10)Gordon Company purchased an asset on January 1, 2016 for $25,000. At that time, Gordon Company estimated the residual value would be $1,000 at the end of the asset's projected ten-year life. It is now January 1, 2020; Gordon Company now estimates the asset will have a residual value of $1,500, and has a remaining useful life of four years (will last until the end of 2023). Assuming Gordon Company uses the straight-line method, what will be the depreciation expense recorded for 2020?
A)$3,475
B)$2,937.50
C)$2,400
D)none of the above
In: Accounting
Fieldman Company purchased a machine for leasing purposes on January 1, 2020, for $1,500,000. The machine has a 10-year life, has no residual value, and will be depreciated on a straight-line basis. On January 2, 2020, Fieldman leased the machine to Dahlia Company for $150,000 a year for a five-year period ending December 31, 2024. Dahlia does not guarantee a residual value of the machine at lease-end, although Dahlia can purchase the machine at the end of the lease term for 40% of the estimated residual value which is a significant discount. Dahlia paid $150,000 to Fieldman on January 2, 2020, the first annual payment date.
How would Fieldman Company and Dahlia Company classify the lease, considering a 5% implicit interest rate for both parties?
Fieldman Company Dahlia Company
| A. |
Operating Lease Finance Lease |
|
| B. |
Sales Type Lease Finance Lease |
|
| C. |
Finance Lease Finance Lease |
|
| D. |
Operating Lease Operating Lease |
In: Accounting
On 1 July 2022, Dean Ltd acquired all the issued shares of Lewis Ltd for a cash consideration of $1 000 000. At that date, the financial statements of Lewis Ltd showed the following information.
Share capital $650 000
General reserve 20 000
Retained earnings 250 000
All the assets and liabilities of Lewis Ltd were recorded at amounts equal to their fair values at the acquisition date, except some equipment recorded at $50 000 below its fair value with a related accumulated depreciation of $80 000. Also, Dean Ltd identified at acquisition date a contingent liability related to a lawsuit where Lewis Ltd was sued by a former supplier and attached a fair value of $40 000 to that liability.
Required
a) Prepare the acquisition analysis at 1 July 2022.
b) Prepare the consolidation worksheet entries for Dean Ltd’s group
at 1 July 2022, assuming that Lewis Ltd has not revalued the
equipment in its own accounts.
c) Prepare the consolidation worksheet entries for Dean Ltd’s group
at 1 July 2022, assuming that Lewis Ltd has revalued the equipment
in its own accounts.
In: Accounting
Assume the following information: U.S. deposit rate for 1 year = 11% U.S. borrowing rate for 1 year = 12% Singapore deposit rate for 1 year = 8% Singapore borrowing rate for 1 year = 10% Singapore forward rate for 1 year = $0.40 Singapore spot rate = $0.39
3. Using the information above, if a US. Company expects to receive S$600,000 for exports sold to a Singapore company:
a. What will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a forward hedge?
b. If the spot rate for the Singapore dollar 1 year later is $0.48, was the forward hedge a good strategy? Why? (Show by computation to defend your answer)
In: Finance
write a report recommending one course of action/approach/selection
-Small business strategy.
Discuss the specific challenges of managing a small
enterprise. Identify the features that all successful small
companies share and suggest a course of action for a small
business founder that can increase the likelihood of succes
In: Finance
Presented below is the comparative balance sheet for Wildhorse
Inc., a private company reporting under ASPE, at December 31, 2021,
and 2020:
| WILDHORSE INC. Balance Sheet December 31 |
||||||
| Assets | 2021 | 2020 | ||||
| Cash | $54,900 | $98,000 | ||||
| Accounts receivable | 101,000 | 75,000 | ||||
| Inventory | 205,000 | 155,500 | ||||
| Long-term investment | 101,500 | 0 | ||||
| Property, plant, and equipment | 535,000 | 460,000 | ||||
| Less: Accumulated depreciation | (162,500 | ) | (140,000 | ) | ||
| $834,900 | $648,500 | |||||
| Liabilities and Shareholders' Equity | ||||||
| Accounts payable | $57,500 | $47,000 | ||||
| Dividends payable | 6,000 | 0 | ||||
| Income tax payable | 14,000 | 15,000 | ||||
| Long-term notes payable | 25,000 | 0 | ||||
| Common shares | 630,000 | 525,000 | ||||
| Retained earnings | 102,400 | 61,500 | ||||
| $834,900 | $648,500 | |||||
| WILDHORSE INC. Income Statement Year Ended December 31, 2021 |
||||||
| Sales | $650,900 | |||||
| Cost of goods sold | 432,000 | |||||
| Gross profit | 218,900 | |||||
| Operating expenses | $147,500 | |||||
| Loss on sale of equipment | 3,000 | 150,500 | ||||
| Profit from operations | 68,400 | |||||
| Interest expense | 3,000 | |||||
| Interest revenue | (4,500 | ) | (1,500 | ) | ||
| Profit before income tax | 69,900 | |||||
| Income tax expense | 14,000 | |||||
| Profit | $55,900 | |||||
| Additional information: | ||
| 1. | Cash dividends of $15,000 were declared. | |
| 2. | A long-term investment was acquired for cash at a cost of $101,500. | |
| 3. | Depreciation expense is included in the operating expenses. | |
| 4. | The company issued 10,500 common shares for cash on March 2, 2021. The fair value of the shares was $10 per share. The proceeds were used to purchase additional equipment. | |
| 5. | Equipment that originally cost $30,000 was sold during the year for cash. The equipment had a carrying value of $9,000 at the time of sale. | |
| 6. | The company issued a note payable for $28,000 and repaid $3,000 by year end. | |
| 7. | All purchases of inventory are on credit. | |
| 8. | Accounts Payable is used only to record purchases of inventory. | |
Prepare a cash flow statement for the year using the direct
method.
