1. HK Limited has 100 employees. Each employee earns two weeks of paid vacation per year. Vacation time not taken in the year earned can be carried over to two calendar years. Paid leave is first taken out of the balance brought forward from the previous year and then out of the current year’s entitlement (a FIFO basis). During 2019, 30 employees took both weeks’ vacation, but at the end of the year, 70 employees had vacation time carryover as follows:

        During 2019, the average salary for employees is $5,000 per week.              [5 marks]

2. The profit sharing plan requires HK Ltd. to pay 2% of its net profit to its two directors, Mr. Yau Wen and Ms. Shally Tin. The net profit for 2019 is $3,500,000. Mr. Wen will receive the bonus six months after the end of 2019, whereas Ms. Tin would be paid on July 2021 since she joined the company in March of 2019.                         [5 marks]

3. HK Ltd. agrees to pay a fixed contribution of 5% of employees’ salary to a retirement plan, subject to a cap of $1,250 per month for each employee. The contribution is paid monthly on or before the 10th of the following month. Out of the 200 employees, 160 employees earn an average monthly salary of $20,000.   The remaining employees earn more than $35,000 per month.                                           [5 marks]

Required:

Classify the nature of the employee benefit(s) above and explain the accounting treatment (provide journal entries if necessary) in accordance with relevant Hong Kong Accounting Standard(s).

Company Zeta bought new office furniture in the year 2000. The purchase cost was 97972 dollars and in addition it had to spend 13926 dollars for installation. The furniture has been in use since April 21st, 2000. Zeta forecasted that in 2015 the office furniture would have a net salvage value of $1000. Using the US Accelerated Depreciation Schedule, estimate the value of depreciation recorded in the accounting books in the year 2004 if the company decided to sell the furniture on June 5th (of 2004). (note: round your answer to the nearest cent and do not include spaces, currency signs, or commas)

CORRECT ANSWER: 4996.25

Kevin deposits $1220.33 each quarter into an annuity account for his child's college fund. He wishes to accumulate a future value of $95,000 in 15 years. Assuming an APR of 3.4%, how much of the $95,000 will Kevin ultimately deposit in the account, and how much is interest earned? Round your answers to the nearest cent, if necessary.

Deposit:_______

Interest Earned:_______

An individual consumer in the neoclassical theory is assumed to be ‘rational,’ ‘isolated,’ and ‘representative.’ (i) Explain the meaning of a rational, isolated, and representative consumer; and (ii) explain why such a hypothetical individual consumer is needed in the neoclassical theory of consumption.

1. Describe how individual learning styles affect the degree to which a learner can understand or perform educational activities. Discuss the importance of an educator identifying individual learning styles and preferences when working with learners.

Precision Machining Corporation has been growing steadily over the past decade. Demand for the company’s
products continues to rise, so management has decided to expand the production facility; $2 800 000 has been
set aside for this over the next four years.
Management has developed two different plans for expanding over the next four years: Plan A and Plan B. Plan
A would require equal amounts of $750 000, one year from now, two years from now, three years from now,
and four years from now. Plan B would require $300 000 now, $700 000 one year from now, $900 000 two
years from now, and $975 000 four years from now.
The company has decided to fund the expansion with only the $2 800 000 and any interest it can earn on it.
Before deciding which plan to use, the company asks its treasurer to predict the rates of interest it can earn on
the $2 800 000. The treasurer expects that Precision Machining Corporation can invest the $2 800 000 and earn
interest at a rate of 4.5% p.a. compounded semi-annually during Year 1, 5.0% p.a. compounded semi-annually
during Years 2 and 3, and 5.5% p.a. compounded semi-annually during Year 4. The company can withdraw part
of the money from this investment at any time without penalty.
Questions
1.
a. Could Precision Machining Corporation meet the cash requirement of Plan A by investing
the $2 800 000 as described above? (Use “now” as the focal date.)
b. What is the exact difference between the cash required and the cash available from the
investment?
2.
a. Could Precision Machining Corporation meet the cash requirements of Plan B by investing
the $2 800 000 as described above? (Use “now” as the focal date.)
b. What is the difference between the cash required and the cash available from the
investment?
3.
a. Suppose Plan A was changed so that it required equal amounts of $750 000 now, one year
from now, two years from now, and four years from now. Could Precision Machining
Corporation meet the cash requirements of the new Plan A by investing the $2 800 000 as
described above? (Use “now ” as the focal date.)
b. What is the difference between the cash required and the cash available from the
investment?
4. Suppose the treasurer found another way to invest the $2 800 000 that earned interest at a rate of 4.9%
compounded quarterly for the next five years.
a. Could the company meet the cash requirements of the original Plan A with this new
investment? (Show all your calculations.)
b. Could the company meet the cash requirements of Plan B with this new investment? (Show
all your calculations.)
c. If the company could meet the cash requirements of both plans, which plan would the
treasurer recommend? In other words, which plan would have the lower present value?

this is the case study

Precision Machining Corporation has been growing steadily over the past decade. Demand for the company’s products continues to rise, so management has decided to expand the production facility; $2 800 000 has been set aside for this over the next four years.

