1. HK Limited has 100 employees. Each employee earns two weeks of paid vacation per year. Vacation time not taken in the year earned can be carried over to two calendar years. Paid leave is first taken out of the balance brought forward from the previous year and then out of the current year’s entitlement (a FIFO basis). During 2019, 30 employees took both weeks’ vacation, but at the end of the year, 70 employees had vacation time carryover as follows:

During 2019, the average salary for employees is $5,000 per week.                       

2. The profit sharing plan requires HK Ltd. to pay 2% of its net profit to its two directors, Mr. Yau Wen and Ms. Shally Tin. The net profit for 2019 is $3,500,000. Mr. Wen will receive the bonus six months after the end of 2019, whereas Ms. Tin would be paid on July 2021 since she joined the company in March of 2019.                     

3. HK Ltd. agrees to pay a fixed contribution of 5% of employees’ salary to a retirement plan, subject to a cap of $1,250 per month for each employee. The contribution is paid monthly on or before the 10th of the following month. Out of the 200 employees, 160 employees earn an average monthly salary of $20,000.   The remaining employees earn more than $35,000 per month.   

Required:

Classify the nature of the employee benefit(s) above and explain the accounting treatment (provide journal entries if necessary)

Explain what is meant by product/ service standards and best practice models. (200–250 words)

If you identified a need for changes/ improvements to customer service strategies, to whom would you report this and in what format might the report be made? (30–50 words)

To whom should customer feedback be disseminated and why? (120–150 words)

Is it possible for an organisation to provide excellent customer service without every employee having a job they feel makes a real contribution? Explain your answer. (50–100 words)

We should encourage our customers to complain! In a paragraph of at least 250 words, explain what this statement means, how it should be applied, why it should be applied and why a policy of encouraging customer complaints would benefit your organisation, or indeed, any other organisation.

Sunny Ltd., a hand sanitizer manufacturer, has prepared its financial statements for the year ended at December 31, 2019. On February 28, 2020, the board of directors authorized to issue the financial statements to shareholders. The following events have occurred:

1. On December 1, 2019, the board of directors decided to issue $50,000,000, 9% convertible bonds for the purpose of expanding business in other countries. The conversion rate is fixed at 50 shares for bond with face value of $1,000. The convertible bonds are offered to the public on January 15, 2020. The market interest rate for a similar bond without conversion option is at 12%.                                                                                       [3 marks]

2. On October 23, 2019, Sunny signed a contract to sell 10,000 hand sanitizer to a local store at a price of $200 each. However, due to the increase in the cost of materials, the estimated cost of making one hand sanitizer has been increased to $250. Sunny has to deliver the hand sanitizer to its customer on January 30, 2020.                                                      [4 marks]

3. Under the terms of the sales contract, Sunny undertakes to recall its new formulated sanitizer, for its manufacturing defects within six months from the date of sale. The accountants estimated that 5% of the sanitizer will be returned for refund. In January 2020, Sunny discovered a serious problem in the manufacturing process of the new formulated sanitizer. Because of this, Sunny expected that 20% of the sanitizer sold in 2019 will be returned for refund.        [4 marks]

4. On December 15, 2019, a group of customers reported that the hand sanitizer that they bought in 2019 caused them have serious skin infection problems. They filed a lawsuit against Sunny on December 20, 2019. The company’s attorney said that it was probable that Sunny would be liable for the case. However, the amount of damage could not be estimated. [4 marks]

5. On February 12, 2020, the above lawsuit case was settled for the amount of $2,500,000.                                                                                                    [4 marks]
6. Sunny has retail stores in China doing poorly. On February 15, 2020, Sunny estimated that those stores might report a loss of $1,500,000 in 2020.                                       [4 marks]

7. In May 2019, Sunny had legal disputes with Coco Limited. Unable to reach out-of-court settlement with Coco, Sunny sued Coco for compensation for damages in August 2018. In November 2019, Sunny heard good news about the lawsuit in which the company sued Coco. Sunny’s lawyer is confident that the company will win the case and will receive about $120,000 in compensation for damages from Coco in early 2020. Sunny recognized the gain and receivable from litigation of $120,000 in year 2019.                                       [4 marks]

8. On March 1, 2020, a customer owing $600,000 to Sunny filed for bankruptcy. The financial statements include an allowance for doubtful debts pertaining to this customer only of $30,000. [3 marks]

Required:

For each of the above event, state the correct accounting treatments in accordance with Hong Kong Accounting Standards for the year ended at December 31, 2019. If it is an event after the reporting period, identify whether it is an adjusting or non-adjusting event. Give reasons for your answer.

