Quick Silver, Smart Learning and Blooming Ltd.

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…

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KIBT Ltd is a consumer electronic company and considering to invest

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…

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Pabst & Maxfield, Accounting Practice Sets

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…

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Brabant Inc. recorded the following transactions for one of its successful items

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…

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FAC1 – Here is the list of accounts of Extase Inc.

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…

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On 1 July 2018, Red River Ltd acquired 70% of the share capital

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…

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On 1 July 2018, River Ltd acquired 90% of the share capital to gain control of Creek Ltd

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…

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The following information relates to Brunswick Ltd

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…

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Great Sand Ltd offers $200 million in debentures, which is payable on application

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.

 

Required:

Prepare the journal entries to record the issue of the debentures and the annual interest payments on 30th June 2019.

Limo Belle Services, Media Medium and Fortress Reconstruction Inc.

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.…

Murungi Co. Ltd. Extracted the following trial balance

Murungi Co. Ltd. Extracted the following trial balance as on 31st December, 2004. Dr                               Cr Shs.                              Shs. Share Capitalrrtt 250,000 ordinary shares of Shs.100 each                                                                         25,000,000 125,000 10% preference shares of Shs. 100 each                                                             12,500,000 10% debentures                                                                                                             10,000,000 Freehold premises at cost                                                           25,000,000 Motor vehicles at cost                                                                 7,500,000 Fixtures and fittings                                                                    1,300,000 Plant and machinery at cost                                                         2,500,000 Profit and loss A/C, 1 Jan 2004                                                                                        2,685,000 Sales                                                                                                                            59,475,000 Stock at 1 Jan 2004                                                                   10,775,000 Bad debts written off                                                                      125,000 Purchases                                                                                 16,900,000 Dividends paid at 30 June 2004 Preference dividend                                                                       625,000 Ordinary dividend                                                                       1,250,000 Debenture interest paid at 30 June 2004                                            500,000 Trade Debtors/Creditors                                                               2,700,000                    1,500,000 Accumulated depreciation…

The cash flows shown below were extracted from the accounts of Jason Taylor

Question 1 The cash flows shown below were extracted from the accounts of Jason Taylor, a music shop owner. Repayment of loan $390 000 Sale of property 390 000 Interest received 1 560 Payment to employees 78 000 Receipts from customers 273 000 Expenses paid 23 400 Computer equipment purchase 23 400 GST paid 780 Payments to suppliers 156 000 Income taxes paid 3 120 Beginning cash balance 7 800 A. Prepare a statement of cash flows using the direct method. B. Outline some cash flow warning signals. Question 2 Selected information for two companies competing in the catering industry is presented in the table below: Account Name  Lawson  Dawson Current assets $110,500 $167,900 Non-current assets $250,000 $299,000 Current Liabilities $58,600…