Short answer question:

Mr. Jones needs to send a shipment from China to the United States. His boss asks him to prepare a set of potential crash options for accomplishing this in 5 days, 4 days, 3 days, 2 days, and 1 day. He calls an air transport company and finds out that the shipment can be flown in one day for a cost of $1000. Then he calls an ocean shipping company and finds out that it can be transported in 5 days for a cost of $200. He uses these two numbers to find the slope: it costs $800 more to reach the US 4 days earlier, or $200 per day. Then, he uses the slope to calculate the cost of a 4-day trip ($400), a 3- day trip ($600), and a 2-day trip ($800). What is wrong with Mr. Jones’s approach?

The Article"Amazon Profit Falls as Pandemic-Related Costs Rise"

NEW YORK — Amazon’s sales soared in the first three months of the year, as more homebound people shopped online amid the coronavirus pandemic.

But getting millions of packages to shopper’s doorsteps is expensive. The rising costs pushed Amazon’s first-quarter profit down 29% and its earnings missed Wall Street expectations. Amazon shares slipped about 5% in after-hours trading April 30.

And CEO and founder Jeff Bezos says Amazon will spend more.

Bezos said he expects the company to spend $4 billion “and perhaps a bit more” in the second quarter. That money will go to pay workers overtime, to buy masks or other safety protection for them and to disinfect Amazon’s vast warehouses where orders are packed and shipped.

Still, the company is in better financial position than most traditional retailers. Macy’s, Kohl’s and Gap temporarily closed their stores, losing much of their sales. They also have stopped paying their workers.

Amazon, whose reputation is built on speedy deliveries, has struggled to keep up with the surge in orders. Deliveries that took two days or less can now take a week or longer. And it is sold out of many of the products people need, like toilet paper and disinfectant sprays.

The problem, Amazon said, is that it can’t get products into its warehouses and out again fast enough. The company doesn’t know when delivery times will return to normal.

“Right now, things are still so up in the air that I can’t really project when that day will be,” said Brian Olsavsky, Amazon’s chief financial officer.

It has hired 175,000 people to try to keep up with the rush of orders and is paying workers an extra $2 an hour. But many have stayed home, worried they may contract the virus at the warehouse where thousands of people work. Some have protested what they said were unsafe conditions.

In France, a court closed all six Amazon warehouses, saying that the company didn’t do enough to protect workers. Amazon has said it provides workers with face masks, has been checking temperatures and keeps workers apart.

Overall, the Seattle-based company reported net income of $2.54 billion in the first quarter, compared with $3.56 billion a year ago. Earnings per share came to $5.01, below the $6.23 analysts expected, according to FactSet.

Revenue rose 26% to $75.45 billion, beating the $73.7 billion analysts expected.

Outside of online shopping, Amazon’s other businesses also grew. Revenue at its cloud computing business, which helps powers video streaming site Netflix and other companies, rose 33%.

At Whole Foods, revenue rose 8%. Amazon said much of the sales increase happened in March, when shoppers headed to Whole Foods to stock up on groceries due to the pandemic.

Its total workforce topped 840,000 at the end of March, adding more than 42,000 employees since the end of last year. Amazon.com Inc. is the second-largest U.S.-based employer behind Walmart.

Summarize and describe importance of story. What are the implications for this story on the future? The story should be three robust paragraphs

Sales and Production Budget II You have been assigned to prepare the cash budget, which is one portion of the master budget for Marble Company. According to a credit agreement with the company’s bank, Marble Company promises to have a minimum cash balance of $65,000 at each month-end. In return, the bank has agreed that the company can borrow up to $175,000 at a monthly interest rate of 2%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $40,000 on the last day of each month. The company has a cash balance of $60,000 and a loan balance of $125,000 at January 1. Marble Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year.

1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated should be indicated in parentheses “( )”.)
2. If the cash receipts and payments changed to the values shown in the table below, how would the budget change?

3. Cash Receipts		Cash Payments
   January February March	$500,000    $475,000 $500,000	$450,000 $375,000 $525,000

4. Write a business letter to the CEO analyzing the cash budgets of this company and state your recommendations based on the initial cash receipts and cash payments and on the cash receipts and cash payments changes.

