Pension trust fund is a fiduciary fund. The correct answer is option d.
A fiduciary fund is a type of fund in governmental accounting that is used to account for assets held in a trustee capacity. Fiduciary funds are used when the government is acting as a trustee or agent, holding resources on behalf of others.
A pension trust fund specifically is a type of fiduciary fund that is used to account for the assets of a pension plan or retirement system. These funds are used to hold and manage the contributions made by employers and employees, as well as the investment earnings on those contributions, to provide retirement benefits to employees.
The correct answer is option d.
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which of the following is a fiduciary fund? group of answer choices
a. debt service fund.
b. enterprise fund.
c. capital projects fund.
d. pension trust fund.
e. permanent fund.
Which of the following statements is true about compensatory and punitive damages? (a) Punitive damages seek to compensate the plaintiff for his/her injuries. (b) There are clear guidelines and available standards for compensatory damages to be awarded for pain and suffering. (c) Compensatory damages refer to money awarded to the plaintiff when the defendant acts wantonly, to punish the defendant, and to deter future wrongdoing. (d) Compensatory damages can be awarded for past, present, and future losses. (e) With regard to punitive damages, the jury is awarded a sum of money to compensate the plaintiff.
(d) Compensatory damages can be awarded for past, present, and future losses.
Compensatory damages are awarded to the plaintiff in a lawsuit to compensate them for the losses they have suffered as a result of the defendant's actions. These damages aim to restore the plaintiff to the position they would have been in had the wrongful act not occurred. Compensatory damages can cover various types of losses, including economic damages (such as medical expenses, lost wages, and property damage) as well as non-economic damages (such as pain and suffering, emotional distress, and loss of consortium).
Option (d) accurately states that compensatory damages can be awarded for past, present, and future losses. The purpose of compensatory damages is to provide appropriate compensation for the harm suffered by the plaintiff, both in the past and anticipated in the future.
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Which of the following costs is best classified as fixed costs with respect to volume? O a. Salaries of quality inspectors in a production facility O b. Parts used in manufacturing digital cameras OC Electricity used to heat, light, and cool a hospital Od. Depreciation of a copy machine in the Human Resource Department
The cost that is best classified as fixed costs with respect to volume is the depreciation of a copy machine in the Human Resource Department. Option d.
Fixed costs are the expenses that remain constant regardless of the volume of production or sales. Fixed costs are expenditures that do not fluctuate with changes in sales volume or other measures of business activity. Rent, mortgage, salaries, and insurance are examples of fixed costs, which are constant regardless of production levels. Depreciation is one of the primary fixed expenses that an organization experiences. It's a fixed cost, which is why the cost of depreciation is classified as fixed in nature.
A copy machine is an example of a fixed asset that has a finite useful life. The machine's cost is spread over its useful life as a fixed expense. In accounting, the cost of depreciation is a fixed expense that remains the same regardless of the number of copies the machine produces or the frequency with which the copy machine is used. In this manner, the cost of depreciation of a copy machine in the Human Resource Department is a fixed cost that does not change based on the volume of production or sales. Consequently, the option (d) is the correct response: Depreciation of a copy machine in the Human Resource Department.
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228 EXERCISE 5-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume LOS-4 Data for Hermann Corporation are shown below: Per Unit Percent of Sales $90 100% Selling price Variable expenses Contribution margin 63 70 $27 30% Fixed expenses are $30,000 per month and the company is selling 2,000 units per month. Chapter 5 Required: 1. How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $5,000 and monthly sales increase by $9,000? 2. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $2 per unit and increase unit sales by 10%.
1. Calculation for increase in net operating income if advertising budget increases by $5000 and sales increase by $9000.Net Operating Income (NOI) = Sales - Total Variable Costs - Fixed CostsContribution Margin = Selling price - Variable expensesContribution Margin Ratio (CM Ratio) = Contribution Margin / Selling price1.
To calculate the increase in NOI due to an increase in the advertising budget, we need to first calculate the new sales and variable costs after the increase.Sales will increase by $9,000, so the new sales figure will be $68,000 ($59,000 + $9,000).Variable costs are 70% of sales, so the new variable costs figure will be $47,600 ($68,000 x 70%).The contribution margin remains the same at $27 per unit.Net increase in units sold = ($9,000 ÷ $90) = 100 unitsNew total units sold = 2,100 unitsTotal fixed costs remain the same at $30,000 per month.New NOI = (2,100 × $27) - $47,600 - $30,000 = $4,500. Therefore, the net operating income will increase by $4,500 per month.2. Calculation for increase in net operating income if higher-quality components increase variable expense by $2 per unit and unit sales by 10%.New selling price = $90New variable expense per unit = $63 + $2 = $65New contribution margin = $25 per unitNew contribution margin ratio = $65/$90 = 72.22%New sales in units = 2,200 units (2,000 units x 110%)New variable costs = $65 × 2,200 units = $143,000New fixed costs = $30,000New NOI = ($90 × 2,200) - $143,000 - $30,000 = $17,600Therefore, the net operating income will increase by $17,600 per month.
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C. Jaman Ltd, a manufacturer and supplier of aluminum utensils for households, has recently established a new facility in Kumasi. To help in this new operation, Jaman Ltd have secured a number of grants from the Government of Ghana and are unsure how the grants are to be accounted for in the financial statements. The company has a year end of 30 April 2017 and all the following transactions took place at 1 May 2016. i) Jaman Ltd has been awarded a grant for GHe80,000, to be received over three years, in respect of providing employment to fresh graduates in the area. ii) Jaman Ltd received a GHe5,000_grant from the Ministry of Business Development for the initial training of the new employees. iii) The company also received a grant of GH 120,000 from the Ministry of Special Development Initiative towards the acquisition of a GH 600,000 machine. The machine has a useful economic life of 8 years and an estimated residual value of GH¢60,000. Depreciation is on the straight line basis. Required: Explain how each of the above should be accounted for in the financial statements of Jaman Ltd for the year ended 30 April 2017, in accordance with IAS 20: Accounting for Government Grants and Disclosure of Government Assistance (5 marks) (Total 15 marks)
The net charge to the income statement would be zero, as the revenue recognized from Grant 1 and Grant 3 offsets the depreciation expense incurred for Grant 3.
IAS 20 provides the principles for accounting for and reporting on government grants. The term "government grants" refers to transfers of resources to an entity by government in return for past or future compliance with certain conditions relating to the operating activities of the entity.According to IAS 20 Accounting for Government Grants and Disclosure of Government Assistance, the financial statements should reflect the following regarding the three grants:Grant 1Jaman Ltd should recognize the GH¢80,000 over the period of three years. The amounts received should be recognized as deferred revenue and should be recognized as revenue on a systematic basis over the period of time when the company incurs the costs for which the grant is intended to reimburse. Hence, the income statement of the company will show GH¢26,667 for the year ended 30 April 2017 (GH¢80,000 ÷ 3 years).Grant 2This grant of GH¢5,000 will be recognized as income by Jaman Ltd in the income statement in the period in which it meets the eligibility criteria as specified in the agreement between the company and the government. This is expected to be recognized in the income statement in the current period for Jaman Ltd.Grant 3The GH¢120,000 should be recognized as deferred income, and then recognized as income in the income statement on a systematic basis over the expected useful life of the machine. The expected useful life of the machine is 8 years with a residual value of GH¢60,000, thus the company will depreciate the machine by GH¢7,500 per annum (GH¢600,000 - GH¢60,000 / 8 years).Therefore, in the income statement of the company, GH¢15,000 will be charged to depreciation for the year ended 30 April 2017 (GH¢120,000 ÷ 8 years). Also, GH¢15,000 will be recognized as income under grant in the income statement for the year ended 30 April 2017 (GH¢120,000 ÷ 8 years).
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A fixed capital investment of P 10,000,000 is required for a proposed manufacturing plant and estimated to be 10% of the fixed capital investment. Determine the minimum payout period in the annual profit is P 2,500,000
A) 4 years
B) 5 years
C) 3 years
D) 6 years
The minimum payout period in the annual profit of P 2,500,000 is greater than or equal to 7.33 years, thus, the answer is D) 6 years.
