HATV ELECTRONICS COMPANY HATV Electronics Co. is one of only ten distributors in Alaba for the major electronics producers Sony, Daewoo, and LG Electronics. HATV also distributes for a number of smaller electronics companies such as Toshiba. The company distributes these products to wholesalers and stores, and it operates a retail shop of its own in central Alaba Market. A leading electronics company offered a promotional opportunity to all its Alaba distributors in November 1999. If they sold at least N250million worth of merchandise during the month of January 2010, they would receive 3.8 percent of that turnover (i.e.)., a minimum of N9,500,000. When Mr. Emeka, the general director of HATV, received this promotional offer from the electronics company, he did some calculations and decided that he would be able to reach this sales target, even though it was 25 percent higher than his previous December sales of N200 million for the high-volume pre-Christmas season. Mr. Emeka believed that he could make that 25 percent jump in sales force. He considered several ideas before deciding on a combined approach of new advertising and providing gifts and rewards to customers, wholesalers, and salespeople. He felt that he could reach the additional sales target if he planned carefully and set incentives for his sales force and wholesalers. He wanted to raise his profile in the mind of the buying public so that they would think of HATV as the best source for their electronics needs. Many Nigerians buy televisions, CD stereos, and other machines for the Christmas holiday, and he wanted to attract more of these customers to his business. He decided on television advertising, with a total of ten commercials to be aired on the weekends when his target audience would most likely be watching television. He normally aired his commercials only a few times in the Christmas period, and he felt that the increased exposure would help boost sales. He decided to ask customers how they chose HATV and to keep track of how many mentioned the TV ads in their answers. He mentioned the electronics company that was offering the promotion prominently in his advertising, and also the fact that there would be free gifts, such as knapsacks, T-shirts, power banks, and digital clocks for all who purchased their electronics from HATV. He had received all of these gifts from electronics producers during various promotion campaigns, and he still had a large stock left to give away. He thought that these small gifts might make his customers choose to buy the promoted products from HATV rather than at any of the other shops in the Alaba electronics sales area. Mr. Emeka felt that motivating his agents and sales staff to sell was even more important than increasing his advertising and offering small gifts to his customers. If his sales staff felt the urgency to reach the sales goal and were rewarded for their efforts, he felt they could easily reach his target sales figures. He came up with a commission scheme for his wholesale agents, offering a 0.5 percent commission on turnover to all agents who exceeded an agreed figure per month. He thought he could easily pay the commission out of the 3.8 percent turnover bonus that he would get from the promoter if the sales campaign succeeded. He was correct in his estimates of what his agents would be able to sell, and most agents exceeded their sales targets and collected the 0.5 percent commission. He chose random days as “hot sales” days and set sales targets for his retail sales force; those who met the targets would receive N200,000. He used this strategy only occasionally, because he thought that his sales force could concentrate on exceptional sales only at certain times, and if he used this tactic too often they might “burn out” before the N250million target was reached at the end of January. He did, however meet with his sales staff regularly to review their targets and how they were achieving them. His strategy turned out to be successful. He exceeded the electronics company’s sales target and collected his substantial 3.8 percent bonus. He also learned a few ways to motivate his sales force to reach difficult sales targets when necessary.

Describe the strategies employed by Mr. Emeka, the general director of HATV Electronics Company, to meet the company’s sales goals for the month of January 2010.
Explain how Mr. Emeka’s strategy met with success in terms of the company’s sales goal for January 2010.

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THE BUSINESS This practice set is designed in two parts. The first part provides a review of the financial statements of a corporation selling United States and Texas flags. Pete's Patriotic Flags, Inc., primary operation is the sale of flags. A financial analysis and Statement of Cash Flow will be required. In the second part, Pete's Patriotic Flags, Inc. will expand to include the manufacturing process of the flags. All cases of academic dishonesty will be reported to the Office of Student Life. PART ONE INSTRUCTIONS The financial information for the past two years (2021 and 2020) is provided. Using a spreadsheet application, such as Microsoft Excel, and the information from the previous years, provide the following: 1. Prepare a Statement of Cash Flows for the current year using the indirect method. Use the following template. 2. Using horizontal analysis, prepare a Comparative Balance Sheet. Copy the financial statements on Blackboard into an Excel spreadsheet and insert a column to add the percentages. 