Management has developed two different plans for expanding over the next four years: Plan A and Plan B. Plan A would require equal amounts of $750 000, one year from now, two years from now, three years from now, and four years from now. Plan B would require $300 000 now, $700 000 one year from now, $900 000 two years from now, and $975 000 four years from now.

The company has decided to fund the expansion with only the $2 800 000 and any interest it can earn on it. Before deciding which plan to use, the company asks its treasurer to predict the rates of interest it can earn on the $2 800 000. The treasurer expects that Precision Machining Corporation can invest the $2 800 000 and earn interest at a rate of 4.5% p.a. compounded semi-annually during Year 1, 5.0% p.a. compounded semi-annually during Years 2 and 3, and 5.5% p.a. compounded semi-annually during Year 4. The company can withdraw part of the money from this investment at any time without penalty.

Questions

1. 1. Could Precision Machining Corporation meet the cash requirement of Plan A by investing the $2 800 000 as described above? (Use “now” as the focal date.)
   2. What is the exact difference between the cash required and the cash available from the investment?
2. 1. Could Precision Machining Corporation meet the cash requirements of Plan B by investing the $2 800 000 as described above? (Use “now” as the focal date.)
   2. What is the difference between the cash required and the cash available from the investment?
3. 1. Suppose Plan A was changed so that it required equal amounts of $750 000 now, one year from now, two years from now, and four years from now. Could Precision Machining Corporation meet the cash requirements of the new Plan A by investing the $2 800 000 as described above? (Use “now ” as the focal date.)
   2. What is the difference between the cash required and the cash available from the investment?
4. Suppose the treasurer found another way to invest the $2 800 000 that earned interest at a rate of 9% compounded quarterly for the next five years.
   1. Could the company meet the cash requirements of the original Plan A with this new investment? (Show all your calculations.)
   2. Could the company meet the cash requirements of Plan B with this new investment? (Show all your calculations.)
   3. If the company could meet the cash requirements of both plans, which plan would the treasurer recommend? In other words, which plan would have the lower present value?

8.         A variable cost

            a.   decreases in total with increases in volume

            b.   increases on a per-unit basis with increases in volume

            c.   increases in total with increases in volume

            d.   decreases on a per-unit basis with increases in volume

            e.   None of the above

9.   In standard costing, the upper and lower control limits are used to determine

            a.   the direction of the variance

            b.   the dollar amount of the variance

            c.   whether or not to investigate a variance

            d.   All of the above

            e.   None of the above

10. The direct materials usage variance is part of the performance evaluation of the

            a.   production manager

            b.   sales manager

            c.   purchasing agent

            d.   controller’s office

            e.   None of the above

11. Volume variances are generally the responsibility of the

            a.   purchasing agent

            b.   production manager

            c.   sales manager

            d.   controller’s office

            e.   None of the above

12. When using variable costing,

            a.   all fixed costs are deducted on the variable costing income statement

            b.   the total cost of goods sold is deducted on the variable costing income statement

            c.   the cost allocated to ending inventory consists of both fixed and variable costs

            d.   the total contribution margin on the variable costing income statement is based on units produced

            e.   None of the above

13. According to GAAP, if the ending balance in the overhead control account is considered immaterial,

            a.   it is closed to direct materials, work-in-process, and finished goods

            b.   it is closed to work-in-process, finished goods, and cost of goods sold

            c.   it is closed to finished goods and cost of goods sold

            d.   the total is closed to cost of goods sold

            e.   None of the above

14. According to the IMA’s Statement of Ethical Professional Practice, an accountant must “Disclose all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations.” This falls under the category of

            a.   Competence

            b.   Confidentiality

            c.   Integrity

            d.   Credibility

            e.   None of the above

15. The margin of safety is

            a.   the amount of revenue earned (or expected to be earned) above the break-even point

            b.   the amount of revenue earned (or expected to be earned) above total fixed costs

            c.   the amount of revenue earned (or expected to be earned) above total costs

            d.   the amount of revenue earned (or expected to be earned) above total variable costs

            e.   None of the above