PUBLIC SECTOR ACCOUNTING ASSIGNMENT
CASH vs ACCRUAL ACCOUNTING IN PUBLIC SERVICES
Transition from cash based accounting to modified accrual accounting has imperatively been slow but a gradually evolving global movement across the nation which is being undertaken by majority state and local governments over past two decades. This migration from cash to modified accrual accounting was being called from increased demand for accountability and transparency in the public sector which only the use of cash accounting was not able to suffice. Therefore, the Public Service Committee [PSC] of International Federation of Accountants [IFAC] has been continually putting forward words of encouragement to adopt the International Public Sector Accounting Standards [IPSAS] to all developing nations.
Many countries has made several attempts to achieve this on two previous occasions back in the years 1994 and 1998, however the project of migration was put aside on both occasions. Besides that, in the year 2005 a similar attempt was made, yet public service ended up adopting a different approach which was used in the previous unsuccessful attempts. Despite of many years of attempts, many countries are still in the process of this migration. It was noted that overall unstable government and regular coups created hindrance in the progress of fast migration towards modified accrual accounting.
Therefore, modified accrual accounting is yet to be effectively blended into the accounting systems of one countries public service. IFAC has signified that there may have been certain “factors” that has influenced the migration of cash based accounting to modified accrual accounting and made it a slow progress.
DISCUSSION POINT 1: From your viewpoint what could have been these factors that IFAC is placing emphasis on?
Required: Students must include a reference list [Mandatory] – APA referencing style AND in writing the report, the emphasis should be placed on the above mentioned discussion point [content/body of the assignment]
In: Accounting
|
Carlsbad Corporation's sales are expected to increase from $5 million in 2019 to $6 million in 2020, or by 20%. Its assets totaled $5 million at the end of 2019. Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2019, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 6%, and the forecasted retention ratio is 30%. Use the AFN equation to forecast Carlsbad's additional funds needed for the coming year. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar. $ Now assume the company's assets totaled $3 million at the end of
2019. Is the company's "capital intensity" the same or different
comparing to initial situation? |
In: Accounting
FastTrack Bikes, Inc. is thinking of developing a new composite road bike. Development will take six years and the cost is
$200,000
per year. Once in production, the bike is expected to make
$300,000
per year for
10
years. The cash inflows begin at the end of year 7.For parts a-c, assume the cost of capital is
10.0%.
a. Calculate the NPV of this investment opportunity. Should the company make the investment?
b. Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.
c. How long must development last to change the decision?
For parts d-f, assume the cost of capital is
14.0%.
d. Calculate the NPV of this investment opportunity. Should the company make the investment?
e. How much must this cost of capital estimate deviate to change the decision?
f. How long must development last to change the decision?
a. Calculate the NPV of this investment opportunity.
If the cost of capital is
10.0%,
the NPV is
$nothing.
In: Accounting
The following information relates to Dane City during its fiscal year ended December 31, 20X2:
| Inventory—1/1/X2 | $ | 40,000 | |
| —12/31/X2 | 43,000 | ||
| Encumbrances outstanding—1/1/X2 | 4,000 | ||
| —12/31/X2 | 8,900 | ||
| Purchase orders during 20X2 | 194,000 | ||
| Amount credited to vouchers payable during 20X2 | 181,200 | ||
Required:
For items 1 through 10, determine the amounts based solely on the
preceding information.
1. What is the amount of 20X2 general fund transfers out?
general fund transfers out
2. How much should be reported in 20X2 as general fund liabilities
from entitlements for compensated absences?
general fund liabilities
3. What is the 20X2 assigned amount of the general fund
balance?
general fund balance
4. What is the 20X2 capital projects fund balance?
capital projects fund balance
5. What is the 20X2 fund balance on the special revenue fund for
tourist promotion?
special revenue fund
6. What is the amount of 20X2 debt service fund expenditures?
debt service fund expenditures
7. What amount should be included in the governmentwide financial
statements for the cost of long-term assets acquired in 20X2?
cost of long-term assets
8. What amount stemming from the 20X2 transactions and events
decreased the long-term debt liabilities reported in the
governmentwide financial statements?
amount of decrease
9. Using the purchases method, what is the amount of 20X2 supplies
expenditures?
supplies expenditures
10. What was the total amount of 20X2 supplies encumbrances?
supplies encumbrances
In: Accounting
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:
| Beech Corporation | ||
| Balance Sheet | ||
| June 30 | ||
| Assets | ||
| Cash | $ | 92,000 |
| Accounts receivable | 130,000 | |
| Inventory | 48,600 | |
| Plant and equipment, net of depreciation | 216,000 | |
| Total assets | $ | 486,600 |
| Liabilities and Stockholders’ Equity | ||
| Accounts payable | $ | 77,000 |
| Common stock | 329,000 | |
| Retained earnings | 80,600 | |
| Total liabilities and stockholders’ equity | $ | 486,600 |
Beech’s managers have made the following additional assumptions and estimates:
Estimated sales for July, August, September, and October will be $270,000, $290,000, $280,000, and $300,000, respectively.
