Question and Answer - 59

In comparing total payroll tax expense with that of the preceding year, Merlin Brendin, CPA,
observed a significant increase, even though the total number of employees increased only from
175 to 185. To investigate the difference, he selected a large sample of payroll disbursement
transactions and carefully tested the
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Explain the relationship between the acquisition and payment cycle and the inventory and
warehousing cycle in the audit of a manufacturing company. List several audit procedures in the
acquisition and payment cycle that support your explanation.
The Ruswell Manufacturing Company applied manufacturing overhead to inventory at

December 31, 2011, on the basis of $3.47 per direct labor hour. Explain how you will evaluate
the reasonableness of total direct labor hours and manufacturing overhead in the ending
inventory of finished goods.
Which analytical procedures are most important in verifying notes payable? Which types of
misstatements can the auditor uncover by the use of these tests?
Give the reasons why inventory is often the most difficult and time consuming part of many
audits.
You have been engaged for the audit of the Y Company for the year ended December 31, 2011.
The Y Company is in the wholesale chemical business and makes all sales at 25% over cost.
Following are portions of the clientâ€™s sales and purchases accounts for the calendar year
2011. You observed the physical inventory of
Describe the duties of a stock registrar and a transfer agent. How does the use of their services
affect the client's internal controls?
Items 1 through 6 are questions typically found in a standard internal control questionnaire used
by auditors to obtain an understanding of internal control for notes payable. In using the
questionnaire for a client, a "yes" response indicates a possible internal control, whereas a "no"
indicates a potential deficiency
List the major analytical procedures for testing the overall reasonableness of inventory. For each
test, explain the type of misstatement that could be identified.
You are doing the audit of the UTE Corporation, for the year ended December 31, 2011. The
following schedule for the property, plant, and equipment and related allowance for depreciation
accounts has been prepared by the client. You have compared the opening balances with your
prior yearâ€™s audit documentation. The
Archer Uniforms, Inc., is a distributor of professional uniforms to retail stores that sell work
clothing to professionals, such as doctors, nurses, security guards, etc. Traditionally, most of the
sales are to retail stores throughout the United States and Canada. Most shipments are processed
in bulk for delivery dire
Multiple Choice Questions The following multiple choice questions concern interest-bearing
liabilities. Choose the best response. a. The audit program for long-term debt should include
steps that require the (1) Verification of the existence of the bondholders. (2) Examination of any
bond trust indenture. (3) Inspecti
Multiple Choice Questions The following questions concern internal controls in the payroll and
personnel cycle. Choose the best response. a. A factory foreman at Steblecki Corporation
discharged an hourly worker but did not notify the human resources department. The foreman
then forged the workerâ€™s signature on time
Following are audit procedures commonly performed in the inventory and warehousing cycle for
a manufacturing company: 1. Read the client's physical inventory instructions and observe
whether they are being followed by those responsible for counting the inventory. 2. Account for
a sequence of inventory tags and trace ea
The following audit procedures are typical of those found in auditing the payroll and personnel
cycle: 1. Scan journals for all periods for unusual transactions to determine whether they are
recorded correctly. 2. Select a sample of 40 entries in the payroll journal and trace each to an
approved time card. 3. Discuss w
Identify five general ledger accounts that are likely to be affected by the payroll and personnel
cycle in most audits.
The Securities and Exchange Commission (SEC) found that Centerpulse Ltd., a publicly traded
company based in Switzerland, fraudulently misstated its 2002 third and fourth quarter financial
statements filed with the SEC. Visit the SECâ€™s website (www.sec.gov) and search the link to
â€œLitigation Releasesâ€ to locate L
It is common practice to audit the balance in notes payable in conjunction with the audit of
interest expense and interest payable. Explain the advantages of this approach.
Many auditors assert that certain audit tests can be significantly reduced for clients with adequate
perpetual records that include both unit and cost data. What are the most important tests of the
perpetual records that the auditor must make before reducing assessed control risk? Assuming
the perpetuals are determined
Each employee for the Gedding Manufacturing Co., a firm using a job-cost inventory costing
method, must reconcile his or her total hours worked with the hours worked on individual jobs
using a job time sheet at the time weekly payroll time cards are prepared. The job time sheet is
then stapled to the time card. Explain
Explain why a proper cutoff of purchases and sales is heavily dependent on the physical
inventory observation. What information should be obtained during the physical count to make
sure that cutoff is accurate?
During the first-year audit of Jones Wholesale Stationery, you observe that commissionâ€™s
amount to almost 25 percent of total sales, which is somewhat higher than in previous years.
Further investigation reveals that the industry typically has larger sales commissions than Jones
and that there is significant variatio
State what is meant by cost accounting records and explain their importance in the conduct of an
audit.
What major audit procedures are involved in testing for the ownership of inventory during the
observation of the physical counts and as a part of subsequent valuation tests?
Evaluate the following statement: "The corporate charter and the bylaws of a company are legal
documents; therefore, they should not be examined by the auditors. If the auditor wants
information about these documents, an attorney should be consulted."
What kinds of information can be confirmed with a transfer agent?
Explain why the percentage of total audit time in the cycle devoted to performing tests of
controls and substantive tests of transactions is usually far greater for the payroll and personnel
cycle than for the sales and collection cycle.
Distinguish among a payroll master file, a W-2 form, and a payroll tax return. Explain the
purpose of each.
List five tests of controls that can be performed for the payroll and personnel cycle and state the
purpose of each control tested.
You are assigned to the December 31, 2011, audit of Sea Gull Airframes, Inc. The company
designs and manufactures aircraft superstructures and airframe components. You observed the
physical inventory at December 31 and are satisfied that it was properly taken. The inventory at
December 31, 2011, has been priced, extend
Evaluate the following comment by an auditor: â€œMy job is to determine whether the payroll
records are fairly stated in accordance with accounting standards, not to find out whether they are
following proper hiring and termination procedures. When I conduct an audit of payroll, I keep
out of the human resources depart
How does the audit of owners' equity for a closely held corporation differ from that for a publicly
held corporation? In what respects are there no significant differences?
Define what is meant by compilation tests. List several examples of audit procedures to verify
compilation.
Items 1 through 8 are selected questions typically found in questionnaires used by auditors to
obtain an understanding of internal control in the inventory and warehousing cycle. In using the
questionnaire for a client, a "yes" response to a question indicates a possible internal control,
whereas a "no" indicates a pot
Evaluate the following statement: "The most important audit procedure to verify dividends for
the year is a comparison of a random sample of cancelled dividend checks with a dividend list
that has been prepared by management as of the dividend record date."
The following misstatements are included in the accounting records of Lathen Manufacturing
Company: 1. Joe Block and Frank Demery take turns â€œpunching inâ€ for each other every
few days. The absent employee comes in at noon and tells his foreman that he had car trouble or
some other problem. The foreman does not kno
The following are various asset misappropriations involving the payroll and personnel cycle. 1.
The payroll clerk submitted payroll information for a fictitious employee and had the funds
directly deposited to a bank account that he controlled. 2. An employee adds 10 overtime hours
that she did not work to her time rec
Your client, Red Horse Inc., prepared the following schedule for long term debt for the audit of
financial statements for the year ended December 31, 2011: Required a. What type of evidence
would you examine to support the beginning balances in the accounts? b. What types of evidence
would you use to support the add
You are the manager in the audit of Vernal Manufacturing Company and are turning your
attention to the income statement accounts. The in-charge auditor assessed control risk for all
cycles as low, supported by tests of controls. There are no major inherent risks affecting income
and expense accounts. Accordingly, you d
What are the differences across the studies focusing on the TPP's impact on the United States
economy? What is your assessment of the trade deal's influence on United States workers?
What was the extent of the Petro bras scandal? Who did it impact? What made this case such a
problem for Brazil?
After President Suharto's resignation in 1998, the political and economic development of
Indonesia emerged from an era of corruption and strict control. How can the changes
implemented to date impact the country? What else needs to be done by Indonesia's leaders to
continue this trend?
Discuss the importance and relevance of a particular SDG (e.g., clean water and sanitation). How
does achieving this goal relate to our everyday lives? Does it matter that this is identified as a
relevant goal? Is it possible to reach the guidelines for this SDG by 2030?
Before the physical examination, the auditor obtains a copy of the client's inventory instructions
and reviews them with the controller. In obtaining an understanding of inventory procedures for
a small manufacturing company, these deficiencies are identified: Shipping operations will not
be completely halted during th
China's new law has implications for both urban land holders and rural land holders, but it is
especially important for the latter group. Explain what China's new property law means for
farmers.
How important is the Chinese market to Starbucks? Does the presence of look-alike companies
like Xing Ba Ke deter firms from entering the market?
What is the nature of the mensalao scandal? How extensive was it? What was the reaction in
Brazil to its occurrence?
A 1996 law suit against Unocal was dismissed on the grounds that the Unocal could not be held
liable for the actions of a foreign government against its own people although the judge noted
that the company was aware of what was going on in the country. Discuss the difference between
acting in an ethical manner and acti
Why has Dalian Wanda Group expanded internationally at such a fast rate? How do the
acquisitions made fit into the company's strategy overall?
Reflect on the new strategy that Burberry is undertaking in Japan. Given that this is a shift away
from Sanyo Shokai's past strategy, what can you expect in the near future concerning
performance in the country? What is Burberry's goal in the long-term?
Reflect on how military dictatorships like the one in Myanmar hamper economic development.
Discuss the consequences of this type of political system.
Explain the concept of guanxi. How did Mintz's guanxiwang help his company become so
successful?
What prompted the new property law in China? Why did it take so long to actually develop the
law?
Is there evidence that China is pursuing an import substitution policy? How would this type of
policy benefit the country?
Compare and contrast these explanations of FDI: internalization theory and Knickerbocker's
theory of FDI
Why do American companies transfer white-collar jobs to countries like India and the
Philippines?
Why did Unocal's investment become so controversial? Did Unocal behave in an ethical
manner?
Explain the concept of Islamic Calvinism. How has Islamic Calvinism helped the Kayseri region
of Turkey?
What are the practical limits to outsourcing health care provision to other countries?
What does the transference of white-collar jobs mean to recipient countries such as India and the
Philippines?
Reread the Management Focus feature: Did Walmart Violate the Foreign Corrupt Practices Act?
What is your opinion? If you think it did, what do you think the consequences will be for
Walmart?
How has Dalian Wanda Group established itself in its home market of China? In other words,
what is the company best known for?
What does the FCPA prohibit U.S. business leaders from doing in other countries?
Evaluate the seventeen sustainable development goals. How attainable is each goal? Are there
some which are more readily achievable than others? Support your answers.
What does the proposed agreement between the United States and the European Union mean for
U.S. companies selling to the European Union? Will consumers benefit?
What must one consider to determine if NAFTA was beneficial to the U.S.?
Using Myanmar as an example, discuss how "crony capitalism" and strict control of dissent
impact the development of a political and economic system.
How has Vietnam balanced the economic reforms with the social and cultural changes that result
from such actions? What are some of the challenges that the country's leaders will face if it
continues as a more market-based economy?
Discuss the implications of corruption on the development and growth of a country. How can
Russia's current political system best be described? What conclusions can you draw regarding
Russia's economic prospects?
Why do you think the policy on sugar in the United States is so heavily slanted towards sugar
producers at the expense of candy manufacturers and consumers? What can manufacturers do?
What does your response tell you about the benefits of free trade?
Why did Daimler feel the need to make bribe payments? What advantages did the practice give
the company? Did Daimler act in an ethical manner?
Consider the corrupt culture at Daimler. Why do you think that the practice of making routine
bribes persisted for so many years? Why do you think no one blew the whistle on the practice?
Reread the Management Focus feature on "U.S. Magnesium Seeks Protection." Who gains most
from the antidumping duties levied by the United States on imports of magnesium from China
and Russia? Who are the losers? Are these duties in the best national interests of the United
States?
Why did the WTO rule against the European Union?
What are the benefits of creating a single financial market in the European Union for companies?
Does it make sense for consumers?
What incentive does China have to open its markets to foreign products? Why might China resist
such a move?

