Claims against a company whereby the creditor has a charge against specific property is known as a:

      a.    circulating security interest.

      b.    specific debt covenant.

      c.     non-circulating security interest.

      d.    floating charge.

The details below were extracted from the accounting records of Great South East Ltd (a company in the process of liquidation).

40 000 $1 preference shares fully paid	$40 000
120 000 $1 ordinary shares paid to 50 cents	60 000
	$100 000
Cash available (after payment of all creditors)	$10 000

Assume that the constitution of Great South East Ltd states that in the event of liquidation, all shares are to rank equally, based on the number of shares held, in distributing any surplus or deficiency.

For preference shareholders, what is the amount of the actual refund or call?

The details below were extracted from the accounting records of Great South East Ltd (a company in the process of liquidation).

                                                                                                                     

40 000 $1 preference shares fully paid	$40 000
120 000 $1 ordinary shares paid to 50 cents	60 000
	$100 000
Cash available (after payment of all creditors)	$10 000

Assume that the constitution of Great South East Ltd states that in the event of liquidation, all shares are to rank equally, based on the number of shares held, in distributing any surplus or deficiency.

What will be the deficiency or surplus apportioned to preference shareholders?

On 1 January 2014, Cowboys Ltd acquired all the issued shares in Tate Ltd. At that date, the plant of Tate Ltd had a fair value of $20 000 more than its carrying amount and an estimated useful life of 5 years. Tate Ltd depreciates the plant on a straight-line basis. The plant was sold to external parties on 31 December 2014. The business combination valuation entries in relation to the plant as at 30 June 2015 will include:

1. Adjustments to the plant account to recognise the fair value adjustment at acquisition date
2. Adjustments to the current depreciation expense
3. Adjustments to retained earnings (reflecting previous year's depreciation and related tax effect)
4. Transfers from business combination valuation reserve to retained earnings

Unity Limited acquired 100% of the share capital of Bellvista Limited for $300 000. Bellvista had total shareholder’s equity of $200 000. The book values of Bellvista Limited’s assets were: buildings $100 000, machinery $120 000. The fair values of these assets were: buildings $180 000, machinery $140 000. The tax rate is 30%. The acquisition analysis will determine:

Fredericks Limited acquired all the identifiable assets and liabilities of Nicole Limited for $134 000. Nicole's assets and liabilities as on the acquisition date (assumed at fair value) are: plant $72 000; inventories $40 000; accounts receivable $18 000; patents $10 000; goodwill $5 000; accounts payable $16 000. The difference on acquisition is:

On 1 July 2014, Peter Limited acquired all the issued shares of Kerri Limited for $100 000 when the equity of Kerri Limited consisted of:

Share capital	$70 000
Retained earnings	30 000

The pre-acquisition entry at 1 July 2014 is:

I.	Shares in Kerri Limited	Dr	100 000
	Retained earnings	Cr		30 000
	Share capital	Cr		70 000
II.	Retained earnings	Dr	30 000
	Share capital	Dr	70 000
	Shares in Kerri Limited	Cr		100 000
III.	Retained earnings	Dr	30 000
	Share capital	Dr	70 000
	Business Combination Valuation Reserve	Dr	10 000
	Shares in Kerri Limited	Cr		110 000
IV.	Goodwill	Dr	10 000
	Share capital	Dr	70 000
	Retained earnings	Dr	30 000
	Shares in Kerri Limited	Cr		110 000

On January 1, 2020, Swifty Company purchased 12% bonds having a maturity value of $230,000, for $247,437.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Swifty Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

Prepare the journal entry at the date of the bond purchase. (Enter answers to 2 decimal places, e.g. 2,525.25. 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.)

Date	Account Titles and Explanation	Debit	Credit

Jan 01, 2020

----------------------------------------------------------------------

Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 2,525.25.)

Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 2,525.25.)

Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method
Date		Cash Received		Interest Revenue		Premium Amortized		Carrying Amount of Bonds
1/1/20		$		$		$		$
1/1/21
1/1/22
1/1/23
1/1/24
1/1/25 -------------------------------- Prepare the journal entry to record the interest revenue and the amortization at December 31, 2020. (Round answers to 2 decimal places, e.g. 2,525.25. 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.) Date      Account Title and Explanation Debit Credit Dec. 31, 2020 Prepare the journal entry to record the interest revenue and the amortization at December 31, 2021. (Round answers to 2 decimal places, e.g. 2,525.25. 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.) Date Account Title and Explanation Debit    Credit Dec. 31, 2021

Flounder Limited, which follows IFRS, has adopted the policy of classifying interest paid as operating activities and dividends paid as financing activities. Condensed financial data for 2020 and 2019 follow (in thousands):

FLOUNDER LIMITED Comparative Statement of Financial Position December 31
			2020			2019
Cash			$2,010			$1,150
FV-NI investments			1,300			1,420
Accounts receivable			1,845			1,350
Inventory			1,660			2,030
Plant assets			2,005			1,790
Accumulated depreciation			(1,200	)		(1,170	)
			$7,620			$6,570
Accounts payable			$1,295			$950
Accrued liabilities			290			340
Mortgage payable			1,370			1,590
Common shares			2,080			1,790
Retained earnings			2,585			1,900
			$7,620			$6,570
FLOUNDER LIMITED Income Statement Year Ended December 31, 2020
Sales						$6,885
Cost of goods sold						4,700
	Gross margin					2,185
Administrative expenses						910
Income from operations						1,275
Other expenses and gains
	Interest expense		$(20	)
	Gain on disposal of FV-NI investments		80			60
Income before tax						1,335
Income tax expense						405
Net income						$930

Additional information: During the year, $70 of common shares were issued in exchange for plant assets. No plant assets were sold in 2020. The FV-NI investments’ carrying amount and market value were the same at December 31, 2020.

Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000). Enter amounts in thousands.)

My question is how do you calculate : Proceeds from the the sale of FV-NI Investments ?

The following information is relevant to the computation of Charlie Co.’s earnings per share to be
disclosed on Charlie’s income statement for the year ending December 31, 2020:
 2020 net income: $800,000
 Common shares activity in 2020:
o Shares outstanding at January 1, 2020: 600,000
o Shares issued on May 1, 2020: 24,000
o Treasury shares purchased on July 31, 2020: 60,000
 $5,000,000 face value, 2% 10-year convertible bonds were outstanding on January 1,
2020. Each $1,000 par value bond is convertible into 20 shares of Charlie’s common
stock
 Charlie’s corporate tax rate is 25%
Charlie has no stock options, stock warrants, preferred stock or other convertible securities
outstanding in 2020.

Required
Compute Charlie’s basic and diluted earnings per share for 2020.

Based on the article, what was driving this flurry of corporate issuance?

Apple on Wednesday joined U.S. companies ranging from Deere & Co. to Walt Disney in a recent sprint to issue new bonds, taking advantage of the steep decline in benchmark interest rates and a surge in investor demand.

Apple launched its first bond deal since 2017 and is looking to raise $4 billion to $5 billion with bonds ranging in maturity from three to 30 years, according to people familiar with the sale.

Twenty-one corporations with investment-grade credit ratings issued bonds totaling about $27 billion on Tuesday, said Andrew Karp, head of investment-grade capital markets at Bank of America. “That’s equivalent to a busy week for us — in one day,” he said.

The bond boom is the corporate version of the refinancing rush that hit the mortgage market last month as homeowners moved to lock in cheaper loans. Sharply declining U.S. government bond yields — the 10-year Treasury yields about 1.5% compared with around 2% in July — have dragged down corporate borrowing costs in lockstep. The yield of Disney’s bond due in 2046 fell to 2.83% from 3.3% since the start of August, according to data from MarketAxess.

Deere and Disney nabbed record-low yields on bonds they issued Tuesday and the surge continued Wednesday with Apple leading the charge. Coca-Cola and health insurer Anthem also announced new bond sales Wednesday, according to S&P Global Market Intelligence.

Companies are also capitalizing on a surge in demand for investment-grade corporate debt in recent months that is helping to drive yields lower, said Gibson Smith, founder of Denver-based Smith Capital Investors.“The flows are presenting issuers with an opportunity to borrow at new lows,” he said.

Mutual funds focusing on corporate investment-grade bonds took in $32 billion over the past three months compared with $77 billion of outflows from all stock funds over the same period, according to data from Thomson Reuters Lipper.

