Hardex Inc is a manufacturer of commercial and heavy industrial pipe nozzles. The firm’s two product lines are called Easyflow and Heavyflow nozzles. The primary raw materials are flexible steel sheets, and 15cm x 13cm of plastic sheets. Each Easyflow nozzle requires a 2/3 of a meter and a Heavyflow nozzle requires a one metre of steel sheet. Allowing for normal breakage and scrap steel sheet, the company can cut either enough to make four Easyflow or two Heavy flow nozzles from a single steel sheet. Other raw materials are costly and treated as indirect materials. Karen Shaw, Hardex Inc.’s accountant has gathered the following information in preparation for the company’s annual budget for the next year. Sales in the fourth…Details
Assume that the company, where you are working as a team in Financial Department, is considering a potential project with a new product that is expected to sell for an average price of $22 per unit and the company expects it can sell 650 000 unit per year at this price for a period of 4 years. Launching this project will require purchase of a $3 500 000 equipment that has residual value in four years of $500 000 and adding $ 850 000 in working capital which is expected to be fully retrieved at the end of the project. Other information is available below: Depreciation method: straight line Variable cost per unit: $17 Cash fixed costs per year: $450 000 Discount rate: 10% Tax Rate: 30%…Details
Question 1. Quick Silver Ltd is looking for financial investment in the securities market. Two investment options are available in different securities: Bonds and ordinary shares. Treasury bond: the bond is paying 10% coupon rate. Interest is paid semiannually. The bonds have a face value of $1,000 and will mature 25 years from now. Commonwealth Bank ordinary share: the share just paid a dividend of $6.50 per share. The Company Management agreed on steady growth of 5% in dividends and earnings over the foreseeable future. The required rate of return for shares of this type is 18%. Required: Compute the current value of the Treasury Bond if the YTM of the bond is 7% annually; Calculate the current value of Commonwealth…Details
KIBT Ltd is a consumer electronic company and considering to invest in either of two competing projects that will allow the company to eliminate a production bottleneck and meet the growing demand for its products. The company’s engineering department narrowed the alternatives down to two projects A and B. Working with the accounting and finance personnel, the company’s CFO developed the following estimates of the cash flows for A and B over the relevant 6-year time horizon. The firm has a 12 per cent required return and views these projects as equally risky. Year Project A cash flows Project B cash flows 0 -$660,000 -$950,000 1 $250,000 $190,000 2 190,000 170,000 3 180,000 180,000 4 160,000 260,000 5 120,000 570,000…Details
Schedule of Accounts Receivable as at 31 May 20XX Customer Invoice No. Terms Date of Invoice Amount Due Coral Holiday Resort 3347 N30 15/05/20XX $ 2,160.00 Beach and Reef Holidays 3339 N30 3/05/20XX 1,320.00 Budget Diving Tours 3352 N30 29/05/20XX 2,280.00 $ 5,760.00 Schedule of Accounts Payable as at 31 May 20XX Supplier Invoice No. Terms Date of Invoice Amount Due Louis Reevsby 1753 N7 31/05/20XX $ 960.00 One Stop Diving Shop 13467 N30 30/04/20XX 2,400.00 Diving DownUnder 9412 N30 8/05/20XX 2,464.00 $ 5,824.00 Pro Diver Trial Balance as at 31 May 20XX Account Number Account Debit Credit 100 Bank Account $ 14,632.20 105 Petty Cash 200.00 110 Accounts Receivable 5,760.00 120 Prepaid Insurance 381.25 130 Prepaid Rates and…Details
Scenario #1: Inventory Brabant Inc. recorded the following transactions for one of its successful items, a product called XL5: January 01 Opening inventory: 1,500 units @ $9.50 per unit. Purchases: January 01 2,200 units @ $10.50 per unit $23,100 January 01 1,900 units @ $11 per unit $20,900 February 01 1,300 units @ $11.50 per unit $14,950 March 01 1,600 units @ $12 per unit $19,200 Total 7,000 units $78,150 Sales: 1,600 units @ $18.50 per unit January 01 1,700 units @ $19 per unit $29,600 January 01 1,100 units @ $19 per unit $32,300 February 01 1,800 units @ $19.50 per unit $20,900 February 01 6,200 units $35,100 Total $117,900 Assignment: a. Calculate the Ending Inventory for the three…Details
