Question 1 Tap Sdn Bhd bought an asset on 5 April 2017 at a cost of RM180,000. The asset had an expected useful life of 10 years and an expected residual value of RM20,000. The company applies straight-line depreciation to this category of non-current assets. It also charges a full year depreciation in the year of acquisition and no depreciation in the year of disposal. Its financial year ends on 31 December.
At 31 December 2018, the company revalued the asset to RM240,000. Its expected remaining useful life is now 8 years, but its expected residual value is zero.
Required:
(a) Show in T account the accounting entries required to record the revaluation of the asset on 31 December 2018. [4 marks]
(b) The asset was sold on 12 February 2020 for RM235,000. Calculate the gain or loss on disposal reported in the income statement for Year 2020, and show the total effect on the disposal on the retained earnings of the company. Ignore taxation. [4 marks]
In: Accounting
)(a)Suppose the MIDLAND bank expects the New Zealand dollar (NZ$) will depreciate against the US$ from its spot rate of $0.43 to $0.42 in 60 days. The following interbank lending and borrowing rates exist: Currency Lending Rate Borrowing Rate US$ 7% 7.2% NZ$ 22.0% 24% Midland Bank has access to NZ$ 10million or US$ 4.3million.How can the bank attempt to make a speculative profit based on expected exchange rate movement without risking depositors money? Estimate the profit (or losses) that could be earned from this strategy. (b)Identify the factors which determine changes in equilibrium exchange rate. Discuss how any two of these factors affect equilibrium exchange rate.
In: Finance
17. Height of Men and Women in the U.S. Women: μ= 64 inches , σ = 3.5 Men: μ= 70 inches , σ = 4
a. calculate the z score that corresponds to a women height of 68 inches.
b. state the percentile ranking for that score.
c. for both women and men in the US, calculate the z score and raw score (in inches) that separates the tallest 2.5% from the 97.5% of scores below.
d. for both women and men in the US, calculate the z score and raw score in inches, that separates the shortest 2.5% of the population from the other 97.5%
f. What percent of women and men in the US have heights between the two z scores you calculated to answer questions c and d ?
In: Statistics and Probability
There is much concern raised today regarding the level of national debt in the US. Considering this, and the continuing use of fiscal policy, is the US at risk for hyperinflation? What are the implications for the macro-economy? For industry? How might globalization and global conflict contribute or ease the potential impacts?
please refer from the textbook MACROECONOMICS by N Gregory Mankiw
In: Economics
Problem 2: Jonah and the Whale
Jonah, Inc. has two operating divisions in a decentralized structure. Division X is located in the US and produces the Xwater, which is an input to Division Y’s WhaleY. Division Y is located in the South of France. Division X uses idle capacity to produce Xwater. Xwater has a US domestic market price of $60. Its variable costs are $25 per unit. Jonah’s US tax rate is 40% of income. In addition to the transfer price for each Xwater received from Division X, Division Y also pays a shipping fee of $15 per unit ofXwater to get the Xwater from the US to France. The WhaleY costs an additional $10 to produce and sells for an equivalent of $115. Division Y could purchase Xwater from a Paris supplier for $50 per unit with no shipping cost. The company’s French tax rate is 70% of income. Assume French tax laws permit transferring at either variable cost or market price.
Assuming you have two choices – Variable and Market Price – what transfer price is economically optimal for Jonah, Inc.?
In: Accounting
Coronado Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company’s bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,492,700 of 10% term corporate bonds on March 1, 2020, due on March 1, 2035, with interest payable each March 1 and September 1, with the first interest payment on September 1st, 2020. At the time of issuance, the market interest rate for similar financial instruments is 8%.
As the controller of the company, determine the selling price of
the bonds. (Round factor values to 5 decimal places,
e.g. 1.25124 and final answer to 0 decimal places, e.g.
458,581.)
| Selling price of the bonds |
$ |
In: Accounting
Question 4 [27]
The following bank reconciliation statement was prepared by the bookkeeper of Veggie Stores for January 2020. The financial year of the business ends in January each year.
|
Bank overdraft as per bank statement |
R35 000 |
|
Outstanding deposit on 10 January 2020 |
R12 900 |
|
28 January 2020 |
R10 000 |
|
Outstanding deposit: Cheque received from B Brother dated 24 February 2020 |
R1 800 |
|
Outstanding cheques: |
|
|
R7 000 |
|
R9 800 |
|
R4 800 |
|
Bank charges |
R570 |
|
Balance as per bank account in the General Ledger |
? |
Required:
Complete question 4.3 and 4.4 specifically in format below
4.3
|
Amount |
Error |
Corrective action |
(9)
4.4
|
Debit |
Credit |
|
(7)
In: Accounting
Question 4 [27]
The following bank reconciliation statement was prepared by the bookkeeper of Veggie Stores for January 2020. The financial year of the business ends in January each year.
|
Bank overdraft as per bank statement |
R35 000 |
|
Outstanding deposit on 10 January 2020 |
R12 900 |
|
28 January 2020 |
R10 000 |
|
Outstanding deposit: Cheque received from B Brother dated 24 February 2020 |
R1 800 |
|
Outstanding cheques: |
|
|
R7 000 |
|
R9 800 |
|
R4 800 |
|
Bank charges |
R570 |
|
Balance as per bank account in the General Ledger |
? |
Required:
Complete question 4.3 and 4.4 specifically in format below
4.3
|
Amount |
Error |
Corrective action |
(9)
4.4
|
Debit |
Credit |
|
(7)
In: Accounting
Glaus Leasing Company agrees to lease equipment to Jensen Corporation on January 1, 2020. The following information relates to the lease agreement.
| 1. | The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. | |
| 2. | The cost of the machinery is $525,000, and the fair value of the asset on January 1, 2020, is $700,000. | |
| 3. | At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $50,000. Jensen estimates that the expected residual value at the end of the lease term will be 50,000. Jensen amortizes all of its leased equipment on a straight-line basis. | |
| 4. | The lease agreement requires equal annual rental payments, beginning on January 1, 2020. | |
| 5. | The collectibility of the lease payments is probable. | |
| 6. | Glaus desires a 5% rate of return on its investments. Jensen’s incremental borrowing rate is 6%, and the lessor’s implicit rate is unknown. |
b. Calculation for annual rental payment
| c) | Calculation of present value of minimum lease payment | |||
d. Prepare the journal entries Jensen would make in 2020 and 2021 related to the lease arrangement
e. Prepare the journal entries Glaus would make in 2020 and 2021
In: Accounting
Crane Incorporated leases a piece of machinery to Blue Company
on January 1, 2020, under the following terms.
| 1. | The lease is to be for 4 years with rental payments of $13,046 to be made at the beginning of each year. | |
| 2. | The machinery’ has a fair value of $68,934, a book value of $51,440, and an economic life of 10 years. | |
| 3. | At the end of the lease term, both parties expect the machinery to have a residual value of $25,720. To protect against a large loss, Crane requests Blue to guarantee $18,040 of the residual value, which Irving agrees to do. | |
| 4. | The lease does not transfer ownership at the end of the lease term, does not have any bargain purchase options, and the asset is not of a specialized nature. | |
| 5. | The implicit rate is 5%, which is known by Blue. | |
| 6. |
Collectibility of the payments is probable. |
|
Evaluate the criteria for classification of the lease, and describe the nature of the lease. |
Prepare the journal entries for Blue for the year 2020.
|
Suppose Blue did not guarantee any amount of the expected residual value. Prepare the journal entries for Blue for the year 2020.
Suppose Blue did not guarantee any amount of the expected residual value. Prepare the journal entries for Crane for the year 2020.
In: Accounting