Comprehensive Accounting Cycle Review
15.ACR Quigley Corporation's trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below.
| Debit | Credit | |
|---|---|---|
| Cash | $ 25,500 | |
| Accounts Receivable | 51,000 | |
| Inventory | 22,700 | |
| Land | 65,000 | |
| Buildings | 95,000 | |
| Equipment | 40,000 | |
| Allowance for Doubtful Accounts | $ 450 | |
| Accumulated Depreciation—Buildings | 30,000 | |
| Accumulated Depreciation—Equipment | 14,400 | |
| Accounts Payable | 19,300 | |
| Interest Payable | -0- | |
| Dividends Payable | -0- | |
| Unearned Rent Revenue | 8,000 | |
| Bonds Payable (10%) | 50,000 | |
| Common Stock ($10 par) | 30,000 | |
| Paid-in Capital in Excess of Par—Common Stock | 6,000 | |
| Preferred Stock ($20 par) | -0- | |
| Paid-in Capital in Excess of Par—Preferred Stock | -0- | |
| Retained Earnings | 75,050 | |
| Treasury Stock | -0- | |
| Cash Dividends | -0- | |
| Sales Revenue | 570,000 | |
| Rent Revenue | -0- | |
| Bad Debt Expense | -0- | |
| Interest Expense | -0- | |
| Cost of Goods Sold | 400,000 | |
| Depreciation Expense | -0- | |
| Other Operating Expenses | 39,000 | |
| Salaries and Wages Expense | 65,000 | |
| Total | $803,200 | $803,200 |
Unrecorded transactions and adjustments:
Instructions
(Ignore income taxes.)
(a)
Prepare journal entries for the transactions and adjustment listed above.
(b)
Prepare an updated December 31, 2020, trial balance, reflecting the journal entries in (a).
Total $871,200
In: Accounting
The market for Wolverine Root Beer is shown in the following demand and supply schedules:
Price (6-pack of Wolverine Root Beer) Quantity Demanded Quantity Supplied
5.00 300 300
4.50 400 250
4.00 600 200
3.50 900 150
3.00 1400 100
Draw a graph to illustrate the market demand and supply for Wolverine Root Beer. What is the equilibrium price and quantity? Describe the situation that would result if the price of Wolverine Root Beer was $4.00.
Gertrude loves both Wolverine Root Beer and Spartan Root Beer. What if she goes shopping and finds that Wolverine Root Beer's price has just risen from $3.00 to $4.00 a six-pack. What effect will this have on her demand for Spartan Root Beer? Why? Use words and graphs to show what will happen in both the Wolverine and Spartan root beer markets (use separate graphs for each product).
Gertrude enjoys eating hot dogs with her root beer (all brands of root beer). What effect would rise in the price of hot dogs have on her demand for root beer? Why? Again, use words and a graph for the root beer market to demonstrate your answer.
Wolverine and Spartan root beer are the best root beers according to the Root Beer Review. But to save money Gertrude usually buys the generic store brand root beer – People’s Choice brand- that is also sold where Gertrude shops. Suppose that Gertrude gets a promotion and a big pay raise at work. What will this do to her demand for generic root beer? Draw a graph of the generic root beer market and explain what happened and why.
A manufacturer can produce hot dog buns and hamburger buns using similar production technology. Suppose that, ceteris paribus, the price of hamburgers rises dramatically. How will this affect the production decisions of this manufacturer? Use a graph to show the effect on the hot dog bun market.
In Canada, the city government in Vancouver introduced rent controls in the rental housing market in after the New Democratic Party took over. Explain what kind of price control is rent control (floor or ceiling). Draw a graph and explain what the situation was like before and after the new government took over.
Hip urban coffee shops with wi-fi, comfy couches and spaces to socialize are found to increase productivity and innovation in a wide variety of local industries whether or not their employees actually go to the coffee shops. What type of externality (or spillover) does this create and what policy should be enacted? In words and a graph, explain how resources are misallocated (over- or under-allocated) and the action the government should take.
In: Economics
Answer ALL questions
Section A
Question 1
a) The HY group acquired 35% of the equity share capital of SX on 1
July 2019 paying R70,000. This shareholding enabled HY group to
exercise significant influence over SX.
At 1 July 2019 the equity of SX comprised:
R
R1 equity shares 100,000
Retained earnings 50,000
SX made a profit for the year ended 30 June 2020 (prior to dividend
distribution) of R130,000 and paid a dividend of R80,000 to its
equity shareholders.
Calculate the value of HY’s investment in SX for inclusion in its
consolidated statement of financial position at 30 June 2020.
