The fact that generally accepted accounting principles allow companies flexibility in choosing between certain allocation methods can make it difficult for a financial analyst to compare periodic performance from firm to firm.

Suppose you were a financial analyst trying to compare the performance of two companies. Company A uses the double-declining-balance depreciation method. Company B uses the straight-line method. You have the following information taken from the 12/31/18 year-end financial statements for Company B:

You also determine that all of the assets constituting the plant and equipment of Company B were acquired at the same time, and that all of the $200,000 represents depreciable assets. Also, all of the depreciable assets have the same useful life and residual values are zero.

Required:

1. In order to compare performance with Company A, estimate what B's depreciation expense would have been for 2015 through 2018 if the double-declining-balance depreciation method had been used by Company B since acquisition of the depreciable assets.
2. If Company B decided to switch depreciation methods in 2018 from the straight line to the double-declining-balance method, prepare the 2018 journal entry to record depreciation for the year, assuming no journal entry for depreciation in 2018 has yet been recorded.

Course：Business Law

Frontier Entertainment Pty Ltd is a company that trades under the name “Concert Connections” (CC). In January of 2019, CC negotiated and arranged for three international acts to tour Australia in 2020 and 2021. The three artists, their Australian concert locations and dates were as follows:

1. Taylor Swifty Sydney / Melbourne / Adelaide Brisbane / Perth / Hobart November – December 2020

2. Ed Shearer Brisbane / Perth / Hobart January – February 2021

3. Lady Gaggle Sydney / Canberra / Darwin August – September 2021

In April of 2020, those consumer concert goers who purchased tickets to one or more of the Taylor Swifty concerts received notice from CC that due to the COVID- 19 pandemic, Taylor’s arranged concerts had been cancelled. The notification further stated that CC would be cancelling all ticket purchase contracts and retaining the full $550.00 ticket purchase price previously paid by concert goers in accordance with Clause 10 of the contract entered when the ticket(s) were originally purchased. Clause 11 of the same contract also states that in the event of CC exercising its rights in relation to clause 10, ticket purchasers are prohibited from taking any legal action for recovery of their money previously paid.

Samuel purchased 5 tickets for his family to attend the Taylor Swifty concert in Sydney on 02 November 2020. Samuel comes to see you and says that despite CC’c clearly expressed contractual right to retain his $2,700.00, their refusal not to refund him his money is unfair. Samuel wants to know if the Australian Consumer Law (ACL) can assist his cause.

Advise Samuel

Summit Energy is an alternative energy producer. Your hedge fund is interested in investing into the company. As an analyst, you need to estimate firm value and its price per share using the NPV method and report it to the energy portfolio manager. So far you’ve partially forecasted its earnings for 2020-2022 (numbers are in millions).

Assume that annual net working capital represents 10% of revenues. In 2021 Summit plans to purchase new equipment for its new generation of wind mills for $200 million. No other purchases are planned in 2020 or 2022.

Please enter the answer in the following format: XX,XXX

A. Calculate Summit's free cash flow in 2022.

B. Summit Energy’s beta is 1.7. Calculate its expected rate of return if the market portfolio return is 12% and the risk free rate is 4%

C. Calculate Summit’s terminal value if free cash flows are expected to grow 2% perpetually starting 2023. Use its expected rate of return from question B as a discount rate.

D. Calculate Summit’s NPV as of 2020. Use its expected rate of return from question B as a discount rate

MBA 5008 Quanatitative Analysis

Most business decisions involve elements of uncertainty and randomness. The notion of probability is used everywhere, both in business and in our daily lives. I reviewed the following video and need some help answering this question: https://www.youtube.com/watch?v=_sY3ZRxhBaM

A. Explain the concept of probability by applying a specific application example of probability in business? B. Discuss the economic implications of the video?

