In his December 6, 2010 article in Datamation titled The Five E's of Cloud Computing Management in 2011, Jeffrey Kaplan states:

"The beauty of today's Cloud Computing solutions is that corporate executives and end-users can more easily critique their functional capabilities and user-friendliness before selecting one to address their needs. However, business decision-makers still need plenty of IT help looking "under the hood" at how these offerings are architected, delivered and supported to ensure they can integrate with existing systems and fulfill their promises. IT managers and CIOs should put selection criteria, procurement procedures and governance policies in place to oversee the evaluation and contracting processes." (Available here.)

When considering cloud computing, Kaplan says "corporate executives and end-users can more easily critique their functional capabilities and user-friendliness." What are the implications of this for planning IT acquisition projects? How much change do you see, if any, in solution selection criteria, procurement procedures, and governance approaches because of cloud computing, assuming the organization has established these earlier based on best practices?

Royal West Airlines Ltd.
Income Statement
For the Year Ended December 31, 2020
Sales revenue $2,561,096
Cost of sales (1,003,860)
Gross margin $1,557,236
Other expenses ( 890,743)
Net income, before income tax $ 666,493
Royal West Airlines is a regional airline that services Western Canada.
Notes:
a) $10,000 in legal fees relating to the restructuring of a debt.
b) A brand new airplane costing $65,000 used to service a new route
c) Interest on late municipal tax balances of $1,000
d) Sponsorship of a local musical production costing $9,240
e) Convention that was held in Barcelona, Spain costing $3,300
f) Interest expense of $4,000 that was associated with the acquisition of a GIC
g) Cost of sponsoring local hockey teams $500
h) Food and entertainment for clients $60,000
i) Life insurance premiums on the life of the president (required by the bank) $2,000
Item 1. During the year the Company spent $6,500 for landscaping its head office grounds.
For accounting purposes this cost was deducted in the year
Item 2. The Other Expenses account included the following amounts:
Item 3. The Other Income and losses account included the following amount:
$32,000 spent on a staff Christmas party where all employees were invited to
attend the event.
Item 6. All of Royal’s remaining capital assets are Class 1 which related to an office
building that was purchased in 2019. The UCC at the beginning of 2020 was $625,100.
On July 1, the Company added an additional room for $20,000. No Class 1 assets were
disposed of in the year.
Item 5. In 2020, the Company deducted $21,000 bad debt expense based on a review
of specific accounts.
Item 4. For tax purposes, the machinery that was sold was a Class 10 asset. All assets
in class were disposed of. The machinery was purchased for $15,000 and its UCC
balance at the beginning of 2020 was $10,250. The asset was sold in 2020 for
$14,600.
Required:
Complete the table below and show the adjustments that would be required in Royal West Airlines 2020
SCHEDULE 1 for each item listed in the question. For each item, show whether it adds to NITP by
marking “+” in the appropriate column, a “-“ mark if it subtracts from NITP, and a “na” mark if it is not
applicable.
Description
Addition (+)
Subtraction (-)
(na)
$ amount
Citation
Net Income for accounting
$666,493 9(1)
Item 1.
Item 2. a)
b)
c)
d)
e)
f)
g)
h)
i)
Item 3.
Item 4.
Item 5.
Item 6.

The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2020 for the years 2020 and 2019, and the income statements for the years ended October 31, 2019 and 2020, are presented below.

COOKIE & COFFEE CREATIONS INC.

Balance Sheet

October 31

COOKIE & COFFEE CREATIONS INC.

Income Statement

Year Ended October 31

Additional information:

Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more kitchen equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semi-annual payments of $2,500 on May 1 and November 1 of each year, plus interest of 5% on the outstanding balance.

1. Prepare a horizontal analysis of the income statement for Cookie & Coffee Creations Inc. using 2019 as a base year. Also, prepare a vertical analysis of the income statement for Cookie & Coffee Creations Inc. for 2020 and 2019.

2. Comment your findings.

3. What would justify a decision by Cookie & Coffee Creations Inc. to buy the additional equipment? What alternatives are there instead of bank financing?

Waterways prepared the balance sheet and income statement for the irrigation installation division for 2020. Now the company also needs to prepare a statement of cash flows for the same division. The comparative balance sheets for Waterways Corporation’s Irrigation Installation Division for the years 2019 and 2020 and the income statement for the year 2020 are presented below. Additional information: 1. Waterways sold a company vehicle for $24,200. The vehicle had been used for 10 years. It cost $80,500 when purchased and had a 10-year life and a $6,100 salvage value. Straight-line depreciation was used. 2. Waterways purchased with cash new equipment costing $209,100. 3. Prepaid expenses increased by $33,800. All changes in accounts payable relate to inventory purchases.

