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AGEC331_2-1.3.09

Course: AGEC 425, Spring 2011
School: Purdue
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Word Count: 485

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2.3.09 UNDERSTANDING AGEC331 BUYERS To sell you first must understand what and why Perceived Need The Economic Exchange Model up When buyers make a specific purchase decision they believe they will gain more then they give Customers also buy because of their emotional and psychological needs They may choose a product because of its peace of mind or panache Abraham Maslow 5 Levels of Needs The...

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2.3.09 UNDERSTANDING AGEC331 BUYERS To sell you first must understand what and why Perceived Need The Economic Exchange Model up When buyers make a specific purchase decision they believe they will gain more then they give Customers also buy because of their emotional and psychological needs They may choose a product because of its peace of mind or panache Abraham Maslow 5 Levels of Needs The Hierarchy of Human Needs Relating your product to one of these needs will enable you to succeed Adoption Diffusion Curve Innovator First 2.5% to adopt a new product Early Adopter The next 13.5% Early Majority 34% following Late Majority 34% getting into game late Laggard 16% least worried with keeping up with the Joneses Innovator Sees self as in touch with new ideas Frequently read research bulletins Well educated Scientific approach to problem solving Able to deal abstractly Early Adopter Willing to try a new idea Not the first to embrace new technology Refer as one of the first Well educated Stays up to date with company meetings Early Majority Willing to try new Socially oriented With enough evidence, jump on board Many contacts in the community Late Majority The wait and see attitude Skeptical Tend to be educated less Smaller business Rely more on friends for information Laggards Least progressive Afraid of debt Less well read Not heavily involved in community Three Types of Buyers Relationship Economic Business It is through determining the customers predominant motivation that you can better understand how that customer will likely evaluate your sales approach Type of buyer has no relation to size of business Relationship Economic Likes regular contact Wants to chat Trusts information sources they know Likes informal and formal Accepts salesman, trusts Likes full service packages Always considers cost Likes to compare prices Reacts quickly Not interested in service Competitive Relies on own information sources Pragmatic Self Reliant Business Brief, to the point Likes facts, research, Expertise, Organization, Oppointments Compares and evaluates Behavior Styles Dominance approach to problems and challenges, wants results and problems solved quickly Influence approach to people, Relationship is everything, emotions are main thing Steadiness approach to changes and new ideas, Keeps everything the same, prefer control Compliance approach to how customer deals with rules, Obeys rules, likes guidelines, regulations
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Purdue - AGEC - 425
AGEC331 2.3.09UNDERSTANDING BUYERSTo sell you first must understand what and whyPerceived Need The Economic Exchange Model up When buyers make a specific purchase decision they believe they will gain more then they give Customers also buy because
Purdue - AGEC - 425
AGEC331 1.29.09PROSPECTINGProspecting is identifying potential new customers A prospect is a Potential customer Identifying prospects, converting them to customers is one of a salespersons most improtant tasks The Role of Prospecting in Strategic S
Purdue - AGEC - 425
AGEC331 1.29.09PROSPECTINGProspecting is identifying potential new customers A prospect is a Potential customer Identifying prospects, converting them to customers is one of a salespersons most improtant tasks The Role of Prospecting in Strategic S