(Total for sub-question (a) = 5 marks)
b) CD had 5,000,000 R1 ordinary shares in issue. Subsequently, CD
made a rights issue of 1 new ordinary share at R3.50 per share for
every 5 ordinary shares currently held. At the same date CD’s
ordinary shares were trading at R4.75.
Required:
(i) Explain the difference between a bonus issue and a rights issue
of shares.
(ii) Prepare the journal entries required to record CD’s rights
issue in its financial records, assuming that all rights were taken
up.
(Total for sub-question (d) = 5 marks)
c) HI, a parent entity, is planning to acquire a shareholding in
ABC. The following
alternative investment strategies are being considered:
(i) HI can purchase 80,000 preferred shares in ABC;
(ii) HI can purchase 40,000 equity shares and 50,000 preferred
shares in ABC;
(iii) HI can purchase 70,000 equity shares in ABC and no preferred
shares.
ABC has the following issued share capital:
R
R1 Equity shares 100,000
R1 10% Preferred Shares 100,000
Holders of preferred shares do not have any votes at annual general
meetings.
Required:
Identify with reasons how HI would classify its investment in ABC
in its consolidated financial statements for each of the
alternative investment strategies. (Total for sub-question (e) = 5
marks)
d) Keswick Co acquired 80% of the share capital of Derwent Co on 1
June 20X5. The summarised draft statements of profit or loss for
Keswick Co and Derwent Co for the year ended 31 May 20X6 are shown
below:
Keswick Co Derwent Co
R000 R000
Revenue 8,400 3,200
Cost of sales (4,600) (1,700)
–––––– ––––––
Gross profit 3,800 1,500
Operating expenses (2,200) (960)
–––––– ––––––
Profit before tax 1,600 540
Tax (600) (140)
–––––– ––––––
Profit for the year 1,000 400
–––––– ––––––
During the year Keswick Co sold goods costing R1,000,000 to Derwent
Co for R1,500,000. At 31 May 20X6, 30% of these goods remained in
Derwent Co’s inventory.
Required:
(a) Prepare the Keswick group consolidated statement of profit or
loss for the year ended 31 May 20X6. Note: The statement should
stop once the consolidated profit for the year has been determined.
The amounts attributable to the non-controlling interest and equity
owners of Keswick are not required. Show all workings as credit
will be awarded to these as appropriate.
(b) Which of the following formulas describes the amount to be
entered in the consolidated statement of profit or loss as ‘Profit
attributable to: Equity owners of Keswick Co’?
A Group profit after tax – non-controlling interest
B Group profit after tax + non-controlling interest
C Keswick Co’s profit after tax
D Group profit after tax
(c) What amount should be shown in the consolidated statement of
profit or loss for the non-controlling interest?
In: Accounting
Item 1
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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To summarize, the elaboration model of instruction starts by presenting knowledge at a very general or simplified level in the form of a special kind of overview. Then it proceeds to add detail or complexity in "layers" across the entire breadth of the content of the course (or curriculum), one layer at a time, until the desired level of detail or complexity is reached. References: |
They soon switched to a model based on the elaboration theory (Reigeluth, 1999). Using this approach, the game would begin with a level that offered the simplest version of the whole task (the epitome); subsequent levels would become increasingly more complex--an approach common to videogames--with opportunities for review and synthesis. References: |
Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
This is not plagiarism
Hints
Item 2
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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Other major issues involve the accepted methods by which fidelity is measured. There are two major methods described in the literature for fidelity measurement. The first is through mathematical measurement that calculates the number of identical elements shared between the real world and the simulation; the greater the number of shared identical elements, the higher the simulation fidelity. A second method to measure fidelity is through a trainees' performance matrix. References: |
Liu et al. (2009) identified two major methods for measuring fidelity. The first is a mathematical (objective) method that requires counting "the number of identical elements shared between the real world and the simulation; the greater the number of shared identical elements, the higher the simulation fidelity" (p. 62). The second method involves a performance matrix that compares a human's performance in the simulation with that person's real-world performance, producing an indirect measure of fidelity. References: |
Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
This is not plagiarism
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Item 3
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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Student Version |
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Educational researchers, policymakers, and practitioners agree that educational research is often divorced from the problems and issues of everyday practice--a split that creates a need for new research approaches that speak directly to problems of practice (National Research Council [NRC], 2002) and that lead to the development of "usable knowledge" (Lagemann, 2002). Design-based research (Brown, 1992; Collins, 1992) is an emerging paradigm for the study of learning in context through the systematic design and study of instructional strategies and tools. We argue that design-based research can help create and extend knowledge about developing, enacting, and sustaining innovative learning environments. References: |
A decade later, researchers interested in studying learning in naturalistic settings (inspired by Brown's approach) began a concerted effort to define the standards and argue the legitimacy of this type of research through design. For example, the Design-Based Research Collective defined design-based research (DBR) as "an emerging paradigm for the study of learning in context, through the systematic design and study of instructional strategies and tools" (DBRC, 2003, p. 5). References: |
Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
This is not plagiarism
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Item 4
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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The study of learning derives from essentially two sources.Because learning involves the acquisition of knowledge, the first concerns the nature of knowledge and how we come to know things.... The second source in which modern learning theory is rooted concerns the nature and representation of mental life. References: |
The study of learning derives from essentially two sources. The first concerns the nature of knowledge and how we come to know things. The second source concerns the nature and representation of mental life.
