necessary investment? (10 marks)
[问答题](b) What are the advantages and disadvantages of using a balanced scorecard to better assess the overallperformance of Lawson Engineering? (8 marks)
[问答题](b) What are the advantages and disadvantages of using franchising to develop La Familia Amable budget hotelchain? (8 marks)
[问答题]2 Ramon Silva is a Spanish property developer, who has made a considerable fortune from the increasing numbers ofEuropeans looking to buy new homes and apartments in the coastal regions of Mediterranean Spain. His frequentcontact with property buyers has made him aware of their need for low cost hotel accommodation during the lengthyperiod between finding a property to buy and when they actually move into their new home. These would-be propertyowners are looking for inexpensive hotels in the same locations as tourists looking for cheap holiday accommodation.Closer investigation of the market for inexpensive or budget hotel accommodation has convinced Ramon of theopportunity to offer something really different to his potential customers. He has the advantage of having nopreconceived idea of what his chain of hotels might look like. The overall picture for the budget hotel industry is notencouraging with the industry suffering from low growth and consequent overcapacity. There are two distinct marketsegments in the budget hotel industry; firstly, no-star and one-star hotels, whose average price per room is between30 and 45 euros. Customers are simply attracted by the low price. The second segment is the service provided bytwo-star hotels with an average price of 100 euros a night. These more expensive hotels attract customers by offeringa better sleeping environment than the no-star and one-star hotels. Customers therefore have to choose between lowprices and getting a poor night’s sleep owing to noise and inferior beds or paying more for an untroubled night’s sleep.Ramon quickly deduced that a hotel chain that can offer a better price/quality combination could be a winner.The two-star hotels typically offer a full range of services including restaurants, bars and lounges, all of which arecostly to operate. The low price budget hotels offer simple overnight accommodation with cheaply furnished roomsand staffed by part-time receptionists. Ramon is convinced that considerable cost savings are available through betterroom design, construction and furniture and a more effective use of hotel staff. He feels that through offering hotelfranchises under the ‘La Familia Amable’ (‘The Friendly Family’) group name, he could recruit husband and wife teamsto own and operate them. The couples, with suitable training, could offer most of the services provided in a two-starhotel, and create a friendly, family atmosphere – hence the company name. He is sure he can offer the customer twostarhotel value at budget prices. He is confident that the value-for-money option he offers would need little marketingpromotion to launch it and achieve rapid growth.Required:(a) Provide Ramon with a brief report, using strategic models where appropriate, showing where his proposedhotel service can add value to the customer’s experience. (12 marks)
[问答题](d) There is considerable evidence to suggest that as a result of implementation problems less than 50% of allacquisitions achieve their objectives and actually end up reducing shareholder value.Required:Provide Ken with a brief report on the most likely sources of integration problems and describe the keyperformance indicators he should use to measure progress towards acquisition objectives. (15 marks)
[问答题](c) Assess the advantages and disadvantages to Datum Paper Products taking the greenfield option as opposedto the acquisition of Papier Presse. (15 marks)
[问答题](b) Assuming that the acquisition proceeds, what steps will Datum Paper Products need to take to build a sharedculture in the two companies? (10 marks)
[问答题](b) What advantages and disadvantages might result from outsourcing Global Imaging’s HR function?(8 marks)
[问答题]4 Global Imaging is a fast growing high tech company with some 100 employees which aims to double in size over thenext three years. The company was set up as a spin out company by two research professors from a major universityhospital who now act as joint managing directors. They are likely to leave the company once the growth objective isachieved.Global Imaging’s products are sophisticated imaging devices facing a growing demand from the defence and healthindustries. These two markets are very different in terms of customer requirements but share a related technology.Over 90% of sales are from exports and the current strategic plan anticipates a foreign manufacturing plant being setup during the existing three-year strategic plan. Current management positions are largely filled by staff who joined inthe early years of the company and reflect the heavy reliance on research and development to generate the productsto grow the business. Further growth will require additional staff in all parts of the business, particularly inmanufacturing and sales and marketing.Paul Simpson, HR manager at Global Imaging is annoyed. This stems from the fact that HR is the one managementfunction not involved in the strategic planning process shaping the future growth and direction of the company. Hefeels trapped in a role traditionally given to HR specialists, that of simply reacting to the staffing needs brought aboutby strategic decisions taken by other parts of the business. He feels even more threatened by one of the joint managingdirectors arguing that HR issues should be the responsibility of the line managers and not a specialist HR stafffunction. Even worse, Paul has become aware of the increasing number of companies looking to outsource some orall of their HR activities.Paul wants to develop a convincing case why HR should not only be retained as a core function in Global Imaging’sactivities, but also be directly involved in the development of the current growth strategy.Required:Paul has asked you to prepare a short report to present to Global Imaging’s board of directors:(a) Write a short report for Paul Simpson on the way a Human Resource Plan could link effectively with GlobalImaging’s growth strategy. (12 marks)