3. Using vertical analysis, prepare a Comparative Income Statement. Copy the financial statements on Blackboard into an Excel spreadsheet and insert a column to add the percentages. 4. Using the financial statements in the practice set (located on Blackboard), calculate the ratios below: (Use the following templates shown here in the practice set) a. b. C. d. Quick ratio both years Accounts Receivable Turnover 2021 Number of Days Sales in Receivables 2021 (Company policy states 30 days in receivables) Inventory Turnover 2021 Number of Days Sales in Inventory 2021 (Company policy states 8 days to turn over inventory) Ratio of Liabilities to Stockholders' Equity 2021 i. Return on Total Assets 2021 j. Return on Stockholders' Equity 2021 k. Earnings Per Share 2020 and 2021 e. f. g. h. Working Capital both years Current Ratio both years 5. Acting as an accounting advisor to the firm, prepare a memo in which you analyze the financial statements you prepared in step two and prepare an analysis of the company's financial position. Identify two strengths and two weaknesses in the company. Make two recommendations to improve the company's financial position. Be specific in each of the recommendations and use as many of the ratios calculated in a-k and the vertical and horizontal analysis to support your explanation and analysis. If you do not use the ratios in your answer you will not credit for the memo. The length should be no more than three paragraphs: one for strengths, one for weaknesses, and one for recommendations. 6. Blackboard Instructions a. Memo analyzing the company's strengths and weaknesses with two recommendations. Write your memo in a Word document using ratios to analyze the strengths and weaknesses of the company. Make sure there are no spelling, grammatical, or punctuation errors. Once it is completed make sure that you print it out and then rewrite it in Blackboard. Add information concerning numbers using the format as shown here below and enter it into Blackboard as specified: b. When the answer is in units enter the number as is (See example below) i. 280 When the answer is for ratios (i.e., Current ratio) and has a decimal take it out two decimal spaces (See example below) L 280.89 d. When ratios are in days/times take out to two decimal places and write days or times after the number (See example below) i. 280.96 days or times C. e. When the answer is in dollars ALWAYS include a dollar sign, comma in the dollar amount and cents as shown below: L $280.83 or $3,800.44 or $480.00 or $3,600.00 Please follow all instructions. If the answers are formatted incorrectly the answer will be counted wrong. COMPRATIVE BALANCE SHEET Current Assets: Cash Accounts Receivable, net Merchandise Inventory Prepaid Rent Assets Total Assets Total Current Assets. Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, Plant, and Equipment Pete's Patriotic Flags, Inc. Comparative Balance Sheet December 31, 2021and 2020 2021 366,520 160,000 130,000 70,000 $726,520 240,000 (60,000) $180,000 $906,520 2020 90,000 170,000 70,000 50,000 $380,000 250,000 (40,000) $220,000 $600,000 Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable Dividends Payable Unearned Revenue Salaries payable Federal Income Taxes Payable Total Current Liabilities Long Term Liabilities Bond Payable: Note Payable Total Liabilities Stockholders' Equity; Common Stock, $10 Par Paid-In Capital in Excess of Par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 2021 90,000 20,000 70,000 30,000 $210,000 20,000 60.000 $290,000 150,000 15,000 451.520 $616,520 $906,520 2020 55,000 80,000 50,000 15,000 $200,000 100,000 $300,000 100,000 10,000 190,000 $300,000 $600,000 Sales Cost of Goods Sold Gross Margin Operating Expenses: Salaries and Wages Expense Rent Expense Depreciation Expense Total Operating Expenses Income from Operations Loss on Sale of Equipment Interest Expense Pete's Patriotic Flags, Inc. Comparative Statement of Income For the Years Ended December 31, 2021 and 2020 Increase (Decrease) in Operating Income. Income before Taxes Federal Income Taxes Net Income 2021 1,600,000 1.040.000 $560,000 80,000 20,000 30,000 $130,000 $430,000 (500) (8,000) (8,500) 421,500 (126,450) $295,050 2020 940,000 693,000 $247,000 50,000 20,000 24,000 $94,000 $153,000 (3,000) (3.000) 150,000 (45,000) $105,000 COMPARATIVE STATEMENT OF STOCKHOLDERS' EQUITY Common Stock Retained Earnings, Beginning of Year Pete's Patriotic Flags, Inc. Comparative Statement of Stockholders' Equity For the Years Ended December 31, 2021 and 2020 2021 165,000 190,000 Net Income 295,050 ? Less: Dividends Retained Earnings, End of Year $451,520 Total Stockholders' Equity $616,520 1. Equipment with a cost of $20,000 was sold for $9,500 cash. 2. Stock was issued for cash. 3. The dividends were paid in cash. 4. The tax rate is 30%. 2020 110,000 95,000 105,000 10,000 $190,000 $300,000 THE BUSINESS This practice set is designed in two parts. The first part provides a review of the financial statements of a corporation selling United States and Texas flags. Pete's Patriotic Flags, Inc., primary operation is the sale of flags. A financial analysis and Statement of Cash Flow will be required. In the second part, Pete's Patriotic Flags, Inc. will expand to include the manufacturing process of the flags. All cases of academic dishonesty will be reported to the Office of Student Life. PART ONE INSTRUCTIONS The financial information for the past two years (2021 and 2020) is provided. Using a spreadsheet application, such as Microsoft Excel, and the information from the previous years, provide the following: 1. Prepare a Statement of Cash Flows for the current year using the indirect method. Use the following template. 