Transactions from Gravenhurst Inc.’s current year follow. Gravenhurst follows IFRS.

In each of the above situations, discuss the appropriateness of the journal entries in terms of generally accepted accounting principles. For the purposes of your discussion, assume that the financial statements, particularly net income, will be used by the court in a divorce settlement for the company president’s spouse.

Seattle-Pipes Co. produces pipes to be supplied to a Seattle utility company. The requirement of the utility company is that the pipes need to be 200 cm long. Longer pipes are acceptable to the utility company but any pipe less than 200 cm is rejected. Seattle-Pipes loses all its production cost on pipes that are rejected.

The production process is such that it has some variability in the lengths of pipes produced, and this variability can be well approximated by a Normal distribution. Seattle- Pipes can adopt one of the following three production processes:

• Process A: Produces pipes with an average length of 200 cm and a standard deviation of 0.5 cm

• Process B: Produces pipes with an average length of 201 cm and a standard deviation of 1 cm

• Process C: Produces pipes with an average length of 202 cm and a standard deviation of 1.5 cm

1. If Seattle-Pipes adopts the third Process (Process “C”), what is the probability it will haveits pipe rejected by the utility company? Enter your answer as a decimal probability (not a percent) rounded to 4 decimal places.

2. b) Seattle-Pipes temporarily changes its requirements and has a new requirement that it will accept any pipe of length from 199 cm to 202 cm. That is, pipes ranging in length from 199 cm to 202 cm will be accepted, others will be rejected.

   With this changed requirement, which production process (out of the 3) will result in the smallest percentage of rejections?

3. c) Seattle-Pipes earns a revenue of $200 for every pipe that gets accepted and loses all money for any pipe that is rejected. The cost of producing the pipes is $140 per pipe ifproduction process “A” is used, $160 per pipe if production process “B” is used, and $177 per pipe if production process “C” is used.

   Given this information, which production process would you recommend to maximize profits (revenue minus cost) if the requirement of the utility company is that pipes need to be of 200 cm (or more) and any pipe shorter than 200 cm is rejected?

Pandalela Products manufacturers a variety of household products. The company is considering introducing a new detergent. The company's CFO has collected the following information about the proposed product.

* The project has an anticipated economic life of 4 years.

*The company will have to purchase a new machine to produce detergent. The machine has an up-front cost (t=0) of RM 2million. The machine will be depreciated on a straight-line basis over 4 years (that is , the company's depreciation expense will be RM 500,000in each of the first four years (t = 1,2,3 and 4). The company anticipates that the machine will last for four years, and that after four years, its salvage value will equal zero.

* If the company goes ahead with the proposed product, it will have an effect on the company's net operating working capital. At the outset, t=0, inventory will increase by RM 140,000 and accounts payable will increase by RM 40,000. At t=4, the net operating working capital will be recovered after the project is completed.

* The detergent is expected to generate sales revenue of RM 1 million the first year ( t=1), RM2 million the second year (t=2), RM 2 million the third year (t = 3), and RM 1 million the final year (t = 4). Each year the operating cost (not including depreciation) are expected to equal 50% of sales revenue.

* The company's interest expenses each year will be RM100,000.

* The new detergent is expected to reduce the after tax cash flows of the company's existing products by RM250,000 a year (t=1,2,3 and 4).

* The company's overall WACC is 10%. However the proposed project is riskier than the average project for Pandalela Products; the project's WACC is estimated to be 12%.

* The company's tax rate is 40%.

a. Determine the relevant cash flows for this project.

b. What is the internal rate of return of the project?

c. What is the net present value of the project?

d. Should the company proceed with the project? Why?

Use the table to answer the following questions

a) What is the price of the product? b) What is the marginal revenue from the fourth unit output? c) What is the profit, when firm produce 5 units?

Money matters -- and it really matters in the nonprofit sector. Yet a proper system of accessing capital does not exist in the nonprofit sector the way it does in the private sector. Through a combination of philanthropy, government support and/or contracts, and if applicable, earned revenue, nonprofits cobble together revenue to survive and deliver services.

• But is this any way to grow or sustain a sector?
• Is there a better way?
• Please include 3-5 paragraphs.

3. What is the relationship between cash flows from operations and Income for the year of the statement?

4. Explain the difference between the direct method and the indirect method of disclosing cash flows from operations.

5. Do you believe that cash inflows and outflows associated with nonoperating items such as interest expense, interest revenue, and dividend revenue, should be separated from operating cash flows? Explain.