[问答题](b) Explain how the process of developing scenarios might help John better understand the macro-environmentalfactors influencing Airtite’s future strategy. (8 marks)
[问答题]3 Airtite was set up in 2000 as a low cost airline operating from a number of regional airports in Europe. Using theseless popular airports was a much cheaper alternative to the major city airports and supported Airtite’s low cost service,modelled on existing low cost competitors. These providers had effectively transformed air travel in Europe and, in sodoing, contributed to an unparalleled expansion in airline travel by both business and leisure passengers. Airtite usedone type of aircraft, tightly controlled staffing levels and costs, relied entirely on online bookings and achieved highlevels of capacity utilisation and punctuality. Its route network had grown each year and included new routes to someof the 15 countries that had joined the EU in 2004. Airtite’s founder and Chief Executive, John Sykes, was anaggressive businessman ever willing to challenge governments and competitors wherever they impeded his airline andlooking to generate positive publicity whenever possible.John is now looking to develop a strategy which will secure Airtite’s growth and development over the next 10 years.He can see a number of environmental trends emerging which could significantly affect the success or otherwise ofany developed strategy. 2006 had seen fuel costs continue to rise reflecting the continuing uncertainty over globalfuel supplies. Fuel costs currently account for 25% of Airtite’s operating costs. Conversely, the improving efficiency ofaircraft engines and the next generation of larger aircraft are increasing the operating efficiency of newer aircraft andreducing harmful emissions. Concern with fuel also extends to pollution effects on global warming and climatechange. Co-ordinated global action on aircraft emissions cannot be ruled out, either in the form. of higher taxes onpollution or limits on the growth in air travel. On the positive side European governments are anxious to continue tosupport increased competition in air travel and to encourage low cost operators competing against the over-staffedand loss-making national flag carriers.The signals for future passenger demand are also confused. Much of the increased demand for low cost air travel todate has come from increased leisure travel by families and retired people. However families are predicted to becomesmaller and the population increasingly aged. In addition there are concerns over the ability of countries to supportthe increasing number of one-parent families with limited incomes and an ageing population dependent on statepensions. There is a distinct possibility of the retirement age being increased and governments demanding a higherlevel of personal contribution towards an individual’s retirement pension. Such a change will have a significant impacton an individual’s disposable income and with people working longer reduce the numbers able to enjoy leisure travel.Finally, air travel will continue to reflect global economic activity and associated economic booms and slumps togetherwith global political instability in the shape of wars, terrorism and natural disasters.John is uncertain as to how to take account of these conflicting trends in the development of Airtite’s 10-year strategyand has asked for your advice.Required:(a) Using models where appropriate, provide John with an environmental analysis of the conditions affecting thelow cost air travel industry. (12 marks)
[问答题]There is considerable evidence that small firms are reluctant to carry out strategic planning in their businesses.(b) What are the advantages and disadvantages for Gould and King Associates in creating and implementing astrategic plan? (8 marks)
[问答题]2 David Gould set up his accounting firm, providing accounting services to small businesses, in 2001. Within threeyears his fee income was in excess of £100K a year and he had nearly 100 clients most of whom had been gainedthrough word of mouth. David recognised that these small or micro businesses, typically employing ten or fewerpeople, were receiving less than satisfactory service from their current accountants. These accounting firms typicallyhad between five and ten partners and operated regionally and not nationally. Evidence of poor service includedlimited access to their particular accountant, poor response time to clients’ enquiries and failure to identifyopportunities to save clients money. In addition bad advice, lack of interest in business development opportunities forthe client and poor internal communication between the partners and their staff contributed to client dissatisfaction.David has deliberately kept the costs of the business down by employing three part-time accountants and relying onhis wife to run the office.David had recently met Ian King who ran a similar sized accounting firm. The personal chemistry between the twoand complementary skills led to a partnership being proposed. Gould and King Associates, subject to securing thenecessary funding, is to be launched in September 2006. David is to focus on the business development side of thepartnership and Ian on the core services provided. Indicative of their creative thinking is David’s conviction thataccounting services are promoted very inadequately with little attempt to communicate with clients using the Internet.He is also convinced that there are real opportunities for the partnership to move into new areas such as providingaccountancy services for property developers, both at home and abroad. Ian feels that the partnership should set upits own subsidiary in India, enjoying the benefits of much cheaper accountancy staff and avoiding the costs andcomplications of outsourcing their core accounting services. Ian sees fee income growing to £2 million in five years’time.David has been asked by his bank to provide it with a business plan setting out how the partnership intends to growand develop.Required:(a) Write a short report for David giving the key features that you consider to be important and that you wouldexpect to see in the business plan for the Gould and King partnership that David has to present to his bank.(12 marks)
