On January 1, 2020, Sweet Company issued 10-year, $2,060,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Sweet common stock. Sweet’s net income in 2020 was $535,600, and its tax rate was 20%. The company had 103,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.

(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.)

(b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $1,030,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Sweet common stock. (Round answer to 2 decimal places, e.g. $2.55.)

Juan acquires a new 5-year class asset on March 14, 2020, for $200,000. This is the only asset Juan acquired during the year. He does not elect immediate expensing under § 179. He does not claim any available additional first-year depreciation. On July 15, 2021, Juan sells the asset.

Click here to access depreciation table to use for this problem.

a. Determine Juan's cost recovery for 2020.
$

b. Determine Juan's cost recovery for 2021.
$

On August 2, 2020, Wendy purchased a new office building for $3,800,000. On October 1, 2020, she began to rent out office space in the building. On July 15, 2024, Wendy sold the office building.

If required, round your answers to the nearest dollar.

Click here to access the depreciation table to use for this problem.

a. What MACRS convention applies to the new office building?
Half-year

b. What is the life of the asset for MACRS?
15 years

c. Determine Wendy's cost recovery deduction for 2020 and 2024.
2020: $
2024: $

On January 1, 2020, Carla Company issued 10-year, $1,980,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Carla common stock. Carla’s net income in 2020 was $479,400, and its tax rate was 20%. The company had 102,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.

(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.)

(b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $1,020,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Carla common stock. (Round answer to 2 decimal places, e.g. $2.55.)

On January 1, 2020, Kingbird Inc. issued $350,000 of 6-year, 3% bonds to yield a market interest rate of 4%. Interest is paid every quarter on January 1, April 1, July 1, and October 1. Kingbird has a calendar year end. After recording the December 31, 2021 accrual for quarterly interest, and making the payment on January 1, 2022, all the bonds were redeemed at 101.

Prepare a bond amortization schedule for the first two years (8 interest periods). (Round answers to 0 decimal places, e.g. 5,276.) KINGBIRD INC. Bond Discount Amortization Schedule Effective-Interest Method Semi-Annual Interest Period Interest Payment Interest Expense Amortization Bond Amortized Cost Issue Date, Jan. 1, 2020 $ Apr. 1, 2020 $ $ $ $ Jul. 1, 2020 Oct 1, 2020 Dec. 31, 2020 (accrual) Apr. 1, 2021 Jul. 1, 2021 Oct 1, 2021 Dec. 31, 2021 (accrual)

Please respond to the following discussion post:

The strategy that Avon president Andrea Jung began to pursue to turn grow the company’s wealth was to follow the same guidelines in international markets that the American companies used, which was to give country managers considerable autonomy. This policy allowed them to use the Avon brand name in a direct-sales format that was the company’s hallmark (Hill, 2015, p. 404). Once Jung realized that this business model was not working for Avon she transformed the company by hiring seasoned managers from well-known global consumer products companies such as Proctor & Gamble and Unilever to regain control over communications, performance visibility, and accountability of the company (Hill, 2015, p. 405).This move was the beginning of a positive growth performance of the company, and by 2007, this strategy was starting to yield dividends. Jung began using stars to promote the Avon products which resulted in higher product sales, and an increase in its sales force.

Avon soon took another tumble in market shares in the year 2010 and 2011 because of an increase of competition from rival companies like Proctor & Gamble. Problems arising from technology issues and bribes from government officials in China caused Avon to be charged with violating the Foreign Corrupt Practices Act. After feeling the pressure from investors Jung relinquished her role as CEO in 2011. Sometimes CEO’s take risks that start out on a good path but after a while find that changes need to be made sooner than later in order to offset market changes that will affect company growth. Jung’s aggressive strategy proved to be a failure in the end and ultimately resulted in her ouster as CEO.

QUESTION 3 REQUIRED Use the information provided below to prepare the following for Electroman Limited for August and September 2020 (using separate monetary columns for each month):

3.1 Debtors Collection Schedule

3.2 Cash Budget. Note: Where applicable, round off amounts to the nearest Rand. INFORMATION Electroman Limited sells appliances.

The following forecasts were made:

1. The bank balance on 31 July 2020 is expected to be R50 000 (favourable).

2. Sixty percent (60%) of all sales are for cash; the balance is on credit. Credit sales for June and July 2020 are expected to be R320 000 and R360 000 respectively. Sales are expected to increase by 10% each month. Twenty percent (20%) of the credit sales are expected to be settled during the month of the sale for a discount of 5%. The remaining customers usually pay in the month after the sale.