All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 45% in the month of sale and 55% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.
Each month’s ending inventory must equal 20% of the cost of next month’s sales. The cost of goods sold is 60% of sales. The company pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.
Monthly selling and administrative expenses are always $50,000. Each month $5,000 of this total amount is depreciation expense and the remaining $45,000 relates to expenses that are paid in the month they are incurred.
The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.
Required:
1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30.
2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30.
2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30.
3. Prepare an income statement for the quarter ended September 30.
4. Prepare a balance sheet as of September 30
In: Accounting
[The following information applies to the questions displayed below.]
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:
| Beech Corporation Balance Sheet June 30 |
|
| Assets | |
| Cash | $ 73,000 |
| Accounts receivable | 125,000 |
| Inventory | 56,000 |
| Plant and equipment, net of depreciation | 221,000 |
| Total assets | $ 475,000 |
| Liabilities and Stockholders’ Equity | |
| Accounts payable | $ 82,000 |
| Common stock | 309,000 |
| Retained earnings | 84,000 |
| Total liabilities and stockholders’ equity | $ 475,000 |
Beech’s managers have made the following additional assumptions and estimates:
1. Estimated sales for July, August, September, and October will be $320,000, $340,000, $330,000, and $350,000, respectively.
2. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.
3. Each month’s ending inventory must equal 25% of the cost of next month’s sales. The cost of goods sold is 70% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.
4. Monthly selling and administrative expenses are always $40,000. Each month $6,000 of this total amount is depreciation expense and the remaining $34,000 relates to expenses that are paid in the month they are incurred.
5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.
Required:
1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30.
2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30.
2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30.
3. Prepare an income statement for the quarter ended September 30.
4. Prepare a balance sheet as of September 30.
In: Accounting
Longboat Manufacturing produces a single product requiring the following direct material and direct labor:
| Cost per Unit of Input | Required Amount per Unit of Product | |
|---|---|---|
| Material A | $9 / pound | 20 ounces |
| Material B | $7 / pound | 4 ounces |
| Material C | $25 / gallon | 0.4 gallon |
| Cutting labor | $12 / hour | 45 minutes |
| Shaping labor | $15 / hour | 15 minutes |
| Finishing labor | $14 / hour | 75 minutes |
Manufacturing overhead consists of indirect materials, $0.60 per unit of product; indirect labor, $1,000 per month plus $0.75 per unit of product; factory maintenance, $17,000 per year plus $0.65 per unit of product; factory depreciation, $18,000 per year; and annual factory property taxes, $10,000. Selling and administrative expenses include the salaries of a sales manager, $40,000 per year; an office manager, $22,000 per year; and two salespersons, each of whom is paid a base salary of $15,000 per year and a commission of $4 per unit sold. Advertising and promotion of the product are done through a year-round media package program costing $1,500 per week.
a. Analyze all cost and expense factors to determine a general formula (based on units of production) for total cost.
Round variable cost per unit answers to two decimal places, if applicable.
| Total Fixed Costs | Variable Cost per Unit | |||
|---|---|---|---|---|
| Material A | Answer | Answer | ||
| Material B | Answer | Answer | ||
| Material C | Answer | Answer | ||
| Cutting labor | Answer | Answer | ||
| Shaping labor | Answer | Answer | ||
| Finishing labor | Answer | Answer | ||
| Manufacturing overhead: | ||||
| Indirect material | Answer | Answer | ||
| Indirect labor | Answer | Answer | ||
| Factory maintenance | Answer | Answer | ||
| Factory depreciation | Answer | Answer | ||
| Factory property taxes | Answer | Answer | ||
| Selling and administration expenses | ||||
| Sales administration salaries | Answer | Answer | ||
| Office administration salaries | Answer | Answer | ||
| Sales salaries and commissions | Answer | Answer | ||
| Advertising and promotion | Answer | Answer | ||
| Total component cost | Answer | Answer |
b. Assuming a relevant range of 10,000 to 30,000 units, what is the estimated unit cost for producing and selling 10,000 units? 25,000 units? Explain the variation in unit cost at the two levels of production.