[问答题]Churchill Ice Cream has to date made two unsuccessful attempts to become an international company.(d) What reasons would you suggest to explain this failure of Churchill Ice Cream to become an internationalcompany? (5 marks)
[问答题](c) What changes to Churchill’s existing marketing mix will be needed to achieve the three strategic goals?(15 marks)
[问答题](b) Using relevant evaluation criteria, assess how achievable and compatible these three strategic goals are overthe next five years. (20 marks)
[问答题](b) Using models where appropriate, what are likely to be the critical success factors (CSFs) as the businessgrows and develops? (10 marks)
[问答题]4 David Silvester is the founder and owner of a recently formed gift packaging company, Gift Designs Ltd. David hasspotted an opportunity for a new type of gift packaging. This uses a new process to make waterproof cardboard andthen shapes and cuts the card in such a way to produce a container or vase for holding cut flowers. The containerscan be stored flat and in bulk and then simply squeezed to create the flowerpot into which flowers and water are thenput. The potential market for the product is huge. In the UK hospitals alone there are 200,000 bunches of flowersbought each year for patients. David’s innovative product does away with the need for hospitals to provide and storeglass vases. The paper vases are simple, safe and hygienic. He has also identified two other potential markets; firstly,the market for fresh flowers supplied by florists and secondly, the corporate gift market where clients such as cardealers present a new owner with an expensive bunch of flowers when the customer takes delivery of a new car. Thevase can be printed using a customer’s design and logo and creates an opportunity for real differentiation and impactat sales conferences and other high profile PR events.David anticipates a rapid growth in Gift Designs as its products become known and appreciated. The key question ishow quickly the company should grow and the types of funding needed to support its growth and development. Theinitial financial demands of the business have been quite modest but David has estimated that the business needs£500K to support its development over the next two years and is uncertain as to the types of funding best suited toa new business as it looks to grow rapidly. He understands that business risk and financial risk is not the same thingand is looking for advice on how he should organise the funding of the business. He is also aware of the need to avoidreliance on friends and family for funding and to broaden the financial support for the business. Clearly the fundingrequired would also be affected by the activities David decides to carry out himself and those activities better providedby external suppliers.Required:(a) Provide David with a short report on the key issues he should take into account when developing a strategyfor funding Gift Designs’ growth and development. (10 marks)
[问答题](b) Assess the extent to which social responsibility issues could and should affect his decision to move into thenew product area. (8 marks)
[问答题]3 Clyde Williams is facing a dilemma. He has successfully built up a small family-owned company, Concrete SolutionsLtd, manufacturing a range of concrete based products used in making roads, pavements and walkways. Theproduction technology is very low tech and uses simple wooden moulds into which the concrete is poured. As aconsequence he is able to use low skilled and low cost labour, which would find it difficult to find alternativeemployment in a region with high unemployment levels. The company has employed many of its workforce since itscreation in 1996. The company’s products are heavy, bulky and costly to transport. This means its market is limitedto a 30-mile area around the small rural town where the manufacturing facility is located. Its customers are a mix ofprivate sector building firms and public sector local councils responsible for maintaining roads and pavements. By itsnature much of the demand is seasonal and very price sensitive.A large international civil engineering company has recently approached Clyde with an opportunity to become asupplier of concrete blocks used in a sophisticated system for preventing coast and riverbank erosion. The processinvolves interlocking blocks being placed on a durable textile base. Recent trends in global warming and pressure inmany countries to build in areas liable to flooding have created a growing international market for the patented erosionprevention system. Clyde has the opportunity to become the sole UK supplier of the blocks and to be one of a smallnumber of suppliers able to export the blocks to Europe. To do it he will need to invest a significant amount in CAM(computer aided manufacturing) technology with a linked investment in the workforce skills needed to operate thenew technology. The net result will be a small increase in the size of the labour force but redundancy for a significantnumber of its existing workers either unwilling or unable to adapt to the demands of the new technology. Successfulentry into this new market will reduce his reliance on the seasonal low margin concrete products he currently producesand significantly improve profitability.One further complication exists. Concrete Solutions is located in a quiet residential area of its home town. Clyde isunder constant pressure from the local residents and their council representatives to reduce the amount of noise anddust created in the production process. Any move into making the new blocks will increase the pollution problemsthe residents face. There is a possibility of moving the whole manufacturing process to a site on a new industrial estatebeing built by the council in a rival town. However closure of the existing site would lead to a loss of jobs in the currentlocation. Clyde has asked for your help in resolving his dilemma.Required:(a) Using models where appropriate, advise Clyde on whether he should choose to take advantage of theopportunity offered by the international company. (12 marks)