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Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
This is not plagiarism
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Item 5
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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Original Source Material |
Student Version |
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In examining the history of the visionary companies, we were struck by how often they made some of their best moves not by detailed strategic planning, but rather by experimentation, trial and error, opportunism, and--quite literally--accident. What looks in hindsight like a brilliant strategy was often the residual result of opportunistic experimentation and "purposeful accidents." References: |
When I look back on the decisions I've made, it's clear that I made some of my best choices not through a thorough analytical investigation of my options, but instead by trial and error and, often, simply by accident. The somewhat random aspect of my success or failure is, at the same time, both encouraging and scary. |
Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
This is not plagiarism
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Item 6
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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A communication channel is the means by which messages get from one individual to another.The nature of the information-exchange relationship between a pair of individuals determines the conditions under which a source will or will not transmit the innovation to the receiver and the effect of such a transfer. References: |
Rogers places great importance on the sharing of information about an innovation. He defines a communication channel as "the means by which messages get from one individual to another" (p. 18). He describes two general media channels of communication: mass media and interpersonal; and two scopes of channels: localite and cosmopolite. References: |
Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
This is not plagiarism
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Item 7
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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The philosophical position known as constructivism views knowledge as a human construction. The various perspectives within constructivismare based on the premise that knowledge is not part of an objective, external reality that is separate from the individual. Instead, human knowledge, whether the bodies of content in public disciplines (such as mathematics or sociology) or knowledge of the individual learner, is a human construction. References: |
Does knowledge exist outside of, or separate from, the individual who knows? Constructivists argue that "... human knowledge, whether the bodies of content in public disciplines (such as mathematics or sociology) or knowledge of the individual learner, is a human construction." References: |
Which of the following is true for the Student Version above?
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Item 8
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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Precedent is also described as "the unique knowledge embedded in a known design" (Oxman, 1994, p. 146), meaning, in everyday terms, that the memory of having experienced an existing design is a memory that contains special forms of knowledge... At heart, the design case is a description of a real artifact or experience that has been intentionally designed. A case may be as minimal as an individual image of a commercial product, a building, an advertisement, a classroom or anything else designed; these forms of design cases appear in hundreds of magazines, design annuals, competition catalogs, display books, web portfolios and similar venues. References: Boling, E. (2010). The need for design cases: Disseminating design knowledge. International Journal of Designs for Learning, 1 (1), 1-8. |
According to Boling (2010, p. 2), "At heart, the design case is a description of a real artifact or experience that has been intentionally designed." She explains that the primary goal of a design case is to provide designers with precedent--defined by Oxman as "the unique knowledge embedded in a known design" (as quoted in Boling, 2010, p. 2). She further explains that expert designers are aware of numerous precedents which may be helpful in future designs. For example, educational game designers can view unique cases of game designs as precedents, which, in turn, may facilitate design of new games. References: Boling, E. (2010). The need for design cases: Disseminating design knowledge. International Journal of Designs for Learning, 1 (1), 1-8. |
Which of the following is true for the Student Version above?
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Item 9
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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The study of learning derives from essentially two sources.Because learning involves the acquisition of knowledge, the first concerns the nature of knowledge and how we come to know things.... The second source in which modern learning theory is rooted concerns the nature and representation of mental life. References: |
Driscoll (2000) concludes that "the study of learning derives from essentially two sources... The first concerns the nature of knowledge and how we come to know things.... The second ... concerns the nature and representation of mental life" (p. 10).
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Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
This is not plagiarism
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Item 10
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button.