Round answers to two decimal places.
Estimated per unit cost for 10,000 units $Answer
Estimated per unit cost for 25,000 units $Answer
c. If 22,000 units are produced and sold in a year, what selling price results in a net income before income tax of $75,000?
Round answers to two decimal places, if needed.
$Answer
In: Accounting
Bella Donna Company has 100,000 shares of $4 par common stock issued and outstanding as of January 1, 2018. The shares were originally issued for $9 per share. On February 3, 2018, Bella Donna repurchased 3,690 shares at $6 per share for the purposes of retiring them. What will be the balance in Paid in capital in excess of par after February 3rd transaction?
PLEASE SHOW ALL WORK AND EXPLAIN, THANK YOU
In: Accounting
Alpha Manufacturing Co. Ltd. makes a product by way of three consecutive processes. The following data relates to process 2 for the month of June. (i) Transfer in from Process 1, 1,500 units valued at $240.50 each. (ii) Other costs incurred during the month were: Direct material added $127,070 Direct manufacturing wages $131,450 Manufacturing overheads $168,175 (iii) 200 units were scrapped during the period. Normal losses were estimated to be 5% of input during the period. The scrap value of any loss is $250.00 per unit. These rejected units had reached the following degree of completion: Transfer In from Process 1 100% Direct material added 80% Direct manufacturing wages 60% Manufacturing Overhead 20% (iv) During June, 1,000 units were completed and transferred to Process 3 (v) Work-in-progress at the end of June was 400 units and had reached the following degree of completion: Transfer from process 1 100% Direct material added 70% Direct manufacturing wages 40% Production overhead 20% (v) There were no unfinished goods in process 2 at the beginning of June. Required: (a) Prepare a statement of equivalent production to determine the equivalent units and conversion costs and the cost per equivalent unit for direct materials (From Process 1 & Direct Material Added), Manufacturing Wages & Manufacturing Overhead. (b) Calculate the: - Total cost of units completed and transferred to Process 3 - Cost of unexpected losses - Cost of ending work-in-process inventory in Process 2 (c) Prepare the Work-In-Process Inventory - Process 2 T-account, clearly showing the ending balance. (d) State the journal entries necessary to record the assignment of direct materials, direct manufacturing wages and manufacturing overhead applied to Process 2. Also give the journal entries to record the cost of product completed and transferred to Process 3.
In: Accounting
What is res ipsa loquitur? Which three elements does the plaintiff have to proof? 2. How is res ipsa loquitur different from negligence per se? 3. When can a defendant use the defense of a Good Samaritan statute? 4. In James v. Meow Media, did the court properly find the defendant video game distributors not liable? Why? 5.What is the difference between compensatory damages and punitive damages?
In: Accounting
[The following information applies to the questions displayed below.] Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cash $ 73,000 Accounts receivable 125,000 Inventory 56,000 Plant and equipment, net of depreciation 221,000 Total assets $ 475,000 Liabilities and Stockholders’ Equity Accounts payable $ 82,000 Common stock 309,000 Retained earnings 84,000 Total liabilities and stockholders’ equity $ 475,000 5.value: 20.00 pointsRequired information Beech’s managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $320,000, $340,000, $330,000, and $350,000, respectively. 2. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 3. Each month’s ending inventory must equal 25% of the cost of next month’s sales. The cost of goods sold is 70% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July. 4. Monthly selling and administrative expenses are always $40,000. Each month $6,000 of this total amount is depreciation expense and the remaining $34,000 relates to expenses that are paid in the month they are incurred. 5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30. Required: 1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30. 2-a. Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30. 2-b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30. 3. Prepare an income statement for the quarter ended September 30. 4. Prepare a balance sheet as of September 30.
In: Accounting
On February 1, 2021, Arrow Construction Company entered into a
three-year construction contract to build a bridge for a price of
$8,480,000. During 2021, costs of $2,160,000 were incurred with
estimated costs of $4,160,000 yet to be incurred. Billings of
$2,660,000 were sent, and cash collected was $2,410,000.
