Chapter 10 - Problem Solving
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On January 1, 2020, Novotna Company purchased $400,000, 8% bonds of Aguirre Co. for$369,114. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2025. Novotna Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, Novotna Company sold the bonds for $370,726 after receiving interest to meet its liquidity needs.
Instructions
a. Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale.
b. Prepare the amortization schedule for the bonds.
c. Prepare the journal entries to record the semiannual interest on July 1, 2020, and December 31, 2020.
d. If the fair value of Aguirre bonds is$372,726 on December 31, 2021, prepare the necessary adjusting entry. (Assume the fair value adjustment balance on December 31, 2020, is a debit of $3,375.)
e. Prepare the journal entry to record the sale of the bonds on January 1, 2022.
Why does oil in Angola not always benefit Angolans?
The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed and transferred to Finished Goods Inventory.
Work in Process Inventory Beginning = 4,500
Direct materials = 47,100
Direct labor = 29,600
Applied overhead = 15,800
Total Mfg. costs = 97,000
Ending WIP = 8,900
The cost of jobs transferred to finished goods is:
B.$105,900.
C. $88,100.
Use the P&G example at the beginning of the chapter to explain the benefits to the customer of adopting a business processes perspective. Why might a traditional functional perspective have “blinded” P&G to the problems with the old system?
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University Human Resources
8-step problem solving process, organizational effectiveness.
121 University Services Building, Suite 50 Iowa City , IA 52242-1911 United States
Step 1: Define the Problem
- What is the problem?
- How did you discover the problem?
- When did the problem start and how long has this problem been going on?
- Is there enough data available to contain the problem and prevent it from getting passed to the next process step? If yes, contain the problem.
Step 2: Clarify the Problem
- What data is available or needed to help clarify, or fully understand the problem?
- Is it a top priority to resolve the problem at this point in time?
- Are additional resources required to clarify the problem? If yes, elevate the problem to your leader to help locate the right resources and form a team.
- Consider a Lean Event (Do-it, Burst, RPI, Project).
- ∙Ensure the problem is contained and does not get passed to the next process step.
Step 3: Define the Goals
- What is your end goal or desired future state?
- What will you accomplish if you fix this problem?
- What is the desired timeline for solving this problem?
Step 4: Identify Root Cause of the Problem
- Identify possible causes of the problem.
- Prioritize possible root causes of the problem.
- What information or data is there to validate the root cause?
Step 5: Develop Action Plan
- Generate a list of actions required to address the root cause and prevent problem from getting to others.
- Assign an owner and timeline to each action.
- Status actions to ensure completion.
Step 6: Execute Action Plan
- Implement action plan to address the root cause.
- Verify actions are completed.
Step 7: Evaluate the Results
- Monitor and Collect Data.
- Did you meet your goals defined in step 3? If not, repeate th 8-Step Process.
- Were there any unforeseen consequences?
- If problem is resolved, remove activities that were added previously to contain the problem.
Step 8: Continuously Improve
- Look for additional opportunities to implement solution.
- Ensure problem will not come back and communicate lessons learned.
- If needed, repeat the 8-Step Problem Solving Process to drive further improvements.
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Problem solving
Sometimes, it is not enough to just cope with the problems – they need to be solved.
Most people engage in problem solving every day. It occurs automatically for many of the small decisions that need to be made on a daily basis.
For example, when making a decision about whether to get up now or sleep in for an extra 10 minutes, the possible choices and the relative risks and benefits of obeying the alarm clock or sleeping later come automatically to mind.
Larger problems are addressed in a similar way. For example: “I have tasks that need to be done by the end of the week. How am I going to get them all done on time?”
After considering the possible strategies, 1 is chosen and implemented. If it proves to be ineffective, a different strategy is tried.
People who can define problems, consider options, make choices, and implement a plan have all the basic skills required for effective problem solving.
Sometimes following a step-by-step procedure for defining problems, generating solutions, and implementing solutions can make the process of problem solving seem less overwhelming.
Six step guide to help you solve problems
Step 1: identify and define the problem.
- State the problem as clearly as possible. For example: “I don’t have enough money to pay the bills.”