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It is helpful to think in terms of two basic kinds of change: piecemeal and systemic. Piecemeal change leaves the structure of a system unchanged. It often involves finding better ways to meet the same needs, such as using an analogy to help your students learn the science concepts you taught in an otherwise similar manner last year. In contrast, systemic change entails modifying the structure of a system, usually in response to new needs. References: |
Reiguleth (1999) mentions two different kinds of change: Piecemeal and Systemic change. Systemic change entails modifying the structure of a system, in order to meet new needs. In contrast, piecemeal change leaves the structure of a system unchanged. For example, new innovations instead of traditional methods could be used to engage students in learning. |
Which of the following is true for the Student Version above?
Word-for-Word plagiarism
Paraphrasing plagiarism
This is not plagiarism
In: Psychology
On June 15, 2018, Sanderson Construction entered into a
long-term construction contract to build a baseball stadium in
Washington, D.C., for $310 million. The expected completion date is
April 1, 2020, just in time for the 2020 baseball season. Costs
incurred and estimated costs to complete at year-end for the life
of the contract are as follows ($ in millions):
| 2018 | 2019 | 2020 | |||||||
| Costs incurred during the year | $ | 70 | $ | 60 | $ | 30 | |||
| Estimated costs to complete as of December 31 | 130 | 30 | — | ||||||
Required:
1. Compute the revenue and gross profit will
Sanderson report in its 2018, 2019, and 2020 income statements
related to this contract assuming Sanderson recognizes revenue over
time according to percentage of completion.
2. Compute the revenue and gross profit will
Sanderson report in its 2018, 2019, and 2020 income statements
related to this contract assuming this project does not qualify for
revenue recognition over time.
3. Suppose the estimated costs to complete at the
end of 2019 are $120 million instead of $30 million. Compute the
amount of revenue and gross profit or loss to be recognized in 2019
using the percentage of completion method.
Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. (Enter your answers in millions. Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.)
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Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time. (Enter your answers in millions. Loss amounts should be indicated with a minus sign.)
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In: Accounting
Your friend, Jane Lee, recently won the Lotto Max and is planning to sell her business and move to England. Jane owns the Vancouver Running Centre Inc. (Centre) that offers training and running clinics. She has provided you with the trial balance for the year ended October 31, 2018 (the company’s year-end).
Vancouver Running Centre Inc.
Unadjusted Trial Balance
October 31, 2020
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Account Name |
Trial Balance |
||||
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DR |
CR |
||||
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Cash |
$ 43,000 |
||||
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Accounts Receivable |
25,000 |
||||
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Inventory |
54,000 |
||||
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Supplies |
2,500 |
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Prepaid Insurance |
4,800 |
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Computer equipment |
52,000 |
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Accumulated Depreciation |
6,000 |
||||
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Bank loan |
$ 15,000 |
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Accounts Payable |
17,000 |
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Unearned Revenue |
30,000 |
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Common Shares |
25,000 |
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Retained Earnings |
0 |
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Dividends Declared |
15,000 |
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Revenue earned |
320,300 |
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Cost of goods sold |
47,000 |
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Wage expense |
78,000 |
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Interest expense |
5,000 |
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Advertising expense |
7,500 |
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Depreciation expense |
2,000 |
||||
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Telephone expense |
8,000 |
||||
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Rent expense |
60,000 |
||||
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Supplies expense |
9,500 |
||||
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Total |
$413,300 |
$413,300 |
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Required:
She has asked you to review the trial balance and the additional information and prepare any adjusting journal entries you believe are necessary to ensure the accounts are complete and accurate in accordance with Generally Accepted Accounting Principles. Place your responses together with supporting calculations in the table provided. Explanations are not required.
1) The computer equipment is in excellent shape. It was purchased on July 1, 2019 and is expected to have a useful life of 4 years at which time it is expected to be sold for $4,000.
2) On February 1, 2020, Centre received and recorded in Revenue Earned a $20,000 cash advance from the Richmond School Board. The payment covers marathon training for the eight-month period starting July 1, 2020.
3) Each of Centre’s employees is paid $1,500 every two weeks – i.e.10 days of work. The six employees did not receive a pay cheque for the last seven working days of October 2020, as the bookkeeper was ill. The amounts were both recorded and paid upon her return on November 4, 2020.
6) On January 1, 2020 Centre purchased a two-year liability insurance policy for $4,800.
7) A letter from Centre’s landlord dated October 25, 2020 demands a total of $18,000 to be paid to cover the rent for the months of September to November 2020 inclusive. Centre’s monthly rent expense has been constant for the past three years.
8) Supplies on hand at October 31, 2020 are estimated at $3,500.
