Assume that you are the project manager for the construction of a 15-mile road. Further assume that the work is uniformly distributed over 12 weeks. The total approved budget for this project is $600,000. At the end of the first three weeks of work $160,000 has been spent and five miles of road have been completed. At the end of the first three weeks, what do you think of the current status of the project in terms of cost and schedule? Describe the earned value analysis terms that you use and their formulas, and then calculate each metric. Then interpret your results. Important: there are more than 3 earned value metrics to calculate.

Construction project requires an intial investment of $900,000, has a nine-year life, and salvage value is Zero. Sales are projected at 75,000 units per year. Price per unit is $47, variable cost per unit is $34, and fixed costs are $825,000 per year. The tax rate is 35%, and discount rate is 15%. Using straight-line depreciation method:
1. Calculate the accounting break-even point in number of units, what is the degree of operating leverage at the accounting break-even point
2. Calculate the OCF, NPV
3. Calculate the financial break-even point in number of units

Jack Construction Supplies Ltd.

Jack Construction Supplies Ltd. (Jack) is a retail and commercial building supply dealer. Until recently, Jack was part of a national chain of stores, but the chain decided to sell off stores that weren’t in its core business. Several local investors purchased Jack. The purchasers believe that Jack will be successful, but that it wasn’t well managed by the chain. The new investors paid $1,000,000 in cash for Jack. Jack will also pay 25% of net income before unusual or non-recurring items that Jack earns in excess of $500,000 for each of the next three years (including fiscal 2019), as reported in Jack’s general purpose financial statements.

It’s now late January 2020. Jack has just provided its financial statements for the fiscal year ended December 31, 2019 to the national chain as required by the agreement of purchase and sale. The CFO of the company that sold Jack has asked you to examine the financial statements, discuss any issues with Jack’s new management, and identify any problems that might affect net income end the amount the national chain is due as part of the agreement. In your review, you identified the following issues:

1. Jack reported net income before unusual or non-recurring items of $510,000 for the year ended December 31, 2019.
2. Jack’s business with most customers is transacted in cash or on credit cards. Jack offers credit terms to builders and contractors, allowing them up to 90 days to pay. The revenue on these sales is recognized at the time of the exchange. Jack has also given extended credit terms to a number of struggling home builders in its community. The builder began construction of new homes, but sales have been slower than expected. Jack has agreed to accept payment each time a builder sells one of its homes. To date, none of these builders have defaulted on any amounts they owe. Jack recognizes these sales on collection of cash from a builder. As of the end of December 31, 2019, these builders owe $275,000. The costs associated with these sales are $150,000. These costs were expensed as incurred.
3. During 2019, Jack’s management discovered that certain assets purchased several years ago hadn’t been depreciated. The amount of depreciation that should have been expensed to date on these assets, $175,000, was fully expensed in 2019.
4. In mid-2015, Jack obtained an exclusive dealership for a line of high-quality kitchen cabinets. The dealership rights were for an initial five-year period, with five-year renewals possible at the option of the manufacturer. At the time of signing the initial agreement, Jack was assured that a renewal was virtually certain. Jack spent $210,000 to set up displays to promote the line. These costs were capitalized and are being amortized over 10 years. In December 2019, Jack learned that the exclusive dealership arrangement will not be renewed because it’s no longer part of the national chain. Jack won’t be able to sell the products beyond April 2020. Jack wrote off the unamortized portion of the costs in 2019.
5. Jack purchased some heavy equipment for use in the lumberyard at an auction for $225,000. The equipment was fairly old and in poor condition and required $125,000 to get it in working condition. Jack’s management believes the equipment will be usable for at least 10 years. Jack capitalized the purchase price of the equipment and expensed the $125,000 as a repair cost.
6. In May 2019, Jack opened a large plumbing department. Because management had little expertise in plumbing but wanted to provide for customers’ plumbing needs, it contracted with SEH Plumbing Ltd. (SEH) to own and operate the plumbing department. SEH paid Jack a $200,000 non-refundable fee on July 15, 2019 and will pay 5 percent of net sales (sales after returns and bad debts) per year. SEH is getting the plumbing department ready for business. The contract between SEH and Jack is for 10 years. Jack capitalized the $200,000 fee as a long-term deposit and will recognize it as revenue over the term of the contract on a straight-line basis.

