On January 1, 2017, Windsor Corporation sold a building that cost $254,700 and that had accumulated depreciation of $105,950 on the date of sale. Windsor received as consideration a $244,700 non-interest-bearing note due on January 1, 2020. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2017, was 9%. At what amount should the gain from the sale of the building be reported? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

On January 1, 2017, Windsor Corporation purchased 350 of the $1,000 face value, 9%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2027, and pay interest annually beginning January 1, 2018. Windsor purchased the bonds to yield 11%. How much did Windsorpay for the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Windsor Corporation bought a new machine and agreed to pay for it in equal annual installments of $5,280 at the end of each of the next 10 years. Assuming that a prevailing interest rate of 6% applies to this contract, how much should Windsorrecord as the cost of the machine? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Windsor Corporation purchased a special tractor on December 31, 2017. The purchase agreement stipulated that Windsor should pay $19,010 at the time of purchase and $4,500 at the end of each of the next 8 years. The tractor should be recorded on December 31, 2017, at what amount, assuming an appropriate interest rate of 12%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Windsor Corporation wants to withdraw $119,850 (including principal) from an investment fund at the end of each year for 9 years. What should be the required initial investment at the beginning of the first year if the fund earns 11%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

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.

(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.)

You suggest that the Villige Pharmacy should use a flexible budget to assist decision making, planning and control.

The company expects to issue prescriptions 20,000 over the coming year.  

Assuming that the first 10,000 prescriptions require 0.10 direct labour hours to dispense and the remainder require 0.15 direct labour hours and that overheads are absorbed on the basis of direct labour hours.

The budgeted semi-variable costs for each of the four overhead items are split as follows:

1. Prepare an overhead budget for the expected activity level for the coming year.

2. Prepare an overhead budget that reflects activity that is 10 per cent higher than expected.

are share price always reflective of the underlying performance of a company? provide arguments for and against. at the aggregate level, does the stock market always reflect the underlying performance of all firms? provide examples if possible.

The first financial instrument was a loan. On January 1, the company borrowed 5million on a key shareholder at rate of 3%, at that time when the market rate of interest was 5%. In order to convince the shareholder to lend the money to the company at a rate lower the the market rate of interest, the company agreed that, in 5 years the shareholder would have the option of either accepting full repayment of the debt, or receiving 500,000 shares in the company. The second financial instrument was a compensatory stock option plan that was granted to 10 key management positions for the first time. The company wanted to provide these employees with additional compensation and due to financial constraints could not increase salaries. The plan allowed these management employees to purchase 5,000 options each to purchase shares at $50 each when they were actually worth $100. The options were granted on January 1, 2017 and were exercisable within a two year period. Total compensation was estimated to be $550,000. And the expected period of benefit was one year beginning on the grant date. No other management employees exercised their options during the year but you exercised all of your options on December 31st 2017. The final transaction. The company decided to enter a contract to purchase U.S currency (December 15 2017). The company agreed to buy $7 million in U.S. currency for $7,070,000 (U.S. $1 = Canadian $1.01) from foreign currency inc. using a 90 day forward contract. Any changes to the Canadian dollars will be transferred to the company. On December 31, 2017 the new value was U.S. $1 = Canadian $ 1.02. Assume fair value of contract was 50,000$ at December 31, 2017

Required:

B) determine the carrying amount of each statement of financial portion at near end, December 31, 2017

Selected comparative financial statements of Korbin Company follow:

KORBIN COMPANY Comparative Income Statements For Years Ended December 31, 2017, 2016, and 2015

2017 2016 2015 Sales $ 392,189 $ 300,449 $ 208,500 Cost of goods sold 236,098 189,884 133,440 Gross profit 156,091 110,565 75,060 Selling expenses 55,691 41,462 27,522 Administrative expenses 35,297 26,440 17,306 Total expenses 90,988 67,902 44,828 Income before taxes 65,103 42,663 30,232 Income taxes 12,109 8,746 6,137 Net income $ 52,994 $ 33,917 $ 24,095 KORBIN COMPANY Comparative Balance Sheets December 31, 2017, 2016, and 2015 2017 2016 2015 Assets Current assets $ 53,162 $ 41,593 $ 55,599 Long-term investments 0 900 3,460 Plant assets, net 100,263 106,488 64,372 Total assets $ 153,425 $ 148,981 $ 123,431 Liabilities and Equity Current liabilities $ 22,400 $ 22,198 $ 21,600 Common stock 71,000 71,000 53,000 Other paid-in capital 8,875 8,875 5,889 Retained earnings 51,150 46,908 42,942 Total liabilities and equity $ 153,425 $ 148,981 $ 123,431

