Lon Timur is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Lon, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall locations. Lon has gathered the following investment information.

(a)

Determine the annual (1) net income and (2) net annual cash flows for the commuter service. (Round answers to 0 decimal places, e.g. 125.)

(b)

Compute (1) the cash payback period and (2) the annual rate of return. (Round answers to 2 decimal places, e.g. 10.50.)

(c)

Compute the net present value of the commuter service. (Round answer to 0 decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

1. Interpret the term “financial assets” and “financial liabilities” in accordance to IAS 32 Financial Instruments: Presentation and give examples of each.

Jeeler​'s Netballs is a manufacturer of​ high-quality basketballs and volleyballs. Setup costs are driven by the number of batches. Equipment and maintenance costs increase with the number of​ machine-hours, and lease rent is paid per square foot. Capacity of the facility is 14,000 square​ feet, and Jeeler is using only 80​% of this capacity. Jeeler records the cost of unused capacity as a separate line item and not as a product cost. The following is the budgeted information for Jeeler​:

Other budget information​ follows:

1.Calculate the budgeted cost per unit of cost driver for each indirect cost pool.

2.What is the budgeted cost of unused​ capacity?

3.What is the budgeted total cost and the cost per unit of resources used to produce​ (a) basketballs and​ (b) volleyballs?

4.Why might excess capacity be beneficial for JeelerJeeler​? What are some of the issues JeelerJeeler should consider before increasing production to use the​ space?

The Stellar Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Stellar has decided to locate a new factory in the Panama City area. Stellar will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs.

Building A: Purchase for a cash price of $618,100, useful life 26 years.

Building B: Lease for 26 years with annual lease payments of $70,340 being made at the beginning of the year.

Building C: Purchase for $653,200 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,540. Rental payments will be received at the end of each year. The Stellar Inc. has no aversion to being a landlord.

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In which building would you recommend that The Stellar Inc. locate, assuming a 12% cost of funds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and less expensive than the home consoles. The company only recently began producing the home model. Since the introduction of the new product, profits have been steadily declining. Management believes that the accounting system is not accurately allocating costs to products, particularly because sales of the new product have been increasing.

Management has asked you to investigate the cost allocation problem. You find that manufacturing overhead is currently assigned to products based on their direct labor costs. For your investigation, you have data from last year. Manufacturing overhead was $1,580,000 based on production of 350,000 handheld consoles and 85,000 home consoles. Direct labor and direct materials costs were as follows:

Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are as follows:

Required:

a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? (Round "Total cost per unit" to 2 decimal places.)

b. How much overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product? (Do not round intermediate calculations. Round "Total cost per unit" to 2 decimal places.)

The accounting records of Wall’s China Shop reflected the following balances as of January 1, Year 3:

The following five transactions occurred in Year 3:

1. First purchase (cash): 125 units @ $96
2. Second purchase (cash): 195 units @ $104
3. Sales (all cash): 375 units @ $200
4. Paid $16,100 cash for salaries expense
5. Paid cash for income tax at the rate of 25 percent of income before taxes
   

Required
a. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow. Compute the income tax expense for each method.
b. Use a vertical model to show the Year 3 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average. (Hint: Record the events under an accounting equation before preparing the statements.)

When preparing government-wide statements, which of the following is not true?

Multiple Choice

• Entries are necessary to adjust revenues to the accrual basis, record expenses not recognized under the modified accrual basis.

• Entries are necessary to eliminate fiduciary funds.

• General capital assets, general long-term debt, and internal service funds are added through worksheet journal entries.

• Worksheet entries eliminate elements of the modified accrual basis fund statements that do not conform to accrual accounting, such as expenditures for capital assets and principal repayments.

The capital accounts of Trent Henry and Tim Chou have balances of $147,400 and $92,600, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry’s interest for $27,400 and one-fourth of Chou’s interest for $19,000. Clarke contributes $75,000 cash to the partnership, for which she is to receive an ownership equity of $75,000.

Assume that you are the owner of a wholesale store and that you operate as a sole trader. On April 1, 2019 you had the following items in your business:

Stock, $14,500,000; Motor vehicles, $15,000,000; Creditors/Accounts payable- J. Downey $1,500,000, P. Wright $2,000,000; Cash in hand, $300,000; Pre-paid insurance, $80,000; Bank loan, $4,000,000; Furniture & fittings, $3,600,000; Accrued rent, $100,000; Cash at Bank, $12,000,000; Debtors/Accounts receivable-A. Howard $3,000,000, S. Simpson $2,800,000; K. Kirk $350,000.   

During April 2019 the following business were transacted:

April 1- Bought goods on credit from B. Burke $4,500,000.

          3- Paid rent with cheque $150,000.

          5- Sold goods on credit to A. Harvey, $5,600,000.

          7- Cash sales, $400,000.

        10- Paid electricity bill $130,000 cash.

