QUESTION 1

1. When the direct write-off method of recognizing bad debt expense used, which of the following accounts would NOT be used?

   		Bad Debt Expense
   		Accounts Receivable
   		Allowance for Bad Debts
   		All of the above are used in the direct write-off method

1 points   

QUESTION 2

1. When the allowance method of recognizing bad debt expense is used, the entries at the time of collection a a small account previously off would:

   		Increase net income
   		Increase Allowance for Bad Debts
   		Decrease net income
   		Decrease Allowance for Bad Debts

1 points   

QUESTION 3

1. Deuce Company uses the allowance method to estimate the losses form uncollectible receivables. Net sales for the year are $120,000 and the company estimates its bad debts as 1 percent of net sales. If there is already a $1,200 debit balance in Allowance for Bad Debts, how should be recorded as Bad Debt Expense?

   		$1,200
   		$2,400
   		$24,000
   		No entry is required

1 points   

QUESTION 4

1. Following are the account balances from the December 31 trial balance of Hark Company. If 10% of the Accounts Receivable is estimated to be uncollectible, the entry to record the estimate of bad debts would include a debit to Bad Debt Expense for:

   	DB
   Accounts Receivable	20,000
   Allowance fro Bad Debts	800
   Sales Revenue	135,000

   		$2,000
   		$2,080
   		$2,800
   		$1,200

1 points   

QUESTION 5

1. A promissory note dated Dec. 1, 2012 bearing interest at a rate of 8% and due in 60 days is sent ot a creditor. The face value of the note is $10,000. The entry for accrued interest at December 31, 2012 by the issuer of the note includes a:

   		Debit to interest expense of $67
   		A credit ot interest payable of $133
   		Credit to interest expense of $67
   		Debit to interest payable of $133

1 points   

QUESTION 6

1. The entry (or entries) requried to record a sales return by a customer when using the perpetual inventory method would consist of:

   		A debit to Sales Revenue and a credit to Accounts Receivable
   		A debit to Sales Returns and Allowances and a credit to Accounts Receivables
   		Debits to Sales Returns and Allowances and Inventory and credits to Accounts Receivable and Costs of Goods Sold
   		Debits to Sales Returns and Allowances and Cost of Goods Sold and credits to Accounts Receivable and Inventory

1 points   

QUESTION 7

1. Which of the following will result if the current year's ending inventory amount is understated in the cost of goods calculation:

   		Cost of goods sold will be overstated
   		Total assets will be overstated
   		Net income will be overstated
   		Both A and C

1 points   

QUESTION 8

1. Which of the following would be true if inventory costs were increasing?

   		LIFO would result in lower net income and lower ending inventory amounts than would FIFO
   		FIFO would result in lower net income and higher ending inventory amounts than would LIFO
   		LIFO would result in a lower net income amount but a higher ending inventory amount that would FIFO
   		None of the above

1 points   

QUESTION 9

1. Given the following sale and purchasing information, what is the ending iinventory, if the periodic FIFO costing alternative is used? The beginning inventory on hand was 100 units at $1 each.

   1st Purchase	700 units @ $2
   2nd Purchase	1,000 units @ $3
   3rd Purchase	500 units @ $4
   4th Purchase	500 units @ $5
   Total units purchased	2,700
   1st Sale	400 units @$7
   2nd Sale	750 units @$8
   3rd Sale	500 units @$9
   4th Sale	500 units @$10
   Total units sold	2,150

   		$400
   		$500
   		$1,250
   		$3,100

1 points   

QUESTION 10

1. Using the following purchases and sales, what is the ending inventory if the periodic LIFO costing alternative is used? The beginning inventory iis 100 units on hand at $2 each.

   1st Purchase	500 units @$2
   2nd Purchase	1,000 units @ $3
   3rd Purchase	500 units @ $4
   4th Purchase	500 units @ $5
   Total units purchased	2,500
   1st Sale	600 units @$7
   2nd Sale	750 units @$8
   3rd Sale	500 units @$9
   4th Sale	500 units @$10
   Total units sold	2,350

   		$400
   		$500
   		$1,250
   		$3,100

1 points   

QUESTION 11

1. Using the following information, what is the average cost per unit available for sale during the year if the periodic inventory method is used (round to nearest cent)? The beginning inventory on had was 100 units at $1 each.

