Question

Mario is the new supply chain manager at Excel Air Enterprises Inc., a U.S. manufacturing company based in South Carolina that provides air blasting and painting equipment. The company recently started selling equipment in Bangladesh. To date, Excel’s only customer in Bangladesh is Modu Equipment. Modu’s president, Vivek Sharma, complained that products have not been delivered on time. Vivek was told in January that it would take four weeks to have all ordered products delivered to Bangladesh, but it is now March and he has only received some of the equipment. He added that he ordered motor wheels urgently needed for a client, but they have not yet arrived, despite his flagging the order to the previous supply chain manager. Vivek has also been waiting on Excel to send a signed statement certifying the country of origin of the products and that the products were in accordance with the invoice. Vivek advised Mario that if Excel did not fix its problems immediately, Modu Equipment would begin using a Miami-based company that had recently approached him. Mario began investigating what type of equipment was being shipped and where the bottleneck was. He reviewed the purchase order and saw that Modu had ordered storage elevators, blast cabinets, vacuum equipment and a few smaller items including the motor wheels. With this information, he would determine how the products were sent from the warehouse and then try to track the exact location of the products on their way to Bangladesh. Trucking and Packing from Excel In March, Excel started to use the low-cost U.S. carrier Demplar Logistics to transport larger products from the warehouse to the shipping port in Charleston, North Carolina. The owners of Demplar and Excel were good friends. The companies had negotiated a new two-year agreement in early March. Mario searched through emails and files, but couldn’t find the contract from Demplar Logistics. He had no idea what the carrier was supposed to do. He contacted Demplar to get further details about the services it offered Excel, but was unable to reach anyone there. Mario then went to the warehouse to speak with Keith, the shipping and warehouse manager, about the products shipped to Modu—particularly the motor wheels. He was surprised when Keith told him, “We thought the motor wheels could go with the rest of the equipment, so we packed them in the sea freight container, too. You know, it may save us some money. We ran out of filling Global Value Chain Module — International Distribution © FITT 2 material, but don’t worry—we packed it in a way that nothing will happen to them.” Mario knew that some of the larger equipment had protruding parts, so he became concerned the smaller items would be damaged en route. Mario also realised the blast cabinet Modu had ordered was still in the warehouse. Keith said the light box component had to be removed from the top of the blast cabinet in order to meet the sea freight container height regulations, and his staff needed the company’s engineer to help make the modification before the shipment could proceed. Modu was also waiting on the vacuum equipment, which was found next to the blast cabinet in the warehouse. Keith and his staff had never sent vacuum equipment by sea, and they needed a forty-foot container with an open top. Someone had ordered a hard top container instead. If the open-top container was not used, the container could not be loaded by crane on to the cargo ship. Mario thought to himself, “How did we not know this before?” After Mario finished speaking with Keith, he went back to the office and received a call from Steve at Demplar Logistics. Steve advised that there was a verbal contract in place between Demplar and Excel; a written contract was still being prepared. He also said Demplar was experiencing a shortage of truck drivers and could not come for another four to five days to carry containers to the port. Steve added that Mario would be very fortunate to find a company able to assist in trucking, as finding new truck drivers to replace those retiring had become a nationwide problem. Mario had to find a solution to this, as he needed to get equipment moved not only internationally, but in the U.S. as well. The Compromise Mario called the freight forwarders that Excel used, DWE World Express, which offered a full range of services, such as export packing and containerization. To save costs, Excel did not use DWE’s U.S. pick-up service or any other packaged services. It used DWE as shipping agents and customs brokers to arrange the export customs clearance and to pay the export duties. Mario was used to working with freight forwarders who offered door-to-door service, so this would be an adjustment. However, DWE did offer satellite tracking, and Mario used his smartphone to track Excel’s latest shipment to Modu through the mobile application. To Mario’s disappointment, the latest shipment was in Bangladesh, but delayed due to customs clearance issues. At the seaport in Chittagong, Bangladesh, goods are unloaded from the ship and then inspected by customs and stored. The consignee has four days to provide the required documents needed for customs clearance and then remove the goods from the storage area. Vivek has been waiting for a missing document from Excel to be able to provide the complete set of documents to Bangladeshi customs. The demurrage has been accumulating for the past two weeks. Vivek knew that the sales agreement with Excel stated that Modu was responsible for charges once the shipment arrived in Bangladesh, but as he believed the missing documentation was Excel’s fault, he wanted Excel to pay for the demurrage. As a part of the sales contract between Excel and Modu, they negotiated the following shipping delivery terms: “CFR, Port of Chittagong, Bangladesh, Incoterms® 2010.” Modu had a great relationship with its own freight forwarders in Bangladesh and could negotiate favourable freight rates. With this in mind, Excel had already offered Modu a reduced price for its equipment. Global Value Chain Module — International Distribution © FITT 3 Mario called Vivek to explain he would be getting all the outstanding equipment shipped as soon as possible. He prepared the signed