In: Accounting
Mr. Raju just appointed as an account manager at NH Sdn Bhd, a retail company selling merchandises for local market. Mr. Raju is being responsible to prepare and monitor the budget and expenses of the company business. Currently the company is preparing the quarterly budget as of 31 December 2020 and he has been asked by Ms. Sally, the owner of the company, to prepare a master budget. The sales forecast for the merchandises are provided as follows:
Unit sales | |
August 2020 | 1,500 actual |
September 2020 | 1,600 actual |
October 2020 | 1,700 budgeted |
November 2020 | 2,300 budgeted |
December 2020 | 2,400 budgeted |
January 2021 | 1,300 budgeted |
The average selling price and the average purchase price per unit are RM250 and RM120 respectively. As for desired ending inventory is expected 30% of next month’s unit sales. Collections from customers will be 20% in month of sale, 50% in month after sale and 30% two months after sale.
As for projected cash payments, inventory purchases will be paid in the month following acquisition. Meanwhile, variable cash expenses are equal to 35% of each month’s sales and paid in the month of sale. Fixed cash expenses are RM20,000 per month and are paid in the month incurred. Depreciation on equipment is RM2,000 per month. Desired ending cash balance per month will be RM20,000.
NH Sdn Bhd also has provided the following information at 30 September 2020
Balance Sheet as at 30 September 2020
RM | |
Cash | 30,000 |
Account Receivable | 245,000 |
Merchandise inventory(650 unit) | 78,000 |
Fixed Assets (net) | 110,000 |
Total assets | 463,800 |
Account Payable(Merchandise) | 148,800 |
Owner’s Equity | 315,000 |
Total liability and equity | 463,800 |
Required:
Based on the information given, you are required to prepare the following budget** for the upcoming quarter ending 31 December 2020.
In: Accounting
Mr. Raju just appointed as an account manager at NH Sdn Bhd, a retail company selling merchandises for local market. Mr. Raju is being responsible to prepare and monitor the budget and expenses of the company business. Currently the company is preparing the quarterly budget as of 31 December 2020 and he has been asked by Ms. Sally, the owner of the company, to prepare a master budget. The sales forecast for the merchandises are provided as follows:
|
Unit sales |
|
|
August 2020 |
1,500 actual |
|
September 2020 |
1,600 actual |
|
October 2020 |
1,700 budgeted |
|
November 2020 |
2,300 budgeted |
|
December 2020 |
2,400 budgeted |
|
January 2021 |
1,300 budgeted |
The average selling price and the average purchase price per unit are RM250 and RM120 respectively. As for desired ending inventory is expected 30% of next month’s unit sales. Collections from customers will be 20% in month of sale, 50% in month after sale and 30% two months after sale.
As for projected cash payments, inventory purchases will be paid in the month following acquisition. Meanwhile, variable cash expenses are equal to 35% of each month’s sales and paid in the month of sale. Fixed cash expenses are RM20,000 per month and are paid in the month incurred. Depreciation on equipment is RM2,000 per month. Desired ending cash balance per month will be RM20,000.
NH Sdn Bhd also has provided the following information at 30 September 2020
Balance Sheet as at 30 September 2020
|
RM |
|
|
Cash |
30,000 |
|
Account Receivable |
245,000 |
|
Merchandise inventory(650 unit) |
78,000 |
|
Fixed Assets (net) |
110,000 |
|
Total assets |
463,800 |
|
Account Payable(Merchandise) |
148,800 |
|
Owner’s Equity |
315,000 |
|
Total liability and equity |
463,800 |
Required:
Based on the information given, you are required to prepare the following budget** for the upcoming quarter ending 31 December 2020.
In: Accounting
Burbank, California
Over two decades, your predecessor and boss, CEO Michael Eisner, accomplished much, starting the Disney Channel, the Disney Stores, and Disneyland Paris, and acquiring ABC television, Starwave Web services (from Microsoft cofounder Paul Allan), and Infoseek (an early Web search engine). But his strong personality and critical management style created conflict with shareholders, creative partners, and board members, including Roy Disney, nephew of founder Walt Disney.