        12- Paid J. Downey $1,000,000 by cheque.

        15- Sold goods on credit to S.Simpson, $7,000,000.

        15- Paid P. Wright $1,500,000 by cheque.

        18- S.Simpson paid $3,500,000 by cheque.

        19- Bought goods on credit from F. Smith, $2,400,000.

        22- Sold goods for cash to T. Royal, $1,800,000.

        24- Returned damaged goods valued at $300,000 to B.Burke.  

        25- Paid wages by cheque, $3,000,000.

        27- Paid insurance $70,000 cash.

        28- Paid $50,000 cash for transportation charge for goods bought from F. Daley.

        28- Received a cheque for $2,200,000 from A. Howard.

        29- Sold goods on credit to V. James, $6,200,000.

        29- Miscellaneous expenses paid with cheque, $1,250,000.

        29- Bought goods for cash from C. Croft for $350,000.

        30- Banked $1,000,000.

        30- A. Harvey returned incorrect goods delivered to him valued at $200,000.

        30- The balance on K. Kirk’s account was written off as irrecoverable.

        30- Received $300,000 cash as commission for selling goods for D. Riley.

         Notes:

(i)                 On April 30, 2019 stock on hand was valued at $11,000,000.

(ii)               Office furniture and motor vehicles are to be depreciated at 10% and 20% per annum respectively using the straight line method.

(iii)              $100,000 in rent was owed on April 30, 2019.

(iv)             On April 30, 2019 wages paid in advance amounted to $200,000.

(v)               There was no accumulated depreciation on fixed assets as at April 1, 2019.

Required:

Use the above information to prepare the following for the month of April 2019

(g)   The Sales Ledger.

(h)   The Purchases Ledger.

(i)     The General/Nominal Ledger.

Barbour Corporation, located in Buffalo, New York, is a retailer of high-tech products and is known for its excellent quality and innovation. Recently, the firm conducted a relevant cost analysis of one of its product lines that has only two products, T-1 and T-2. The sales for T-2 are decreasing and the purchase costs are increasing. The firm might drop T-2 and sell only T-1.

Barbour allocates fixed costs to products on the basis of sales revenue. When the president of Barbour saw the income statements (see below), he agreed that T-2 should be dropped. If T-2 is dropped, sales of T-1 are expected to increase by 10% next year, but the firm’s cost structure will remain the same.

Required:

1. Find the expected change in annual operating income by dropping T-2 and selling only T-1.

2. By what percentage would sales from T-1 have to increase in order to make up the financial loss from dropping T-2? (Enter your answer as a percentage rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)

3. What is the required percentage increase in sales from T-1 to compensate for lost margin from T-2, if total fixed costs can be reduced by $54,000? (Enter your answer as a percentage rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).)

Sinkal Co. was formed on January 1, 2018 as a wholly owned foreign subsidiary of a U.S. corporation. Sinkal's functional currency was the stickle (§). The following transactions and events occurred during 2018: Jan. 1 Sinkal issued common stock for §1,000,000. June 30 Sinkal paid dividends of §20,000. Dec. 31 Sinkal reported net income of §80,000 for the year. Exchange rates for 2018 were: Jan.1 § 1 = $ 0.42 June 30 § 1 = $ 0.46 Dec.31 § 1 = $ 0.48 Weighted average rate for the year § 1 = $ 0.44 What was the amount of the translation adjustment for 2018? Multiple Choice $52,000 negative translation adjustment. $62,800 negative translation adjustment. $62,800 positive translation adjustment. $440,000 negative translation adjustment. $26,000 positive translation adjustment.

Cane Company manufactures two products called Alpha and Beta that sell for $150 and $110, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 108,000 units of each product. Its average cost per unit for each product at this level of activity are given below:

The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars.

Required:

1. What is the total amount of traceable fixed manufacturing overhead for each of the two products?

2. What is the company’s total amount of common fixed expenses?

3. Assume that Cane expects to produce and sell 86,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 16,000 additional Alphas for a price of $104 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order?

5. Assume that Cane expects to produce and sell 101,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 16,000 additional Alphas for a price of $104 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 9,000 units.

a. What is the financial advantage (disadvantage) of accepting the new customer’s order?

b. Based on your calculations above should the special order be accepted?

Answer the following questions

1) How does ASC 606 — Revenue From Contracts With Customers(new standard for revenue recognition) impact on debt to equity ratio and current ratio. Please explain in detail.

2)Provide why the following statement is false.Provide proper explanation

"Comparability across companies will be enhanced since ASC 606 provides clear rules, by industry, for when and how to recognise revenue"

On June 30, Sharper Corporation’s stockholders' equity section of its balance sheet appears as follows before any stock dividend or split. Sharper declares and immediately distributes a 50% stock dividend.

(1) Prepare the updated stockholders' equity section after the distribution is made.
(2) Compute the number of shares outstanding after the distribution is made.