b-3. Prepare a year-end balance sheet for each year accounting period. (Please explain how you get Year 2 Cash under current Assets as well. Thank you:

Mark’s Consulting experienced the following transactions for 2018, its first year of operations, and 2019. Assume that all transactions involve the receipt or payment of cash.

Transactions for 2018

1. Acquired $60,000 by issuing common stock.

2. Received $125,000 cash for providing services to customers.

3. Borrowed $21,000 cash from creditors.

4. Paid expenses amounting to $58,000.

5. Purchased land for $35,000 cash.

Transactions for 2019

Beginning account balances for 2019 are:

1. Acquired an additional $21,000 from the issue of common stock.

2. Received $132,000 for providing services.

3. Paid $16,000 to creditors to reduce loan.

4. Paid expenses amounting to $65,000.

5. Paid a $12,000 dividend to the stockholders.

6. Determined that the market value of the land is $45,000.

1. b-3. Prepare a year-end balance sheet for each year accounting period.

Merit & Family purchased engines from Canada for 30,000 Canadian dollars on March 10 with payment due on June 8. Also, on March 10, Merit acquired a 90-day forward contract to purchase 30,000 Canadian dollars at C$1 = $0.50. The forward contract was acquired to manage Merit & Family’s exposed net liability position in Canadian dollars, but it was not designated as a hedge. The spot rates were

Required:
Prepare journal entries for Merit & Family to record the purchase of the engines, entries associated with the forward contract, and entries for the payment of the foreign currency payable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

• Record the entry to revalue the foreign currency receivable to the current equivalent U.S. dollar value.
• Record the entry to revalue the foreign currency accounts payable to the current U.S. dollar value.
• Record the payment of U.S. dollars to an exchange broker for the forward contract.
• Record the receipt of Canadian dollars from the exchange broker.
• Record the settlement of the foreign currency payable.

a) Tom Goodly Ltd guarantees the bank overdraft of Pete Smith Ltd during 2018. Tom Goodly Ltd’s reporting period ends on 30 June each year. At the time of

providing the guarantee, Pete Smith Ltd was in a sound financial position. During late 2019, due to the outbreak of the COVID-19 pandemic, international

trading conditions deteriorated to such an extent that Pete Smith Ltd incurred substantial losses. Finally, on 25 July 2020, Pete Smith Ltd was forced to file for

protection from its creditors.

Required:

Explain how Tom Goodly Ltd would report the guarantee provided to Pete Smith Ltd in its financial statements ending

i) 30 June 2019

ii) 30 June 2020 3

b) As at 30 June 2018, T&P Ltd’s equity accounts are as follow: 400  000 ‘A’ ordinary shares, issued at $2.50 each, fully paid $ 1 000 000

75  000  6% cumulative preference shares, issued at $3 and paid to $2 150  000

Accumulated losses (12 750)

As the company had incurred a loss for the year ended 30 June 2018, no dividends were declared for that year. The following transactions and events occurred during the year ended 30 June 2020.

2019 July 25 The directors made the final call of $1 on the preference shares. Aug 31 All call monies were received except those owing on 5000 preference shares.

Sept 7 The directors resolved to forfeit 5000 preference shares for non-payment of the call. The constitution of the company directs that forfeited amounts are not to be refunded to shareholders. The shares will not be reissued.

Nov 1 The company issued a prospectus offering 40  000 ‘B’ ordinary shares payable in two instalments: $3 on application and $2 on 30 November 2022. The offer closed on 30 November.

Nov 30 Applications for 50  000 ‘B’ ordinary shares were received.

Dec 1 The directors resolved to allot the ‘B’ ordinary shares pro rata with all

applicants receiving 80% of the shares applied for. Excess application

monies were allowed to be held. The shares were duly allotted.

Dec 5 Share issue costs of $8600 were paid.

Required:

Prepare general journal entries to record the above transactions.

Edom Company, the lessor, enters into a lease with Davis Company to lease equipment to Davis beginning January 1, 2016. The lease terms, provisions, and related events are as follows:

Required:

Let’s start with a product everyone is familiar with. If you were going to purchase a new car, walk us through the steps you would go through in your purchase process. How does your process differ from the process detailed in the text? How does it differ from others in this thread?

This assignment is designed to get you to locate the Annual Report for a company and become familiar with its contents, particularly the financial statements and the notes to the financial statements (LO 2 and 3). While we have looked at very basic formats of the financial statements, the financial statements for a company contain much more detailed information much of which you have not been introduced to yet. Pay attention in the Annual Report to the information provided in the notes to the financial statements as you will find a lot of useful information in them that may help with some of the assignment questions.

