Q-02 (MARKS: 15 )

After reviewing the financial statements section of Annual report dated Dec-31, 201 the following points regarding Statement of financial Position against which doubts are presented to you.

Inventory: The following items are included in Inventory

1. Goods held on consignment from another company
2. Short term investments in shares and bonds that will be resold in near future
3. Goods sold f.o.b destination that are in transit at Dec-31
4. Office supplies
5. Goods sent on consignment to another company

Investments:

1. Bonds that will mature in 5 years are purchased; the company has a strategy to hold them to collect the contractual cash flow on bonds for 5 years. (These bonds are reported at fair value).
2. Ordinary shares of a distributor are purchased to meet regulatory requirement for doing business in the distributor’s region, the investment will be held indefinitely. (Classified as trading).

Property Plant and Equipment

1. Interest cost during the construction of a building is not included in the cost of the building.
2. There is a recovery of impairment loss regarding equipment resulting in an amount in excess of the carrying value that would result had impairment would not occurred.
3. Gain on Revaluation of Land is disclosed in Income statement.

Receivables

The company has treated a tax refund as receivable the outcome of which is probable

Liabilities

Including in liabilities is a contingency regarding a litigation the outcome of which is possible but not probable.

           Required: You being Financial Analyst asked to Comment on each Note stated above, also give your suggestions for a right treatment if there is a wrong treatment.

During 2017, Larkspur Company started a construction job with a contract price of $1,610,000. The job was completed in 2019. The following information is available. 2017 2018 2019 Costs incurred to date $405,900 $766,500 $1,076,000 Estimated costs to complete 584,100 328,500 –0– Billings to date 300,000 893,000 1,610,000 Collections to date 267,000 809,000 1,435,000 Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. Gross profit recognized in 2017 $ Gross profit recognized in 2018 $ Gross profit recognized in 2019 $

Indiana Co. began a construction project in 2016 with a contract price of $150

million to be received when the project is completed in 2018. During 2016, Indiana

incurred $36 million of costs and estimates an additional $84 million of costs to

complete the project. Indiana recognizes revenue over time and for this project

recognizes revenue over time according to the percentage of the project that has

been completed.

Suppose that, in 2017, Indiana incurred additional costs of $63.75 million and

estimated an additional $42.75 million in costs to complete the project. What profit

or loss will Indiana record for 2017?

During 2020, Sandhill Company started a construction job with a contract price of $1,590,000. The job was completed in 2022. The following information is available.

Part 1

Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.

1) Find the minimum number of football fans required in a poll to estimate, within 1.5%, the percentage who believe that LeBron James could play in the NFL. Use 90% confidence, and assume no prior estimate of the percentage in question is available.

Select one:

a. 2037

b. 23

c. 609

d. 3007

2)Your professor wishes to estimate the proportion of high school students enrolled in college-level courses each school year. How large a sample is necessary if she wishes to be 90% confident with a margin of error of 3.5 percent? From an old 1999 study, the percentage of high school students enrolled in college-level courses was estimated to be 18.3%.

Select one:

a. 330

b. 469

c. 810

d. 331

3)In a sample of 56 tax returns filed by local hotel managers in a recent year, the taxable incomes are found to have a mean of $41225 and a population standard deviation of $6112. Construct the 99% confidence interval for the mean taxable income of all local hotel manager that year.

Select one:

a. 39255 < Mu < 41259

b. 39624 < Mu < 42826

c. 39122 < Mu < 43328

d. 39121 < Mu < 43327

4)Noise levels at various area urban hospitals were measured in decibels. The mean of the noise levels in 84 corridors was 61.2 decibels, and the population standard deviation was 7.9. Find the margin of error for a 90% confidence interval for the mean.

Select one:

a. 10.9844

b. 6.1392

c. 1.4179

d. 2.2579

In a study of 10 insurance sales representatives from a certain large city, the average age of the group was 48.6 years with a standard deviation of 4.1 years. Find the 90% confidence interval of the population mean age of all insurance sales representatives in that city.

Select one:

a. 45.63 < Mu < 48.50

b. 46.23 < Mu < 50.99

c. 46.22 < Mu < 50.98

d. 46.47 < Mu < 50.73

5)Your professor wishes to estimate the proportion of ALL high school students enrolled in college-level courses each school year. A sample of 1500 students revealed that 18.3% were enrolled in college-level courses. Find the margin of error for a 99% confidence interval for a proportion.

Select one:

a. .00988

b. .01642

c. .01957

d. .02571

Design changes are identified to be one of the major causes of project delays and cost overruns. As a construction project manager, what would you do to avoid or minimize the impact of this problem?

You are given the sample mean and the population standard deviation. Use this information to construct the​ 90% and​ 95% confidence intervals for the population mean. Interpret the results and compare the widths of the confidence intervals.

A random sample of 35 home theater systems has a mean price of ​$125.00.  Assume the population standard deviation is ​$19.60

Question: Analysis and Design Models: What's the Difference?

With the analysis phase behind us, reflect on the models built for the Theater project. How are they different from the models you plan on using during the design phase. Explain the differences in your own words. Next, find an article and/or video to share with the class on the subject.