Hello, in this lecture, we're going to continue to do some shorter test type problems, problems that could be fit into multiple choice formats. So we have a company here uses a weighted average perpetual inventory system and reports the following. So we've got some purchases and sales and they give us the units and the sale and the purchase price. What is the per unit value of ending inventory at August 31st? Okay, so anytime we do these, whether it be average FIFO or LIFO, I would generally use at least six basically rows and let me show you kind of why that would be. I would have the sales rows here that we would have lined out. I'm just going to highlight those just so we can see them. And then I'm going to have three more and this is going to be related to basically the purchases and the ending inventory. So if we start off here, we've got a purchase. So we have a purchase that happens and I'm not going to put the date in right now, but I'm going to put that in my last three sales because we're going to have three pieces of information. We've got the units, we've got the cost per unit and then we've got the total. So we've got the units of nine, we've got the cost per unit of $11 and if we multiply that out then our ending inventory that would be on the balance sheet is nine times 11 and that's where we are at at this point. We don't need to average anything. The per unit cost is $11 at this point. Then we purchased another 11 units, so we're just going to purchase again. We're going to go over these columns over here and we purchased another 11 units at tab $15 tab. I'm going to multiply that out. So now we've got 11 times the $15. So now we have this issue where we're going to have a problem if we sell the units because we have some that cost 11, some that cost 15. We're not going to use the LIFO or the FIFO. We're going to average them. So we could do that now. How are we going to average this items? How are we going to average this? Well, we can add these up. We can say the sum of the total units are 9 and 11 and that would say we have 20 units. And then I'm going to skip over here. I'm not going to sum these up. That wouldn't make any sense because these are unit prices to add them up. It's not like the one unit price would be the sum of those. So we're going to sum up the totals though, the total that we have on the balance sheet here. And then we can take the average. We can say, hey, this is the numerical value we have in the balance sheet. Some of them cost 11. Some of them cost 15, but we're just going to come up with an average number. So the average then would be equal to the cost of 264 divided by the units, 20. And that would give an average of 1320. So we bought them for 11, 15. We're averaging 1320. Then we have a sale that happens. We have a sale and of course, this is the only row we really care about at this point. This is the only row that is of relevance at this point going down. And I'm going to say the sale is over here. I'm going to, that's why I have these other three rows because there could be two pieces of information depending on what type of question they ask. So it's good to just always kind of put these out, at least in these types of rows. And the sales is going to be, in this case, 18 units. And then the cost, if they want to give us, they didn't ask for the cost of sales, but they could. That's why it's good to break them out. And the cost is going to be this 1320, 1320. So it's not the 11, it's not the 15, it's the 1320. I don't know why I can't put that in there. And then if we multiply that out, then the cost of sales is this times this. Now we don't have the sales price. They didn't even give us that. If we did, we'd need three more columns here, given us the sales side of it. But we're only dealing with the cost side of it. That's why we're just using these six columns. And now we're going to see what's left there. Well, we had 20, and we just sold 18. Therefore, we've got 20 minus 18 left for force two. And we know that they all cost 13.2, because that's the average. And so we're going to say, what's left on the balance sheet? Two times 13.2. OK, so then we got one more, so this is what's on the balance sheet at this point in time, then we got one more purchase that happens. So we purchase, and we don't need anything in these columns. We're going to go over here. Now it went up because to 14, it's kind of inflation. This is like the normal, I'm sorry, the units were 14, but the cost was also going up to 14. And that's kind of like inflation. You would think the costs per unit would go up, but they don't have to. They could go down at some points for some different reasons. But all else equal kind of you would think costs would go up over time. But in any case, we multiply that out. We're going to say now we got 14 units times the $14 per unit. And that now cost us the 196. So this is where we were at last time. And now we have what we have here that we just purchased. So we can then take those and find the average again. So the average would then be the sum of the two that we had before plus the 14 that we just purchased. And that would be 16. And then we're going to add the totals, not the unit amounts. We're going to add the totals. And we're going to say, all right, we had $20 to $40 on the balance sheet. And then 196 that we purchased, that's $122.40. If we take the average, then the average cost would be the $222.40 on the balance