In: Accounting
This is a study on minimum wage and poverty thresholds. I have included the procedure for one year, 2009, below. You will calculate all variables for all years 1968 – 2013. You will have three graphs. Check the attached excel data sheet to see what info. you already have. You will need to calculate a few variables for each year. Use the excel data sheet to do quick and easy cut and paste formulas. If you need help, or are hyperventilating now, just drop me a line or come by the office. JB
Step 1. Start off by using the 2009 and 2010 data. You have this data on the excel data sheet:
(NMW, H2 and H4 are nominal variables)
Step 2. Convert nominal minimum wage (NMW) to real minimum wage (RMW).
Minimum wage (NMW) from data source in 2009 = $______, the CPI for 2009 = ______
Formula 1: RMW= NMW/CPI in hundredths
_____________ for 2009
Step 3. Calculate yearly percent change in RMW (PP). % chg PP represents annual percent change in purchasing power.
Formula 2: % chg PP from 2009 to 2010:
= (RMW in 2010–RMW in 2009)/RMW in 2009) x 100, = _____________________; an (increase or decrease) in purchasing power.
Step 4. Calculate the yearly percentage change in the CPI (INFLT). INFLT represents annual percent change in inflation.
Formula 3: INFLT from 2009 to 2010:
= (CPI2010 – CPI2009/ CPI2009 x 100;
= (CPIY2011 – CPI2010)/ CPI2010 x 100;
= __________________, an (increase or decrease) in inflation from 2009 to 2010
Step 5. Graph 1. For every year, graph % chg in PP and Inflation (INFLT) on the same graph. Title of graph should be Trend in Purchasing Power and Inflation for Selected Years
Step 6. Calculate real annual income 1(INC1): RMW x 40 hours per week x 50 weeks per year.
Formula 4: INC1 for 2009 = ______________, H2 =________ , this is a nominal value
Formula 5: Convert to real value (RH2) = h2/CPI (2009) in hundredths = _______________
| Year | NMW | CPI-U | H2 | H4 | CPI/100 | RMW | % chg pp | inflation rate | INC1 | rh2 | INC1PCTRH2 | INC1PCTR4 | rh4 | INC2PCTRH2 | INC2PCTRH4 | ||
| 1968 | 1.6 | 34.8 | 2262 | 3553 | |||||||||||||
| 1970 | 1.6 | 38.8 | 2525 | 3968 | |||||||||||||
| 1972 | 1.6 | 41.8 | 2724 | 4275 | |||||||||||||
| 1976 | 2.3 | 56.9 | 3711 | 5815 | |||||||||||||
| 1979 | 2.9 | 72.6 | 4725 | 7412 | |||||||||||||
| 1980 | 3.1 | 82.4 | 5363 | 8414 | |||||||||||||
| 1981 | 3.35 | 90.9 | 5917 | 9287 | |||||||||||||
| 1988 | 3.35 | 118.3 | 7704 | 12092 | |||||||||||||
| 1991 | 3.8 | 136.2 | 8865 | 13924 | |||||||||||||
| 1992 | 4.25 | 140.3 | 9137 | 14335 | |||||||||||||
| 1994 | 4.25 | 148.2 | 9661 | 15141 | |||||||||||||
| 1996 | 4.25 | 156.9 | 10233 | 16036 | |||||||||||||
| 1997 | 4.75 | 160.5 | 10473 | 16400 | |||||||||||||
| 1998 | 5.15 | 163 | 10634 | 16660 | |||||||||||||
| 2000 | 5.15 | 172.2 | 11239 | 17603 | |||||||||||||
| 2001 | 5.15 | 177.1 | 11569 | 18104 | |||||||||||||
| 2002 | 5.15 | 179.9 | 11756 | 18392 | |||||||||||||
| 2003 | 5.15 | 184 | 12015 | 18810 | |||||||||||||
| 2004 | 5.15 | 188.9 | 12334 | 19307 | |||||||||||||
| 2005 | 5.15 | 195.3 | 12755 | 19971 | |||||||||||||
| 2006 | 5.15 | 201.6 | 13167 | 20614 | |||||||||||||
| 2007 | 5.15 | 207.3 | 13540 | 21203 | |||||||||||||
| 2008 | 5.85 | 215.3 | 14051 | 22025 | |||||||||||||
| 2009 | 6.55 | 214.5 | 13991 | 21954 | |||||||||||||
| 2010 | 7.25 | 218.1 | 14218 | 22314 | |||||||||||||
| 2011 | 7.25 | 224.9 | 14657 | 23021 | |||||||||||||
| 2012 | 7.25 | 229.6 | 14937 | 23492 | |||||||||||||
| 2013 | 7.25 | 233 | 15156 | 23836 |
In: Economics
Problem 21-43 (LO. 7, 8, 11)
Phoebe and Parker are equal members in Phoenix Investors, LLC. They are real estate investors who formed the LLC several years ago with equal cash contributions. Phoenix then purchased a parcel of land. Phoenix holds all land for investment.