Copper Bottom Pot Company manufactures one product, The Big Pot. The company has the following standards per unit for the The Big Pot:

Standard quantity Standard price Standard cost

Direct materials 6.0 KGs $14 per KG $84

Direct labour 1.5 Hours $20 per hour $30

The following is recorded by the company for The Big Pot for January 2020:

• The company produced 600 units during the month

• A total of 4000 KGS of material were purchased at a cost of $52,000

• On Jan 1, 2020, there was no beginning inventory of materials on hand, 200 KGs of materials

  remained in the warehouse unused at the end of the month.

• The company employs 12 people to produce The Big Pot. In January, each worked an average of

  65 hours at an average of $21 per hour.

0. Required:

   1. For Direct Materials used in the production of The Big Pot:

      1. Calculate the DM price variance

      2. Calculate the DM quantity variance

      3. The materials were purchased from a new supplier who would like to enter into a long-term

         contract with the company, would you recommend the company enter into this contract? Explain based on your interpretation of the variances for materials.

1. For Direct Labour employed in the production of The Big Pot:

   1. Calculate the DL rate variance

   2. Calculate the DL efficiency variance

   3. In the past, the 12 people employed in the production of The Big Pot consisted of four

      experienced workers and eight inexperienced assistants. During January, the company experimented with shifting the labour mix to six experienced workers and six inexperienced assistants. Would you recommend the new labour mix continue? Explain based on your interpretation of the variances for labour.

The senior management of SFU and UBC were deeply concerned about the enrollment for Fall 2020 in March because of the pandemic. However, it turned that the enrollment went up by 5 – 10% for Fall 2020. Please explain this phenomenon using concepts from this course.  

If the salary is paid at the end of the year, how much will John get?

1. He can keep his current job at the management firm D&L. His annual salary at the firm is $65,000 per year and is salary is expected to increase at 3% per year until retirement. He is currently 28 years old and he expects to work for 40 more years. His current job includes a full paid health insurance plan and is current average tax rate is 26%. John has a savings account with enough money to cover the entire cost of the MBA program.

2. The Carlton College offers a one-year MBA program. The tuition cost is $85,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $4,500. The Carlton program is a full-time one that does not allow students to work in the meantime. John thinks that after the Carlton degree he will be able to receive an offer of $92,000 per year with a $18,000 signing bonus. The salary at this job will increase at 3.5% per year. His average tax rate at this level of income will be 29%.

As a recently hired MBA intern, you are working in a consulting capacity to provide an analysis for Al Dente's Italian Restaurant. A financial income Statement is presented below: Sales $2,698,000 Cost of sales (all variable) $1,557,563 Gross Margin $1,140,438 Operating expenses: Variable $277,975 Fixed $213,675 Total operating expenses: $491,650 Administative expenses (all fixed) $564,375 Net operating income $84,413 This income statement presents the sales, expenses and pre-tax operating income for a local eating facility. At Al Dente, the average meal cost for lunches and dinners are $20 and $40 respectively. Al Dente serves both lunch and dinner 300 days per year and serves twice as many lunches as dinners. As the MBA intern you are to prepare a managerial accounting focused report to the owners of Al Dente's Italian Restaurant, to include the following:

1. Prepare a contribution margin income statement using the given financial data. Use the following format:

Sales

Variable costs

Cost of sales

Operating

Total variable costs

Contribution margin

Fixed costs

Operating

Administrative

Total fixed costs

Net operating income

Farmers Technology is a software company based in New Baden. On January 1, 2017, the company granted 20,000 shares of restricted stock to its CEO. The restricted stock had a par value of $1 and a fair value of $15 per share at issuance. The service period is 4 years. The restricted stock also has a performance condition, where the restricted stock will only vest if the company’s profits grow by 50% or more over the 4-year service period.
The likelihood that the company will meet the performance condition was determined at each of these dates as follows:
December 31, 2017 = not probable
December 31, 2018 = probable
Your task is to provide the necessary journal entries in 2017 and 2018.