John West plc used cars has always hired students from the local university to wash the cars on the lot. John West is considering the purchase of an automatic car wash that would be used in place of the students. The following information has been gathered by John West's accountant to help him make a decision on the purchase:

a) Payments to students for washing cars total R15 000 per year at present.

b) The car wash would cost R21 000 installed, and it would have a 10 year useful life. John West uses straight line depreciation on all assets. The car wash would have a negligible salvage value in 10 years.

c) Annual out-of-pocket costs associated with the car wash would be: wages of students to operate the wash, keep the soap bin full and so forth, R6 300; utilites, R1 800; and insurance and maintenance , R900.

d) John West now earns a return of 20% on the funds invested in his inventory of used cars. He feels that he would have to earn an equivalent rate on the car wash for the purchase to be attractive.

Required:

1) Determine the annual savings that would be realized in cash operating costs if the car wash was purchased.

2) Calculate the simple rate of return promised by the car wash, (Hint: Note that this is a cost reduction project.) Will John West accept this project if he expects a 20% return?

3) Calculate the payback period on the car wash. John West (who has a reputation for being something of a penny-pincher) will not purchase any equipment unless it has a payback of four years or less. Will he purchase the car wash equipment?

4) Calculate ( to the nearest whole percent) the internal rate of return promised by the car wash. Based on this calculation, does it appear that the simple rate of return would normally be an accurate guide in investment decisions?

1. The cost per equivalent unit of direct materials and conversion in the Bottling Department of Beverages on Jolt Company is $0.80 and $0.20, respectively. The equivalent units to be assigned costs are as follows:

   	Equivalent Units
   	Direct Materials	Conversion
   Inventory in process, beginning of period	0	2,650
   Started and completed during the period	55,430	55,430
   Transferred out of Bottling (completed)	55,430	58,080
   Inventory in process, end of period	3,160	2,600
   Total units to be assigned costs	58,590	60,680

   The beginning work in process inventory had a cost of $3,640. Determine the cost of completed and transferred out production and the ending work in process inventory. Round answers to nearest whole dollar.

   Completed and transferred out production	$
   Inventory in process, ending	$

1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold.

3. Prepare an income statement.

Prepare an income statement.

Please use Microsoft excel. Using a Nested Loop, what is the equation to solve for letter grade

What is target costIng? Please provide an in-depth explanation of its benefits to an organization. More specifically, the aerospace industry.

Martinez Co. is building a new hockey arena at a cost of $2,690,000. It received a downpayment of $550,000 from local businesses to support the project, and now needs to borrow $2,140,000 to complete the project. It therefore decides to issue $2,140,000 of 12%, 10-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield 11%.

- Prepare the journal entry to record the issuance of the bonds on January 1, 2016.

- Prepare a bond amortization schedule up to and including January 1, 2020, using the effective interest method.

- Assume that on July 1, 2019, Martinez Co. redeems half of the bonds at a cost of $1,173,900 plus accrued interest. Prepare the journal entry to record this redemption.

1. Apple, Inc. has approximately $178 billion dollars in cash. Recently, they paid a quarterly cash dividend of approximately $0.52 per share. Do you think management is justified in keeping that large amount of cash rather than paying out a larger dividend?

2. Think of a business you would like to start, or maybe you already have one. Discuss the best way to finance your working capital and why.

3.  If you were to start a business, what mix of equity to debt would you be comfortable with and why?

please put the number by the answers. Thanks.

PART A

Bushman Ltd enters into a contract with Lessor Ltd for the use of a ship for one year. The ship is to be used to transport wood from central Queensland to the port of Brisbane. Lessor does not have substitution rights.

The contract specifies a maximum distance that the ship can be used. Bushman Ltd is responsible for operating the ship from central Queensland to the port of Brisbane and is able to choose the details of the journeys (including speed, route and rest stops) within the parameters of the contract. Bushman Ltd does not have the right to continue using the trip after the specified duration is complete.

REQUIRED:

Identify whether a lease exists for Bushman Ltd in accordance with the provisions of AASB 16

‘Leases’. Provide any necessary explanations to support your answer.

PART B

On 1 July, 2020 Bushman Ltd entered into a four-year lease of a building from Lessor Ltd. The terms of the lease agreement are as follows.

• Four payments of $200,000 are due starting on 30 June 2021 (after interest has accrued).
• Bushman can elect to terminate the lease at any time, but they need to pay 20% of an annual lease payment for administrative purposes upon termination
• The economic life of the building is estimated to be ten years.
• The fair value of the building at the commencement of the lease is $1,000,000.
• At the end of the lease term, Bushman has the option to purchase the building from Lessor Ltd at a price that is 10% lower than the predicted market value of the building at that time.
• The interest rate implicit in the lease is 5 per cent.

Assume that the contract is a lease for the purposes of AASB 16 ‘Leases’.

REQUIRED:

Explain how Lessor Ltd would classify the lease in accordance with the requirements of AASB

116 ‘Leases’. Show all necessary working, explanations and assumptions to support your

answer. Also prepare the necessary journal entries for the first year in the books of Lessor Ltd (i.e. 1 July 2020 to 30 June 2021).

