The Cost of the Cheap Shirt Conduct some research about the working conditions and regulatory environment in clothing factories in Bangladesh. Economists warn about quick fixes for wages and the imposition of U.S. safety standards on foreign factories. They offer the following figures to illustrate that the issue of labor conditions in other countries is complex. In Bangladesh, clothing factories get about $6.75 per shirt. These are the factory costs: $4.75 for the fabric and thread $1.00 for the shirt’s labels $0.38 wage costs for each shirt (workers earn $70 to $80 a month) $0.15 per shirt for laundering That leaves $0.47 per shirt for facilities, shipment, marketing, and perhaps the interest on loans. The cost of living in Bangladesh is $40 per month for rent, and food per adult is $13 per month. Milk for a child is $5 per month. Those who work in the factories are generally the main wage earners in their families because no other jobs pay as well. Given this analysis, where do you see some fixes for the safety and wage issues? What needs to be done besides instituting codes of ethics and factory and labor standards? Assume that you are a manager for a clothing firm in the United States and you are being sent to Bangladesh to select a new manufacturer for your clothing lines. Discuss some of the issues that will affect your decisions about choosing a new facility to work with.

1）Ethan Grenfell recently launched a firm in the clothing industry, targeting 13-17 year olds. One thing Ethan thinks he has accomplished is producing products that have universal appeal, so he will not vary his approach from country to country. Ethan is pursuing a ________ strategy.

Select one:

a. universal

b. multidomestic

c. home

d. contemporary

e. global

2）Ethan Wendler is the Chief Operating Officer of a startup in the health food industry. He is also a member of his firm's board of directors. In board of directors terminology, Ethan is a(n) _______ director.

Select one:

a. junior

b. outside

c. inside

d. expert

e. senior

3）Femrock guitars are stylish and come in feminine colors, and is the only guitar maker that incorporates design features that accommodate a woman's smaller hand and build. The best way to describe how Femrock’s business idea was recognized is ________.

Select one:

a. brainwriting

b. observing trends

c. brainstorming

d. finding a gap in the marketplace

e. talking to musicians

You are the practice manager for Dermatology Associates of Linwood (DAL): a multi-physician dermatology practice. Recently, the physician partners have decided to invest in purchasing an existing dermatology practice in a neighboring city, which will be operated under the group's name. They have asked you to research the financial logistics of acquiring this new location. The practice is fully-staffed, however the (one) physician owner is retiring, leaving an opening for a new physician to be hired. In keeping with DAL's standard of care, several new expenses will be incurred with the acquisition, including: access to DAL's electronic medical record system, a Fraxel laser, and new furniture for the waiting room area.

Draft a proposal, addressing the following items in a Word document:

• Summary of estimated primary startup costs (create a table to illustrate and organize this information)
• Financing options
• Summary of when the practice will reach profitability. Explain the finance principle you can use to make this determination. (You do not need to perform the calculations, but you do need to explain how to estimate and assess profitability).
• Include a minimum of three references, APA style, on a separate page.

Use the following comparative Balance Sheets, Income Statement, and additional information to prepare the 2018 Statement of Cash Flows for United Brands Corporation.

Required:

Prepare an entire Statement of Cash Flows (all three sections) using the indirect method for the Operating Activities section.

Prepare the Operating Activities section using the direct method.

United Brands Corporation

Balance Sheets

December 31, 2018 and 2017

($ in millions)

2018 2017 Incr (Decr)

ASSETS

Current Assets:

Cash $41 $20 $21

Accounts receivable 32 30 2

Inventory 46 50 (4)

Prepaid insurance 3 6 (3)

Property, Plant, & Equipment:

Land 80 60 20

Equipment 81 75 6

Less: Accumulated depreciation (16) (20) (4)

Total Assets $267 $221

LIABILITIES

Current Liabilities:

Accounts payable $26 $20 $6

Salaries payable 3 1 2

Income tax payable 6 8 (2)

Notes payable, current 34 47 (13)

Long-term Liabilities:

Notes payable, long-term 20 0 20

EQUITY

Common stock, $10 par, 50 million

shares authorized, 13 million issued in 2018,

10 million issued in 2017 $130 $100 $30

Paid-in capital in excess of par-common stock 29 20 9

Retained Earnings 19 25 (6)

Total Liabilities and Equity $267 $221

United Brands Corporation

Income Statement

for the year ended December 31, 2018

($ in millions)

Sales revenue $100

Cost of goods sold (60)

Gross profit $40

Operating expenses:

Salaries expense (13)

Depreciation expense (3)

Insurance expense (7)

Income from operations $17

Other income and expenses:

Interest expense (2)

Gain on sale of land 8

Loss on sale of equipment (2)

Income before income tax $21

Income tax expense (9)

Net income $12

Additional information for 2018 transactions:

All inventory is purchased on account, and the Accounts Payable account is used exclusively for inventory purchases.

A portion of the company land was sold for $18 million in cash. This land was originally purchased in a previous year for $10 million.

Land was purchased for $30 million cash for use as a parking lot.

Equipment was sold in 2018 that had an Accumulated Depreciation balance of $7 million on the date of sale. The equipment originally cost $14 million and was sold at a loss for cash. (HINT: You must determine the amount of cash received.)

In 2018, new equipment was acquired by issuing a 12%, five-year, $20 million note payable to the seller.

