The manager of a small hotel resort is considering expansion. He would like to issue bonds but do not quite understand why he may or may not receive what amount of money is stated on the face of the bond but he has to repay what is on the face of the face bond. Write a report to the manager explaining the market forces that determine how much money will be collected. Also explain how the interest payment on bonds are calculated and paid. write a report with 800 words explaining the market forces that determine how much money will be collected and how the interest payment on bonds are calculated and paid.

The monthly budget amounts in the report were based on an expected production of 60,000 units per month or 720,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August because only 58,000 units were produced.

Instructions

a)  

Prepare a budget report for August using flexible budget data.

(b)  

In September, 64,000 units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was 10% higher than its actual cost in August, and (2) fixed costs were the same in September as in August.

On January 1, 2018 Vulcan Company purchased 400 of the 1000 shares of Star Trek company stock for $60,000.                                                                                                                  

At this time, Star Trek had a truck with a book value of $40,000 and a fair market value of $80,000. The truck has a life of 5 years with no salvage value and Star Trek uses straight line depreciation                                                                                                                              

On July 1, 2018 Star Trek paid a dividend of $1 per share                                                                                                                              

On December 31, 2018 Star Trek reported a profit of $11,000 and its stock was selling $151 per share                                                                                                                      

On July 1, 2019 Star Trek paid a dividend of $2 per share                                                                                                                               

On December 31, Star Trek reported a loss of $5000 and its stock was selling for $148 per share                                                                                                                 

On July 1, 2020 Star Trek announced that it wasn't paying any dividends in 2020.                                                                                                                              

On December 31, 2020 Star Trek reported a profit of $3000 and its stock was selling for $155 per share                                                                                                                  

On January 31, 2021 Vulcan sold its entire investment in Star Trek at $150 per share                                                                                                                      

REQUIRED                                                                                                                          

A) MAKE ALL THE JOURNAL ENTRIES CONNECTED WITH VULCAN'S INVESTEMENT IN STAR TREK IN                           2018                                                                                                      

                2019                                                                                                      

                2020                                                                                                      

                2021                                                                                                      

                B) FILL IN THE FOLLOWING TABLE                                                                                                                           

                                2018       2019       2020                                                      

INVESTMENT IN STAR TREK                                                                                                                        

INVESTMENT INCOME                                                                                                                  

When bondholders decide to exercise their convertible bonds, the company values the common stock at the ____________.

A. par value of the stock

B market value of the stock

C. carrying value of the bonds

D. par value of the bonds

Berry Ltd (“BEL”) carried on trading business in Hong Kong. Its provisional income statement for the year ended 31 March 2019 shows a net profit before taxation of $3,000,000, inter alia, after crediting the following income and charging the following expenses:

Explanatory Notes

1. BEL purchased goods from Hong Kong suppliers and sold to overseas customers. Over 100 overseas agents solicited customers for BEL. The agents would receive orders for BEL in overseas and forward the same to BEL for final confirmation.

2

3 During the year 2009, BEL bought the proprietary interest of a registered product design for use by its suppliers to produce BEL’s products at a price of $1 million. During the year 2018/19, BEL sold the proprietary interest of the product design at a price of $1.3 million and hence made a profit of $300,000. Also BEL bought a registered trademark during the year 2019/20 at a price of $2 million, which was not reflected in the above income statement. The trademark has a protection period of 4 years starting from 2018/19.

4 The product research expense included $150,000 for new research equipment.

5

*The bank loan was used to buy trading stock.

6 The repairs expense of $100,000 was for initial repairs to a second-hand packing machine which was acquired during the year. The expense was for the purpose to put the machine back to operable condition for obtaining the relevant license from the government.    

7

Write-off of a staff loan* (5% interest and 95% principal) 20,000

Bad debts recovered (trade debts written off in the year 2018/19) (8,000)

Provision - 5 % on total trade debtors’ balance 10,000

                - on specified trade debtors 53,000

Total per accounts 75,000

The loan was provided to the staff’s bank account in Hong Kong.

8 Depreciation allowance agreed by the Inland Revenue Department for the year was $200,000

Required

1. Calculate the profits tax payable by BEL for the year of assessment 2018/19, ignore provisional tax.

1. 2. Explain your profits tax treatments for the following items:
1. Sales through overseas agents $5,000,000
2. Interest from fixed term bank deposit interest $300,000
3. Sales proceeds of the registered product design $1,300,000
4. Registered trademark acquisition cost $2,000,000
5. Interest on bank loan $140,000
6. Write-off of staff loan $20,000
7. Initial repairs expense of the second-hand packing machine $100,000

1. Taxpayer (“T”) a 59 year-old calendar year individual taxpayer purchased an annuity from an insurance company for $100,000 in 2019. The terms of the annuity were that the company would pay T $5,000 a year to T for the rest of T’s life. How much income will T include in T’s personal income tax return as a result of receiving the $5,000 payment

in 2020?   _____________

In 2050? ______________

Required information

Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products.

