Arthur Seth has a rice farmer for several years making up his accounts to December 31st each year. On 1st July, Bernice Aku joined the business Details of the partnership were as follows: Seth Bernice Capital introduced GHC 5,000 GHC 2,500 Profit sharing ratio 2 : 1 Cost of living allowance GHC200 per month GHC200 per month Risk allowance GHC300 per month GHC300 per month Interest on Capital GHC500 per month GHC250 per month Management Allowance GHC300 per month GHC100 per month These allowances were charged in the accounts in arriving at the following profits: Year to December 31, 2016 GHC30,000 Year to December 31, 2017 GHC 45,000 Residual values of assets in use in the business as at 1st January, 2016 were as follows: Tractors GHC 5,600 Farm House GHC 12,000 A combined harvester was purchased in March, 2016 at a cost of GHC 80,000. Required: Determine the chargeable incomes of the partners for the relevant years.

Additional Funds Needed

The Booth Company's sales are forecasted to double from $1,000 in 2016 to $2,000 in 2017. Here is the December 31, 2016, balance sheet:

Booth's fixed assets were used to only 50% of capacity during 2016, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 6% and its payout ratio to be 45%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar.

Additional Funds Needed

The Booth Company's sales are forecasted to double from $1,000 in 2016 to $2,000 in 2017. Here is the December 31, 2016, balance sheet:

Booth's fixed assets were used to only 50% of capacity during 2016, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 7% and its payout ratio to be 30%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar.

XYZ's stock price and dividend history are as follows:

An investor buys three shares of XYZ at the beginning of 2016, buys another two shares at the beginning of 2017, sells one share at the beginning of 2018, and sells all four remaining shares at the beginning of 2019.

a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answer to 2 decimal places. Do not round other calculations.)

b. What is the dollar-weighted rate of return? (Hint: Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2016, to January 1, 2019. If your calculator cannot calculate internal rate of return, you will have to use trial and error.) (Round your answers to 4 decimal places. Negative amount should be indicated by a minus sign.)

Consider a simple economy that produces two goods: pencils and envelopes. The following table shows the prices and quantities of the goods over a three-year period.

Use the information from the preceding table to fill in the following table.

From 2017 to 2018, nominal GDP   , and real GDP   .

The inflation rate in 2018 was   .

Why is real GDP a more accurate measure of an economy's production than nominal GDP?

Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes.

Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.

Real GDP is not influenced by price changes, but nominal GDP is.

The table below contains data on Fincorp Inc. The balance sheet items correspond to values at year-end 2015 and 2016, while the income statement items correspond to revenues or expenses during the year ending in either 2015 or 2016. All values are in thousands of dollars.

* Taxes are paid in their entirety in the year that the tax obligation is incurred.

^† Net fixed assets are fixed assets net of accumulated depreciation since the asset was installed.

What was the change in net working capital during the year? (Enter your answer in thousands of dollars.)

It’s September 2015 and United Grain Growers (UGG) wants to hedge the planned sale of 80,000 metric tons of corn in March 2016. Corn is a non-Board grain, and UGG recently acquired this inventory and is storing it in two new concrete high throughput elevators.

Corn futures contracts are available, and to avoid the contracts’ delivery requirements, UGG will hedge using April 2016 corn futures, where one contract is for 5000 bushels. The initial margin requirements are 1650 per contract, spot price for corn today is 3.70 per bushel, while the futures prices for the April contract is 4.25 per bushel. Note: 5000 bushels ≈ 127 metric tons.

1. How many contracts are needed for this hedge? Long or short?
2. What is the total margin requirement?
3. In March 2016, UGG sold corn to the market at the then spot price of 4.00 per bushel. On the sale date they closed the futures contracts (“offset” them), and the futures price was 4.15/bushel at that time. What is the net per bushel price obtained for corn, reflecting the hedge g/l?

Section B –Answer ALL Questions: 50 Marks

Question 1: 20 Marks

Superior Manufacturing Company has the following cost and expense data for the year ending December 31, 2016:

Raw materials, January 1 $30,000 Insurance—factory $ 14,000

Raw materials, December 31 20,000 Property taxes—factory building 6,000

Raw materials purchased 205,000 Sales (net) 1,500,000

Indirect materials 15,000 Delivery expenses 100,000

Work in process, January 1 80,000 Sales commissions 150,000

Work in process, December 31 50,000 Indirect labour 90,000

Finished goods, January 1 110,000 Factory machinery rent 40,000

Finished goods, December 31 120,000 Factory utilities 65,000

Direct labour 350,000 Depreciation—factory building 24,000

Factory manager's salary 35,000 Administrative expenses 300,000

Instructions

(a) Prepare a cost of goods manufactured schedule for Superior Manufacturing Company for 2016 –

(b) Prepare an income statement for Superior Manufacturing Company for 2016 –

Professional Fees Earned Budget for a Service Company

Roberts and Chou, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending December 31, 2016:

The average billing rate for staff is $150 per hour, and the average billing rate for partners is $270 per hour.

Prepare a professional fees earned budget for Roberts and Chou, CPAs, for the year ending December 31, 2016.

Professional Labor Cost Budget for a Service Company

Roberts and Chou, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending December 31, 2016:

Based on the data provided above and assuming that the average compensation per hour for staff is $40 and for partners is $135, prepare a professional labor cost budget for each department for Roberts and Chou, CPAs, for the year ending December 31, 2016.