You need to read Article 2 ““Our farmers need a better deal”: Study shows true cost of trade barriers” to answer questions below. Part (a) Article 2 specifically mentions: “A NEW AgriFutures Australia-funded study shows that farm subsidies and import barriers abroad lowered Australia’s net farm incomes by 15 per cent and reduced its farm exports by 29 per cent.” Use the concept of supply and demand to explain the paragraph above, especially why farms subsidies abroad lowered Australia’s net farm income and reduced its farm exports. [6 marks] Part (b) Use the concept of supply and demand to explain the paragraph above, especially why import barriers abroad lowered Australia’s net farm income and reduced its farm exports. [6 marks]
Hint for both Parts (a) and (b): you can assume that the world consists only of two countries: Australia and a country called the Rest of the World. The two countries initially trade freely with each other and Australia exports its farm products to the Rest of the World. Then analyse what happens when the Rest of the World provides a production subsidy to its farmers or impose an import tariff on its imports of Australia’s farm products.
Article 2 (Source: Beef Central, April 20, 2020) “Our farmers need a better deal”: Study shows true cost of trade barriers A NEW AgriFutures Australia-funded study shows that farm subsidies and import barriers abroad lowered Australia’s net farm incomes by 15 per cent and reduced its farm exports by 29 per cent. The report by Kym Anderson and Ernesto Valenzuela explores the impact of international agriculture subsidies on Australia, a non-subsidising agricultural export country. The report shows that in the four years to 2018 the average nominal rate of assistance to farmers rose for all OECD countries by one-tenth (from 21pc to 23pc), and for the EU28 by slightly more (by one sixth, from 21pc to 25pc), between 2014 and 2016-18. Aggregate agricultural nominal rate of assistance by country 2014 and 2016-18. (% weighted average using value of production without assistance as weights) *Indonesia refers to 2015 in place of 2016-18. Source: OECD (2019). The report shows that import barriers (tariffs and tariff rate quotas) remain the dominant protective policy instrument globally, but domestic support through budgetary transfers has grown in relative importance this century. In 2014, such transfers accounted for a little over one quarter of the cost of these policies to Australian net farm incomes and agricultural exports. All but one-quarter of the impact on Australian agriculture of global farm support measures are due to policies of the EU, Japan, China and Korea. Australia’s red meat, wheat and dairy industries are the most adversely affected by farm policies abroad, but rice and cotton exports also are negatively impacted, especially relative to their production size. The aggregate value of farmer assistance is highest in China and the EU, followed by Japan, the United States, Indonesia and Korea. AgriFutures Australia Senior Manager, Business Development, Jen Medway said the findings would equip industries, policy makers and governments with the knowledge to negotiate better trade deals for Australian farmers, fishers and foresters. “We’re increasingly connected with, and competing against, our farming peers across the globe and there’s no better time for the Australian agricultural community to reassess the impacts of global trade policies. Even small wins can have significant flow-on effects to producers on the ground.” Report author Kym Anderson said the report’s key recommendations highlighted the important role of government trade negotiators in ensuring Australian agricultures’ global competitiveness. ...
In: Economics
The following financial information is for Wildhorse Company.