Kitts Ltd. has recently decided to go public and has hired you as their independent accountant. They wish to adhere to IFRS and know that they must prepare a statement of cash flows. Their financial statements for 2020 and 2019 are provided below:

Statements of Financial Position

                                                                     Dec 31/2020           Dec 31/2019

Cash.............................................                   $ 51,000                  $ 24,000

Accounts receivable........................                     45,000                     27,000

Merchandise inventory....................                     48,000                     60,000

Property, plant and equipment..........   $ 76,000                  $ 120,000

     Less accumulated depreciation.... (40,000)       36,000    (38,000)    82,000

Total Assets                                                    $ 180,000                $ 193,000

Accounts payable............................                   $ 17,000                 $ 12,000

Income taxes payable.....................                     34,000                     44,000

Dividends payable………………………………                       2,000                          -0-

Deferred income tax liability………………                     10,000                       5,000

Bonds payable................................                     50,000                     80,000

Unamortized bond discount……………….                     (2,000)                     (5,000)

Common shares.............................                     27,000                     27,000

Retained earnings...........................                      42,000                     30,000

Total Liabilities & Shareholders’ Equity                $ 180,000                $ 193,000

Statement of Comprehensive Income

Year ended December 31, 2020

Sales........................................................................................... $ 1,050,000

Cost of sales................................................................................       894,000

Gross profit..................................................................................       156,000

Selling and administrative expenses................................................         99,000

Income from operations................................................................         57,000

Interest expense..........................................................................           9,000

Income before taxes.....................................................................         48,000

Income taxes...............................................................................         12,000

Net income.................................................................................. $      36,000

The following additional data were provided for the year ended December 31, 2020:

1.   Dividends were declared.

2.   Equipment was sold for $30,000. This equipment originally cost $ 44,000, and had accumulated depreciation of $8,000 at the time of sale. Any gains, losses or other expenses not separately disclosed are included in “selling and administrative expenses”.

3.   Bonds were retired during the year for proceeds equal to their carrying value. The unamortized discount associated with the bonds redeemed was $2,000.

Required #1:

From the information above, prepare, in good form, a Statement of Cash Flows under the direct method to the extent the information provided permits all disclosures, for the year ended December 31, 2020. Show supporting calculations only in area indicated; not in the body of the good form presentation.

Kitts Limited

Statement of Cash Flows For the Year ended December 31, 2020

Supporting calculations:

Required #2:

Prepare, in good form, the cash from operations only under the indirect method of presentation. Kitts Limited wishes to disclose any separate disclosures as regards interest and taxes in the body of the cash flow from (used in) operations sections and not as a separate disclosure. Show any supporting calculations in the area indicated, not in the body of the good form presentation.

Kitts Limited

Statement of Cash Flows (Operations Only) For the Year ended December 31, 2020

Supporting calculations:

Asia Pacific Ltd started operating on 1 July 2017 with 12 employees. Three years later all of those employees were still with the company. On 1 July 2019 the company hired 15 more people but by 30 June 2020 only 10 of those employed at the beginning of that year were still employed by Asia Pacific Ltd. All employees are entitled to 13 weeks’ long-service leave after a conditional period of 10 years of employment with Asia Pacific Ltd. At 30 June 2020 Asia Pacific Ltd estimates the following:  The aggregate annual salaries of all employees hired on 1 July 2017 is now $1,200,000.  The aggregate annual salaries of all current employees hired on 1 July 2019 is now $800,000.  The probability that employees hired on 1 July 2017 will continue to be employed for the duration of the conditional period is 40 per cent.  The probability that employees hired on 1 July 2019 will continue to be employed for the duration of the conditional period is 20 per cent.  Salaries are expected to increase indefinitely at 1 per cent per annum. The interest rates on high-quality corporate bonds are as follows: Corporate bonds maturing in seven years 6% Corporate bonds maturing in eight years 8% Corporate bonds maturing in nine years 8% Corporate bonds maturing in ten years 10% At 30 June 2019 the provision for long-service leave was $12,000. Required: a) Calculate the total accumulated long-service leave benefit as at 30 June 2020. b) What amount should be reported for the long-service leave provision as at 30 June 2020 in accordance with AASB 119? c) Prepare the journal entry for the provision for long-service leave for 30 June 2020 in accordance with AASB 119. d) Which employee benefits are required to be discounted in accordance with AASB 119? (1 mark, maximum 100 words

