Near the end of 2019, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2019.

To prepare a master budget for January, February, and March of 2020, management gathers the following information.

1. The company’s single product is purchased for $30 per unit and resold for $59 per unit. The expected inventory level of 4,750 units on December 31, 2019, is more than management’s desired level, which is 20% of the next month’s expected sales (in units). Expected sales are January, 6,750 units; February, 8,750 units; March, 10,750 units; and April, 10,000 units.
2. Cash sales and credit sales represent 20% and 80%, respectively, of total sales. Of the credit sales, 61% is collected in the first month after the month of sale and 39% in the second month after the month of sale. For the December 31, 2019, accounts receivable balance, $125,000 is collected in January 2020 and the remaining $395,000 is collected in February 2020.
3. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2019, accounts payable balance, $65,000 is paid in January 2020 and the remaining $285,000 is paid in February 2020.
4. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $66,000 per year.
5. General and administrative salaries are $156,000 per year. Maintenance expense equals $1,900 per month and is paid in cash.
6. Equipment reported in the December 31, 2019, balance sheet was purchased in January 2019. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $40,800; February, $91,200; and March, $28,800. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month’s depreciation is taken for the month in which equipment is purchased.
7. The company plans to buy land at the end of March at a cost of $165,000, which will be paid with cash on the last day of the month.
8. The company has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $16,000 at the end of each month.
9. The income tax rate for the company is 39%. Income taxes on the first quarter’s income will not be paid until April 15.

Required:
Prepare a master budget for each of the first three months of 2020; include the following component budgets.

1. Monthly sales budgets.
2. Monthly merchandise purchases budgets.
3. Monthly selling expense budgets.
4. Monthly general and administrative expense budgets.
5. Monthly capital expenditures budgets.
6. Monthly cash budgets.
7. Budgeted income statement for the entire first quarter (not for each month).
8. Budgeted balance sheet as of March 31, 2020.

THIS ENTIRE THING IS ONE EXERCISE, PLEASE ANSWER ALL PARTS:

Near the end of 2019, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2019.

To prepare a master budget for January, February, and March of 2020, management gathers the following information.

1. The company’s single product is purchased for $30 per unit and resold for $59 per unit. The expected inventory level of 4,750 units on December 31, 2019, is more than management’s desired level, which is 20% of the next month’s expected sales (in units). Expected sales are January, 7,500 units; February, 8,500 units; March, 10,750 units; and April, 10,000 units.
2. Cash sales and credit sales represent 20% and 80%, respectively, of total sales. Of the credit sales, 59% is collected in the first month after the month of sale and 41% in the second month after the month of sale. For the December 31, 2019, accounts receivable balance, $125,000 is collected in January 2020 and the remaining $395,000 is collected in February 2020.
3. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2019, accounts payable balance, $70,000 is paid in January 2020 and the remaining $290,000 is paid in February 2020.
4. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $48,000 per year.
5. General and administrative salaries are $132,000 per year. Maintenance expense equals $2,200 per month and is paid in cash.
6. Equipment reported in the December 31, 2019, balance sheet was purchased in January 2019. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $38,400; February, $98,400; and March, $21,600. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month’s depreciation is taken for the month in which equipment is purchased.
7. The company plans to buy land at the end of March at a cost of $165,000, which will be paid with cash on the last day of the month.
8. The company has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $17,000 at the end of each month.
9. The income tax rate for the company is 41%. Income taxes on the first quarter’s income will not be paid until April 15.

Required:
Prepare a master budget for each of the first three months of 2020; include the following component budgets.

1. Monthly sales budgets.
2. Monthly merchandise purchases budgets.
3. Monthly selling expense budgets.
4. Monthly general and administrative expense budgets.
5. Monthly capital expenditures budgets.
6. Monthly cash budgets.
7. Budgeted income statement for the entire first quarter (not for each month).
8. Budgeted balance sheet as of March 31, 2020.

Morning Star Ltd was registered on 1 July 2020, as a company with a constitution limiting the shares that could be offered to 5 000 000 Ordinary shares (including all classes) and 2 000 000 preference shares. The company issued a prospectus dated 1 July 2020 inviting the public to apply for 3 000 000 Ordinary A class shares at $3.00 per share. The terms of the shares on issue are $1.50 on application, $1.00 on allotment and $0.50 to be called within six months of allotment before 31 December 2020.

If the issue is oversubscribed the directors will make a pro-rata issue of shares and the excess application money will be applied to allotment and calls before any refunds will be given.

On 15 July, the directors also decided to issue 500 000 non-voting Ordinary B shares as fully paid to the promoters for a payment of $2.00 per share.

On 30 July, applications for the Ordinary A class shares closed. Applications for 4 500 000 shares in total had been received with applicants for 3 000 000 shares paying the full price and 1 500 000 shares paying only the application fee.

On 1 August, the Ordinary A class shares were allotted on a pro-rata basis with all allotment money owed paid by the 30 August.

The company paid share issue costs of $10,000 for the issuing of Ordinary A shares on 1 September. The share issue costs related to legal expenses associated with the share issue and fees associated with the drafting and advertising of the prospectus and share issue.

The call on the Ordinary A shares was made on 15 Septmber and due by 30 September. All call money was received except for the call on 100 000 shares. The directors met and forfeited the shares on 15 October. On 30 October, the forfeited shares were reissued at $2.40 fully paid to $3.00. Costs associated with reissuing the forfeited shares totalled $4,000. The remaining money was refunded to the defaulting shareholders on 15 November.

On 1 January 2021, Morning Star Ltd issued via a private placement semi-annual coupon debentures (which pay interest every 6 months) with a nominal value of $700,000. The debenture term is three years and the coupon rate is 8% per year. The market requires a rate of return of 10% per year. The money came in and the debentures were allotted on the same date. The first interest payment will occur on 30 June 2021.

