The condensed budgeted income statement for the Phan and Nguyen partnership for 2020 is as follows:

A cost behaviour analysis indicates that 75% of the cost of goods sold is variable, 42% of the selling expenses are variable, and 40% of the administrative expenses are variable. (Use the CVP income statement format in calculating profits.)

Calculate the break-even point in total sales dollars and in units for 2020. (Round contribution margin per unit to 1.25, contribution margin ratio to 1 decimal place, e.g. 15.2% and final answers to 0 decimal places, e.g. 5,275.)

Nguyen was a marketing major in university. He believes that the sales volume can be increased only by intensive advertising and promotional campaigns. He therefore proposed the following plan as an alternative to Phan’s: (1) increase variable selling expenses to $0.59 per unit, (2) lower the selling price per unit by $0.25, and (3) increase fixed selling expenses by $40,000. Nguyen quoted an old marketing research report that said that sales volume would increase by 60% if these changes were made.

Calculate Nguyen’s break-even point in dollars and units. (Round contribution margin per unit and contribution margin ratio to 2 decimal places, e.g. 15.25 or 15.25% and final answers to 0 decimal places, e.g. 5,275.)

Determine which plan should be accepted.

The Chief Executive Officer of your company Hoota Limited wants you to explain the accounting treatment of the following transactions following your return from an IFRS workshop on various accounting standards. You are the finance manager of your company.

Transaction One

Hoota Limited introduced two pension schemes, ‘CON’ and ‘BEN’ on 1 April 2019 for the benefit of its employees. The following information relates to the two schemes as at 1 April 2020:

CON Scheme

Under this scheme the company’s obligation is limited to its fixed annual contribution of K600,000. The membership of this pension scheme is senior management staff of the company.

At 1 April 2019, there were contributions paid in advance for the year ending 31 March 2020 amounting to K150,000. In the year ending 31 March 2020, the company made total contribution of K1,040,000 out of which K200,000 related to the year ending 31 March 2021. During the year to 31 March 2021, total contributions of K1,400,000 were made out of which K250,000 were made in advance for the year that followed.

BEN Scheme          

Under this scheme, the company guarantees benefits to the employees when they reach 60 years or after working for the company for 30 years whichever comes earlier. The membership of this pension scheme is employees other than senior management staff.

The following relates to the pension scheme:                                  K’000

Net plan assets at 1 April 2020                                                  500

Current service cost                                                                2,000

Contributions paid                                                                      800

Pension benefits paid                                                                  400

Net plan liability at 31 March 2021                                            200

Appropriate annual discount rate 12%

During the year to 31 March 2021, Hoota Limited adjusted the formula used to calculate the benefits payable to employees. This resulted in a decrease of K510,000 in pension benefits payable to employees.

Contributions and pension benefits were all paid at 31 March 2021.

The company has only recorded contributions paid in its financial statements for the year to 31 March 2021.

Required:

Explain how the two schemes, CON and BEN should be treated in the financial statements of Hoota Limited for the year to 31 March 2021.

Note: Include all relevant calculations in your explanation.                                                                                                                                                                                             

Transaction two

Hoota Limited deals in groceries and hardware products. The company has thus two divisions, groceries’ division and hardware’s division. It was formed six (6) years ago by two Zambians who are the directors of the company. They have been responsible for the day to day running of the business. One of the directors made the following comments: “we have not seen the need to disclose the performance of each division. We have only been interested in the overall performance of the company; disclosing the performance of each division is a waste of time and

does not add any value to our financial statements. Further, as far as I am concerned, there are no known criteria for identifying operating segments”.

Required:

Discuss the comments made by the director of Hoota limited, making reference to appropriate accounting standards.                                                                                               

                                                                                                                        [Total: 20 marks]

Using the numbers shown in parentheses, indicate how each separate question will affect the reconciliation of December 31, 2020. (Assume you are reconciling the balance per books and the balance per bank to the correct or adjusted balance). Write your answers on the space provided before each number. Use only CAPITAL LETTERS.

A. Add to bank balance
B. Deduct from the bank balance
C. Add to book balance
D. Deduct from book balance
E. No effect

1. Bank service charge for December, P 300, not recorded on books.

2. Checks totaling P 41,500 were outstanding at December 31, 2020.

3. Deposits totaling P 26,500 were in transit at December 31, 2020.

4. Check No. 601 dated November 30, 2020 was paid by the bank in December.

5. Check No. 607 for P 2,050 were recorded on the books as P 2,500.

6. A check from a customer was paid by the bank in December. It had been returned earlier in December for proper endorsement and was redeposited. No entry for the return or re-deposit had been made.