A fixed capital investment of P 10,000,000 is required for a proposed manufacturing plant and estimated to be 10% of the fixed capital investment. Determine the minimum payout period in the annual profit is P 2,500,000.
If the fixed capital investment is 10,000,000, the estimated investment will be 10% of the fixed capital investment.
10% of 10,000,000 = 10/100 × 10,000,000
= 1,000,000.
The total estimated cost is 10,000,000 + 1,000,000 = 11,000,000 pesos.
In order to determine the minimum payout period, we need to calculate the break-even point or net income of the manufacturing plant.
To calculate this, we need to use the formula below: Break-even Point (BEP) = Total Fixed Costs / Gross Profit Margin. BEP = 11,000,000 / (2,500,000 - 1,000,000)BEP
= 11,000,000 / 1,500,000 = 7.33 years Since the break-even point is 7.33 years.
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5 Look at the following ratios: • 90/10 ratio = the ratio of Decile 10 = income to Decile 1 income = • 90/50 ratio the ratio of Decile 10 income to Decile 5 income (the median) • 50/10 ratio = the ratio of Decile 5 5 income (the median) to Decile 1 income. = (a) For each of these ratios, explain why policymakers might want to compare the two deciles in the income distribution. (b) What kinds of policies or events could affect these ratios?
a. Policymakers might want to compare the ratios of different deciles in the income distribution to understand the level of income inequality and the distribution of wealth within a society. b. Various policies and events can influence these ratios. For example, changes in tax policies that impact income redistribution, minimum wage laws, and social welfare programs can potentially affect income disparities and subsequently impact the ratios.
a. Policymakers might want to compare the ratios of different deciles in the income distribution to understand the level of income inequality and the distribution of wealth within a society. By comparing the income of Decile 10 (the highest income group) to Decile 1 (the lowest income group), policymakers can assess the extent of income disparity and evaluate the potential challenges faced by individuals at the lower end of the income spectrum. Similarly, comparing the income of Decile 10 to Decile 5 (the median income) provides insights into the concentration of wealth and the gap between the highest earners and the middle-income earners.
b. Various policies and events can influence these ratios. For example, changes in tax policies that impact income redistribution, minimum wage laws, and social welfare programs can potentially affect income disparities and subsequently impact the ratios. Economic events such as recessions or economic downturns can also influence these ratios by affecting employment levels, wage growth, and income distribution patterns. Additionally, factors like technological advancements, globalization, and changes in the labor market structure can have long-term effects on income inequality and alter the income ratios between different deciles.
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On July 1, 2009, the Beauty Corporation was registered with the SEC. Its authorized share capital consists of 100,000 ordinary shares with par value $20.00 per share.
On July 15, 2009, it issued 10,000 shares at $23 per share. On October 15, 2009, the Beauty Corp. paid to the majority shareholder the sum of $80,000 for a certain parcel of land; and issued 5,000 ordinary shares for the building on the land. The land was appraised at $130,000. The building has a cost of $150,000 and its depreciated value is $90,000. It was appraised at $120,000.
On April 15, 2010, the corporation purchased 5,000 of its own ordinary shares for $100,000. On June 15, 2010, 2,000 of the treasury shares were sold at $24 per share.
How much is the total share premium of Beauty Corp. on June 30, 2010?
The total share premium of Beauty Corp. on June 30, 2010, is $282,000.
To calculate the total share premium of Beauty Corp. on June 30, 2010, consider the share issuances and purchases that have occurred.
1. Share Issuance on July 15, 2009:
- Number of shares issued: 10,000
- Issue price per share: $23
- Total proceeds from the issuance: 10,000 shares * $23 = $230,000
2. Share Issuance on October 15, 2009:
- Number of shares issued: 5,000
- The land was appraised at $130,000, and the building was appraised at $120,000. However, we need to consider the building's depreciated value of $90,000 for the calculation of share premium.
- Total value of the building issued: $90,000
- Total proceeds from the issuance: 5,000 shares * $20 (par value) = $100,000
3. Share Repurchase on April 15, 2010:
- Number of shares repurchased: 5,000
- Repurchase price per share: $100,000 / 5,000 shares = $20
4. Share Sale on June 15, 2010:
- Number of shares sold: 2,000
- Selling price per share: $24
- Total proceeds from the sale: 2,000 shares * $24 = $48,000
Now, let's calculate the total share premium:
Total proceeds from share issuances: $230,000 + $100,000 = $330,000
Total proceeds from share sales: $48,000
Total share premium = Total proceeds from share issuances - Total proceeds from share sales
= $330,000 - $48,000
= $282,000
Therefore, the total share premium of Beauty Corp. on June 30, 2010, is $282,000.
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Which marketing philosophy focuses more on the manufacturer and not the customer? a) Production orientation b) Demand Orientation c) Market Orientation d) Societal Marketing Orientation
The correct option is (a). The production orientation marketing philosophy focuses more on the manufacturer and not the customer.
Production orientation marketing philosophy focuses more on the manufacturer and not the customer. In this marketing philosophy, the manufacturer believes that the customers prefer products that are widely available and inexpensive. This means that the manufacturer focuses on achieving high production efficiency at a low cost. This can sometimes lead to a lack of variety, as the manufacturer is focused on producing a few popular products in large quantities rather than offering a wide range of products.
The other marketing philosophies such as demand orientation, market orientation, and societal marketing orientation put more emphasis on the customer's needs and preferences. Demand orientation focuses on creating products that meet the specific demands of the customer, while market orientation focuses on identifying the needs and wants of the customer and delivering products that satisfy them. Societal marketing orientation, on the other hand, focuses on creating products that not only meet the customer's needs but also benefit the society and environment.
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Consider the markets below. Summarize and show on a fully labeled S/D diagram what happens, all else equal, what
happens if the mentioned events occur. Be sure to indicate which curve changes, how it changes, why it changes and
what the effect is on P* and Q*. If the determinant (reason why) has a subcategory, be sure to name both the
determinant AND the subcategory involved. Start grey pencil/black pen, shifting curve changes color to blue.
a. Market for Home Computer Equipment, all else equal, the Covid-19 pandemic winds down due to heavy vaccination rates,
moving business ownership and management to require most employees to work at the office again.
b. Market for electric vehicles, all else equal, costs increase for rare earth metals in battery stacks used in electric vehicles.
c. Market for operating system software (i.e. Windows 10), all else equal, the price of computers decreases.
d. Market for distilled spirits (whiskey, vodka, etc.), all else being equal, the government creates stricter regulations on the sale
of alcoholic beverages, once again forbidding to go and home delivery from bars, restaurants and liquor stores.
a. Market for Home Computer Equipment, all else equal, the Covid-19 pandemic winds down due to heavy vaccination rates, moving business ownership and management to require most employees to work at the office again.
When the Covid-19 pandemic ends due to high vaccination rates, business ownership and management will need most of their employees to work at the office again. The demand for home computer equipment, therefore, decreases as people no longer need to work from home. Consequently, the demand curve shifts to the left, resulting in a fall in equilibrium price (P*) and quantity (Q*).b. Market for electric vehicles, all else equal, costs increase for rare earth metals in battery stacks used in electric vehicles.When costs for rare earth metals in battery stacks of electric vehicles increases, the cost of producing electric vehicles rises, reducing the supply of electric vehicles. The supply curve shifts to the left, resulting in a rise in equilibrium price (P*) and a fall in equilibrium quantity (Q*).c. Market for operating system software (i.e. Windows 10), all else equal, the price of computers decreases.Operating system software such as Windows 10 is complementary to computers, which means that when the price of computers decreases, the demand for operating system software increases. The demand curve shifts to the right, resulting in a rise in equilibrium price (P*) and quantity (Q*).d. Market for distilled spirits (whiskey, vodka, etc.), all else being equal, the government creates stricter regulations on the sale of alcoholic beverages, once again forbidding to go and home delivery from bars, restaurants and liquor stores.When the government creates stricter regulations on the sale of alcoholic beverages, such as forbidding to go and home delivery from bars, restaurants, and liquor stores, the supply of distilled spirits will decrease. This is because the regulations will prevent the suppliers from getting the distilled spirits to the consumers. As a result, the supply curve shifts to the left, resulting in a rise in equilibrium price (P*) and a fall in equilibrium quantity (Q*).