3. All appliances are purchased on credit and the creditors are paid in the month after the purchase. Purchases are expected to be as follows: July R420 000 August R460 000 September R510 000

4. Salaries and wages are expected to cost R85 800 for September 2020, after a 10% increase takes effect on 01 September 2020.

5. Advertising expenses are expected to be 6% of the total monthly sales, and are paid one month later. 6. Equipment that cost R300 000 is expected to be purchased during August 2020.

6. A deposit of 10% will be paid in August and the balance plus finance charges of R20 000 is payable in 5 equal instalments commencing September 2020.

7. A long-term loan of R250 000 at 12% per annum interest is to be raised on 01 August 2020. Interest on loan and a loan repayment of R5 000 is payable monthly on the last day of each month, commencing 31 August 2020.

8. Other cash expenses are expected to amount to R80 000 for July 2020. These expenses are expected to increase by 5% each month.

9. An interim dividend of 8 cents per share is expected to be paid to shareholders on 31 August 2020. The issued share capital of Electroman Li

mited consists of 500 000 ordinary shares

                          
       TFAC4001 Assessment 2020                  
Question 1                          
                          
Classic Dining Ltd. is considering opening a new restaurant in a rented facility.                          
It wishes to evaluate this investment over the five-year leasing period, on the assumption                           
that the equipment would be sold and the working capital recovered at the end of the 5th .                          
year                          
The following estimates in respect of the new restaurant have been prepared.                          
                          
                   €'000      
Premium on lease (capital expenditure)                    600      
Equipment and furnishing investment                   850      
Estimated disposal value of equipment at end of year 5                   100      
                          
Weighted average cost of capital                   11%      
                          
Estimates / Year           Year 1   Year 2   Year 3   Year 4   Year 5
                          
Numbers of customers           32,000   36,000   40,000   42,000   45,000
                          
Average revenue per customer           € 75   € 75   € 78   € 80   € 82
                          
Food & bev. costs per customer           € 23   € 24   € 25   € 26   € 27
Variable wages cost per cust.           € 19   € 20   € 21   € 22   € 23
                          
Fixed Costs           €'000   €'000   €'000   €'000   €'000
Annual rent (lease) of premises           425   425   425   425   425
Marketing and admin. expenses           225   200   180   180   180
Depreciation of equipment           150   150   150   150   150
Salaries           150   160   170   180   200
Apport. head office overheads           75   75   80   85   100
           1,025   1,010   1,005   1,020   1,055
                          
Profits lost in other restaur. €000           60   70   80   90   100
Working capital as % of turnover           4%   4%   4%   4%   4%
                          
Required:                          
                          
(a)   Evaluate the above project using the following methods:                      
                          
       Net present value                  
       Internal rate of return                  
       Nominal payback period                  
                          
(b)   Comment on the proposed investment                       (5.33 marks)
                           (33.33 marks)

persuade to wear a mask in 2020

                          
       TFAC4001 Assessment 2020                  
Question 1                          
                          
Classic Dining Ltd. is considering opening a new restaurant in a rented facility.                          
It wishes to evaluate this investment over the five-year leasing period, on the assumption                           
that the equipment would be sold and the working capital recovered at the end of the 5th .                          
year                          
The following estimates in respect of the new restaurant have been prepared.                          
                          
                   €'000      
Premium on lease (capital expenditure)                    600      
Equipment and furnishing investment                   850      
Estimated disposal value of equipment at end of year 5                   100      
                          
Weighted average cost of capital                   11%      
                          
Estimates / Year           Year 1   Year 2   Year 3   Year 4   Year 5
                          
Numbers of customers           32,000   36,000   40,000   42,000   45,000
                          
Average revenue per customer           € 75   € 75   € 78   € 80   € 82
                          
Food & bev. costs per customer           € 23   € 24   € 25   € 26   € 27
Variable wages cost per cust.           € 19   € 20   € 21   € 22   € 23
                          
Fixed Costs           €'000   €'000   €'000   €'000   €'000
Annual rent (lease) of premises           425   425   425   425   425
Marketing and admin. expenses           225   200   180   180   180
Depreciation of equipment           150   150   150   150   150
Salaries           150   160   170   180   200
Apport. head office overheads           75   75   80   85   100
           1,025   1,010   1,005   1,020   1,055
                          
Profits lost in other restaur. €000           60   70   80   90   100
Working capital as % of turnover           4%   4%   4%   4%   4%
                          
Required:                          
                          
(a)   Evaluate the above project using the following methods:                      
                          
       Net present value                  
       Internal rate of return                  
       Nominal payback period                  
                          
(b)   Comment on the proposed investment                       (5.33 marks)
                           (33.33 marks)