Case Study 2 Construction

Fred’s Sheds

Fred Smith, the founder and chief executive of Fred’s Sheds, received a phone call one afternoon from a local farmer, Mr Jones, requesting a quote to design and build a large storage shed on his property. Fred asked Mr Jones what size and type of shed he would like, when he wanted work to commence, and when he wanted it completed.

Mr Jones told him that he required a large shed, big enough to store his tractor and utility vehicle, and spaces for a workbench, tools and fertilisers.  

He also specified that the shed must have power, water and a toilet. He requested that the shed be made of high quality materials, because twice in the previous ten years some of the other sheds on his property had been damaged by inclement weather, costing him many thousands of dollars in repairs.

Mr Jones wanted work to commence in 6 week’s time and would like the job completed no more than 3 weeks after that so he would have a place to store his vehicles before the winter rains came.

Mr Jones asked Fred to come up with a design and quote to build his shed and asked him to present them to him at a meeting at his house in a week’s time.

He told Fred that he was obtaining three quotes from three different builders, and that he would select his preferred builder based on four criteria.

These were quality, the ability to start and finish on time, and cost.

Mr Jones said he would like to spend no more than $40,000 on the shed, but would consider alternate proposals that were a little higher in price if they could exceed his minimum evaluation criteria.

As soon as Fred hung up the phone his mind started to think of all the different tasks he would need to do to win and complete the job. Having built many sheds before, he was confident he had the project management skills to build a shed that met Mr Jones’s extensive criteria. He jotted down some of his thoughts on a notepad so that he would not forget anything.

First of all, Fred knew he would have to come up with a winning design, so he would need to put his designer, Karen, on the job of coming up with some innovative designs.

Fred would also have to source higher quality building materials than he usually used because, although Fred always used good materials, he thought he would try to use the best possible materials, if it was cost effective, to give him the edge in meeting Mr Jones’s stringent evaluation criteria over his two competitors.

Fred also knew that he would need to plan the human resources necessary to complete the job in the timeframe required. Some of his other construction projects were nearing completion, so it would not be too much of a problem getting some of his construction workers to start in 6 weeks’ time. However, Fred was not sure about the availability of his subcontractors, Eddie the electrician, Bob the plumber, Gary the glazier and Tony his fencing contractor and odd job man, because business was booming and they were all very busy.

If he was successful in winning the contract, Fred knew that there would still be lots of work to be done. After signing the contract, he would need to submit a Development Application and construction certificate to the local council and await their approval.

Mr Jones’s final selections for colour and style of shed materials would need to be finalised and a deposit received prior to commencing work.

Once all that had been accomplished, Fred and his team of four would have to prepare the site for construction. This would involve performing underground cable service checks, and perhaps contracting a surveyor to locate existing boundaries as the shed was going to be built close to the boundary with Mrs Mitchell’s neighbouring property.

The site would need to be cleared, temporary site facilities such as a toilet, site fencing, power and water would have to be established, the site set out and the formwork built. Following this, the site would be excavated.

While the excavation was taking place, Fred would need to remember to book a council inspection for the formwork prior to concreting, as well as booking the concrete truck, a date for the shed to be delivered, a date for the shed installation team to put the shed into place, and dates for his subcontractors to come and install power and water.

After pouring the concrete and finish, his team would need to strip the formwork. At this time Fred could invoice Mr Jones for a progress payment as this represented a milestone in the project. Following this the shed could be delivered and installed,

Eddie the electrician could be called in to connect the mains power, Bob the plumber could connect the water and install the toilet and Gary the glazier could install the windows. While they were busy doing that, Fred and his team could start clearing the site, removing any rubbish and the temporary site amenities.

Once all these tasks were accomplished, the job would be at practical completion. Fred would then meet with Mr Jones, present him with a final bill and handover the keys to the shed. Fred smiled to himself feeling confident that he would beat his two competitors to the job and thinking that he would soon have another satisfied customer.

Complete the project budget in the resources and cost template.

******** I need just a simple example

Resource and Cost Template

Case Study 2 Construction

Fred’s Sheds

Fred Smith, the founder and chief executive of Fred’s Sheds, received a phone call one afternoon from a local farmer, Mr Jones, requesting a quote to design and build a large storage shed on his property. Fred asked Mr Jones what size and type of shed he would like, when he wanted work to commence, and when he wanted it completed.