Discuss the pros and cons of investing in Russia. As a CEO of a company in the oil industry
would you invest in Russia? How does a stable government affect a country's ability to attract
investment?
With Alibaba's ownership of the popular TaoBao online shopping system (similar to eBay and
Amazon) and its spread across the world, will a Western-based online shopping culture
ultimately infiltrate China?
Was the European Commission justified in its case against Intel? Why or why not?
Volkswagen has signaled that it is going to stay the course in Russia, despite current political and
economic headwinds. Why do you think it made this decision? What are the pros and cons of this
decision? In your opinion, is it the correct decision?
What do you think about U.S. consumers paying more for light trucks and SUVs because of this?
What were the causes of the 2010-2012 sovereign debt crisis in the EU? What does this crisis tell
us about the weaknesses of the euro? Do you think the euro will survive the sovereign debt
crisis?
How did your hosts react?
India's castes system has been around for many years. Explain why its influence has diminished
among educated urban middle class Indians.
Do you agree with the characterizations of the TPP as "a terrible deal" and "disastrous"? Discuss
the pros and cons for the United States of enacting the trade agreement?
Which theory (or theories) best explain Volkswagen's FDI in Russia?
Why are many private companies in India resisting the hiring quotas suggested by the
government? Why might it be necessary to hire lower caste individuals?
Since 2010, Myanmar's new president has implemented a series of political and economic
reforms. How will these reforms change the nation? What do they mean for the country's
citizens?
Discuss the problems associated with Burberry's licensing arrangement in Japan. What were the
benefits of establishing a relationship with Sanyo Shokai in the country?
What is dumping? Were Chinese and Russian producers guilty of dumping? How did U.S.
Magnesium justify its claims against Russian and Chinese producers?
Consider the trade war that initiated the protests led by Bove. The EU instituted restrictions on
the import of hormone treated beef because it was feared that the product might lead to health
problems. The WTO stated that the restrictions were prohibited under WTO agreements and
ordered the EU to lift the restrictions
Will the United States suffer from the loss of highly skilled and high paying jobs? What does the
transference of white-collar jobs mean to the average American?
Discuss China's efforts to encourage investment in its underdeveloped areas. What effect will
investment have on these areas? How can firms prepare for the unique challenges of operating in
these areas?
What factors underlie the decision by Volkswagen to invest directly in automobile production in
Russia? Why was FDI preferable to exporting from existing factories in Germany?
What does the Institute for International Economics suggest about the benefits of free trade?
If China will go from 17 million to 190 million middle-income people by the year 2020, would
the scenario presented Best Buy in 2006 not be applicable anymore? That is, the culture shock in
2006 was that the Chinese would not pay for Best Buy's overly expensive products unless they
are a brand like Apple. Would newly r
Russia is largely dependent on oil exports to drive its economy forward. Given the sharp fall in
global oil prices that occurred in 2014 and 2015, what impact do you think this will have on FDI
into Russia?
Why is the U.S. often the largest source of FDI? Did you think it was China?
What benefits does Cemex bring to host countries? How have the company's investments in
foreign markets contributed to its ability to be a leader in the global cement industry?
Why was McDonald's chosen as the target for anti-globalization protests? How can companies
like McDonald's protect themselves from the actions of protesters like Bove?
Evaluate the relative success of economic liberalization efforts in Vietnam. How have these
actions improved life for everyday citizens in the country? What prospects may allow Vietnam to
continue on its path of economic development?
As a U.S. consumer, do you support China's subsidies on autos and auto parts? Does your
response change if you work for a U.S. auto maker? Why or why not?
Who benefits from the "chicken tariff" on light trucks? Why do you think the tariff is still in
place?
What are the impediments to creating a single financial market in the European Union? What
does the potential for this type of market mean for countries like Great Britain that have not
joined the euro-zone?
What does a falling euro mean for U.S. companies exporting to the European Union and for U.S.
companies with operations in the bloc?
As an employee of Stora Enso, what does its commitment to a sustainable strategy mean to you?
How does Stora Enso's strategy affect its position in the global marketplace?
Why would Chinese steel companies be willing to sell their product at a loss? Though it has
created a negative response from the U.S. Commerce Department, discuss the possible reasons
that this strategy might be pursued.
Why are sugar prices in the U.S. nearly double the average world price of sugar?
What did Ross Perot mean by the "giant sucking sound" that would occur after NAFTA?
Why is a sustainable strategy so important to Stora Enso? What message does its publicly stated
commitment to sustainability send? Consider your response from the perspective of various
stakeholders including investors and local communities.
How might shareholders of a company view its contributing resources to social causes? How
might customers view it? Employees?
Discuss the implications of the financial crisis in Greece on other countries in the euro zone.
What does the loss of confidence in Greece and in Spain, Portugal, and Italy as well mean for the
bloc?
Mercantilism is a bankrupt theory that has no place in the modern world. Discuss.
What are some of the characteristics of the regional trading blocks in Africa? Would these
characteristics act as an impediment to the development of TFTA?
Why are the actions of institutions like the European Commission important to the function of
markets? How does the European Commission protect consumers?
Do you agree that U.S. taxpayers should protect U.S. sugar farmers against less expensive
imports?
How might you figure out whether or not you should be late, on time, or early if you're meeting
with people in another country?
Supporters of the proposed new trade deal between the United States and the European Union
claim that it will make all countries involved better off. Do you agree? Who stands to lose as a
result of the trade pact?
What are the benefits to American providers of outsourcing certain well-defined tasks such as
interpreting an MRI scan to foreign providers based in countries such as India? What are the
costs?
How do you think FDI by foreign automobile companies might benefit the Russian economy? Is
there any potential downside to Russia from this inflow of FDI?
Provide an overview of the current situation in the global steel market. As a steel producer from
the United States, how do you feel about the dynamics described in the case? If you were a
steelworker in the United States, what would be at the front of your mind?
What can other companies that are considering investing in China learn from the experiences of
Best Buy and eBay?
In your opinion, could U.S. complaints about China's policies toward its auto exports actually
harm U.S. producers more than they help? Should the U.S. dismiss its complaint with the WTO?
What is the "chicken tariff?" What does it have to do with light trucks and SUVs?
Compare the difference between doing business in the West and doing business in China.
Will China maintain its strong economic growth in years to come? Some suggest it will until
2050. What do you think?
Are the claims that China is following a neo-mercantilist policy valid? Why or why not?
How can strategy at Umicore best be describedâ€•as a zero sum game or a positive-sum game?
Support your answer.
What are companies from other countries looking for when they invest in the U.S.?
Did NAFTA actually result in U.S. job losses? What are some other reasons for a loss of jobs?
Why is the European Union so concerned about beef from cattle that have been given growth
hormones?
Why is the U.S. the largest recipient of FDI from companies in other countries?
When did the first companies start to practice CSR in the United States?
Do you agree that U.S. consumers should keep paying twice as much for sugar than people in
other parts of the world?
Consider the challenges involved with investing in China. How does China's political position
and economic situation affect its ability to attract foreign direct investment?
Reflect on the decision made by Cemex with regard to international expansion. Why do you
think the company chose to invest directly in other countries rather than export? Why was it
more attractive for Cemex to acquire companies in foreign markets rather than establish its own
operations?
Do you think establishing the Tripartite Free Trade Area (TFTA) is a good plan for Africa? Why
or why not?
What does the ITC's ruling mean for American consumers of magnesium? In your opinion, was
the ruling fair?
Who are the primary beneficiaries of the growth of medical tourism? Who might lose from this
trend?
(Pension Expense, Journal Entries for 2 Years) Gordon Company sponsors a defined benefit
pension plan. The following information related to the pension plan is available for 2010 and
2011. (a) Compute pension expense for 2010 and 2011. (b) Prepare the journal entries to record
the pension expense and the companyâ€™s fu
(Pension Expense, Journal Entries, Statement Presentation) Henning Company sponsors a

