From the end of 2009 to the end of 2019, the size of the United States National Debt held by the public grew from $6.8 trillion to $17.2 trillion. During the same period, the 10 year US Treasury Bond yield to maturity fell from 3.59% in December 2009 to 1.86% in December of 2019. Explain how such an increase in the supply of government bonds can lead to a fall in the interest rate. Second, consider that the 10 year bond rate has fallen further in 2020 to 0.68 percent on October 1, despite a further increase in the national debt ($20.5 trillion as of June 30, 2020) due to the decline in the economy and increase in federal government spending. Why has this continued in 2020 during an economic crisis?

Ahmed, an Australian resident, was made redundant on 30th June 2020 at the age of 58. He had been employed at the company for 14 years and 9 months. His taxation records for the year ended 30th June 2020 revealed the following:

Gross wages up to redundancy $65000 (PAYG withheld $18400)

Interest on savings account held jointly with spouse $4200

Genuine redundancy payment $93000

Lump sum received from his superannuation fund:

Taxable component (element taxed in the fund) $372000 (PAYG withheld $26000)

Ahmed has adequate private health insurance cover for the year.

Required:

For the year ended 30 June 2020, calculate Ahmed's:

a) Taxable Income

b) Net Tax Payable or Refundable

Explain the impact on US export and import if the US dollar has depreciated in comparison with other currencies. For example, the exchange rate for the Canadian dollar was 1.36 per U.S dollar in 2003. Now in 2020, it is 1.31 Canadian dollars per U.S.dollar under this case the dollar has suffered a slight depreciation. Also, when the dollar has depreciated in the case of the Chinese Yuan from 8.27 in 2003 to 6.69 yuans in 2020 per U.S dollar. Also, when there is not either appreciation or depreciation from 2003 to 2020 which is the case of Saudi Arabia currency its exchange rate remains the same 3.75 Riyals per dollar since 2003. Then explain the impact of U.S. exports and imports under these scenarios.

On January 1, 2020, Sweet Corporation granted its president a share appreciation rights (SARs) package covering employment over a three-year period. The package was based on SARs increases for 20,100 shares over the fair value on January 1, 2020 of $17 per common share. The SARs package to be paid in cash at the end of the third year (i.e., December 31, 2022).

The fair values of the Sweet shares were as follows:

Prepare the journal entries to record the Share Appreciation Rights (SARs) package, and the payment on December 31, 2022 assuming that Sweet follows ASPE.

Acme Co. has projected the following sales for 2019: Q1 = $870 Q2 = $920 Q3 = $850 Q4 = $950 Sales for each quarter in 2020 are projected to be 20 percent greater than the previous quarter (ie. Q1 2020 is projected to be 20% higher than Q4 2019). Calculate expected payments to suppliers in each quarter for 2019, assuming: 1) Acme places orders during each quarter equal to 40 percent of projected sales for the next quarter. For example, if Q1 2020 sales are expected to be $1140, then purchases in Q4 of 2019 would be estimated to be $1140 x 0.4 = $456 2) Acme's average days of payables is 90 days.

Q1 payments =

Q2 payments =

Q3 payments =

Q4 payments =

The graph illustrates a normal distribution for the prices paid for a particular model of HD television. The mean price paid is $1600 and the standard deviation is $140.
1180 1320 1460 1600 1740 1880 2020


Use the 68-95-99.7 Rule to answer the following questions.

What is the approximate percentage of buyers who paid more than $2020?
%

What is the approximate percentage of buyers who paid more than $1880?
%

What is the approximate percentage of buyers who paid between $1460 and $1740?
%

What is the approximate percentage of buyers who paid between $1460 and $1600?
%

What is the approximate percentage of buyers who paid between $1600 and $2020?
%

What is the approximate percentage of buyers who paid between $1600 and $1880?

The following information is an extract from the financial statements of Extreme-Experiences Pty Ltd.

a)    Calculate the following ratios for both 2019 and 2020.

b)    Comment on the Liquidity of Extreme-Experiences using the answers in part a).

c) Which ratio measures Solvency? Provide suggestions on how to improve the Solvency of Extreme-Experiences.