The asset class is still attracting inflows because it occupies a sweet spot in the fixed-income landscape. Bonds issued by name-brand corporations give investors a relatively safe alternative that still pays more than government bonds when they switch out of stocks and high-yield debt because of global uncertainty. Conversely, government-bond investors fleeing the negative yields spreading through Asia and Europe can buy corporate bonds without taking on too much more risk.U.S. government bond yields were virtually unchanged Wednesday after initially rising on optimism about easing tensions in Hong Kong.

The yield on the benchmark 10-year Treasury note recently traded at 1.466%, compared with around 1.469% Tuesday, according to data from Tradeweb. Yields fall as bond prices rise.

Santana Rey created Business Solutions on October 1, 2020. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following chart of accounts includes the account number used for each account and any balance as of December 31, 2020. Santana Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Receivable account. This change allows the company to continue using the existing chart of accounts.

No.	Account Title	Debit			Credit
101	Cash	$	48,472
106.1	Alex’s Engineering Co.		0
106.2	Wildcat Services		0
106.3	Easy Leasing		0
106.4	IFM Co.		3,120
106.5	Liu Corp.		0
106.6	Gomez Co.		2,808
106.7	Delta Co.		0
106.8	KC, Inc.		0
106.9	Dream, Inc.		0
119	Merchandise inventory		0
126	Computer supplies		620
128	Prepaid insurance		2,097
131	Prepaid rent		885
163	Office equipment		8,030
164	Accumulated depreciation—Office equipment				$	210
167	Computer equipment		20,900
168	Accumulated depreciation—Computer equipment					1,090
201	Accounts payable					1,260
210	Wages payable					620
236	Unearned computer services revenue					1,340
307	Common stock					72,952
318	Retained earnings					9,460
319	Dividends		0
403	Computer services revenue					0
413	Sales					0
414	Sales returns and allowances		0
415	Sales discounts		0
502	Cost of goods sold		0
612	Depreciation expense—Office equipment		0
613	Depreciation expense—Computer equipment		0
623	Wages expense		0
637	Insurance expense		0
640	Rent expense		0
652	Computer supplies expense		0
655	Advertising expense		0
676	Mileage expense		0
677	Miscellaneous expenses		0
684	Repairs expense—Computer		0

In response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms of 1/10, n/30, FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company’s new merchandising activities. Its transactions for January through March follow.

Jan.		4		The company paid cash to Lyn Addie for five days’ work at the rate of $155 per day. Four of the five days relate to wages payable that were accrued in the prior year.
		5		Santana Rey invested an additional $24,900 cash in the company in exchange for more common stock.
		7		The company purchased $6,700 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB shipping point, invoice dated January 7.
		9		The company received $2,808 cash from Gomez Co. as full payment on its account.
		11		The company completed a five-day project for Alex’s Engineering Co. and billed it $5,410, which is the total price of $6,750 less the advance payment of $1,340. The company debited Unearned Computer Services Revenue for $1,340.
		13		The company sold merchandise with a retail value of $4,400 and a cost of $3,550 to Liu Corp., invoice dated January 13.
		15		The company paid $770 cash for freight charges on the merchandise purchased on January 7.
		16		The company received $4,050 cash from Delta Co. for computer services provided.
		17		The company paid Kansas Corp. for the invoice dated January 7, net of the discount.
		20		The company gave a price reduction (allowance) of $700 to Liu Corp. and credited Liu's accounts receivable for that amount.
		22		The company received the balance due from Liu Corp., net of the discount and the allowance.
		24		The company returned defective merchandise to Kansas Corp. and accepted a credit against future purchases (debited accounts payable). The defective merchandise invoice cost, net of the discount, was $486.
		26		The company purchased $9,200 of merchandise from Kansas Corp. with terms of 1/10, n/30, FOB destination, invoice dated January 26.
		26		The company sold merchandise with a $4,510 cost for $5,890 on credit to KC, Inc., invoice dated January 26.
		31		The company paid cash to Lyn Addie for 10 days’ work at $155 per day.
Feb.		1		The company paid $2,655 cash to Hillside Mall for another three months’ rent in advance.
		3		The company paid Kansas Corp. for the balance due, net of the cash discount, less the $486 credit from merchandise returned on January 24.
		5		The company paid $600 cash to Facebook for an advertisement to appear on February 5 only.
		11		The company received the balance due from Alex’s Engineering Co. for fees billed on January 11.
		15		The company paid a $4,690 cash dividend.
		23		The company sold merchandise with a $2,540 cost for $3,370 on credit to Delta Co., invoice dated February 23.
		26		The company paid cash to Lyn Addie for eight days’ work at $155 per day.
		27		The company reimbursed Santana Rey $288 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense."
Mar.		8		The company purchased $2,820 of computer supplies from Harris Office Products on credit with terms of n/30, FOB destination, invoice dated March 8.
		9		The company received the balance due from Delta Co. for merchandise sold on February 23.
		11		The company paid $800 cash for minor repairs to the company’s computer.
		16		The company received $5,290 cash from Dream, Inc., for computing services provided.
		19		The company paid the full amount due of $4,080 to Harris Office Products, consisting of amounts created on December 15 (of $1,260) and March 8.
		24		The company billed Easy Leasing for $9,227 of computing services provided.
		25		The company sold merchandise with a $2,092 cost for $2,860 on credit to Wildcat Services, invoice dated March 25.
		30		The company sold merchandise with a $1,118 cost for $2,310 on credit to IFM Company, invoice dated March 30.
		31		The company reimbursed Santana Rey $128 cash for business automobile mileage. The company recorded the reimbursement as "Mileage Expense."

