PT Tiktak Signed The Contract On June 1, 20X3, Based On The Contract On
PT Tiktak signed the contract on June 1, 20X3, based on the contract on 31 Mel 20×6, Tiktak will issue its ordinary shares worth Rp250,000, in accordance with IAS 32 on December 31, 20×3 Financial instruments that arise under the contract will be classified as: A. Financial Assets B. Financial Liabilities C. Equity Instruments D. Inherent derivatives
A Construction Company Signed A Contract To Build A Plant For A Customer. Construction
A construction company signed a contract to build a plant for a customer. Construction covered a four-year period. Data concerning the construction were as follows: Contract price = $780,000 Estimated costs = $600,000 Actual results: Actual costs Billings Year 1*. $120,000 $100,000 Year 2*. 100,000 110,000 Year 3*. 240,000 240,000 Year 4*. 160,000 330,000 *No change in estimated costs. Using the information above, answer the following questions: (a) How much income will be reported in Years 1, 2, 3, and 4 if the completed contract method is used? Year 1: $ Year 2: $ Year 3: $ Year 4: $ (b) How much income will be reported each year if the percentage-of-completion method is used? Year 1: $ Year 2: $ Year 3: $ Year 4: $ (c) What net amount would be reported on the balance sheet for contracts in process at the end of year 1 if the completed contract method is used? $ (d) What net amount would be reported on the balance sheet for contracts in process at the end of year 1 if the percentage-of-completion method is used? $
On January 2, 2019, Russ Inc. Paid P1,864,000 For 60,000 Ordinary Shares Of Butter
On January 2, 2019, Russ Inc. paid P1,864,000 for 60,000 ordinary shares of Butter Company. The investment represents a 30% interest in the net assets of Butter and gave Russ the ability to exercise significant influence of Butter’s operating and financial policy decisions. Russ received dividends of P4 per share on December 4, 2017, and Butter reported net income of P750,000 for the year ended December 31, 2019. The market value of Butter’s ordinary share at December 31, 2019 was P33 per share. The book value of Butter’s net assets was P4,500,000 and: The fair market value of Butter’s depreciable assets, with an average remaining useful life of 10 years, exceeded their book value by P880,000. The remainder of the excess of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. What is the carrying value of the investment in Butter ordinary shares at December 31, 2019? Select one: a. P1,614,000 b. P1,980,000 c. P1,350,000 d. P1,822,600 What is the carrying value of the investment in Butter ordinary shares on December 31, 2019? Assume that the 60,000 shares represent a 10% interest in the net assets of Butter rather than a 30% interest. Select one: a. P2,062,600 b. P1,822,600 c. P1,875,400 d. P1,849,000
On January 1, 2016, PT Kirana Bought A Patent For A New Product At
On January 1, 2016, PT Kirana bought a patent for a new product at a price of Rp 120,000,000. At the time of purchase, the patent is valid for 10 years, but the useful life of the patent is only 8 years due to competition from the product. On December 31, 2020, the product was withdrawn from the market by the government. The product was withdrawn from the market by the government. What is the burden that will be recorded by PT Kirana in 2020 for the product withdrawal transaction by the government? A. Rp. 120,000,000 B. Rp. 75,000,000 C. Rp. 45,000,000 D. There is no right answer
Kingbird Corporation (a Calendar Year C Corporation) Reports The Following Income And Expenses This
Kingbird Corporation (a calendar year C corporation) reports the following income and expenses this year: Income from operations $200,000 Expenses from operations 140,000 Dividends received (15% ownership) 15,000 On October 1, Kingbird Corporation made a contribution to a qualified charitable organization of $9,000 in cash (not included in any of the above items). Determine Kingbird’s charitable contribution deduction.