- Be specific about the behaviour, situation, timing, and circumstances that make it a problem. For example: “I need to pay the phone and gas bills, and I don’t have enough money to cover both this month.”
Step 2: Generate possible solutions
- List all the possible solutions; don’t worry about the quality of the solutions at this stage.
- Try to list at least 15 solutions, be creative and forget about the quality of the solution.
- If you allow yourself to be creative you may come up with some solutions that you would not otherwise have thought about.
Step 3: Evaluate alternatives
- The next step is to go through and eliminate less desirable or unreasonable solutions.
- Order the remaining solutions in order of preference.
- Evaluate the remaining solutions in terms of their advantages and disadvantages.
Step 4: Decide on a solution
- Specify who will take action.
- Specify how the solution will be implemented.
- Specify when the solution will be implemented. For example: tomorrow morning, phone the gas company and negotiate to pay the gas bill next month.
Step 5: Implement the solution
- Implement the solution as planned.
Step 6: Evaluate the outcome
- Evaluate how effective the solution was.
- Decide whether the existing plan needs to be revised, or whether a new plan is needed to better address the problem.
- If you are not pleased with the outcome, return to step 2 to select a new solution or revise the existing solution, and repeat the remaining steps.
Problem solving is something we do every day.
Some problems are small or easily solved - others are more complicated and can seem overwhelming.
One way of tackling problems is to use a specific and systematic problem solving procedure. If you’ve tried to solve certain problems without much success, try these steps out and see if they help.
Learning to solve problems effectively will help you to minimise the level of stress in your life and improve your overall sense of well-being.
Try it out and see.
Where to get help
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See your doctor
Visit healthdirect (external site) or call 1800 022 222, mental health emergency response line (mherl).
- Metro callers: 1300 55 788
- Peel: 1800 676 822
- Rural and remote areas 1800 552 002
- Most people engage in problem solving daily.
- Sometimes following a step-by-step process to define problems, consider options and make choices can make problem solving less overwhelming.
- You can always talk to your doctor or mental health practitioner and ask for help.
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- Centre for Clinical Interventions
- Unhelpful thinking styles
- Depression – reversing the vicious cycle
- Anxiety – reversing the vicious cycle
Related sites
- Centre for Clinical Interventions (external site)
- Head to Health (external site)
- Accessibility
- Patients' rights
- About Problem Solving
- Related Topics
Problem Solving Resources
Case studies, problem solving related topics.
- Brainstorming
- Continuous Improvement
- Eight Disciplines (8D)
- Fishbone Diagram
- Nine Windows
- Shainin System™
- Total Quality Management (TQM)
- Quality Resources /
- Problem Solving
What is Problem Solving?.
Quality Glossary Definition: Problem solving
Problem solving is the act of defining a problem; determining the cause of the problem; identifying, prioritizing, and selecting alternatives for a solution; and implementing a solution.
- The problem-solving process
- Problem solving resources
Problem Solving Chart
The Problem-Solving Process
In order to effectively manage and run a successful organization, leadership must guide their employees and develop problem-solving techniques. Finding a suitable solution for issues can be accomplished by following the basic four-step problem-solving process and methodology outlined below.
1. Define the problem
Diagnose the situation so that your focus is on the problem, not just its symptoms. Helpful problem-solving techniques include using flowcharts to identify the expected steps of a process and cause-and-effect diagrams to define and analyze root causes .
The sections below help explain key problem-solving steps. These steps support the involvement of interested parties, the use of factual information, comparison of expectations to reality, and a focus on root causes of a problem. You should begin by:
- Reviewing and documenting how processes currently work (i.e., who does what, with what information, using what tools, communicating with what organizations and individuals, in what time frame, using what format).
- Evaluating the possible impact of new tools and revised policies in the development of your "what should be" model.
2. Generate alternative solutions
Postpone the selection of one solution until several problem-solving alternatives have been proposed. Considering multiple alternatives can significantly enhance the value of your ideal solution. Once you have decided on the "what should be" model, this target standard becomes the basis for developing a road map for investigating alternatives. Brainstorming and team problem-solving techniques are both useful tools in this stage of problem solving.
