A falling head permeability test was performed on a re-moulded silty clay soil sample 150 mm in diameter and 250 mm in length. The diameter of the standpipe was 12.7 mm. At the start of the test, the height of the water in the standpipe measured 2,236 mm above the constant water level where the soil sample was immersed in. After 7 hours and 45 minutes, the height of the water in the standpipe was measured at 1971 mm. Determine: (i) the coefficient of permeability of the soil (in m/sec), and (ii) the estimated height of the water in the standpipe after a further 12 hours of running this test. (iii) the total time (from the start of the test in days, hours, minutes and seconds) it will take for the water level in the standpipe to reach a height of 600 mm.  

Drof's silver reserves are being depleted, so its sales are falling. Also, because its pit is getting deeper each year, its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 5% per year.If the current dividend is $6 per share and the investor's required rate of return is 13%, what is the value of Drof's stock?

Answer: $31.67

Please show all work and formulas used for a financial calculator, not excel.

1. Financial Statements of a Manufacturing Firm

   The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:

   •	Purchased $398,300 of materials.
   •	Used $342,500 of direct materials in production.
   •	Incurred $296,000 of direct labor wages.
   •	Applied factory overhead at a rate of 75% of direct labor cost.
   •	Transferred $826,100 of work in process to finished goods.
   •	Sold goods with a cost of $784,700.
   •	Revenues earned by selling bikes, $1,404,600.
   •	Incurred $337,400 of selling expenses.
   •	Incurred $125,600 of administrative expenses.

   a. Prepare the income statement for Rushmore Biking Inc. for the month ending February 28. Assume that Rushmore Biking Inc. uses the perpetual inventory method.

   Rushmore Biking Inc.
   Income Statement
   For the Month Ended February 28
   		$
   		$
   Selling and administrative expenses:
   	$
   Total selling and administrative expenses
   		$

   b. Determine the inventory balances on February 28, the end of the first month of operations.

   Materials inventory, February 28	$
   Work in process inventory, February 28	$
   Finished goods inventory, February 28	$

Which of the following questions would be studied in the area of microeconomics?

-What determines the number of hours an individual works?

-Do interest rates affect net exports?

-Will an increase in government spending cause inflation?

-What portion of total spending comes from households?

-Does hosting the Olympics decrease the unemployment rate?

If governments were to increase spending, determine the effect on RGDP, price levels, and AD. By increasing spending, do you believe government is trying to slow down or speed up the economy? Why? I When economic growth occurs, what happens to LRAS and SRAS? What happens to price levels and RGDP

Sam Smith, the laundry supervisor of the Toronto Street Shelter, stared at the memo that had just reached his desk:

The shelter had adopted a responsibility accounting system. From now on you will receive quarterly reports comparing the costs of operating your department with budgeted costs. The reports will highlight the differences (variances) so that you can zero in on the departure from budgeted costs. (This is called management by exception.) Responsibility accounting means you are accountable for keeping the costs in your department within budget. The variances from the budget will help you identify which costs are out of line, and the sizes of the variances will indicate the most important ones. Your first such report accompanies this announcement. [Exhibit 1]

As this report indicates, your costs are significantly above budget for the quarter. You need to pay particular attention to labor, supplies and maintenance. Please get back to me by the end of this week with a plan for making the needed reductions

Mr. Smith knew that he needed a plan, yet midwinter was the busiest time of the year at the shelter, and the laundry was piling up faster than his staff could wash it.

Background

Toronto Street Shelter was located in the heart of Toronto. Founded in the late 1800’s, it had been serving the homeless every since, providing hot meals, shelter, and companionship. Situated on a busy urban thoroughfare, it was a have of last resort for many of the city’s indigent, and “home” for many others. As might be expected, the demand for its services was especially high in the winter, when temperatures frequently dropped to below freezing, and life on the street became unbearable.

The shelter provide three services. Its most significant service activity was the Hot-Meal Program, where it served hundreds of meals a day. A meal of hot soup and a sandwich was available to anyone who arrived between the hours of noon and 2 pm and 5pm to 7pm. Its second program was its Overnight Hostel, where it had 150 beds that were available on a first-come, first-served basis. The linen was changed daily, and fresh towels were always available, so that the shelter’s clients could look forward to clean sheets and a hot shower. Finally, it had a counseling program, in which a staff of three full-time social workers assisted clients to cope with the difficulties that had brought them to the shelter, and in establishing themselves in a more self-sufficient lifestyle.

System Changes

In March, the shelter had hired a new administrator to improve it business activities. A business school graduate with prior experience in manufacturing and service companies in the private sector, one of his first steps had been to introduce what he called “responsibility accounting”. He had instituted a new budgeting system, along with the provision of quarterly cost reports to the shelter’s department heads. Previously, cost data had been presented to the department heads on a yearly basis.

The annual budget for the current fiscal year had been constructed by the new administrator, based on an analysis of the three prior year’s costs. The analysis show that all costs increased each year, with more rapid increases between the second and third year. He considered establishing the budget at an average of the three prior years’ costs hoping that the installation of the system would reduce costs to this level. However, in view of the rapidly increasing prices, he finally chose the prior fiscal year’s costs less 3% for the current year’s budget. He decided to measure activity by client nights, and to set the budget for pounds of laundry processed at last year’s level, which was approximately equal to the volume of the past three years.