defined benefit pension plan for its employees. The following data relate to the operation of the
plan for the year 2010 in which no benefits were paid. 1. The actuarial present value of future
benefits earned by employees for service
At the end of the current period, Agler Inc. had a projected benefit obligation of $400,000 and
pension plan assets (at fair value) of $350,000. What are the accounts and amounts that will be
reported on the companyâ€™s balance sheet as pension assets or pension liabilities?
(Pension Worksheet) Webb Corp. sponsors a defined-benefit pension plan for its employees. On
January 1, 2010, the following balances relate to this plan. Plan assets $480,000 Projected benefit
obligation 600,000 Pension asset/liability 120,000 Accumulated OCI (PSC) 100,000 As a result
of the operation
At the end of the current year, Pociek Co. has prior service cost of $9,150,000. Where should the
prior service cost be reported on the balance sheet?
For 2007, Campbell Soup Company had pension expense of $32 million and contributed $32
million to the pension fund. Prepare Campbell Soup Companyâ€™s journal entry to record
pension expense and funding.
(Computation of Prior Service Cost Amortization, Pension Expense, Journal Entries, and Net
Gain or Loss) Aykroyd Inc. has sponsored a noncontributory-defined benefit pension plan for its
employees since 1987. Prior to 2010, cumulative net pension expense recognized equaled
cumulative contributions to the plan. Other re
Discuss the concept of property rights protection and why it is so important to companies. What
does the court ruling against Xing Ba Ke mean for other companies that are already doing
business in China, or are considering entering the market?
(Basic Pension Worksheet) The following facts apply to the pension plan of Boudreau Inc. for
the year 2010. Using the preceding data, compute pension expense for the year 2010, as part of
your solution, prepare a pension worksheet that shows the journal entry for pension expense for
2010 and the year-end balances in th
(Pension Expense, Journal Entries, Amortization of Loss) Gottschalk Company sponsors a