On January 1 of the current year, to acquire a one-third interest in the entity, Reece contributed to the LLC some land she had held for investment. Reece purchased the land five years ago for $120,000; its fair market value at the contribution date was $90,000. No special allocation agreements were in effect before or after Reece was admitted to the LLC. A few years later, Phoenix sold the land contributed by Reece for $84,000.
Immediately before Reece's property contribution, the balance sheet of Phoenix Investors, LLC, was as follows:
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Problem 21-51 (LO. 3, 7, 9, 10) Suzy contributed assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in Suz-Anna GP (a general partnership in which both partners are active owners). Anna contributed land and a building valued at $640,000 (basis of $380,000) in exchange for the remaining 60% interest. Anna's property was encumbered by qualified nonrecourse financing of $100,000, which was assumed by the partnership. The partnership reports the following income and expenses for the current tax year:
During the current tax year, Suz-Anna refinanced the land and building (i.e., the original $100,000 debt was repaid and replaced with new debt). At the end of the year, Suz-Anna held recourse debt of $100,000 for partnership accounts payable (recourse to the partnership but not personally guaranteed by either of the partners) and qualified nonrecourse financing of $200,000. a. Suzy's beginning basis in her partnership interest is $, and Anna's basis is $. b. Enter the amounts and line number for the following items that will appear on Suzy's Schedule K-1.
What income, deduction, and taxes does Suzy report on her tax
return? c. Assume all partnership debts are shared proportionately. Suzy's year-end basis in her partnership interest is $, and Suzy's amount at risk is $. |
a. Regarding the land sale, how much is recognized and how is it allocated?
On the land sale, under § 704(c), $ of unrealized gain or loss at the contribution date on property contributed for an LLC interest is allocated to .
b. Complete the balance sheet reflecting basis and fair market value for the LLC immediately after the land sale.
|
c. Prepare schedules that roll the partners' capital accounts forward from before to immediately after the sale. Prepare two schedules: tax basis and fair market value.
If an amount is none, enter "0".
|
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Prepare the schedule that shows the computation of the fair market value of each LLC member's capital account.
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In: Accounting
Condensed balance sheet and income statement data for Swifty Corporation appear below:
|
SWIFTY CORPORATION |
||||||
|
2021 |
2020 |
2019 |
||||
| Cash |
$ 27,500 |
$ 23,500 |
$ 18,500 |
|||
| Accounts receivable |
50,500 |
50,000 |
48,500 |
|||
| Other current assets |
94,500 |
95,500 |
65,000 |
|||
| Property, plant, and equipment (net) |
530,000 |
471,500 |
401,000 |
|||
|
$702,500 |
$640,500 |
$533,000 |
||||
| Current liabilities |
$ 71,500 |
$ 77,500 |
$ 70,000 |
|||
| Long-term debt |
77,500 |
84,500 |
46,500 |
|||
| Common shares |
318,000 |
280,000 |
287,000 |
|||
| Retained earnings |
235,500 |
198,500 |
129,500 |
|||
|
$702,500 |
$640,500 |
$533,000 |
||||
|
SWIFTY CORPORATION |
||||
|
2021 |
2020 |
|||
| Sales revenue |
$790,000 |
$741,000 |
||
| Less: Sales returns and allowances |
36,000 |
59,000 |
||
| Net sales |
754,000 |
682,000 |
||
| Cost of goods sold |
411,500 |
375,000 |
||
| Gross profit |
342,500 |
307,000 |
||
| Operating expenses (including income taxes) |
201,500 |
227,000 |
||
| Profit |
$ 141,000 |
$ 80,000 |
||
Additional information:
| 1. | The market price of Swifty’s common shares was $3.00, $4.00, and $7.00 for 2019, 2020, and 2021, respectively. | |
| 2. | All dividends were paid in cash. | |
| 3. | Weighted-average common shares were 35,000 in 2021 and 30,500 in 2020. |
1) Compute the following ratios for 2020 and 2021.
(Round asset turnover, earnings per share and price
earning ratio answers to 2 decimal places, e.g. 1.83 or 1.83% and
all other answers to 1 decimal place e.g. 1.5%.)
