Please come to the Discussion Board and post up a summary of your end of life interview.

• How do you prepare for an interview?
• What materials do you bring and why?

a) Question 2a) Draw a graph representing a loanable funds market. Assume inelastic supply of loanable funds. Make sure to label axes, curves, and equilibrium. Write down equations for each of the curves. b) Interpret the slope of the demand for loanable funds curve. c) Interpret the slope of the supply of loanable funds curve. In 2020, the COVID pandemic has spread around the world. Some substantial policy changes in response to the adverse effects of the pandemic in the US included an increase in spending on publicly provided medical tests and provision of stimulus checks to public ($1200 per person). d) Focus on these two events only and illustrate them on your loanable funds model diagram. e) What changes to the equilibrium can you predict with this model going from (a) to (d) and what is the intuition for your predictions?

South Africa: Oil prices drop: What will fuel the energy industry post-COVID-19?

On April 20, 2020, the global petroleum industry witnessed a historic plummeting of benchmark US oil below $0 a barrel. Brent crude oil also has fallen nearly 70% from the beginning of the year. The drop in oil prices raises questions about the future of the global and regional energy industry as well as the role of fossil fuels in the transition towards a more sustainable energy future after the pandemic economic lockdown.

Use the extract above to write an essay in which you discuss the following:

• The name of the shock mentioned in the extract                              (2)
• The effect of the decline in oil prices on economic growth in South Africa (to discuss this point sufficiently, an AD-AS graph and detailed explanation are required.)

1. At the beginning of its fiscal year 2020, an analyst made the following forecast for Greenfield, Inc. (in millions of dollars):

Greenfield has a net debt of $1,950 at the end of 2019. Assume that free cash flow will grow at 4 percent per year in 2024 and 2025, after that this will grow at 5 percent per year. Greenfield had 425 million shares outstanding at the end of 2019, trading at $72.5 per share. Using a required return of 9 percent, calculate the following for Greenfield at the beginning of 2020 (You have to fill in the table below, and also show your working process):

1. The enterprise value                                                                           

[5 marks]

2. Equity value                                                                            

[2 mark]

3. Equity value per share                                                                        

[1 mark]

4. Based on your estimate, should investors buy the share of this company?

                                                                                                              [1 mark]

2019 is the first year of operation for Flitz Company. Applicable tax rates enacted by the end of 2018 are as follows:2019 25%2020 20%2021 and later 30%Compute the amount of deferred taxes to appear on the balance sheet at 12/31/19 with proper classifications, prepare the journal entry to record income tax expense for 2019, and show the current and deferred portions of income tax expense on the income statement for 2019.(a) In 2019 Flitz had pre-tax financial income of $450,000.(b) Pre-tax financial income was different from taxable income due to the following:Depreciation, the straight-line method for financial purpose while MACRS is used for tax purpose 35,000(tax-deductible in 2019, expense in 2020 20,000 in 2021 15,000)Fine for pollution 8,000(not tax-deductible, expense in 2019) Revenue received in advance 14,000(taxable 2019, revenue in 2020)Revenue from investment on equity method for financial purpose and cost method is used for tax purpose 10,000(revenue in 2019, taxable in 2020) Litigation accrual 80,000(expense in 2019, tax-deductible in 2022)Interest received on municipal bonds 6,000(revenue in 2019, not taxable)

The Lynbrook Rentals Company offers credit terms to all of its customers. At the end of 2019, accounts receivables totaled $3,400,000. During 2020 credit sales were $2,100,000 and cash collections from customers were $3,700,000. The allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $42,000 at the beginning of 2020 and $70,000 in receivables were written off during the year as uncollectible. In addition, $20,000 was collected from a customer whose account was written off in 2019. The allowance for uncollectible accounts is determined by an ageing of accounts receivable. An aging of accounts receivable at December 31, 2020, reveals the following:

Age Group 0-60 days 61-90 days 91-120 days Over 120 days

Required:

Percentage of Year-end Percent Receivable in Group Uncollectible

55% 5% 30 15 10 45 5 60

a. Prepare journal entries to record the write-off of receivables, collection of the accounts receivable previously written off, and the year-end adjusting entry for bad debt expense.
b. Show how accounts receivables would be presented in the 2020 year-end balance sheet?