defined benefit plan for its 100 employees. On January 1, 2010, the companyâ€™s actuary
provided the following information. Accumulated other comprehensive loss (PSC) $150,000
Pension plan assets (fair value and market-related ass
Boey Company reported net income of $25,000 in 2011. It had the following amounts related to
its pension plan in 2011: Actuarial liability gain $10,000; Unexpected asset loss $14,000;
Accumulated other comprehensive income (G/L) (beginning balance), zero. Determine for 2011
(a) Boeyâ€™s other comprehensive income, and
The meaning of the term â€œfundâ€ depends on the context in which it is used. Explain its
meaning when used as a noun. Explain its meaning when it is used as a verb.
(Comprehensive 2-Year Worksheet) Hobbs Co. has the following defined-benefit pension plan
balances on January 1, 2010. Projected benefit obligation $4,600,000 Fair value of plan assets
4,600,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2011, the
company amends its pension agree
Explain how cash-basis accounting for pension plans differs from accrual-basis accounting for
pension plans. Why is cash-basis accounting generally considered unacceptable for pension plan
accounting?
Home stake Mining Company is a 120-year-old international gold mining company with
substantial gold mining operations and exploration in the United States, Canada, and Australia.
At year-end, Home stake reported the following items related to income taxes (thousands of
dollars). Total current taxes $ 26,349 T
Projected benefit obligation $2,600,000 Plan assets at fair value 2,000,000 Accumulated OCI
(PSC) 1,100,000 How should these balances be reported on Hawkinsâ€™s balance sheet at
December 31, 2010?
(Second Year of Depreciation Difference, Two Differences, Single Rate, Extraordinary Item)
The following information has been obtained for the Gocker Corporation. 1. Prior to 2010,
taxable income and pretax financial income were identical. 2. Pretax financial income is
$1,700,000 in 2010 and $1,400,000 in 2011. 3. On J
(Pension Worksheet) Hanson Corp. sponsors a defined-benefit pension plan for its employees.
On January 1, 2010, the following balances related to this plan. Plan assets (market-related
value) $520,000 Projected benefit obligation 700,000 Pension asset/liability 180,000 Cr Prior
service cost 81,000 N
(Three Differences, No Beginning Deferred Taxes, Multiple Rates) The following information is
available for Rammers Corporation for 2010. 1. Depreciation reported on the tax return exceeded
depreciation reported on the income statement by $120,000. This difference will reverse in equal
amounts of $30,000 over the years
(Computation of Actual Return) Gingrich Importers provides the following pension plan
information. Fair value of pension plan assets, January 1, 2010 $2,400,000 Fair value of pension
plan assets, December 31, 2010 2,725,000 Contributions to the plan in 2010 280,000 Benefits
paid retirees in 2010
(Pension Expense, Journal Entries) The following information is available for the pension plan of
Brady Company for the year 2010. (a) Compute pension expense for the year 2010. (b) Prepare
the journal entry to record pension expense and the employerâ€™s contribution to the pension
plan in2010.
(Five Differences, Compute Taxable Income and Deferred Taxes, Draft Income Statement) Wise
Company began operations at the beginning of 2011. The following information pertains to this
company. 1. Pretax financial income for 2011 is $100,000. 2. The tax rate enacted for 2011 and
future years is 40%. 3. Differences betw
(Disclosures: Pension Expense and Other Comprehensive Income) Tavares Enterprises provides
the following information relative to its defined benefit pension plan. (a) Prepare the note
disclosing the components of pension expense for the year 2010. (b) Determine the amounts of
other comprehensive income and comprehensiv
Shin Corporation had a projected benefit obligation of $3,100,000 and plan assets of $3,300,000
at January 1, 2010. Shin also had a net actuarial loss of $465,000 in accumulated OCI at January
1, 2010. The average remaining service period of Shinâ€™s employees is 7.5 years. Compute
Shinâ€™s minimum amortization of the
Two Differences, Two Rates, Future Income Expected) Presented below are two independent
situations related to future taxable and deductible amounts resulting from temporary differences
existing at December 31, 2010. 1. Mooney Co. has developed the following schedule of future
taxable and deductible amounts. 2. Roesch C
Determine the meaning of the following terms. (a) Contributory plan. (b) Vested benefits. (c)
Retroactive benefits. (d) Years-of-service method.
A headline in the Wall Street Journal stated, â€œFirms Increasingly Tap Their Pension Funds to
Use Excess Assets.â€ What is the accounting issue related to the use of these â€œexcess
assetsâ€ by companies?
Two Differences, 2 Years, Compute Taxable Income and Pretax Financial Income) The
following information was disclosed during the audit of Elbert Inc. 2. On January 1, 2010,
equipment costing $600,000 is purchased. For financial reporting purposes, the company uses
straight-line depreciation over a 5-year life. For tax
(Deferred Taxes, Income Effects) Stephanie Delaney, CPA, is the newly hired director of
corporate taxation for Acme Incorporated, which is a publicly traded corporation. Ms.
Delaneyâ€™s first job with Acme was the review of the companyâ€™s accounting practices on
deferred income taxes. In doing her review, she noted di
(Pension Worksheetâ€”Missing Amounts) The accounting staff of Usher Inc. has prepared the
following pension worksheet. Unfortunately, several entries in the worksheet are not
decipherable. The company has asked your assistance in completing the worksheet and
completing the accounting tasks related to the pension plan f
Explain the difference between service cost and prior service cost.
Where can authoritative iGAAP related to the accounting for pensions be found?
(Explain Computation of Deferred Tax Liability for Multiple Tax Rates) At December 31, 2010,
Higley Corporation has one temporary difference which will reverse and cause taxable amounts
in 2011. In 2010 a new tax act set taxes equal to 45% for 2010, 40% for 2011, and 34% for 2012
and years thereafter. Explain what circ
Go to the bookâ€™s companion website and use information found there to answer the
following questions related to The Coca-Cola Company and PepsiCo, Inc. (a) What are the
amounts of Coca-Colaâ€™s and PepsiCoâ€™s provision for income taxes for the year 2007? Of
each companyâ€™s 2007 provision for income taxes, what port
Identify the five components that comprise pension expense. Briefly explain the nature of each
component.
Describe the reporting of pension plans for a company with multiple plans, some of which are
underfunded and some of which are overfunded.
In general, how can an employer choose an appropriate discount rate for its pension plan? What
information could an employer use in choosing a discount rate?
(Postretirement Benefit Worksheetâ€”Missing Amounts) The accounting staff of Holder Inc. has
prepared the postretirement benefit worksheet on page 1102. Unfortunately, several entries in the
worksheet are not decipherable. The company has asked your assistance in completing the
worksheet and completing the accounting t
At December 31, 2010, Besler Corporation had a projected benefit obligation of $560,000, plan
assets of $322,000, and prior service cost of $127,000 in accumulated other comprehensive
income. Determine the pension asset/liability at December 31, 2010.
Norton Co. had the following amounts related to its pension plan in 2010. Actuarial liability loss
for 2010 $28,000 Unexpected asset gain for 2010 18,000 Accumulated other comprehensive
income (G/L) (beginning balance) 7,000 Cr Determine for 2010: (a) Nortonâ€™s other
comprehensive income (loss),
What are the major differences between postretirement healthcare benefits and pension benefits?
What is the role of an actuary relative to pension plans what are actuarial assumptions?
Why didnâ€™t the FASB cover both types of postretirement benefitsâ€”pensions and
healthcareâ€”in the earlier pension accounting rules?
(Pension Expense, Journal Entries, Statement Presentation) Ferrari Company received the
following selected information from its pension plan trustee concerning the operation of the
companyâ€™s defined benefit pension plan for the year ended December 31, 2010. The service
cost component of pension expense for employee s
At January 1, 2010, Beatty Company had plan assets of $280,000 and a projected benefit
obligation of the same amount. During 2010, service cost was $27,500, the settlement rate was
10%, actual and expected return on plan assets were $25,000, contributions were $20,000, and
benefits paid were $17,500. Prepare a pension
(Explain Future Taxable and Deductible Amounts, How Carry back and Carry forward Affects
Deferred Taxes) Maria Rodriquez and Lynette Kingston are discussing accounting for income
taxes. They are currently studying a schedule of taxable and deductible amounts that will arise in
the future as a result of existing tempora
What are postretirement benefits other than pensions?
What information about its pension plan must a publicly traded company disclose in its interim
financial statements?
Refer to P&Gâ€™s financial statements and the accompanying notes to answer the following
questions. (a) What amounts relative to income taxes does P&G report in itâ€™s: (1) 2007
income statement? (2) June 30, 2007, balance sheet? (3) 2007 statement of cash flows? (b)
P&Gâ€™s provision for income taxes in 2005, 2006, an
What factors must be considered by the actuary in measuring the amount of pension benefits
under a defined benefit plan?
Describe the accounting for actuarial gains and losses.
(Computation of Actual Return, Gains and Losses, Corridor Test, and Pension Expense)
Erickson Company sponsors a defined benefit pension plan. The corporationâ€™s actuary
provides the following information about the plan. (a) Compute the actual return on the plan
assets in 2010. (b) Compute the amount of the other comp