Many alternative solutions to the problem should be generated before final evaluation. A common mistake in problem solving is that alternatives are evaluated as they are proposed, so the first acceptable solution is chosen, even if it’s not the best fit. If we focus on trying to get the results we want, we miss the potential for learning something new that will allow for real improvement in the problem-solving process.
3. Evaluate and select an alternative
Skilled problem solvers use a series of considerations when selecting the best alternative. They consider the extent to which:
- A particular alternative will solve the problem without causing other unanticipated problems.
- All the individuals involved will accept the alternative.
- Implementation of the alternative is likely.
- The alternative fits within the organizational constraints.
4. Implement and follow up on the solution
Leaders may be called upon to direct others to implement the solution, "sell" the solution, or facilitate the implementation with the help of others. Involving others in the implementation is an effective way to gain buy-in and support and minimize resistance to subsequent changes.
Regardless of how the solution is rolled out, feedback channels should be built into the implementation. This allows for continuous monitoring and testing of actual events against expectations. Problem solving, and the techniques used to gain clarity, are most effective if the solution remains in place and is updated to respond to future changes.
You can also search articles , case studies , and publications for problem solving resources.
Innovative Business Management Using TRIZ
Introduction To 8D Problem Solving: Including Practical Applications and Examples
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Root Cause Analysis: The Core of Problem Solving and Corrective Action
One Good Idea: Some Sage Advice ( Quality Progress ) The person with the problem just wants it to go away quickly, and the problem-solvers also want to resolve it in as little time as possible because they have other responsibilities. Whatever the urgency, effective problem-solvers have the self-discipline to develop a complete description of the problem.
Diagnostic Quality Problem Solving: A Conceptual Framework And Six Strategies ( Quality Management Journal ) This paper contributes a conceptual framework for the generic process of diagnosis in quality problem solving by identifying its activities and how they are related.
Weathering The Storm ( Quality Progress ) Even in the most contentious circumstances, this approach describes how to sustain customer-supplier relationships during high-stakes problem solving situations to actually enhance customer-supplier relationships.
The Right Questions ( Quality Progress ) All problem solving begins with a problem description. Make the most of problem solving by asking effective questions.
Solving the Problem ( Quality Progress ) Brush up on your problem-solving skills and address the primary issues with these seven methods.
Refreshing Louisville Metro’s Problem-Solving System ( Journal for Quality and Participation ) Organization-wide transformation can be tricky, especially when it comes to sustaining any progress made over time. In Louisville Metro, a government organization based in Kentucky, many strategies were used to enact and sustain meaningful transformation.
Certification
Quality Improvement Associate Certification--CQIA
Certified Quality Improvement Associate Question Bank
Lean Problem-Solving Tools
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NEW Root Cause Analysis E-Learning
Quality 101
Making the Connection In this exclusive QP webcast, Jack ReVelle, ASQ Fellow and author, shares how quality tools can be combined to create a powerful problem-solving force.
Adapted from The Executive Guide to Improvement and Change , ASQ Quality Press.
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Study with Quizlet and memorize flashcards containing terms like Problem Solving, The final step in problem solving is ..., Thinking and more.
8-Step Problem Solving Process · Step 1: Define the Problem · Step 2: Clarify the Problem · Step 3: Define the Goals · Step 4: Identify Root Cause of the Problem.
The final step in the problem-solving process is check your work. Log in for more information. Question. Asked 7/
Six step guide to help you solve problems · Step 1: Identify and define the problem · Step 2: Generate possible solutions · Step 3: Evaluate alternatives · Step 4:
Hey there! The final step in the problem-solving process is to check your work. Check your work to make sure you got the right answer. If
1. Define the problem · 2. Generate alternative solutions · 3. Evaluate and select an alternative · 4. Implement and follow up on the solution.
It makes the decision making process easier. • It provides a justifiable solution. All six steps are followed in order – as a cycle, beginning with “1.
The final part of the problem-solving process is to analyze the results. This can be done after a couple of weeks, months, or years, depending
Problem-solving is a learner-centered approach that emphasizes the learner's active involvement in the learning process.
Okay. Problem solving process is blue analyze is to analyze the reserves. Okay, so this is all about our final answer when we are going to solve