This questioned need to based in JB HIFI ANNUAL REPORT 2019

Question 1 Describe the principal activities of the company? (1 mark)

Question 2 Define the revenue recognition criteria of the company and identify the page number and note number where this is stated in the annual report?

Question 3 Describe how the company values all classes of property, plant and equipment? Identify the page number and note number where this is stated in the annual report?

Question 4 Name the Audit firm responsible for performing the audit of the financial statements of the company. Explain why the auditor must declare their independence, and also explain why the financial statements must be audited by an external party.

Question 5 Provide any evidence of the company’s initiative or commitment to business sustainability practices. Why are businesses concerned about sustainability?

PART B ‐ ANALYSIS OF COMPANY’S FINANCIAL INFORMATION

Question 1 Using the company financial information, analyse and compare their 2018 and 2019 financial data by answering the following questions (you should analyse 2 ratios for each question):

A. Calculate the efficiency of the company by identifying and calculating two efficiency ratios. You need to calculate the two ratios for 2018 and 2019 (2 mark).

B. You must also explain what the efficiency ratio results tell us about the company performance occurring between the 2 periods (1 mark). Has the company’s efficiency improved or deteriorated? (1 mark)

C. Analyse the profitability of the company by identifying and calculating two profitability ratios. You need to calculate the two ratios for 2018 and 2019 (1 mark).

D. You must also explain what the profitability ratio results tell us about the company performance occurring between the 2 periods. (1 mark) Has the company’s profitability improved or deteriorated? (1 mark)

E. Analyse the company debt position by identifying and calculating two ratios. You need to calculate the two ratios for 2018 and 2019 (1 mark).

F. You must also explain what the debt ratio results tell us about the company performance occurring between the 2 periods. (1 mark). Has the company’s debt position improved or deteriorated? (1 mark)

Make or Buy Terry Inc. manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 3,000 units of product OP89 for $165,000. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs:

Costs per Unit

Direct materials $26

Direct labor $17

$Variable overhead $15

Allocated fixed overhead $4

Required: Calculate the relevant cost for producing the product. Relevant Cost Per Unit Total $0

Direct materials $

Direct labor $

Variable overhead $

Allocated fixed overhead $

Total

Calculate the additional cost or savings of producing the product internally versus purchasing the product externally, from a supplier..

Chapter 15 The University Bookstore Student Computer Purchase Program Case page 762 The University Bookstore Student Computer Purchase Program: The University Bookstore is owned and operated by State University through an independent corporation with its own board of directors. The bookstore has three locations on or near the State University campus. It stocks a range of items, including textbooks, trade books, logo apparel, drawing and educational supplies, and computers and related products, including printers, modems, and software. The bookstore has a program to sell personal computers to incoming freshmen and other students at a substantial educational discount, partly passed on from computer manufacturers. This means that the bookstore just covers computer costs, with a very small profit margin remaining. Each summer all incoming freshmen and their parents come to the State campus for a 3 day orientation program. The students come in groups of 100 throughout the summer. During their visit the students and their parents are given details about the bookstore’s computer purchase program. Some students place their computer orders for the fall semester at this time, whereas, others wait until later in the summer. The bookstore also receives orders from returning students throughout the summer. This program presents a challenging management problem for the bookstore. Orders come in throughout the summer, many old a few weeks before school starts in the fall, and the computer suppliers require at least 6 weeks for delivery. Thus, the bookstore must forecast computer demand to build up inventory to meet student demand in the fall. The student computer program and the forecast of computer demand have repercussions all along the bookstore supply chain. The bookstore has a warehouse near campus where it must store all computers because it has no storage space at its retail locations. Ordering too many computers not only this up the bookstore’s cash reserves, it also takes up limited storage space and limits inventories for other bookstore products during the bookstore’s busiest sales period. Because the bookstore has such a low profit margin on computers, its bottom line depends on these other products. Because competition for good students has increased, the university has become very quality conscious and insists that all university facilities provide exemplary student service, which for the bookstore means meeting all student demands for computers when fall semester starts. The number of computers ordered also affects the number of temporary warehouse and bookstore workers who must be hired for handling and assisting with PC installations. The number of truck trips from the warehouse to the bookstore each day of fall registration is also affected by computer sales. The bookstore student computer purchase program has been in place for 14 years. Although, the student population has remained stable during this period, computer sales have been somewhat volatile. Following are the historical sales data for computers during the first month of fall registration: 1. Develop an appropriate forecast model for the bookstore manager to use to forecast computer demand for the next fall semester. Show work for the following forecast techniques: A. Moving average (n = 3) B. Moving average (n = 5) C. Weighted Moving average (50%, 30%, 20%, starting with most recent period) D. Linear trend line E. Exponential smoothing (alpha = .3 2. Adjusted exponential smoothing (alpha = .3, beta = .4) A. Complete all above forecast techniques using MS Excel, QM for Windows or Excel QM B. Label everything appropriately. You do not need to make each forecast technique a separate tab on the sheet. However, please label columns correctly. C. Place your name in the document 3. Identify the forecast technique with the lowest MAD. YEAR

