1. In the following table, assume that someone retires in 2006 with an initial income payment of $25,000 per year in benefits. The benefit payment is then indexed to the Consumer Price Index (CPI) for the next 20 years. Assume also that the CPI would rise by 2% per year. Column (1) shows the value of the CPI in each year, using 2006 as the base year. Calculate the indexed nominal benefits by 2% per year in column (2), the real annual benefits in column (3), the indexed nominal benefits by 3% per year in column (4), and the real annual benefits in column (5).

Joe Wright, a sole trader, extracted the following trial balance from his books at
the close of business on 31st March 2006.
GH¢ GH¢
Sales 400,000
Purchases 350,000
Sales returns 5,000
Purchases returns 6,200
Opening stock at 1st January 2006 100,000
Provision for doubtful debts 800
Wages and salaries 30,000
Rates 6,000
Telephone 1,000
Shop fittings at cost 40,000
Van at cost 30,000
Debtors and creditors 9,800 7,000
Bad debts 200
Capital 179,000
Bank balance 3,000
Drawings 18,000
593,000 593,000
a) Closing stock at 31st December 2006 GH¢120,000.
b) Accrued wages GH¢5,000.
c) Rates prepaid GH¢500.
d) The provision for doubtful debts to be increased to 10% of debtors.
e) Telephone account outstanding GH¢220.
f) Depreciate shop fittings at 10 percent per annum, and Van at 20 percent
per annum, on cost.
Required prepare income statement and a balance sheet as at 31st December 201

Timing-Waiting Lines

Joe Hammer is thinking about setting up a special counter for the do-it-yourself customers at which they can get, not only help where to find products in the store, but also some quick advice about the best way to handle their upcoming projects. Experience has taught Joe that six minutes is a good figure to allow for the average time required to serve a “do-it-yourselfer” and that these customers will arrive every 15 minutes throughout the day.

a.) If joe sets up the counter under these conditions, what operating characteristics might he expect?

b.) What might Joe do to avoid the costs of idleness?

c.) What is the likelihood(probability) that three or more customers will be at the counter, either waiting or being served, at any given time?

Calculate the Utilization rate, idleness rate, Average time in queue, Average time in system, Average number in queue, Average number in system, and probability that three or more customers will be in the counter system at the same time.

1. A store sells three different clothing designs and has recorded sales of each over five different 24-hour periods:

Design A         Design B         Design C

     16                    33                    23

     18                    31                    27

     19                    37                    21

     17                    29                    28

     13                    34                    25

Use the Kruskal-Wallis H test and the Chi-Square table at the 0.05 level to compare the three designs.

1. A store sells three different clothing designs and has recorded sales of each over five different 24-hour periods:

Design A         Design B            Design C

     16                    33                    23

     18                    31                    27

     19                    37                    21

     17                    29                    28

     13                    34                    25

Use the Kruskal-Wallis H test and the Chi-Square table at the 0.05 level to compare the three designs.

27. Which of the following would not increase a bank’s Net Interest Margin, assuming all else stays the same? Choose two a) an increase in the interest rate on its loans b) corporate borrowers paying off some of their loans and the bank using the funds to invest in Treasury notes Yes c) customers switching a portion of their time deposits to demand deposits d) the bank issues additional equity and keeps the funds in cash e) a decrease in the federal funds rate assuming the bank borrows more in the federal funds market than it lends

Media Mogul Inc.

Media Mogul Inc. is a marketing company that offers a variety of marketing offerings to its customers.

Specifically:

• Media will create a TV commercial for $1M, build an app for $500K, and build a Facebook page for

$250K. These amounts represent Media’s charges for these items when Media sells them separately to

customers. The TV commercial, the app, and the Facebook page are not interrelated; that is, each

functions independently of the other offerings.

• If a customer purchases all aforementioned items together, the total cost is $1.5M. Payment terms are

50 percent consideration due at contract signing, with the remaining 50 percent due over the rest of

the development period (25 percent at mid-point, 25 percent at completion).

• If the app is downloaded 500K times or more in the first month, there is a one-time bonus of $250K

payable to Media.