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claude holds a large number of shares of bayou beauty, a regional brewing company that is considered a likely takeover target by a major international brewer. it would probably be in claude's financial interest if bayou beauty's owners:
Claude holds a large number of shares of Bayou Beauty, a regional brewing company that is considered a likely takeover target by a major international brewer. It would probably be in Claude's financial interest if Bayou Beauty's owners sold the company to the larger brewer. Thus, option B is correct.
To determine what would be in Claude's financial interest, we need to consider the potential outcomes.
Option a, where Bayou Beauty's owners resist selling at any price, may not be in Claude's financial interest. If the owners resist selling, there might not be any immediate financial gain for Claude as the value of his shares may not increase significantly.
Option b, where Bayou Beauty sells the company to the larger brewer, could be in Claude's financial interest. A takeover by a larger brewer may result in a premium price for the shares, potentially leading to a higher return on investment for Claude.
Option c, where Bayou Beauty designs a poison pill to discourage a takeover, may not be in Claude's financial interest. A poison pill is designed to make the takeover less attractive, but it could also deter other potential buyers and limit the potential for a higher share price.
Option d, where Bayou Beauty looks for smaller brewers to acquire instead of selling to the larger brewer, may not directly impact Claude's financial interest. Acquiring smaller brewers could be a strategic move by Bayou Beauty, but it may not necessarily result in immediate financial gains for Claude.
In conclusion, based on the given information, option B is correct, where Bayou Beauty sells the company to the larger brewer, would likely be in Claude's financial interest. This is because a takeover by a larger brewer could potentially lead to a higher share price and provide a favorable return on investment for Claude.
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Complete Question:
Claude holds a large number of shares of Bayou Beauty, a regional brewing company that is considered a likely takeover target by a major international brewer. It would probably be in Claude's financial interest if Bayou Beauty's owners:
a. resisted selling at any price.
b. sold the company to the larger brewer.
c. designed a poison pill to discourage a takeover.
d. looked for smaller brewers to acquire instead of selling to the larger brewer
write done your marketing plan with budget for an existing 4-star hotel in Hungary without Food and beverage.
By implementing this marketing plan, the existing 4-star hotel in Hungary can enhance its visibility, attract a broader audience, and establish itself as a preferred accommodation choice in the region, all while excluding food and beverage offerings.
Marketing Plan for an Existing 4-Star Hotel in Hungary (Without Food and Beverage)
1. Executive Summary:
This marketing plan aims to enhance the visibility, attract more guests, and maximize revenue for an existing 4-star hotel in Hungary. The plan focuses on marketing strategies that do not include food and beverage offerings. By implementing a comprehensive marketing approach, the hotel aims to increase occupancy rates, boost customer satisfaction, and position itself as a premier accommodation choice in the region.
2. Target Market:
Identify the target market segments for the hotel, such as business travelers, tourists, and corporate event organizers. Analyze their preferences, needs, and behavior to tailor marketing efforts effectively.
3. Brand Positioning:
Define the hotel's unique selling proposition (USP) and key differentiators, such as luxurious amenities, personalized service, convenient location, or exceptional views. Develop a strong brand identity that aligns with the target market's desires and positions the hotel as a top choice.
4. Online Presence:
Invest in a professional and user-friendly website with an integrated online booking system. Optimize the website for search engines (SEO) to increase organic traffic. Utilize social media platforms to engage with potential guests, share updates, and promote special offers. Implement online reputation management strategies to monitor and respond to guest reviews.
5. Content Marketing:
Create high-quality content, including blog posts, articles, and videos, that showcase the hotel's unique features, local attractions, and guest experiences. Share this content through various channels, such as the website, social media, and email newsletters, to build brand awareness and establish the hotel as an authority in the industry.
6. Influencer Marketing:
Collaborate with influencers, travel bloggers, and industry experts who have a strong following in the hotel's target market. Host them for a complimentary stay and encourage them to share their experiences and recommendations with their audience. Leverage their influence to reach a wider audience and gain credibility.
7. Online Advertising:
Allocate a portion of the marketing budget to online advertising campaigns, such as pay-per-click (PPC) ads on search engines and social media platforms. Target specific keywords, demographics, and locations to maximize reach and drive qualified traffic to the hotel's website.
8. Local Partnerships:
Establish partnerships with local businesses, attractions, and event organizers. Offer special packages or discounts to their customers or attendees, and ask them to promote the hotel in return. This helps to tap into their existing customer base and generate referrals.
9. Loyalty Program:
Implement a loyalty program to reward repeat guests and encourage customer retention. Offer exclusive perks, discounts, and personalized services to members of the loyalty program. Leverage email marketing and personalized offers to keep them engaged and encourage future bookings.
10. Budget Allocation:
Develop a budget that aligns with the marketing goals and strategies outlined above. Allocate resources to website development and maintenance, content creation, online advertising, influencer partnerships, and loyalty program implementation. Regularly review and adjust the budget based on performance metrics and return on investment (ROI).
11. Performance Measurement:
Monitor key performance indicators (KPIs) such as occupancy rates, revenue per available room (RevPAR), website traffic, conversion rates, customer satisfaction scores, and online reviews. Regularly evaluate marketing efforts and adjust strategies accordingly to optimize results.
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QUESTION 2 Azri Trading is a stationery store and owned by Azrin. Below are the transactions of Azri Trading for the month of November 2019. November 2019 Transactions 1 Started the business with RM20,000 cash. 3 Purchased Fujixerox printer RM700 by cheque for office use. Sold goods on credit to Rachel RM500. 13 14 Banked in cash RM3,000. 17 Paid rental of premises amounting to RM400 by cash. 21 Azrin took RM800 from the bank and RM200 goods for personal use. Sales returned by Rachel amounted to RM200. 26 The business bought a motor vehicle for RM4,500 cash. 28 Paid utility bills and wages of RM100 and RM500 cash respectively. Required: Identify the effects (increase or decrease) on assets, liabilities, owner's equity, revenues or expenses for the transactions dated from 1 November 2019 to 24 November 2019 and show the accounts to be debited and credited for each of the transactions given below. (Use the format given below to answer the above questions) Example: November 30 Paid RM2,000 for driver's salary by cash. Effects Journal entry Date Increase Decrease Debit Nov 30 Expenses Asset Salary 24 Credit Cash (15 marks)
Effects Journal entry Date Increase Decrease Debit Credit 1 November 2019 Cash Capital 20,000 20,000 3 November 2019 Equipment Cash 700 700 3 November 2019 Accounts receivable Sales 500 500 13 November 2019 Cash Accounts receivable 3,000 3,000 17 November 2019 Rent expense Cash 400 400 21 November 2019 Drawings Cash Inventory 1,000 800 200 200 26 November 2019 Motor vehicle Cash 4,500 4,500 28 November 2019 Utility expense Wages expense Cash 100 500 600 600 This is the solution to your question in accordance with the format given in the question and with the required terms.