2)
Based on the ratios calculated, indicate the improvement or lack thereof in Swifty Corporation’s financial position and operating results from 2020 to 2021.
| Based on the ratios calculated, Swifty Corporation’s financial position and operating results from 2020 to 2021 is |
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Current Attempt in Progress
Condensed balance sheet and income statement data for Swifty Corporation appear below:
|
SWIFTY CORPORATION |
||||||
|
2021 |
2020 |
2019 |
||||
| Cash |
$ 27,500 |
$ 23,500 |
$ 18,500 |
|||
| Accounts receivable |
50,500 |
50,000 |
48,500 |
|||
| Other current assets |
94,500 |
95,500 |
65,000 |
|||
| Property, plant, and equipment (net) |
530,000 |
471,500 |
401,000 |
|||
|
$702,500 |
$640,500 |
$533,000 |
||||
| Current liabilities |
$ 71,500 |
$ 77,500 |
$ 70,000 |
|||
| Long-term debt |
77,500 |
84,500 |
46,500 |
|||
| Common shares |
318,000 |
280,000 |
287,000 |
|||
| Retained earnings |
235,500 |
198,500 |
129,500 |
|||
|
$702,500 |
$640,500 |
$533,000 |
||||
|
SWIFTY CORPORATION |
||||
|
2021 |
2020 |
|||
| Sales revenue |
$790,000 |
$741,000 |
||
| Less: Sales returns and allowances |
36,000 |
59,000 |
||
| Net sales |
754,000 |
682,000 |
||
| Cost of goods sold |
411,500 |
375,000 |
||
| Gross profit |
342,500 |
307,000 |
||
| Operating expenses (including income taxes) |
201,500 |
227,000 |
||
| Profit |
$ 141,000 |
$ 80,000 |
||
Additional information:
| 1. | The market price of Swifty’s common shares was $3.00, $4.00, and $7.00 for 2019, 2020, and 2021, respectively. | |
| 2. | All dividends were paid in cash. | |
| 3. | Weighted-average common shares were 35,000 in 2021 and 30,500 in 2020. |
Compute the following ratios for 2020 and 2021. (Round asset turnover, earnings per share and price earning ratio answers to 2 decimal places, e.g. 1.83 or 1.83% and all other answers to 1 decimal place e.g. 1.5%.)
|
2021 |
2020 |
|||||
| Profit margin | % | % | ||||
| Asset turnover | times | times | ||||
| Earnings per share |
$ |
$ |
||||
| Price-earnings ratio | times | times | ||||
| Payout ratio | % | % | ||||
| Debt to total assets | % | % | ||||
| Gross profit margin | % | % | ||||
In: Accounting
Typifying Tanzania’s Upward Trajectory
A company that incites financial innovation and socioeconomic development, Barclays Bank Tanzania is gearing up for a new, exciting chapter in its already illustrious history.
The 1990s will go down as a crucial decade in Tanzania history.
A 10-year period characterized by political, social and economic transformation, it witnessed the country’s first successful multi-party election in 1995 and the signing of the progressive East African Community Treaty in 1999 – a cooperative commercial and political agreement between Tanzania, Kenya, and Uganda. The Tanzanian banking sector also embarked on a plan for financial liberalization at this time, part of a country-wide effort to sustain positive economic growth. Through the mobilization of financial resources and bolstered competition this was achieved facilitating greater freedoms amongst domestic banks and welcoming international players that helped to improve the availability of financial services and the quality of existing services. One such enterprise that has risen to the fore as a result is Barclays Bank Tanzania – a firm that has thrived since establishing a national footprint at the turn of the millennium. “The banking industry continues to undergo significant transformation in Tanzania and across the region, driven to a large extent by changing customer demographics, technological advancements and innovation,” explains Abdi Mohamed, the organisation’s Chief Executive Officer. “It’s critical to the growth of the economy, playing a pivotal role in supporting the government’s growth agenda.” A fully-fledged commercial bank serving the retail, business and corporate segments, Barclays has become a spearhead of the progressions that Mohamed refers to. Offering a full suite of deposit and lending products targeted to all key sectors of the economy, the business is well represented across the country with a network of 15 branches and an ATM network of 62. “We’re proud of our relentless focus on customers, competitive products, digital channels and our talented and diverse workforce,” Mohamed adds.
