Soul Ltd is an Australian company that makes and sells small electronic goods and its financial year ends on 30 June. On 1 February 2018, a customer from the United States ordered some goods from Soul Ltd at an invoice cost of US$400,000 on terms FOB destination. On 30 April 2018, the goods were delivered to the customer. The agreed payment arrangements are that 30% of the total amount owing would be paid on delivery, 20% three months after delivery, and the remaining 50% four months after delivery. The end of the reporting period for Soul Ltd is 30 June. The following exchange rates are applicable.

Required:

In accordance with AASB 121, prepare the relevant journal entries of Soul Ltd to account for the above transactions.

Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2018 are as follows:

The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2018, but at the end of 2018, the company amended the pension formula creating a prior service cost of $11 million. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Required:

1. Calculate the pension expense for 2018.
2. Prepare the journal entry to record pension expense, gains or losses, prior service cost, funding, and payment of benefits for 2018.
3. What amount will Electronic Distribution report in its 2018 balance sheet as a net pension asset or net pension liability?

Colah Company purchased $1 million of Jackson, Inc., 5% bonds at par on July 1, 2018, with interest paid semiannually.
Colah determined that it should account for the bonds as an available-for-sale investment. At December
31, 2018, the Jackson bonds had a fair value of $1.2 million. Colah sold the Jackson bonds on July 1, 2019 for
$900,000.

Required:
1. Prepare Colah’s journal entries to record:
a. The purchase of the Jackson bonds on July 1
b. Interest revenue for the last half of 2018
c. Any year-end 2018 adjusting entries
d. Interest revenue for the first half of 2019
e. Any entries necessary upon sale of the Jackson bonds on July 1, 2019, including updating the fair-value
adjustment, recording any reclassification adjustment, and recording the sale
2. Fill out the following table to show the effect of the Jackson bonds on Colah’s net income, other comprehensive
income, and comprehensive income for 2018, 2019, and cumulatively over 2018 and 2019.

2018 2019 Total
Net Income
OCI
Comprehensive Income

On January 1, 2018, HGC Camera Store adopted the dollar-value LIFO retail inventory method. Inventory transactions at both cost and retail, and cost indexes for 2018 and 2019 are as follows:

Required:

Required:
Estimate the 2018 and 2019 ending inventory and cost of goods sold using the dollar-value LIFO retail inventory method. (Do not round other intermediate calculations. Round your cost-to-retail percentage calculations to 2 decimal places and final answers to the nearest whole dollar.)

On January 1, 2018, Buffalo Corp. had 488,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account. February 1 Issued 115,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 96,000 shares of treasury stock June 1 Issued a 3-for-1 stock split October 1 Reissued 61,000 shares of treasury stock

a.Determine the weighted-average number of shares outstanding as of December 31, 2018.

b.Assume that Buffalo Corp. earned net income of $3,330,000 during 2018. In addition, it had 105,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2018. Compute earnings per share for 2018, using the weighted-average number of shares determined in part (a).

c.Assume the same facts as in part (b), except that the preferred stock was cumulative. Compute earnings per share for 2018.

Colah Company purchased $1.5 million of Jackson, Inc. 8% bonds at par on July 1, 2018, with interest paid semi-annually. When the bonds were acquired Colah decided to elect the fair value option for accounting for its investment. At December 31, 2018, the Jackson bonds had a fair value of $1.75 million. Colah sold the Jackson bonds on July 1, 2019 for $1,350,000.

Required: 1. Prepare Colah's journal entries for the following transactions:

a. The purchase of the Jackson bonds on July 1.

b. Interest revenue for the last half of 2018.

c. Any year-end 2018 adjusting entries.

d. Interest revenue for the first half of 2019.

e. Any entry or entries necessary upon sale of the Jackson bonds on July 1, 2019.

2. Fill out the following table to show the effect of the Jackson bonds on Colah’s net income, other comprehensive income, and comprehensive income for 2018, 2019, and cumulatively over 2018 and 2019:

You have the following financial statements for two building companies and have been asked to compare them:

Income statements for the year to 31st December 2019

Statements of financial position as at 31st December 2019

Additional information:

• All purchases and sales were on credit”

Required:

1. Calculate the following ratios for each company.

1. Pre-tax Return on Equity (use total shareholders’ funds as your denominator)
2. Operating profit margin
3. Net profit (before tax) margin
4. Trade receivable (debtor) period in days
5. Current ratio
6. Acid test ratio (Quick ratio)
7. Gearing ratio (use debt + equity as your denominator)
8. Interest cover
9. Dividend cover
10. Dividend per share (in pence)

[30 marks]

2. “Amy Ltd supplies, installs and maintains burglar alarms systems for business clients. The accountant has provided a horizontal analysis and is concerned about the firm's performance.”

Required: provide a brief report on the results of the analysis? Comments should include any concerns you may have.

(Maximum word count: 100)

Question 9

Bluebell Ltd provides credit services. Bluebell Ltd provides its employees with long service leave entitlements of 13 weeks of paid leave for every 10 years of continuous service. As the company has been operating for only 5 years, no employees have become entitled to long service leave. However, the company recognises a provision for long service leave using the projected unit credit approach required by AASB 119/IAS 19. The following information is obtained from Bluebell Ltd's payroll records and actuarial reports for the non-managerial staff of its debt collection business at 30 June 2019.

Prepare the journal entry to account for Bluebell Ltd's provision for long service leave at 30 June 2019 in relation to the non-managerial employees of the company's debt collection business. (Enter debit entries first, followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round discount factors to 6 decimal places e.g. 0.527512 and final answers to 0 decimal places, e.g. 5,275.)

A medical researcher wants to compare the pulse rates of smokers and non-smokers. He believes that the pulse rate for smokers and non-smokers is different and wants to test this claim at the 0.01 level of significance. The researcher checks 51 smokers and finds that they have a mean pulse rate of 79, and 58 non-smokers have a mean pulse rate of 77. The standard deviation of the pulse rates is found to be 10 for smokers and 8 for non-smokers. Let μ1 be the true mean pulse rate for smokers and μ2 be the true mean pulse rate for non-smokers.

Step 1 of 4 : State the null and alternative hypotheses for the test.

Step 2 of 4 : Compute the value of the test statistic. Round your answer to two decimal places.

Step 3 of 4 : Find the p-value associated with the test statistic. Round your answer to four decimal places.

Step 4 of 4 : Make the decision for the hypothesis test and state your conclusion.

A medical researcher wants to compare the pulse rates of smokers and non-smokers. He believes that the pulse rate for smokers and non-smokers is different and wants to test this claim at the 0.02  level of significance. The researcher checks 79 smokers and finds that they have a mean pulse rate of 87, and 75 non-smokers have a mean pulse rate of 83. The standard deviation of the pulse rates is found to be 6 for smokers and 6 for non-smokers. Let μ1 be the true mean pulse rate for smokers and μ2 be the true mean pulse rate for non-smokers.

Step 1 of 4 :

State the null and alternative hypotheses for the test.

Step 2 of 4:

Compute the value of the test statistic. Round your answer to two decimal places.

Step 3 of 4:

Determine the decision rule for rejecting the null hypothesis H0. Round the numerical portion of your answer to three decimal places.

Step 4 of 4:

Make the decision for the hypothesis test.