HB ltd has been experiencing dwindling sales in its business operations due to competitions from other agents dealing in communication equipment. On 1 January 2006, HB Ltd decided to diversify its operations to the information technology (IT) industry by acquiring SL Ltd, a company dealing in the manufacture of IT equipment and software design.

The summarized financial statements of HB Ltd and SL Ltd were as follows:

Income statement for the year ended 30September 2006

Statement of financial position as at 30 September 2006

                                                       10,000        3,600

Total equity and liabilities            45,600        16,000

Additional information:

1. HB ltd acquired 80% of ordinary share capital of SL ltd for sh. 10,280,000 and also acquired half of the 10% debentures in the company.
2. The fair value of the assets of SL Ltd at the date of acquisition were the same as their book values except for plant whose fair value were more by sh. 3.2 million. As at 1 January 2006, the plant had a remaining useful life of four years. SL Ltd depreciates plant on straight line basis on cost.
3. During the post-acquisition period, HB Ltd sold goods to SL Ltd for sh 12 million. These goods had a cost HB Ltd sh 9 million. Subsequently, SL Ltd sold some of the goods purchased from HB at sh 10 million for 15 million.
4. On 30 June 2006, HB Ltd and SL Ltd paid dividends of sh 1000,000 and 500,000 respectively.
5. Included in the account receivables and payables is sh 750,000 being the amount SL Ltd owed HB Ltd.
6. Goodwill is considered to be impaired by 25% as at September 2006. Goodwill impairment is classified as an administrative expense by the group company.

Required

1. Group Income statement for the year ended 30 September 2006.
2. Group Statement of financial position as at 30 September 2006.

Fox Company manufactures a specialty brass hardware item that it sells to com-

panies that use it as an attachment for the garden hoses they manufacture. During the most recent

month, there were 1,500,000 units in opening inventory. During the month 6,000,000 units were

entered into production and 7,000,000 were completed. The units in ending inventory were 100%

complete with respect to materials costs and 90% complete with respect to conversion costs. The

accounting records show that there were $3,000,000 of materials costs and $750,000 of conver-

sion costs in opening inventory, and in the current month, materials costs of $11,250,000 and

conversion costs of $5,955,000 were added.

Required

(a) Compute the cost per equivalent unit for materials.

(b) Compute the cost per equivalent unit for conversion.

(c) Compute the materials cost in ending work in process.

(d) Compute the conversion cost in ending work in process.

(e) Compute the material costs transferred out.

(f) Compute the conversion cost transferred out

Assume the company has investments in debt securities. One is classified as a trading security and the other is classified as an available-for-sale security. Create a scenario where it is year end and the investments have changed in fair market value. Describe the scenario and explain how the financial statements would be affected. Be detailed and include numbers in the examples. Include any applicable journal entries.

CR Black has supplied the following data for use in its activity based costing system:

Overhead Costs:

Wages and Salaries $ 700,000 Other Overhead Costs $ 400,000 Total Overhead Costs $1,100,000

Activity Cost Pool:

Direct Labor Support

Order Processing

Customer Support

Other

Activity Measure:

Number of direct labor-hours

Number of orders

Number of Customers

This is an organizationSustaining activity

Total Activity:

10,000 DLHs

500 Orders

100 customers

Not applicable

Selling Price $700 per unit Units Ordered 100 units Direct materials $350 per unit Direct labor-hours (DLH) 0.5 DLH per unit Direct labor rate $25 per DLH

Distribution of Resource Consumption across Activities

During the year, CR Black completed an order for a special optical switch for a new customer, Gucwa Telecom. The customer did not order any other products during the year. Data concerning that order follow:

Data concerning the Calandra Telecom Order

5) Prepare a report showing the overhead costs for the order from Calandra, including customer support costs, and prepare a report showing the customer margin for Calandra Telecom.

Please show all work!!

Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 1,075 hours each month to produce 2,150 sets of covers. The standard costs associated with this level of production are:

During August, the factory worked only 800 direct labor-hours and produced 2,500 sets of covers. The following actual costs were recorded during the month:

At standard, each set of covers should require 3.0 yards of material. All of the materials purchased during the month were used in production.

Required:

1. Compute the materials price and quantity variances for August.

2. Compute the labor rate and efficiency variances for August.

3. Compute the variable overhead rate and efficiency variances for August.

Exercise 11-8 Volume Trade-Off Decisions [LO11-5, LO11-6]

Barlow Company manufactures three products—A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow:

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?

E2-6 (Algo) Finding Unknown Values in the Cost of Goods Manufactured Report [LO 2-3, 2-6]

Mulligan Manufacturing Company uses a job order cost system with overhead applied to products at a rate of 150 percent of direct labor cost.

Required:
Treating each case independently, selected from the manufacturing data given below, find the missing amounts. You should do them in the order listed. (Hint: For the manufacturing costs in Case 3, first solve for conversion costs and then determine how much of that is direct labor and how much is manufacturing overhead.) (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar. Enter all amounts as positive values.)

In October 2017, Nicole of Nicole’s Getaway Spa (NGS) eliminated all existing inventory of cosmetic items. The trouble of ordering and tracking each product line had exceeded the profits earned. In December, a supplier asked her to sell a prepackaged spa kit. Feeling she could manage a single product line, Nicole agreed. NGS would make monthly purchases from the supplier at a cost that included production costs and a transportation charge. The spa would use a perpetual inventory system to keep track of its new inventory.
  
    On December 30, 2017, NGS purchased ten units at a total cost of $7.00 per unit. NGS purchased thirty more units at $9.00 in February 2018, but returned five defective units to the supplier. In March, NGS purchased fifteen units at $11.00 per unit. In May, fifty units were purchased at $11.00 per unit; however, NGS took advantage of a 2.00/10, n/30 discount from the supplier. In June, NGS sold fifty units at a selling price of $12.90 per unit and thirty-five units at $10.90 per unit.


Required:
1. State whether the transportation cost included in each purchase should be recorded as a cost of the inventory or immediately expensed.

• Immediately expensed

• Inventory cost

2. Compute the Cost of Goods Available for Sale, Cost of Goods Sold, and Cost of Ending Inventory using the first-in, first-out (FIFO) method. (Do not round intermediate calculations. Round final answers to the nearest dollar amount.)

3-a. Calculate the inventory turnover ratio, using the inventory on hand at December 31, 2017, as the beginning inventory. (Round your answer to 1 decimal place.)

Describe the role of the following agency:

- Treasury

which of the following is a reason the standard mileage rate would be allowed in 2018 for business owner?

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]

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.

The following information relates to Dane City during its fiscal year ended December 31, 20X2:

1. On October 31, 20X2, to finance the construction of a city hall annex, Dane issued 8 percent, 9-year general obligation bonds at their face value of $617,000. Construction expenditures during the period equaled $365,300.
2. Dane reported $110,300 from hotel room taxes restricted for tourist promotion in a special revenue fund. The fund paid $82,000 for general promotions and $23,000 for a motor vehicle.
3. Dane transferred 20X2 general fund revenues of $105,500 to a debt service fund and used them to repay $97,000 of 9 percent, 14-year term bonds and to pay $8,500 of interest. The bonds were used to acquire a citizens’ center.
4. At December 31, 20X2, as a consequence of past services, city firefighters had accumulated entitlements for compensated absences of $83,000. General fund resources available at December 31, 20X2, are expected to be used to settle $18,000 of this amount, and $65,000 is expected to be paid out of future general fund resources.
5. At December 31, 20X2, Dane was responsible for $84,000 of outstanding general fund encumbrances, including the $8,900 for supplies in the following table.
6. Dane uses the purchases method to account for supplies. The following information relates to supplies:

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