statement certifying the country of origin and sent it by email to Vivek, hoping the Bangladeshi customs would accept it until the original arrived by courier in three days. Mario also offered to pay for the extra demurrage. Vivek was still not happy with the service offered by Excel. He told Mario he would not be purchasing equipment from Excel again. Learning Outcomes This case study relates to the following learning outcomes from the module International Distribution in the course Global Value Chain: • Decide on the most efficient method(s) of transportation based on identified requirements to minimize risks, maintain quality of the product, minimize costs and ensure on-time delivery to the target market. • Prepare goods for shipping while following appropriate procedures, such as packing, lashing, container selection, to minimize risks and maintain the quality of goods. • Ensure regulatory requirements for exporting and importing are met. • Comply with customs regulations, protocols and trade facilitation programs when transporting goods across borders. • Contract and deliver services to meet needs of the clients, in a manner that complies with the importing country’s requirements. Please refer to your Case Study 1 A Case of Late Deliveries which you can view in Documents in LMS Amp educator. According to the Nine Supplier Interaction Model, which 2 groups of suppliers could Excel Air Enterprises Inc. fit into best in its relationship with Modu Equipment? Give at least two reasons for your answer

Name: mario is the new supply chain manager at excel air enterprises inc a us manufacturing company based in south carolina that provides air blasting and painting equipment the company recently started sel
Uploaded: 2023-01-06T07:03:54-08:00
Duration: 1 min 31 s
Channel: Sri K
Description: mario is the new supply chain manager at excel air enterprises inc a us manufacturing company based in south carolina that provides air blasting and painting equipment the company recently started sel

          Mario is the new supply chain manager at Excel Air Enterprises
Inc., a U.S. manufacturing company based in South Carolina that
provides air blasting and painting equipment. The company recently
started selling equipment in Bangladesh. To date, Excel’s only
customer in Bangladesh is Modu Equipment. Modu’s president, Vivek
Sharma, complained that products have not been delivered on time.
Vivek was told in January that it would take four weeks to have all
ordered products delivered to Bangladesh, but it is now March and
he has only received some of the equipment. He added that he
ordered motor wheels urgently needed for a client, but they have
not yet arrived, despite his flagging the order to the previous
supply chain manager. Vivek has also been waiting on Excel to send
a signed statement certifying the country of origin of the products
and that the products were in accordance with the invoice. Vivek
advised Mario that if Excel did not fix its problems immediately,
Modu Equipment would begin using a Miami-based company that had
recently approached him. Mario began investigating what type of
equipment was being shipped and where the bottleneck was. He
reviewed the purchase order and saw that Modu had ordered storage
elevators, blast cabinets, vacuum equipment and a few smaller items
including the motor wheels. With this information, he would
determine how the products were sent from the warehouse and then
try to track the exact location of the products on their way to
Bangladesh. Trucking and Packing from Excel In March, Excel started
to use the low-cost U.S. carrier Demplar Logistics to transport
larger products from the warehouse to the shipping port in
Charleston, North Carolina. The owners of Demplar and Excel were
good friends. The companies had negotiated a new two-year agreement
in early March. Mario searched through emails and files, but
couldn’t find the contract from Demplar Logistics. He had no idea
what the carrier was supposed to do. He contacted Demplar to get
further details about the services it offered Excel, but was unable
to reach anyone there. Mario then went to the warehouse to speak
with Keith, the shipping and warehouse manager, about the products
shipped to Modu—particularly the motor wheels. He was surprised
when Keith told him, “We thought the motor wheels could go with the
rest of the equipment, so we packed them in the sea freight
container, too. You know, it may save us some money. We ran out of
filling Global Value Chain Module — International Distribution ©
FITT 2 material, but don’t worry—we packed it in a way that nothing
will happen to them.” Mario knew that some of the larger equipment
had protruding parts, so he became concerned the smaller items
would be damaged en route. Mario also realised the blast cabinet
Modu had ordered was still in the warehouse. Keith said the light
box component had to be removed from the top of the blast cabinet
in order to meet the sea freight container height regulations, and
his staff needed the company’s engineer to help make the
modification before the shipment could proceed. Modu was also
waiting on the vacuum equipment, which was found next to the blast
cabinet in the warehouse. Keith and his staff had never sent vacuum
equipment by sea, and they needed a forty-foot container with an
open top. Someone had ordered a hard top container instead. If the
open-top container was not used, the container could not be loaded
by crane on to the cargo ship. Mario thought to himself, “How did
we not know this before?” After Mario finished speaking with Keith,
he went back to the office and received a call from Steve at
Demplar Logistics. Steve advised that there was a verbal contract
in place between Demplar and Excel; a written contract was still
being prepared. He also said Demplar was experiencing a shortage of
truck drivers and could not come for another four to five days to
carry containers to the port. Steve added that Mario would be very
fortunate to find a company able to assist in trucking, as finding
new truck drivers to replace those retiring had become a nationwide
problem. Mario had to find a solution to this, as he needed to get
equipment moved not only internationally, but in the U.S. as well.
The Compromise Mario called the freight forwarders that Excel used,
DWE World Express, which offered a full range of services, such as
export packing and containerization. To save costs, Excel did not
use DWE’s U.S. pick-up service or any other packaged services. It
used DWE as shipping agents and customs brokers to arrange the
export customs clearance and to pay the export duties. Mario was
used to working with freight forwarders who offered door-to-door
service, so this would be an adjustment. However, DWE did offer
satellite tracking, and Mario used his smartphone to track Excel’s
latest shipment to Modu through the mobile application. To Mario’s
disappointment, the latest shipment was in Bangladesh, but delayed
due to customs clearance issues. At the seaport in Chittagong,
Bangladesh, goods are unloaded from the ship and then inspected by
customs and stored. The consignee has four days to provide the
required documents needed for customs clearance and then remove the
goods from the storage area. Vivek has been waiting for a missing
document from Excel to be able to provide the complete set of
documents to Bangladeshi customs. The demurrage has been
accumulating for the past two weeks. Vivek knew that the sales
agreement with Excel stated that Modu was responsible for charges
once the shipment arrived in Bangladesh, but as he believed the
missing documentation was Excel’s fault, he wanted Excel to pay for
the demurrage. As a part of the sales contract between Excel and
Modu, they negotiated the following shipping delivery terms: “CFR,
Port of Chittagong, Bangladesh, Incoterms® 2010.” Modu had a great
relationship with its own freight forwarders in Bangladesh and
could negotiate favourable freight rates. With this in mind, Excel
had already offered Modu a reduced price for its equipment. Global
Value Chain Module — International Distribution © FITT 3 Mario
called Vivek to explain he would be getting all the outstanding
equipment shipped as soon as possible. He prepared the signed
statement certifying the country of origin and sent it by email to
Vivek, hoping the Bangladeshi customs would accept it until the
original arrived by courier in three days. Mario also offered to
pay for the extra demurrage. Vivek was still not happy with the
service offered by Excel. He told Mario he would not be purchasing
equipment from Excel again.
Learning Outcomes
This case study relates to the following learning outcomes from
the module International Distribution in the course Global Value
Chain:
• Decide on the most efficient method(s) of transportation based
on identified requirements to minimize risks, maintain quality of
the product, minimize costs and ensure on-time delivery to the
target market.
• Prepare goods for shipping while following appropriate
procedures, such as packing, lashing, container selection, to
minimize risks and maintain the quality of goods.
• Ensure regulatory requirements for exporting and importing are
met. • Comply with customs regulations, protocols and trade
facilitation programs when transporting goods across borders.
• Contract and deliver services to meet needs of the clients, in
a manner that complies with the importing country’s
requirements.
Please refer to your Case Study 1 A Case of Late
Deliveries which you can view in Documents in LMS Amp
educator. According to the Nine Supplier Interaction Model, which 2
groups of suppliers could Excel Air Enterprises Inc. fit into best
in its relationship with Modu Equipment? Give at least two reasons
for your answer

Added by Patrick G.