You have been asked by senior management to report on changing customer needs and to compare changes in customer satisfaction. Explain how you would go about doing this, how you would access the necessary data and the reporting procedures you should follow. (300–350 words)

On January 1, 2017, the Kane Kite Company leased a new fabric-cutting machine from Stewart Standard, Inc. Under the terms of the lease, Kane Kite must pay $ 200,000 at the beginning of each year, beginning on January 1, 2017, over a nine- year term. The lease terms do not contain a transfer of ownership and there is no bargain purchase option. There is also no residual value specified in the contract. The cutting machine has a useful life of nine years and Kane Kite depreciates similar equipment owned using the straight- line method. Kane Kite’s incremental borrowing rate is 9% and the 8% implicit rate in the lease is known to Kane Kite. The machine cost Stewart Standard $ 1,300,000 to manufacture and it has a selling price of $ 1,349,328. Stewart has no uncertainties as to future costs to be incurred and collection of the annual lease payment. Kane is required to pay $ 5,600 at the end of each year for maintenance and taxes, which it records as general and administrative expenses.

Required a. What type of lease is this for both the lessee and lessor? b. Prepare the lease amortization table for the lease term. c. Prepare the journal entries necessary for Stewart Standard on January 1, 2017, and on December 31, 2017. d. Prepare the journal entries necessary for Kane Kite Company on January 1, 2017, and on December 31, 2017.

1- Suppose receipts of $20,000 are moved from March to April. (March receipts are now planned at $94,999 while April receipts are planned at $110,210.)

- What change would this have on the total season’s receipt plan?

- What change would this have on the total season’s average stock and turnover?

Discuss the extent to which decision making is relevant in an organisation. ( 15 marks)

ANSWER THE QUESTION IN NEARLY 1000 WORDS.

Shadee Corp. expects to sell 550 sun visors in May and 320 in June. Each visor sells for $21. Shadee’s beginning and ending finished goods inventories for May are 60 and 45 units, respectively. Ending finished goods inventory for June will be 60 units.

Each visor requires a total of $3.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.00 each. Shadee wants to have 27 closures on hand on May 1, 21 closures on May 31, and 22 closures on June 30 and variable manufacturing overhead is $1.75 per unit produced. Suppose that each visor takes 0.70 direct labor hours to produce and Shadee pays its workers $7 per hour. Additional information: Selling costs are expected to be 12 percent of sales. Fixed administrative expenses per month total $1,600.

1. Required: Complete Shadee's budgeted income statement for the months of May and June. (Note: Assume that fixed overhead per unit is $3.00.)

Question 3                                                                                                       10 marks

Barton Company requested a large loan from First National Bank (FNB) to acquire a large piece of land for future expansion. Bart reported current assets of R1,900 ,000 (R430 000 in cash) and current liabilities of R1,075,000. FNB denied the request for a number of reasons. When the Company received the news, the financial controller immediately paid R420 000 that was owed to several trade creditors. He then asked the bank to reconsider the loan application. Based on the abbreviated facts would you advise FNB to advance the loan? Why? Are the actions of the financial controller ethical?

1) What could be the reasons for the denial of the request for a loan? (2)

2) After the actions of the controller what would be your advice for FNB and why (7)

3) Are the actions of the financial controller ethical? (1)

NB: limit your answer for all 3 sub-questions to 500 words or less

1)You are likely using various forms of social media (e.g., Twitter, Facebook). Please explore the idea of how would this non-financial information external to the company be of use? What other nonfinancial information would be useful? Could you think of financial information that is external to the organization that might be useful to management as well?

2)Why is it important for an accountant to understand their business and industry as well as managements informational needs in addition to knowing how to generate financial statements? Please present your own examples.

Please help me out!