Purdue - AGEC - 425
AGEC331 1.27.09Call PlanningThere will likely be many Sales Calls and each will have its own Sales Call StrategyOverall Planning Process Planning a Sales Call Game Planning From Account Strategy to Call Planning Each Call should ain an understand
Purdue - AGEC - 425
AGEC331 1.23.09Strategic PlanningStrategy Defined A strategy is a plan to assemble your resources, skills, knowledge, energy, time, people, and decide how to use them to accomplish your objectives. Its about making choices, determines how decisions a
Purdue - AGEC - 425
AGEC331 1.20.09MarketingMarketing big picture, including all customers, long term Looks are customers in groups or segments Marketing decisions are made in every area that touches the customer Determines the segments of customers who respond similarl
Purdue - AGEC - 425
AGEC 331 1.15.09 Next Tuesday: seating chart will be made MUST HAVE Copymat binder before then APRIL 7TH RSS EXAM make sure there are no conflicts About RSS (Ready Set Sell) Must pick product/service to sell Cannot be Cutco, Kirby, car etc Must be Busines
Purdue - MGMT - 351
M351 Notes, Class 4: Bonds, pages 688 - 703 A. Forms of bonds: secured or not, term, serial, callable, convertible, commodity, zero coupon (deep discount or zero interest), registered, bearer, income, and revenue. B. Bond terminology: 1. Stated or coupon
Purdue - MGMT - 351
Formulas and Diagrams for Future Values and Present Values Future value of a single cash flow: ( + ) 1 inPresent Value of a single cash flow:1 (1+ i )n(1+i)n 1 Future Value of an Annuity: iPresent Value of an Annuity:11 (1+ i )n in = number of peri
Purdue - MGMT - 351
NameSection Homework Quiz21.You have the following information for ABC Companys five-year, zero coupon note payable: note issued on September 1, 2010, effective interest rate is 6% with annual compounding assumed, the maturity amount of the note is $80
Purdue - MGMT - 351
Homework Quiz1 1. Described below are three transactions of Larson Company for 2010: On May 10, the company purchased goods from Fry Company for $50,000, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on
Purdue - MGMT - 351
NameSection Homework Quiz31.ABC Company owes $500,000 plus $80,000 accrued interest to Megacapital. ABCs debt is an 8% note which matures in 2018. ABC is in arrears as its operations became unprofitable three years ago and remain so. On December 31, 20
Purdue - MGMT - 351
M351 Notes, Class 2: Current Liabilities, pp. 636-651 A. Liability definition: probable future outflow arising from a present obligation resulting from past transactions 1. Current Liability definition: a liability that will likely require an outflow with
Purdue - MGMT - 351
EXERCISE 21-1 (a) This is a capital lease to Adams since the lease term (5 years) is greater than 75% of the economic life (6 years) of the leased asset. The lease term is 831/3% (5 6) of the assets economic life. (b) Computation of present value of minim
Purdue - MGMT - 351
EXERCISE 21-6(a) $38,514 x 5.7122* = $220,000 *Present value of an annuity due of 1 for 8 periods at 11%. (b) 1/1/11. Lease Receivable . Cost of Goods Sold . 220,000 . 170,000 220,000 170,000 Sales Inventory1/1/11. Cash 38,514 . Lease Receivable 38,514
Purdue - MGMT - 351
Example Homework QuizDay 2 1. Glaus Corp. signed a three-month, zero-interest-bearing note on November 1, 2010 for the purchase of $150,000 of inventory. The face value of the note was $152,205. Assuming Glaus used a Discount on Note Payable account to in
Purdue - MGMT - 351
EXERCISE 13-1 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) (p) Current liability. Current liability. Current liability or long-term liability depending on term of warranty. Current liability. Footnote disclosure (assume not probable and/or
Purdue - MGMT - 351
Forms of Borrowing Contracts1.Zero coupon note. As an example assume a $100,000, 6%, 5-year zero coupon note with annual compounding. proceeds $100,000Proceeds = ($100,000)(PVsa, n=5, i=6%) = ($100,000 x .7473) = $74,730 Effects on the accounts at borr