The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation.

1. The March 31 amount of computer supplies still available totals $2,095.
2. Prepaid Insurance coverage of $699 expired during this three-month period.
3. Lyn Addie has not been paid for seven days of work at the rate of $155 per day.
4. Prepaid rent of $2,655 expired during this three-month period.
5. Depreciation on the computer equipment for January 1 through March 31 is $1,090.
6. Depreciation on the office equipment for January 1 through March 31 is $210.
7. The March 31 amount of merchandise inventory still available totals $574.

2. Post the journal entries in part 1 to the accounts in the company’s general ledger. Note: Begin with the ledger’s post-closing adjusted balances as of December 31, 2020.

Traditionally 35% of the students at Wortham University were in the Business College, 35% of the students were in the Liberal Arts College, and 30% of the students were in the Education College. To see whether or not the proportions have changed, a sample of 300 students was taken. Ninety of the sample students are in the Business College, 120 are in the Liberal Arts College, and 90 are in the Education College. The hypothesis is to be tested at the 5% level of significance. The critical value from the table equals

Why we use sampling techniques in research, suggest the most suitable sampling technique to obtain the necessary data, giving two reasons each for your choice. a) What support do faculty members require in the current covid 19 situation, from a University? b) Which advertisements do people remember watching talk shows? c) How are textile companies planning to respond to the introduction of new taxes?

A company is evaluating the purchase of Machine A. The new machine would cost $120,000 and would be depreciated for tax purposes using the straight-line method over an estimated ten-year life to its expected salvage value of $20,000. The new machine would require an addition of $30,000 to working capital. In each year of Machine A’s life, the company would reduce its pre-tax costs by $40,000. The company has a 12% cost of capital and is in the 35% marginal tax bracket. (using Excel)

a. Identify the incremental cash flows from investing in Machine A.

b. Calculate the investment’s net present value (NPV).

c. Calculate the investment’s internal rate of return (IRR).

d. Should the company purchase Machine A? Why or why not?

(Organizing cash flows, NPV, IRR) This problem follows Problem 13. It is now five years later. The company did buy Machine A, but just this week Machine β came on the market; Machine β could be purchased to replace Machine A. If acquired, Machine β would cost $80,000 and would be depreciated for tax purposes using the straight-line method over an estimated five-year life to its expected salvage value of $20,000. Machine β would also require $30,000 of working capital but would save an additional $20,000 per year in pre-tax operating costs. Machine A’s salvage value remains $20,000, but it could be sold today for $40,000.(USING EXCEL)

a. Identify the incremental cash flows from converting to Machine B.

b. Calculate this investment’s net present value (NPV).

c. Calculate this investment’s internal rate of return (IRR).

d. Should the company convert to Machine B? Why or why not?