The Lynbrook Rentals Company offers credit terms to all of its customers. At the end of 2019, accounts receivables totaled $3,400,000. During 2020 credit sales were $2,100,000 and cash collections from customers were $3,700,000. The allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $42,000 at the beginning of 2020 and $70,000 in receivables were written off during the year as uncollectible. In addition, $20,000 was collected from a customer whose account was written off in 2019. The allowance for uncollectible accounts is determined by an ageing of accounts receivable. An aging of accounts receivable at December 31, 2020, reveals the following:

Age Group   Percentage of Year-end Receivable in Group Percent Uncollectible

0-60 days 55%   5%

61-90 days 30 15

91-120 days 10 45

Over 120 days 5 60

Required:

a. Prepare journal entries to record the write-off of receivables, collection of the accounts receivable previously written off, and the year-end adjusting entry for bad debt expense.
b. Show how accounts receivables would be presented in the 2020 year-end balance sheet?

QUESTION 1

1. The main issue in accounting for foreign currency transactions is:

   		how to distinguish between denomination currency or settlement currency.
   		how to translate the financial statements of a foreign operation.
   		how to treat any foreign exchange differences that arise when assets or liabilities are remeasured at the end of the reporting period using the closing rate.
   		how to record transactions with foreign operations.

0.1 points   

QUESTION 2

1. For a company that has an Australian A$ as its functional currency, which of the following is not a foreign currency transaction?

   		goods sold at prices denominated in UK pounds.
   		inventory sold to a customer in Hong Kong who pays in A$.
   		borrowing funds where amounts are payable in NZ$.
   		equipment sold at prices denominated in Japanese Yen.

0.1 points   

QUESTION 3

1. In determining an entity's functional currency, factors to be considered include which of the following?

   		The currency in which receipts from operating activities are usually retained.
   		The currency that mainly influences sales prices for goods and services.
   		The currency of the country whose competitive forces and regulations mainly determine the sales price of its goods and services.
   		All of the above.

0.1 points   

QUESTION 4

1. Which exchange rate is used at the end of the reporting period?

   		The closing rate.
   		The indirect rate.
   		The spot rate.
   		The ending rate.

0.1 points   

QUESTION 5

1. A realised exchange difference arises:

   		on remeasurement of a monetary liability at the end of the reporting period.
   		when the exchange rate changes between initial recognition and cash settlement.
   		on initial recognition of a monetary asset.
   		when the exchange rate changes between initial recognition and end of reporting period.

0.1 points   

QUESTION 6

1. At the date of the transaction, a foreign currency monetary item is initially recognised and measured using:

   		The closing rate.
   		US dollars.
   		The foreign currency monetary value.
   		Spot exchange rate.

0.1 points   

QUESTION 7

1. All of the following assets can be defined as ‘qualifying assets’ except:

   		manufacturing plants.
   		power generation facilities.
   		investment properties.
   		inventories purchased ready for sale.

0.1 points   

QUESTION 8

1. Which of the following statements is incorrect?

   		Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds.
   		Financial assets and inventories that are manufactured or otherwise produced over a short period of time, and assets that are ready for their intended use or sale when acquired, are qualifying assets.
   		Financial assets and inventories that are manufactured or otherwise produced over a short period of time, and assets that are ready for their intended use or sale when acquired, are not qualifying assets.
   		A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

0.1 points   

QUESTION 9

1. If an Australian (A$) company enters a forward exchange contract to buy US$20,000, then which of the following applies?

   		The company’s contractual obligation (at the forward rate) and contractual right (at the spot rate) are settled on a net basis.
   		The company has a contractual right to receive US$20,000 at the settlement date and that right is an asset fixed in A$ at the forward rate.
   		The company has a contractual obligation to deliver foreign currency at the settlement date and that obligation is realised at the spot rate.
   		The company’s forward contract will act as a hedge against a recognised asset.

0.1 points   

QUESTION 10

1. AASB121/ IAS 21 The Effects of Changes in Foreign Exchange Rates requires that the financial report disclose which of the following?

   		The net exchange differences recognised in OCI and accumulated in a separate component of equity.
   		The amount of exchange differences recognised in the profit or loss for the period other than those that relate to financial instruments measured at fair value through profit or loss.
   		Any change in functional currency and reason for change.
   		All of the above.