On the same day (1 January), Monring Star issued 50,000 options for class A shares with an exercise price of $2.5 each. It costs $0.50 per option. These options expires on 30 June 2021.

The company issued via a private placement 400,000 redeemable preference shares of $2.00 each on 30 June 2021. The shares offer a fixed dividend of 7 per cent per annum. The shares are later redeemed to non-voting Ordinary Class B shares at the choice of the shareholders on 30 June 2022.

By 30 June 2021, 40,000 options were exercised. The remaining options are lapsed.

Prepare an extract of the statement of change in equity to show the composition and movement of the ordinary shares account of Morning Star Ltd as at 30 June 2021 and 30 June 2022. Please provide the opening balance, change in share capital and closing balance of each classes of shares.

Exercise 4-3

Stockholders’ equity in TransWorld Inc. on December 31, 2010, is shown below:

Stockholder equity accounts were affected by the following transactions in 2011:

Jan 1   TransWorld purchased 2,000 treasury shares at $24/share.
Jan 7   Declared a $3/share dividend, payable on Feb 15 to the Feb 28 stockholders of record.
Feb 15   Paid the dividend (Jan 7 declaration).
May 7   Sold 800 of treasury shares for cash at $27/share.
Aug 15   Sold 1200 of treasury shares for cash at $21/share.
Sep 20   Declared a $3/share dividend, payable on Oct 15 to the Sep 30 stockholders of record.
Oct 15   Paid the dividend (Sep 20 declaration).
Dec 31   Closed the credit balance of $188,000 (from net income) in the Retained Earnings Income Summary account.

1.   Use the information provided to prepare the following:

a.   Journal entries for the 2011 transactions.
b.   December 31, 2011, retained earnings statement.
c.   For distinguished performance, prepare the investors’ equity section of TransWorld’s December 31, 2011, balance sheet.

Presented below are three independent situations.

1. Ivanhoe Stamp Company records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. Ivanhoe’s past experience indicates that only 80% of the stamps sold to licensees will be redeemed. Ivanhoe’s liability for stamp redemptions was $13,180,300 at December 31, 2019. Additional information for 2020 is as follows.

If all the stamps sold in 2020 were presented for redemption in 2021, the redemption cost would be $5,191,300. What amount should Ivanhoe report as a liability for stamp redemptions at December 31, 2020?

2. In packages of its products, Shamrock Inc. includes coupons that may be presented at retail stores to obtain discounts on other Shamrock products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. Shamrock honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. Shamrock estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Shamrock during 2020 is as follows.

What amount should Shamrock report as a liability for unredeemed coupons at December 31, 2020?

3. Bridgeport Company sold 692,300 boxes of pie mix under a new sales promotional program. Each box contains one coupon, which submitted with $4.50, entitles the customer to a baking pan. Bridgeport pays $6.50 per pan and $1.00 for handling and shipping. Bridgeport estimates that 70% of the coupons will be redeemed, even though only 244,200 coupons had been processed during 2020. What amount should Bridgeport report as a liability for unredeemed coupons at December 31, 2020?

Let (X,dX),(Y,dY ) be metric spaces and f: X → Y be a continuous bijection. Prove that if (X, dX ) is compact, then f is a homeomorphism. (Hint: it might be convenient to use that a function is continuous if and only if the inverse image of every open set is open, if and only if the inverse image of every closed set is closed).

Suppose A and B are subsets of R, and define:
d(A,B) = inf{|a−b| : a ∈ A,b ∈ B}.

(a) Show that if A∩B 6= ∅, then d(A,B) = 0.

(b) If A is compact, B is closed, and A∩B = ∅, show d(A,B) > 0.

(c) Find 2 closed, disjoint subsets of R (say A and B) with d(A,B) = 0

What is the purpose of a throttling valve? What are the implications of having a throttling valve prior to the pump inlet? Explain in terms of NPSH. i.e. what will happen if the valve is placed before the pump? or why do we put the valve after the pump instead of before the pump.

The table below gives information on the CPI and the monthly take-home pay of Bill Jones, an employee at the Ford Canada.

(a) What is the purchasing power of the dollar for 2007 based on the period 2002? (Round the final answer to 5 decimal places.)

(b) Determine Mr. Jones’ "real" monthly income for 2007. (Round the final answer to 2 decimal places.) .

(c) What is the purchasing power of the dollar for 2010 based on the period 2002? (Round the final answer to 5 decimal places.)

(d) Determine Mr. Jone's "real" monthly income for 2010. (Round the final answer to 2 decimal places.)

Year (2002 = 100) Consumer Price Index (CPI) Mr. Martins Monthly Take-Home Pay ($) 2002 100.0 2300 2007 111.5 2700 2010 116.5 2900 2013 122.8 3100

The table below gives information on the CPI and the monthly take-home pay of Bill Jones, an employee at the Ford Canada.

(a) What is the purchasing power of the dollar for 2007 based on the period 2002? (Round the final answer to 5 decimal places.)

(b) Determine Mr. Jones’ "real" monthly income for 2007. (Round the final answer to 2 decimal places.) .

(c) What is the purchasing power of the dollar for 2010 based on the period 2002? (Round the final answer to 5 decimal places.)

(d) Determine Mr. Jone's "real" monthly income for 2010. (Round the final answer to 2 decimal places.)

Year (2002 = 100) Consumer Price Index (CPI) Mr. Martins Monthly Take-Home Pay ($) 2002 100.0 2300 2007 111.5 2700 2010 116.5 2900 2013 122.8 3100