QUESTION 1 Kasabrunu Enterprise is a business operating in the second-hand clothing in Kwadaso. Mr. Bruni the owner of Kasabrunu Enterprise (KE) employed Mr. Ojidomi a BSc. Accounting graduate as the Accountant. Business is booming and KE is expected to be in operation for a long time. Mr. Odjidomi has been with the business for 5 years and has assured Mr. Bruni that profits declared will not be deceptive since the same method will be continuously used for the accounting treatment of similar items until Mr. Bruni decides to change from dealing in second hand clothing to the purchase and sale of spare parts which they discussed. As part of the policy adopted by the business, the Accountant records only transactions that can be valued in monetary terms in the books of account and produces financial information at regular period for the perusal of Mr. Bruni. On reaching home, Sefakor Ojidomi, the daughter of Mr. Ojidomi who is pursuing an accounting programme in Owusuwusu College of Accountancy asked his father to guide her with an assignment. Sikadanka, the Chairman and CEO of Defenders Ltd recently confronted the Chief Accountant of the company over the way and manner the financial statements were presented for the 2019 financial year. The following points are summaries of the CEO’s reservations about the financial statements: He argued that the values of the company’s assets be shown at current market values since these values will provide a better view of the company’s value. The Chief Accountant is still insisting that the assets should be stated at original cost. He expressed shock when the financial statements did not show a value for the company’s efficient staff. He argued that the company’s beautiful and handsome sales personnel are valuable assets used to attract customers and therefore insisted that this “power of attraction” should be recognised in the books of accounts and reflected on the face of the financial statement. He was worried when a potential sale of millions of Ghana cedis to a certain buyer from whom purchase orders have been received have not been recognized in the books of accounts as sales. The Chief Accountant argued that these potential customers have only been sent pro-forma invoices and so are not obliged to pay the company. The CEO recently bought a saloon car for his son out of company funds. The Chief Accountant recorded this on a current account for the CEO. This resulted in an intense argument. The CEO threatened to dismiss the Chief Accountant should he refuse to recognize the purchase of the saloon car as a transaction of the company. The CEO insisted that the value of expired inventory should be maintained in the books of accounts and not written off. Sefakor presented the assignment and scored a 100% for the 1st time. On the 27th of March, 2019, Mr. Ogboro, the purchasing officer of KE prepared documents to purchase on credit 1,500 bales of second-hand clothing from Osimeyo and brothers (OB.). O.B delivered the goods to KE 4 (four) days after the order was placed with all appropriate documents. KE only deals in male second-hand clothing but included in the goods delivered were 15 bales of ladies second-hand clothing which Mr. Ogboro returned to OB as it did not meet the description provided. Customers purchased the goods either on credit or outright payment with cash or cheque. Documents showing evidence of payment were given to these customers. All customers who purchased on credit paid through their bankers by transfers made directly to the bank accounts of KE. KE is later advised accordingly by her bankers. Mr. Odjidomi prepares bank reconciliation statements quarterly. He made a request on the 15th of March 2019 for a bank statement from Obidibi commercial bank. Upon receipt of the bank statement, he compared the balance with that of the Cash book and it did not agree. The Accountant’s friend, Oyeni Bawabawat, an accounts officer at Oshikishiki Enterprise requested for reasons for the disagreement. He confessed his inability to grasp these reasons during his studies. After an in-depth explanation, Mr. Odjidomi, the Accountant asked his friend to assist him prepare a bank reconciliation statement as he had to urgently attend an important meeting. The Accountant provided his friend with the information below: The cash book, bank column of Kasabrunu Enterprise showed a credit balance of GHS578,000 while the bank statement for the period showed a debit balance of GH¢338,000 on 31st March,2019. A thorough investigation revealed the following: Cheques drawn amounting to GHS195,0000 had not been presented to the bank for payment. A cash deposit into the bank of GHS97,800 was recorded as GHS79,800 in the cash book. Bank charges of GHS10,900 and standing order payment of GHS12,100 relating to telephone bills entered on the bank statement had not been recorded in the cash book. A cheque of GHS245,000 drawn by the firm had been