[问答题](b) Good Sports Limited has successfully followed a niche strategy to date.Assess the extent to which an appropriate e-business strategy could help support such a niche strategy.(8 marks)
[问答题]2 Good Sports Limited is an independent sports goods retailer owned and operated by two partners, Alan and Bob. Thesports retailing business in the UK has undergone a major change over the past ten years. First of all the supply sidehas been transformed by the emergence of a few global manufacturers of the core sports products, such as trainingshoes and football shirts. This consolidation has made them increasingly unwilling to provide good service to theindependent sportswear retailers too small to buy in sufficiently large quantities. These independent retailers can stockpopular global brands, but have to order using the Internet and have no opportunity to meet the manufacturer’s salesrepresentatives. Secondly, UK’s sportswear retailing has undergone significant structural change with the rapid growthof a small number of national retail chains with the buying power to offset the power of the global manufacturers.These retail chains stock a limited range of high volume branded products and charge low prices the independentretailer cannot hope to match.Good Sports has survived by becoming a specialist niche retailer catering for less popular sports such as cricket,hockey and rugby. They are able to offer the specialist advice and stock the goods that their customers want.Increasingly since 2000 Good Sports has become aware of the growing impact of e-business in general and e-retailingin particular. They employed a specialist website designer and created an online purchasing facility for theircustomers. The results were less than impressive, with the Internet search engines not picking up the companywebsite. The seasonal nature of Good Sports’ business, together with the variations in sizes and colours needed tomeet an individual customer’s needs, meant that the sales volumes were insufficient to justify the costs of runningthe site.Bob, however, is convinced that developing an e-business strategy suited to the needs of the independent sportsretailer such as Good Sports will be key to business survival. He has been encouraged by the growing interest ofcustomers in other countries to the service and product range they offer. He is also aware of the need to integrate ane-business strategy with their current marketing, which to date has been limited to the sponsorship of local sportsteams and advertisements taken in specialist sports magazines. Above all, he wants to avoid head-on competitionwith the national retailers and their emphasis on popular branded sportswear sold at retail prices that are below thecost price at which Good Sports can buy the goods.Required:(a) Provide the partners with a short report on the advantages and disadvantages to Good Sports of developingan e-business strategy and the processes most likely to be affected by such a strategy. (12 marks)
[问答题](d) Family owned and managed businesses often find delegation and succession difficult processes to get right.What models would you recommend that Tony use in looking to change his leadership and management styleto create a culture in the Shirtmaster Group better able to deal with the challenges it faces? (10 marks)
[问答题](c) The Shirtmaster division and Corporate Clothing division, though being part of the same group, operate largelyindependently of one another.Assess the costs and benefits of the two divisions continuing to operate independently of one another.(15 marks)
[问答题](b) Both divisions have recognised the need for a strategic alliance to help them achieve a successful entry intoEuropean markets.Critically evaluate the advantages and disadvantages of the divisions using strategic alliances to develop theirrespective businesses in Europe. (15 marks)
[问答题](b) Examine how adopting a Six Sigma approach would help address the quality problems at UPC.(10 marks)
[问答题](c) Explain how Perfect Shopper might re-structure its downstream supply chain to address the problemsidentified in the scenario. (10 marks)
[问答题](b) Explain how Perfect Shopper might re-structure its upstream supply chain to address the problems identifiedin the scenario. (10 marks)
[问答题]3 Local neighbourhood shops are finding it increasingly difficult to compete with supermarkets. However, three yearsago, the Perfect Shopper franchise group was launched that allowed these neighbourhood shops to join the groupand achieve cost savings on tinned and packaged goods, particularly groceries. Perfect Shopper purchases brandedgoods in bulk from established food suppliers and stores them in large purpose-built warehouses, each designed toserve a geographical region. When Perfect Shopper was established it decided that deliveries to these warehousesshould be made by the food suppliers or by haulage contractors working on behalf of these suppliers. Perfect Shopperplaces orders with these suppliers and the supplier arranges the delivery to the warehouse. These arrangements arestill in place. Perfect Shopper has no branded goods of its own.Facilities are available in each warehouse to re-package goods into