Wanda Is The Chief Executive Officer Of Pink Corporation, A Publicly Traded, Calendar Year
Wanda is the Chief Executive Officer of Pink corporation, a publicly traded, calendar year C corporation. For the current year, Wanda’s compensation package consists of: Cash compensation $ 2,500,000 Nontaxable fringe benefits 250,000 Taxable fringe benefits 150,000 Bonus tied to company performance 2,000,000 How much of Wanda’s compensation is deductible by Pink Corporation?
In The Current Year, Crimson, Inc., A Calendar C Corporation, Has Income From Operations
In the current year, Crimson, Inc., a calendar C corporation, has income from operations of $180,000 and operating deductions of $225,000. Crimson also had $30,000 of dividends from a 15% stock ownership in a domestic corporation. Which of the following statements is correct with respect to Crimson for the current year? a. A dividends received deduction is not allowed in computing Crimson’s NOL. b. Crimson’s NOL is $15,000. c. Crimson’s dividends received deduction is $15,000. d. The NOL is carried back 3 years and forward 10 years by Crimson. e. None of these choices are correct.
The Company Has A Project With A 5-year Life That Requires An Initial Investment
The company has a project with a 5-year life that requires an initial investment of $200,000, and is expected to yield annual cash flows of $62,500. What is the net present value of the project if the required rate of return is set at 10%? Calculation Steps Present Value of an Annuity of $1 at Compound Interest. Net Present Value = (________ $ x________ ) – $_________ Note: Round your answer to the nearest whole dollar. What NPV does the previous calculation yield? $_________________ PART 2 When funds for capital investments are limited, projects can be ranked using a present value index. A project with a negative net present value will have a present value index below 1.0. Also, it is important to note that a project with the largest net present value may, in fact, return a lower present value per dollar invested. Let’s look at an example of how to determine the present value index. The company has a project with a 5-year life, an initial investment of $220,000, and is expected to yield annual cash flows of $58,500. Whathat is the present value index of the project if the required rate of return is set at 6%? Present value index = Total present value of net cash flows Initial investment Calculation Steps Note: Round total present value of net cash flows and initial investment to nearest dollar. Round present value index to two decimal places. Note: Round total present value of net cash flows and initial investment to nearest dollar. Round present value index to two decimal places. Present value index = $________ = ____________ $________ PART 3 A company has a project with a 5-year life, requiring an initial investment of $219,600, and is expected to yield annual cash flows of $55,000. What is the internal rate of return? IRR Factora = Investmentb Annual cash flowsc aIRR Factor: This is the factor which you’ll use on the table for the present value of an annuity of $1 dollar in order to find the percentage which corresponds to the internal rate of return. bInvestment: This is the present value of cash outflows associated with a project. If all of the investment is up front at the beginning of the project, the present value factor is 1.000. cAnnual Cash Flows: This is the amount of cash flows to be received annually as a result of the project. Calculation Steps Present Value of an Annuity of $1 at Compound Interest. IRR Factor = $_________ = _________, rounded to 6 decimals $__________ The calculated factor corresponds to which percentage in the present value of ordinary annuity table? %_________ PART 4 APPLY THE CONCEPTS: Net present value and Present value index Ewing Manufacturing is looking to invest in Project A or Project B. The data surrounding each project is provided below. Ewing’s cost of capital is 11%. Project A Project B This project requires an initial investment of $172,500. The project will have a life of 6 years. Annual revenues associated with the project will be $130,000 and expenses associated with the project will be $35,000. This project requires an initial investment of $135,000. The project will have a life of 4 years. Annual revenues associated with the project will be $109,000 and expenses associated with