(Amortization of Accumulated OCI Balances) Keeton Company sponsors a defined-benefit
pension plan for its 600 employees. The companyâ€™s actuary provided the following
information about the plan. The average remaining service life per employee is 10.5 years. The
service cost component of net periodic pension expense fo
(2-Year Worksheet) On January 1, 2010, Cunningham Company has the following defined
benefit pension plan balances. Projected benefit obligation $4,500,000 Fair value of plan assets
4,200,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2011, the
company amends its pension agree
If pension expense recognized in a period exceeds the current amount funded by the employer,
what kind of account arises, and how should it be reported in the financial statements? If the
reverse occursâ€”that is, current funding by the employer exceeds the amount recognized as
pension expenseâ€”what kind of account ar
AMR Corporation (parent company of American Airlines) reported the following for 2007 (in
millions). Service cost $370 Interest on P.B.O 672 Return on plan assets 747 Amortization of
prior service cost 16 Amortization of net loss 25 Compute AMR Corporationâ€™s 2007 pension
expense.
Mancuso Corporation amended its pension plan on January 1, 2010, and granted $160,000 of
prior service costs to its employees. The employees are expected to provide 2,000 service years
in the future, with 350 service years in 2010. Compute prior service cost amortization for 2010.
(Pension Expense, Journal Entries) Latoya Company provides the following selected information
related to its defined-benefit pension plan for 2010. (a) Compute pension expense and prepare
the journal entry to record pension expense and the employerâ€™s contribution to the pension
plan in 2010. Preparation of a pension
Given the items and amounts shown on page 1094, compute the actual return on plan assets: fair
value of plan assets at the beginning of the period $9,500,000; benefits paid during the period
$1,400,000; contributions made during the period $1,000,000; and fair value of the plan assets at
the end of the period $10,150,0
What are â€œliability gains and losses,â€ and how are they accounted for?
What is service cost, and what is the basis of its measurement?
(Basic Accounting for Temporary Differences) Dexter Company appropriately uses the asset
liability method to record deferred income taxes. Dexter reports depreciation expense for certain
machinery purchased this year using the modified accelerated cost recovery system (MACRS)
for income tax purposes and the straight-li
(Postretirement Benefit Expense Computation) Kreter Co. provides the following information
about its postretirement benefit plan for the year 2010. Compute the postretirement benefit
expense for2010.
(3-Year Worksheet, Journal Entries, and Reporting) Jackson Company adopts acceptable
accounting for its defined-benefit pension plan on January 1, 2009, with the following beginning
balances: plan assets $200,000; projected benefit obligation $250,000. Other data relating to 3
yearsâ€™ operation of the plan are shown o
(Postretirement Benefit Expense Computation) Garner Inc. provides the following information
related to its postretirement benefits for the year 2010. Accumulated postretirement benefit
obligation at January 1, 2010 $710,000 Actual and expected return on plan assets 34,000 Prior
service cost amortization
(Application of the Corridor Approach) Kensett Corp. has the following beginning-of-the-year
present values for its projected benefit obligation and market-related values for its pension plan
assets. The average remaining service life per employee in 2009 and 2010 is 10 years and in
2011 and 2012 is 12 years. The net g
Cadbury Company, which uses iGAAP, has a postretirement benefit plan. During 2010 Cadbury
recognized $30,000 unexpected asset gains in income. Just $10,000 of the gains exceeded the
corridor, and the average remaining service lives of Cadburyâ€™s employees is 10 years.
Discuss how Cadburyâ€™s accounting for the unexpec
(Computation of Pension Expense, Amortization of Net Gain or Lossâ€“Corridor Approach,