sheet, the total cost divided by the number of units being 16 at this point. Average cost being this $13.90, $13.90. Next one says a company's inventory record reports the following. And then we have the beginning balance and two purchases. And then on August 15th, sold 64 units using the FIFO Perpetual Inventory Method. What is the value of ending of the inventory at August 15th? So if you know the FIFO and you can see these fairly well, you can basically see that the FIFO, if we're talking about the inventory, we're talking about what is left at the end, that's going to be the amount that it's going to be left here. So we could basically sum these up and see counting backwards how much would still be left after the sales amount. But I'm going to set this up in a similar way that we're kind of working no matter what they ask. And so this would be a little bit longer of a process, but it will work basically for most of the different types of problems. So once again, I'm going to have like six columns here, one, three, four, five, six, one for the cost of the sales and one for the purchases. And then anything over here. So we have the beginning balance, beginning balance. I'm going to put that over here. So we have two pieces of information, 32 units at $22 means that we're starting off with 32 times 22 for a dollar amount of 704.  So of course the purchase was 27 at 21. And so that means that we have 27 times 21. And that gives us the 567. So the total at this time, we have basically two layers and that is the 704 and the 567. And then we had another purchase and that's going to be at $31 and I mean 31 units at $22. And if we multiply that out, 31 units times $22 and that gives us the 682. Now if we think about the units that were sold, there were 64 units sold. So remember what we're going to eat up these, then eat up these and then these. That's the three layers that we're going to eat up. And because it's first in, first out, we're going to take the oldest ones first. So I'm going to put the purchase down here or the sale here. And I'm just going to take it layer by layer. So if we sold 64 units, that's greater than 32, therefore the 32 is gone. We're selling all those at the $22. So if they asked us for the cost of goods sold, which they didn't, they asked us for the ending inventory, but the cost of goods sold would include that 32 times the 22 here. And then we got the 32 and the 27. That adds up to 59, which is still less than the 64. So we're going to take all that 27 that's going to be gone at 21 units and if we multiply those out, then the cost of the goods sold would include this amount. And now we need to get 64 units. So we're going to take whatever else we need to to get up to that 64 from this layer now, the 31 layer. So I'm going to do it this way. I'm going to say 64 minus the 32 minus the 27 is what we're going to need to make this plus this plus this equal the 64 units, which we are selling. So of these 31, then we're going to sell five of those and those cost 22 units. And if we multiply that out, then we have five times 22. And there we have this. Now, now we're going to basically see what our layers are. And of course, this layer is wiped out. This layer is wiped out. We're only left with part of this 31, this 31 minus these five units. That's what we're left with. Those cost $22. Therefore, what we have left in Indian inventory is the 26 times the 22. So that's what we have left. That's the Indian inventory. They could have asked us for the cost of goods sold of this. And notice what that would be is the sum of these $1,381. Next one says company reported the falling income statement informations. We have sales. We've got the cost of goods sold and we have gross profit calculations. It then says that the beginning inventory is correct. However, the Indian inventory figure was overstated by 24,000. Given this information, the correct gross profit would be what? So we could just basically recalculate this. I'm going to just say sales is $141,000. We know the cost of goods sold calculation is going to include the beginning inventory, say beginning inventory, $138,000 plus the purchases. So I'm just pulling these numbers down and they're telling us that these numbers were correct. Make this a bit larger so we can see that. So the purchases then is just this number, $277,000, therefore the cost available, this plus this. I'm going to go ahead and underline this number, home tab, fonts, underline. So all we did was take the $138,000 plus the $277,000 to get what is available.  So the ending inventory and this is where the problem happened. They're saying that this number is too high. So therefore we got to reduce that number by the $24,000. So I'm just going to take this number, ending inventory, $148,000 minus $24,000 to get the correct number after accounting for the overstatement. And that'll give us this $124,000. Then we can have the correct cost of goods sold, which I'm going to put over here in this column for my purposes so we can pull that cost goods sold out and then have the gross profit in the outer column. So I'm going to scroll down since we don't need that information anymore. And we're going to say this equals the cost of goods available minus what's in ending inventory. That is now the cost of goods sold, the new adjusted cost goods sold. Gross profit is then calculated as the $144,000 minus the $291,000 given the revised gross profit of $123,000.


