What is the 95 percent confidence intervals for the average daily inventory holding cost Pre- and Post- COVID-19 (X_1&〖 X〗_2 )? And what do you conclude by comparing these intervals? Also what is the 99 percent confidence interval for the average daily inventory holding cost Post- COVID-19 (X_2 )? And what do you conclude by comparing the 95 and 99 percent confidence intervals for the average daily inventory holding cost Post- COVID-19 (X_2 )?

4. On January 1, 2019, Roberts Inc. purchased 10% of the outstanding 1,000,000 common shares of Sunk for $200,000. Roberts Inc. considers this investment to be a non-strategic investment. At the

December 31, 2020-year end, the fair value of this investment was $208,000. Sunk's profit in 2020 was $100,000. Sunk paid a dividend of $.60 per common share. On January 1, 2021, Robert decided to buy an additional 25% of Sunk's 1,000,000 common shares for $500,000. This second purchase allowed Robert to significantly influence Sunk. In 2021, Sunk's profit was $140,000. Sunk paid dividends of $.50 per common share in 2021.

For 2020, the investment is considered to be a fair value through profit and loss investment:

Required:

1. Make journal entries for 2020 and 2021 on Robert’s books with respect to the Investment in Sunk.

For 2020, the investment is considered to be a fair value through profit and loss inv.

2. Which method of Investment Accounting is Robert Inc using? Justify your response.

On December 18, 2020, Stephanie Corporation acquired 100 percent of a Swiss company for 4.023 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2020, the book and fair values of the subsidiary’s assets and liabilities were as follows:

Stephanie prepares consolidated financial statements on December 31, 2020. By that date, the Swiss franc has appreciated to $1.10 = CHF 1. Because of the year-end holidays, no transactions took place prior to consolidation.

1. Determine the translation adjustment to be reported on Stephanie’s December 31, 2020, consolidated balance sheet, assuming that the Swiss franc is the Swiss subsidiary’s functional currency. What is the economic relevance of this translation adjustment?

2. Determine the remeasurement gain or loss to be reported in Stephanie’s 2020 consolidated net income, assuming that the U.S. dollar is the functional currency. What is the economic relevance of this remeasurement gain or loss?

On June 30, 2020, Buffalo Company issued $4,860,000 face value of 14%, 20-year bonds at $5,591,240, a yield of 12%. Buffalo uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.

(a) Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (1) The issuance of the bonds on June 30, 2020. (2) The payment of interest and the amortization of the premium on December 31, 2020. (3) The payment of interest and the amortization of the premium on June 30, 2021. (4) The payment of interest and the amortization of the premium on December 31, 2021. No. Date Account Titles and Explanation Debit Credit (1) June 30, 2020 (2) December 31, 2020 (3) June 30, 2021 (4) December 31, 2021

During 2020, Sandhill Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Sandhill for a lump sum of $119,700 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below.

During 2020, Sandhill sells 400 lounge chairs, 200 armchairs, and 240 straight chairs.

What is the amount of gross profit realized during 2020? What is the amount of inventory of unsold straight chairs on December 31, 2020? (Round cost per chair to 2 decimal places, e.g. 78.25 and final answer to 0 decimal places, e.g. 5,845.)

During 2020, Skysong Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Skysong for a lump sum of $77,805 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below.

During 2020, Skysong sells 260 lounge chairs, 130 armchairs, and 156 straight chairs.

What is the amount of gross profit realized during 2020? What is the amount of inventory of unsold straight chairs on December 31, 2020? (Round cost per chair to 2 decimal places, e.g. 78.25 and final answer to 0 decimal places, e.g. 5,845.)

Machinery purchased for $41,200 by Swifty Corp. on January 1, 2015, was originally estimated to have an 8-year useful life with a residual value of $6,000. Depreciation has been entered for five years on this basis. In 2020, it is determined that the total estimated useful life (including 2020) should have been 10 years, with a residual value of $7,000 at the end of that time. Assume straight-line depreciation and that Swifty Corp. uses IFRS for financial statement purposes.

Prepare the entry that is required to correct the prior years’ depreciation, if any

Prepare the entry to record depreciation for 2020.

Repeat part (b) assuming Swifty Corp. uses ASPE and the machinery is originally estimated to have a physical life of 8.5 years and a salvage value of $0. In 2020, it is determined that the total estimated physical life (including 2020) should have been 11 years, with a salvage value of $400 at the end of that time.

Repeat part (b) assuming Swifty Corp. uses the double-declining-balance method of depreciation.