Journal Entries for 3 Years) Hiatt Toothpaste Company initiates a defined-benefit pension plan
for its 50 employees on January 1, 2010. The insurance company which administers the pension
plan provided the following selected informat
Briefly discuss the IASB/FASB convergence efforts in the area of postretirement-benefit

accounting.
(Permanent and Temporary Differences, One Rate) The accounting records of Shinault Inc. show
the following data for 2010. 1. Life insurance expense on officers was $9,000. 2. Equipment was
acquired in early January for $300,000. Straight-line depreciation over a 5-year life is used, with
no salvage value. For tax purpo
Access the glossary (â€œMaster Glossaryâ€) to answer the following. (a) What is an
accumulated benefit obligation? (b) What is a defined benefit postretirement plan? (c) What is
the definition of â€œactuarial present valueâ€? (d) What is a prior service cost?
(Accounting and Classification of Deferred Income Taxes) Part A This year Gumowski
Company has each of the following items in its income statement. 1. Gross profits on installment
sales. 2. Revenues on long-term construction contracts. 3. Estimated costs of product warranty
contracts. 4. Premiums on officersâ€™ life in
For Warren Corporation, year-end plan assets were $2,000,000. At the beginning of the year,
plan assets were $1,780,000. During the year, contributions to the pension fund were $120,000,
and benefits paid were $200,000. Compute Warrenâ€™s actual return on plan assets.
In computing the interest component of pension expense, what interest rates may be used?
Differentiate between â€œaccounting for the employerâ€ and â€œaccounting for the pension
fund.â€
(Postretirement Benefit Worksheet) Using the information in *E20-22, prepare a worksheet

inserting January 1, 2010, balances, showing December 31, 2010, balances, and the journal entry
recording postretirement benefit expense. (a) Determine the missing amounts in the 2010
postretirement worksheet, indicating whether th
Differentiate between a defined-contribution pension plan and a defined-benefit pension plan.

Explain how the employerâ€™s obligation differs between the two types of plans.
(Computation of Pension Expense) Bickner Company provides the following information about
its defined-benefit pension plan for the year 2010. Compute the pension expense for the
year2010.
(One Temporary Difference, Tracked for 4 Years, One Permanent Difference, Change in Rate)
The pretax financial income of Truttman Company differs from its taxable income throughout
each of 4 years as follows. Pretax financial income for each year includes a nondeductible
expense of $30,000 (never deductible for tax pur
(Comprehensive 2-Year Worksheet) Lemke Company sponsors a defined-benefit pension plan

for its employees. The following data relate to the operation of the plan for the years 2010 and
2011. (a) Prepare a pension worksheet presenting both years 2010 and 2011 and accompanying
computations and amortization of the loss (2
For 2010, Sampsell Inc. computed its annual postretirement expense as $240,900. Sampsellâ€™s
contribution to the plan during 2010 was $180,000. Prepare Sampsellâ€™s 2010 entry to record
postretirement expense.
What is a private pension plan? How does a contributory pension plan differ from a
noncontributory plan?
(Amortization of Accumulated OCI (G/L), Corridor Approach, Pension Expense Computation)

The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses.
Other information about the companyâ€™s pension obligation and plan assets is as follows.
Gustafson Inc. has a stable labor force of 4
How does an â€œasset gain or lossâ€ develop in pension accounting? How does a â€œliability
gain or lossâ€ develop in pension accounting?
(Worksheet for E20-13) Using the information in E20-13 about Erickson Companyâ€™s defined
benefit pension plan, prepare a 2010 pension worksheet with supplementary schedules of
computations. Prepare the journal entries at December 31, 2010, to record pension expense and
related pension transactions. Also, indicate the
(NOL without Valuation Account) Jennings Inc. reported the following pretax income (loss) and
related tax rates during the years 2006â€“2012. Pretax financial income (loss) and taxable
income (loss) were the same for all years since Jennings began business. The tax rates from
2009â€“2012 were enacted in 2009. (a) Prep
If an employer has a defined-benefit pension plan, what components would make up its net
periodic pension cost?
(Postretirement Benefit Expense Computation) Engle hart Co. provides the following
information about its postretirement benefit plan for the year 2010. Compute the postretirement
benefit expense for2010.
Manno Corporation has the following information available concerning its postretirement benefit
plan for 2010. Service cost $40,000 Interest cost 47,400 Actual and expected return on plan
assets 26,900 Compute Mannoâ€™s 2010 postretirement expense.
Briefly describe some of the similarities and differences between U.S. GAAP and iGAAP with
respect to the accounting for pensions.
(Identify Temporary Differences and Classification Criteria) The asset-liability approach for
recording deferred income taxes is an integral part of generally accepted accounting principles.
(a) Indicate whether each of the following independent situations should be treated as a
temporary difference or as a permanent d
What is meant by â€œprior service costâ€? When is prior service cost recognized as pension
expense?
What is the meaning of â€œcorridor amortizationâ€?
Lahey Corp. has three defined-benefit pension plans as follows. How will Lahey report these
multiple plans in its financialstatements?
(Application of Years-of-Service Method) Andrews Company has five employees participating

in its defined-benefit pension plan. Expected years of future service for these employees at the
beginning of 2010 are as follows. On January 1, 2010, the company amended its pension plan
increasing its projected benefit obligatio
(One Temporary Difference, Tracked 3 Years, Change in Rates, Income Statement Presentation)
Crosley Corp. sold an investment on an installment basis. The total gain of $60,000 was reported
for financial reporting purposes in the period of sale. The company qualifies to use the
installment-sales method for tax purposes.
Name three approaches to measuring benefit obligations from a pension plan and explain how
they differ.
(Preparation of Pension Worksheet) Using the information in E20-2 prepare a pension worksheet
inserting January 1, 2010, balances, showing December 31, 2010, balances, and the journal entry
recording pension expense.
What is the difference between the APBO and the EPBO? What are the components of
postretirement expense?
(Basic Pension Worksheet) The following defined pension data of Rydell Corp. apply to the year
2010. For 2010, prepare a pension worksheet for Rydell Corp. that shows the journal entry for
pension expense and the year-end balances in the related pensionaccounts.
(Postretirement Benefit Worksheet) Using the information in *E20-19, prepare a worksheet

inserting January 1, 2010, balances, and showing December 31, 2010, balances. Prepare the
journal entry recording postretirement benefit expense.
What are the advantages of providing within-the-guestroom information about the

complimentary breakfast service in a limited-service hotel?

