P6.10 The Resolute Resort hotel currently operates at 75% occupancy, using a rack rate for all rooms of $60 and a marginal cost per room sold of $ 8 . calculate the occupancy figures for discount grid using discount percentages of 5%,15%,and 20%

P6.11 Motley Motel's potential average room rate is calculated to be $62.Assume that this motel had three market segments.Vacation travelers use 75% of the room nights and are charged 100% of the rack rate. business travelers use 15% of the room nights and are charged 90% of the rack rate.sport teams acounts for 10% of the room nights and are charged 80% of the rack rate.

a. calculate the room rate by market segment.

2. Prove that your calculations are correct,assuming that total annual room nights are 7,300.

All Clean of Alberta manufactures individual shampoos for hotel/motel clientele. The fixed manufacturing overhead costs for 2019 will total $576,000. The company uses good units finished for fixed overhead allocation and anticipates 300,000 units of production. Good units finished on average 92 percent of total units produced. During January, 20,000 units were produced. Actual fixed overhead cost per good unit averaged $2.82 in January.

Required (20 Points - Show formula and calculation for full points).

A. Determine the fixed overhead rate for 2019.

B. Determine the fixed overhead static-budget variance for January.

C. Determine the fixed overhead production-volume variance for January.

D. Determine the fixed overhead rate variance for January.

6.   Jiffy Park Corp. has annual sales of $50,705,000, an average inventory level of $15,015,000, and average accounts receivable of $10,015,000. The firm's cost of goods sold is 85% of sales. The company makes all purchases on credit and has always paid on the 30th day. However, it now plans to take full advantage of trade credit and to pay its suppliers on the 40th day. The CFO also believes that sales can be maintained at the existing level but inventory can be lowered by $1,950,000 and accounts receivable by $1,950,000.

      a.   What is Jiffy Park’s cash conversion cycle (CCC) prior to the changes proposed?

      b.   What is Jiffy Park’s CCC after implementing the suggested changes?

      c.   What is the net change in Jiffy Park’s CCC given what you just calculated above?

Exercise 9-11 Flexible Budget [LO9-1]

Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,400 per month plus $0.07 per car washed. The company actually washed 8,200 cars in August and collected an average of $5.90 per car washed.

Required:

Prepare the company’s flexible budget for August.

Exercise 9-10 Planning Budget [LO9-1]

Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,400 per month plus $0.08 per car washed. The company expects to wash 8,400 cars in August and to collect an average of $6.50 per car washed.

Required:

Prepare the company’s planning budget for August.

Business Law

Mickey has never liked Nucky so he decides to play a practical joke on him by pretending to sell him his home in the Cayman Islands. He tells Torrio that he has no intention of selling Nucky the home. Mickey approaches Nucky in a bar where Nucky is clearly intoxicated. The home is assessed at $10 million but he offers Nucky the home for $50,000. He winks and smiles at Nucky and Nucky accepts and the two shake hands. Nucky quits his job at Replay Baseball and moves to the Cayman Islands where Mickey informs him that he never had any intention of selling him the home. Nucky is moving furniture and trimming the hedges at the time. Of course, Mickey never mentioned that he owned a second home in the Cayman Islands that was recently destroyed in a hurricane.  

Nucky decides that he will build a new home in Massachusetts with a large Jacuzzi. He compiles specifications for the construction of the home and sends it to several general contractors so they may provide bids/quotations. Part of the general contract includes a large plumbing sub contract. Boardwalk Construction submits a bid to Nucky for $20 million to serve as the general contractor. As part of its general bid, Boardwalk Construction factored $1 million for plumbing based upon a sub bid submitted by Atlantic Plumbing. There were two other bids for the plumbing work. Boardwalk Construction and Atlantic Plumbing have a falling out and Atlantic Plumbing no longer wants to work on the project. The two other bids were for $10 million each respectively.   

1. Discuss whether Atlantic Plumbing may revoke its offer. What are the competing arguments? Are there any other important facts?

Boardwalk Construction is working on small renovation project for Capone at his home. There is no written contract, but the two have orally agreed that Boardwalk will renovate Capone’s garage for $75,000. The two have agreed that construction is to be completed within one month. Two weeks later, Boardwalk approaches Capone and complains that the cost of nails has increased by 40% and that the cold weather has slowed the construction project. Boardwalk and Capone agree to increase the contact by $5,000 and to extend the completion date by three weeks. Each party agrees in writing to this change. Upon completion of the project, Boardwalk sends Capone a bill for $80,000.

2. How much does Capone have to pay? What are the competing arguments?

Boardwalk Construction has provided Eli a quotation of $20,000 to provide and install a high-end refrigerator. Boardwalk has provided this quote in writing and has stated that the quote is valid for 30 days and that Boardwalk may not revoke its offer. The next day, several of Boardwalk’s employees quit. Boardwalk sends a fax to Eli attempting to revoke its offer. Two seconds after Boardwalk sends the fax, it receives a fax from Eli accepting the offer.

3. Is there an agreement here? What are the competing arguments?

*(Please don't copy and paste the answer from another question, if I am asking those questions again that's because I want different answers!)*

Business Law

Mickey has never liked Nucky so he decides to play a practical joke on him by pretending to sell him his home in the Cayman Islands. He tells Torrio that he has no intention of selling Nucky the home. Mickey approaches Nucky in a bar where Nucky is clearly intoxicated. The home is assessed at $10 million but he offers Nucky the home for $50,000. He winks and smiles at Nucky and Nucky accepts and the two shake hands. Nucky quits his job at Replay Baseball and moves to the Cayman Islands where Mickey informs him that he never had any intention of selling him the home. Nucky is moving furniture and trimming the hedges at the time. Of course, Mickey never mentioned that he owned a second home in the Cayman Islands that was recently destroyed in a hurricane.