Purdue - MGMT - 351
PURDUE UNIVERSITY SCHOOL OF MANAGEMENTIntermediate Accounting IIManagement 351Spring 2010 Instructor Professor Robert Eskew Phone: 494-4469Office: 226 Krannert Center Hours: By appointmentAdministrative resource person: Ms. Sue Stone, Krannert 502, p
Purdue - MGMT - 351
EXERCISE 14-12 Reacquisition price ($1,000,000 x 101%). Less: Net carrying amount of bonds redeemed: Par value. Unamortized discount. Unamortized bond issue costs. Loss on redemption Calculation of unamortized discount Original amount of discount: $1,000,
Purdue - MGMT - 351
M351 Notes, Class 7: Leases, pages 1014-1135 A. What has to be true for point #2 on page 1118 to produce an advantage for the lessee? B. There are two kinds of leases: capital and operating C. Lease capitalization criteria (meet any one and a non-cancelab
Purdue - MGMT - 351
M351 Notes, Class 3: Current Liabilities and Contingencies, pp. 651-668 A. Gain Contingency: only tax loss carryforwards are recognized; other gain contingencies on page 651. B. Loss Contingency: an event that may produce a future payable/payment has occu
Purdue - MGMT - 351
Name Solution 1. Homework Quiz5SectionABC Company (the lessee) entered into a 10-year capital lease with XYZ Products (lessor). Annual rental payments are $50,000 with the first payment due at June 1, 2010. ABCs incremental borrowing rate is 11% and ABC
Purdue - MGMT - 351
PROBLEM 21-7(a)December 31, 2010 Leased Equipment Under Capital Leases. Lease Liability. 166,794 (To record leased asset and related obligations at the present value of 5 future annual payments of $40,000 discounted at 10%, $40,000 x 4.16986)166,794De
Purdue - MGMT - 351
EXERCISE 20-16 The excess of the cumulative net gain or loss over the corridor amount is amortized by dividing the excess by the average remaining service period of employees. The average remaining service period is computed as follows:Expected future ye
Purdue - MGMT - 351
EXERCISE 15-1 (a) Jan. 10 Cash (80,000 x $6). Common Stock (80,000 x $3). Paid-in Capital in Excess of Par. Organization Expense. Common Stock (5,000 x $3). Paid-in Capital in Excess of Par. Cash (30,000 x $8). Common Stock (30,000 x $3). Paid-in Capital
Purdue - MGMT - 351
EXERCISE 20-1 (a) Computation of pension expense: Service cost. Interest cost ($500,000 x .10). Expected return on plan assets. Prior service cost amortization. Pension expense for 2010. Pension Expense. Cash. Pension Asset /Liability. Other Comprehensive
Purdue - MGMT - 351
EXERCISE 20-9 (a) Note to financial statements disclosing components of 2010 pension expense: Note X: Net pension expense for 2010 is composed of the following components of pension cost: Service cost. Interest cost. Expected return on plan assets. Prior
Purdue - MGMT - 351
NameSection Homework Quiz61.Pension information for Woods, Inc. for the year 2011 is: Service cost Interest on projected benefit obligation Interest on vested benefits Amortization of prior service cost due to increase in benefits Expected return on pl
Purdue - MGMT - 351
EXERCISE 16-16 (a) Event Dates Outstanding Shares Outstanding Restatement 1.2 x 3.0 1.2 x 3.0 3.0 3.0 Fraction of Year 1/12 1/12 2/12 1/12 4/12 3/12 Weighted Shares 144,000 180,000 360,000 155,000 620,000 480,000 1,939,000Beginning balance Jan. 1Feb. 1 4
Purdue - MGMT - 351
EXERCISE 16-14 (a) 1/1/10 Unearned Compensation. Common Stock ($10 x 10,000). Paid-in Capital in Excess of Par. 12/31/11Compensation Expense ($500,000 5). Unearned Compensation. 500,000 100,000 400,000 100,000 100,000(b)7/25/14Common Stock. Paid-in Cap
Purdue - MGMT - 351
EXERCISE 16-4 (a) Cash . Bonds Payable. Premium on Bonds Payable. (To record issuance of $10,000,000 of 8% convertible debentures for $10,600,000. The bonds mature in twenty years, and each $1,000 bond is convertible into five shares of $30 par value comm
Purdue - MGMT - 351