One of your first moves as Disney’s new CEO was repairing relationships with Pixar Studios and its then CEO Steve Jobs. Pixar produced computer-animated movies for Disney to distribute and market. Disney also had the right to produce sequels to Pixar Films, such as Toy Story, without Pixar’s involvement. Jobs argued, however, that Pixar should have total financial and creative control over its films. When Disney CEO Michael Eisner disagreed, relations broke down, with Pixar seeking other partners. On becoming CEO, you approached Jobs about Disney buying Pixar for $7 billion. More important than the price, however, was promising Jobs and Pixar’s leadership, President Ed Catmull and creative guru John Lasseter, total creative control of Pixar’s films and Disney’s storied but struggling animation unit. Said Jobs, “I wasn’t sure I could get Ed and John to come to Disney unless they had that control.”
Although Pixar and Disney animation thrived under the new arrangement, Disney still had a number of critical strategic problems to address. Disney was “too old” and suffering from brand fatigue as its classic but aging characters, Mickey Mouse (created in 1928) and Winnie-the-Pooh (licensed by Disney in 1961), accounted for 80 percent of consumer sales. On the other hand, Disney was also “too young” and suffering from “age compression,” meaning it appealed only to young children and not preteens, who gravitated to Nickelodeon, and certainly not to teens at all. Finally, despite its legendary animated films, over time Disney products had developed a reputation for low-quality production, poor acting, and weak scripts. Movies “High School Musical 3: Senior Year,” “Beverly Hills Chihuahua,” “Bolt,” “Confessions of a Shopaholic,” “Race to Witch Mountain,” and “Bedtime Stories” disappointed audiences and failed to meet financial goals. As you told your board of directors, “It’s not the marketplace, it’s our slate [of TV shows and movies].”
With many of Disney’s brands and products clearly suffering, you face a basic decision: Should Disney grow, stabilize, or retrench? Disney is an entertainment conglomerate with Walt Disney Studios (films), parks and resorts (including Disney Cruise lines and vacations), consumer products (i.e., toys, clothing, books, magazines, and merchandise), and media networks such as TV (ABC, ESPN, Disney Channels, ABC Family), radio, and the Disney Interactive Media Group (online, mobile, and video games and products). If Disney should grow, where? Like Pixar, is another strategic acquisition necessary? If so, who? If stability, how do you improve quality to keep doing what Disney has been doing, but even better? Finally, retrenchment would mean shrinking Disney’s size and scope. If you were to do this, what divisions would you shrink or sell?
Next, given the number of different entertainment areas that Disney has, what business is it really in? Is Disney a content business, creating characters and stories? Or is it a technology/distribution business that simply needs to find ways to buy content wherever it can, for example, by buying Pixar and then delivering that content in ways that customers want (i.e., DVDs, cable channels, iTunes, Netflix, social media, Internet TV, etc.)?
Finally, from a strategic perspective, how should Disney’s different entertainment areas be managed? Should there be one grand strategy (i.e., growth, stability, retrenchment) that every division follows, or should each division have a focused strategy for its own market and customers? Likewise, how much discretion should division managers have to set and execute their strategies, or should that be controlled and approved centrally by the strategic planning department at Disney headquarters?
If you were CEO at Disney, what would you do?
Please white down with details
In: Operations Management
The following draft trial balance has been produced for Bodurm plc for the year to 30 April 2020.
|
£000 |
£000 |
|
|
Revenue |
6,475 |
|
|
Opening inventory |
1,200 |
|
|
Purchases |
2,570 |
|
|
Administrative expenses |
420 |
|
|
Distribution costs |
227 |
|
|
Cash at bank |
112 |
|
|
6% Bank loan repayable in 2026 |
1,050 |
|
|
Bank loan interest paid |
63 |
|
|
Interim dividend paid |
170 |
|
|
Land cost |
2,100 |
|
|
Buildings cost |
2,350 |
|
|
Plant and equipment cost |
1,077 |
|
|
Motor vehicles cost |
252 |
|
|
Accumulated depreciation at 1 May 2019: |
||
|
Buildings |
564 |
|
|
Plant and equipment |
621 |
|
|
Motor vehicles |
84 |
|
|
Retained earnings at 1 May 2019 |
333 |
|
|
Ordinary share capital |
2,310 |
|
|
Trade receivables/payables |
1,400 |
677 |
|
Intangible assets |
400 |
|
|
Intangible amortisation at 1 May 2019 |
80 |
|
|
Under provision of income tax in the previous year |
19 |
|
|
Deferred tax at 1 May 2019 |
133 |
|
|
Suspense |
33 |
|
|
12,360 |
12,360 |
You are given the following information:
Plant and equipment 25% reducing balance, charged to cost of sales
Buildings 2% straight-line, charged to administrative expenses
Motor vehicles Straight line over a 6-year life, charged to distribution costs
Depreciation is charged in full in the year of purchase, but none is charged in the year of disposal
YOU ARE REQUIRED TO:
Prepare in a format suitable for publication for Bodurm plc:
All calculations should be to the nearest £000
Type or paste question here
In: Accounting