charged by the bank in error to another customer’s account. A dividend of GHS15,000 paid directly to the bank had not been entered in the cash book. A cheque for GHS20,000 paid into bank had been dishonoured and shown as such by the bank but no entry of the dishonour had been made in the cash book. The following cheques and cash deposits entered in the cash book and paid to the bank have not been credited by the bank: cash deposits GHS76,500; cheques receipts: Maame Dakona GH¢54,500; Ntekuma Ananse GHS34,000. A cheque drawn for GHS32,000 had been entered in the cash book in the error GHS23,000. A cheque for GHS16,000 drawn by another customer of the same name had been charged to the firm’s bank account in error. After adjusting the cash book balance, Oyeni Bawabawat prepared the bank reconciliation statement. After waiting for 3 hours, he was informed that Mr. Odjidomi will be in the meeting for 6 hours. Oyeni then left for his office. Required: A i) Identify and explain two (2) accounting policies adopted by Kasabrunu Enterprise (1mark) ii) State the accounting concept in each of the CEO’s reservation in Sefakor’s assignment. Explain your reason for choosing the concept. NB: Present your answer in a tabular form as illustrated below Concept/Principle | Definition/Explanation | Reason (5 marks) B. Identify and explain the use of three (3) source documents in the transaction to purchase and sell 1,500 bales of second-hand clothing. (4.5 marks) C. i) State and explain six (6) reasons Mr. Odjidomi will give to his friend for the disagreement in the cash book and bank statement balances. (3 marks) ii) Imagine you are Oyeni Bawabawat. Show the appropriate adjustments to be made in the cash book (4.5 marks) Prepare a Bank Reconciliation Statement for Mr. Odjidomi. (2 marks) (Total 20 marks) QUESTION 2 Halibatu, a sole trader, deals in phones and computer accessories at the Ohiamankwa Enterprise. The following Trial Balance was extracted from her books at 31st December, 2019 DR. GHS’000 | CR. GHS’000 Drawings & Capital: 2,128 | 18,043 Receivables & Payables: 7,689 | 5,462 Purchases & Sales: 62,101 | 122,242 Rent & Rates: 900 Gas &Electricity: 246 Carriage: 200 Salaries & Wages: 8,268 Bad debts: 247 Allowance for receivables: 326 Inventory (1/1/2019): 9,274 Insurance: 172 Discounts: 150 | 350 Advertising: 933 Cash at bank & on hand: 2,142 Investment in 91-Day Treasury Bills: 740 Interest on investment received: 56 Motor Vans at cost: 16,000 Computers (cost GH¢5million): 3,600 Provision for depreciation: Motor Vans | 8,600 Motor Expenses: 861 Returns: 232 | 54 Rent received: 750 Freehold premises at cost: 40,000 Totals: 155,883 | 155,883 Additional information: a) Inventory as at 31st December, 2019 was GHS 9,884,000 b) Rent & Rates paid covered the period 1st January, 2019 to 31st March, 2020. c) Some tenants have not yet paid their rent to Ohiamankwa Enterprise. The amount involved was GHS 250,000. d) Electricity bill of GHS 85,000 for December, 2019 has just been received. Halibatu intends to pay within the third week of January, 2020. No record has been made in the books. e) GHS 80,000 out of total carriage of GHS 200,000 relates to carriage on purchases made f) Allowance for receivables is adjusted to 5% of total receivables at the end of the year. g) An amount of GHS 202,000 was spent on the personal vehicle of Halibatu. This was included in the motor expenses. h) Depreciation is to be charged on vans at annual rate of 20% on cost. Computers are to be depreciated at the rate of 25% using the reducing balance method. You are required to prepare: i) Income statement for the year ended 31st December, 2019 ii) Statement of financial position as at 31st December, 2019 (Total 20 marks) QUESTION 3 A The agreement of the trial balance totals is an indication that all transactions have been properly recorded in the books of accounts. Do you agree with this statement? Required: Outline 4 reasons to justify your response. (8 marks) B ABC Ltd started business on 1/1/14, and its financial year ends on 31st December each year. The following information was extracted from the company’s asset register. DATE | TRANSACTION | AMOUNT (GHS) 2016 January, 1 | Purchased one motor van | 58,500 2016 September, 1 | Purchased two motor vans | 78,000 each 2018 March, 1 | Purchased one motor van | 45,200 2018 May, 2 | Sold the motor van purchased in January,2016 | 18,240 2019 April 1 | Purchased three motor vans | 62,000 each Additional Information The company’s policy is to depreciate Motor vehicles at a rate of 20% per annum on cost. You are required to prepare: i) The Motor vehicles account (2016-2019) ii) Provision for depreciation account (2016-2019) iii) Disposal account for 2018 iv) Statement of profit or loss extract for 2018 and 2019 v) Statement of financial position extract for 2018 and 2019 (12 marks) (Total 20 marks)

Sri K.

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