|
WILDHORSE COMPANY |
||||
|---|---|---|---|---|
|
Assets |
2017 |
2016 |
||
|
Cash |
$ 70,000 |
$ 68,000 |
||
|
Debt investments (short-term) |
51,000 |
40,000 |
||
|
Accounts receivable |
109,000 |
91,000 |
||
|
Inventory |
231,000 |
167,000 |
||
|
Prepaid expenses |
27,000 |
26,000 |
||
|
Land |
134,000 |
134,000 |
||
|
Building and equipment (net) |
264,000 |
186,000 |
||
|
Total assets |
$886,000 |
$712,000 |
||
|
Liabilities and Stockholders’ Equity |
||||
|
Notes payable |
$171,000 |
$109,000 |
||
|
Accounts payable |
67,000 |
53,000 |
||
|
Accrued liabilities |
41,000 |
41,000 |
||
|
Bonds payable, due 2017 |
250,000 |
170,000 |
||
|
Common stock, $10 par |
206,000 |
206,000 |
||
|
Retained earnings |
151,000 |
133,000 |
||
|
Total liabilities and stockholders’ equity |
$886,000 |
$712,000 |
||
|
WILDHORSE COMPANY |
||||
|---|---|---|---|---|
|
2017 |
2016 |
|||
|
Sales revenue |
$ 899,000 |
$ 798,000 |
||
|
Cost of goods sold |
650,000 |
575,000 |
||
|
Gross profit |
249,000 |
223,000 |
||
|
Operating expenses |
192,000 |
168,000 |
||
|
Net income |
$ 57,000 |
$ 55,000 |
||
Additional information:
| 1. | Inventory at the beginning of 2016 was $ 117,000. | |
| 2. | Accounts receivable (net) at the beginning of 2016 were $ 90,000. | |
| 3. | Total assets at the beginning of 2016 were $ 634,000. | |
| 4. | No common stock transactions occurred during 2016 or 2017. | |
| 5. | All sales were on account. |
A) Compute the liquidity and profitability ratios
of Wildhorse Company for 2016 and 2017. (Round all
answers to 2 decimal places, e.g. 1.83 or 1.83%. If % change is a
decrease show the numbers as negative, e.g. -1.83% or
(1.83%).)
B) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2017, and (2) as of December 31, 2018, after giving effect to the situation. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%. If % change is a decrease show the numbers as negative, e.g. -1.83% or (1.83%).)
|
Situation |
Ratio |
|||
|---|---|---|---|---|
|
1. |
18,000 shares of common stock were sold at par on July 1, 2018. Net income for 2018 was $ 54,000. |
Return on common stockholders’ equity | ||
|
2. |
All of the notes payable were paid in 2018. All other liabilities remained at their December 31, 2017 levels. Total assets on December 31, 2018, were $ 908,000. |
Debt to assets ratio | ||
|
3. |
The market price of common stock was $ 9 and $ 12 on December 31, 2017 and 2018, respectively. |
Price-earnings ratio |
||
In: Accounting
|
The Town of Bedford Falls approved a General Fund operating budget for the fiscal year ending June 30, 2017. The budget provides for estimated revenues of $2,838,000 as follows: property taxes, $1,948,000; licenses and permits, $380,000; fines and forfeits, $280,000; and intergovernmental (state grants), $230,000. The budget approved appropriations of $2,782,000 as follows: General Government, $530,000; Public Safety, $1,660,000; Public Works, $380,000; Culture and Recreation, $156,000; and Miscellaneous, $56,000. |
| Required |
| a&b. |
Prepare the journal entry (or entries), to record the Town of Bedford Falls’s General Fund operating budget on July 1, 2016, the beginning of the Town’s 2017 fiscal year and also record the following transactions that occurred during the month of July 2016. Also show entries in the subsidiary ledger accounts, to record the Town of Bedford Falls’s General Fund operating budget on July 1, 2016, the beginning of the Town’s 2017 fiscal year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) |
| 1. |
Revenues were collected in cash amounting to $37,000 for licenses and permits and $15,000 for fines and forfeits. |
| 2. |