Mr Jones told him that he required a large shed, big enough to store his tractor and utility vehicle, and spaces for a workbench, tools and fertilisers.  

He also specified that the shed must have power, water and a toilet. He requested that the shed be made of high quality materials, because twice in the previous ten years some of the other sheds on his property had been damaged by inclement weather, costing him many thousands of dollars in repairs.

Mr Jones wanted work to commence in 6 week’s time and would like the job completed no more than 3 weeks after that so he would have a place to store his vehicles before the winter rains came.

Mr Jones asked Fred to come up with a design and quote to build his shed and asked him to present them to him at a meeting at his house in a week’s time.

He told Fred that he was obtaining three quotes from three different builders, and that he would select his preferred builder based on four criteria.

These were quality, the ability to start and finish on time, and cost.

Mr Jones said he would like to spend no more than $40,000 on the shed, but would consider alternate proposals that were a little higher in price if they could exceed his minimum evaluation criteria.

As soon as Fred hung up the phone his mind started to think of all the different tasks he would need to do to win and complete the job. Having built many sheds before, he was confident he had the project management skills to build a shed that met Mr Jones’s extensive criteria. He jotted down some of his thoughts on a notepad so that he would not forget anything.

First of all, Fred knew he would have to come up with a winning design, so he would need to put his designer, Karen, on the job of coming up with some innovative designs.

Fred would also have to source higher quality building materials than he usually used because, although Fred always used good materials, he thought he would try to use the best possible materials, if it was cost effective, to give him the edge in meeting Mr Jones’s stringent evaluation criteria over his two competitors.

Fred also knew that he would need to plan the human resources necessary to complete the job in the timeframe required. Some of his other construction projects were nearing completion, so it would not be too much of a problem getting some of his construction workers to start in 6 weeks’ time. However, Fred was not sure about the availability of his subcontractors, Eddie the electrician, Bob the plumber, Gary the glazier and Tony his fencing contractor and odd job man, because business was booming and they were all very busy.

If he was successful in winning the contract, Fred knew that there would still be lots of work to be done. After signing the contract, he would need to submit a Development Application and construction certificate to the local council and await their approval.

Mr Jones’s final selections for colour and style of shed materials would need to be finalised and a deposit received prior to commencing work.

Once all that had been accomplished, Fred and his team of four would have to prepare the site for construction. This would involve performing underground cable service checks, and perhaps contracting a surveyor to locate existing boundaries as the shed was going to be built close to the boundary with Mrs Mitchell’s neighbouring property.

The site would need to be cleared, temporary site facilities such as a toilet, site fencing, power and water would have to be established, the site set out and the formwork built. Following this, the site would be excavated.

While the excavation was taking place, Fred would need to remember to book a council inspection for the formwork prior to concreting, as well as booking the concrete truck, a date for the shed to be delivered, a date for the shed installation team to put the shed into place, and dates for his subcontractors to come and install power and water.

After pouring the concrete and finish, his team would need to strip the formwork. At this time Fred could invoice Mr Jones for a progress payment as this represented a milestone in the project. Following this the shed could be delivered and installed,

Eddie the electrician could be called in to connect the mains power, Bob the plumber could connect the water and install the toilet and Gary the glazier could install the windows. While they were busy doing that, Fred and his team could start clearing the site, removing any rubbish and the temporary site amenities.

Once all these tasks were accomplished, the job would be at practical completion. Fred would then meet with Mr Jones, present him with a final bill and handover the keys to the shed. Fred smiled to himself feeling confident that he would beat his two competitors to the job and thinking that he would soon have another satisfied customer.

Complete the work breakdown structure (WBS) template.

Work Breakdown Structure Template

Harrison Company issued $600,000 of 10%, 20-year bonds on January 1, 2020. Interest is paid semiannually on July 1 and December 31 each year. Harrison Company uses the straight-line method of amortization for bond premium or discount.

B. Assume the bonds are issued at 100. Provide the journal entries for the issuance of the bonds and the first two interest payments. (3 points)

The following information was obtained from the accounting records and financial statements of Fairbanks Inc.

Additional information:

• On February 1, 2020, Fairbanks issued common shares for machinery and equipment. The common shares had a current market value of $20,000.
• On March 1, 2020, Fairbanks sold equipment that cost $200,000, with a book value of $90,000, for $95,000.
• On August 15, 2020, Fairbanks sold land with an original cost of $200,000 for $189,000.
• On September 27, 2020, Fairbanks issued a stock dividend to shareholders valued at $10,000.
• On December 31, 2020, Fairbanks declared and paid cash dividends of $3,000.

