1) You are US company, 500,000 BP (British Pound) payable to UK in one year. Answer in terms of US$.

Information for Forward Contract:

Forward exchange rate (one yr): 1.54 $/BP

Information for Money Market Instruments (MMI):

Current exchange rate: 1.50 $/BP

Investment return at Aerion Fund Management (in UK): 4% annual

Interest rate of borrowing from Bank of America (in USA): 2% annual

Information you need for Currency Options Contract:

Options premium: 0.015 $/BP

Interest rate of borrowing from Bank of America (USA): 2% annual

Allowed to exercise options at 1.54 $/BP

What are the costs of MMI? (Answer in US$ of course. You are US company!)

2) You are US company, 500,000 BP (British Pound) payable to UK in one year. Answer in terms of US$.

Information for Forward Contract:

Forward exchange rate (one yr): 1.54 $/BP

Information for Money Market Instruments (MMI):

Current exchange rate: 1.50 $/BP

Investment return at Aerion Fund Management (in UK): 4% annual

Interest rate of borrowing from Bank of America (in USA): 2% annual

Information you need for Currency Options Contract:

Options premium: 0.015 $/BP

Interest rate of borrowing from Bank of America (USA): 2% annual

Allowed to exercise options at 1.54 $/BP

If the break-even exchange rate for the Currency Options Contract is 1.46 $/BP, and you believe the exchange rate at the time of the payment would be 1.43 $/BP, should you sign the contract?

You work in the Admissions Office for a small regional university in Massachusetts Your assistant entered a list of college applicants for the Fall 2021 semester. You determine if a student qualifies for early admission or early rejection based on SAT and GPA. After determining the immediate admissions and rejections, you calculate a total score based on SAT and GPA to determine regular admissions and rejections.

Sheffield Corp. issued $6,498,000 of 8% bonds on October 1, 2020, due on October 1, 2025. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 9% effective annual interest. Sheffield Corp. closes its books annually on December 31. Complete the following amortization schedule for the dates indicated. Use the effective-interest method. (Round answers to 0 decimal places, e.g. 5,275.)

Date Cash Interest Expense Bond Discount Carrying Amount of Bonds October 1, 2020 $

April 1, 2021

October 1, 2021

SHOW LIST OF ACCOUNTS

Prepare the adjusting entry for December 31, 2021. Use the effective-interest method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 SHOW LIST OF ACCOUNTS

Compute the interest expense to be reported in the income statement for the year ended December 31, 2021. Interest expense $

Grove Corporation issued $2,400,000 of 8% bonds on October 1, 2012, due on October 1, 2017. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Grove Corporation closes its books annually on December 31.

Instructions

(a)   Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method.

                                                                          Debit                       Credit            Carrying Amount

                                         Credit Cash      Interest Expense      Bond Discount            of Bonds   

        October 1, 2012                                                                                                  $2,214,672

        April 1, 2013

        October 1, 2013

(b)   Prepare the adjusting entry for December 31, 2013. Use the effective-interest method.

(c)   Compute the interest expense to be reported in the income statement for the year ended December 31, 2013.

Gibco Limited has an October 31 year end. On October 1, 2020 Gibco had the following current liabilities

listed on its books:

Bank credit line ................................................ $23,250

Accounts payable ............................................. 100,500

CPP, EI and income tax payable ...................... 9,620

Unearned revenues ........................................... 12,000

During October 2020 Gibco engaged in the following transactions:

Oct 1 Paid $20,000 on the line of credit with their bank to replace the bank overdraft.

Oct 5 Sold goods worth $30,000 on which they had previously received a $12,000 deposit. The balance is due

in 30 days.

Oct 12 Bought $20,000 of inventory on credit, terms of 30 days.

Oct 15 Paid amounts due the Government of Canada for the payroll amounts outstanding from September 30.

Oct 20 Paid $87,000 owing to a supplier.

Oct 21 Received $5,000 from a client for work that will be performed in January 2021.

Oct 21 Sold $56,000 of goods half for cash, half on credit.

Oct 30 Paid the monthly payroll amounts to employees. The gross payroll was $16,200. Amounts withheld

from the employees' cheques were as follows:

 Canada pension plan premiums (CPP) $802

 Employment insurance premiums (EI) $259

 Income tax $2,800

At this time, the company also recorded their liability for amounts due to the government for CPP and

EI.

Oct 31 Declared $5,000 of dividends payable next year.

Instructions

a) Prepare all of the journal entries required as a result of the above transactions.

b) Prepare the current liabilities section of the statement of balance sheet at October 31, 2020.

On October 1, 2016, Ball Company issued 10% bonds dated October 1, 2016, with a face amount of $350,000. The bonds mature in 8 years. Interest is paid semiannually on March 31 and September 30. The proceeds from the bond issuance were $355,751.07 to yield 9.70%. Ball Company has a December 31 fiscal year-end and does not use reversing entries.

Required:

Prepare journal entries to record the issuance of the bonds and the interest payments for 2016 and 2017 using the effective interest method. Additional Instructions

PAGE 1

GENERAL JOURNAL

Prepare journal entries to record the issuance of the bonds and the interest payments for 2016 and 2017 using the straight-line method. Additional Instructions

PAGE 1

GENERAL JOURNAL

   Flexed Budget for October Actual for October

Output 40,000 units 40,000 units

Sales $500,000 $400,000

Raw materials $100,000 $88,000

Labour $250,000 $180,000

Overheads $325,000 $375,000

The adverse (unfavourable) sales variance of $100,000 is best explained by-:

a. an increase in the expenses incurred by the business in the period

b. the sales manager and sales team not making the target level of sales

c. the price the units were sold for was less than budgeted

d. it is not possible to tell from this information

On October 1, 2016, Ball Company issued 7% bonds dated October 1, 2016, with a face amount of $310,000. The bonds mature in 12 years. Interest is paid semiannually on March 31 and September 30. The proceeds from the bond issuance were $320,168.62 to yield 6.60%. Ball Company has a December 31 fiscal year-end and does not use reversing entries.

Required:

Please explain solution. Thank you

On October 1, 2016, Ball Company issued 10% bonds dated October 1, 2016, with a face amount of $350,000. The bonds mature in 8 years. Interest is paid semiannually on March 31 and September 30. The proceeds from the bond issuance were $355,751.07 to yield 9.70%. Ball Company has a December 31 fiscal year-end and does not use reversing entries.

Required:

On October 1, 2016, Ball Company issued 6% bonds dated October 1, 2016, with a face amount of $210,000. The bonds mature in 9 years. Interest is paid semiannually on March 31 and September 30. The proceeds from the bond issuance were $218,888.62 to yield 5.40%. Ball Company has a December 31 fiscal year-end and does not use reversing entries.

Required: