Paine Ltd makes and sells a single product. Annual sales in units for 2017 are expected to be 200,000, and standard cost and selling price per unit is:

£

Selling price 35

Variable costs:

Materials 8

Labour 8

Overheads 2

Annual fixed overheads for 2015 are budgeted at:

Manufacturing: 600,000

Non-manufacturing 250,000

Actual production and sales for the first quarter was 45,000 units. The actual revenue and expenditure for the quarter was as follows:

Sales revenue 1,720,000

Expenditure:

Materials 365,500

Labour 375,500

Variable overhead 97,200

Fixed overheads

Manufacturing 135,000

Non-manufacturing 75,000

Paine Ltd divides the annual budget by 4 in order to produce quarterly variance analysis reports.

Required:

a) Prepare the first quarter variance analysis report showing the fixed budget, flexible budget and flexible budget variances.

b) Suggest how this report could be improved in terms of variable costs variance analysis, describing any extra information you would need in order to do so.

4) At the first joint meeting of the FASB, IASB and EASB (Endorian Accounting Standards Board) the controversy over inventory arose. The EASB allows LIFO and NIFO (next in first out) which values inventory at the price of acquiring the next unit. Their argument is that this is the minimum price at which the merchandise would be sold, and obsolete inventory would have no value. FASB allows LIFO but not NIFO and of course IASB does not allow either one. The US-IRS has stated that they will NOT change their policy regarding the requirement of LIFO for books if it is used for taxes, thus any removal of LIFO from GAAP would cause an increase in taxes for US Companies. For some unknown reason (maybe they listened to too much of Mr. Spock’s singing) they have come to you for advice. Should NIFO be allowed for financial accounting purposes why or why not? Should LIFO be allowed for financial accounting purposes why or why not? DEFEND your answer including the impact these methods have on income statements, taxes and balance sheets.

At the first joint meeting of the FASB, IASB and EASB (Endorian Accounting Standards Board) the controversy over inventory arose. The EASB allows LIFO and NIFO (next in first out) which values inventory at the price of acquiring the next unit. Their argument is that this is the minimum price at which the merchandise would be sold, and obsolete inventory would have no value.   FASB allows LIFO but not NIFO and of course IASB does not allow either one. The US-IRS has stated that they will NOT change their policy regarding the requirement of LIFO for books if it is used for taxes, thus any removal of LIFO from GAAP would cause an increase in taxes for US Companies. For some unknown reason (maybe they listened to too much of Mr. Spock’s singing) they have come to you for advice. Should NIFO be allowed for financial accounting purposes why or why not? Should LIFO be allowed for financial accounting purposes why or why not? DEFEND your answer including the impact these methods have on income statements, taxes and balance sheets.

1) At the first joint meeting of the FASB, IASB and EASB (Endorian Accounting Standards Board) the controversy over inventory arose. The EASB allows LIFO and NIFO (next in first out) which values inventory at the price of acquiring the next unit. Their argument is that this is the minimum price at which the merchandise would be sold, and obsolete inventory would have no value. FASB allows LIFO but not NIFO and of course IASB does not allow either one. The US-IRS has stated that they will NOT change their policy regarding the requirement of LIFO for books if it is used for taxes, thus any removal of LIFO from GAAP would cause an increase in taxes for US Companies. For some unknown reason (maybe they listened to too much of Mr. Spock’s singing) they have come to you for advice. Should NIFO be allowed for financial accounting purposes why or why not? Should LIFO be allowed for financial accounting purposes why or why not? DEFEND your answer including the impact these methods have on income statements, taxes and balance sheets.

Rantzow-Lear Company buys and sells debt securities expecting to earn profits on short-term differences in price. The company’s fiscal year ends on December 31. The following selected transactions relating to Rantzow-Lear’s trading account occurred during December 2018 and the first week of 2019.

Required:
1. Prepare the appropriate journal entry or entries for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. Indicate any amounts that Rantzow-Lear Company would report in its 2018 balance sheet and income statement as a result of this investment.

On 1 June, 2019, immediately after payment of the interest due that day, Tim Shaw bought two bonds each with a face value of $100,000 and a coupon rate of 8% p.a., paid half-yearly. The first bond will mature on 1 December 2021 and the second bond will mature on 1 December 2025. At the date of purchase, both bonds were selling at par. Since then, yields on bonds have risen by 2% pa, compounded half-yearly. Tim now intends to sell the bonds and put a deposit on a house.

a. Calculate the price he will receive from each bond if he sells on 1 September, 2019 at the new yield. (Hint: There are 92 days from 1 June, 2019 to 1 September, 2019, and 183 days from 1 June, 2019 to 1 December, 2019 – in both cases, ignoring the first day and including the last day of the period.)

b. Explain the relative price movements in the two bonds, as evidenced in your answer to part a above.

You have information about recent sales that you want to use for testing the database. 1. Create the tables for the data provided. The tables should include the primary and foreign keys. Provide the SQL statements. 2. Insert the data into the tables. Provide the SQL statements. 3. Show the contents of each table. Provide the SQL statements.

Customer Table Customer ID, Last Name, First Name, Street Address, City, State, Zip Code, Current Balance, Credit Limit, Sales Rep. ID Sales Representatives Table Sales Rep ID, Last Name, First Name, Street Address, City, State, Zip, Region, Region Description, Total Commission, Commission Rate Orders Table Order ID, Order Date, Customer, Shipping Date, Order Lines Order ID, Part ID, Number Ordered, Quoted Price Part Table Part ID, Part Description, Units on Hand, Class, Warehouse Number, Unit Price

Please show all work

Part 1 -- Bonds:

1. National Company issued a 7.5% bond, dated January 1, 2020 with a face amount of $600,000 on January 1, 2020. The bonds mature on December 31, 2026. The market yield for bonds of similar risk and maturity was 5.5%. Interest is made semiannually on June 30 and December 31.

REQUIRED:

1. Determine the price of the bonds at January 1, 2020 (be certain to include all of the “Given” information as discussed in class).
2. Prepare a bond amortization table using the effective interest method (as reviewed in class), and make certain to obtain totals for the columns of Cash Interest Paid, Interest Expense, and Premium Amortization.
3. Prepare the journal entry to record their issuance by National Company on January 1, 2020.
4. Prepare the journal entry recording the first interest payment on June 30, 2020.
5. Prepare the journal entry recording the interest payment on December 31, 2020.
6. Prepare journal entries at maturity on December 31, 2026.
7. Prepare the journal entry to record the retirement of the bond at a call price of $640,000 on January 1, 2023.
8. Instead of retirement of the bond as described in “g” above, assume the bond was retired @108 call price on January 1, 2023. Prepare the journal entry to record this retirement of the bond.

Part 2 -- Installment note:

2. On January 1, 2020 National Company signed a $500,000, 7% installment note to be repaid with 8 equal annual installments to be first made on December 31, 2020, and then every December 31 thereafter.

REQUIRED:

1. Determine the amount of each annual payment.
2. Prepare an amortization table for this installment note (as reviewed in class).
3. Prepare the journal entry for the issuance of the installment note.
4. Prepare the journal entry for the first payment on the note.

Name and explain ONE effect of price controls, either minimum price controls (price floors) OR maximum price controls (price ceilings).