A small plastic airplane that can purchased at a store for $6

Plastic models of this type are made using an injection molding machine. A die is created out of special steel in the shape of the vehicle. Other molds are used for the wheels and other parts. Molten plastic, usually styrene, is pumped into the mold under pressure which forms the body of the vehicle. It is ejected from the mold, allowed to cool and then is later painted, assembled, boxed and sold. Items like this are normally sold to specialized distributors who sell to the hobby shop retailers. The hobby shop would usually pay about 50% of the retail price and the distributor would pay approx. 60% of the price the retailer paid. In selling the model, the manufacturer would typically make a gross profit of 33.3%, meaning its cost of the item is $1.20.

Assume that the cost of the die is $10,000 and it can be used to make 25,000 models before it wears out. If produced in house, the unit cost of the styrene material is $.10; the unit costs of painting each model are $.05 fixed and $.05 variable. The plastic box it is sold in costs $.15. The rest of the unit costs are split 2/3 fixed and 1/3 variable. The model can be produced in lots of 5,000 as warranted by sales demand.

A Mexican toy company has offered to supply the completed model for $.90 each plus $.15 for shipping, custom duties etc. provided the US company orders and pays for all 25,000 models at one time. If purchased from the Mexican company, no US worker would lose their job but there could be reduced overtime for the employees.

REQUIRED:

1) Describe the process the US company should use to critically evaluate whether or not to accept the offer from the Mexican company.

2).Prepare a schedule showing unit costs [fixed & variable] of the model and breakeven sales in $ and units IF the US company manufactures the model car and sells it to the distributor.(show your work)

Case Study #1                          WALITAN CONSTRUCTION COMPANY

Ashley Wesley is the assistant controller at the Walitin Construction Company. Walitin is headquartered in Miami, Florida, and has a general contractor’s license in 30 differ­ent states. It is a privately held company with about 5,000 stockholders, with the majority of the stock being owned by the Walitin family.

Roberta Walitin has been the CEO of Walitin Construction for the previous 12 years. Everyone considers her an excellent leader with excellent business skills. She has an undergraduate degree from the University of Illinois in engineering and an MBA from the same school with a concentration in accounting.

Roberta has always insisted on ethical business practices, so two years ago she worked
with Ashley to set up an ethics hotline, which Ashley personally manages on a daily
basis. Anyone either inside or outside of the company can submit tips anonymously by e-mail, telephone, or a special Web page she had set up. There is a prominent link to the hotline on the home page of the company’s Web site.

Since Ashley set up the hotline, she has received three tips, all via the Web. In every case, the tip was about a subcontractor overbilling the company for services ren­dered. In two of the cases, she was unable to confirm or disconfirm whether there was fraud, mainly because it is almost impossible to investigate the work of a sub­contractor on a job that has already been completed. But in the other case, she caught a roofer billing for fictitious work. She did not report the fraud to authorities, but Roberta did immediately replace the subcontractor with another roofing company. Ashley reports to Bob Benson, Walitin’s controller. He’s been with the company for many years and works very closely with Roberta. His main interest seems to be producing the financial statements and working with her to obtain new clients. Roberta and Bob spend large periods of their time going to lunches with clients, participating in civic meetings, and helping in small community-service construc­tion projects.

Because Bob is busy so much of the time with outside activities, Ashley pretty much runs everything in accounting on her own except for the software and hardware, which Bob manages in conjunction with the head of the IT department.

Bob is not interested in details, and anytime Ashley tries to explain something to him, he simply waves a hand and says, “Don’t worry me with operational issues. Just take care of it.” Ashley has learned to live with his hands-off approach.

Overall, Ashley runs everything smoothly. Her main problem is that Betty Grabber, the senior accountant reporting to her, wants Ashley’s job. To make things worse, Betty is a niece of Roberta Walitin’s husband.

Betty is a very wily person. Her goal is to have Ashley fired, and she’s been using her family connections to get the message to Roberta that Ashley is scheming to have Bob Benson, the controller, fired. Ashley also suspects that Betty has been spreading a rumor that she’s planning to go to work for a competitor if she is not successful in tak­ing over Bob’s job.

Ashley is unsure as to whether Bob is aware of the rumors. He seems to be avoiding her recently, and there seems to an edge in his usually friendly voice. Ashley is feeling depressed just thinking about it. She’s heard that Bob is having serious marital prob­lems. Perhaps those problems are affecting the way he acts.