GCA Ltd reported the following information in its statement of financial position at 30 June 2020:

                   Plant                                                                    $650,000

                   Accumulated depreciation – plant                  (150,000)

                   Intangible assets                                               300,000

                   Accumulated amortisation                               (100,000)

                   Land                                                                    300,000

                   Total non-current assets                                  1,000,000

                   Cash                                                                    50,000

                   Inventory                                                             180,000

                   Total current assets                                          230,000

                   Total assets                                                       $1,230,000

                   Liabilities                                                             150,000

                   Net assets                                                          $1,080,000

At 30 June 2020, GCA Ltd analysed the internal and external sources of information that would indicate deterioration in the worth of its assets. It determined that there were indications of impairment. GCA Ltd calculated the recoverable amount of the assets to be $980,000.

Provide the journal entry for any impairment loss at 30 June 2020. Show all calculations.

During 2020, Skysong Company started a construction job with a contract price of $1,590,000. The job was completed in 2022. The following information is available.

Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.

eTextbook and Media

List of Accounts

Prepare all necessary journal entries for 2021

Case Study 3:

QWERTY It is now June 2013. Qwerty Limited is an Irish based company that designs, manufactures and sells a wide range of wireless computer keyboards to retailers in both Ireland and Northern Ireland. QWERTY is co- owned by twin brothers Paul and Joe Hayes, who founded the company after graduating from their local university with undergraduate degrees in Computer Science and Electronic Engineering respectively. Since then, QWERTY has experienced rapid sales growth (with modest but growing profitability) and now employs 55 full-time employees from their Limerick base. Paul and Joe are the only directors of the company. Performance Measurement As a result of the on-going difficulties experienced by QWERTY in acquiring adequate levels of credit from their local financial institutions to fund their working capital, Paul and Joe have decided with immediate effect, that if any of their products are budgeted to be loss-making for the forthcoming year, they should be discontinued immediately in an attempt to protect the future viability of the company. Consequently, the 2014 budgetary data for one of QWERTY's most popular (and to-date profitable) keyboards called “Exile”, is causing Paul and Joe a lot of concern (see Appendix I for the 2014 budgetary data on “Exile”). In an on-going attempt to reduce their costs, all of QWERTY's 2014 budgetary forecasts were jointly prepared by the company's co-owners, having previously been contracted out to a small local firm of Chartered Accountants. In addition to focusing on product profitability as a key performance indicator, Paul and Joe are also keen to consider the use of some non-financial metrics to guide them in making future strategic decisions. Having discussed the various options available, allied to the nature of the industry in which they compete, they have collectively decided on “innovation” as the key non-financial success factor for QWERTY to focus on in the short to medium term, although they have yet to agree on any specific performance measures.
Growth Opportunities Paul has always been more growth focused than Joe and for the past year has been exploring various options to expand the company. He has identified a venture capital investor, with an interest in small technology companies. The investor has made an offer to invest €/£ 2 million in QWERTY for 36% of the equity. Paul and Joe agree that this is an attractive offer. An agreement has been signed and this investment will go ahead within the next three months. The venture capital investor is impressed by Paul and Joe's management of QWERTY but has some concerns that it does not have the corporate governance structures to sustain its growth over the medium to long term. As a condition of the investment the venture capital investor is insisting that he has a position on the board of directors and a veto over major strategic decisions made by the company. Paul and Joe are agreeable to these conditions.
Paul is proposing that they use the funds raised from the new investor to part-finance the acquisition of Screen Magic Limited (“SCREEN”), an Irish company which manufactures computer screens. Paul has had preliminary discussions with the owner (and managing director) of SCREEN, who has told him he is keen to retire soon after finding the last few years increasingly stressful trying to resolve a complex tax issue affecting SCREEN and dealing with increasingly onerous regulations on environmental standards in manufacturing. He may be interested in selling SCREEN and has provided information on the company (see Appendix II). Paul has been pushing a “growth by acquisition” strategy for several years because he believes QWERTY is too narrowly focused on one sector and believes acquisitions almost always deliver significant value through synergies and economies of scale. He is confident that if QWERTY acquires another company he and Joe have the management skills required to ensure a successful integration. Paul is eager to agree the terms of the takeover of SCREEN before the venture capital investor takes his seat on the board as he is not sure if the investor would approve of the takeover. Bridging finance would be available from QWERTY's bank to finance the acquisition pending receipt of the new equity funds. This facility would be personally guaranteed by Paul and Joe.

CASE STUDY 3 QUESTIONS

QUESTION 3: Suggest and justify any three (3) specific performance measures in relation to “innovation” that you think QWERTY should adopt to enhance their future performance.

QUESTION 4: Identify one (1) potential ethical issue facing Paul and Joe and discuss how it should be resolved.