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Question 2 7 Marks
Julie and Luigi Ketano have decided to lease premises to open a food outlet Pasta Passion. They intend to provide a wide range of products, from a variety of pasta and associated ingredients to take away pasta dishes such as lasagne and pasta salads.
A. Distinguish between economic and non economic information relevant to making decisions.
B. Write a brief memo to Julie and Luigi, identifying the 3 types of economic decisions they will be required to make and 3 types of non-economic information they might be required to consider in establishing their business.
QST, 3
B. What does relevance mean in terms of the accounting statements you produced? How would the financial statements you produced help the supplier of building materials decide whether or not to trade with Steven. What parts of the financial statements would be positive indicators that SConstructions would pay on time and what items may cause some concern for the supplier?
C. Does SConstructions conform to the following accounting assumptions and why? a. Accounting Entity assumption b. Going concern assumption
QST, 4
Refer to the information contained in the Nike Code of Ethics Inside the Lines
A. What is meant by being socially responsible?
B. B. Would the following situations be considered a breach of the Nike code of ethics and why? a. A company director is asking that the company contribute $10000 to assist him to run for office as a member of parliament b. A retailer offers executive members of the company all expenses paid holidays if they can have the rights to release a new product first c. A director is aware that NIKE is shortly to announce a substantial profit decrease and thinks it would be a good time to sell shares d. As an employee of NIKE you are in charge of outsourcing production of some of the company’s products. You are approached by a relative to assign a substantial contract to their firm.

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