2. Using horizontal analysis, prepare a Comparative Balance Sheet. Copy the financial statements on Blackboard into an Excel spreadsheet and insert a column to add the percentages. 3. Using vertical analysis, prepare a Comparative Income Statement. Copy the financial statements on Blackboard into an Excel spreadsheet and insert a column to add the percentages. 4. Using the financial statements in the practice set (located on Blackboard), calculate the ratios below: (Use the following templates shown here in the practice set) a. b. C. d. Quick ratio both years Accounts Receivable Turnover 2021 Number of Days Sales in Receivables 2021 (Company policy states 30 days in receivables) Inventory Turnover 2021 Number of Days Sales in Inventory 2021 (Company policy states 8 days to turn over inventory) Ratio of Liabilities to Stockholders' Equity 2021 i. Return on Total Assets 2021 j. Return on Stockholders' Equity 2021 k. Earnings Per Share 2020 and 2021 e. f. g. h. Working Capital both years Current Ratio both years 5. Acting as an accounting advisor to the firm, prepare a memo in which you analyze the financial statements you prepared in step two and prepare an analysis of the company's financial position. Identify two strengths and two weaknesses in the company. Make two recommendations to improve the company's financial position. Be specific in each of the recommendations and use as many of the ratios calculated in a-k and the vertical and horizontal analysis to support your explanation and analysis. If you do not use the ratios in your answer you will not credit for the memo. The length should be no more than three paragraphs: one for strengths, one for weaknesses, and one for recommendations. 6. Blackboard Instructions a. Memo analyzing the company's strengths and weaknesses with two recommendations. Write your memo in a Word document using ratios to analyze the strengths and weaknesses of the company. Make sure there are no spelling, grammatical, or punctuation errors. Once it is completed make sure that you print it out and then rewrite it in Blackboard. Add information concerning numbers using the format as shown here below and enter it into Blackboard as specified: b. When the answer is in units enter the number as is (See example below) i. 280 When the answer is for ratios (i.e., Current ratio) and has a decimal take it out two decimal spaces (See example below) L 280.89 d. When ratios are in days/times take out to two decimal places and write days or times after the number (See example below) i. 280.96 days or times C. e. When the answer is in dollars ALWAYS include a dollar sign, comma in the dollar amount and cents as shown below: L $280.83 or $3,800.44 or $480.00 or $3,600.00 Please follow all instructions. If the answers are formatted incorrectly the answer will be counted wrong. COMPRATIVE BALANCE SHEET Current Assets: Cash Accounts Receivable, net Merchandise Inventory Prepaid Rent Assets Total Assets Total Current Assets. Property, Plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, Plant, and Equipment Pete's Patriotic Flags, Inc. Comparative Balance Sheet December 31, 2021and 2020 2021 366,520 160,000 130,000 70,000 $726,520 240,000 (60,000) $180,000 $906,520 2020 90,000 170,000 70,000 50,000 $380,000 250,000 (40,000) $220,000 $600,000 Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable Dividends Payable Unearned Revenue Salaries payable Federal Income Taxes Payable Total Current Liabilities Long Term Liabilities Bond Payable: Note Payable Total Liabilities Stockholders' Equity; Common Stock, $10 Par Paid-In Capital in Excess of Par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 2021 90,000 20,000 70,000 30,000 $210,000 20,000 60.000 $290,000 150,000 15,000 451.520 $616,520 $906,520 2020 55,000 80,000 50,000 15,000 $200,000 100,000 $300,000 100,000 10,000 190,000 $300,000 $600,000 Sales Cost of Goods Sold Gross Margin Operating Expenses: Salaries and Wages Expense Rent Expense Depreciation Expense Total Operating Expenses Income from Operations Loss on Sale of Equipment Interest Expense Pete's Patriotic Flags, Inc. Comparative Statement of Income For the Years Ended December 31, 2021 and 2020 Increase (Decrease) in Operating Income. Income before Taxes Federal Income Taxes Net Income 2021 1,600,000 1.040.000 $560,000 80,000 20,000 30,000 $130,000 $430,000 (500) (8,000) (8,500) 421,500 (126,450) $295,050 2020 940,000 693,000 $247,000 50,000 20,000 24,000 $94,000 $153,000 (3,000) (3.000) 150,000 (45,000) $105,000 COMPARATIVE STATEMENT OF STOCKHOLDERS' EQUITY Common Stock Retained Earnings, Beginning of Year Pete's Patriotic Flags, Inc. Comparative Statement of Stockholders' Equity For the Years Ended December 31, 2021 and 2020 2021 165,000 190,000 Net Income 295,050 ? Less: Dividends Retained Earnings, End of Year $451,520 Total Stockholders' Equity $616,520 1. Equipment with a cost of $20,000 was sold for $9,500 cash. 2. Stock was issued for cash. 3. The dividends were paid in cash. 4. The tax rate is 30%. 2020 110,000 95,000 105,000 10,000 $190,000 $300,000

Answer rating: 100% (QA)

Question 1 To meet the companys sales goal for the month of January 2010 Mr Emeka employed a combined approach of new advertising and providing gifts and rewards to customers wholesalers and salespeop... View the full answer