Assume that you are the food and beverage manager in a hotel in New York, San Francisco, New
Orleans, or Honolulu that attracts guests from all over the world. What menu-planning tactics
could you use that recognize the diverse food preferences of the international markets served by
your property?
List some of the examples of sustainable business practices discussed in the video.
Explain how average annual percentages changes in the U.S. population by race from 1995 â€“
2050 should impact todayâ€™s diversity planning for organizations of the future.
List and define the three types of organization members found in multinational organizations.
Discuss the contribution that each type can bring to building the success of the organization.
Describe CaringWorks' hiring process.
Evaluate the following statement: McDonaldâ€™s can learn to manage its U.S. operations better
by studying how successful competitive operations are managed in other countries.
How will you be able to use the classical approach to management in your job as a manager?
Assume that you are an overnight guest eating a hotel's complimentary breakfast the morning of
your departure. Assume also that you are a businessperson staying in a five-star hotel about to
dine in the property's high-check dining room on the 60th floor of the property. What are some
expectations you would have that w
What would be some of the biggest challenges in your professional and work lives if you were
an expatriate managing a hotel in a country whose language you were fluent in? If you were not
fluent in the country's language?
The front office training methods used by hotels to develop effective front office agents can vary
greatly. Identify one type of hotel (e.g., full-service, limited-service, extended stay, and
economy) in your area, and contact one of the property's front office managers to determine: â€¢
Who trains new front office ag
Staffing the night auditor's position in a hotel can sometimes be a real challenge. Why do you
think it is most often harder to find qualified night auditors than it is to find qualified front office
agents working other shifts?
Describe the many roles of the managers in the video.

It has been said that a hotelier will pay for food items of the quality purchased even though food
items of the same quality are not received. What are some procedures that you as a food service
manager would use to help ensure that proper receiving procedures are in use in your hotel?
What overall characteristics are important to azTeen Magazine when hiring teenaged interns?
Some hotels use dining room servers and room service attendants interchangeably. What special
training would a room service attendant need to become an efficient dining room server?
Some hotels' FOMs authorize their front office agents to adjust room charges up to the amount of
a guest's total charges for their stay. Other FOMs limit the dollar amount of adjustment that can
be made without first seeking approval from a supervisor. What would be the advantages to the
hotel of each approach? Which a
As Jarden continues to expand globally, what challenges do you envision for the company in
maintaining quality control over the products produced?
Assume you are a manager working at the New York Timesâ€™ headquarters. Based on the
current changes taking place at the newspaper, which of Henri Fayolâ€™s 14 principles of
management would be the most pertinent to you? Why?
Describe the beginnings of Campus MovieFest as discussed by Vijay Makar in the video.
Do you think Verizon has a responsibility to support education and safety in the communities in
which it does business? Explain.
You have used simulation exercises to learn important front office management skills. What are
other areas within a hospitality operation for which you think simulations would be a good way
to provide employee training? Give three specific examples.
How important is having a diverse workforce to Siemenâ€™s? Discuss fully.
There are numerous tasks that servers must perform in order to make their guests' dining
experience a memorable one. What are some basics you would use as a hotel restaurant manager
to train new service staff in the proper way to perform these tasks?
Communication problems often impact the effective planning and delivery of banquets. It is
natural for marketing and sales department personnel to want to do whatever they can to fill the
hotel's guest rooms and public function spaces. It is also natural for food production staff to be
concerned about banquet events be
How does Henri Fayolâ€™s contribution to management differ from the contributions of Frank
and Lillian Gilbreth?
Discuss three similarities and three differences of international versus transnational

organizations.
Which of the approaches to management discussed in this chapter does Pam Rogers Klyn seem
to be emphasizing the least in her work as a manager? Explain.
Is the preparation of expatriates more important than their repatriation? Explain fully. Both are
equally important.
What standards are used at azTeen Magazine in order to measure organizational performance?
Pilferage of hotel assets by employees is common in the hotel industry. Would you recommend
terminating a good hotel employee proven to have pilfered a bar of soap from a room attendant's
cart? Why or why not?
If you were a recruiter for a hotel organization, what would be among the most important factors
you would consider as you recruited management trainee applicants?
Assume that you are a department head in a lodging organization that believes in and practices
entrepreneurship. What percentage of your total compensation would ideally be based upon your
ability to attain predetermined goals? How much discretion would you want in making decisions
under this ideal situation?
Identify two advantages of using a decentralized accounting system in a hotel, as well as two
disadvantages of such a system.
What factors would you consider in deciding whether your hotel should purchase and then rent
audiovisual equipment (e.g., a digital projector and screen or specialized video conferencing
equipment) to groups conducting business meetings at your property?
Material Safety Data Sheets are a valuable source of safety-related information for workers. In
most cases, however, these documents are provided only in English and Spanish. Increasingly,
the hotel industry employs individuals whose native language is neither of these. Assume that
your hotel employs 25 such individual
Some hotel managers believe that uniformed security personnel in the hotel increase the comfort
level of guests in the same manner as would uniformed police officers. Other managers feel that
uniformed security personnel increase guests' concern about security and their own safety and
thus have a negative effect. If it
Whatâ€™s the relationship between social responsibility and ethics?
What risks would be of most concern to you if you were thinking about starting your own
business?
Assess Cracker Barrelâ€™s issues with diversity from 10 years ago versus today. What did they
do wrong and what have they done right?
What are three alternatives you could give to a meeting planner hoping to provide lunch to
meeting attendees in your limited-service hotel's small meeting room?
With all the changes occurring at the Times, do you think the systems approach to management
is applicable to this organization? Why or why not?
Budgets may be affected by a variety of external events that are unforeseen by management.
Identify three such events that could affect a hotel's long-term budget. Identify three events that
could affect its annual budget.
How do rooms demand forecasts affect the selling prices of a lodging operation's guest rooms?
Why is it important for Cracker Barrel to embrace diversity? What impact can an indifference to
diversity have on customers and employees?
Give three specific examples (one each) of questions you can ask faculty members, campus
recruiters, and school alumni to gain information you could use to identify potential
One important decision that must sometimes be made by a hotel pertains to when to deny credit
to a client or guest formerly allowed to charge purchases. What factors would influence your
decision to deny future credit to a current client whose direct bill account was past due?
Assume that you are a hotelier who has a group booked at your hotel. The group has picked up
all of its originally requested rooms and is now requesting additional rooms at the same reduced
rates you originally agreed to when their group roomâ€™s contract was signed. You do have
rooms available to fulfill the group's n
What do the managers say are the rewards and challenges of their jobs?
You have learned about several service styles in common use in hotel a la carte dining and
banquet operations. How would you determine which style(s) to use for your operation?
Assuming that Verizon has such a responsibility, in what instances would it be relatively easy for
the company to be committed to living up to it?
Some hotels state that they guarantee room availability (but not room type availability) when a
guest arrives with a guaranteed reservation. Name one advantage of such an approach. Name one
disadvantage.
How has Lynn used the four functions of management in building her business?
Who are the relevant stakeholders of Warby Parker? How is each stakeholder group impacted by
the organizationâ€™s mission?
In some hotels, management has determined that any purchase made by a hotel staff member
above an established dollar amount must be preapproved by the hotel's general manager or
controller. Identify five factors that you would want to address in such a policy. How would this
policy affect accounting procedures in the h
Describe the many roles of the azTeen management staff as discussed by Deb Rochford,
Michelle Burgess, and Veronica Sherbina in the video.
Hotel controllers generally rely upon other managers in a hotel to verify many of the invoices
submitted for payment Assume that you are serving in the role of hotel controller and suspect a
manager of submitting falsified invoices for the purpose of defrauding the hotel. Outline a
procedure you would implement to prev
Describe how the Reems Creek Renewable Energy Campus is engaging in corporate social
responsibility.
Assume that you are a food and beverage director working with the hotel's chef to plan a new
menu. You want to add a vegetarian item to the new menu. What information would the chef
want from you before implementing such a change?
How would you control diversity activities at Siemenâ€™s if you were top management?
What types of control do you think could be useful to ensure that only registered hotel guests
utilize the free food services that are available at a limited-service hotel?
Guests with physical limitations related to their movement, hearing, or sight present special
safety concerns for a hotel. This is especially true in times of emergency. What are some steps
hoteliers can take to ensure that such guests receive needed assistance in case of a hotel
emergency, such as a fire or other situ
Should managers be philanthropic? Explain fully. Discuss some of the pitfalls that philanthropic
managers must avoid.
How would you determine the food cost per guest to budget for the operation of your limited-
service hotel's breakfast? What indirect costs, if any, such as for lobby cleaning, administrative
expenses, and related costs other than food and direct serving labor, would you allocate to the
food services operation? Why?
Review the section of the chapter that addresses international job placement. Consider five things
your team feels would be important to know about a host country before agreeing to accept a job
there (e.g., the educational system in place or the religious tolerance practiced). Explain how you
would go about obtaining
In terms of the contemporary view of management skills, which activities and skills do you see
Adkins using in his career? How do you think he has acquired those skills?
Assuming that you are involved in managing a McDonaldâ€™s in Japan, what challenges do you
think will be the most difficult for you to meet? Why?
While many hotels employ progressive discipline programs, theft is usually grounds for
immediate termination. Would you implement an immediate termination policy at your hotel, or
would you give a second chance to a cashier caught stealing? Why? What factor(s) would
influence your decision?
How do you think working conditions have changed at the New York Times? What do you
imagine it was like to work there in 1851?
Where does diversity awareness and commitment start? In Cracker Barrelâ€™s case, should it
come from the store level or the corporate office? Why?
Some graduating students view starting salary as more important than benefits when selecting
their initial employer? Others view benefits as more important. What factors do you think impact
these alternate views?
Assume that you are a banker asked to lend money to an op-erating hotel. Identify three pieces of
financial information you would want to see before making the loan. How important would it be
to you that the data submitted was independently verified as accurate?
The food and beverage department and its housekeeping counterpart employ the vast majority of
the employees in a full-service hotel. These departments are very labor-intensive because it is not
practical to use technology to replace human workers in these areas. To what extent do you think
technology will replace emplo
What is the value in having managers at the career exploration stage within an organization?
Why? The decline stage? Why?
In this activity, teams are assigned the task of carefully considering the content in specifically
assigned FOMS lessons. Each team should assume that a student in the class has successfully
completed the assigned lessons. Using the information in Figure 15.4 as a guide, create one new
bullet point that could be utiliz
The chapter provides examples of competencies that are necessary for job success. Identify three
of the competencies you feel are most important. For each of these: 1. Cite an additional example
of how the competency would be used. 2. Provide an example of a hotel problem that can occur
if the competency has not been
When managing people, describe the significance of understanding both â€˜minorityâ€™ and
â€˜majorityâ€™ groups as they exist in an organization.
Discuss the use of organizational resources (human, monetary, raw materials, and capital) in the
restaurant industry. What challenges would a restaurant manager or owner face with each one?
Do you think that at some point in your career you will become involved in international
management? Explain.
The independent verification of financial information in a hotel is an important way to help