Sarah is the owner of a pre-school called “We Care for Kids” located in Sydney. Between January 2018 and December 2019, Sarah's business has boomed. Many parents were forced to place their names on a waiting list in the hopes of a future vacancy. Sarah’s business was chronically short staffed and consequently she was working very long hours. When Sarah heard that her sister, Jenny, who lived in Western Australia, had recently completed childcare qualifications at University, she sent her an email on the 17th of January 2020, which stated: “Dear Jenny, I am absolutely swamped at my pre-school and I desperately need help. Mum tells me that you have completed your childcare diploma at University. Would you be interested in coming to Sydney and working for me as a childcare worker? For $80 per week, I will rent you the granny flat at the rear of my house. The tenant who is living there now has given me notice – he is moving out by January 25. I would love to see you. Love, Sarah” Unfortunately, two days after Sarah sent Jenny the email, several children at the childcare centre were diagnosed with COVID 19. As a consequence, many parents withdrew their children from the pre-school and consequently business was drastically reduced. Sarah then had no need for any further staff, including Jenny. Meanwhile, Jenny was thrilled to receive Sarah’s email because many of her friends had gone to live and work in Sydney after finishing their University studies. By January 20, 2020 news of the COVID 19 outbreak at Sarah's childcare centre was being covered widely by the media. Jenny saw those media reports. Wanting to tie Sarah to the deal quickly, Jenny replied by posting a letter on January 21, as follows: “Dear Sarah, Thank you very much for this opportunity. I have resigned my job here and have bought a plane ticket. I leave on January 23 to go to Queensland for a beach holiday and I will arrive in Sydney on Wednesday, February 5, 2020. I will be ready to start work for you straight away. Also thank you for your offer of the rental of the granny flat – I accept with pleasure. Thanks again, love, Jenny” Sarah received this letter on February 1, 2020. However, on January 28, Sarah sent an email to Jenny describing what had happened to her business and telling her that there was no job for her at this time. Unfortunately, Jenny did not read this email because she had already left for Queensland. Whilst she was travelling, she did not access her email. Advise Jenny whether a binding contract exists.

please provide answers with issue, law, application and conclusion in regards to the contract law.

Sakura PLC is a leading investment company in Australia and you the below details relating to the capital structure of the company.
Information concerning raising new capital
Bonds
$1,000
Face value
13%
Coupon Rate (Annual Payments)
20
Term (Years)
$25
Discount offered (required) to sell new bonds
$10
Flotation Cost per bond
Preference Shares
11%
Required rate to sell new preference shares
$100
Face Value
$3
Flotation cost per share
Ordinary Shares
$83.33
Current Market Price
$4.00
Discount on share price to sell new shares
$5.40
Flotation Cost per bond
$5.00
2019 - Proposed Dividend
Dividend History
$4.63
2019
$4.29
2018
$3.97
2017
$3.68
2016
$3.40
2015
Current Capital Structure
Extract from Balance Sheet
$1,000,000
Long-Term Debt
$800,000
Preference Shares
$2,000,000
Ordinary Shares
Current Market Values
$2,000,000
Long-Term Debt
$750,000
Preference Shares
$4,000,000
Ordinary Shares
Tax Rate
33%
Risk Free Rate
5%
3
a) Calculate the cost associated with each new source of finance. The firm has no retained earnings available.
b) Calculate the WACC given the existing weights
The financial controller does not believe the existing capital structure weights are appropriate to minimise the firm’s cost of capital in the medium term and believes they should be as follows
Long-term debt 40%
Preference Shares 15%
Ordinary Shares 45%
c) What impact do these new weights have on the WACC?
The firm is considering the following investment opportunity. (2020-2027)
Data is as follows
Initial Outlay
$1,600,000
Upgrade
$700,000
End of Year 4
Upgrade -
350,000
Increased sales units per annum - (Year 5-8)
Working Capital
$45,000
Increase required
Estimated Life
8
Years
Salvage Value
$60,000
Depreciation Rate
0.125
For tax purposes
The machine is fully depreciated by the end of its useful life
Other Cash Expenses
$60,000.00
Per annum (Years 1-4)
Other Cash Expenses
$76,000.00
Per annum (Years 5-8)
Production Costs
$0.15
Per Unit
Sales price
$0.75
Per Unit (Years 1-4)
Sales price
$1.02
Per Unit (Years 5-8)
Prior sales estimates
Year
Sales
2010
520000
2011
530000
2012
540000
2013
560000
2014
565000
2015
590000
2016
600000
2017
610000
2018
615559
2019
659000
2020
680000
4
d) Calculate the Net Present Value, Internal Rate of Return and Payback Period
The financial controller is considering the use of the Capital Asset Pricing Model as a surrogate discount factor. The risk-free rate is 5 per cent.
Year
Stock Market
Share
Index
Price
2010
2000
$15.00
2011
2400
$25.00
2012
2900
$33.00
2013
3500
$40.00
2014
4200
$45.00
2015
5000
$55.00
2016
5900
$62.00
2017
6000
$68.00
2018
6100
$74.00
2019
6200
$80.00
2020
6300
$83.33
e) Calculate the CAPM
f) Explain why this figure may differ from that calculated above (i.e. Cost of equity – Ordinary Shares)
5
Question 3
Previous Years
Sales
1400
Retained Earnings
170
Costs
900
Dividends
180
Tax rate
0.3
Assets
Liabilities/Equity
Current Assets
Current Liabilities
Cash
460
Creditors
600
Debtors
540
Short Term Notes
100
Inventory
600
Non-Current Assets
Non-Current Liabilities
PP&E
2000
Debentures
900
Total Assets
3600
Owner’s Equity
Retained Profits
1000
Ordinary Shares
1000
3600
Percentage of Sales Approach – Assume all spontaneous variables move as a percentage of sales.
a) Given an expected increase in sales of 12%, what is the amount of external funding required?
b) To maintain the current debt/equity ratio how much debt and how much equity is required?
c) Assuming the company is only operating at 95% capacity, how much new funding (if any) is required?