On March 1, 2018, the Miner Company received authorization to issue $160,000 in debentures. The bonds have a stated interest rate of 6%, and they mature in ten years. Interest is payable each February 28^th and August 31^st. On October 31, 2021, Miner issued 90 of the bonds and received cash from the lender in the total amount of $98,500.

Then, on May 1, 2025, the bondholders converted the bonds into 8,800 shares of Miner’s $10 par common stock. Miner paid all interest due to May 1^st in cash.

Miner has a fiscal year-end that ends on each June 30^th. Prepare ONLY those journal entries that the company would make with relating to the bonds on MARCH 1, 2018, OCTOBER 31, 2021, FEBRUARY 28, 2022, and MAY 1, 2025.

Bellamy Corporation uses customers served as its measure of activity. The company bases its budgets on the following information: Revenue should be $3.20 per customer served. Wages and salaries should be $21,000 per month plus $0.80 per customer served. Supplies should be $0.70 per customer served. Insurance should be $5,300 per month. Miscellaneous expenses should be $3,100 per month plus $0.10 per customer served.

The company reported the following actual results for October:

Customers served 22,000

Revenue $ 73,300

Wages and salaries $ 40,400

Supplies $ 16,100

Insurance $ 5,500

Miscellaneous expense $ 7,400

Required:

Prepare a report showing the company's revenue and spending variances for October. Label each variance as favorable (F) or unfavorable (U).

RCK Ltd issues a prospectus inviting the public to subscribe for 90 million ordinary shares of $2.00 each. The terms of the issue are that $1.00 is to be paid on application and the remaining $1.00 within one month of allotment.

Applications are received for 108 million shares during July 2018. The directors allot 90 million shares on 15 August 2018. All applicants receive shares on a pro rata basis. The amounts payable on allotment are due by 20 September 2018. By 20 September 2018 the holders of 18 million shares have failed to pay the amounts due on allotment. The directors forfeit the shares on 30 September 2018.

The shares are resold on 15 October 2018 as fully paid. An amount of $2.00 per share is received. The balance of forfeited shares is refunded on 20 October 2018.

Answer the three questions below. For questions (i) and (ii) key dates are as follows: Balance date is June 30th. The Audit Report was signed on September 30th. The Financial Statements were issued to shareholders on November 4th.

(i) State three audit procedures required under ASA 560 if the auditor discovers that a material event took place on July 23rd.

(ii) Is the auditor required to undertake any audit procedures if he/ she was informedby management on October 9th that management intended to amend the financial report because of the bankruptcy of a major debtor on October 4th?

(iii) True or False. If an auditor provides a new audit report in relation to a subsequent event, it cannot be dated earlier than the date on which the directors approved the emended financial report.

Pacific Ink had beginning work-in-process inventory of $1,005,960 on October 1. Of this amount, $423,500 was the cost of direct materials and $582,460 was the cost of conversion. The 61,000 units in the beginning inventory were 30 percent complete with respect to both direct materials and conversion costs.

During October, 128,000 units were transferred out and 43,000 remained in ending inventory. The units in ending inventory were 80 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. Costs incurred during the period amounted to $3,314,300 for direct materials and $4,022,730 for conversion.

a-1. Compute the cost of goods transferred out and the cost of ending inventory using the FIFO method.

a-2. Is the ending inventory higher or lower under the weighted-average method compared to FIFO?

[The following information applies to the questions displayed below.]

Pacific Ink had beginning work-in-process inventory of $744,960 on October 1. Of this amount, $304,920 was the cost of direct materials and $440,040 was the cost of conversion. The 48,000 units in the beginning inventory were 30 percent complete with respect to both direct materials and conversion costs.

During October, 102,000 units were transferred out and 30,000 remained in ending inventory. The units in ending inventory were 80 percent complete with respect to direct materials and 40 percent complete with respect to conversion costs. Costs incurred during the period amounted to $2,343,600 for direct materials and $3,027,840 for conversion.

Compute the costs of goods transferred out and the ending inventory using the weighted-average method. (Do not round intermediate calculations.)

Pacific Ink had beginning work-in-process inventory of $750,960 on October 1. Of this amount, $307,920 was the cost of direct materials and $443,040 was the cost of conversion. The 51,000 units in the beginning inventory were 25 percent complete with respect to both direct materials and conversion costs. During October, 108,000 units were transferred out and 33,000 remained in ending inventory. The units in ending inventory were 75 percent complete with respect to direct materials and 35 percent complete with respect to conversion costs. Costs incurred during the period amounted to $2,556,000 for direct materials and $3,278,760 for conversion.

Required: a. Compute the equivalent units for the materials and conversion cost calculations. b. Compute the cost per equivalent unit for direct materials and for conversion costs using the FIFO method.

Consider the two following recent media headlines about the environment. Explain how, exactly, each of those stories represent an instance of the concept of ‘Government failure’.

1. Federal plan [on plastics] may need recycling. Just nine percent of the three million tonnes [of plastics] produced a year is re-used, with the rest ending up in landfills or, worse, entering the environment as pollution. – National Post, Thursday, October 5, 2020, page A1.

2. The carbon tax will need to rise if Ottawa wishes to make its [Paris Accord] targets. The Director of the Parliamentary Budget Office, Yves Giroux, estimates that the carbon tax will need to rise to $117 per ton [of carbon equivalent] by 2030 if it applies to all industries. – Ici Radio Canada, Thursday, October 8, 2020.

Windsor Inc. issued $3,840,000 of 10%, 10-year convertible bonds on June 1, 2020, at 99 plus accrued interest. The bonds were dated April 1, 2020, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis.

On April 1, 2021, $1,440,000 of these bonds were converted into 35,000 shares of $21 par value common stock. Accrued interest was paid in cash at the time of conversion.