the project will be $60,000. Calculate the net present value and the present value index for each project using the present value tables provided below. Present Value of $1 (a single sum) at Compound Interest. Present Value of an Annuity of $1 at Compound Interest. Note: • Use a minus sign to indicate a negative NPV. • If an amount is zero, enter “0”. • Enter the present value index to 2 decimals. Project A Project B Total present value of net cash flow $____ $_____ Amount to be invested ______ ______ Net present value $_____ $_____ Present value index: Project A ______ Project B _______ PART 5 APPLY THE CONCEPTS: Internal rate of return The Ewing purchasing department has made revisions to their costs and annual cash flows for Project A and Project B, as outlined below. Project A Project B Project A’s revised investment is $249,600. The project’s life and cash flow have changed to 6 years and $54,000, respectively, while expenses have been eliminated. Project B’s revised investment is $107,000. The project’s life and cash flow have changed to 5 years and $82,500 while expenses reduced slightly to $55,000. Compute the internal rate of return factor for Project A and Project B and then identify each project’s corresponding percentage from the PV ordinary annuity table. Note: Enter the IRR factor, to 5 decimal places. Project A: The calculated IRR factor is ______ and this value corresponds to which percentage in the present value of ordinary annuity table? %______ Project B: The calculated IRR factor is _______ and this value corresponds to which percentage in the present value of ordinary annuity table? %_______
On August 1, 20Y9, Brooke Kline Established Western Realty. Brooke Completed The Following Transactions
On August 1, 20Y9, Brooke Kline established Western Realty. Brooke completed the following transactions during the month of August: a. Opened a business bank account with a deposit of $22,000 in exchange for common stock. b. Purchased office supplies on account, $1,900. c. Paid creditor on account, $1,400. d. Earned sales commissions, receiving cash, $41,000. e. Paid rent on office and equipment for the month, $2,600. f. Paid dividends, $3,400. g. Paid automobile expenses for month, $3,150, and miscellaneous expenses, $1,700. h. Paid office salaries, $4,300. i. Determined that the cost of supplies on hand was $800; therefore, the cost of supplies used was $1,100. 2.b. Prepare a statement of stockholders’ equity for August. Refer to the list of Accounts, Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. If an amount is zero, enter “0”.
Estimate Showing All Relevant Calculations The Maximum Premium Navidale Co Could Pay To Acquire
estimate showing all relevant calculations the maximum premium Navidale Co could pay to acquire Lonchivar Co explaining the approach taken and any assumptions made.
XYZ Company Uses A Job Order Cost System To Determine The Cost Of Doing
XYZ Company uses a job order cost system to determine the cost of doing repair work. The average shop direct labor rate is $20 per hour. Estimated costs and expenses for the coming year are as follows: Engine Parts $675,000 Shop direct labor 300,000 Depreciation on shop equipment 65,000 Shop supervisor salaries 115,000 Shop property taxes 33,000 Shop supplies 12,000 Advertising expense 40,000 Administrative office salaries 87,000 Administrative office depreciation expense 10,000 Instructions; Calculate the predetermined overhead rate using direct labor hours as the activity base.
AUDITING
AUDITING
ARTICLE EXTRACT POINT A: “Company X May Have Inflated Profits By Up To 50
ARTICLE EXTRACT POINT A: “Company X may have inflated profits by up to 50 per cent over the last two years through the use of acquisition accounting to write-down inventories and establish other liabilities. POINT B: Weak operating cash flow with a widening divergence from cash profits raises additional concerns that profits are being manipulated. Tell-tale signs include rising receivables and inventories which suggest possible channel-stuffing and deferral of overheads. POINT C: The winding down of benefits from acquisition accounting may have left a hole in earnings; if we are correct, there is 35 per cent downside to the share price.” QUESTION: Explain how Company X may have used acquisition accounting to write down inventories and establish other liabilities to inflate profits as in Point A.