smaller units, more suitable for the requirementsof the neighbourhood shop. These smaller units, typically containing 50–100 tins or packs, are usually small trays,sealed with strong transparent polythene. Perfect Shopper delivers these to its neighbourhood shops using specialisthaulage contractors local to the regional warehouse. Perfect Shopper has negotiated significant discounts withsuppliers, part of which it passes on to its franchisees. A recent survey in a national grocery magazine showed thatfranchisees saved an average of 10% on the prices they would have paid if they had purchased the products directlyfrom the manufacturer or from an intermediary – such as cash and carry wholesalers.As well as offering savings due to bulk buying, Perfect Shopper also provides, as part of its franchise:(i) Personalised promotional material. This usually covers specific promotions and is distributed locally, either usingspecialist leaflet distributors or loosely inserted into local free papers or magazines.(ii) Specialised signage for the shops to suggest the image of a national chain. The signs include the Perfect Shopperslogan ‘the nation’s local’.(iii) Specialist in-store display units for certain goods, again branded with the Perfect Shopper logo.Perfect Shopper does not provide all of the goods required by a neighbourhood shop. Consequently, it is not anexclusive franchise. Franchisees agree to purchase specific products through Perfect Shopper, but other goods, suchas vegetables, fruit, stationery and newspapers they source from elsewhere. Deliveries are made every two weeks tofranchisees using a standing order for products agreed between the franchisee and their Perfect Shopper salesrepresentative at a meeting they hold every three months. Variations to this order can be made by telephone, but onlyif the order is increased. Downward variations are not allowed. Franchisees cannot reduce their standing orderrequirements until the next meeting with their representative.Perfect Shopper was initially very successful, but its success has been questioned by a recent independent report thatshowed increasing discontent amongst franchisees. The following issues were documented.(i) The need to continually review prices to compete with supermarkets(ii) Low brand recognition of Perfect Shopper(iii) Inflexible ordering and delivery system based around forecasts and restricted ability to vary orders (see above)As a result of this survey, Perfect Shopper has decided to review its business model. Part of this review is to reexaminethe supply chain, to see if there are opportunities for addressing some of its problems.Required:(a) Describe the primary activities of the value chain of Perfect Shopper. (5 marks)
[问答题](b) Analyse how effective project management could have further improved both the process and the outcomesof the website re-design project. (10 marks)
[问答题](c) Identify and evaluate other strategic options ONA could consider to address the airline’s current financial andoperational weaknesses.Note: requirement (c) includes 2 professional marks (10 marks)
[问答题](b) The CEO of Oceania National Airways (ONA) has already strongly rejected the re-positioning of ONA as a ‘nofrills’ low-cost budget airline.(i) Explain the key features of a ‘no frills’ low-cost strategy. (4 marks)
[问答题]Susan is aware of benchmarking as a useful input into performance measurement and strategic change.(b) Assess the contribution benchmarking could make to improving the position of the Marlow Fashion Groupand any limitations to its usefulness. (8 marks)
[问答题]4 Susan Grant is in something of a dilemma. She has been invited to join the board of the troubled Marlow FashionGroup as a non-executive director, but is uncertain as to the level and nature of her contribution to the strategicthinking of the Group.The Marlow Fashion Group had been set up by a husband and wife team in the 1970s in an economically depressedpart of the UK. They produced a comprehensive range of women’s clothing built round the theme of traditional Englishstyle. and elegance. The Group had the necessary skills to design, manufacture and retail its product range. TheMarlow brand was quickly established and the company built up a loyal network of suppliers, workers in the companyfactory and franchised retailers spread around the world. Marlow Fashion Group’s products were able to commandpremium prices in the world of fashion. Rodney and Betty Marlow ensured that their commitment to traditional valuescreated a strong family atmosphere in its network of partners and were reluctant to change this.Unfortunately, changes in the market for women’s wear presented a major threat to Marlow Fashion. Firstly, womenhad become a much more active part of the workforce and demanded smarter, more functional outfits to wear at work.Marlow Fashion’s emphasis on soft, feminine styles became increasingly dated. Secondly, the tight control exercisedby Betty and Rodney Marlow and their commitment to control of design, manufacturing and retailing left themvulnerable to competitors who focused on just one of these core activities. Thirdly, there was a reluctance by theMarlows and their management team to acknowledge that a significant fall in sales and profits were as a result of afundamental shift in demand for women’s clothing. Finally, the share price of the company fell dramatically. Betty andRodney Marlow retained a significant minority ownership stake, but the company had had a new Chief ExecutiveOfficer every year since 2000.Required:(a) Write a short report to Susan Grant identifying and explaining the strategic strengths and weaknesses in theMarlow Fashion Group. (12 marks)
[问答题]The group have now decided to convert their business idea into reality.(b) What elements should a marketing plan contain to achieve a successful launch of their restaurant?(8 marks)