Asia Pacific Ltd started operating on 1 July 2017 with 12 employees. Three years later all of those employees were still with the company. On 1 July 2019 the company hired 15 more people but by 30 June 2020 only 10 of those employed at the beginning of that year were still employed by Asia Pacific Ltd. All employees are entitled to 13 weeks’ long-service leave after a conditional period of 10 years of employment with Asia Pacific Ltd. At 30 June 2020 Asia Pacific Ltd estimates the following:  The aggregate annual salaries of all employees hired on 1 July 2017 is now $1,200,000.  The aggregate annual salaries of all current employees hired on 1 July 2019 is now $800,000.  The probability that employees hired on 1 July 2017 will continue to be employed for the duration of the conditional period is 40 per cent.  The probability that employees hired on 1 July 2019 will continue to be employed for the duration of the conditional period is 20 per cent.  Salaries are expected to increase indefinitely at 1 per cent per annum. The interest rates on high-quality corporate bonds are as follows: Corporate bonds maturing in seven years 6% Corporate bonds maturing in eight years 8% Corporate bonds maturing in nine years 8% Corporate bonds maturing in ten years 10% At 30 June 2019 the provision for long-service leave was $12,000. Required: a) Calculate the total accumulated long-service leave benefit as at 30 June 2020. b) What amount should be reported for the long-service leave provision as at 30 June 2020 in accordance with AASB 119? c) Prepare the journal entry for the provision for long-service leave for 30 June 2020 in accordance with AASB 119. d) Which employee benefits are required to be discounted in accordance with AASB 119? (1 mark, maximum 100 words

Asia Pacific Ltd started operating on 1 July 2017 with 12 employees. Three years later all of those employees were still with the company. On 1 July 2019 the company hired 15 more people but by 30 June 2020 only 10 of those employed at the beginning of that year were still employed by Asia Pacific Ltd.

All employees are entitled to 13 weeks’ long-service leave after a conditional period of 10 years of employment with Asia Pacific Ltd.

At 30 June 2020 Asia Pacific Ltd estimates the following:

 The aggregate annual salaries of all employees hired on 1 July 2017 is now $1,200,000.

 The aggregate annual salaries of all current employees hired on 1 July 2019 is now $800,000.

 The probability that employees hired on 1 July 2017 will continue to be employed for the duration of the conditional period is 40 per cent.

 The probability that employees hired on 1 July 2019 will continue to be employed for the duration of the conditional period is 20 per cent.

 Salaries are expected to increase indefinitely at 1 per cent per annum.

The interest rates on high-quality corporate bonds are as follows:

Corporate bonds maturing in seven years 6%

Corporate bonds maturing in eight years 8%

Corporate bonds maturing in nine years 8%

Corporate bonds maturing in ten years 10%

At 30 June 2019 the provision for long-service leave was $12,000.

Required: a) Calculate the total accumulated long-service leave benefit as at 30 June 2020.

b) What amount should be reported for the long-service leave provision as at 30 June 2020 in accordance with AASB 119?

c) Prepare the journal entry for the provision for long-service leave for 30 June 2020 in accordance with AASB 119.

d) Which employee benefits are required to be discounted in accordance with AASB 119? (1 mark, maximum 100 words)