   1st Purchase	500 units @$2
   2nd Purchase	1,000 units @ $3
   3rd Purchase	500 units @ $4
   4th Purchase	500 units @ $5
   Total units purchased	2,500
   1st Sale	600 units @$7
   2nd Sale	750 units @$8
   3rd Sale	500 units @$9
   4th Sale	500 units @$10
   Total units sold	2,350

   		$2.61
   		$3.10
   		$3.53
   		$3.31

1 points   

QUESTION 12

1. A firm had a beginning inventory balance of $1,000, net purchases of $35,000 and sales of $40,000. Its gross margin percentage was 25%. Using the gross margin method, the ending inventory balance is:

   		$1,000
   		$7,000
   		$6,000
   		$10,000

1 points   

QUESTION 13

1. Which of the following is NOT usually depreciated, depleted or amortized?

   		Furniture
   		Land
   		Mineral deposits
   		Patents

1 points   

QUESTION 14

1. Depreciation can best be described as a method of

   		Allocating the costs of assets over their useful life
   		Accumulating funds for the replacement of assets
   		Reducing the carrying cost of assets to current market value
   		Deriving tax benefits

1 points   

QUESTION 15

1. The book value of an asset is the:

   		Original cost of the asset
   		Market value of the asset
   		Total of all expenses associated with the asset
   		Acquisition cost of the asset less any accumulated depreciation on the asset

1 points   

QUESTION 16

1. On January 1, 2012 Powers Press purchased equipment at a cost of $6,300. The equipment had an estimated useful life of three years or 15,000 hours. The equipment will have a $600 salvage value at the end of its life. The depreciation expense for the year ending December 31, 2012 using the straight-line method would be:

   		$1,900
   		$1,883
   		$475
   		$471

1 points   

QUESTION 17

1. On January 1, 2006, Powers press purchased equipment at cost of $6,300. The equipment had an estimated useful life of three years or 15,000 hours. The equipment will have a $600 salvage value at the end of its life. The equipment was used for 3,250 hours in 2012. The depreciation epense for the year ending December 31, 2012 using the units of production method would be:

   		$1,900
   		$1,235
   		$3,250
   		$1,365

1 points   

QUESTION 18

1. On January 1, 2011, Kinnear Company purchased equipment at a cost of $20,000. The equipment had useful life of 5 years and a salvage value of $2,000. Kinnear Company use the straight-line depreciation method for all its assets. Given this information, if the company sells the equipment for $13,600 on December 31, 2006, it will have a(n):

   		$2,000 loss
   		$2,000 gain
   		$800 loss
   		$800 gain

1 points   

QUESTION 19

1. The balance sheet category "intangible assets" includes:

   		Patents, trademarks and franchises
   		Equipment, land and buildings
   		Investments, receivables and customer lists
   		Goodwill, inventory and furnishings

1 points   

QUESTION 20

1. On March 3, 2006, Binford Tools acquired the following assets from Mace Harware for $360,000. How much goodwill should be recorded for this transactions?

   	Book Value	Fair Market Value
   Accounts Receivable	58,000	33,000
   Inventory	92,000	76,000
   Equipment	139,000	182,000
   Patent	13,000	8,000

