Additional Instructions:

Show all calculations and include clear explanations.  

Case Problem:

Over the past several years, decommissioned U.S. warships have been turned into artificial reefs in the ocean by towing them out to sea and sinking them.  The thinking was that sinking the ship would conveniently dispose of it while providing an artificial reef environment for aquatic life.  In reality, some of the sunken ships have released toxins into the ocean and have been costly to decontaminate.  In the late 1990s, at least two international conventions have made it all but impossible to export used warships for salvage without removing all military equipment, conducting a complete cleanup and cutting the ship into such comparatively small pieces as to make the entire exercise relatively expensive.

The new environmental regulations have made disposal of ships an expensive project.  The United States has hundreds of mothballed warships, presenting an extremely expensive problem for military authorities and the government.  Now the U.S. government is taking bids to instead dismantle and recycle ships that have recently been decommissioned (but have not been sunk yet.)

Assume that a recently decommissioned aircraft carrier, the USS Blaze, is estimated to contain 40 tons of recyclable materials able to be sold for approximately $32.8 million.  About 90% of the value in old ships is the metals, including steel, copper, copper alloys, and lead that can be removed, sold for remelting, and reformed into new metal products.  There are also some high-value metals; such as, nickel alloys, stainless steel, and titanium that can be found in some parts of all warships but may be present is such small quantities that recovery and resale may not be cost effective. The low bid for dismantling and transporting the ship materials to appropriate facilities is $34.5 million. Recycling and dismantling the ship would create about 500 jobs for about a year on the West Coast area.  This geographic area has been experiencing record-high unemployment rates in recent years.

As an alternative, reefing these ships would create new habitats for underwater life and can be done using newer environmentally safe methods.  These new artificial reefs would enhance fishery resources and facilitate the access and utilization by recreational and commercial fishermen. Artificial reefs can also increase tourism by attracting sport divers for recreational purposes.  Academic organizations may be interested in using the site to study fish and other marine life which may open the door for more funding from these research activities.  Research has shown that a new reef will attract 60,000 – 70,000 divers and add more than 10 million to the local tourism industry.  Research has also shown that artificial reefs can substantially increase the population of reef-associated species.  Within months the G. B. Churchartificial reef in British Columbia had hundreds of encrusted individuals on its hull and within 2.5 years had seen an increase of nearly 100 species.  

Reefing the ship would cost an estimated 800K (or $0.8 million) which includes cleaning of the vessel of toxics, oils and greases, PCB containing electrical and electronic equipment and other readily removable PCB containing equipment, local towing and docking, preparation (unspecified) and other incidental overhead items, insurance, and making the vessels safe for divers (diverizing).  There will also be yearly maintenance costs in perpetuity.

1. Is it more financially advantageous to sink the ship or to dismantle and recycle it?  Show your calculations.  (Worth 4 pts.)

2.From a sustainability standpoint, what should be done with the decommissioned aircraft carrier? (Worth 4 pts.)  

3.List some of the other quantitative and qualitative factors that should enter into this analysis. (Worth 10 pts.)

4.As a taxpayer(s), which action would you prefer (sink or recycle)?  Defend your answer.  (Worth 4 pts.)

Additional Instructions:

Show all calculations and include clear explanations.  

Case Problem:

Over the past several years, decommissioned U.S. warships have been turned into artificial reefs in the ocean by towing them out to sea and sinking them.  The thinking was that sinking the ship would conveniently dispose of it while providing an artificial reef environment for aquatic life.  In reality, some of the sunken ships have released toxins into the ocean and have been costly to decontaminate.  In the late 1990s, at least two international conventions have made it all but impossible to export used warships for salvage without removing all military equipment, conducting a complete cleanup and cutting the ship into such comparatively small pieces as to make the entire exercise relatively expensive.

The new environmental regulations have made disposal of ships an expensive project.  The United States has hundreds of mothballed warships, presenting an extremely expensive problem for military authorities and the government.  Now the U.S. government is taking bids to instead dismantle and recycle ships that have recently been decommissioned (but have not been sunk yet.)

Assume that a recently decommissioned aircraft carrier, the USS Blaze, is estimated to contain 40 tons of recyclable materials able to be sold for approximately $32.8 million.  About 90% of the value in old ships is the metals, including steel, copper, copper alloys, and lead that can be removed, sold for remelting, and reformed into new metal products.  There are also some high-value metals; such as, nickel alloys, stainless steel, and titanium that can be found in some parts of all warships but may be present is such small quantities that recovery and resale may not be cost effective. The low bid for dismantling and transporting the ship materials to appropriate facilities is $34.5 million. Recycling and dismantling the ship would create about 500 jobs for about a year on the West Coast area.  This geographic area has been experiencing record-high unemployment rates in recent years.