ARTICLE EXTRACT POINT A: “Company X May Have Inflated Profits By Up To 50
ARTICLE EXTRACT POINT A: “Company X may have inflated profits by up to 50 per cent over the last two years through the use of acquisition accounting to write-down inventories and establish other liabilities. POINT B: Weak operating cash flow with a widening divergence from cash profits raises additional concerns that profits are being manipulated. Tell-tale signs include rising receivables and inventories which suggest possible channel-stuffing and deferral of overheads. POINT C: The winding down of benefits from acquisition accounting may have left a hole in earnings; if we are correct, there is 35 per cent downside to the share price.” QUESTION: Explain what is meant by “channel stuffing
ARTICLE EXTRACT POINT A: “Company X May Have Inflated Profits By Up To 50
ARTICLE EXTRACT POINT A: “Company X may have inflated profits by up to 50 per cent over the last two years through the use of acquisition accounting to write-down inventories and establish other liabilities. POINT B: Weak operating cash flow with a widening divergence from cash profits raises additional concerns that profits are being manipulated. Tell-tale signs include rising receivables and inventories which suggest possible channel-stuffing and deferral of overheads. POINT C: The winding down of benefits from acquisition accounting may have left a hole in earnings; if we are correct, there is 35 per cent downside to the share price.” QUESTION: Explain what is meant by “winding down of benefits from acquisition accounting” and how this may have left a hole in the company’s reported earnings.
At The Beginning Of Its Second Year Of Operations, Its Balance Sheet Appeared As
At the beginning of its second year of operations, its balance sheet appeared as follows: Little Folks Baseball Ltd. Balance Sheet 31 December 2016 Assets ———Amount (£)———- Debits Credits Cash 56,000 Accounts Receivable 80,000 Land 600,000 Total Assets 736,000 Liabilities and Stockholders’ Equity Liabilities: Accounts Payable 64,000 Stockholders’ Equity: Capital Stock 400,000 Retained Earnings 272,000 Total Liabilities and Stockholders’ Equity 736,000 The summarized transactions for the year are as follows: • Issued additional capital stock for cash, £ 200,000 • Collected £ 80,000 on accounts receivable • Paid £ 64,000 on accounts payable • Received membership fees from parents (non – refundable): in cash, £ 260,000; and on account, £ 120,000 • Incurred operating expenses: for cash, £ 60,000; and on account, £ 160,000 • Paid dividends of £ 16,000 • Purchased more land for cash, £ 96,000 • Placed an order for new equipment expected to cost £ 120,000 Required: Journal entries
ALLOWANCE FOR DOUBTFUL DEBTS Zet Ltd. Decided To Make Allowance For Doubtful Debts At
ALLOWANCE FOR DOUBTFUL DEBTS Zet Ltd. decided to make allowance for doubtful debts at the rate of 5% of trade receivables at the end of its financial year, that is 31 December each year. He made the first allowance on 31 December 2017. Trade receivables has been as follows: Year 2017 2018 2019 2020 Trade Receivables (£) 114,00 12,200 10,800 11,200 prepare journal entries, ledgers, trial balance, Profit
In An Approximately 500-word Response, Address The Following Issues/questions: Cash Is The Lifeblood Of
In an approximately 500-word response, address the following issues/questions: Cash is the lifeblood of any business, and without it survival is very unlikely. Do you agree or disagree? Explain what information a statement of cash flows provides to supplement a statement of financial position and an income statement. Why is there still some controversy surrounding published statements of cash flows? How important are such statements in terms of the financial reporting requirements within YOUR country?
AUDITING And Assurance Services PAPER In Your Learning Reflection, You Need To Reflect On
AUDITING and Assurance Services PAPER In your learning reflection, you need to reflect on how you apply and internalise an auditing related concept that you have learnt in this paper to daily and/or work life. The words limit is 800-1000 words. Marks are awarded based on the depth of the reflection. You may consider the following format for the reflection: Introduction: Briefly state what you will reflect on (i.e. an incident happened at work, a prior experience, a book you read or a concept you learnt). Body: Describe the facts with the incident or experience you had. Explain the significance of this incident (experience) to you. (Think about how you felt and why you choose this incident to reflect upon). Analyze the relevance of this incident to an auditing concept (or multiple concepts). How did this incident help you to understand the concept(s) or vice versa? Do you feel your understanding of the audit concept(s) is sufficient? Are there any other questions you want to explore as a result of the incident or experience? Ending: How do you learn this paper so far? Overall how is your progress of learning this paper? What are the skills you think are useful for learning? If not, what can you do to improve? please use the reference below books that Bold words You may refer to Kember, McKay, Sinclair, and Wong (2008) and Wong, Kember, Chung, and Certed (1995) for examples of different level of reflection.