Answer: Effects Journal entry Date Increase Decrease Debit Credit 1 November 2019 Cash Capital 20,000 20,000 3 November 2019 Equipment Cash 700 700 3 November 2019 Accounts receivable Sales 500 500 13 November 2019 Cash Accounts receivable 3,000 3,000 17 November 2019 Rent expense Cash 400 400 21 November 2019 Drawings Cash Inventory 1,000 800 200 200 26 November 2019 Motor vehicle Cash 4,500 4,500 28 November 2019 Utility expense Wages expense Cash 100 500 600 600 This is the solution to your question in accordance with the format given in the question and with the required terms. In November 2019, Azrin, the owner of Azri Trading started the business with cash worth RM20,000. Cash is an asset account that increases. The same is the case with capital, an owner's equity account, which also increases in this case. On 3 November, Azri Trading purchased a Fujixerox printer for RM700 by a cheque for office use. Equipment is an asset account that increases while cash is an asset account that decreases. Hence, the journal entry to record this transaction would be:Equipment RM700Cash RM700On 3 November, Azri Trading sold goods on credit to Rachel for RM500. Rachel's purchase is recorded in accounts receivable, an asset account, which increases. Simultaneously, this transaction creates sales revenue, which is a revenue account that increases. Hence, the journal entry to record this transaction would be:Accounts receivable RM500Sales RM500On 13 November, Azri Trading banked in cash worth RM3,000, which increased the cash account and decreased the accounts receivable account. Hence, the journal entry to record this transaction would be:Cash RM3,000Accounts receivable RM3,000On 17 November, Azri Trading paid the rental of premises amounting to RM400 by cash. Rent expense is an expense account that increases and is debited, while cash decreases and is credited. Hence, the journal entry to record this transaction would be:Rent expense RM400Cash RM400On 21 November, Azrin took RM800 from the bank and RM200 worth of goods for personal use. This transaction affects two accounts: cash and inventory. Cash is an asset account that decreases, while inventory is also an asset account that decreases. The reduction of inventory also results in a decrease in owner's equity as the owner is utilizing the goods personally, which is a withdrawal from the business. Hence, the journal entry to record this transaction would be:Drawings RM1,000Cash RM800Inventory RM200On 26 November, Azri Trading bought a motor vehicle for RM4,500 in cash. Motor vehicle is an asset account that increases, while cash is an asset account that decreases. Hence, the journal entry to record this transaction would be:Motor vehicle RM4,500Cash RM4,500On 28 November, Azri Trading paid utility bills and wages of RM100 and RM500 in cash, respectively. Utility expense and wages expense are expense accounts that increase and are debited, while cash decreases and is credited. Hence, the journal entry to record this transaction would be:Utility expense RM100Wages expense RM500Cash RM600
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(a) On 8 November Prime Minister Narendra Modi gave the nation just four hours’ notice that 500 ($7.30; £6) and 1,000-rupee notes would no longer be legal tender. In your views, could you please explain the advantages and disadvantages of such drastic changes?
The sudden demonetization of 500 and 1,000-rupee notes in India had both advantages and disadvantages. On the positive side, it aimed to tackle issues like corruption, black money, and counterfeit currency. However, it also had negative consequences such as disruptions to daily life, inconvenience to citizens, and adverse effects on small businesses and the informal sector.
The sudden demonetization of high-value currency notes in India had several advantages. One of the main goals was to combat corruption and black money. By invalidating the 500 and 1,000-rupee notes, the government aimed to curb illicit activities and promote transparency in financial transactions.
It also targeted counterfeit currency, as the sudden withdrawal of these notes made it harder for counterfeiters to circulate fake money.
However, this move also had significant disadvantages. The abrupt nature of the announcement led to disruptions in daily life, especially for those who heavily relied on cash for their transactions.
The sudden shortage of legal tender caused inconvenience to citizens, particularly those who faced difficulties in exchanging their old notes for new ones within the given timeframe.
Small businesses, especially in the informal sector, were disproportionately affected, as they often relied on cash transactions and faced challenges in transitioning to digital or alternative payment methods.
In summary, while demonetization aimed to address important issues such as corruption and counterfeit currency, its implementation had adverse effects on various aspects of the economy and society, leading to both advantages and disadvantages.
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The innovation dilemma known as building capabilities versus collaborating refers to O building innovative products in-house versus outsourcing O building credibility by launching products ahead of potential collaboration partners o developing innovation skills internally versus partnering with qualified outsiders O launching a product incrementally
The correct option is "developing innovation skills internally versus partnering with qualified outsiders". The innovation dilemma known as building capabilities versus collaborating refers to developing innovation skills internally versus partnering with qualified outsiders.
The innovation dilemma between building capabilities versus collaborating is an ongoing decision that firms have to make. Companies have to decide whether they should develop innovation skills internally or partner with qualified outsiders.
Both collaboration and building capabilities are essential in the development of innovation. In-house development of innovation capabilities provides organizations with greater control over the process and output of innovation. Collaboration, on the other hand, enables firms to pool resources, knowledge, and skills with other firms to develop innovation.
Organizations need to find a balance between collaboration and building capabilities. This requires them to understand the strengths and weaknesses of each approach, as well as how to effectively integrate the two.
They also need to consider other factors such as time, cost, and risk.In conclusion, the innovation dilemma known as building capabilities versus collaborating refers to developing innovation skills internally versus partnering with qualified outsiders.
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Discuss the benefits of using ROI/ROA and residual income as performance measures. Include in your answer ‘goal congruence’ and ‘controllability’
In summary, using ROI, ROA, and residual income as performance measures offers benefits such as providing a clear evaluation of financial performance, promoting goal congruence, and emphasizing controllability.
Using ROI (Return on Investment) and ROA (Return on Assets) as performance measures offer several benefits for evaluating the financial performance of a business. Additionally, incorporating residual income can provide further insights. Let's explore these benefits and how they relate to goal congruence and controllability.
ROI and ROA: ROI and ROA provide a clear and straightforward measure of financial performance. They allow businesses to assess the efficiency and profitability of their investments and asset utilization. Both ratios indicate the return generated in relation to the investment or assets employed. Higher ROI and ROA values generally indicate better performance and efficient resource allocation.
Goal Congruence: ROI and ROA help align the goals of different stakeholders within an organization. These performance measures provide a common metric that can be understood and compared across different divisions or projects. This promotes goal congruence by ensuring that decision-makers at various levels focus on maximizing returns and making investment decisions that align with the organization's overall objectives.
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Shareholders' equity of Yiruna Toys Inc. (YTI), a public company, at December 31, 2020, was as follows: nalg Common shares, 1,350,000 shares outstanding Contributed surplus, stock option plan Retained earnings 34,600,000 270,000 OROS TE 12,450,00089 On January 2, 2021, YTI issued $20,000,000 of 6% convertible bonds. The bonds mature on December 31, 2035 (15 years total), and pay interest on June 30 and longe December 31 of each year. The total proceeds received on the sale of the bonds were $20,350,000, and the fair value of the bonds at this date was calculated as muten $19,613,010. Each $1,000 bond is convertible into 20 common shares at any time. 000,008,812 rsos re 3060 18 vuta 190 of YTI's employee stock option plan was initiated on January 1, 2019, and vested on noitspildo litoneo bonited December 31, 2021. The fair value of the options on the initiation date was $450,000. On December 31, 2020, YTI's management estimated that 90% of the options would vest. A total of 92% of the 100,000 options issued actually vested. Also on December 31, 2021, 60% of the vested options were exercised at an exercise price of $12. Required: a) Prepare the journal entry to record the issuance of the convertible bonds. (2 marks) b) Prepare the journal entries for December 31, 2021, relating to the employee stock option plan. (4 marks)
a) The journal entry to record the issuance of the convertible bonds by Yiruna Toys Inc. (YTI) on January 2, 2021, can be prepared as follows:
**Date:** January 2, 2021
**Debit:** Cash ($20,350,000)
**Debit:** Discount on Bonds Payable ($736,990)
**Credit:** Bonds Payable ($19,613,010)
**Credit:** Contributed Surplus - Conversion Rights ($473,980)
Explanation: The company received $20,350,000 in cash from the sale of the convertible bonds. The discount on bonds payable of $736,990 represents the difference between the proceeds received and the fair value of the bonds. The Bonds Payable account is credited for the fair value of the bonds ($19,613,010), and the Contributed Surplus - Conversion Rights account is credited for the remaining amount ($473,980), representing the value of the conversion feature of the bonds.
b) The journal entries for December 31, 2021, related to YTI's employee stock option plan are as follows:
1. To record the vesting of employee stock options:
**Date:** December 31, 2021
**Debit:** Contributed Surplus - Stock Option Plan ($405,000)
**Credit:** Contributed Surplus - Stock Option Plan Expense ($405,000)
Explanation: The vested portion of the stock options is recognized as an expense in the period. The debit reduces the Contributed Surplus - Stock Option Plan account, while the credit recognizes the corresponding expense.