2. Complete the below table to calculate income statement data in common-size percents.

3. Complete the below table to calculate the balance sheet data in trend percents with 2015 as the base year.

Sharp Company manufactures a product for which the following standards have been set:

During March, the company purchased direct materials at a cost of $43,335, all of which were used in the production of 2,425 units of product. In addition, 4,000 direct labor-hours were worked on the product during the month. The cost of this labor time was $28,000. The following variances have been computed for the month:

Required:

1. For direct materials:

a. Compute the actual cost per foot of materials for March.

b. Compute the price variance and the spending variance.

2. For direct labor:

a. Compute the standard direct labor rate per hour.

b. Compute the standard hours allowed for the month’s production.

c. Compute the standard hours allowed per unit of product.

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 990 hours each month to produce 1,980 sets of covers. The standard costs associated with this level of production are:

During August, the factory worked only 1,000 direct labor-hours and produced 2,200 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.

(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.)

Tshepo and Onalenna are two graduates who were employed by a big company in Pikwe. after gaining some experience, they gace in to the temptation to go it alone. They approached a company consultant in town who advised that they could open their own company with the two as directors sharing 50:50. Their first major business was through a tender for construction of an oil pipeline from Maun to Franscis town. This tender was valued at P50 million. After receiving their first payment, they all over suddenly become spent thrift. They settled for expensive procurement of cars, houses; which they billed on the company. As a consequence taxes bagan to fall due and government pressed them to account for the monies they had received. Fearing they might be prosecuted, they withdraw all the money and migrate to South Africa. The company has been betrayed and so are the employees and the government.

required :

In relation to company law, explain the doctrine of separate legal personality and illustrate the effect of the doctrine on the liability of owners of the company  

Albuquerque, Inc., acquired 36,000 shares of Marmon Company several years ago for $900,000. At the acquisition date, Marmon reported a book value of $980,000, and Albuquerque assessed the fair value of the noncontrolling interest at $100,000. Any excess of acquisition-date fair value over book value was assigned to broadcast licenses with indefinite lives. Since the acquisition date and until this point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast licenses.

At the present time, Marmon reports $1,110,000 as total stockholders’ equity, which is broken down as follows:

View the following as independent situations:

1. a. & b. Marmon sells 8,000 and 5,000 shares of previously unissued common stock to the public for $30 and $20 per share. Albuquerque purchased none of this stock. What journal entry should Albuquerque make to recognize the impact of this stock transaction? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.)

During the year, Hepworth Company earned a net income of $59,225. Beginning and ending balances for the year for selected accounts are as follows:

There were no financing or investing activities for the year. The above balances reflect all of the adjustments needed to adjust net income to operating cash flows.

Required:

X

Amount Descriptions

Refer to the list below for the exact wording of an amount description within your Statement of Cash Flows.

X

Operating Cash Flows - Indirect Method

1. Prepare a schedule of operating cash flows using the indirect method. (Note: Use a minus sign to indicate any decreases in cash or cash outflows. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.)

Final questions

2. Suppose that all the data used in Requirement 1 except the ending accounts payable and cash balances are not known. Assume also that you know that the operating cash flow for the year was $20,075. What is the ending balance of accounts payable?

3. Conceptual Connection: Hepworth has an opportunity to buy some equipment that will significantly increase productivity. The equipment costs $25,000. Assuming exactly the same data used for Requirement 1, can Hepworth buy the equipment using this year’s operating cash flows?

The Sunbelt Corporation has $44 million of bonds outstanding that were issued at a coupon rate of 12.175 percent seven years ago. Interest rates have fallen to 11.50 percent. Mr. Heath, the Vice-President of Finance, does not expect rates to fall any further. The bonds have 18 years left to maturity, and Mr. Heath would like to refund the bonds with a new issue of equal amount also having 18 years to maturity. The Sunbelt Corporation has a tax rate of 36 percent. The underwriting cost on the old issue was 3.3 percent of the total bond value. The underwriting cost on the new issue will be 1.5 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with a call premium of 8 percent starting in the sixth year and scheduled to decline by one-half percent each year thereafter (consider the bond to be seven years old for purposes of computing the premium). Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Assume the discount rate is equal to the aftertax cost of new debt rounded up to the nearest whole percent (e.g. 4.06 percent should be rounded up to 5 percent).

a. Compute the discount rate. (Do not round intermediate calculations. Input your answer as a percent rounded up to the nearest whole percent.)
Discount Rate:_____________

b. Calculate the present value of total outflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)
PV of total outflows:_________

c. Calculate the present value of total inflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)
PV of total inflows:_______

d. Calculate the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
Net present value:_______
e. Should the Sunbelt Corporation refund the old issue?
Yes or No

Washington County’s Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board’s decision appear below.

