The following statement of financial position relates to XYZ Ltd for the years ending 30 June 2019 and 30 June 2020.

Additional Information:

1. Gross profit for the year ended 30 June 2020 was $110,500, and consisted of:

Sales Revenue                 $393,500

Cost of Sales                     283,000

2. All purchases and sales of inventory were on credit.
3. Loss for the year ended 30 June 2020 was $18,750, after deducting expenses of $129,250 from the gross profit figure.
4. Expenses of $129,250 comprise of depreciation on Buildings and on Plant & Equipment, a loss on sale of land, $5,000 in interest expense, and other expenses (other expenses relate to Accrued Employee Expenses in the statement of financial position).
5. During the year ended 30 June 2020, cash dividends were paid.
6. The increase in Buildings was due to building extensions which were paid for during the year, and a block of land costing $37,500 was sold for $31,250 cash.
7. No Plant & Equipment was purchased or sold during the year.
8. The revaluation increment on land of $20,000 does not have any effect on profit or loss.

Required:

Prepare the statement of cash flows of XYZ Ltd for the year ended 30 June 2020 based on the direct method of presentation. Ignore tax effects. Notes are not required.

Indigo Company manufactures equipment. Indigo’s products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $200,000 to $1,500,000 and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform to specifications. Indigo has the following arrangement with Winkerbean Inc.

Indigo delivers the equipment on June 1, 2020, and completes the installation of the equipment on September 30, 2020. The equipment has a useful life of 10 years. Assume that the equipment and the installation are two distinct performance obligations which should be accounted for separately.

How should the transaction price of $970,000 be allocated among the service obligations? (Do not round intermediate calculations. Round final answers to 0 decimal places.)

eTextbook and Media

List of Accounts

Prepare the journal entries for Indigo for this revenue arrangement on June 1, 2020 and September 30, 2020, assuming Indigo receives payment when installation is completed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

show work and explain

Indigo Company manufactures equipment. Indigo’s products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $200,000 to $1,500,000 and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment and does not require proprietary information about the equipment in order for the installed equipment to perform to specifications. Indigo has the following arrangement with Winkerbean Inc.

Indigo delivers the equipment on June 1, 2020, and completes the installation of the equipment on September 30, 2020. The equipment has a useful life of 10 years. Assume that the equipment and the installation are two distinct performance obligations which should be accounted for separately.

How should the transaction price of $970,000 be allocated among the service obligations? (Do not round intermediate calculations. Round final answers to 0 decimal places.)

eTextbook and Media

List of Accounts

Prepare the journal entries for Indigo for this revenue arrangement on June 1, 2020 and September 30, 2020, assuming Indigo receives payment when installation is completed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

show work and explain

Essan Construction Inc., which has a calendar year end, has entered into a non-cancellable fixed price contract for $2.8 million beginning September 1, 2020, to build a road for a municipality. It has been estimated that the road construction will be complete by June 2022. The following data pertain to the construction period.

(A) Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized during each year of the construction period. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

(B) Using the percentage-of-completion method, prepare the journal entries for 2020 and 2021. (Use Materials, Cash, Payables for costs incurred to date.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

For Year 2020:

For Year 2021:

(C) Using the percentage-of-completion method, what is the balance in the Contract Asset/Liability account at December 31, 2020 and 2021? (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

(D)

Naa Tetterley Company Ltd engaged your firm to prepare a Cash Budget for them. They informed you that:
a. They have two bills payable of $55,000 and $60,000 with due dates of 31st July and 30th September, 2020 respectively.
These bills will be paid on their due dates
b. The Company wishes to arrange with its bankers for any necessary re-financing in advance, which will ensure a minimum end of month cash balance of $25,000
You are also given the following information: i. The projected sales and purchases:
SALES     ($)         PURCHASES ($)

June 65,000              July.    57,000

July 90,000              August. 45,000

August 65,000          September.    51,000

September 68,000        October.    42,000

October 75,000

ii. The cash balance on 1st July, 2020 will be $18,000

iii. All sales are on terms of a 2% discount allowed on any payment made by the tenth of the month following the sale. Past experience indicates that 70% of the sales are collected within the first 10 days; 20% during the remainder of the first month; and 8% in the second month following the sale. 2% of the sales are considered irrecoverable.

iv. All payments for purchases qualify for 2% discount. Two-thirds of the invoices will be paid in the month of the purchase, and one-third in the month following the purchase.

v. Operating expenses are expected at $6,000 for July 2020. This will increase by 10% per month for the subsequent months.

vi. The company will receive $1,500 monthly from property rentals. This amount will be paid half-a-month in arrears.

vii. An amount of $2,500 will be realised in July from the sale of obsolete equipment.

viii. The company will buy a new plant for $42,000 on 1st June, 2020. The payment for this amount will be spread over 6 monthly equal instalments, starting from August, 2020.

ix. The company anticipates receiving interest on investment of $10,000 every month.

Required:
a. Prepare the Cash Budget for the three months ending 30th September, 2020

b. Outline any four benefits and four limitations respectively of a Cash Budget.          

Smart Company prepared its annual financial statements dated December 31, 2020. The company applies the FIFO inventory costing method; however, the company neglected to apply the LC&NRV valuation to the ending inventory. The preliminary 2020 statement of earnings follows:

Assume that you have been asked to restate the 2020 financial statements to incorporate the LC&NRV inventory valuation rule. You have developed the following data relating to the ending inventory at December 31, 2020:

1. Restate the statement of earnings to reflect the valuation of the ending inventory on December 31, 2020, at the LC&NRV. Apply the LC&NRV rule on an item-by-item basis.(FINISHED BELOW ANSWER QUESTION 2)

2. Compare and explain the LC&NRV effect on each amount that was changed in part 1. (Negative answers should be indicated by a minus sign.)

The concept of returns to scale has been used by business managers in order to increase the production efficiency to assess the productivity of organizational inputs like labor, machinery and equipment, and even technological innovation.

a. Describe the concept of returns to scale (RTS). Is it a short-run (SR), or long-run (LR) phenomenon?

b. List and describe the three types of RTS. Give an example each type of RTS (Increasing Returns to scale-IRTS, Constant returns to scale-CRTS, and Decreasing Returns to scale-DRTS).

c. What difficulties might a growing firm encounter as it grows in the size of its operation.

d. What other factor(s) beyond the production process might impact the growth and profitability of an organization that managers have to consider to scale up their production process?

Which of the following is NOT a source of monopoly power?

Select one:

a.

government regulations prohibiting entry of new firms

b.

decreasing marginal costs

c.

innovation

d.

economies of scale

An example of a monopoly would be:

Select one:

a.

a gasoline service station in Los Angeles.

b.

a sole provider of electrical power in a city.

c.

a grocery store in Chicago.

d.

Walmart.

Natural monopolies:

Select one:

a.

produce the optimal quantity of output, unlike other monopolies.

b.

exist when one firm can produce the market output at a lower cost than two or more firms.

c.

generally experience large diseconomies of scale, leading to production inefficiencies and work stoppages.

d.

face market demand curves that are perfectly elastic.

The US health care industry is immense, complex and dynamic. Every country faces the decisions of what services should be produced, how they should be produced, how they should be distributed, and how to allow for growth and innovation? Comment on how these decisions are currently being made in the United States? What are the various purposes that prices served? Can you provide an example of how a particular purpose of price has affected an organization you are familiar with? Once your material is posted, be sure to review and comment on the materials that at least two of your peers have located. Please note: resources cannot be duplicated, so be sure to get into the conversation early! Your initial post to the given topic of discussion should contain a minimum of 2–3 peer-reviewed references.