As an alternative, reefing these ships would create new habitats for underwater life and can be done using newer environmentally safe methods.  These new artificial reefs would enhance fishery resources and facilitate the access and utilization by recreational and commercial fishermen. Artificial reefs can also increase tourism by attracting sport divers for recreational purposes.  Academic organizations may be interested in using the site to study fish and other marine life which may open the door for more funding from these research activities.  Research has shown that a new reef will attract 60,000 – 70,000 divers and add more than 10 million to the local tourism industry.  Research has also shown that artificial reefs can substantially increase the population of reef-associated species.  Within months the G. B. Churchartificial reef in British Columbia had hundreds of encrusted individuals on its hull and within 2.5 years had seen an increase of nearly 100 species.  

Reefing the ship would cost an estimated 800K (or $0.8 million) which includes cleaning of the vessel of toxics, oils and greases, PCB containing electrical and electronic equipment and other readily removable PCB containing equipment, local towing and docking, preparation (unspecified) and other incidental overhead items, insurance, and making the vessels safe for divers (diverizing).  There will also be yearly maintenance costs in perpetuity.

1. Is it more financially advantageous to sink the ship or to dismantle and recycle it?  Show your calculations.  (Worth 4 pts.)

2.From a sustainability standpoint, what should be done with the decommissioned aircraft carrier? (Worth 4 pts.)  

3.List some of the other quantitative and qualitative factors that should enter into this analysis. (Worth 10 pts.)

4.As a taxpayer(s), which action would you prefer (sink or recycle)?  Defend your answer.  (Worth 4 pts.)

As the auditor of Komsu Air Limited (KAL) that manufactures and installs large commercial airconditioning systems. KAL typically has two or three large contracts (ranging from $6 million to $10 million each) in progress at any one time. The contracts usually take up to six months to complete, although unexpected on-site difficulties can result in lengthy delays in completion (of up to 12 months). KAL finances its operations with a mixture of equity, long-term debt (secured by fixed assets) and short-term bank loans.

It is now May 2017 and your planning of the audit of KAL for the year ended 30 June 2017 is nearing completion. You have met with the management of KAL and, from those discussions and a review of the preliminary information provided by KAL, you have identified several issues that may have implications for the company’s ability to continue as a going concern. The relevant issues are as follows:

 Competition in the industry is becoming more intense, with some customers now installing their own systems.

 KAL’s bank has requested cash flow forecasts for the coming year to support the short-term loans. It has indicated that it may need to withdraw funding or restructure debt if the forecasts are not adequate. The review of work-in-progress indicates that all the contracts in progress at year end are due for completion within six months of the balance date. There are no new contracts in place for the coming year, although management has indicated that there are orders currently being negotiated. The nature of the business is such that sales will fluctuate considerably from year to year depending on the timing of one or two large contracts.

 Assets consist chiefly of plant and equipment, some of which is specialised to the industry. Debtors are significant, but recoverability is not considered an issue as the ongoing projects are with reputable customers and management is not aware of any problems. Creditor balances are at normal levels, and the company is in a positive working capital position.

 Included in provisions is a large provision for warranty for one of KAL’s jobs completed at a hotel two years ago. It appears that the air-conditioning system is still not working and the hotel is now requesting a substantial refund of the contract price.

Required:

Explain whether you believe the area of going concern should be assessed as high risk and mitigating factors for KAL’s audit for the year ended 30 June 2017. (10 marks, maximum 300 words)

1) Find the minimum number of football fans required in a poll to estimate, within 1.5%, the percentage who believe that LeBron James could play in the NFL. Use 90% confidence, and assume no prior estimate of the percentage in question is available.

Select one:

a. 2037

b. 23

c. 609

d. 3007

2)Your professor wishes to estimate the proportion of high school students enrolled in college-level courses each school year. How large a sample is necessary if she wishes to be 90% confident with a margin of error of 3.5 percent? From an old 1999 study, the percentage of high school students enrolled in college-level courses was estimated to be 18.3%.

Select one:

a. 330

b. 469

c. 810

d. 331

3)In a sample of 56 tax returns filed by local hotel managers in a recent year, the taxable incomes are found to have a mean of $41225 and a population standard deviation of $6112. Construct the 99% confidence interval for the mean taxable income of all local hotel manager that year.

Select one:

a. 39255 < Mu < 41259

b. 39624 < Mu < 42826

c. 39122 < Mu < 43328

d. 39121 < Mu < 43327

4)Noise levels at various area urban hospitals were measured in decibels. The mean of the noise levels in 84 corridors was 61.2 decibels, and the population standard deviation was 7.9. Find the margin of error for a 90% confidence interval for the mean.