Required:

1. Prepare the cash flow statement, using the indirect method, for Fairbanks for the year ended December 31, 2020.

JY investment Ltd holds a well-diversified portfolio of shares that has a market value of $1.5 million on 30 June 2019. JY is concerned about possible downturns in the share market and on 1 March 2020 decides to take out a sell position in eleven “September 2020 SPI 200 Futures” units when the SPI 200 is 5500. The SPI 200 Futures contract unit value is the value of SPI 200 multiplied by $25. To enter the contract, JY pays an initial cash deposit (margin) of $150,000 to a broker. On 30 June 2020, the reporting date of JY investment Ltd, the unit price of the September SPI futures contracts has fallen to 5300 and the market value of the firm’s portfolio of shares is $1 435 000. Assume broker allows a $50,000 drop before making a margin call to allow for minor fluctuations in the market. The shares are sold on 31 August 2020 when the market value of the shares is $1 290 000 and the September SPI 200 futures contract closed out at 5250 on 31 August 2020. Assume the futures contracts qualify as a hedge, the shares are marked to market.

REQUIRED: Prepare journal entries to account for the above events from 1 March 2020 to 31 August 2020. Show all calculations and round them to the nearest dollar amount. No narration is required.

JY investment Ltd holds a well-diversified portfolio of shares that has a market value of

$1.5 million on 30 June 2019. JY is concerned about possible downturns in the share market and on 1 March 2020 decides to take out a sell position in eleven “September 2020 SPI 200 Futures” units when the SPI 200 is 5500. The SPI 200 Futures contract unit value is the value of SPI 200 multiplied by $25. To enter the contract, JY pays an initial cash deposit (margin) of $150,000 to a broker.

On 30 June 2020, the reporting date of JY investment Ltd, the unit price of the September SPI futures contracts has fallen to 5300 and the market value of the firm’s portfolio of shares is $1 435 000. Assume broker allows a $50,000 drop before making a margin call to allow for minor fluctuations in the market.

The shares are sold on 31 August 2020 when the market value of the shares is $1 290 000 and the September SPI 200 futures contract closed out at 5250 on 31 August 2020. Assume the futures contracts qualify as a hedge, the shares are marked to market.

QUESTION

Prepare journal entries to account for the above events from 1 March 2020 to 31 August 2020. Show all calculations and round them to the nearest dollar amount. No narration is required.

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Watch the interview with PWC’s Gerard Verweij at the Bloomberg website and answer the following questions:

1. According to Gerard Verweij, global data and analytics leader at PriceWaterhouseCoopers (PwC), what impact will AI have on jobs and productivity and consumption? Where is talent needed to advance and leverage data analytics and AI in business?

2. what other challenges do you see for the advancement of audit data analytics (ADA) through AI?

Based on the data collected during the telephone interview, the nurse determines that Alice is in very early labor. Because she lives close to the hospital, she is instructed to stay home until her labor progresses. Outline the instructions and recommendations for care Alice and her husband should be given for the nursing diagnosis: Readiness for enhanced knowledge of labor progression RT lack of exposure.

As part of an interview for a summer job with the Coast Guard, you have been asked to help determine the search area for two sunken ships by calculating their velocity just after an accident. According to the last radio transmission from the luxury liner Apollo (3.9 × 104 metric tons), it was going due east at a steady speed of 21 knots in calm seas through a rare fog just before it was struck broadside by the freighter Blake (6.1 × 104 metric tons), which was traveling north at steady speed of 11 knots. The transmission also noted that when the freighter's bow pierced the hull of the liner, the two ships stuck together and sank. What was the speed and direction of the ships after the collision ? (Take zero degrees to be straight east and counter-clockwise as positive.)

1)____ knots

2)____ degrees

When conducting an interview with a group of people in order to enter a television program, it is found that 30% of 1500 people do not meet the required requirements. 34 people are interviewed.
a)   What is the probability that less than 24 meet the required requirements?
b)   What is the probability that 14 to 27 do not meet the required requirements?
c)   What is the probability that more than 26 meet the required requirements?
d)   What is the probability that less than 23 or more than 29 do not meet the required requirements?