   		$61,000
   		$58,000
   		$39,000
   		0

Question 2: Preparation and Presentation of the Income Statement Flexible and Confused Limited has just employed you as the new finance director. The first task you have been assigned to complete is to prepare the income statement for the 12-month period ended March 31, 2018. On your desk on your first day, the previous finance director left valuable information to complete the task. 1. During the year Flexible and Confused Limited – a company that sells dishwashers – sold a total of 13,187,000 units at an average sales price of $41.25. 2. The old finance director also indicated that direct labour, direct material and applied overhead were equal to 20%, 12% and 25% of total sales revenue. 3. Following is a list of other expenses incurred by the company. Expense Account Total Incurred Advertising and Marketing Costs $5,512,000.00 Sales Entertainment $2,561,000.00 Selling Insurance $690,000.00 Office Repairs and Maintenance $1,590,000.00 Office Depreciation $14,457,000.00 Wages of General Operations Staff $12,801,000.00 Salaries Sales Staff $11,036,000.00 Administrative Travel Costs $1,260,000.00 4. On January 1, 2018, the company sold a piece of equipment held for investment and recognized a loss on the sale of $4,221,000. 5. The company also enjoyed revenue from other sources noted as: Other Income totalling $9,050,000 and Interest Revenue totalling $8,661,000. 6. On April 1, 2017, the company sold land that resulted in a loss of $4,891,000. 7. If the company reports a profit during the year, the effective corporate tax rate is 25%. If a loss is reported the effective tax rate is zero. 8. The company incurred finance interest charges during the accounting period of $22,890,000. 9. The company is involved in joint venture operations. As a result of goof financial conditions, the company recorded a net gain of $6,079,000 from its share of the joint venture operations. 10. From the operations of its associate firms, the company expects to record a net gain of $42,287,000 for the financial period ended March 31, 2019. Required: Using the information supplied, prepare an income statement for Flexible and Confused Limited for the accounting period that conforms with IFRS IAS 1 recommendation and course requirements. (Hint: Expenses should be classified by function (e.g., cost of goods sold) not nature.

explain and justify all your answer clearly with steps thanks

Question 6        (Marks: 35) Structured Query Language (SQL) is a language that is widely used in industry to create, update and query data in relational databases. This question must NOT be done practically (i.e. in the computer room). You are required to write the SQL code in your answer book. Q.6.1 The below sample data in third normal form was provided by a database designer. Answer the below questions using this data. Table: Country Primary key: CountryID (auto number) All fields are mandatory CountryID Name Abbreviation CallingCode 1 South Africa ZA 27 2 Lesotho LS 266 3 Namibia NA 264 4 Egypt EG 20 Table: President Primary key: PresidentID (auto number) Foreign key: CountryID (mandatory) All fields are mandatory PresidentID CountryID Name Surname Year 1 1 Cyril Ramaphosa 2018 2 1 Jacob Zuma 2009 3 3 Hage Geingob 2015 4 3 Hifikepunye Pohamba 2005 18; 19; 20                       2020 © The Independent Institute of Education (Pty) Ltd 2020   Page 10 of 11    Q.6.1.1 Write a SQL statement to create the table President. Hint: The sample data should give you an indication of the data types you should use. (5)      Q.6.1.2 Write a SQL statement that will count the number of presidents that were inaugurated after 2009. (4)      Q.6.1.3 Write a SQL statement to insert the below row into table Country. CountryID Name Abbreviation CallingCode 5 Botswana BW 267 (4)      Q.6.1.4 Write a SQL statement to get the list of all the countries from the database, in alphabetical order by country name. Include all the columns from the Country table. (3)      Q.6.1.5 Write a SQL statement to get the list of all the presidents with a surname starting with the letter R. Include all fields from the President table. (3)      Q.6.1.6 Write a SQL statement to get the list of all the presidents, showing only the name and surname of the president, and the name of their country. (5) Q.6.2 What is the difference between the WHERE and HAVING clauses in SQL statements? (4) Q.6.3 What is the purpose of an index in a SQL database? (1) Q.6.4. The below ERD has been implemented in a SQL database. What will the result be of each of the below queries? Provide an explanation for your answer.   18; 19; 20                       2020 © The Independent Institute of Education (Pty) Ltd 2020   Page 11 of 11 Q.6.4.1 (2)      Q.6.4.2 (2)      Q.6.4.3  

Monty Corporation is authorized to issue 53,000 shares of $5 par value common stock. During 2017, Monty took part in the following selected transactions.

Can you please explain how you get to this answer? Thank you!

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Suppose Home has unit Labor requirements: 3 units of labor (hours) to produce one pound of apples, 2 units of labor (hours) to produce one pound of banana. Suppose Foreign has unit Labor requirements: 5 units oflabor (hours) to produce a pound of apples, 1 unit of labor (hours) to produce one pound of banana.

1) Draw the Relative Supply of Apples for the world (Home and Foreign).
2) Suppose the Relative Demand for Apples is as follows: Relative Demand: (Qa/Qb)^D = (PB/PA)
If Both countries trade, what will be the traded relative price of Apples, (PA/PB) ?
3) Show that Home Benefits from trade.