Select one:

a. 10.9844

b. 6.1392

c. 1.4179

d. 2.2579

In a study of 10 insurance sales representatives from a certain large city, the average age of the group was 48.6 years with a standard deviation of 4.1 years. Find the 90% confidence interval of the population mean age of all insurance sales representatives in that city.

Select one:

a. 45.63 < Mu < 48.50

b. 46.23 < Mu < 50.99

c. 46.22 < Mu < 50.98

d. 46.47 < Mu < 50.73

5)Your professor wishes to estimate the proportion of ALL high school students enrolled in college-level courses each school year. A sample of 1500 students revealed that 18.3% were enrolled in college-level courses. Find the margin of error for a 99% confidence interval for a proportion.

Select one:

a. .00988

b. .01642

c. .01957

d. .02571

Using the governmental- and proprietary type funds, indicate which would be used to record each of the following events.

GF General Fund

SRF Special Revenue Fund

DSF Debt Service Fund

CPF Capital Projects Fund

PF Permanent Fund

EF Enterprise Fund

ISF Internal Service Fund

HINT: Some events require the use of two funds to record them. Be sure to select the answer that reflects the appropriate order in which the journal entries would be recorded into both funds.

1. Bonds were issued by the fund used to account for providing water to the residents of a municipality.

2. The fund that finances the city’s basic day-to-day operating activities lent $50,000 to the fund that will provide city agencies with supplies on a user charge basis.

3. The city-operated utility that provides electricity to the residents of a municipality billed the city for electricity provided to city agencies.

4. The city charter requires all hotel taxes to be accounted for in a separate fund dedicated to maintaining the downtown business district. Hotel tax collections for the period were $500,000.

5. Salaries were paid to the city’s police officers and firefighters.

6. The state lottery, which operates like a business entity, sent a check for its net revenues (after paying lottery prizes) to the state. The state will add these revenues to general state revenues as part of the state’s program for financing elementary and secondary education.

7. Interest and principal on the city’s general obligation debt were paid, using resources accumulated specifically for that purpose.

8. The fund that finances the city’s day-to-day operating activities transferred cash to the fund that pays principal and interest on outstanding debt.

9. The city sold general obligation bonds to buy land as part of a city hall expansion program.

10. The city’s central motor pool billed each city department for use of vehicles.

11. The state established a highway beautification program, to be financed by dedicating a new motor vehicle license fee to that purpose.

12. A wealthy taxpayer donated securities to a village, stipulating that the donation be kept in perpetuity and that the resulting investment income be used solely to help support the activities of the village library.

13. The state-operated toll road collected tolls of $1 million.

14. The village maintains a perpetual-care public cemetery fund. Income from that fund was transferred to the fund that accumulates resources dedicated to maintaining the cemetery.

NewTech Medical Devices is a medical devices wholesaler that commenced business on June 1, 20X1. The company purchases merchandise for cash and on open account. In June 20X1, NewTech Medical Devices engaged in the following purchasing and cash payment activities:

Required:

2a. Post the transactions to the appropriate accounts in the general ledger.

2b. Post the transactions to the appropriate accounts in the accounts payable ledger.

3. Prepare a schedule of accounts payable at June 30, 20X1.

GENERAL LEDGER ACCOUNTS

ACCOUNTS PAYABLE LEDGER ACCOUNTS

BioCenter Inc.
New Concepts Corporation
Park Research

Analyze:
What was the amount of merchandise returned to vendors by NewTech Medical Devices in June?

Please provide a step by by step solution

Please key these names in alphabetical index filing order accordint to the ARMA rules

1. James Danforth, Jr.
2. Burns Travel Agency
3. Strathcona County Water Department
4. Norton R. Henson
5. Sister Marie O’Doul
6. The Lone Ranger Riding Supplies
7. The Jefferson Party House
8. El Rancho Inn
9. Cecil Young-Jones
10. RCT Manufacturers
11. Administrative Management Society
12. Hotel Baker
13. Triple-Star Enterprises
14. Miss Robert’s Charm School
15. Acadia University, Wolfville, Nova Scotia
16. Bob Guerin
17. William T. Au
18. Thomas Kaplan, M.D.
19. Irene McGregor
20. Arthur P. Van der Linden
21. Ontario Municipal Board
22. John Wilkins Supply Corp.
23. Southwestern Distributors
24. Department of Employment and Immigration
25. Four Corners Answering Service
26. Reliable Answering Service
27. Montgomery Ward & Co.
28. South East Pipeline
29. Webbers’ Home for the Aged
30. People’s Republic of China
31. Prince Albert Printing Co.
32. The Mercantile Bank of Canada
33. Aero Bolt and Screw Co., Montreal
34. Strong Memorial Hospital
35. Surv-Ur-Self Pastries, Inc.