EXERCISE 15-12 (a) 6/1 Retained Earnings. Dividends Payable. 6/14 6/30 No entry on date of record. Dividends Payable. Cash.(b)6,000,000 6,000,0006,000,000 6,000,000If this were a liquidating dividend, the debit entry on the date of declaration would b
Purdue - MGMT - 351
EXERCISE 15-8 (a) $1,000,000 x 6% = $60,000; $60,000 x 3 = $180,000. The cumulative dividend is disclosed in a note to the stockholders equity section; it is not reported as a liability. Preferred Stock (3,000 x $100). Common Stock (3,000 x 7 x $10). Paid
Purdue - MGMT - 351
Example Problem On Taxes Solution Income before Tax is $200,000. Tax rate is 40%. Financial Report To Shareholders $20,000 5,000 30,000 11,000 24,000 9,000 10,000 Tax Return $35,000 4,000 8,000 17,000 -3,000Depreciation Warranty expense Installment sales
Purdue - MGMT - 351
EXERCISE 19-4 (a) Pretax financial income for 2010. $ 80,000 Excess depreciation per tax return. (16,000) Excess rent collected over rent earned. 27,000 Nondeductible fines. 11,000 Taxable income. $102,000 Taxable income. $102,000 Enacted tax rate. 30% In
Purdue - MGMT - 351
EXERCISE 17-1 (a) 1 (b) 2 (c) 1 (d) 2 (e) 3 (f) 2EXERCISE 17-2 (a) January 1, 2010 Held-to-Maturity Securities. Cash. (b) December 31, 2010 Cash .30,000 Interest Revenue. (c) December 31, 2011 Cash .30,000 Interest Revenue. 30,000 30,000 300,000 300,000
Purdue - MGMT - 351
PROBLEM 17-7(a)February 1 Available-for-Sale Securities. Interest Revenue (4/12 x .10 x $300,000). Cash. 310,000 April 1 300,000 10,000Cash . 15,000 Interest Revenue ($300,000 x .10 x 6/12). 15,000 July 1 Available-for-Sale Securities. Interest Revenue
Purdue - MGMT - 351
Homework Quiz9 Name SectionRecall that: Cash + Other Assets = L + PIC + BRE + R X + G L D1. 2. 3. 4. 5. 6. 7. 8. 9.What was 2007 Net Income? What was the dollar amount of 2007 Dividends? (2 points) What was 2007 Treasury Stock purchases in shares? In d
Purdue - MGMT - 351
Homework Quiz8 Name SectionRecall that: Cash + Other Assets = L + PIC + BRE + R X + G L D Transaction 1. 2. 3. 4. On 1/19/10 ABC Companys corporate charter authorized 500,000 shares of $10 par value stock of which 300,000 shares had been issued (sold) an
Purdue - MGMT - 351
Homework Quiz7 Name 1. SectionPension Worksheet. Using the information below, complete the pension worksheet for 2010 on the next page.Amounts at December 31, 2009 a. Accumulated OCI (Loss) $91,000 (Prior service cost recognized in 2009) b. PBO Balance
Purdue - MGMT - 351
NameSection Homework Quiz6 ReplaceRecall that: Cash + Other Assets = L + PIC + BRE + R X + G L DTransaction 1. 2. 3. 4.ABC Company sold (issued) 10,000 shares of its $12 par value common stock for $31.50 per share. ABC Company purchased from sharehold
Purdue - MGMT - 351
M351 Notes, Class 13: Stockholders Equity, pages 740-756 A. Stockholders share proportionally: 1. 2. 3. 4. in profits and losses in management (right to vote for the board) in assets in liquidation in new issues of stock of the same class (preemptive righ
Purdue - MGMT - 351
M351 Notes, Class 11: Pensions and OPEB, pages 1067-1079 A. Pensions are to be recognized in the companys balance sheet and in the notes to its financial statements. B. In the companys balance sheet the net funded status (a net pension asset or a net pens
Purdue - MGMT - 351
Homework Quiz11 Name SectionABC Company had 552,000 issued and outstanding shares of $10 par common stock at 1/1/10. ABC also had 10,000 shares of $100 par, 6% convertible preferred stock issued and outstanding at 1/1/10. Each $100 par preferred share is
Purdue - MGMT - 351
M351 Notes, Class 21, Taxes Day 1, pp. 990-1005 A. Terminology: the following phrases all mean the same amount on the financial statement prepared for ownerspretax financial income, income before taxes, income for financial reporting, income for book purp
Purdue - MGMT - 351
Homework Quiz10 Name SectionABC Company had 490,000 issued and outstanding shares of $10 par common stock at 1/1/10. ABC also had 10,000 shares of $100 par, 6% preferred stock issued and outstanding at 1/1/10. During 2010 ABC did the following: a. Issued