PART C

REQUIRED:

Assume also that the unguaranteed residual value of the building at the end of the lease term is $100,000. Prepare any necessary journal entries in the books of Bushman Ltd for the period 1 July 2020 to 30 June 2023 to record the lease in accordance with the requirements of AASB 16 ‘Leases’. Show all necessary working, explanations and assumptions to support your answer.

Oyolium Ltd was incorporated 10 years ago and has been quite successful. The company wants to expand and requires further funds to do so. Rather than seeking finance from Banks it decides to offer Ordinary shares to the public. A Prospectus was issued on 1^st August 20X3 seeking applications for 5,000,000 Ordinary share at $10.00 each. Details of the offer are:

• $3.00 on Application to be received on or by 30^th September 20X3
• $2.00 payable on Allotment
• The remaining $5.00 to be available for Call at the company’s discretion.

Applications for 7,000,000 shares were received by the required date. Details are:

• 1,000,000 applications paid for the shares in full (ie $10.00)
• The remaining applications (6,000,000) paid $3.00 as requested.

The company decided to deal with the oversubscription as follows:

• The applications who paid for their shares in full were allotted all the share applied for. Excess money was held by the company.
• Of the remaining applications:
• 1,000,000 applicants had their applications refused and their money refunded.
• The remaining applications (5,000,000) were allotted shares in proportion to their applications (ie 4/5). Any excess money was retained by the company.

Shares were allotted on the 1^st October 20X3 and all allotment monies were received on 31^st October 20X3.

On the 1^st January 20X4 the company made a call of $2.50 per share required to be paid by the 28^th February 20X4. All shareholders paid their monies as required.

REQUIRED

Prepare all the general journal entries in the records of Oyolium Ltd to record all the described events above.

Adams Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system to activity-based costing. The following are the cost data that Jane Price, the cost accountant, prepared for the third quarter of 2018 (during which Adams made 70,000 tennis racquets and 29,400 badminton racquets).

   
Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the beginning of the quarter. Facility-level cost includes depreciation of all production equipment.

   
Required

1. Compute the cost per unit for each product.

2. If management wants to price badminton racquets 30 percent above cost, what price should the company set?

Apache Corporation manufactures a single product called E-Z Printer. The standard cost per unit of product is shown below.

The predetermined manufacturing overhead rate is $7 per direct labor hour. It was computed from a master manufacturing overhead budget based on normal production of 20,000 direct labor hours (10,000 units) for the month. The master budget showed total variable costs of $80,000 ($4.00 per hour) and total fixed overhead costs of $60,000 ($3.00 per hour). Actual costs for October in producing 9,700 units were as follows.

The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.

Instructions

Compute the following variances for the E-Z Printer for the Apache Corporation and indicate whether the variance is favorable or unfavorable (F or U). Round computations and final answers to 0 decimal places. Show ALL computations or NO credit given.

1. Total materials variance
2. Direct materials price variance
3. Direct materials quantity variance
4. Total labor variance
5. Direct labor price variance
6. Direct labor quantity variance
7. Total overhead variance

Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system:

*Applied to Work in Process during the period.

The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored.

Required:

1. How many units were produced last period?

2. How many pounds of direct material were purchased and used in production?

3. What was the actual cost per pound of material? (Round your answer to 2 decimal places.)

4. How many actual direct labor-hours were worked during the period?

5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.)

6. How much actual variable manufacturing overhead cost was incurred during the period?

Boyne University offers an extensive continuing education program in many cities throughout the state. For the convenience of its faculty and administrative staff and to save costs, the university operates a motor pool. The motor pool’s monthly planning budget is based on operating 19 vehicles; however, for the month of March the university purchased one additional vehicle. The motor pool furnishes gasoline, oil, and other supplies for its automobiles. A mechanic does routine maintenance and minor repairs. Major repairs are performed at a nearby commercial garage.

The following cost control report shows actual operating costs for March of the current year compared to the planning budget for March.

The planning budget was based on the following assumptions:

1. $0.22 per mile for gasoline.
2. $0.11 per mile for oil, minor repairs, and parts.
3. $46 per automobile per month for outside repairs.
4. $81 per automobile per month for insurance.
5. $8,610 per month for salaries and benefits.
6. $206 per automobile per month for depreciation.

The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pool’s performance.

Required:

1. Calculate the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

7

Decision on Accepting Additional Business

Brightstone Tire and Rubber Company has capacity to produce 196,000 tires. Brightstone presently produces and sells 150,000 tires for the North American market at a price of $97 per tire. Brightstone is evaluating a special order from a European automobile company, Euro Motors. Euro is offering to buy 23,000 tires for $81.75 per tire. Brightstone's accounting system indicates that the total cost per tire is as follows:

Brightstone pays a selling commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $5 per tire. In addition, Euro has made the order conditional on receiving European safety certification. Brightstone estimates that this certification would cost $117,300.

a. Prepare a differential analysis dated January 21 on whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors. If an amount is zero, enter zero "0". If required, round interim calculations to two decimal places.

Determine whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors.

b. What is the minimum price per unit that would be financially acceptable to Brightstone? Round your answer to two decimal places.

$per unit