Asia Pacific Ltd started operating on 1 July 2017 with 12 employees. Three years later all of those employees were still with the company. On 1 July 2019 the company hired 15 more people but by 30 June 2020 only 10 of those employed at the beginning of that year were still employed by Asia Pacific Ltd. All employees are entitled to 13 weeks’ long-service leave after a conditional period of 10 years of employment with Asia Pacific Ltd. At 30 June 2020 Asia Pacific Ltd estimates the following:  The aggregate annual salaries of all employees hired on 1 July 2017 is now $1,200,000.  The aggregate annual salaries of all current employees hired on 1 July 2019 is now $800,000.  The probability that employees hired on 1 July 2017 will continue to be employed for the duration of the conditional period is 40 per cent.  The probability that employees hired on 1 July 2019 will continue to be employed for the duration of the conditional period is 20 per cent.  Salaries are expected to increase indefinitely at 1 per cent per annum. The interest rates on high-quality corporate bonds are as follows: Corporate bonds maturing in seven years 6% Corporate bonds maturing in eight years 8% Corporate bonds maturing in nine years 8% Corporate bonds maturing in ten years 10% At 30 June 2019 the provision for long-service leave was $12,000. Required: a) Calculate the total accumulated long-service leave benefit as at 30 June 2020. b) What amount should be reported for the long-service leave provision as at 30 June 2020 in accordance with AASB 119? c) Prepare the journal entry for the provision for long-service leave for 30 June 2020 in accordance with AASB 119. d) Which employee benefits are required to be discounted in accordance with AASB 119? (1 mark, maximum 100 words)

Asia Pacific Ltd started operating on 1 July 2017 with 12 employees. Three years later all of those employees were still with the company. On 1 July 2019 the company hired 15 more people but by 30 June 2020 only 10 of those employed at the beginning of that year were still employed by Asia Pacific Ltd. All employees are entitled to 13 weeks’ long-service leave after a conditional period of 10 years of employment with Asia Pacific Ltd. At 30 June 2020 Asia Pacific Ltd estimates the following:  The aggregate annual salaries of all employees hired on 1 July 2017 is now $1,200,000.  The aggregate annual salaries of all current employees hired on 1 July 2019 is now $800,000.  The probability that employees hired on 1 July 2017 will continue to be employed for the duration of the conditional period is 40 per cent.  The probability that employees hired on 1 July 2019 will continue to be employed for the duration of the conditional period is 20 per cent.  Salaries are expected to increase indefinitely at 1 per cent per annum. The interest rates on high-quality corporate bonds are as follows: Corporate bonds maturing in seven years 6% Corporate bonds maturing in eight years 8% Corporate bonds maturing in nine years 8% Corporate bonds maturing in ten years 10% At 30 June 2019 the provision for long-service leave was $12,000. Required: a) Calculate the total accumulated long-service leave benefit as at 30 June 2020. b) What amount should be reported for the long-service leave provision as at 30 June 2020 in accordance with AASB 119? c) Prepare the journal entry for the provision for long-service leave for 30 June 2020 in accordance with AASB 119. d) Which employee benefits are required to be discounted in accordance with AASB 119? (1 mark, maximum 100 words)

Asia Pacific Ltd started operating on 1 July 2017 with 12 employees. Three years later all of those employees were still with the company. On 1 July 2019 the company hired 15 more people but by 30 June 2020 only 10 of those employed at the beginning of that year were still employed by Asia Pacific Ltd.
All employees are entitled to 13 weeks’ long-service leave after a conditional period of 10 years of employment with Asia Pacific Ltd.
At 30 June 2020 Asia Pacific Ltd estimates the following:
 The aggregate annual salaries of all employees hired on 1 July 2017 is now $1,200,000.
 The aggregate annual salaries of all current employees hired on 1 July 2019 is now $800,000.
 The probability that employees hired on 1 July 2017 will continue to be employed for the duration of the conditional period is 40 per cent.
 The probability that employees hired on 1 July 2019 will continue to be employed for the duration of the conditional period is 20 per cent.
 Salaries are expected to increase indefinitely at 1 per cent per annum.
The interest rates on high-quality corporate bonds are as follows:
Corporate bonds maturing in seven years 6%
Corporate bonds maturing in eight years 8%
Corporate bonds maturing in nine years 8%
Corporate bonds maturing in ten years 10%
At 30 June 2019 the provision for long-service leave was $12,000.
Required:
a) Calculate the total accumulated long-service leave benefit as at 30 June 2020.
b) What amount should be reported for the long-service leave provision as at 30 June 2020 in accordance with AASB 119?
c) Prepare the journal entry for the provision for long-service leave for 30 June 2020 in accordance with AASB 119.
d) Which employee benefits are required to be discounted in accordance with AASB 119? (1 mark, maximum 100 words)