This morning Ashley had a major surprise when she started reading her e-mail, which contained a new anonymous tip. Someone had submitted it last night via the Web, and it had automatically been forwarded to her via e-mail. The tip read as follows:

To: Walitin Tip System

From: http://[email protected]

Sent: Tuesday 8/1/2015

Ms. Wesley,                                                                

I’m sending this tip to help you. I understand what you are going through. You’re working for a liar and a thief. Bob Benson is hacking the accounting system to produce fraudulent financial statements. He’s doing it in such a way that you’ll get the blame. It’s going to be a big mess.

What should Ashley do? Should she try to investigate? Should she report the tip to Roberta?

Evaluate Walitin’s hotline and make recommendations for its improvement.

Please answer your client’s question about this LC?

1)     Who is the advising bank?

2)     Who is the issuing bank?

3)     Can importer cancel this LC?

4)     Can your client ship 70 computers at the time (two shipments)?

5)     Can this order be shipped from Vancouver?

6)     Your client needs 6 months to manufacture 140 laptops. How do you solve this issue?

7)     What part will confirm this LC? Is it mandatory?

8)     Can exporter present the documents in February 2021?

Export Documentary Credit in SWIFT Format

·        TO: ROYAL BANK OF CANADA - TORONTO

·        FROM: SAUDI ARABIAN MONETARY AGENCY, RIYADH SAUDI ARABIA

·        IRREVOCABLE DOCUMENTARY

·        CREDIT NUMBER: 98765

·        DATE OF ISSUE: 19/07/2020

·        DATE AND PLACE OF EXPIRY: 19/02 /2021, TORONTO

·        Applicant: AFZAL TRADING 785-34 PORT SAID ST. RIYADH 4S89 SAUDI ARABIA

·        BENEFICIARY: TORONTO CAMERA COMPANY 7 2875 EVANS AVENUE, SUITE 501 ETOBICOKE, ONTARIO M9C IAJ CANADA

·        CURRENCY CODE, AMOUNT: USD 100,000.00

·        DRAFTS AT: 90 DAYS FROM BILL OF LADING DATE

·        DRAWEE: ROYAL BANK OF CANADA, INTERNATIONAL TRADE CENTRE, 180 WELLINGTON ST. WEST, TORONTO, ONTARIO M5J IJ1, CANADA

·        PARTIAL SHIPMENT: ALLOWED

·        TRANSHIPMENT: NOT ALLOWED

·        LOADING ON BOARD / DISPATCH TAKING IN CHARGE AT/ FROM ANY EAST COAST CANADIAN PORT FOR TRANSPORTATION TO JEDDAH PORT, SAUDI ARABIA

·        LATEST DATE OF SHIPMENT: 19/09/2020

·        DESCRIPTION OF GOODS AND/OR SERVICES: 140 Laptops Model ABC

·        UNIT PRICE: $700 US

·        CLEAN ON-BOARD OCEAN BILL OF LADING MADE OUT TO THE ORDER OF ISSUING BANK

·        ALL DOCUMENTS MUST MENTION IMPORT PERMIT#24680

·        CONFIRMATION REQUIREMENT: ADD YOUR CONFIRMATION

The University of Crookington wants to offer one of its courses online. It costs $45,000 to create the necessary infrastructure, and $15,000 to develop the digital content for the first course.

The University estimates that there is a 80% probability of the course being successful, in which case annual cash flows from assets of $8,000 can be expected for 7 years. Otherwise, annual cash flows from assets of only $5,000 can be expected over the same time period.

The University has a weighted average cost of capital of 10% and estimates that the online course would be as risky as its existing assets.

1. What is the NPV of the project?

The University will observe the demand for the first online course over two years. If the course turns out to be successful, the University can offer another 2 courses online by investing $15,000 each for content development in two years and then earning $8,000 per year for 7 years. No additional investment in infrastructure will be required.

2. What is the NPV of the project including this option?

Create a catchy and short title for this blog down below. It has to be short, catchy and creative.

Where would anyone get the most up-to-date news on their favorite restaurants, public schools or local shops during the Coronavirus? If I were to take an actual poll (which will be run through my social media), most would likely say it would be on Instagram, Twitter, and Facebook. I was following one of my favorite bands on Instagram one day, I noticed they have canceled their entire tour due to the Coronavirus. I went to Ticketmaster.com to see if their post on Instagram was true. Unfortunately, the concert was postponed until a later date. The date is still to be determined.  