Supplies were ordered by the following functions in early July 2016 at the estimated costs shown: |
| General Government | $ | 8,000 |
| Public Safety | 12,500 | |
| Public Works | 6,700 | |
| Culture and Recreation | 4,800 | |
| Miscellaneous | 1,500 | |
| Total | $ | 33,500 |
| 3. |
During July 2016, supplies were received at the actual costs shown below and were paid in cash. General Government, Culture and Recreation, and Miscellaneous received all supplies ordered. Public Safety and Public Works received part of the supplies ordered earlier in the month at estimated costs of $11,300 and $6,500, respectively. |
| Actual Cost | Estimated Cost | |||||
| General Government | $ | 7,900 | $ | 8,000 | ||
| Public Safety | 11,400 | 11,300 | ||||
| Public Works | 6,700 | 6,500 | ||||
| Culture and Recreation | 4,700 | 4,800 | ||||
| Miscellaneous | 1,500 | 1,500 | ||||
| Total | $ | 32,200 | $ | 32,100 | ||
| c. |
Calculate the amount of budgeted but unrealized revenues in total and from each source as of July 31, 2016. |
| d. |
Calculate the amount of available appropriation in total and for each function as of July 31, 2016. Revenues were collected in cash amounting to $37,000 for licenses and permits and $15,000 for fines and forfeits. Record the issuance of the purchase orders and contracts. Record the issuance of the purchase orders and contracts. |
In: Accounting
BC Co. took four tax deductions on their 2016 tax return that have issues that could result in some or all of the deductions being disallowed if ABC’s 2016 tax return is audited. ABC believes the deductions are justifiable but knows that tax law related to each item is unclear. Information about each deduction follows:
1) Amount of deduction $500,000
ABC’s probability full deduction will be allowed 60%
ABC’s estimate of potential deduction being allowed
500,000 60%
400,000 30%
250,000 10%
2) Amount of deduction $800,000
ABC’s probability full deduction will be allowed 40%
ABC’s estimate of potential deduction being allowed
800,000 40%
650,000 30%
500,000 20%
400,000 10%
3) Amount of deduction $300,000
ABC’s probability full deduction will be allowed 30%
ABC’s estimate of potential deduction being allowed
300,000 30%
250,000 15%
200,000 40%
125,000 15%
4) Amount of deduction $900,000
ABC’s probability full deduction will be allowed 45%
ABC’s estimate of potential deduction being allowed
900,000 45%
800,000 40%
650,000 15%
ABC’s 2016 tax rate was 25%. ABC is a calendar-year company. During 2017, ABC Co. received notification that its 2016 tax return was being audited. At December 31, 2017, the IRS had verbally communicated their findings on deductions 1 – 3. Their findings were as follows:
Deduction 1 $120,000 disallowed
Deduction 2 no disallowance
Deduction 3 $80,000 disallowed
Deduction 4 was still under examination at December 31, 2017. Prior to December 31, 2017, ABC and the IRS formalized their agreement on deductions 2 and 3 by signing IRS Form 906, “Closing Agreement on Final Determination Covering Specific Matters.” ABC is disputing the IRS’ findings related to deduction 1.
1. What amount if any liability should ABC recognize at December 31, 2016 related to the tax effects of these four deductions? (ignore possible interest and penalties)
2. Can ABC assert an “effective settlement” for any of the deductions taken on the 2016 tax return at December 31, 2017?
3. What amount of liability should ABC report at December 31, 2017 related to the 2016 deductions assuming ABC has not changed its assessment of deduction 1 or 4?
Provide authoritative support for your answer where necessary.
In: Accounting
Question 5
The following are Coronado Corp.’s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017.