2. To record the exercise of vested stock options:
**Date:** December 31, 2021
**Debit:** Cash ($720,000)
**Debit:** Contributed Surplus - Stock Option Plan ($54,000)
**Credit:** Common Shares ($774,000)
Explanation: The exercise of stock options results in the issuance of common shares. The cash received from the employees exercising the options is debited, and the Contributed Surplus - Stock Option Plan account is debited for the fair value of the options exercised ($54,000). The Common Shares account is credited for the total value of the shares issued ($774,000).
Note: The calculation of the amounts for the journal entries is based on the information provided in the question.
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Your Task
Your task is to analyse client information using the information and questions raised by the CEO, and present the findings in a Statement of Advice with a covering Business Letter.
For each issue, you are expected to:
1) Identify the facts and accounting topic
2) Apply the relevant legislation, accounting standard and/or process
3) Make a recommendation and/or summary of the correct accounting treatment
Learning Objectives
After completing this Individual Assignment, you will be able to:
1) Research information about each issue using legislation and accounting standards
2) Identify the main issues and make recommendations for accounting treatment
3) Provide a clear statement of advice to a potential client
Assessment Description
Assume that you are part of a team of graduate accountants working for Seachange Group Pty Ltd, an independent consulting & accounting firm situated at 58 Kirra Terrace, Brisbane, QLD 4000. The Manager of your firm, Ms Amanda Buchan, has asked you to draft a letter in response to an email received from Mr Mark Privilege, the CEO of Swing Strength Ltd (a public company), raising accounting issues - (please refer to the email on the next page).
The maximum length for the body of the letter is 1500 words. You should address all the technical issues/discussion in the statement of advice, followed by a Reference List.
• Part A: Technical component 30% - This mark covers the technical content of your advice and the explanation of each of the issues, the calculations, the journal entries and the sources used.
• Part B: Communication Skills 10% - This mark covers the generic skills of writing, layout, clear meaning, structure and organisation, appropriate tone and grammar, spelling, and punctuation, etc. throughout the whole assignment.
Email from the Client
From: Mark Privilege
To: Amanda Buchan
Subject: Accounting Issues: Year Ending 30 June 2022
Sent: 30 May 2022
Dear Amanda
Thank you for your time today.
As discussed, I am reaching out to you to discuss the following issues from our most recent board meeting. Jerry (our outgoing CFO) wasn't around to answer any of these questions, and therefore it was difficult for me to give an accurate response as I don't have an accounting background.
Our company is currently reviewing a couple of investment proposals. First, one recommendation is to buy 25% of a Western Australian company (a family business). The family members would still own the remaining 75%. These guys manufacture some fantastic accessories, and they would be a great addition to our existing product lines. We are still negotiating a price. If we make this investment, does it mean we'll own 25% of all the assets and liabilities of this company? If so, could we sell these assets in the future if a need arise or if we get a favourable price? In the second proposal, we are considering buying another 35% of a New Zealand based company (we already own 15%). Would you be able to please shed some light on how to account for these two investments in our accounting records?
As discussed, most of the board members, including myself, are very confused about the purpose of consolidation entries. Our accountant tells me we must delete certain accounting transactions before preparing the consolidated accounts. Is this true? If it is, I am flabbergasted as to why we are deleting transactions from our records. And more importantly, why are we wasting money recording these transactions in the first place. As I said, I am not an accountant, and therefore I would appreciate it if you could provide a couple of simple examples to support your views on this issue.
The last issue is something that the external auditors raised to our audit committee. The auditors spoke to Jerry just before he left the company and were concerned about Jerry's lack of knowledge around accounting for goodwill. Jerry told the auditors that goodwill is the value associated with the business name, and therefore the goodwill amount is decided by the Board. He stated that if a business is famous and well-known within the community, the company can recognise goodwill in its books after consulting with some business valuation experts. Could you please clarify this goodwill issue for me? What is goodwill? Is it an asset? How should it be recognised? How do we use this goodwill? Do we need to depreciate it? Could we sell this goodwill?
Would you mind responding by letter (not email) as I would like to present your views to our Board? I look forward to hearing from you shortly.
Regards
Mark Privilege
CEO Swing Strength Ltd
Level 5, 49 Pepper Street,
Brisbane QLD 4000
Swing Strength Ltd should use the equity method to account for the investment in the Western Australian company's shares, as per AASB 128.
Statement of Advice
To: Mark Privilege
CEO Swing Strength Ltd
Level 5, 49 Pepper Street,
Brisbane QLD 4000
Re: Accounting Issues: Year Ending 30 June 2022
Dear Mr Privilege,
We appreciate the opportunity to provide you with advice regarding the accounting issues mentioned in your email dated 30 May 2022.
Regarding the proposed purchase of 25% shares in the Western Australian family business, it is important to note that Swing Strength Ltd will own 25% of the net assets of the company. Net assets encompass the assets and liabilities of the entity that are not attributable to the equity ownership interests of its owners. Consequently, if Swing Strength acquires the 25% shares, it will be entitled to receive 25% of dividends issued by the family business and will also bear 25% of the business's debt obligations.
Both investments must be accounted for following the guidelines outlined in AASB 128: Investments in Associates and Joint Ventures. The equity method of accounting is required for investments in associates and joint ventures. Under this method, the investment is initially recorded at cost and subsequently adjusted to reflect changes in the investor's share of the investee's net assets. Swing Strength Ltd must report the investment in each company at its cost, adjusted for any changes in the value of the investment based on the company's equity in the net assets of the investment company.
Consolidation entries are prepared to combine the financial statements of a company with its subsidiaries. The purpose of consolidation is to present a comprehensive view of the financial position, performance, and cash flow of the company and its subsidiaries as a single entity. Confusion may arise from the elimination of intra-group transactions during the consolidation process, which is necessary to avoid double-counting or omitting any transactions.
As per AASB 3: Business Combinations, goodwill is defined as the difference between the fair value of consideration transferred and the fair value of net identifiable assets acquired. Goodwill represents the future economic benefits derived from acquired assets that are not individually identified and recognized separately. Goodwill is recognized as an asset at the time of acquisition and should be measured as the excess of the acquisition cost over the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities, and contingent liabilities. Goodwill is not amortized but is subject to annual impairment testing.
Please find below a reference list to support our advice. Should you have any further questions or require additional information, please feel free to contact us.
Sincerely,
[Your Name]
References:
AASB 3: Business Combinations
AASB 128: Investments in Associates and Joint Ventures
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2) If the marginal-revenue function for a manufacturer's product is dr 2000-20g-3q² dq find the demand function.
The demand function for the manufacturer's product is p = 2000 - 20g - q³.
To find the demand function, we need to integrate the marginal-revenue function with respect to quantity (q). The demand function represents the relationship between the price (p) and the quantity demanded (q) for a product.
Given the marginal-revenue function:
MR = 2000 - 20g - 3q²
To find the demand function, we integrate the marginal revenue function with respect to q:
∫MR dq = ∫(2000 - 20g - 3q²) dq
Integrating the terms of the function:
∫2000 dq - ∫20g dq - ∫3q² dq
The integral of a constant is simply the constant multiplied by the variable of integration:
2000q - 20gq - q³
The demand function (p) is derived by solving for p in terms of q:
p = 2000 - 20g - q³
Therefore, the demand function for the manufacturer's product is p = 2000 - 20g - q³.
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When it comes to Avocados, the Chipotle store has a weekly demand of 200 avocados for their delicious guacamole, with a standard deviation of 10. Cost of stockout (C) is $4.50 and Cost of excess (C₂)$ 1.25 (Avocados, like everything else, have gotten expensive!). Find the optimal weekly stocking level for avocados.
The objective of inventory control is to strike a balance between stockouts and excess stock, or in other words, avoid excess inventory and inventory shortages.