7. An interest charge was made to the account by the bank in error.

8. The December bank statement included the proceeds of a customer’s draft collected by the bank on December 30, 2020, but not recorded on the books.


9. Credit memorandum from the bank for December was not recorded in December. It was, however, recorded in January 2021.


10. A debit memo issued by the bank for P 450 recorded as a credit to cash.

3. Y received stock as a gift from her father in 2019. Her father purchased the stock several years ago of $30,000. The stock was worth $20,000 at the time the gift was received. Y sold the stock for $18,000 in 2020.

How much gain or loss, if any, should Y report on her 2020 tax return?

Assume the same facts as above, except that Y sold the stock for $25,000. How much gain or loss, if any, should Y report on her 2020 tax return?

Amazon leased equipment from United Machines on July 1, 2020, in a finance lease. The present value of the lease payments discounted at 10% was $82,000. Ten annual lease payments of $12,000 are due each year beginning July 1, 2020. United Machines had constructed the equipment recently for $66,000. What net effect did the lease have on the income statement of United Machines for the year ending December 31, 2020? Ignore taxes. a. $23,000 b. $0 c. $16,000 d. $19,500 e. $3,500

The dataset HomesForSale has data on houses available for sale in three Mid-Atlantic states (NY, NJ, and PA). Table 1 shows the mean and standard deviation from the three Mid-Atlantic states, in thousands of dollars. Use this table, the knowledge that within the US the average house sells for about 265 thousand dollars1, and a 5% significance level to answer the following questions.

Table 1 Mean housing prices for New York, New Jersey, and Pennsylvania


Click here for the dataset associated with this question.


1According to the US Census in April 2011.

(a) Test whether the average cost of a house in New York is significantly greater than the US average.

Give the test statistic and the p-value.

Round your answer for the test statistic to two decimal places and your answer for the p-value to three decimal places.

test statistic = Enter your answer in accordance to item (a) of the question statement

p-value = Enter your answer in accordance to item (a) of the question statement

Is the average cost of a house in New York significantly greater than the US average?

Choose the answer from the menu in accordance to item (a) of the question statementChoose the answer from the menu in accordance to item (a) of the question statement  YesNo

(b) Test whether the average cost of a house in New Jersey is significantly greater than the US average.

Give the test statistic and the p-value.

Round your answer for the test statistic to two decimal places and your answer for the p-value to three decimal places.

test statistic = Enter your answer in accordance to item (b) of the question statement

p-value = Enter your answer in accordance to item (b) of the question statement

Is the average cost of a house in New Jersey significantly greater than the US average?

Choose the answer from the menu in accordance to item (b) of the question statementChoose the answer from the menu in accordance to item (b) of the question statement  YesNo

(c) Test whether the average cost of a house in Pennsylvania is significantly greater than the US average.

Give the test statistic and the p-value.

Round your answer for the test statistic to two decimal places and your answer for the p-value to three decimal places.

test statistic = Enter your answer in accordance to item (c) of the question statement

p-value = Enter your answer in accordance to item (c) of the question statement

Is the average cost of a house in Pennsylvania significantly greater than the US average?

Choose the answer from the menu in accordance to item (c) of the question statementChoose the answer from the menu in accordance to item (c) of the question statement  YesNo

(d) Which state shows the most evidence that the state average is greater than the US average?

New York

New Jersey

Pennsylvania

The Shamrock Pub provides catering services to local businesses. The following information was available for The Shamrock Pub for the years ended December 31, 2019 and 2020.

Shamrock management is preparing for a meeting with its bank concerning renewal of a loan and has collected the following information related to the above balances.

1.The cash reported at December 31, 2020, reflects the following items: petty cash $1,560 and postage stamps $120. The other current assets balance at December 31, 2020, includes the checking account balance of $3,900.

2.On November 30, 2020, Shamrock agreed to accept a 6-month, $4,940 note bearing 12% interest, payable at maturity, from a major client in settlement of a $4,940 bill. The above balances do not reflect this transaction.

3.Shamrock factored some accounts receivable at the end of 2020. It transferred accounts totaling $10,000 to Final Factor, Inc. with recourse. Final Factor will receive the collections from Shamrock's customers and will retain 2% of the balances. Final Factor assesses Shamrock a finance charge of 3% on this transfer. The fair value of the recourse liability is $360. However, management has determined that the amount due from the factor and the fair value of the resource obligation have not been recorded, and neither are included in the balances above.

4.Shamrock charged off uncollectible accounts with balances of $1,570. On the basis of the latest available information, the 2020 provision for bad debts is estimated to be 2.5% of accounts receivable.

Based on the above transactions, determine the balance for (1) Accounts Receivable and (2) Allowance for Doubtful Accounts at December 31, 2020. (Round answers to 0 decimal places, e.g. 125.)