In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $165,000. The old snowplow could be sold now for $16,500. The new, larger plow will cost $14,000 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet service it will bring to the county, will increase economic activity in the community. The board projects that the increased economic activity will result in $72,000 per year in additional tax revenue for the county.

In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county’s hurdle rate for capital projects is 11 percent.

Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)

Required:

1. 1. Prepare a net-present-value analysis of the proposed long runway.

QUESTION ONE

1. Briefly explain the following types of errors:

(i) Error of commission                                                                                          

(ii) Error of principle                                                                                              

(iii) Complete reversal of entries                                                                             

(iv) Compensating errors                                                                                        

2. The trial balance of Amanda Ltd as at 30 April 2018 did not balance. On investigation, the following errors were discovered:
   1. A loan of Sh.2,000,000 from one of the directors has been correctly entered in the cashbook but posted to the wrong side of the loan account.
   2. The purchase of a motor vehicle on credit fro Sh.2,860,000 had been recorded by debiting the supplier’s account and crediting the motor expenses account.
   3. A cheque for Sh.80,000 from Ogola, a customer to whom goods are regularly supplied on credit, was correctly entered in the cashbook but was posted to the credit of bad debts recovered account in the mistaken belief that it was a receipt from Agola, a customer whose debt had been written off three years earlier.
   4. In reconciling the company’s cash book with the bank statement, it was found that bank charges of Sh.38,000 had not been entered in the company’s records.
   5. The totals of the cash discount columns in the cashbook for the month of April 2018 had not been posted to the respective discount accounts.

The figures were:

6. The company had purchased some plant on 1 March 2017 for Sh.1,600,000. The payment was correctly entered in the cashbook but was debited to the plant repairs account. Depreciation on such plant is provided for at the rate of 20% per annum on cost.

Required:

(i) Journal entries with narrations to correct the above errors.                                

(ii) Suspense accounts showing the original difference                                            

1.Sweet Company’s outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100 par value and 11,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

Dividend Declared

Year 1 $ 3,000

Year 2 $ 7,000

Year 3 $ 37,000

The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Multiple Choice

A.$24,000 preferred; $23,000 common.
B.$15,000 preferred; $32,000 common.
C.$8,000 preferred; $39,000 common.
D.$19,000 preferred; $28,000 common.
E.$16,000 preferred; $31,000 common.

2.Torino Company has 2,400 shares of $10 par value, 4.5% cumulative and nonparticipating preferred stock and 24,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

Multiple Choice

A.$1,660.
B.$580.

C.$2,160.

D$1,080.
E.$500.

3.Global Corporation had 41,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 25% stock dividend when the market value of each share was $25. The entry to record the dividend declaration is:

Multiple Choice

A.Debit Retained Earnings $205,000; credit Common Stock Dividend Distributable $205,000.

B.Debit Retained Earnings $256,250; credit Common Stock Dividend Distributable $256,250.

C.Debit Retained Earnings $256,250; credit Common Stock Dividend Distributable $205,000; credit Paid-In Capital in Excess of Par Value, Common Stock $51,250.

D.Debit Retained Earnings $256,250; credit Cash $256,250.

E.No entry is made until the stock is issued.

4.A corporation issued 5,700 shares of $10 par value common stock in exchange for some land with a market value of $84,000. The entry to record this exchange is:

A.Debit Land $84,000; credit Common Stock $57,000; credit Paid-In Capital in Excess of Par Value, Common Stock $27,000.

B.Debit Land $84,000; credit Common Stock $84,000.

C.Debit Land $57,000; credit Common Stock $57,000.

D.Debit Common Stock $57,000; debit Paid-In Capital in Excess of Par Value, Common Stock $27,000; credit Land $84,000.

E.Debit Common Stock $84,000; credit Land $84,000.

5.A corporation declared and issued a 20% stock dividend on October 1. The following information was available immediately prior to the dividend:

Retained earnings $ 690,000

Shares issued and outstanding 54,000

Market value per share $ 21

Par value per share $ 5

The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:

Multiple Choice

A.$54,000.

B.$(54,000).

C.$0.

D.$226,800.

E.$(226,800).