Starbucks has used Instagram as their platform to inform the public of the changes they have done to better serve the committee and to protect its employees from further spreading this virus. Starbuck’s Instagram post from March 26, 2020 states, “Thank you to the healthcare workers and first responders who are working tirelessly to keep our communities safe. Inspired by the generosity of our partners (employees), we are offering all front-line responders a free tall iced or hot brewed coffee at participating stores in the US.”  

West Contra Costa Schools used Facebook as their platform to announce changes in the education and services for K-12 schools in Contra Costa County, California. A post from March 27, 2020, shows a schedule and location list for student meal pick-ups for students during the stay-at-home order from the state of California. They included the list to be read in English and in Spanish due to the demographics of the county. They have also included other posts like board meeting schedules. Which these meetings were conducted through Facebook Live.

Nintendo used Instagram as their platform to release information about the new Nintendo Direct Mini set to release on March 26, 2020. At the beginning of the video post, it states, “Please note due to COVID-19, release dates and other information presented in this video are subject to change. For potential updates, please check the official Nintendo website and social media channels, as well as those of other publishers. Our hearts go out to all those impacted by COVID-19 during this challenging time.”

I have seen many companies post condolences to those impacted by COVID-19. They even share some employee accomplishments during the stay-at-home order to make it personable. During this time everyone is either feeling really motivated to try something new or tired of being in one place at all times. Posts on social media really help us get in touch with others around the world to “venture out”. How would you use social media as a PR objective for your company? Either as strictly informational, use for productivity or make it personable?  

Presented below are 11 income statement items from Braun Company for the year ended December 31, 2020.

Sales revenue $2,700,000

Cost of goods sold 1,150,000

Interest revenue 15,000

Loss from abandonment of plant assets   45,000

Gain from extinguishment of debt 28,000

Selling expenses 290,000

Administrative expenses 190,000

Effect of change in estimated useful lives of fixed assets (included in administrative expenses) 35,000

Loss from earthquake 30,000

Gain on disposal of discontinued operation 50,000

Instructions

a. Using the information above, prepare a condensed multiple-step income statement. Assume a tax rate of 30% and 100,000 shares of common stock outstanding during 2020.

Presented below are 11 income statement items from Braun Company for the year ended December 31, 2020.

Sales revenue $2,700,000

Cost of goods sold 1,150,000

Interest revenue 15,000

Loss from abandonment of plant assets 45,000

Gain from extinguishment of debt 28,000

Selling expenses 290,000

Administrative expenses 190,000

Effect of change in estimated useful lives of fixed assets (included in administrative expenses) 35,000

Loss from earthquake 30,000

Gain on disposal of discontinued operation 50,000

Instructions

b. Compute comprehensive income for Braun in 2020, assuming Braun had an unrealized holding loss on an available-for-sale debt investment, net of tax, $12,000.

Nash Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2021. The following information is available for the years 2018–2020. Net Income Computed Using Average-Cost Method FIFO Method LIFO Method

2018 $15,980 $19,140 $12,070

2019 18,090 21,090 14,040

2020 20,130 24,990 16,940

(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2021. Account Titles and Explanation Debit Credit Enter an account title Enter a debit amount Enter a credit amount Enter an account title Enter a debit amount Enter a credit amount

(b) Determine net income to be reported for 2018, 2019, and 2020, after giving effect to the change in accounting principle. Net Income 2018 $Enter a dollar amount 2019 $Enter a dollar amount 2020 $Enter a dollar amount

(c) Assume Nash Company used the LIFO method instead of the average cost method during the years 2018–2020. In 2021, Nash changed to the FIFO method. Prepare the journal entry necessary to record the change in principle.

(a)Describe intangible assets? Give THREE (3) examples of intangible assets.

(b)How is the cost of the intangible assets be determined if it is acquired by issuance of shares.

(c)Identify THREE (3) typical costs included in the cash purchase of an intangible asset.

(d)Assuming that MCO Bhd acquires the customer list of a social media for RM8,000,000. The company expects to benefit from the information evenly over a four-year period. REQUIRED: Explain the accounting treatment for the customer list acquired by MCO Bhd in accordance with MFRS 138 Intangible Assets.

(e)Based on MFRS 138 Intangible Assets, state TWO (2) criteria that an entity must meet in order for the development costs (e.g. construction of prototypes) to be capitalised?

How might a major retailer such as sears or JC penney benefit from having a transformational leader as a CEO?