Comparative Balance Sheet
|
COMPARATIVE BALANCE SHEETS |
|||||||||
|
2017 |
2016 |
Increase |
|||||||
|
Cash |
$821,300 |
$698,500 |
$122,800 |
||||||
|
Accounts receivable |
1,118,800 |
1,165,800 |
(47,000 |
) |
|||||
|
Inventory |
1,863,300 |
1,709,100 |
154,200 |
||||||
|
Property, plant, and equipment |
3,292,300 |
2,950,900 |
341,400 |
||||||
|
Accumulated depreciation |
(1,153,700 |
) |
(1,030,800 |
) |
(122,900 |
) |
|||
|
Investment in Myers Co. |
307,300 |
274,600 |
32,700 |
||||||
|
Loan receivable |
248,800 |
— |
248,800 |
||||||
|
Total assets |
$6,498,100 |
$5,768,100 |
$730,000 |
||||||
|
Accounts payable |
$1,010,500 |
$951,500 |
$59,000 |
||||||
|
Income taxes payable |
30,300 |
49,600 |
(19,300 |
) |
|||||
|
Dividends payable |
80,000 |
100,200 |
(20,200 |
) |
|||||
|
Lease liabililty |
401,900 |
— |
401,900 |
||||||
|
Common stock, $1 par |
500,000 |
500,000 |
— |
||||||
|
Paid-in capital in excess of par—common stock |
1,496,000 |
1,496,000 |
— |
||||||
|
Retained earnings |
2,979,400 |
2,670,800 |
308,600 |
||||||
|
Total liabilities and stockholders’ equity |
$6,498,100 |
$5,768,100 |
$730,000 |
||||||
Additional information:
|
1. |
On December 31, 2016, Coronado acquired 25% of Myers Co.’s common stock for $274,600. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,098,400. Myers reported income of $130,800 for the year ended December 31, 2017. No dividend was paid on Myers’s common stock during the year. |
|
|
2. |
During 2017, Coronado loaned $301,400 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $52,600, plus interest at 10%, on December 31, 2017. |
|
|
3. |
On January 2, 2017, Coronado sold equipment costing $60,500, with a carrying amount of $38,100, for $40,000 cash. |
|
|
4. |
On December 31, 2017, Coronado entered into a capital lease for an office building. The present value of the annual rental payments is $401,900, which equals the fair value of the building. Coronado made the first rental payment of $60,600 when due on January 2, 2018. |
|
|
5. |
Net income for 2017 was $388,600. |
|
|
6. |
Coronado declared and paid the following cash dividends for 2017 and 2016. |
|
2017 |
2016 |
|||
|
Declared |
December 15, 2017 |
December 15, 2016 |
||
|
Paid |
February 28, 2018 |
February 28, 2017 |
||
|
Amount |
$80,000 |
$100,200 |
Prepare a statement of cash flows for Coronado Corp. for the year
ended December 31, 2017, using the indirect method.
In: Finance
ABC Co. took four tax deductions on their 2016 tax return that have issues that could result in some or all of the deductions being disallowed if ABC’s 2016 tax return is audited. ABC believes the deductions are justifiable but knows that tax law related to each item is unclear. Information about each deduction follows:
1) Amount of deduction $500,000
ABC’s probability full deduction will be allowed 60%
ABC’s estimate of potential deduction being allowed
500,000 60%
400,000 30%
250,000 10%
2) Amount of deduction $800,000
ABC’s probability full deduction will be allowed 40%
ABC’s estimate of potential deduction being allowed
800,000 40%
650,000 30%
500,000 20%
400,000 10%
3) Amount of deduction $300,000
ABC’s probability full deduction will be allowed 30%
ABC’s estimate of potential deduction being allowed
300,000 30%
250,000 15%
200,000 40%
125,000 15%
4) Amount of deduction $900,000
ABC’s probability full deduction will be allowed 45%
ABC’s estimate of potential deduction being allowed
900,000 45%
800,000 40%
650,000 15%
ABC’s 2016 tax rate was 25%. ABC is a calendar-year company. During 2017, ABC Co. received notification that its 2016 tax return was being audited. At December 31, 2017, the IRS had verbally communicated their findings on deductions 1 – 3. Their findings were as follows:
Deduction 1 $120,000 disallowed
Deduction 2 no disallowance
Deduction 3 $80,000 disallowed
Deduction 4 was still under examination at December 31, 2017. Prior to December 31, 2017, ABC and the IRS formalized their agreement on deductions 2 and 3 by signing IRS Form 906, “Closing Agreement on Final Determination Covering Specific Matters.” ABC is disputing the IRS’ findings related to deduction 1.
