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ACF 100: Introduction to Accounting and Finance

Resit Coursework

Note: Students need to attempt both the sections A and B

This is an individual assignment. Students need to submit hard copy of


the assignment at the program office and soft copy to be uploaded on
the VLE on or before the submission deadline provided by the program
office.

Submission Deadline: 9th August 2010 by 1700 hrs

Section A
1. Case
Shiva is a self employed person and belongs to Sohna. He is an M.A. (Eco) from a
local college. To start his own unit, he has obtained an agency from Nutrine. The
normal lot which he has to purchase and distribute requires the working capital
of Rs.125,000. The space for business is his own house having notional rent of
Rs.10,000 pm. He has employed only one employee for marketing the toffee in
the town and offered him a salary of Rs.800 pm. In-house responsibilities, like
writing letters, maintaining books, activities related to bank and general PR job
etc are handled by Shiva.

Shiva is unaware of maintenance of books of account. He has requested his


friend’s son Mr. Aditya, who is in final year of his commerce graduation to give
him the guidance for maintaining the books of account.

Aditya advised that he would be in a position to help him once a record of all
transaction is made available to him. A month has passed and Shiva found that
the following transactions took place.

Date Transactions Amou


nt
April Rs.
10
1 Brought in capital 125,0
00
2 Deposited in Bank 50,00
0
5 Purchased goods from Nutrine (30% down payment though a 100,0
bank cheque) 00
6 Sold goods to Ramlal on credit 14,00
0
8 Returned goods to Nutrine due to poor quality 5,000
10 Ramlal returned goods 2,000
13 Purchased furniture by paying cash 15,00
0
15 Withdrawn cash from Bank for official use 500
19 Sold goods to Manish & Co. for cash 22,00
0
21 Purchased machinery for packing (payment made in cash) 12,75
0
23 Issued cheque for Nutrine 30,00
0
25 Paid in cash for the stationery purchases 4,000
26 Received from Ramlal 12,00
0
27 Deposited in Bank 30,00
0
30 Typewriter was purchased on credit from Neeraj 3,400
30 Shiva withdrew cash for personal use from Bank 2,900
30 Paid salary 800

Shiva has recorded all the transaction but Aditya has gone out of station for
collection of primary data for his project work and he will be back after a month.
Meanwhile, Shiva needs your help in the below mentioned points
1. Preparing journal, ledger and trial balance
2. After looking at the one month progress, do you suggest Shiva to continue
this business? Give suitable reasons for your answers.
(Marks: 20 + 10)

Section B

AcF 100 (Business Environment)

Assignment

Case Study: Motivating Partners at Starbucks

Starbucks with more than 3,300 locations worldwide, serves millions of coffee
lovers each week. Having a history of excellent growth and profitability,
Starbucks continues to expand. It opens “virtually a store a day.” In addition to
sales of whole bean coffees, fresh brewed espresso beverages, pastries and
confections, and coffee-related accessories and equipment in company operated
retail stores. Starbucks sells whole coffee beans through other outlets including
supermarkets and online. It also manufactures and sells a line of premium ice
creams and the bottled Frappucino coffee drink.

Famed for its coffee products, the company also enjoys a glowing reputation as a
progressive employer. Known for its employee policies and motivational
programs, Starbucks has been included in Fortune magazine’s list of “The 100
Best Companies to Work For” several times.

The basis of Starbucks reputation as a great place to work is contained in the six
guiding principles that form the foundation of the company’s mission statement.
One of these guiding principles is to “provide a great work environment and treat
each other with respect and dignity.” Starbucks tries to “create a work
environment that is lively, exciting and full of enthusiasm.”

One overt symbol of the guiding principle is the name to all Starbucks’
employees. Everyone is called a partner. More important than the name,
however, is a company culture devoted to developing and motivating the
partners. “Starbucks has created a culture dedicated to challenging employees…
to be their best.” Starbucks is dedicated to investing in, supporting and engaging
its partners in the continual reinvention of the company.

The challenge to “be the best” begins with training. All new coffee store
employees (referred to as baristas) receive 25 hours of classroom training under
the guidance of partners who have been specially trained. The training includes
coffee knowledge and customer service skills. Management trainees participate
in up to 12 weeks of classes. They also receive coaching on leadership skills,
diversity awareness, advanced customer services, succession planning and
career development.

Starbucks’ motivational program for its partners consists of “a special blend of


employee benefits” and a work life / personal life program that focuses on the
physical, emotional, mental and creative aspects of each individual.

The company offers a comprehensive benefits package to all partners, including


part-time employees who work a minimum of 20 hours per week. The benefits
package includes full medical and dental insurance coverage, disability and life
insurance, vacation days, a retirement savings plan with matching company
contributions, discounted stock purchase plans, and stock options as part of
Starbuck BEAN STOCK program. Starbucks established the BEAN STOCK program
in 1991 as a way of investing in the employee partners and creating ownership
throughout the company.

The work/life program includes on site fitness services, flexible work schedules,
referral and educational support for child care and elder care issues and a
program that links employees who have shared interests and hobbies. Starbucks
continually seeks to develop programs that address the life stages and personal
needs of its partners. In fact, the company conducts periodic surveys of its
partners to assess their needs and it responds accordingly with appropriate
work/life solutions. “We will ask our partners constantly what’s important to
them and consider these things as we plan into the coming years”, says a
Starbucks manager.

Open communication and innovative thinking both of which positively influence


the partners’ motivation are encouraged through various partners’ relations
mechanisms. These mechanisms include Mission Review, Open Forums and the
Warm Regards recognition program. Mission Review “encourages partners to tell
the company how they’re feeling and ask any questions.” Open forums are held
on a regular basis to review performance, recognize achievements and consider
the future. The Warm Regards program recognizes “outstanding achievement
that embodies the guiding principles, mission and goals of Starbucks.”

These programs benefit both the partners and the company. One of the benefits
for Starbucks is a reduction in operating costs. The company has relatively low
health-care costs, reduced absenteeism and one of the lowest turnover rates in
the restaurant industry. The lower turnover rates also reduce training costs.
Another benefit for Starbucks is the quality of customer services that grows out
of the partners’ commitment to the company.

“We’re profitable because of the value system of our company” observes


Howard Schulz, Starbucks’ Chairman and Chief Global Strategist. “American
companies have failed to realize that there’s tremendous value in inspiring
people to share a common purpose of self-esteem, self-respect, and
appreciation.” Starbucks is “about people – a humanistic approach to doing
business that produces bottom-line results.”

Based on the above case study answer the following question:

Question: Given Starbucks’ benefits package and work/life program, what


insights have you gained about its approach to employee motivation?
Explain your answer using relevant theories.

Word limit: 500-600

Maximum Marks: 20