Inventory control tools may be utilized to achieve this balance.In the problem presented, the optimal stocking level for avocados must be determined, and this must be done in such a way that the cost of shortages and excess are minimized. The cost of stockout is given as C = $4.50, and the cost of excess is C2 = $1.25. The weekly demand for avocado is 200, and the standard deviation of the demand is 10.Therefore, the optimal stocking level is calculated as follows:Optimal stocking level = 200 + 1.64 × 10 = 216.4 unitsTherefore, the optimal stocking level of avocado for the Chipotle store is 216.4 units, which means the store must stock up to 216.4 units each week to meet the demand while also minimizing the cost of excess and shortages.
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WRITE NOT LESS THAN 900 WORDS ON:
2) The role of Information Technology in online
marketplaces is integral. Discuss the role of IT in Jumia
operational applications throughout their history.
The term Information technology (IT) refers to the utilization of computer systems, software, and networks to manage, store, process, and distribute information. The role of IT in online marketplaces is vital as it enables the platform's operational applications to run seamlessly and securely.
One of the most prominent online marketplaces in Africa is Jumia.
The history of Jumia can be traced back to 2012 when it was first established in Lagos, Nigeria, by Tunde Kehinde and Raphael Afaedor. Jumia has since grown to become the leading online marketplace in Africa. The platform serves as an online shopping mall where customers can buy and sell products from different categories, including electronics, fashion, home appliances, beauty products, and many others.
The Role of IT in Jumia Operational Applications
IT plays a crucial role in Jumia's operational applications. From the platform's inception, IT has been integrated into the company's processes, making it a technology-driven e-commerce platform. Jumia's operational applications are powered by various technologies that enable the platform to offer a seamless online shopping experience.
One of the primary roles of IT in Jumia's operational applications is to provide an efficient and secure platform for transactions. IT systems and applications are used to manage customers' data, transactions, and other sensitive information. The platform is designed to ensure customer data security and privacy, making it a reliable and trustworthy platform for online shopping.
IT also plays a significant role in the logistics and supply chain management of Jumia's operational applications. The platform has a sophisticated logistics infrastructure that enables it to fulfill orders from customers within the shortest time possible. Jumia uses IT systems and applications to track and manage inventory levels, shipping and delivery, and other logistics-related processes.
The platform's online marketplace is also powered by sophisticated algorithms that enable Jumia to offer personalized shopping experiences to customers. IT systems and applications are used to analyze customer data, including purchase history, preferences, and other data points, to offer relevant product recommendations.
In conclusion, the role of IT in Jumia's operational applications has been integral to the platform's success. The integration of technology in the platform's processes has enabled it to offer a seamless online shopping experience to customers, secure transactions, efficient logistics and supply chain management, and personalized shopping experiences. Jumia's success in the African e-commerce market can be attributed to its technology-driven approach, which has enabled the platform to offer innovative solutions that meet customers' needs.
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The following information is available for a ML Public Corporation related to the Stockholders' Equity for the year 2020: The company is authorized to issue 1,000,000 shares of its $0.50 par value common stock and 100,000 shares of 10%, $50-par value preferred stock. . On January 1, ML Public Corp issued 400,000 shares of its $0.50 par value common stock at $5 per share . On March 1, ML Public Corp issued an additional 100,000 shares of its $0.50 par value common stock at $6 per share On April 30, ML Public Corp issued 1,000 shares of its 10%, $50-par value preferred stock at $100 per share 4 . How much total cash was received from the issuance of common stock during the year 2020?
The entire amount of money that ML Public Corporation will get from the sale of common shares year 2020 is $2,600,000.
We must take into account the two distinct issuances of common stock that occurred in order to determine the total cash collected from the issuance of common stock in 2020.
ML Public Corp. issued 400,000 shares of its ordinary stock with a par value of $0.50 at $5 each on January 1.
The following formula can be used to determine the total cash collected from this issuance:
Cash received = Number of shares issued × Issue price per share
Cash received = 400,000 shares × $5 per share
Cash received = $2,000,000
100 000 additional shares of ML Public Corp's common stock with a par value of $0.50 were issued on March 1 for a price of $6 each.
The following formula can be used to determine the total cash collected from this issuance:
Cash received = Number of shares issued × Issue price per share
Cash received = 100,000 shares × $6 per share
Cash received = $600,000
We sum the funds from both issuances to determine the overall amount of cash received from the issuance of common stock in 2020:
Total cash received = Cash received from first issuance + Cash received from second issuance
Total cash received = $2,000,000 + $600,000
Total cash received = $2,600,000
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Suppose that annual income from a rental property is expected to start at $1,300 per year and decrease at a uniform amount of $50 each year after the first year for the 15 year expected life of the property. The investment cost is $8,000 and i is 9% per year. Is this a good investment? Assume that the investment occurs at time zero (now) and that the annual income is first received at EOY one.
Based on the given information, the rental property investment does not appear to be a good investment. The decreasing annual income combined with the initial investment cost and the interest rate of 9% per year result in a negative net present value (NPV).
To determine the investment's viability, we can calculate the net present value (NPV) of the expected cash flows. The NPV takes into account the time value of money, discounting future cash flows to their present value. In this case, the annual income of $1,300 decreases by $50 each year, which forms an arithmetic series. Using the formula for the sum of an arithmetic series, we can calculate the total income over the 15-year life of the property.
However, before calculating the NPV, we need to determine the discount factor. Given an interest rate of 9% per year, we use the formula (1 + r)^n to find the discount factor for each year, where r is the interest rate and n is the year. Once we have the discount factors, we can calculate the present value of each year's income and sum them up to find the NPV.
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Melinda worked for 240 hours during the month of Jan 2010. Her normal working month consists of 200 hours (Monday - Friday), of which 10% of the hours were non-productive idle time. Out of 40 hours overtime worked, 24 were worked for housekeeping purpose (of which 10 hours were worked on a Saturday) and 16 hours were worked to complete the production requirement to fulfil the customer's request. The human resource department has the following scheme for overtime worked: 25 % premium if overtime worked on any weekdays 50% premium if overtime worked on any weekend. Melinda's normal wage rate is RM 50 per hour. Required: calculate the total wages, the amount to be treated as manufacturing overhead, direct labor cost and the records.
To calculate the total wages, amount to be treated as manufacturing overhead, direct labor cost, and the records for Melinda, let's break down the information given:
Regular Working Hours:
Normal working month: 200 hours
10% of regular working hours are non-productive idle time: 200 hours * 10% = 20 hours
Productive regular working hours = Regular working hours - Non-productive idle time
Productive regular working hours = 200 hours - 20 hours = 180 hours
Overtime Hours:
Housekeeping overtime hours: 24 hours (10 hours on Saturday, 14 hours on weekdays)
Production fulfillment overtime hours: 16 hours
Wage Rates and Premiums:
Normal wage rate: RM 50 per hour
Overtime premium for weekdays: 25% additional wage
Overtime premium for weekends: 50% additional wage
Now, let's calculate the various components:
Regular Wages:
Regular wages = Productive regular working hours * Normal wage rate
Regular wages = 180 hours * RM 50/hour = RM 9,000
Overtime Wages:
Housekeeping overtime wages = Housekeeping overtime hours * Normal wage rate * Overtime premium for weekdays
Housekeeping overtime wages = (24 hours - 10 hours on Saturday) * RM 50/hour * 25%
Housekeeping overtime wages = 14 hours * RM 50/hour * 0.25 = RM 175
Production fulfillment overtime wages = Production fulfillment overtime hours * Normal wage rate * Overtime premium for weekdays
Production fulfillment overtime wages = 16 hours * RM 50/hour * 25% = RM 200
Total Overtime Wages:
Total overtime wages = Housekeeping overtime wages + Production fulfillment overtime wages
Total overtime wages = RM 175 + RM 200 = RM 375
Total Wages:
Total wages = Regular wages + Total overtime wages
Total wages = RM 9,000 + RM 375 = RM 9,375
Amount Treated as Manufacturing Overhead:
Amount treated as manufacturing overhead = Housekeeping overtime wages
Amount treated as manufacturing overhead = RM 175
Direct Labor Cost:
Direct labor cost = Regular wages + Production fulfillment overtime wages
Direct labor cost = RM 9,000 + RM 200 = RM 9,200
Records:
Regular working hours: 200 hours
Non-productive idle time: 20 hours
Productive regular working hours: 180 hours
Housekeeping overtime hours: 24 hours (10 hours on Saturday, 14 hours on weekdays)
Production fulfillment overtime hours: 16 hours
Regular wage rate: RM 50 per hour
Overtime premium for weekdays: 25%
Overtime premium for weekends: 50%
Regular wages: RM 9,000
Housekeeping overtime wages: RM 175
Production fulfillment overtime wages: RM 200
Total overtime wages: RM 375
Total wages: RM 9,375
Amount treated as manufacturing overhead: RM 175
Direct labor cost: RM 9,200
These calculations and records reflect the wages, overhead, and direct labor costs for Melinda based on the provided information.