Topiary Limited Is A 40 Year Old Company Producing Garden Statues Carved From Marble.
Topiary Limited is a 40 year old company producing garden statues carved from marble. Twenty two years ago it acquired a 100% interest in a marble importing company. Hardstuff Limited. In 20W9 it acquired a 40% interest in a competitor, Landscape Limited and on 1 January 20X7 it acquired a 75% interest in Garden Furniture designs. The draft consolidated accounts for the Topiary Group are as follows. Draft consolidated income statement for the year ended 31 December 20X7 N$ 000 N$ 000 Operating profit 4455 Share of profits of associates 1485 Income from long term investments 600 Interest payable (450) Profit before taxation 6090 Tax on profit Income tax 1173 Deferred taxation 312 Tax attributable to income of associate 435 Tax attributable to investment income 135 (2055) Profit after tax 4035 NCI (300) Profit attributable to equity holders of the parent 3735 Page 14 of 18 Draft consolidated statement of financial position as at 31 December 20X7 20X6 20X7 ASSETS Non –current assets Building 6 600 6 225 Machinery at cost 4 200 9 000 Accumulated depreciation Carrying amounts (3 300) 900 7500 (3 600) 5400 11 625 Goodwill 300 Investment in associates 3 000 3 300 Long-term investments 1230 1 230 11 730 16 455 Current assets Inventories 3000 5925 Receivables 3825 5550 Bank 5460 12285 13545 25020 TOTAL ASSETS 24015 41475 Equity and liabilities Equity Share capital: 25 c shares 6000 11 820 Share premium account 6285 8649 Retained earnings 7500 10 335 30804 NCI 345 31149 Page 15 of 18 Non- current liabilities Obligation under finance lease 510 2130 Loans 1500 4380 Deferred tax 39 90 6 600 2049 Current liabilities Trade payables 840 1500 Obligation under finance lease 600 720 Income tax 651 1386 Accrued interest and finance charges 90 2181 120 3 726 TOTAL EQUITY AND LIABILITIES 24015 41475 Notes 1. There had been no acquisition or disposal of buildings during the year Machinery costing N$ 1.2 million was sold for N$ 1.5 million resulting in a profit of N$ 300 000. New machinery was acquired in 20X7 including additions of N$ 2.55 million acquired under finance leases Page 16 of 18 2. Information relating to the acquisition of Garden Furniture designs N$ 000 Machinery 495 Inventories 96 Trade receivables 84 Bank 336 Trade payables (204) Income tax (51) 756 NCI (189) 567 Goodwill 300 867 2640 000 shares issued as part consideration 825 Balance of consideration paid in cash 42 867 3. Loans were issued at a discount in 20X7 and the carrying amount of the loans at 31 December 20X7 included N$ 120 000 representing the finance cost attributable to the discount and allocated in respect of the current reporting period Required Prepare consolidated statement of cash flows for the Topiary Group for the year ended 31 December 20X7 as required by IAS 7, using the indirect method. There is no need to provide notes to the statement of cash flows. (40 marks)
Vivien Is Considering Buying An Investment Property For $550,000. ANZ Bank Requires 10%
Vivien is considering buying an investment property for $550,000. ANZ Bank requires 10% deposit and offers her a 30-year loan for the balance of the purchase price. She can choose to repay the loan either by equal weekly instalments consisting of interest and principal repayment components at an interest rate of 4.55% p.a., compounded weekly, or by equal fortnightly instalments at 4.75% p.a., compounded fortnightly. a. Explain with calculations which repayment option Vivien should choose. (2 1= 3 marks) b. If Vivien wants to pay $1,000 a week, using the repayment option you identified in part a., how long will it take her to pay off the loan? (4 marks)
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