n February 2020, Oriole Construction signed a contract and commenced construction on a parking garage. The total contract price was $91.0 million and was expected to be completed in July 2022 at a total estimated cost of $82.4 million. Payment by the customer was to be made in several stages, based on significant events and dates throughout the construction timeline. Based on the terms of the contract with the customer, control over the parking garage (i.e. ownership) does not transfer to the customer until completion. Oriole’s year-end was September 30 and follows ASPE.

By the end of September, 2020, Oriole had incurred $8,240,000 in costs and had invoiced $10,600,000 in progress billings. $8,200,000 of the progress billings had been collected.

By September 30, 2021, Oriole had incurred $43,230,000 in total costs and had invoiced $45,400,000 in progress billings, including the progress billings in 2020. Of the total billings, $30,600,000 in total had been collected. Also, Oriole reviewed its cost estimates on the project, and now believed the parking garage would cost $78.6 million in total to complete.

Using the completed-contract method, prepare all journal entries required for the year ended September 30, 2020. Use Materials, Cash, Payables for costs incurred to date. (Credit account titles are automatically indented when the 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.)

Using the completed-contract method, prepare all journal entries required for the year ended September 30, 2021. Use Materials, Cash, Payables for costs incurred to date. (Credit account titles are automatically indented when the 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.)

Prepare the journal entry to record revenue and cost of construction on completion of the project, assuming all billings are completed and the total actual cost is the same as the 2021 estimate. Use Materials, Cash, Payables for costs incurred to date. (Credit account titles are automatically indented when the 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.)

1. Briefly summarize the history of Sanskrit Language and its impact on Indian culture since the ancient time. Give at least one example of its impact(s) in the following areas: religion, music, dance, theater, and literature.

Scenario Suppose that a movie theater faces a downward sloping demand curve for popcorn and it increases the price of a container of popcorn from $4.00 to $4.80, which causes the count of containers sold to fall from 100 to 90.

Questions 1. What is the elasticity coefficient?

2. Is the demand relatively elastic or relatively inelastic?

3. Should the theater consider raising the price of popcorn further?

4. When a firm faces a downward sloping demand curve, should it ever price its product in the inelastic range of the demand curve (if it has such a range)? Explain why or why not.

5. When a firm is a monopolist (or the only seller of a product), should it price its product in the elastic or inelastic range of its demand curve? Explain.

Arlington, Texas wants to build a new recreation center. The estimated cost of construction cost us $14 million with annual staffing and maintenance costs of $520,000 per year over the twenty-year life of the center. At the end of the life of the center, Arlington expects to sell the land for $5 million, though that figure might be as low as $1 million and as high $ 9 million. City staff estimate first year benefits to be $2.1 million (accruing at the end of the first year). Staff expect annual benefits to grow in real terms at 4 percent, though this could be as low as 1 percent and as high as 6 percent. They assume that the real discount rate for use in Arlington should be 7 percent, thought it might be a percentage point higher or lower

a) What is the present value of net benefits for the recreation project using staff predictions?

b) What is the sensivity of the present value of net benefits to alternative predictions about land price, growth rate of annual benefits and the real discount rate.

Bargain Rental Car offers rental cars in an off-airport location near a major tourist destination in California. Management would like to better understand the variable and fixed portions of it car washing costs. The company operates its own car wash facility in which each rental car that is returned is thoroughly cleaned before being released for rental to another customer. Management believes that the variable portion of its car washing costs relates to the number of rental returns. Accordingly, the following data have been compiled: Month Rental Returns Car Wash Costs January 2,500 $ 12,100 February 2,600 $ 13,700 March 2,800 $ 12,900 April 3,200 $ 15,900 May 3,700 $ 17,300 June 5,300 $ 25,500 July 5,600 $ 23,300 August 5,800 $ 24,900 September 4,800 $ 23,900 October 5,200 $ 24,400 November 2,300 $ 11,800 December 3,200 $ 18,100 2. Using least-squares regression, estimate the variable cost per rental return and the monthly fixed cost incurred to wash cars. What is the R2 rounded to the nearest whole percentage? (Round Fixed cost to the nearest whole dollar amount and the Variable cost per unit to 2 decimal places.) fixed cost per month= variable cost per rental return= r-square=

Exercise 10-1

The expenditures and receipts below are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses.

Identify each item by letter and list the items in columnar form, using the headings shown below. All receipt amounts should be reported in parentheses. For any amounts entered in the Other Accounts column, also indicate the account title. (Enter receipt amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). If no entry is required in other accounts, select "No Entry" for the account titles.)

Exercise 10-1

The expenditures and receipts below are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses.

Identify each item by letter and list the items in columnar form, using the headings shown below. All receipt amounts should be reported in parentheses. For any amounts entered in the Other Accounts column, also indicate the account title. (Enter receipt amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). If no entry is required in other accounts, select "No Entry" for the account titles.)