During the classic period the court lifted the veil on a number of occasions - from the list below select the correct answers (you may choose more than one answer)

Group of answer choices

When groups of companies should be viewed as one single entity. (DHN Food Distributors)

Defendant set up a company to solicit customers he was prohibited from soliciting due to previous employment contract (Gilford Motor Co v Horne)

Setting up a company to avoid an estate contract (Jones v Lipman);

Setting up a company to force compulsory purchase of minority shareholdings (Re Bugle Press).

Dealing with the enemy (Daimler v Continential Tyre);

Lord Denning argued in DHN Food Distributors v Tower Hamlets that groups of companies should be viewed as one single entity.

Group of answer choices

True

False

The key question in the case of Adams v Cape Industries was ?

Group of answer choices

It is possible for a company to be held as a mere facade even though it was not originally set up as a sham.

The company was used for some impropriety unconnected to the corporate form.

If there was an existence of an agent-principal relationship.

Whether Cape, the parent company, had a presence in the US through it subsidiaries.

The three situations where the case of Adams v Cape limited veil lifting to are :-

1. Where the interpretation of a statute or document shows that the group of companies is to be treated as one;
2. Where a company is being used as a sham or mere facade;
3. Where there is no agent-principal relationship

1. Find x and y so that the ordered data set has a mean of 42 and a median of 35, hence compute the harmonic mean and geometric mean of the data sample.

       17, 22, 26, 29, 34, x, 42, 67, 70, y                                                         

2. The lengths, in centimeters, of 18 snakes are given below. Draw an ordered stem-and-leaf diagram for the data.                                                                                                                                    

24, 62, 20, 65, 27, 67, 69, 32, 40, 53, 55, 47, 33, 45, 55, 56, 49, 58

3. Costs of production have been monitored for some time within a company and the following data found:

1. Calculate the correlation coefficient.                                                                        
2. Calculate the coefficient of determination and explain its significance for the company.                                                                                                                                                   

4. Using the following frequency distribution table;

Find

1. The mean                                                                                                       
2. Median                                                                                                           
3. Standard deviation                                                                                         
4. Coefficient of skewness and comment                                                          

5. A single fair die is tossed. What is the probability that the score is a prime number?                
6. The following data represents the comparison made between the price of a consumer product and the corresponding demand.

      Determine the linear regression equation of the form y= a+bx that relates price (x) and demand (y).                                                                                                                                                                        

7. An integer is randomly selected between 1 and 50, inclusively. Find the probability that the number is not divisible by 7.                                                                                                                              

There are three arrangements of the word DAD, namely DAD, ADD, and DDA. How many arrangements are there of the word PROBABILITY?            

MegaCorp's corporate headquarters, built in 1970, has asbestos in its insulation. The company's financial statements reflect a $5 million asset retirement obligation (ARO) for the eventual remediation of the asbestos. This ARO was initially estimated and recorded in 2005 when the company adopted FIN 45, Accounting for conditional Asset Retirement obligations. (note: amounts recorded for ARO are generally estimated because it is not always possible to know how much remediating asbestos - or other like issues - will ultimately cost) MegaCorp is a public company with a calendar year-end.

While performing routing maintenance work on the facility, additional sampling identified that presence of asbestos in more places than the company had documented during its initial estimate. The company now believes that total cost to remediate the asbestos will be $9 million. The initial estimate ($5 million) was based on sampling around the plant for areas containing asbestos. The newly discovered areas wutg asbestis were in a part of the facility that was not sampled.

Required: Assume that you are in the controller's group of MegaCorp and have been asked to prepare an accounting issues memorandum documenting your consideration of the following issues. this should be complete memorandum with all sections and appropriate headings, etc.

1. the company's controller is questioning whether this liability for asbestos disposal is even necessary at all. He argues that asbestos must only be remediated if its is disturberd (such as through renovations), and points out that the company does not have any immediate plans to renovate the building. Respond to his question using authoritative guidance. is a liability even necessary if the company plans for disposal or renovation of this builidng are uncertan?

Determine whether the additional liability for the newly discovered asbestos is considered a change in accounting estimate or an error. Note that this is not a change in accounting principle. support your answer using authoritative guidance.

Describe how the company should record this $4 million change (prospectively, or through a retrospective adjustment). What accounts should be debited/credited? you can disregard the use of present value for this example.