Purdue - MGMT - 351
M351 Notes, Class 18: Dilutive Securities and EPS, pages 827-834 A. Restricted stock compensation transfers shares of stock to employees. The restricted shares cannot be sold, transferred, or pledged until the award vests (usually 3 to 5 years). During th
Purdue - MGMT - 351
M351 Notes, Class 15: Stockholders Equity, pages 765-774 A. The balance sheet version of the statement of stockholders equity appears on page 765 in Illustration 15-13. Another version of a statement of stockholders equity appears on page 766 in Illustrat
Purdue - MGMT - 351
M351 Notes, Class 17: Dilutive Securities and EPS, pages 811-827 A. Per share amounts are presented as needed for (see Illustration 16-7 on page 812): Income from continuing operations, net of tax Gain or loss from discontinued operations Income before ex
Purdue - MGMT - 351
M351 Notes, Class 16: Dilutive Securities and EPS, pages 794-811 A. At issuance Convertible Bonds are recorded as a straight debt instrument with all of the proceeds in debt accounts. For example, assume that ABC Company issues 2,000 bonds with a face val
Purdue - MGMT - 351
M351 Notes, Class 14: Stockholders Equity, pages 756-765 A. In order to pay cash dividends a company must have sufficient retained earnings and cash. B. There are four kinds of dividends: 1. 2. 3. 4. cash property liquidating stock (usually common)Divide
Purdue - MGMT - 351
M351 Notes, Class 20, Equity Method, Impairments, Category Transfers, pp. 870-883 A. Accounting using the equity method: When a company purchases shares of another companys common stock, the investment is recorded at cost. For example, assume an investor
Purdue - MGMT - 351
M351 Notes, Class 19, Investment in Debt Securities, pp. 856-870 A. Debt securities (issued by other companies, or governmental entities; does not include A/R and loans receivable as those instruments do not meet the definition of securities) are to be pl
Purdue - MGMT - 351
EXERCISE 19-8 (a) 2010 Income Tax Expense. Deferred Tax Asset ($20,000 x 40%). Deferred Tax Liability ($30,000 x 40%). Income Tax Payable ($830,000 x 40%). 2011 Income Tax Expense. Deferred Tax Asset ($10,000 x 40%). Deferred Tax Liability ($40,000 x 40%)
Purdue - MGMT - 351
Homework Quiz12 Name SectionABC Companys pretax accounting income is $500,000 and its tax rate is 40%. The following items cause taxable income to be different from pretax accounting income: a. Depreciation expense on the tax return is $120,000 and is $9
Purdue - MGMT - 351
M351 Notes, Class 22, Taxes Day 1, pp. 1006-1011 A. Loss carrybackwhen a company has a net operating loss on its tax return, it may carry back the loss to the two previous years and offset profits in those two previous years and receive refunds for taxes
Purdue - MGMT - 351
M351 Notes, Class 22, Taxes Day 1, pp. 1006-1011 A. Loss carrybackwhen a company has a net operating loss on its tax return, it may carry back the loss to the two previous years and offset profits in those two previous years and receive refunds for taxes
Purdue - MGMT - 351
Name Final Exam Tentative Solution Management 351 Spring 2010Section:1. This exam consists of 20 multiple choice items and 4 problems (with several parts each). The exam is 15 pages plus this cover page. Please check to see that your exam document is co
Purdue - MGMT - 351
Statement of Cash Flows Example Problem Sales Cost of Goods Sold Depreciation Expense Gain on sale machinery Net income Accounts Receivable Inventory Accounts Payable Machinery Accumulated Depreciation 2011 10,000 (6,000) (900) 480 3,580 12/31/11 1,000 1,
Purdue - MGMT - 351
M351 Notes, Class 25: Changes & Errors, pages 1197-1214 A. Correction of errors: Restate (go back and change [write over] presented statement amounts to change incorrect statement amounts to correct amounts. Also make a journal entry, if necessary, to cha