(c) Concise Limited makes a component for one of the engines that it builds. It uses, on average, 2,000 of these components, steadily throughout the year. The component costs $16 per unit to make and it costs an additional $320 to setup the production process each time a batch of components is made. The holding cost per unit is 10% of the unit production cost. The company makes these components at a rate of 200 per week, and the factory is open for 50 weeks per annum. Calculate the Economic Batch Quantity EBQ. (d) List and explain seven key purposes of a budgeting system. (e) Briefly explain any four (4) approaches to budgeting

DIRECTIONS: Summarize these notes

The Current Ratio measures a firm’s ability to pay off its short-term obligations. It is calculated as follows: Current Ratio = Current Assets/Current liabilities Ideally, current ratio of 2 is desirable. Current ratio for both Lockheed Martin and Raytheon is less than 2. Moving from 2016 to 2017, the current ratio for both the companies improves indicating increase in current assets or decrease in current liabilities or both. For Lockheed Martin the current ratio improves from 1.2 to 1.38 and for Raytheon it moves from 1.54 to 1.66. Between the two companies, Raytheon is better placed as it has higher current ratios in both 2016 and 2017. Quick Ratio measures a firm's ability to meet current liabilities with its most liquid assets. It is calculated as: Quick Ratio = Current Assets excluding inventories/Current liabilities A quick ratio above 1 is considered safe as liabilities can be safely paid back using liquid assets. Raytheon's quick ratio in 2016 and 2017 is 1.35 and 1.49. The company is well poised. Its quick ratio is improving year to year. Quick ratio less than 1 indicates that the firm cannot fully pay back its liabilities with its most liquid assets. Lockheed Martin has quick ratio of 0.80 and 0.91 in 2016 and 2017. This is a worrisome situation for Lockheed Martin. Even though the quick ratio is improving, it is still less than 1. Raytheon is in a better position than Lockheed Martin as far as liquidity is concerned. From the above ratios, it can be observed that Lockheed is better in terms of asset turnover meaning that it is more efficient in using its assets. Whereas, Raytheon fairs a lot better in terms of converting its account receivables into cash. Raytheon takes about 17 days to do so which contrasts with Lockheed's 60 days. Based on Net Profit Margin, Lockheed Martin performs better than Raytheon as Lockheed Martin’s was 11.22% whereas Raytheon’s was just 7.98% only. Higher Net Profit Margin implies that the firm generates more net profit from each dollar sales it makes. Based on Total Assets turnover, Lockheed Martin performs better than Raytheon as Lockheed Martin’s was .98 whereas Raytheon was just .83. Higher total asset turnover implies that the firm generates more revenue from each dollar asset it has invested in the firm. Based on equity multiplier, Equity multiplier does not always explain about firm’s profitability. Instead, it explains the ratio of total assets of the firm versus total equity for the respective period. Higher the ratio, lower the firm’s dependency on equity capital and vice-versa. Lockheed Martin’s equity multiplier of 21.03 implies that the firm depends very less on its equity capital when compared to Raytheon.

Define

Define

(a)Negotiated transfer pricing method

(b)Marketing based transfer pricing method

Effect of each method on the divisional performance

Exercise 12-5 The following information is available for Splish Brothers Inc. for the year ended December 31, 2017. Beginning cash balance $ 47,835 Accounts payable decrease 3,933 Depreciation expense 172,206 Accounts receivable increase 8,717 Inventory increase 11,693 Net income 301,998 Cash received for sale of land at book value 37,205 Cash dividends paid 12,756 Income taxes payable increase 4,996 Cash used to purchase building 307,207 Cash used to purchase treasury stock 27,638 Cash received from issuing bonds 212,600 Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Splish Brothers Inc. Statement of Cash Flows—Indirect Method $ Adjustments to reconcile net income to $ $

Explain the concept of benchmarking with respect to the analysis and interpretation of profit. Discuss the advantages and disadvantages of the different ways of monitoring profit.