Accounts receivable ending balance$

Allowance for doubtful ending balance$

Prepare the current assets section of The Shamrock Pub's balance sheet at December 31, 2020. (Round answers to 0 decimal places, e.g. 125.) and,

Compute Shamrock's current ratio and accounts receivable turnover for December 31, 2020. The accounts receivable turnover in 2019 was 4.37.

The unadjusted inventory balance of Ultim Corp. is $100,000 on December 31, 2020, based on a physical inventory count. The following items must be considered before the inventory valuation is finalized.

a. On December 31, the physical inventory excluded $250 of merchandise inventory set aside for shipment to a customer, which has not yet shipped.

b. On December 31, the physical inventory excluded $1,000 of merchandise inventory out on consignment in the customers’ showrooms.

c. On December 31, the physical inventory excluded $800 of merchandise held on consignment.

d. $750 of in-transit merchandise was shipped f.o.b. destination to a customer and was excluded from the physical inventory count. The merchandise was turned over to a common carrier on December 28, 2020, and is expected to arrive at the customer on January 2, 2021.

e. Ultim Corp. ordered merchandise on December 26, 2020. The merchandise ($800) was shipped to Ultim Corp. f.o.b. shipping point, and was expected to arrive January 2, 2021. The merchandise was not included in the physical inventory count.

f. A return to a vendor of merchandise for $1,000 was in-transit on December 31, 2020, and was excluded from the physical inventory count. The merchandise was shipped f.o.b. shipping point on December 30, 2020.

Required

Considering items a through f, determine the adjusted inventory balance for Ultim Corp.

Recording Notes Receivable: Issuance, Payment, and Default Marydale Products permits its customers to defer payment by giving personal notes instead of cash. All the notes bear interest and require the customer to pay the entire note in a single payment 6 months after issuance. Consider the following transactions, which describe Marydale's experience with two such notes: On October 31, 2019 Marydale accepts a 6-month, 12% note from Customer A in lieu of a $3,600 cash payment for merchandise delivered on that day. On February 28, 2020 Marydale accepts a 6-month, $2,100, 12% note from Customer B in lieu of a $2,100 cash payment for merchandise delivered on that day. On April 30, 2020 Customer A pays the entire note plus interest in cash. On August 31, 2020 Customer B pays the entire note plus interest in cash. Required: Prepare the necessary journal and adjusting entries required to record Transactions a through d in Marydale's records. For a compound transaction, if an amount box does not require an entry, leave it blank. a. Oct. 31, 2019 Record sale Dec. 31, 2019 Record accrued interest income b. Feb. 28, 2020 Record sale c. Apr. 30, 2020 Record collection of note receivable d. Aug. 31, 2020 Record collection of note receivable

In python,

Here's some fake data.

df = {'country': ['US', 'US', 'US', 'US', 'UK', 'UK', 'UK'],
   'year': [2008, 2009, 2010, 2011, 2008, 2009, 2010],
   'Happiness': [4.64, 4.42, 3.25, 3.08, 3.66, 4.08, 4.09],
   'Positive': [0.85, 0.7, 0.54, 0.07, 0.1, 0.92, 0.94],
   'Negative': [0.49, 0.09, 0.12, 0.32, 0.43, 0.21, 0.31],
   'LogGDP': [8.66, 8.23, 7.29, 8.3, 8.27, 6.38, 6.09],
   'Support': [0.24, 0.92, 0.54, 0.55, 0.6, 0.38, 0.63],
   'Life': [51.95, 55.54, 52.48, 53.71, 50.18, 49.12, 55.84],
   'Freedom': [0.65, 0.44, 0.06, 0.5, 0.52, 0.79, 0.63, ],
   'Generosity': [0.07, 0.01, 0.06, 0.28, 0.36, 0.33, 0.26],
   'Corruption': [0.97, 0.23, 0.66, 0.12, 0.06, 0.87, 0.53]}

I have a list of happiness and six explanatory vars.
exp_vars = ['Happiness', 'LogGDP', 'Support', 'Life', 'Freedom', 'Generosity', 'Corruption']

1. Define a variable called explanatory_vars that contains the list of the 6 key explanatory variables

2. Define a variable called plot_vars that contains Happiness and each of the explanatory variables. (Hint: recall that you can concatenate Python lists using the addition (+) operator.)

3. Using sns.pairplot, make a pairwise scatterplot for the WHR data frame over the variables of interest, namely the plot_vars. To add additional information, set the hue option to reflect the year of each data point, so that trends over time might become apparent. It will also be useful to include the options dropna=True and palette='Blues'.