REQUIRED: Prepare a report to your CFO on your findings and recommendations regarding Jack.

he adjusted trial balance for Tybalt Construction as of December 31, 2019, follows

O. Tybalt invested $6,500 cash in the business in exchange for common stock during year 2019. The December 31, 2018, credit balance of the Retained Earnings account was $124,600.  
Required:
1a. Prepare the income statement for the calendar-year 2019.
1b. Prepare the statement of retained earnings for the calendar-year 2019.
1c. Prepare the classified balance sheet at December 31, 2019.
2. Prepare the necessary closing entries at December 31, 2019.

D&D Construction Ltd. is based in Maitland, Nova Scotia. The company takes on construction jobs ranging from small contracts worth just a few thousand dollars to multi-million-dollar projects. It only prepares accrual and adjusting entries at year end. The following significant transactions have occurred in 20X7, and may have possible yearend adjustment implications:

a) Land

D&D accounts for land using the revaluation model. The company has only one parcel of land. It is recorded in the statement of financial position by D&D at $3.2 million. In 20X7, the value of the land was assessed, and found to be $3 million. No revaluation adjustments have been recorded in the past.

Required:
Prepare the journal entry to record the change in value of the land.

b) Plant and equipment

Details of D&D’s property, plant, and equipment are provided in the data file. Buildings, mobile equipment, automobiles, and office equipment are depreciated using the straight-line method. Tools and equipment are depreciated using the declining balance method. The depreciation rates on tools and equipment vary from 17.5% to 33% per year. Computer equipment is depreciated using a double-declining rate method at 62.5% per year.

On January 1, 20X7, warehouse equipment with a cost of $85,600 was delivered. The equipment was immediately put into service. The useful life is expected to be 11 years, with an expected residual value of $10,500. This equipment is depreciated using the declining balance method at a rate of 17.5%. The invoice for this equipment was received and paid, but was inadvertently not recorded.

On December 31, 20X7, the company disposed of several hand tools. The cost of these tools was $21,300, and accumulated depreciation as at December 31, 20X6, was $18,899. The equipment sold for total proceeds of $6,500. The funds received were recorded by the company as a gain on sale of property, plant and equipment of $6,500.

Depreciation for 20X7 has not yet been recorded for any of the property, plant, and equipment (PPE) held by the company.

Required:

Prepare any necessary journal entries to record and correct the PPE transactions detailed above.

c) Equipment patent

D&D registered a patent on January 1, 20X0. The expected useful life of the patent was 10 years. The patent was capitalized at $110,000. The net book value at January 1, 20X7, was $33,000. On December 31, 20X7, the patent was tested for impairment and it was determined that it had no further value.

Required:

Prepare any necessary journal entries associated with D&D’s equipment patent for 20X7.

Common-Size Income Statements and Horizontal Analysis

Income statements for Mariners Corp. for the past two years are as follows:

Required:

1. Using the format in Example 13-5, prepare common-size comparative income statements for the two years for Mariners Corp. Round percentages to one decimal point.

Feedback

Prepare in correct form common-size comparative income statements for two years. Set up with five columns.

2. Based on Mariner's common size statements in 2017 compared to 2016, it can be concluded that

all of these are true.

gross profit as a percentage of sales declined due to higher cost of goods sold.

net income decreased both in dollars and as a percentage of sales.

selling and administrative expenses increased both in dollars as well as percentage of sales.

a

Feedback

Correct

3. Using the format in Example 13-2, prepare comparative income statements for Mariners Corp., including columns for the dollars and for the percentage increase or decrease in each item on the statement. Round all percentages to the nearest whole percent. If an answer is zero, enter "0".

Common-Size Income Statements and Horizontal Analysis

Income statements for Mariners Corp. for the past two years are as follows:

Required:

1. Using the format in Example 13-5, prepare common-size comparative income statements for the two years for Mariners Corp. Round percentages to one decimal point.

Feedback

Prepare in correct form common-size comparative income statements for two years. Set up with five columns.

2. Based on Mariner's common size statements in 2017 compared to 2016, it can be concluded that

all of these are true.

gross profit as a percentage of sales declined due to higher cost of goods sold.

net income decreased both in dollars and as a percentage of sales.

selling and administrative expenses increased both in dollars as well as percentage of sales.

a

Feedback

Correct

3. Using the format in Example 13-2, prepare comparative income statements for Mariners Corp., including columns for the dollars and for the percentage increase or decrease in each item on the statement. Round all percentages to the nearest whole percent. If an answer is zero, enter "0".

Brush your hair with a plastic comb. Bring the comb close to a small piece of paper. Move a fridge magnet near the comb and then the paper. Do these objects exert forces on one another? Observation and explain scientific principles please.

Find an example of a publicly-traded company that lists two risk factors in their 10-K that you think will become greater liabilities for them in the near future. If you were the CEO, how would you mitigate those risks?