[问答题]3 Fran?ois, Demetris, José and Giuseppe are a group of students from different Mediterranean countries, taking theirMBA in a large UK city. As part of their course requirements, the group has to come up with an innovative businessidea, research into the feasibility of that idea and then present their business plan to a panel. After considerablebrainstorming they have come up with the idea of a themed restaurant based around Mediterranean cooking, menusand service provisionally called ‘Casa del Mediterraneo’ and located in the city centre.Initial research has revealed suitable premises to rent, but also the severe competition they will face in a city that isvery cosmopolitan and well provided for with restaurants serving cuisine from many parts of the world. The city hasa student population of around 100,000 and this, together with a young working population, means that there is avery vibrant social life and a real willingness to sample food from different parts of the world.Required:(a) Identify and evaluate the critical success factors and associated competences that the group should considerin developing their business plan for the restaurant. (12 marks)
[问答题](b) What styles of managing change would you recommend John use to bring about the desired change?(8 marks)
[问答题]2 John Dixon is the recently appointed Chief of Police for a major city in the UK. He has inherited a major problem inthat its residents are very concerned with various forms of antisocial behaviour and minor crimes carried out by asmall number of people, which makes living, working, travelling and socialising in the city centre unpleasant ratherthan life threatening. The city’s residents have recently voted for it being one of the five worst cities in the UK in whichto live. There is little or no contact between the police and these residents.The city is split into a number of police districts, each with its own senior officer in charge. Their focus is on theresponse to emergency calls and solving serious crimes in their district rather than the less urgent crimes affectingeveryday living in the city. Response times and serious crime solution rates are the traditional measures by which theirperformance is measured and leave them open to criticism of simply reacting to events. There is little sense of beingpart of a city police force and, consequently, little sharing of information and experience between the different districts.The failure in policing antisocial behaviour in the city is seen as being largely the result of a shortage of resources.There are also important internal and external groups varying in their support or resistance to any necessary changein policing strategy. Key players include the mayor of the city anxious to improve the reputation of the city, the city’spress, traditionally used to highlighting police failures rather than successes and finally the courts of justice, whichare reluctant to take on the increased workload that any moves towards reducing antisocial behaviour would produce.John is aware of the complexity of the problem he faces in changing the way the city is policed to improve the qualityof life of its citizens. He has, however, an impressive track record as a change agent in previous appointments and isconfident that he can bring about the necessary change.Required:(a) Using change management models where appropriate, provide John with a brief report on the nature ofchange needed in the way the city is policed in order to improve the city’s quality of life. (12 marks)
[问答题]Bonar Paint to date has had no formal strategic planning process.(d) What are the advantages and disadvantages of developing a formal mission statement to guide Bonar Paint’sfuture direction after the buyout? (10 marks)
[问答题]The senior management team is aware of your success in implementing necessary change following a change inownership and control.(c) Identify and explain the key areas of change likely to be needed in Bonar Paint in order to implement asuccessful buyout. (15 marks)
[问答题]Roy Crawford has argued for a reduction in both the product range and customer base to improve companyperformance.(b) Assess the operational advantages and disadvantages to Bonar Paint of choosing such a strategy.(15 marks)
[问答题]3 The managers of Daylon plc are reviewing the company’s investment portfolio. About 15% of the portfolio is represented by a holding of 5,550,000 ordinary shares of Mondglobe plc. The managers are concerned about the effect on portfolio value if the price of Mondglobe’s shares should fall, and are considering selling the shares. Daylon’s investment bank has suggested that the risk of Mondglobe’s shares falling by more than 5% from their current value could be protected against by buying an over the counter option. The investment bank is prepared to sell an appropriate six month option to Daylon for £250,000.Other information:(i) The current market price of Mondglobe’s ordinary shares is 360 pence.(ii) The annual volatility (variance) of Mondglobe’s shares for the last year was 169%.(iii) The risk free rate is 4% per year.(iv) No dividend is expected to be paid by Mondglobe during the next six months.Required:(a) Evaluate whether or not the price at which the investment bank is willing to sell the option is a fair price.(10 marks)
[问答题](c) Acting as an external consultant to Semer, discuss the validity of the proposed strategy to increase gearing, and explain whether or not the estimates produced in (b) above are likely to be accurate. (10 marks)
[问答题](b) Assuming that the cost of equity and cost of debt do not alter, estimate the effect of the share repurchase on the company’s cost of capital and value. (5 marks)
[问答题](d) Estimate by how much the bid might be increased without the shareholders of Paxis suffering a fall in their expected wealth, and discuss whether or not the directors of Paxis should proceed with the bid. (5 marks)
[问答题](c) Discuss the factors that might influence whether the initial bid is likely to be accepted by the shareholders of Wragger plc.