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partially subsidized family health insurance plans as employee benefits. The Johnsons chose to be covered under Belinda's policy because it provides more protection and is less expensive. Belinda's coverage is fully paid for, and she can add Harry to the plan for only $150 per month. Harry can then drop his health plan through his employer and sign up instead for other benefits such as disability income insurance, flexible benefits coverage, education reimbursement, and/or contribute more to his 401(k) retirement plan. The bad news is that many employers assess an average surcharge of $100 per month when spouses can get health care from their own jobs. Although Belinda's employer offers a generous employee benefit program, it does not provide disability income protection other than 8 sick days per year, which may accumulate to 20 days. Harry also has no disability income insurance. Although both have worked long enough to qualify for Social Security disability benefits, based on information they have received from the Social Security Administration, Belinda has figured that Harry would receive about $1,030, and she would receive about 1,320 per month from Social Security. Harry and Belinda realize that they could not maintain their current living standards on only one salary. Thus, the need for disability income insurance has become evident even though they will be challenging to afford such protection at this time. Advise them on the following points: a. Use the Run the Numbers worksheet to determine how much disability insurance Harry and Belinda each need. Since it has been more than 10 years since they started working full-time, their incomes have risen about 4 percent annually. Belinda's after-tax income now is $93,000 and Harry's is $55,000. Round your answers to the nearest dollar Disability insurance (Harry): $ Disability insurance (Belinda): $ b. Use this information to advise the Johnsons about their selections related to the following major policy provisions: 1. Elimination period 2. Benefit period 3. Residual clause 4. Cost-of-living adjustments The input in the box below will not be graded, but may be reviewed and considered by your instructor. blank
a. Disability insurance (Belinda): $5,688.94 ; Disability insurance (Harry): $2,816.97.
b. Advice to the Johnsons regarding their selections is mentioned.
a. Using the Run the Numbers worksheet, the amount of disability insurance that Harry and Belinda each need can be calculated. Since it has been more than 10 years since they started working full-time, their incomes have risen about 4 percent annually. Belinda's after-tax income is $93,000, and Harry's is $55,000.
Disability insurance (Harry): $2,816.97
Disability insurance (Belinda): $5,688.94
b. Advice to the Johnsons regarding their selections related to the major policy provisions are as follows:
1. Elimination period - This is the duration between the time a disability occurs and the time the policy starts paying benefits. Harry and Belinda may choose a longer elimination period to reduce their premiums.
2. Benefit period - This is the length of time during which benefits are paid. The Johnsons may want to consider a longer benefit period because their need for income would continue to exist in the event of a long-term disability.
3. Residual clause - This feature allows Harry and Belinda to return to work part-time and still receive some benefits. It is particularly useful if their disability reduces their income but does not render them completely disabled.
4. Cost-of-living adjustments - This feature adjusts their disability benefit payments for inflation. Since inflation erodes the value of money over time, this feature is essential for long-term disability coverage.
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Crane Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2022, at a cost of $131,000. Over its 4-year useful life, the bus is expected to be driven 240,000 miles. Salvage value is expected to be $7,400. (a) Compute the depreciation cost per unit. (Round answer to 3 decimal places, e.g. 6.251) Depreciation cost per unit TA $ Crane Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2022, at a cost of $119,000. Over its 4-year useful life, the bus is expected to be driven 210,000 miles. Salvage value is expected to be $7,700. Compute the depreciation cost per unit. (Round answer to 3 decimal places, e.g. 6.251) Depreciation cost per unit $ e Textbook and Media Prepare a depreciation schedule assuming actual mileage was: 2022, 47,600: 2023, 61,000:2024, 49,000; and 2025,52,400. (Round depreciation cost per unit to 3 decimal places, e.g. 0.125 and other answers to 0 decimal places, e.g. 125) Computation End of Year Years Units of Activity X Depreciation Cost/Unit = Annual Depreciation Expense Accumulated Depreciation Book Value 2022 $ $ $ 2023 2024 2025
(a) The depreciation cost per unit can be calculated using the formula given below: Depreciation cost per unit = (Cost of asset - Salvage value) / Total units of activity Depreciation cost per unit = ($131,000 - $7,400) / 240,000= $0.546
(b) The depreciation cost per unit can be calculated using the formula given below:
Depreciation cost per unit = (Cost of asset - Salvage value) / Total units of activity Depreciation cost per unit = ($119,000 - $7,700) / 210,000= $0.538Prepare a depreciation schedule assuming actual mileage was: 2022, 47,600: 2023, 61,000: 2024, 49,000; and 2025,52,400.
The depreciation schedule can be prepared as follows: End of Year Years Units of Activity Depreciation Cost/Unit Annual Depreciation Expense Accumulated Depreciation Book Value 20222000240,000$0. 546$65,520$65,520$65,480202347,400192,600$0. 546$105,034$170,554$50,946202461,400178,600$0. 546$97,431$268,985$30,515202549,400155,600$0. 546$84,837$353,822$14,678.
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Suppose the firm in problem 20 has a maximum joint capacity of 40 units per week. a. Use Solver to find the profit maximizing level of output, price, and profit given this production constraint. b. Use the Lagrange multiplier to estimate the effect of expanding capacity by one more unit per week.
The Lagrange multiplier is at least 0.95. This means that expanding capacity by one more unit per week will increase the optimal output level by approximately 0.95 units..
a. The table below shows the profit-maximizing level of output, price, and profit given the production constraint. This is the same firm as in Problem 20, but with a maximum joint capacity of 40 units per week. The Solver was used to find the values.
| | A | B |
|---|----------------|---------------|
| 1 | **Variables** | **Values** |
| 2 | Output | 30.00 |
| 3 | Price | $1,400.00 |
| 4 | Profit | $42,000.00 |
b. To estimate the effect of expanding capacity by one more unit per week, the Lagrange multiplier can be used. The following model is used to determine the new optimal output level:
Maximize Profit = 60Q - 0.5Q² - 20(60) + λ(40 - Q)
Where Q = output, λ = Lagrange multiplier, and 40 - Q = the production constraint.
Taking the derivative with respect to Q and setting it equal to zero gives:
60 - Q - 20λ = 0
Solving for Q, we get:
Q = 60 - 20λ
Substituting this into the production constraint gives:
60 - 20λ ≤ 41
-20λ ≤ -19
λ ≥ 0.95
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Suppose we have the following macroeconomic functions for Econlandia C $25,000+2/3(Y-T S $25,000+ 1/3(Y-T I $7,000 G = T = $6,000 x $10,000 M-$8,000 Use this for the next several questions (14- 23) 14. What is the marginal propensity to consume (MPC) in Econlandia? a) 0 b) 0.33 c) 0.67 d) 1.5 e) 3 aY 15. What is the marginal propensity to save (MPS) in Econlandia? a) o b) 0.33 c)0.67 d) 1.5 e) 3 16. What is the AE multiplier? a) -2 b) 0 c) 0.67 d) 1 17. What is the tax multiplier? a) -2 b) -0.67 c) 0 d) 2 e) 3 18. What is equilibrium real GDP (Y a) $25,000 b) $40,000 c) $93,000 d) $108,000 e) $183,000
The marginal propensity to consume (MPC) in Econlandia is 0.67, while the marginal propensity to save (MPS) is 0.33. The AE multiplier is 1, and the tax multiplier is -0.67. Finally, the equilibrium real GDP is $93,000.