ACCT 301

ASSIGNMENT 4

1. You are required to prepare a Direct Material Budget for the second quarter (April to June) by considering a manufacturing company operating in Saudi Arabia as a sample study.                                                                          (4marks)

2. You are required to prepare the Sales price variance and Revenue sales quantity variance by taking any of your choice Saudi based company and suggest the suitable reasons for the variances.                                                              (3marks)

3. You are required to allot the support department cost to operations department by taking any Saudi based operating company.                            (3marks)

The two discussion questions for this week are as follows:

1. In thinking about overcoming the negative publicity and securities fraud fines related to revenue fraud, some companies succeed and move on, while others fail following the fraud. What forces might influence corporate “survivability” in the face of financial reporting fraud related to revenue?
2. How would you feel entrusting the care of your elderly relative to a company that was previously involved in fraudulent financial reporting?
   1. Would you be able to trust that company to care for your relative?
   2. Do you think that the company has moved on and is now a reliable caregiver that you could trust?

On April 1, 2020, Blossom Ltd. paid $150 for a call to buy 530 shares of NorthernTel at a strike price of $25 per share any time during the next six months. The market price of NorthernTel’s shares was $25 per share on April 1, 2020. On June 30, 2020, the market price for NorthernTel’s stock was $35 per share, and the fair value of the option was $8,200.

Prepare the journal entry to record the purchase of the call option on April 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

eTextbook and Media

List of Accounts

Prepare the journal entry to recognize the change in the call option’s fair value as at June 30, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

eTextbook and Media

List of Accounts

Prepare the journal entry that would be required if Blossom Ltd. exercised the call option and took delivery of the shares as soon as the market opened on July 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Barings Bank collapsed about two decades ago as a result of derivative trading. Identify any other high profile corporate bankruptcy attributable to derivative trading and. Describe the events that created the problem outlining the differences and similarities between Barings Bank and your chosen institution. What are the lessons that financial institutions, investors and regulators can learn from the occurrence of such events.

compare the IMA code of conduct to the AICPA code of professional conduct and assess the effectiveness of the two codes

Bank Reconciliation and Entries

The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,890. During May, the total cash deposited was $75,440 and checks written totaled $70,050. The bank statement indicated a balance of $25,570 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

1. Checks outstanding totaled $11,390.
2. A deposit of $9,280, representing receipts of May 31, had been made too late to appear on the bank statement.
3. The bank had collected for Brentwood Bike Co. $4,900 on a note left for collection. The face of the note was $4,530.
4. A check for $580 returned with the statement had been incorrectly charged by the bank as $850.
5. A check for $410 returned with the statement had been recorded by Brentwood Bike Co. as $140. The check was for the payment of an obligation to Adkins Co. on account.
6. Bank service charges for May amounted to $50.
7. A check for $1,130 from Jennings Co. was returned by the bank because of insufficient funds.

Instructions:

1. Prepare a bank reconciliation as of May 31.

2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank.

3. If a balance sheet is prepared for Brentwood Bike Co. on May 31, what amount should be reported as cash?
$

Collin Zucs, CFO of Travel United, Inc., invested some of the firm's excess cash in the common shares of what he thought were three undervalued securities. At year-end, he reviewed how the portfolio of securities had done.

Required

1. Calculate the value that would be assigned to the portfolio of securities on Travel United's balance sheet at year-end.

$Answer

2. Calculate the income statement effect of the portfolio of securities at year-end.

$Answer Answer

3. Calculate the income statement effect of the portfolio of securities at year-end assuming all securities are classified as available-for-sale.

$Answer

4. Are the company's reported earnings impacted by whether the portfolio of securities are classified as trading versus available-for-sale?

Answer

Will the company's income taxes be impacted?

The Skysong, Inc. opened for business on May 1, 2020. Its trial balance before adjustment on May 31 is as follows.

In addition to those accounts listed on the trial balance, the chart of accounts for Skysong, Inc. also contains the following accounts and account numbers: No. 142 Accumulated Depreciation—Buildings, No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.

Other data:

Do the following:

A. Journalize the adjusting entries on May 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.)

B. Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post sthe adjusting entries. (Post entries in the order of journal entries posted in the previous part of the question. Round answers to 0 decimal places, e.g. 5,275.)

C.  Prepare an adjusted trial balance on May 31. (Round answers to 0 decimal places, e.g. 5,275.)

D.  Prepare an income statement for the month of May 31. (Round answers to 0 decimal places, e.g. 5,275.)

E. Prepare an retained earnings statement for the month of May 31. (Round answers to 0 decimal places, e.g. 5,275.)

F. Prepare a balance sheet at May 31. (List Assets in order of liquidity. List Property, plant and equipment in order of land, buildings and equipment. Round answers to 0 decimal places, e.g. 5,275.)