[问答题](b) Discuss the limitations of the above estimates. (6 marks)
[问答题](c) (i) State the date by which Thai Curry Ltd’s self-assessment corporation tax return for the year ended30 September 2005 should be submitted, and advise the company of the penalties that will be due ifthe return is not submitted until 31 May 2007. (3 marks)(ii) State the date by which Thai Curry Ltd’s corporation tax liability for the year ended 30 September 2005should be paid, and advise the company of the interest that will be due if the liability is not paid until31 May 2007. (3 marks)
[问答题](b) Assuming that Thai Curry Ltd claims relief for its trading loss against total profits under s.393A ICTA 1988,calculate the company’s corporation tax liability for the year ended 30 September 2005. (10 marks)
[问答题](b) Briefly explain the two types of informal communication known as the grapevine and rumour. (6 marks)
[问答题](iii) Lateral or horizontal. (3 marks)
[问答题](ii) Upwards; (3 marks)
[问答题]6 Communication is important for all organisations and requires an understanding of communication flows and channels.Required:(a) Briefly explain the main purposes of the three main formal communication channels in an organisation:(i) Downwards; (3 marks)
[问答题](ii) Theory Y. (5 marks)
[问答题](b) Explain what is meant by McGregor’s(i) Theory X; (5 marks)
[问答题]5 All managers need to understand the importance of motivation in the workplace.Required:(a) Explain the ‘content theory’ of motivation. (5 marks)
[问答题](b) Describe five main barriers to an effective appraisal interview. (10 marks)
[问答题]4 A properly conducted appraisal interview is fundamental in ensuring the success of an organisation’s performanceappraisal system.Required:(a) Describe three approaches to conducting the appraisal interview. (5 marks)
[问答题](c) Briefly describe five factors to be taken into account when deciding whether to use recruitment consultants.(5 marks)
[问答题](b) Describe the advantages of external recruitment. (5 marks)
[问答题]3 An organisation has decided to compare the benefits of promoting existing staff with those of appointing externalcandidates and to assess whether the use of external recruitment consultants is appropriate.Required:(a) Describe the advantages of internal promotion. (5 marks)
[问答题]2 Traditionally, the only objective of a business was to make a profit. However, some writers have suggested that this idea is simplistic and that profitability is only one objective amongst many.Required:State and explain Drucker’s eight classifications of objectives.(15 marks)
[问答题](e) Briefly provide five reasons to the management of Bailey’s why financial rewards could be considered to improve motivation. (5 marks)
[问答题](iii) job enrichment. (5 marks)
[问答题](ii) job enlargement; (5 marks)
[问答题](d) Explain to the management of Bailey’s why consideration should be given to resolving the problems through:(i) job rotation; (5 marks)
[问答题](c) Briefly describe three advantages to Bailey’s of counselling. (3 marks)
[问答题](b) Describe the skills that a counsellor should possess. (14 marks)
[问答题]1 Bailey’s is a large toy manufacturer based in a traditional industrial region. Established in the 1970s, it has faced many changes in the market and survived. This has been due in part to employing a largely unskilled low paid staff,and maintaining its main advantage, that of low production costs based on low pay. Most of the production involves repetitive and boring work with little challenge and opportunity for innovation. Although many of the employees havebeen with the company for some time, there has been a high level of employee turnover.However, an unhappy atmosphere has been apparent for some time. There has been a number of instances ofarguments between the staff, friction between different departments, disturbance, low morale, poor production and general unrest, made worse recently by a decline in business which may lead to staff reduction and redundancy. Poor pay is leading to family problems that are affecting the commitment and motivation of the employees.The business was recently sold to the new owner, Rebecca Stonewall. She is concerned that the negative atmosphere she has found will harm the prospects of the business and is determined to address the issues that have become apparent.She has therefore decided that it is time to take account of opinions and views of the employees in an attempt both to identify the problems and to resolve them. She has appointed external counsellors since she thinks that a programme of individual counselling might be appropriate and is also of the opinion that some form. of different or improved approach to motivation might be the answer to the problems at Bailey’s.Required:(a) Define the role that the external counsellor must fulfil at Bailey’s. (3 marks)
[问答题](b) Explain and give examples of assertive behaviour. (7 marks)
[问答题]6 An important part of managing people in a professional organisation is to be able to distinguish between aggressiveness and assertiveness in an employee.Required:(a) Explain and give examples of aggressive behaviour. (8 marks)
[问答题](b) How can Maslow’s theory be applied to the motivation of staff? (5 marks)
[问答题]5 Your manager has heard of Maslow’s hierarchy of needs theory and how it has some relevance to motivational techniques.Required:(a) Explain Maslow’s hierarchy of needs theory. (10 marks)
[问答题](e) Job instruction. (3 marks)
[问答题](d) Job rotation. (3 marks)
[问答题](c) Mentoring. (3 marks)
[问答题](b) Coaching. (3 marks)