1)Suppose that the Fed is fixing the dollar-pound exchange rate at $2.75 = £1. If the Fed's reserve of pounds falls by £100 million, by how much would the supply of dollars increase, all other things equal?

a)275 million

b)500 million

c)0

d)-500 million

2) In 2009, the United States:

a)imported more services than it exported.

b)imported more goods than it exported.

c)traded mainly with developing nations such as Mexico and India.

d)had a small trade surplus in goods and services.

3) You know that (1 + 0.08)³ = 1.26. What is the present value of $126 received in three years if the annual interest rate is 8 percent?

a)$100

b)$10

c)$126

d)$144

2016

2017

INSTRUCTIONS

You will be performing an analysis of McDonald’s, Wendy’s or Burger King. Place the name on the line below. Using online and/or library resources, including Web sites on the fast food industry and your company’s Web site and annual report, fill out the following External Environment Worksheet for that company:

External Environment Worksheet    - _____________________________

MACROENVIRONMENT

Laws and regulations (5 Points)

What are some key laws and regulations under which this company and the fast food industry must operate?

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

The economy (5 Points)

How does the state of the economy influence the sales of this company’s products?

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Technology (5 Points)

What new technologies strongly affect the company you have selected?

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Demographics (5 Points)

What changes in the population might affect the company’s customer base?

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Social Issues (5 Points)

What changes in society affect the market for your company’s food products?

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

ORGANIZATION COMPETITIVE ENVIRONMENT

Suppliers (3 Points)

How does your company’s relationship with suppliers affect its profitability? Provide specifics related to the company.

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Competitors (3 Points)

What companies compete with the firm you have selected? Do they compete on price, on quality, or on other factors? Explain.

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

New Entrants (3 Points)

Are new competitors to the company likely? possible? Give examples.

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Substitutes and Complements (3 Points)

Is there a threat of substitutes for the fast food industry’s existing products? Are there complementary products that suggest an opportunity for collaboration?

Substitutes:_________________________________________________________________________________________________________________________________________________________________________Complements:_______________________________________________________________________________________________________________________________________________________________________

Customers (3 Points)

What characteristics of the company’s customer base influence the company’s competitiveness?

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

DISCUSSION QUESTIONS

1. What has the company done to adapt to its environment? (See At the boundaries, at the core Pg. 55-56.)

(5 Points)

__________________________________________________________________________________________     ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

2. How does the company attempt to influence its environment? (See independent/cooperative strategies Pg. 57-58) (5 Points)     __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

PART A (MAX 500 words in total)

Effective 2019, the new accounting standard on leasing, AASB16 Leases, will replace the existing leases standard, AASB117. It will remove the classification of leases that has been used for decades and which divides leases into operating and financial leases from the perspective of lessees. The new standard requires leases that were formerly known as operating leases (and were kept off balance sheet) to be recognised for balance sheet proposes (both an asset and a liability will be recognised).

Required:

Evaluate how total assets, total liability and equity would be affected by the new accounting standard on leasing from the perspective of lessees. (5 marks)

The changed standard means that leases with a short-term (e.g., several months) will appear on a balance sheet of lessees, as will leases with a long-term (e.g., multiple years). Discuss whether this new approach is consistent or inconsistent with the definitions of assets and liabilities included within the IASB Conceptual Framework. (5 marks)

PART B (MAX 500 words in total)

Microsoft historically followed the practice of recognizing 25% of revenue from its Windows software over three or four years as it promises future upgrades and add-ons. With the launch of Vista in 2008, it changed the policy to record most of the revenue in the period in which the software was sold. In the third quarter for fiscal year 2008, Microsoft reported an increase in earnings of 65%. The increase came from sales of the new Vista program and also from the acceleration in revenue recognition.

Required:

Critically evaluate the revenue recognition policy adopted by Microsoft in accordance with AASB15 Revenue from Contracts with Customers. (5 marks)

Explain the decision of management to change the revenue recognition policy in terms of the debt hypothesis of Positive Accounting Theory. (5 marks)