A construction project is carried out by a general contractor with the following descriptions:

• Project Duration: 3 months (Start: May 1st; End: July 31st)
• Contract Amount: 20,713+30,081+50,630+40,978+60,886+70,089+30,500+100,165+152,181
• Budget Amount: 100,936+200,081+300,685
• Contract Terms and Conditions
  • Materials: The construction company pays material suppliers in full when it receives payment from the owner. On the last day of each month the construction company may bill the owner for the work completed during the month. The owner pays the monthly bills one month after they are received.
  • Labor: The construction company pays for labor on the 25th of each month.
  • Subcontractor: The construction company pays subcontractors when it receives payment from the owner but withholds 5% from the subcontractor’s payment. Final payment will include payment of the retention.
  • Between the contractor and the owner: On the last day of each month the construction company may bill the owner for the work completed during the month. The owner pays the monthly bills one month after they are received. The owner withholds 5% from the construction company's payment. Final payment will include payment of the retention.
• Cost-loaded schedule and billing schedule to the owner

What is the amount of cash to maintain a positive cash flow in this project?

PART A

GanJee Pty Limited (GanJee) owns and develops properties in the Gosford CBD on the Central Coast of NSW. Upon completion of construction the company leases the apartments and retail space and provides tennants services including waste removal, maintenance and shared facilities like airconditioning. All leases are signed for a period of less than 5 years and are then reviewed before renewal or extension. You wish to establish the fair value of one of GanJee’s Gosford properties using AASB 13/IFRS 13. GanJee purchased the property in 2001 when the Gosford CBD was in decline. At the time, GanJee was able to snap up the property for $0.5 million. In 2015, existing property was demolished and GanJee constructed two impressive tower block buildings with retail space below. The property also includes a hotel, office space and apartments. Construction was expensive, costing $400 million. You have ascertained the following information for your assessment: • The company commissioned the expert opinion of two reputable independent expert appraisers. These appraisers delivered valuation A and valuation B. Valuation A contained the appraiser’s opinion that the property value for GanJee’s Gosford holding had a fair value of $1.3 billion based upon earnings before interest and tax multiplied by a conservative earnings multiple of 6 which is more likely to be considered fair by a potential buyer for the properties. The second valuer in providing valuation B expressed the opinion that the properties had a fair value of $2.75 billion based upon earnings before interest and tax multiplied by an earnings multiple of 8 which is more likely to be considered fair by a potential seller of the property. Both appraisers acknowledged that valuing the property in the current economic climate was difficult as generally there are very few sales of comparable properties. The appraisers communicated that they used their experience in observing valuations of residential rather than commercial and residential properties.  The directors estimate that the current cost of replacing the property would be $1.8 billion based on the current design with today’s construction costs, including labour, materials and overheads. Property prices in the Gosford CBD have increased substantially since 2001. The CBD went through a rapid growth phase in 2017 but there is currently a lull as the City Council does not wish to have new development. The GanJee property is surrounded by fairly derelict buildings which makes valuation difficult. • Present value of future cash flows: The directors have calculated net cash inflows over the next 20 years estimated to be $300 million per year, based on projected cash flows from rental income, tax savings and expenditures. The directors expect that the building will need substantial renovation in 20 years’ time. The directors based their valuation on the following factors: ✓ discount rate of 11.5% to 14.5%; ✓ average subsequent tenure period of ten years for retail units (ILU) and four years for serviced apartments (SA).

Required

Discuss each of the above four values as a basis for establishing a fair value for the property. In accordance with AASB 13/IFRS 13 which methodology do you believe is most appropriate? What additional information if any would you wish to obtain to make a better estimate?

PART B

Walkabout Park wants to determine fair value of the animals in their zoo. They hold the animals primarily for breeding and preservation of native species but also for the benefit of the local population and school group visits.

Required

Provide your recommendation for how the entity should go about measuring the biological assets’ fair value. In your response provide an explanation of possible alternatives and justify your recommendation.

Bliesmer Electronics incurred the following costs.

Instructions

- Determine property, plant, and equipment costs.

- Indicate to which account Bliesmer would debit each of the costsAssume a monthly accounting period.

- The following accounts are available in the general ledger: Prepaid Insurance; GST Clearing; Land; Buildings; Equipment; Land Improvements; Interest Expense; Other Expense.

- Assume the “sales tax” of €5,000 in the first item is GST. All of the other figures given, beginning with Cost 2., are net of GST.

- Add the following cost #10: €30,000 of interest incurred on borrowings to finance construction of the building, where €2,000 was incurred prior to construction, $24,000 was incurred during the nine-month construction period, and €4,000 was incurred after construction was completed.