Year- Computers sold

1 518

2 651

3 708

4 921

5 775

6 810

7 856

8 792

9 877

10 693

11 841

12 1009

13 902

14 1103

Gibson Fabricators Corporation Gibson Fabricators Corporation manufactures a variety of parts for the automotive industry. The company uses a job-order costing system with a plantwide predetermined overhead rate based on direct labour-hours. On the December 10, 2019, the company’s controller made a preliminary estimate of the predetermined overhead rate for 2020. The new rate was based on the estimated total manufacturing overhead cost of $2,475,000 and the estimated 52,000 total direct labourhours for 2020:

Predetermined overhead rate = $2,475,000/ 52,000 hours = $47.60 per direct labour-hour

This new predetermined overhead rate was communicated to top managers in a meeting on the December 11. The rate did not cause any comment because it was within a few pennies of the overhead rate that had been used during 2019. One of the subjects discussed at the meeting was a proposal by the production manager to purchase an automated milling machine centre built by Central Robotics. The president of Gibson Fabricators, Kevin Robinson, agreed to meet with the regional sales representative from Central Robotics to discuss the proposal. On the day following the meeting, Mr. Robinson met with Jay Warner, Central Robotics’ sales representative. The following discussion took place:

Robinson: Larry Winter, our production manager, asked me to meet with you since he is interested in installing an automated milling machine centre. Frankly, I am sceptical. You’re going to have to show me this isn’t just another expensive toy for Larry’s people to play with.

Warner: That shouldn’t be too difficult, Mr. Robinson. The automated milling machine centre has three major advantages. First, it is much faster than the manual methods you are using. It can process about twice as many parts per hour as your present milling machines. Second, it is much more flexible. There are some up-front programming costs, but once those have been incurred, almost no setup is required on the machines for standard operations. You just punch in the code of the standard operation, load the machine’s hopper with raw material, and the machine does the rest.

Robinson: Yeah, but what about cost? Having twice the capacity in the milling machine area won’t do us much good. That centre is idle much of the time anyway.

Warner: I was getting there. The third advantage of the automated milling machine centre is lower cost. Larry Winters and I looked over your present operations, and we estimated that the automated equipment would eliminate the need for about 6,000 direct labour-hours a year. What is your direct labour cost per hour?

Robinson: The wage rate in the milling area averages about $21 per hour. Fringe benefits raise that figure to about $30 per hour.

Warner: Don’t forget your overhead.

Robinson: Next year the overhead rate will be about $48 per hour.

Warner: So including fringe benefits and overhead, the cost per direct labour-hour is about $78.

Robinson: That’s right.

Warner: Since you can save 6,000 direct labour-hours per year, the cost savings would amount to about $468,000 a year.

Robinson: That’s pretty impressive, but you aren’t giving away this equipment are you?

Warner: Several options are available, including leasing and outright purchase. Just for comparison purposes, our 60-month lease plan would require payments of only $300,000 per year.

Robinson: Sold! When can you install the equipment?

Shortly after this meeting, Mr. Robinson informed the company’s controller of the decision to lease the new equipment, which would be installed over the Christmas vacation period. The controller realised that this decision would require recalculation of the predetermined overhead rate for the year 2020 since the decision would affect both the manufacturing overhead and the direct labourhours for the year. After talking with both the production manager and the sales representative from Central Robotics, the controller discovered that in addition to the annual lease cost of $300,000, the new machine would also require a skilled technician/programmer who would have to be hired at a cost of $45,000 per year to maintain and program the equipment. Both of these costs would be included in factory overhead. There would be no other changes in total manufacturing overhead cost, which is almost entirely fixed. The controller assumed that the new machine would result in a reduction of 6,000 direct labour-hours for the year from the levels that had initially been planned. When the revised predetermined overhead rate for the year 2020 was circulated among the company’s top managers, there was considerable dismay.

Required: Part A – Report Write a report addressing the following questions to be submitted to the president of Gibson Fabricators, Kevin Robinson. 1. Recalculate the predetermined rate assuming that the new machine will be installed. Explain why the new predetermined overhead rate is higher (or lower) than the rate that was originally estimated for the year 2020.

2. The company has received a job order from Fairfield corporation. The estimated direct material costs for delivering the order is $45,800. The new machine will be used for this job. The expected labour cost will be $8,400 for 400 hours of direct labour. What will be the estimated total production cost of this job under the new predetermined rate?