Stone, a customer, approaches Media with the hopes of reinventing its image to a younger customer base.

Stone has a verbal agreement with Media that is based on Media’s unsigned quote to Stone on November 30,

20X5, for one TV commercial, one app, and a Facebook page. The agreement creates enforceable rights and

obligations pursuant to Media’s customary business practices. None of these items can be redirected by

Media to another customer. Media performed a credit check on Stone and has determined that Stone has the

intention and ability to pay Media for fulfilling its portion of the contract. Stone is required to pay Media for

performance completed to date if Stone cancels the contract with Media for reasons other than Media’s

failure to perform under the contract as promised.

Stone makes a payment on November 30, 20X5, in the amount of $750K pursuant to the agreement. From the

date of the quote, it takes Media six months to develop and produce the TV commercial, two weeks to

complete the Facebook page, and three months to complete a fully functioning app. Media does not think that

the app will be downloaded 500K times in the first month because Stone’s customer base does not quickly

accept newly developed technology. On the basis of its experience with similar technology, Media has

determined that it takes over three months for Stone’s users to begin to download its apps.

Required

Media’s CFO is trying to understand the new revenue recognition model and has asked you to explain how

Media would account for the above scenario under the new revenue recognition standard.

1. How should Media account for the above offering with Stone under the new revenue recognition

model?

2.How would your conclusions change if:

a. The app sold to Stone is actually downloaded more than 500K times in the first month?

b. Media believed at the outset that there is about a 75 percent chance that the app will be

downloaded more than 500K times and it is probable that there will not be a significant

reversal of revenue?

Break Even Point Case, Sports Bar Assignment:

Key Formulae:

A) PROFIT = REVENUE PER UNIT * QUANTITY – [TOTAL FIXED COST +

(VARIABLE COST PER UNIT * QUANTITY)]

B) BREAKEVEN POINT = TOTAL FIXED COST/(REVENUE PER UNIT –

VARIABLE COST PER UNIT)

Arthur and 2 college friends decide to open a sports bar/restaurant in their home town.

After some research they determined that the best way to start is to obtain a franchise from

a Chicago based company. The company would acquire the land, build and outfit the

facility. AJ and friends would pay a monthly comprehensive fee of $10,000. This fee would

include the franchise royalty payment, the mortgage payment for the actual facility (that

would be paid off in full in 20 years) and all utility fees.

AJ and his 2 friends want to pay themselves $4,000 per month each. The staff would cost

$2,000 per week ($200 each for 10 employees). The estimated variable cost per customer is

$9.00 each. The forecasted revenue is $24.00 per customer.

What is the breakeven point in number of customers per month for the sports

bar/restaurant?

If they served 2,500 customers per month, what would their profit be?

Laelia Ltd sells airplanes for $20,000 each. These airplanes are designed for individual use and can transport customers up to 200 kilometres in one go. Laelia Ltd can also provide custom-designed hangars for its customers’ airplanes at Dawson Creek, Queensland for $2,500 per year. These hangars can only cater to airplanes sold by Laelia Ltd due to regulations. Laelia Ltd sells these items either separately or as a package.

On 1 October 2020 Laelia Ltd enters into a contract to sell an airplane and one year of hangar facilities to Peter Do for $20,500. Cash payment is required at this date, after which legal title to the airplane passes to Peter Do and the hangar services commence. Peter Do is free to fly the airplane anywhere and he is not bound by any restriction. Please ignore effects of GST.

REQUIRED:

(a) Explain how Laelia Ltd would account for the revenue associated with this transaction with Peter Do in accordance with the requirements of AASB 15 ‘Revenue from Contracts

Step 1 – Identify the contract

Step 2 – Identify the performance obligation(s)

Step 3 – Identify the transaction price

Step 4 – Allocate the transaction price

Step 5 – Recognise the revenue as performance obligation(s) is(are) satisfied

What role does social sustainability play in organic farming? Does it contribute to the decision making of consumer choices when picking their produce and how? Does it contribute to the decision making of the producers themselves when deciding on if they should be organic or not? Thanks