Questions
At the end of the year, Randy’s Parts Co. had the following items in inventory: Item...

At the end of the year, Randy’s Parts Co. had the following items in inventory:

Item Quantity Unit Cost Unit Market
Value
P1 60 $ 85 $ 90
P2 40 70 72
P3 80 130 120
P4 70 125 130



a. Determine the amount of ending inventory using the lower-of-cost-or-market rule applied to each individual inventory item.


b. Provide the adjustment necessary to write down the inventory based on Requirement a. Assume that Randy’s Parts Co. uses the perpetual inventory system.

c. Determine the amount of ending inventory, assuming that the lower-of-cost-or-market rule is applied to the total inventory in aggregate.

d. Provide the adjustment necessary to write down the inventory based on Requirement c. Assume that Randy’s Parts Co. uses the perpetual inventory system.

In: Accounting

Last year, 46% of business owners gave a holiday gift to their employees. A survey of...

Last year, 46% of business owners gave a holiday gift to their employees. A survey of business owners indicated that 30% plan to provide a holiday gift to their employees. Suppose the survey results are based on a sample of 60 business owners.

(a)

How many business owners in the survey plan to provide a holiday gift to their employees?
(b) Suppose the business owners in the sample do as they plan. Compute the p value for a hypothesis test that can be used to determine if the proportion of business owners providing holiday gifts has decreased from last year. If required, round your answer to four decimal places. If your answer is zero, enter “0”. Do not round your intermediate calculations.

c.

What is the smallest level of significance for which you could draw such a conclusion? If required, round your answer to four decimal places. If your answer is zero, enter “0”. Do not round your intermediate calculations.

The smallest level of significance for which we could draw this conclusion is ________?

In: Statistics and Probability

The mean per capita consumption of milk per year is 131 liters with a variance of...

The mean per capita consumption of milk per year is 131 liters with a variance of 841.

If a sample of 132 people is randomly selected, what is the probability that the sample mean would be less than  133.5 liters? Round your answer to four decimal places.

In: Statistics and Probability

You have a car loan that requires monthly payments of $300 for the first year and...

  1. You have a car loan that requires monthly payments of $300 for the first year and $500 per month during the second year. The annual rate on the loan is 12% and payments begin in one month. What is the present value?

In: Finance

Are births equally likely in each month of the year? Perform a complete test of hypothesis...

Are births equally likely in each month of the year? Perform a complete test of hypothesis using the data below from 2006. Please show calculator or excel steps used. Total: 4,265,555 January: 340,297 Feburary: 319,235 March: 356,786 April: 329,809 May: 355,437 June: 358,251 July: 367,934 August: 387,798 September: 374,711 October: 367,354 November: 351,832 December: 356,111

In: Statistics and Probability

2 For the current year, the average settlement period for trade receivables at Sisi Company was...

2 For the current year, the average settlement period for trade receivables at Sisi Company was 60 days. This figure is much higher than in previous years. What factors might have contributed to             this change in the ratio?                                                                                                                 (6)

In: Accounting

The home where I grew up was purchased by my father for $3,200 in the year...

The home where I grew up was purchased by my father for $3,200 in the year 1943. As of the year 2012, its market value was $850,000.

  1. Using the concepts of purchasing power, inflation, and price indexes how would you explain this tremendous increase in value?
  2. Are there any other possible outside factors besides the above which might also help explain the increase?

In: Economics

Abebio Limited is a listed company with a year end of 31 December 2019. A director...

Abebio Limited is a listed company with a year end of 31 December 2019. A director of the company has a number of questions relating to the application of International Financial Reporting Standards (IFRS Standards) in its financial statements for the year ended 31 December 2019. The questions appear in notes 1–3.
Note 1 – Pending legal cases
At a recent board meeting, we discussed legal cases which customers A and B are bringing against Abebio in respect of the supply of products which were allegedly faulty. We supplied the goods in the last three months of the financial year.
We have reliably estimated that if the actions succeed, we are likely to have to pay out GHS10 million in damages to customer A and GHS8 million in damages to customer B. Also, Abebio’s legal advisers have reliably estimated that there is a 60% chance that customer A’s claim will be successful and a 25% chance that customer B’s claim will be successful.
I know we have insurance in place to cover us against claims like this. It is highly probable that any claims which were successful would be covered under our policy. Therefore, I would have expected to see a provision for legal claims based on the likelihood of the claims succeeding. However, I would also have expected to see an equivalent asset in respect of amounts recoverable from the insurance company. The financial statements do contain a provision for GHS10 million but no equivalent asset. Disclosure of the information relating to both of the claims and the associated insurance is made in the notes to the financial statements.
Required:
Given the above facts, discuss the correct accounting treatment of the pending legal cases.
Note 2 – Non-current assets
When I look at the statement of financial position, one of the categories of non-current assets is ‘investment properties’ and another category is ‘property, plant and equipment’ – in which all other properties are included. Surely, we invest in all our properties, so why do we have two categories for them in the statement of financial position? How do we decide what goes into ‘property, plant and equipment’ and ‘investment properties’?
In addition, a note to the financial statements states that investment properties are measured at their fair values and not depreciated. Don’t all non-current assets have to be depreciated over their estimated useful lives? Another note states that property included in ‘property, plant and
equipment’ is measured at cost less accumulated depreciation rather than at fair value. Shouldn’t all properties be measured in the financial statements on a consistent basis? Don’t you think this is a clear violation of consistency concept?
Finally, I can’t immediately see from the financial statements where the gains or losses relating to the measurement of investment properties are included. The profit statement seems to include two main components – profit or loss and other comprehensive income. Where would the gains or losses go? Presumably, is the treatment of gains and losses the same for any non-current assets which are measured at fair value?
Required:
Given the above facts, discuss clearly what constitute ‘property, plant and equipment’ and investment property’. You are also required to explain the correct accounting treatment of revaluation gain and loss, and fair value gain and loss.
Note 3 – Inventory
Abebio Limited is a retailer of Italian furniture and has five major product lines: sofas, dining tables, beds, closets, and lounge chairs. At December 31, 2019, quantity on hand, cost per unit, and net realizable value (NRV) per unit of the product lines are as follows:
Required:
Product line
Sofas
Dining tables Bed
Closets Lounge chairs
Quantity on hand
100
200
300
400
500
Cost per unit
GHS 1,000 500 1,500 750 250
NRV per unit
GHS 1,020 450 1,600 770 200
Compute the valuation of the inventory of Abebio Limited at December 31, 2019, under IAS 2 using the “lower of cost and NRV” principle.

In: Accounting

A survey of several 8 to 10 year olds recorded the following amounts spent on a...

A survey of several 8 to 10 year olds recorded the following amounts spent on a trip to the mall:

$11.83,$24.11,$19.93,$15.34

Construct the 99% confidence interval for the average amount spent by 8 to 10 year olds on a trip to the mall. Assume the population is approximately normal.

In: Statistics and Probability

Shannon Industries is considering a project that has the following cash flows :    Year CF...

Shannon Industries is considering a project that has the following cash flows :   

Year

CF

0

-6240

1

1980

2

3750

3

?

4

1000

The project has a payback of 2.25 years.
The firm’s cost of capital is 9.3 percent. What is the project’s net present value (NPV)?

In: Finance