(a) Prepare a statement of cash flows using the indirect method for the year 2020. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

At January 1, 2020, Splish Company’s outstanding shares included the following.

259,000 shares of $50 par value, 7% cumulative preferred stock

974,000 shares of $1 par value common stock

Net income for 2020 was $2,570,000. No cash dividends were declared or paid during 2020. On February 15, 2021, however, all preferred dividends in arrears were paid, together with a 5% stock dividend on common shares. There were no dividends in arrears prior to 2020.

On April 1, 2020, 454,000 shares of common stock were sold for $10 per share, and on October 1, 2020, 112,000 shares of common stock were purchased for $21 per share and held as treasury stock.

Compute earnings per share for 2020. Assume that financial statements for 2020 were issued in March 2021. (Round answer to 2 decimal places, e.g. $2.55.)

Earnings per share $

At January 1, 2020, Headland Company’s outstanding shares included the following.

Net income for 2020 was $2,499,000. No cash dividends were declared or paid during 2020. On February 15, 2021, however, all preferred dividends in arrears were paid, together with a 5% stock dividend on common shares. There were no dividends in arrears prior to 2020.

On April 1, 2020, 436,000 shares of common stock were sold for $10 per share, and on October 1, 2020, 106,000 shares of common stock were purchased for $21 per share and held as treasury stock.

Compute earnings per share for 2020. Assume that financial statements for 2020 were issued in March 2021. (Round answer to 2 decimal places, e.g. $2.55.)

JTC purchased call options on Flynn common shares on July 7, 2020, for $200 as a speculative investment. The call options give JTC the right to buy 100 shares at a strike price of $20 each. The options expire on January 31, 2021.

The following data is observed through 2020:

a. At September 30, 2020, the options are on JTC's balance sheet at a value of ? Muliple Choice: ["$350", "$150", "$200", "$1,950"].

b. In the fourth quarter (October - December) of 2020, JTC records a loss in time value of? Muliple Choice: ["$150", "$90", "$110", "$60"].

c. At December 31, 2020, the options are on JTC's balance sheet at a value of? Muliple Choice: ["$260", "$350", "$460", "$490", "$200", "$290"].

XYZ Company recorded the following information related to their inventory
accounts for 2020:

                          January 1, 2020        December 31, 2020
Direct materials               31,000                   50,000
Work in process                38,000                   41,000
Finished goods                 22,000                   34,000

The following information was taken from XYZ Company's accounting records
for 2020:

Sales revenue ...........................................   $630,000
Direct materials purchased ..............................       ?
Depreciation, factory equipment .........................     34,000
Prime costs .............................................    250,000
Utilities (60% for factory; 40% for office building) ....     20,000
Sales commissions .......................................     71,000
Indirect materials ......................................       ?
Depreciation, office equipment ..........................     30,000
Rent, factory building ..................................     56,000
Net income ..............................................     10,000
Direct labor ............................................       ?
Advertising .............................................     68,000
Production supervisor's salary ..........................     74,000

Additional information:

1.  Direct labor comprised 35% of the conversion costs for 2020.

2.  The actual overhead cost for 2020 was equal to the overhead applied
    to production. Thus there was no overhead variance for 2020.

Calculate XYZ Company's indirect materials cost for 2020.

XYZ Company recorded the following information related to their inventory
accounts for 2020:

                          January 1, 2020        December 31, 2020
Direct materials               31,000                   50,000
Work in process                38,000                   41,000
Finished goods                 22,000                   34,000

The following information was taken from XYZ Company's accounting records
for 2020:

Sales revenue ...........................................   $630,000
Direct materials purchased ..............................       ?
Depreciation, factory equipment .........................     34,000
Prime costs .............................................    250,000
Utilities (60% for factory; 40% for office building) ....     20,000
Sales commissions .......................................     71,000
Indirect materials ......................................       ?
Depreciation, office equipment ..........................     30,000
Rent, factory building ..................................     56,000
Net income ..............................................     10,000
Direct labor ............................................       ?
Advertising .............................................     68,000
Production supervisor's salary ..........................     74,000

Additional information:

1.  Direct labor comprised 35% of the conversion costs for 2020.

2.  The actual overhead cost for 2020 was equal to the overhead applied
    to production. Thus there was no overhead variance for 2020.

Calculate the direct materials purchased by XYZ Company in 2020.