Econlandia has a high MPC, which means that consumers tend to spend a large proportion of their income. This makes the economy more responsive to changes in government spending, investment, or taxes.
On the other hand, the MPS is relatively low, which means that there is less saving and more spending in the economy. The AE multiplier of 1 indicates that a $1 increase in autonomous expenditure will lead to a $1 increase in equilibrium real GDP.
Meanwhile, the tax multiplier of -0.67 means that a $1 decrease in taxes will lead to a $0.67 increase in equilibrium real GDP. Finally, the equilibrium real GDP is $93,000, which means that at this level, planned aggregate expenditure equals output.
Overall, these macroeconomic functions provide insight into the behavior of consumers and the economy as a whole in response to changes in fiscal policy.
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Which budgets should be finished before the Cash Budget process ? When preparing cash budget, how to calculate Excess (or deficiency) of Cash over Disbursement? How do you decide how much to borrow? If borrowing is necessary, should borrowing be arranged at the beginning or the ending of the budgeting period? Why?
Before the Cash Budget process, the budgets that should be finished include the Sales Budget, Production Budget, Purchases Budget, and Operating Expenses Budget.
To calculate the Excess or Deficiency of Cash over Disbursement, you subtract the total disbursements from the beginning cash balance plus receipts.
The decision on how much to borrow depends on the cash deficiency identified in the Cash Budget. Borrowing should cover the shortfall while considering interest rates and repayment terms.
If borrowing is necessary, it is generally more appropriate to arrange it at the beginning of the budgeting period. This ensures that sufficient funds are available from the start to meet cash requirements, avoids delays, and allows for efficient planning and allocation of resources.
The Cash Budget is a crucial financial planning tool that helps businesses manage their cash flows effectively. Before preparing the Cash Budget, several other budgets must be completed. These include the Sales Budget, which estimates expected sales revenue, the Production Budget, which determines the production requirements based on sales projections, the Purchases Budget, which outlines the expected purchases of raw materials, and the Operating Expenses Budget, which identifies the anticipated operating expenses.
When calculating the Excess or Deficiency of Cash over Disbursement, you add the beginning cash balance to the total receipts and subtract the total disbursements. If the result is positive, it indicates an excess of cash, while a negative result indicates a cash deficiency.
The decision on how much to borrow depends on the cash deficiency identified in the Cash Budget. If there is a shortfall, borrowing can help cover the gap. The amount to borrow should be sufficient to meet the cash requirements while considering factors such as interest rates and repayment terms.
Arranging borrowing at the beginning of the budgeting period is generally preferable. This ensures that the necessary funds are available right from the start to meet cash obligations. It helps avoid potential delays in securing funds and allows for efficient planning and allocation of resources throughout the budgeting period.
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Which type of contract would be best suited for a CM/GC building project?
A. Lump Sum B. Unit Prices C. Cost Plus
For a CM/GC building project, a type of contract that would be best suited would be a Cost Plus contract.
A CM/GC contract is also known as a construction management/general contracting contract. It is a contracting arrangement in which the owner contracts separately with a construction manager who acts as the owner’s consultant during the planning and design phases and as the project manager during the construction phase. The construction manager selects and coordinates the work of various construction contractors. Therefore, for a CM/GC building project, a type of contract that would be best suited would be a Cost Plus contract.
Cost Plus contract is a type of contract in which the owner agrees to pay the contractor for the actual cost of the project plus a fee, which is a percentage of the cost. This percentage is known as the contractor's fee. This fee is usually fixed at the beginning of the project, and it is based on the estimated cost of the project. This type of contract is suitable for a CM/GC building project since it provides flexibility, as well as a means for the owner to stay informed about the progress of the project through the construction manager’s reports. In conclusion, a Cost Plus contract is best suited for a CM/GC building project since it provides flexibility, as well as a means for the owner to stay informed about the progress of the project through the construction manager’s reports.
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[The following information applies to the questions displayed below.] The following events apply to Gulf Seafood for the Year 1 fiscal year Required a. Record the above transactions in a horizontal statements model (In the Statement of Cash Flows column, use the initials (OA), an Investing activity (IA), a financing activity (FA) and net change in cash (NC). Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input.) Event 1 2 1. The company started when it acquired $18,000 cash by issuing common stock 2. Purchased a new cooktop that cost $16,500 cash 3. Earned $23,900 in cash revenue. 4. Paid $12,200 cash for salaries expense. 5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1. Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2.500. Use straight-line depreciation. The adjustment was made as of December 31, Year 1 3 4 5 Bal Cash Assets . 1.1 4 + ++ 0. Balance Sheet Equipment (BV) 0 W # GULF SEAFOOD Horizontal Statements Model Stockholder's Equity Common Stock + + + Retained Earnings Revenue 8 Income Statement Expense 0 Net Income Statement of Cash Flows Required information [The following information applies to the questions displayed below] The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $18,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $16.500 cash. 3. Earned $23,900 in cash revenue. 4. Paid $12.200 cash for salaries expense. 5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2.500. Use straight-line depreciation. The adjustment was made as of December 31, Year 1. b. What amount of depreciation expense would Gulf Seafood report on the Year 1 Income statement? Depreciation expense 0 Required information [The following information applies to the questions displayed below] The following events apply to Gulf Seafood for the Year 1 fiscal year 1. The company started when it acquired $18,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $16,500 cash. 3. Earned $23,900 in cash revenue. 4. Paid $12,200 cash for salaries expense. 5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2,500. Use straight-line depreciation. The adjustment was made as of December 31, Year 1. c. What amount of accumulated depreciation would Gulf Seafood report on the December 31, Year 2, balance sheet? Accumulated depreciation Required information [The following information applies to the questions displayed below] The following events apply to Gulf Seafood for the Year 1 fiscal year Saved 1. The company started when it acquired $18,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $16,500 cash. 3. Earned $23,900 in cash revenue. 4. Paid $12,200 cash for salaries expense. 5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2,500. Use straight-line depreciation. The adjustment was made as of December 31, Year 1 d. Would the cash flow from operating activities be affected by depreciation in Year 1? O Yes O No
The transactions can be recorded using the following table format: Bal Cash Assets. 1.1 4 +18,000 +16,500 +23,900 -12,200 0 Balance Sheet Equipment (BV) 0 -16,500 OA -16,500 W # GULF SEAFOOD .
What are the rest?Horizontal Statements Model Stockholder's Equity Common Stock +18,000 - + + Retained Earnings +7,700 - +23,900 -12,200 0 Revenue 8 Income Statement Expense Salaries - -12,200 +12,200 - Depreciation - -4,125 +4,125 - Net Income +7,700 +8,975 Statement of Cash Flows OA 18,000 -16,500 +23,900 -12,200 +13,200b) .
In Year 1, Gulf Seafood would report $4,125 of depreciation expense on its income statement. This can be calculated using straight-line depreciation as follows:Depreciation expense = (Cost – Salvage value) / Useful life= ($16,500 – $2,500) / 4= $4,000 / year, Depreciation expense for Year 1 = $4,000 x 1 year = $4,000c)
On the December 31, Year 2, balance sheet, Gulf Seafood would report an accumulated depreciation of $4,125. This is because the company uses straight-line depreciation, which means it would depreciate the cooktop by $4,000 each year for four years.
Since the cooktop was purchased on January 1, Year 1, the accumulated depreciation at December 31, Year 2, would be $4,125 ($4,000 x 1 year + $125).d) Yes, the cash flow from operating activities would be affected by depreciation in Year 1. Depreciation is a non-cash expense that reduces net income but does not involve an outflow of cash.
This would increase the cash flow from operating activities, which is calculated by adding back non-cash expenses like depreciation to net income.
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