1. What amount if any liability should ABC recognize at December 31, 2016 related to the tax effects of these four deductions? (ignore possible interest and penalties)
2. Can ABC assert an “effective settlement” for any of the deductions taken on the 2016 tax return at December 31, 2017?
3. What amount of liability should ABC report at December 31, 2017 related to the 2016 deductions assuming ABC has not changed its assessment of deduction 1 or 4?
In: Accounting
The following are Ayayai Corp.’s comparative balance sheet
accounts at December 31, 2017 and 2016, with a column showing the
increase (decrease) from 2016 to 2017.
|
COMPARATIVE BALANCE SHEETS |
|||||||||
|
2017 |
2016 |
Increase |
|||||||
| Cash |
$821,300 |
$694,000 |
$127,300 |
||||||
| Accounts receivable |
1,124,400 |
1,158,200 |
(33,800 |
) | |||||
| Inventory |
1,852,600 |
1,702,600 |
150,000 |
||||||
| Property, plant, and equipment |
3,300,400 |
2,951,400 |
349,000 |
||||||
| Accumulated depreciation |
(1,174,500 |
) |
(1,048,100 |
) |
(126,400 |
) | |||
| Investment in Myers Co. |
312,300 |
273,800 |
38,500 |
||||||
| Loan receivable |
250,100 |
— |
250,100 |
||||||
| Total assets |
$6,486,600 |
$5,731,900 |
$754,700 |
||||||
| Accounts payable |
$1,019,600 |
$959,800 |
$59,800 |
||||||
| Income taxes payable |
29,800 |
50,100 |
(20,300 |
) | |||||
| Dividends payable |
79,400 |
99,100 |
(19,700 |
) | |||||
| Lease liabililty |
408,500 |
— |
408,500 |
||||||
| Common stock, $1 par |
500,000 |
500,000 |
— |
||||||
| Paid-in capital in excess of par—common stock |
1,504,000 |
1,504,000 |
— |
||||||
| Retained earnings |
2,945,300 |
2,618,900 |
326,400 |
||||||
| Total liabilities and stockholders’ equity |
$6,486,600 |
$5,731,900 |
$754,700 |
||||||
Additional information:
| 1. | On December 31, 2016, Ayayai acquired 25% of Myers Co.’s common stock for $273,800. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,095,200. Myers reported income of $154,000 for the year ended December 31, 2017. No dividend was paid on Myers’s common stock during the year. | |
| 2. | During 2017, Ayayai loaned $309,100 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $59,000, plus interest at 10%, on December 31, 2017. | |
| 3. | On January 2, 2017, Ayayai sold equipment costing $59,500, with a carrying amount of $38,400, for $39,900 cash. | |
| 4. | On December 31, 2017, Ayayai entered into a capital lease for an office building. The present value of the annual rental payments is $408,500, which equals the fair value of the building. Ayayai made the first rental payment of $59,800 when due on January 2, 2018. | |
| 5. | Net income for 2017 was $405,800. | |
| 6. | Ayayai declared and paid the following cash dividends for 2017 and 2016. |
|
2017 |
2016 |
|||
| Declared | December 15, 2017 | December 15, 2016 | ||
| Paid | February 28, 2018 | February 28, 2017 | ||
| Amount | $79,400 | $99,100 |
Prepare a statement of cash flows for Ayayai Corp. for the year
ended December 31, 2017, using the indirect method
In: Accounting
ABC Co. took four tax deductions on their 2016 tax return that have issues that could result in some or all of the deductions being disallowed if ABC’s 2016 tax return is audited. ABC believes the deductions are justifiable but knows that tax law related to each item is unclear. Information about each deduction follows: 1) Amount of deduction $500,000 ABC’s probability full deduction will be allowed 60% ABC’s estimate of potential deduction being allowed 500,000 60% 400,000 30% 250,000 10% 2) Amount of deduction $800,000 ABC’s probability full deduction will be allowed 40% ABC’s estimate of potential deduction being allowed 800,000 40% 650,000 30% 500,000 20% 400,000 10% 3) Amount of deduction $300,000 ABC’s probability full deduction will be allowed 30% ABC’s estimate of potential deduction being allowed 300,000 30% 250,000 15% 200,000 40% 125,000 15% 4) Amount of deduction $900,000 ABC’s probability full deduction will be allowed 45% ABC’s estimate of potential deduction being allowed 900,000 45% 800,000 40% 650,000 15% ABC’s 2016 tax