Good morning, so let me see if I can make a little bit of room here, put my computer up, thanks. Okay, so this little background of myself, I started at the Stanford O.T.L. in 1988, and probably could not have imagined at that point that I would be standing in front of a group as a guest as yourselves to talk about this issue of what universities should do with their patents. And I think my background too is kind of interesting and is a good sort of reference for this discussion. The founder of the O.T.L., a guy named Nils Reimers, hired me. He founded the office based on the idea of doing what's best for technology and to support the research and education mission of the university. The people that he hired to do the tech transfer job were all technical people who had some kind of relevant business experience. And interesting, I shouldn't be saying this particularly at Harvard Law School, but we had a policy that we weren't going to hire any lawyers into our job because we felt that, or at least Nils felt that, you really needed people who understand, first of all, you understood technology, but secondly, knew what the difficulties of commercializing a product would be and how difficult it is to run a business. And having such an office would lead to a more effective technology transfer. So that is as a backdrop a little bit about my history and where I came from and why I joined the university. I'll talk a little bit about some of the issues. And what I chose to do when I was asked to be on this particular panel, framing the issues, was just basically just to do a bit of a shotgun approach about things that came to my mind about what are important issues to be thinking about for the purpose of this question. And quite frankly, I really don't know what the answer is, but I hope that a lot of the comments or issues that I raise here will provide some kind of useful point for our discussion. All right, so clearly the purpose of a university is research and education. We've talked about that a little bit today, and I don't think there's any question in anybody's mind that the purpose of a university should be first and foremost research and education. But I question the idea that universities should be also responsible or expected to create successful companies. And having done this job for long enough and now having gone into the private world myself, I know how difficult it is to start a company and to get a product at the door and to make accelerates and all these sorts of things. But can we really expect universities to be good at both research and education and being good at creating successful companies? A couple of examples that I thought I would throw out where patents really didn't matter, and I don't think they're mattering today so much. Oxford University's been around for over 900 years and ostensibly hasn't had to rely on its patents to excel at what it's done, what it does or has done to stay excellent for all those years. You know, neither has Stanford. Stanford's only been around for 125 years. But quite frankly, the university has not had to rely on its patents to excel at research and education. Frederick Terman, former provost of Stanford, recognized father of Silicon Valley, came up with this idea of steeples of excellence and the idea was to build a community of technical scholars. And rather than focusing on patents, Terman chose to build a Stanford Research Park, and the idea being to bring industry closer to Stanford research and researchers and students. Down to my second point, the university knowledge is effectively transferred through academic publications and in the brains of graduates. I don't know if there's a way to really quantify this. This is something that we have talked about when we are all talking in the public. But there is a bit of an anecdote here that I can tell you about. Gordon Moore, who was one of the co-founders of Intel, felt that the benefit of being close to Stanford was the ability to hire masters and PhD students that were graduating every year. And it wasn't so that Stanford could rather Intel could license more patents from Stanford. Third point, patents have arguably less value today than when Stanford's office was created in 1970. The Coen Boyer patent issued in less than two years in 1980 had only 14 claims and was licensed to over 400 companies. Contrary to today's world, the AIA has narrowed patent to both subject matter, making it more difficult to get broad claims, the kind of claims that were in the Coen Boyer patent, and the type of inventions that universities excel at making. Furthermore, under the AIA, the inter-parties reviews have invalidated patents that are rated 82% for fully instituted petitions and 52% for partially instituted petitions. And lastly, the first inventor-to-file system forces universities to file patent applications sooner, frequently on inventions that are potentially not fully enabled. So we're living in a much more different world than when universities really fully started getting involved in this idea of patenting and transfer technologies. And then the fourth bullet point, most universities spend more money on patent management than they make. That's already been discussed today, so I'm not going to dwell on that further. Now I'll talk specifically about Stanford. Most Stanford patents have not made any money. Again, it correlates to some of the statistics that have been shown already. Another data point on this point about universities not making money is it took Stanford 14 years to break even. From 1970 to 1984, the university basically operated in the red. So it took 14 years to break even, and we were in the black until this year. And now for the first time, since I've been in the office, the university is going to be operating the technology transfer office in the red. And again, you saw the earlier Brookings study statistic about 87% of university licensing offices not breaking even over a 20-year period. So again, more data as to whether or not universities can stay effective or not in tech transfer. So my last bullet point here on the first page is Stanford MIT alumni produce staggering