1. Discuss whether there is a valid offer and acceptance and, further, discuss whether there is an enforceable contract.

Nucky decides that he will build a new home in Massachusetts with a large Jacuzzi. He compiles specifications for the construction of the home and sends it to several general contractors so they may provide bids/quotations. Part of the general contract includes a large plumbing sub contract. Boardwalk Construction submits a bid to Nucky for $20 million to serve as the general contractor. As part of its general bid, Boardwalk Construction factored $1 million for plumbing based upon a sub bid submitted by Atlantic Plumbing. There were two other bids for the plumbing work. Boardwalk Construction and Atlantic Plumbing have a falling out and Atlantic Plumbing no longer wants to work on the project. The two other bids were for $10 million each respectively.   

2. Discuss whether Atlantic Plumbing may revoke its offer. What are the competing arguments? Are there any other important facts?

Boardwalk Construction is working on small renovation project for Capone at his home. There is no written contract, but the two have orally agreed that Boardwalk will renovate Capone’s garage for $75,000. The two have agreed that construction is to be completed within one month. Two weeks later, Boardwalk approaches Capone and complains that the cost of nails has increased by 40% and that the cold weather has slowed the construction project. Boardwalk and Capone agree to increase the contact by $5,000 and to extend the completion date by three weeks. Each party agrees in writing to this change. Upon completion of the project, Boardwalk sends Capone a bill for $80,000.

3. How much does Capone have to pay? What are the competing arguments?

Boardwalk Construction has provided Eli a quotation of $20,000 to provide and install a high-end refrigerator. Boardwalk has provided this quote in writing and has stated that the quote is valid for 30 days and that Boardwalk may not revoke its offer. The next day, several of Boardwalk’s employees quit. Boardwalk sends a fax to Eli attempting to revoke its offer. Two seconds after Boardwalk sends the fax, it receives a fax from Eli accepting the offer.

4. Is there an agreement here? What are the competing arguments?

Question one  

Under IFRS, where a right to return exists,

a) sales returns and allowances are recognized as contra accounts to Revenues and Accounts Receivable.

b) a refund liability is recognized.

c) this right is disclosed in the financial statements; no accrual necessary.

d) this right does not need to be disclosed or accrued anywhere.

Part B

Marlin Pools and Spas sold 80 hot tubs at $4,500 each. The cost of the hot tubs to Marlin is $2,600. The terms of the sale include a right to return for full refund within 30 days of purchase. Marlin expects that 3 of the hot tubs will be returned. Marlin follows IFRS 15.

Required:

1. Record the journal entries related to the above transactions. Assume 1 hot tub is returned within the 30 days.
2. Now assume Marlin uses ASPE, prepare the journal entries for the above transactions.

Question Two

Ace Company manufactures equipment. Ace’s products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $130,000 to $1,100,000 and are quoted inclusive of installation. The installation process does NOT involve changes to the features of the equipment to perform specifications. Ace has the following relationship with Rose Inc.

• Rose can purchase equipment from Ace for a price of $500,000 and contracts with Ace to install the equipment. Using market data, Rose determines installation service is estimated to have a fair value of $50,000. The cost of the equipment is $200,000.
• Rose is obligated to pay Ace the $500,000 upon delivery and installation of the equipment.

Ace delivers the equipment on August 1, 2020, and completes the installation of the equipment on October 1, 2020. The equipment has a useful life of 7 years. Assume the equipment and the installations are two distinct performance obligations that should be accounted for separately.

Instructions

a)    How should the transaction price of $500,000 be allocated among the service obligations?

b)    Prepare the journal entries for Ace for this revenue arrangement for 2020, assuming Ace receives payment when installation is completed.

Question Three

On December 31, 2019, Resilient Company sells production equipment to Ready Corp. for $160,000. Resilient includes a one-year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on December 31, 2019. Resilient estimates the prices to be $156,000 for the equipment and $4,000 for the cost of the warranty.

Required:

1. Prepare the journal entry to record this transaction on December 31, 2019.
2. Repeat the requirements for (a) assuming that, in addition to the assurance warranty, Resilient sold an extended warranty (service type warranty) for an additional two year (2019 – 2020) for $1,600.

Question Four  

In January 2019, Miller Construction Corp. contracted to construct a building for $3,600,000. Construction started in early 2019 and was completed in 2020. The following additional information is available:

                                                                                          2019               2020

       Costs incurred...................................................... $1,458,000          $1,620,000

       Estimated costs to complete.................................. 1,560,000                         —

       Billed ……………………………………………….    1,700,000           1,900,000

       Collections during the year.................................... 1,440,000            2,160,000

Miller uses the percentage-of-completion method.

Instructions

Under the contract-based approach for percentage completion,

a) How much revenue should Miller report for 2019 and 2020?

b) Prepare all journal entries for 2019 and 2020 for this contract.

c)    What amounts would be presented on Miller’s December 31, 2019 Balance Sheet?

d)    What is the gross profit on the project for each of 2019 and 2020?

The industry average P/E ratio for the construction industry is 15.2 Key Construction, Inc.’s expected earnings per share for next year is $3.48. According to the price/earnings valuation method, what is the value of Key’s stock?

Give 5 Innovative Construction Project/Materials and site its respective concepts and ideas on how it is being useful in the construction industry.

(Note: Send it on a word file. Showing the images of such innovative projects/materials, will have an additional points.)