Quarterly budgets were compiled as one-fourth of the annual budget. Mr. Smith had received the report show in Exhibit 1 in mid-January. He reflected on its content:

A lot of my costs don’t change, even if the number of pounds of laundry changes. I suppose laundry labor, supplies, water-related items, and maintenance vary with changes in pounds, but that’s about all. Nevertheless, shouldn’t my budget reflect those changes? Also, I hadn’t planned for the fact that I was given a salary increase as of October 1 – was I supposed to refuse it to help keep my budget in balance?

Finally, I think that it’s important to note that I had to pay overtime to the staff because the department became inundated with laundry during the cold snap we had back in mid-December. Because of this, my average hourly rate for the whole three months was $10.20 instead of the $9.00 that was in my budget. In fact, and maybe this is a little picky, the average number of minutes it took my staff to wash a pound of laundry actually dropped from $0.48, which was my budget target, to $0.47 for the quarter. Somehow, even though it’s pretty small, I think that should be taken into consideration.

Assignment

What is your assessment of the method the administrator used to construct the budget?

Prepare a flexible budget for the laundry department. What are the volume and spending variances?

What should you acting as Mr. Smith tell his boss about the budget variances by the end of the week?

Exhibit 1

You are the accountant for London Imports and Exports. The company imports and exports food and candy items throughout the world. The company is finalizing its 3^rd quarter financial results. All adjustments have been made for the 3^rd quarter except the adjustment for Bad Debts Expense. The preliminary 3^rd quarter results along with the 1^st and 2^nd quarter results are shown below.

The CFO asked you to look at the Allowance for Doubtful Accounts and use the Aged Accounts Receivable to calculate the adjustment needed for bad debts expense for the 3^rd quarter. The CFO stated that he knows the customers are slower at paying this quarter but he wants the Allowance for Doubtful Accounts to not be increased; in fact he’s encouraging you to decrease it so it has an adjusted balance of $8,000. He wants you to play around with the estimated bad debt loss rates to get the number he wants for the adjusted balance of the Allowance account. You are confused, so you decide to analyze the Allowance for Doubtful Accounts, and you came up with the following summary of the T account below:

AGING OF ACCOUNTS RECEIVABLE SCHEDULE:

Answer the following questions:

1. What is the problem with the Controller asking you to "play around with the estimated bad debt loss until you get it to work"?

2. If you were to record the bad debts expense based on what you learned in accounting, what amount would you record and how did you calculate this?

3. If you were to record the bad debts expense based on what the controller wants, what amount would you record and how did you calculate this?

4. Is there any evidence of unethical behavior in this case? Thoroughly explain your answer. Be sure to mention how net income would be affected based on your answers to #2 and #3 and how this would affect stakeholders. State what you believe is the ethical course of action.

2301 KEY ASSIGNMENT

You are the accountant for London Imports and Exports. The company imports and exports food and candy items throughout the world. The company is finalizing its 3^rd quarter financial results. All adjustments have been made for the 3^rd quarter except the adjustment for Bad Debts Expense. The preliminary 3^rd quarter results along with the 1^st and 2^nd quarter results are shown below.

The CFO asked you to look at the Allowance for Doubtful Accounts and use the Aged Accounts Receivable to calculate the adjustment needed for bad debts expense for the 3^rd quarter. The CFO stated that he knows the customers are slower at paying this quarter but he wants the Allowance for Doubtful Accounts to not be increased; in fact he’s encouraging you to decrease it so it has an adjusted balance of $8,000. He wants you to play around with the estimated bad debt loss rates to get the number he wants for the adjusted balance of the Allowance account. You are confused, so you decide to analyze the Allowance for Doubtful Accounts, and you came up with the following summary of the T account below:

AGING OF ACCOUNTS RECEIVABLE SCHEDULE:

Answer the following questions:

1. What is the problem with the Controller asking you to "play around with the estimated bad debt loss until you get it to work"?

2. If you were to record the bad debts expense based on what you learned in accounting, what amount would you record and how did you calculate this?

3. If you were to record the bad debts expense based on what the controller wants, what amount would you record and how did you calculate this?

4. Is there any evidence of unethical behavior in this case? Thoroughly explain your answer. Be sure to mention how net income would be affected based on your answers to #2 and #3 and how this would affect stakeholders. State what you believe is the ethical course of action.

Amanda would like to organize BAL as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 8 percent annual before-tax return on a $500,000 investment. Amanda’s marginal income tax rate is 37 percent and her tax rate on dividends and capital gains is 23.8 percent (including the 3.8 percent net investment income tax). If Amanda organizes BAL as an LLC, she will be required to pay an additional 2.9 percent for self-employment tax and an additional 0.9 percent for the additional Medicare tax. Also, she is eligible to claim a full deduction for qualified business income on BAL’s income. Assume that BAL will distribute half of its after-tax earnings every year as a dividend if it is formed as a C corporation. (Round your intermediate computations to the nearest whole dollar amount.)

How much cash after taxes would Amanda receive from her investment in the first year if BAL is organised as either an LLC or a C corporation ?

After-tax cash flow for LLC ;

C corporation ?