prevent employee fraud. How often do you believe a controller's own work should lie audited?
What factors would influence your decision?
Guest safety is a primary concern of all effective hotel managers. What steps can you take to
ensure that all of the hotel's employees share your concern for guest safety? Identify at least three
specific activities.
Which of Katzâ€™s managerial skills (technical, human, and conceptual) does Lynn seem to use
most often? Why?
Assuming that Verizon has such a responsibility, in what instances would it be relatively difficult
for the company to be committed to living up to it?
How would you describe the significance of Rodney Adkinsâ€™s work as a manager? Who
benefits from his abilities and efforts?
Assume that you are interested in a career in a hotel food and beverage operations. What would
be the pros and cons of starting work in a smaller full-service hotel? In a larger hotel?
Which of the approaches to management discussed in this chapter does Pam Rogers Klyn seem
to be emphasizing the most in her work as a manager?
What do you think would be the single biggest advantage and disadvantage to working with a
large organization? A small organization?
As you have learned, safety and security are the responsibility of all hotel employees. In some
hotels, however, there is a security department with its own full- and part-time employees. List
three factors that might cause the management of a hotel to employ designated security staff on a
regular basis.
Some hotels allow guests to cancel room reservations at the last minute and without penalty if a
personal emergency arises. Would you implement such a policy? If so, how could you protect
your hotel from unscrupulous guests seeking to defraud your hotel by falsifying the reason for
their last-minute cancellation?
Why did Rainey-Reed say that CaringWorks desires to employ a diverse workforce? How
committed is CaringWorks to creating a diverse organization? In what ways is this commitment
demonstrated?
Assume that your hotel's housekeeping department is experiencing periodic losses of products
that you believe are due to employee theft. As a general manager, what specific steps would you
suggest be taken to address this issue?
What are three reasons hotels operate better when FOMs produce timely and accurate rooms
demand forecasts?
Swimming pool safety is always a concern for hoteliers. Do you believe that there should be a
hotel policy limiting the number of additional guests that a registered hotel guest can invite to
swim at a hotel pool, or should pools be reserved for registered guests only? What factors would
influence your decision?
What steps should a manager of a limited-service hotel offering complimentary alcoholic

beverages during a Manager's Reception take to help ensure that guests do not over-consume
these beverages?

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(Pension Expense, Journal Entries, Amortization of Loss) Gottschalk Company sponsors a

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What are postretirement benefits other than pensions?

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Describe the accounting for actuarial gains and losses.

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What is service cost, and what is the basis of its measurement?

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(Computation of Pension Expense, Amortization of Net Gain or Lossâ€“Corridor Approach,

Briefly discuss the IASB/FASB convergence efforts in the area of postretirement-benefit

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(Postretirement Benefit Worksheet) Using the information in *E20-22, prepare a worksheet

Differentiate between a defined-contribution pension plan and a defined-benefit pension plan.

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(Comprehensive 2-Year Worksheet) Lemke Company sponsors a defined-benefit pension plan

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(Amortization of Accumulated OCI (G/L), Corridor Approach, Pension Expense Computation)

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What is the meaning of â€œcorridor amortizationâ€?

What is the meaning of â€œcorridor amortizationâ€?