[问答题]4 All organisations require trained employees. However, training can take many forms, some of which are internal to the organisation.Required:Explain what is meant by the terms:(a) Computer based training. (3 marks)
[问答题](ii) the panel interview with more than one interviewer. (5 marks)
[问答题](b) Explain the advantages and the disadvantages of:(i) the face to face interview between two people; (6 marks)
[问答题]3 Organisations need to recruit new employees. An important step in the process is the selection interview.Required:(a) Explain the purpose of the selection interview. (4 marks)
[问答题](b) Explain Mintzberg’s five organisational components. (10 marks)
[问答题]2 The activities of an organisation have to be managed and co-ordinated to ensure that its objectives are met. The organisation’s structure is designed to support this.Required:(a) What is meant by the term ‘organisational structure,’ often shown as an organisation chart? (5 marks)
[问答题](iv) how these problems might be overcome. (4 marks)
[问答题](iii) problems with delegation; (4 marks)
[问答题](ii) how effective delegation might be achieved; (6 marks)
[问答题](c) To correct the problems at Flavours Fine Foods, explain to Alan Jones:(i) the need for delegation; (3 marks)
[问答题](iii) delegation. (3 marks)
[问答题](ii) authority; (3 marks)
[问答题](b) Explain in the context of Flavours Fine Foods, what is meant by:(i) responsibility; (4 marks)
[问答题]1 Flavours Fine Foods is a leading producer for the food industry, supplying many of Europe’s leading restaurants.Started just five years ago by brothers Lee and Alan Jones, the organisation has grown from a small company employing five people to a multi-divisional organisation employing 120 people.The organisation’s production facility is divided into three separate departments. Each department has a single manager with supervisors assisting on the production lines. The managers and supervisors, all of whom are aware of their roles, work well together. However, although the organisation has grown, the owners continue to involve themselves in day to day activities and this has led to friction between the owners, managers and supervisors.As a result a problem arose last week. Alan Jones instructed a supervisor to repair a machine on the shop floor, which he refused to do without confirmation and instruction from his departmental manager. The supervisor’s manager,Dean Watkins, became involved and was annoyed at what he saw as interference in his department’s activities. Dean told Alan Jones that he “should have come to me first” because although the responsibility for the overall organisation was a matter for the brothers, action taken in the factory was his through powers that had been delegated to him and through his authority, as manager. In the argument that followed, Alan Jones was accused of failing to understand the way that the hierarchy in such a large organisation operates and that interference with operational decisions by senior management was not helpful.As a consequence of this, Alan Jones has asked you to explain to him and his brother the issues behind the dispute to clarify the roles of managers and supervisors and to indicate how and why successful delegation might be achieved.Required:(a) Explain to Alan Jones the main differences between the work of a manager and that of a supervisor.(13 marks)
[问答题](c) Discuss the reasons why the net present value investment appraisal method is preferred to other investmentappraisal methods such as payback, return on capital employed and internal rate of return. (9 marks)
[问答题](b) Calculate the internal rate of return of the proposed investment and comment on your findings. (5 marks)
[问答题](c) Discuss the ways in which budgets and the budgeting process can be used to motivate managers toendeavour to meet the objectives of the company. Your answer should refer to:(i) setting targets for financial performance;(ii) participation in the budget-setting process. (12 marks)
[问答题](b) Calculate the value of the closing stocks of finished goods at the end of the three-month period, and the valueof cost of sales for the period. (3 marks)
[问答题](b) Discuss how the operating statement you have produced can assist managers in:(i) controlling variable costs;(ii) controlling fixed production overhead costs. (8 marks)
[问答题](c) Discuss the difficulties that may be experienced by a small company which is seeking to obtain additionalfunding to finance an expansion of business operations. (8 marks)
[问答题](b) Explain the meaning of the term ‘Efficient Market Hypothesis’ and discuss the implications for a company ifthe stock market on which it is listed has been found to be semi-strong form. efficient. (9 marks)
[问答题]2 (a) Discuss the nature of the financial objectives that may be set in a not-for-profit organisation such as a charityor a hospital. (8 marks)
[问答题](d) Calculate the ex dividend share price predicted by the dividend growth model and discuss the company’sview that share price growth of at least 8% per year would result from expanding into the retail cameramarket. Assume a cost of equity capital of 11% per year. (6 marks)
[问答题](c) Calculate the theoretical ex rights price per share and the net funds to be raised by the rights issue, anddetermine and discuss the likely effect of the proposed expansion on:(i) the current share price of Merton plc;(ii) the gearing of the company.Assume that the price–earnings ratio of Merton plc remains unchanged at 12 times. (11 marks)
[问答题](b) Determine whether the factoring company’s offer can be recommended on financial grounds. Assume aworking year of 365 days and base your analysis on financial information for 2006. (8 marks)