36. Danforth James Jr

37. Agency Burns Travel

38. Department Strathcona County Water

39. Henson Norton R.

40. O’Doul Sister Marie

41. Supplies The Lone Ranger Riding

42. House The Jefferson Party

43. Inn El Rancho

44. Young-Jones Cecil

45. Manufacturers Rct

46. Society Administrative Management

47. Baker Hotel

48. Enterprises Triple-Star

50. Wolfville University Acadia

51. Guerin Bob

52. Au William T.

53. Kaplan Thomas MD

54. McGregor Irene

55. van der Linden Arthur P.

56. Board Ontario Municipal

57. Corp. John Wilkins Supply

58. Distributors Southwestern

59. Immigration Department Of Employment And

60. Service Four Corners Answering

61. Service Reliable Answering

62. Co. Montgomery Ward &

63. Pipeline South East

64. Aged Webbers’ Home For The

65. China People’S Republic Of

66. Co. Prince Albert Printing

67. Canada The Mercantile Bank Of

68. Montreal Co. Aero Bolt And Screw

69. Hospital Strong Memorial

70. Pastrie Surv-Ur-Self

When Kim Smith graduated with a degree in civil engineering, she pictured herself designing buildings and managing construction. She never imagined herself behind a computer writing reports. However, that is exactly where Kim finds herself today. She has just finished a major project: an environmental assessment of a plot of land on which a client wants to build an office park. Emily, the senior engineer on the project has asked Kim to write the client report. When Kim asked Emily if she could give her a model to follow, Kim pointed to the file cabinet and said, "Sure, you'll find lots of reports in there." Kim found a lot of reports: long ones, short ones, letter reports, and memo reports. The diversity confused her, but she was glad that she saved her business communication textbook from Concordia University. Kim begins writing her report using the 3x3 Writing Process. Her audience, the CEO of Halvorson Properties, wants to know whether it is safe to build an office park on the property he owns. Because this decision has significant financial and environmental effects, Kim decides to write a formal letter report that clearly communicates the message that the property is safe. Kim's research indicated that the site has not been affected by hazardous waste or contaminated groundwater. In the body of the report she will provide enough details about her methodology and findings to give Mr. Halvorson confidence in the assessment. With those decisions in mind. Kim sits down and write's the following report introduction: Dear Mr. Halvorson: At your request, we have conducted an investigation of the site defined by the attached survey map for the purposes of rendering an opinion as to whether the site contains hazardous waste or is being impacted by contaminated groundwater. Our investigation consisted of making soil borings and visual observations of the ground surface, vegetation, and drainage patterns and laboratory testing of soil samples. The testing included physical properties testing and chemical testing of the water extracted from the soil. In addition, we have examined various maps and aerial photos, contacted various government agencies, and contacted the power company in our efforts to determine whether the hazardous waste is known to have impacted the site. our findings are as follows: Your task is to revise Kim's introduction and rewrite it to promote clarity and conciseness.

XYC Inc, a major pest to the tomato crop, are now being controlled by toxic pesticides. The firm ABC invested $5 million in R&D over the last five years to produce a genetically engineered, patented microbe, AK-47, which controls tomato beetles in an environmentally safe way. ABC built a plant with capacity to produce 10,000 pounds of AK-47 per month. The plant cost $12 million and has a 10-year life. AK-47 has a variable cost of $3 per pound. Fixed costs are $50,000 per month for such costs as plant management, insurance, taxes, and security. Plant depreciation is not included in the $50,000 fixed cost. ABC evaluates the plant as an autonomous profit center – like it treats its other divisions.

The plant is currently selling 8,000 pounds of AK-47 per month to tomato farmers for $30 per pound. Another division of ABC, Get-a-Life, wants to secure 1,000 pounds per month of AK-47 that it will process further into a consumer product, Not-so-safe, for gardeners. Get-a-Life is willing to pay an internal transfer price of $5 per pound. Get-a-Life will incur an additional $4 of variable cost per pound of AK-47 in packaging and reducing the potency of AK-47 to make Not-so-safe more appropriate for home gardeners. Not-so-safe will sell for $20 per pound.

Would it be beneficial for the firm for the transfer to take place? Provide quantitative justification along with qualitative interpretations.?

Does your answer to part 1 (re: whether this transfer is beneficial for the firm) depend on the transfer price? Provide a specific explanation for your conclusion, whether “yes” or “no”?.

Discuss the suggested internal transfer price of $5 per pound of AK-47. Specifically, is the plant likely to accept this price and why/why not?

After deciding to use a transfer price of $5 per pound for 1,000 pounds per month of AK-47, the plant receives new orders from tomato farmers for 2,000 additional pounds of AK-47 at $30 per pound. Outline: a) the various options facing the firm, and b) a recommended course of action. Hint: for full credit, there are 2 options that you should compare quantitatively and analyze to support your recommended course of action.