rate was 25%. ABC is a calendar-year company. During 2017, ABC Co. received notification that its 2016 tax return was being audited. At December 31, 2017, the IRS had verbally communicated their findings on deductions 1 – 3. Their findings were as follows: Deduction 1 $120,000 disallowed Deduction 2 no disallowance Deduction 3 $80,000 disallowed Deduction 4 was still under examination at December 31, 2017. Prior to December 31, 2017, ABC and the IRS formalized their agreement on deductions 2 and 3 by signing IRS Form 906, “Closing Agreement on Final Determination Covering Specific Matters.” ABC is disputing the IRS’ findings related to deduction 1. 1. What amount if any liability should ABC recognize at December 31, 2016 related to the tax effects of these four deductions? (ignore possible interest and penalties) 2. Can ABC assert an “effective settlement” for any of the deductions taken on the 2016 tax return at December 31, 2017? 3. What amount of liability should ABC report at December 31, 2017 related to the 2016 deductions assuming ABC has not changed its assessment of deduction 1 or 4? Provide authoritative support for your answer where necessary.
In: Accounting
Edom Company, the lessor, enters into a lease with Davis Company to lease equipment to Davis beginning January 1, 2016. The lease terms, provisions, and related events are as follows:
| 1. | The lease term is 5 years. The lease is noncancelable and requires annual rental receipts of $100,000 to be made in advance at the beginning of each year. |
| 2. | The equipment costs $313,000. The equipment has an estimated life of 6 years and, at the end of the lease term, has an unguaranteed residual value of $20,000 accruing to the benefit of Edom. |
| 3. | Davis agrees to pay all executory costs. |
| 4. | The interest rate implicit in the lease is 14%. |
| 5. | The initial direct costs are insignificant and assumed to be zero. |
| 6. | The collectibility of the rentals is reasonably assured, and there are no important uncertainties surrounding the amount of unreimbursable costs yet to be incurred by the lessor. |
Required:
| 1. | Next Level Determine if the lease is a sales-type or direct financing lease from Edom’s point of view (calculate the selling price and assume that this is also the fair value). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2. | Prepare a table summarizing the lease receipts and interest revenue earned by the lessor. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3. | Prepare journal entries for Edom, the lessor, for the years 2016 and 2017. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepare a table summarizing the lease receipts and interest revenue earned by the lessor. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Journal Prepare journal entries for Edom, the lessor, for the year 2016. Additional Instructions PAGE 1 GENERAL JOURNAL
Prepare journal entries for Edom, the lessor, for the year 2017. Additional Instructions PAGE 1 GENERAL JOURNAL
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In: Accounting
A. According to Equation 20.7, an ac voltage V is given as a function of time t by V = Vo sin 2ft, where Vo is the peak voltage and f is the frequency (in hertz). For a frequency of 56.0 Hz, what is the smallest value of the time at which the voltage equals one-half of the peak-value?
B. The rms current in a copy machine is 7.36 A, and the resistance of the machine is 19.8Ω. What are (a) the average power and (b) the peak power delivered to the machine?
C. A portable electric heater uses 21.8 A of current. The manufacturer recommends that an extension cord attached to the heater receive no more than 2.64 W of power per meter of length. What is the smallest radius of copper (resistivity 1.72 x 10-8 Ω·m) wire that can be used in the extension cord? (Note: An extension cord contains two wires.) of about 12A
D. The average power used by a stereo speaker is 65 W. Assuming that the speaker can be treated as a 4.3-Ω resistance, find the peak value of the ac voltage applied to the speaker.
In: Physics