During 2018, $55 million of short-term (current) notes payable were paid in cash and $42 million of cash was borrowed in the form of short-term debt (current notes payable).

The increase in the common stock account is attributed to two transactions:

Issuance of a 10% stock dividend (1 million shares) when the market price was $13 per share.

Issuance of 2 million shares for cash when the market price was $13 per share.

Cash dividends were declared and paid to shareholders. (HINT: You must determine the amount of cash dividends paid.)

On June 1, 2018, Metlock Company and Bonita Company merged to form Windsor Inc. A total of 876,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis.

On April 1, 2020, the company issued an additional 637,000 shares of stock for cash. All 1,513,000 shares were outstanding on December 31, 2020.

Windsor Inc. also issued $600,000 of 20-year, 8% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 44 shares of common at any interest date. None of the bonds have been converted to date.

Windsor Inc. is preparing its annual report for the fiscal year ending December 31, 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,491,000. (The tax rate is 20%.)

Determine the following for 2020.

(a) The number of shares to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.)

(b) The earnings figures to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.)

Question 1

Mr. Chai sells various types of toys throughout Malaysia. Three of the accounts in the ledger of Mr. Chai indicated the following;

Balances at 1 January 2020:

(i)        Insurance paid in advance RM562

(ii)       Wages outstanding RM306

(iii)      Rent receivable, received in advance RM36

During 2020, Mr. Chai:

(i)           Paid for insurance RM1,019, by bank standing order

(ii)       Paid RM15,000 wages, in cash

(iii)      Received RM2,600 rent, by cheque, from the tenant

At 31 December 2020:

(i)           Insurance prepaid was RM345

(ii)       Wages accrued amounted to RM419

(iii)      Rent receivable in arrears was RM105

Required;

(a)       Prepare the prepaid insurance, accrued wages and rent receivable accounts for the year ended 31 December 2020.

(b)       Prepare the income statement extract showing clearly the amounts of insurance expense, wages expense and rent revenue for the year ended 31 December 2020.

(c)        Explain the effects on the financial statements of accounting for:

               (i)           the expenses accrued at year-end

               (ii)       the income received in advance at year end

(d)       Explain the purposes of accounting for:

              (i)           the expenses accrued at year end

              (ii)       the income received in advance at year end

(Total: 20 marks)

A comparative statement of financial position for Nathalina Industries Inc. follows:
NATHALINA INDUSTRIES INC.
Statement of Financial Position
December 31, 2020
    December 31

Assets 2020 2019
Cash $ 21,000  $ 34,000 
Accounts receivable   114,000  54,000 
Inventory 220,000  189,000 
Land 71,000  110,000 
Equipment 240,000  200,000 
Accumulated depreciation—equipment   (69,000) (42,000)
Total $597,000     $545,000 
Liabilities and Shareholders' Equity        
Accounts payable. 52,000. 59,000

Long term liabilities 25,000 0

Bonds payable 125,000  200,000 
Common shares    204,000  164,000 
Retained earnings   191,000  122,000 
Total $597,000  $545,000 

Additional information:
1. Net income for the fiscal year ending December 31, 2020, was $129,000.
2. Cash dividends were declared and paid in the year.
3. Bonds payable amounting to $75,000 were paid off.
4. Additional issuance of common shares for cash occurred in the year.
5. Land was sold for cash at a gain of $5,000. This gain on sale of the land is listed on the income statement.
6. Equipment was purchased during the year. It was purchased with $25,000 Long term liabilities and the remaining was paid with cash.
7. Depreciation Expense during 2020 was $27,000.

Required: Prepare a statement of cash flows for 2020 using the indirect method.

Sage Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land for $138,000 in cash. In addition, it paid $2,160 in surveying costs and $4,560 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $960 being received from the sale of materials.

Architectural plans were also formalized on December 1, 2020, when the architect was paid $32,400. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows.

The building was completed on July 1, 2021.

To finance construction of this plant, Sage borrowed $609,600 from the bank on December 1, 2020. Sage had no other borrowings. The $609,600 was a 10-year loan bearing interest at 10%.

Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.)

On May 1, 2018, Delta Airlines buys 100 SkyFlight Food Service, Inc. bonds for $1,015 each. Delta classifies this investment as available for sale. This is the first available for sale investment Delta has recorded and the only item that affects comprehensive income during this time period. During 2018, SkyFlight pays all bondholders $42 interest per bond. At the end of 2018, the bonds of Skyflight are trading for $1,020 each. During 2019, Skyflight pays all bondholders interest of $75 per bond. At the end of 2019, the bonds of Skyflight are trading for $1,014 per bond. On May 1, 2020, Delta Airlines sells all of its Skyflight bonds for $1,010 per bond. No interest was paid by Skyflight in 2020. Net income before anything to do with Skyflight (even the interest is not included) for Delta was $20 million in 2018, $16 million in 2019 and $18 million in 2020 after taxes. The tax rate is 20% for all years.

Requirements:

a. Show all the needed journal entries for the Skyflight stock from purchase to sale.

b. Show the statement of comprehensive income for 2018, 2019 and 2020.

c. If accumulated other comprehensive income is $500,000 at the beginning of 2018, what is the accumulated other comprehensive income at the end of 2018, 2019 and 2020