In 2022, costs incurred were $2,660,000 with remaining costs
estimated to be $3,840,000. 2022 billings were $2,910,000 and
$2,635,000 cash was collected. The project was completed in 2023
after additional costs of $3,960,000 were incurred. The company’s
fiscal year-end is December 31. Arrow recognizes revenue over time
according to percentage of completion.
Required:
1. Compute the amount of revenue and gross profit
or loss to be recognized in 2021, 2022, and 2023 using the
percentage of completion method.
2a. Prepare journal entries for 2021 to record the
transactions described (credit "various accounts" for construction
costs incurred).
2b. Prepare journal entries for 2022 to record the
transactions described (credit "various accounts" for construction
costs incurred).
3a. Prepare a partial balance sheet to show the
presentation of the project as of December 31, 2021.
3b. Prepare a partial balance sheet to show the
presentation of the project as of December 31, 2022.
In: Accounting
Barlow Company manufactures three products—A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow:
| Product | |||||||||||
| A | B | C | |||||||||
| Selling price | $ | 180 | $ | 270 | $ | 240 | |||||
| Variable expenses: | |||||||||||
| Direct materials | 24 | 80 | 32 | ||||||||
| Other variable expenses | 102 | 90 | 148 | ||||||||
| Total variable expenses | 126 | 170 | 180 | ||||||||
| Contribution margin | $ | 54 | $ | 100 | $ | 60 | |||||
| Contribution margin ratio | 30 | % | 37 | % | 25 | % | |||||
The same raw material is used in all three products. Barlow Company has only 6,000 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due to a strike in its supplier’s plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $8 per pound.
Required:
1. Calculate the contribution margin per pound of the constraining resource for each product.
2. Assuming that Barlow has unlimited demand for each of its three products, what is the maximum contribution margin the company can earn when using the 6,000 pounds of raw material on hand?
3. Assuming that Barlow’s estimated customer demand is 500 units per product line, what is the maximum contribution margin the company can earn when using the 6,000 pounds of raw material on hand?
4. A foreign supplier could furnish Barlow with additional stocks of the raw material at a substantial premium over the usual price. Assuming Barlow’s estimated customer demand is 500 units per product line and that the company has used its 6,000 pounds of raw material in an optimal fashion, what is the highest price Barlow Company should be willing to pay for an additional pound of materials?
In: Accounting
University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each.
The following data appear in the company records for the current period:
| Maintenance | Personnel | Printing | Developing | |||||||||
| Machine-hours | — | 1,400 | 1,400 | 4,200 | ||||||||
| Labor-hours | 900 | — | 900 | 3,100 | ||||||||
| Department direct costs | $ | 2,800 | $ | 12,800 | $ | 14,500 | $ | 11,700 | ||||
Required:
Allocate the service department costs using the step method, starting with the Maintenance Department. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)
| Maintenance | Personnel | Printing | Developing | |||
| Service department costs | $2,800 | $12,800 | $0 | $0 | ||
| Maintenance | -2,800 | 560 | $560 | $1,680 | ||
| Personnel | -13,360 | 2,672 | 10,688 | |||
| Total costs allocated | 0 | 0 | 3232 | 12368 |
In: Accounting
Short term decision making
Shot plc manufactures three types of furniture products - chairs, stools and tables. The budgeted unit cost and resource requirements of each of these items are detailed below:
|
|
Chair |
Stools |
Table |
||
|
|
($) |
($) |
($) |
||
|
Timber cost |
5.00 |
15.00 |
10.00 |
||
|
Direct labour cost |
4.00 |
10.00 |
8.00 |
||
|
Variable overhead cost |
3.00 |
7.50 |
6.00 |
||
|
Fixed overhead cost |
4.50 |
11.25 |
9.00 |
||
|
|
16.50 |
43.75 |
33.00 |
||
|
Budgeted volumes |
4,000 |
2,000 |
1,500 |
per annum
These volumes are believed to equal the market demand for these products. The fixed overhead costs are attributed to the three products on the basis of direct labour hours. The labour rate is $4.00 per hour. The cost of timber is $2.00 per square metre. The products are made from a specialist timber. A memo from the purchasing manager advises you that because of a problem with the supplier it is to be assumed that this specialist timber is limited in supply to 20,000 square metres per annum.
The sales director has already accepted an order for 500 chairs, 100 stools and 150 tables, which if not supplied would incur a financial penalty of $2,000. These quantities are included in the market demand estimates above. The selling prices per unit of the three products are:
-
Chair $20.00
Stool $50.00 Table $40.00
Required:
In: Accounting