Scenario #1: Financial statements and ratios Here is the list of accounts of Extase Inc. as at September 30, 2012: Accumulated Depreciation – trucks and equipment $31,000 Wages 84,100 Taxes payable 2,800 Land 63,000 Fringe benefits payable 5,400 Receivables 16,400 Sales 367,800 Dividends payable 5,500 Depreciation Expense 26,700 Cost of sales 161,600 Insurance Expense 11,200 Share capital as at October 1, 2011 200,000 Administrative expenses 31,100 Mortgage payable 114,000 Bank loan 21,800 Dividends declared 11,000 Accumulated amortization – building 63,000 Cash 18,000 Income taxes 6,900 Inventories 68,000 Prepaid insurance 2,400 Retained earnings as at October 1, 2011 92,800 Payables 41,000 Finance expense 15,100 Building 243,000 Trucks and equipment 182,500 Wages payable 4,100 Other expenses 8,200 Assignment: Prepare an Income…Details
On 1 July 2018, Red River Ltd acquired 70% of the share capital of Mekong Ltd for $1,200,000. The equity of Mekong Ltd was: Share Capital $1,050,000 General Reserve $ 300,000 Retained Earnings $ 150,000 All assets of Mekong Ltd were recorded at Fair Value (FV) on acquisition, except for a piece of equipment that had a higher FV ($50,000) than its carrying amount. The cost of the equipment was $300,000, and accumulated depreciation is $196,000. The tax rate is 30% Required: Complete the worksheet below using the “Gross Method”. Elimination of investment is subsidiary (Mekong Ltd) Mekong Ltd $ Red River Ltd 70% interest 30% NCI $ FV of consideration transferred 1,200,000 1,200,000 *Plus NCI measured at…Details
On 1 July 2018, River Ltd acquired 90% of the share capital to gain control of Creek Ltd. The following intra-group transactions occurred during the year ending 30 June 2019. During the 2018 – 2019 period, River Ltd sold inventory to Creek Ltd for $2,000,000. River Ltd purchased this inventory for $1,700,000. By 30 June 2019, Creek Ltd has 30% of that inventory still on hand as unsold. Creek Ltd declared a final dividend of $1,500,000 from current year’s profits. Creek Ltd paid Water River Ltd, a consultancy fee of $70,000 during the year. River Ltd provided a loan of $10,000,000 to Creek Ltd. The loan charges 5% interest One half of the interest for the current year remains unpaid as…Details
The following information relates to Brunswick Ltd. At the beginning of the accounting period the company has a wages payable liability of $300 and at the reporting date a wages payable of $720. During the year the wages expense shown in the income statement was $700. At the beginning of the accounting period the company has property plant and equipment (PPE) with a carrying amount of $800. At the end of the accounting period, the carrying amount of the PPE is $2,400. During the year depreciation charged was $160, a revaluation surplus of $480 was recorded and PPE with a carrying amount of $120 was sold for $160. At the beginning of the accounting period the company has retained earnings of…Details
Great Sand Ltd offers $200 million in debentures, which is payable on application. The Interest rate on debentures is 8% per annum, payable annually. By 15 June 2018, applications are received for $240 million debentures. The debentures are allotted on 1 July 2018, which coincides with Great Sand Ltd’s financial year-end.
Prepare the journal entries to record the issue of the debentures and the annual interest payments on 30th June 2019.
Scenario #1: Financial statements and ratios Below you will find the list of accounts of Limo Belle Services Inc. (in Canadian dollars) September 30, 2012 September 30, 2011 Accumulated Depreciation – limousines 30,000 20,000 Depreciation Expense – limousines 10,000 Other expenses 70,000 Retained earnings 4,000 4,000 Share capital 1,000 1,000 Income taxes 35,000 Wages 100,000 Limousines 90,000 60,000 Dividends declared 80,000 Cash 2,000 4,000 Note payable (non-current) 50,000 30,000 Expenses payable 10,000 Accounts Receivable 1,000 Sales 300,000 Wages payable 2,000 From this list of accounts, prepare the following: an Income Statement for period ended Sept. 30, 2012 a Balance Sheet as of Sept. 30, 2012 with comparative figures for 2011 – a Statement of Stockholders’ Equity as of Sept.…