economic value for society without accounting for university patented products. So there's a paper by a professor at Stanford, Charles Easley, that was based on a 2011 survey that found that 39,900 existing companies traced the roots to the founding roots to Stanford alumni. Those companies today, in existence today, have annual revenues of $2.7 trillion. A related study at MIT found similar MIT-originated companies have annual revenues of about $2 trillion. So I look at that statistic and I think, hmm, maybe this is what universities actually do really well. And it's not to say I'm trying to answer this question, so what universities should do with patents, but what I'm trying to point out is that there's a lot of other data there, I think, that we can look at to bring into this question. Okay, so a Stanford faculty member and successful entrepreneur said that startups do not need an exclusive license. That Stanford faculty member happens to be our past president, John Hennessey, who is a founder of MIPS Computer and is on the board of Google. Now, I just want to qualify that John Hennessey clearly is a computer scientist and doesn't necessarily apply towards the life sciences world, which I don't think personally it does. But it is interesting that coming from a faculty member's position and the president of that, that he felt that startups do not need exclusive licenses. Also, I would like to throw out this idea again that's been around for, I think, so I've been around is that non-exclusive licensing is a tax. I think most economists lower the idea of licensing from the standpoint non-exclusive licensing being taxed. It increases the cost of products. But on the other hand, we saw in the case of Coen Boyer, which raised $250 million over its life, it does go a long way to paying the operating costs of the university TTOs and then helps to keep the wheels turning so that we could look for that next big technology. Not a lot has been said about startups, but again, these are numbers I'm sure you all know that high-tech startups usually take three to seven years from launch of a product, from launch two to get a license or to get any product, get cash out the door. And then biotechs typically take seven to 15 years. And the point here is that most are going to fail. Core patents are the kind of patents that universities tend to license generally are fundamental inventions. And usually when a company licenses these early-stage technologies, they quite often decide that they can't commercialize that invention effectively. It's too expensive or just doesn't work somehow and they end up pivoting. But what's really, I think, important is the fact that they actually have created this team of entrepreneurs that get together and can try to figure out a relevant business model that will be successful. So when it comes to publicly funded research, universities as publicly minded institutions strive to do what's passed for the technology. And that's one common mantra is we do what's best for the technology. But the question that comes to mind is doing what's best for the technology the best way to do technology transfer. So Stanford has received more money from alumni donations than it has made through licensing. In the 46 years of its existence OTL has received $1.7 billion in licensed royalties. Over a recent five-year period, Stanford has recently brought in $6.2 billion in philanthropic funding. So let's make sure I'm looking at the same slides here. I did change them a little bit. Again, the point is that universities have other ways of making money and philanthropic gifts generally has been successful at least for Stanford. And that's it for my comments. Thank you.


I wondered, what are some of your own strangest projects or weirdest auditions you've been on, maybe earlier on in your career? Well, in the book, The Disaster Artist, Greg talks about, and this is when he wrote it, long before he knew I wanted to do this movie or anything, he mentions me. Greg got cast in this movie called Retro Puppet Master in the late 90s. Which, ironically, is maybe even worse than the room. Certainly fewer people have seen Retro Puppet Master than the room. In the book he says, the director told me that a young James Franco had auditioned for this movie. And in fact, there was a sequence in our film that got cut out where we showed the making of Retro Puppet Master, and I had cast the actual director of Retro Puppet Master as himself in our movie, The Disaster Artist. And I asked him, I was like, do you have that? I need to see that audition. Your audition for it? Yes, I just, yeah. He didn't have it, I guess he didn't know at the time to save that.  It was like my third audition ever, and so we do the scene, it goes fine, and then the cast and director, she says, all right, can you slate for me real quick? And slate means just to essentially like, look at camera and say your name. So at the time, I didn't know the terminology, so I was like, so I say it one more time, and she's like, can you slate just real quick? So what I hear is, can you sleep real quick? So I'm like, all right, so I get comfortable, and I put my head back, and I start sleeping for her. She's like, no, no, no, I was like, what? So that was Alison Jones, who has since casted me in a couple of roles, but... She casted Ricks and Deeks as well. She gave me my start. So she trusts you on auditions now? I think I just made a pretty strong impression.


Mount Holyoke has incredible opportunities for students to pursue their passions outside the classroom. We have internship opportunities and research opportunities truly all around the world. Faculty and staff are very supportive of students pursuing whatever career that they're interested in. After my first year here at Mount Holyoke I did an internship on Capitol Hill. So I was able to go to Germany to work on polymer science research which was really exciting. I was really able to get that experience through the support I had from faculty here at Mount Holyoke. I think along the way Mount Holyoke has given me the idea to look forward to the next step but also focus on bettering my character now.