Employee power
The latter of these core focus areas has proven to be crucial to the success of Barclays Tanzania. The company pays particular attention to its employment, training and talent retention strategies, evidenced by its emphasis on providing young people with opportunities. “Young people bring special qualities that enhance diversity in the workplace,” explains Mohamed. They’re often brave, passionate and ready to take on new challenges and inject new ideas – qualities which are critical in finding solutions to today’s problems. “They tend to learn more quickly and have the ability to adapt to change. It is this knack for self-learning and adaptability that we look to explore with the vision of developing great leaders of tomorrow.” These attitudes bode well with its citizenship agenda that again seeks to develop local talent. The company ensures it provides an abundance of opportunities to its workforce, recognising the importance of keeping its skilled staff energised and happy. To this end, the firm has developed a three-stage strategy of hiring, developing and holding onto its best workers. “This people-centric plan includes a multitude of elements,” Mohamed explains. “We pay for performance and provide long term incentives for select organisational leaders over a three-year period, owed to the belief that exceptional staff contribute significantly to our business outcomes. We also consistently benchmark our offerings against the rest of the market, uphold employee engagement to the highest of standards and promote diversity wherever possible.”
Admirable social commitments
The mention of diversity leads the CEO to highlight the firm’s empowerment ethos, the company having developed tailored programmes that support up and coming female leaders and running training partnerships with external entities such as Duke University and the International Institute for Management Development. This responsible, progressive, conscious approach to development does not only apply internally, however. Equally, Barclays Tanzania is positioned as an active force for good, viewing citizenship as a fundamental part of its overall strategy. “We’re all about bringing possibilities to life as we support initiatives that help upskill, empower people and play a part in changing, developing and solving communities’ challenges,” Mohamed explains. These efforts fall under a series of distinct citizenship pillars, the first being enterprise development. The CEO reveals: “We have empowered 810 youth living with and affected by HIV/AIDS by upskilling and training them on entrepreneurship skills. Further, more than 600 young people have benefitted from entrepreneurial skills projects via our incubation and acceleration initiatives.” The company’s education efforts are similarly extensive, having sponsored 25 students for their undergraduate studies at the University of Dar es Salaam and Tanzania Institute of Accountancy. “400 graduates have also been trained on work skills under our placement programmes, and we’ve helped to empower more than 5,000 young people through our ReadytoWork programme,” Mohamed adds. In total, Barclays Tanzania has invested more than a billion Tanzanian shillings ($440,000) in social upliftment efforts over the past four years, be it on donations, education skills, natural disasters, enterprise development and/or financial skills. Additionally, 95 percent of its staff have taken time to share their skills and support communities, particularly hospitals, orphans and other disadvantage children. “We take these commitments very seriously, ensuring that we make a difference in people’s lives,” the Chief Executive reiterates.
A brighter future
Corporate social responsibility aside, the company’s investments extend into a variety of other areas as it seeks to bolster not only surrounding communities but equally its own offerings. Digitisation, for example, is a core part of the firm’s agenda across all business segments right now. “With the future of banks being digital, we have to give our customers products and services that speak to that,” Mohamed reveals. “Within the next six months, you can expect to see a lot of exciting innovations become part of our portfolio.” A major rebrand is also underway for Barclays Tanzania as it gears up to incorporate the name of its parent company, Absa Group Limited. “This is very high on our list of priorities,” Mohamed affirms, stating that Absa’s warm, vibrant red colour palette will soon be appearing across its branches and ATMs during the remainder of 2019 and beyond. “The process is subject to regulatory approvals and we thank our regulators for the ongoing support. “It’s a deliberate move from Absa Group to rebrand all its operations to Absa, as was announced in July 2018. Our legacy will serve us well for the future, and as we enter a new era, you can expect to see the energy and the vibrancy of the Absa brand taking us to new levels.” This rebrand and digital drive combined, the CEO and Barclays Tanzania have every right to be optimistic for the future as the bank becomes ever-more focused on driving value for an ever-widening customer base. Mohamed concludes, once again highlighting the positive climate that is facilitating the firm’s continual transformation: “We’ve seen an increase in industry profitability over the last couple of years, and the overall outlook remains positive. “GDP growth rates, inflation and foreign exchange rates all remain within the target range, and the economy is well diversified with a debt to GDP ratio that is within expectations. “We’re certainly excited about the direction of both country and company as we prepare for an incredible journey of brand transformation.” Source: https://www.africaoutlookmag.com/outlook-features/barclays-bank-tanzania
BASED ON THE ARTICAL ABOVE, DISCUSS HOW BARCLAYS BANK TANZANIA CAN USE ANSOFF'S MATRIX AS A BASIS FOR GROWING THE BRAND IN THE FUTURE.
YOUR ANSWER SHOULD INCLUDE THE FOLLOWING:
A) EXISTING MARKET PENETRATION STRATEGY
B) NEW PRODUCT DEVELOPMENT STRATEGY
C) NEW MARKET DEVELOPMENT STRATEGY
D) DIVERSIFICATION STRATEGY
20 MARKS
In: Economics