Prepare the appropriate journal entries for Macy Co. to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system, and purchases these units for resale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Please identify and describe Financial Controller occupations researched

Refer to the following article: Trentmann, Nina, "Danish Insulin Maker Novo Nordisk Cuts Jobs, Shifts R&D Spending; CFO says R&D savings will be reinvested in artificial intelligence, cloud services and automation technologies," Wall Street Journal, 01 Nov 2018 (Online). Drawing from what you have learned in this course as well as any other sources, provide a well labeled and clearly articulated answer -- with explanation and proper references -- to the following:

• • Using the accounting terminology used to date in this course, what kind (or classification) of costs are research and development costs, and where do they usually fit in a profit and loss (or income) statement?
  • Are research and development costs ever included in costs of goods manufactured? If not, why not? If so, to what extent and under what circumstances?
  • Why would it make sense to avoid the complete automation of cash management and accounts receivable tasks (i.e. to continue to use humans for some tasks(? Explain.
• Where appropriate, properly cite any readings, specific pages from any secondary source, or other sources that contributed to or that support your explanation.

E7-7 (Algo) Analyzing and Interpreting the Financial Statement Effects of LIFO and FIFO LO7-2, 7-3 Skip to question [The following information applies to the questions displayed below.] Emily Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2: Units Unit Cost Inventory, December 31, prior year 2,800 $ 13 For the current year: Purchase, April 11 8,960 14 Purchase, June 1 7,850 19 Sales ($52 each) 10,960 Operating expenses (excluding income tax expense) $ 189,000 Required: 1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO.

Nordbock Inc. reports the following outstanding bond issue on its December 31, 20Y1, balance sheet:

1,000,000, 7%, 10-year bonds that pay interest semiannually.

The bonds have been outstanding for five years and were originally issued at face amount. The company is considering redeeming these bonds on January 1, 20Y2, at 103 and issuing new $1,000,000, 5%, five-year bonds at their face amount. These bonds would pay interest semiannually on June 30 and December 31.

Write a brief memo to Liz Nolan, the chief financial officer, discussing the costs of redeeming the existing bonds, the proceeds from issuing the new bonds, and whether this is a good financial decision.

Wehrs Corporation has received a request for a special order of 9,500 units of product K19 for $46.40 each. The normal selling price of this product is $51.50 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product K19 is computed as follows:

Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like some modifications made to product K19 that would increase the variable costs by $6.10 per unit and that would require a one-time investment of $45,900 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order.

Required:

Determine the effect on the company's total net operating income of accepting the special order.

J.J. Heva Company is an American company that prepares its financial statements under US GAAP. In 2014, the company reported income of $5,000,000 wit stockholders’ equity of $40,000,000 on December 31, 2014. In anticipation of possible adoption of IFRS by the US companies, the management wishes to explore possible impacts of the conversion on the company’s financial statements. You are hired to prepare a reconciliation schedule to convert 2014 income as well as stockholders’ equity on December 31, 2014 from US GAAP basis to IFRS. The following information is provided by the company’s accounting department:

1. In 2012, the company’s pension plan was amended and consequently created a past service cost of $75,000.   Half of the past service cost was attributable to already vested employees who had an average remaining service life of 15 years, and half of the past service cost was attributable to non-vested employees who, on average, had two more years until vesting. The company has no retired employees.
2. In 2014, the company entered into a contract to provide engineering services to a long term customer over a 12-month period. The fixed price is $300,000 and the company    estimates with high degree of reliability that the project is 30 percent complete at the end of 2014.
3. The company publicly announced a restructuring plan in 2014 and created a valid expectation on the part of the employees to be terminated that the company will carry out the restructuring. The estimated cost of restructuring is $500,000. No legal obligation to restructure exists as of December 31, 2014.
4. Stock options were granted to key officers on January 1, 2014. The grant date fair value per option was $10, and a total of 9,000 options were granted. The options vest in equal installments over three years: one-third in 2013, one-third in 2014, and one-third in 2015. A straight line method is utilized to recognize compensation expense related to stock options.
5. On January 1, 2013, the company issued $10,000,000 of 5% bonds at par value that matures in five years on December 31, 2017. Costs incurred in issuing the bonds were $500,000. Interest is paid on bonds annually. Assume the effective interest rate is 6.193%.

Make sure your reconciliation statement is accompanied by an adequate explanation and reference for every one of your adjustments. Ignore income taxes.

Fantasy Fashions had used the LIFO method of costing inventories, but at the beginning of 2018 decided to change to the FIFO method. The inventory as reported at the end of 2017 using LIFO would have been $17 million higher using FIFO.

Retained earnings reported at the end of 2016 and 2017 was $237 million and $257 million, respectively (reflecting the LIFO method). Those amounts reflecting the FIFO method would have been $247 million and $269 million, respectively. 2017 net income reported at the end of 2017 was $25 million (LIFO method) but would have been $27 million using FIFO. After changing to FIFO, 2018 net income was $33 million. Dividends of $7 million were paid each year. The tax rate is 40%.
  
Required:
1. Prepare the journal entry at the beginning of 2018 to record the change in accounting principle.
2. In the 2018–2017 comparative income statements, what will be the amounts of net income reported for 2017 and 2018?
3. Prepare the 2018–2017 retained earnings column of the comparative statements of shareholders’ equity.
  

YOU ARE A STAFF ACCOUNTANT AUDITING A “PRIVATE COMPANY” AND FIND A MISREPRESENTATION DURING REVENUE RECOGNITION TESTING. WHO IS THE FIRST PERSON YOU SHOULD INFORM ABOUT YOUR FINDING. WHO ARE THE OTHER PARTIES YOU WILL INFORM ABOUT THE MISREPRESENTATION IF THE FIRST PARTY DOES NOTHING ABOUT THE MISREPRESENTATION.