Lolly Pops Inc. makes really big lollypops in two sizes, large & giant

Lolly Pops Inc. makes really big lollypops in two sizes, large & giant. The company sells lollipops to  convenience stores, fairs, schools for fund raising and in bulk on the internet. Summer is approaching & the company is preparing its budget for the month of December. The lollypops are handmade, mostly out of sugar and attached to wooden sticks. Expected sales are based on past experience. Other information for the month of December follows:   Input prices: Direct materials   Sugar $0.50 per kg Sticks $0.30 each Direct manufacturing labour $8 per direct manufacturing labour hour   Input quantities per unit of output:   Large Giant Direct material                      Sugar 0.25 kg 0.5 kg                  Sticks 1 1 Direct…

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Jim’s Legal services business performed services

During the month of June 2019, Jim’s Legal services business performed services for a specific customer for which the fee was $3,000. The payment was received in the following month of July.

 

Required:

1. Was the revenue earned in June or July?
2. Which financial statement assumption does this relate to?
3. What are the differences between the cash basis of accounting and the accrual basis of accounting?

BAO2000 Accounting Information – MYOB

BAO2000 Accounting Information MYOB Assignment (Individual) Semester 2 2021 ASSUME IT IS NOW 1 September 2021.  You are a newly appointed Accountant with “Valentines Furniture Pty Ltd”, a retail business who supplies high quality Italian furniture with a store that operates in Melbourne CBD. The owner of “Valentines Furniture Pty Ltd” is Mr Giuseppe Fanuli who has decided to employ you to help his store convert from its current manual accounting system to a new computerised accounting system using MYOB Accounting Right Standard AU 2019.4.0 or any other MYOB version. Now that you are employed as an accountant for the store, your first task will be to set up the MYOB company file by following the detailed requests of Mr Fanuli. After completing the setup process, your next task will be to…

Snap Ltd is a seafood business

Snap Ltd is a seafood business with headquarters in Apollo Bay. Snap Ltd products include many varieties of seafood but one item lacking in its product range is Tasmanian Atlantic Salmon. The board of Snap Ltd decided to investigate a takeover of a Tasmanian company, Southern Pty Ltd, whose major product is the packaging of Tasmanian Atlantic Salmon. Strategically, Southern Pty Ltd would be a good fit with Snap Ltd as Snap owns two processing factories in Devonport, one of which is under-utilised.  If Southern were acquired, then Snap would liquidate the company and transfer all the processing work to one of the Devonport factories.   The financial statements of Southern Pty Ltd at 1 September 2019 showed the following information:…

Cena Ltd acquired 80% of the shares of Lesnar Ltd

On 1 July 2016, Cena Ltd acquired 80% of the shares of Lesnar Ltd for $40 000. The following balances appeared in the records of Lesnar Ltd at this date: Share Capital $20 000 General Reserve     2 000 Retained Earnings   10 000 At 1 July 2016, all the identifiable assets and liabilities of Lesnar Ltd were recorded at fair value except for the following: Carrying amount Fair value Machinery (cost $36 000)  $30 000 $40 000 Inventory 16 000  20 000 Receivables  20 000  18 000 The machinery, which had a remaining useful life of 5 years, was adjusted to fair value after the acquisition date in the consolidation worksheet. The machinery was sold by Lesnar Ltd on 1…

You have $50,000 saving and are considering

Question You have $50,000 saving and are considering a 30-year investment which is offered in two phases:   Phase 1: Investing that $50,000 as a lump sum in an investment in the securities market for 20 years. Your securities broker recommends two alternative options: Option A pays interest rate of 11.87%, compounding daily. Option B pays interest rate of 12%, compounding quarterly.   Phase 2:  At the end of 20 years, putting the total amount accumulated in the first phase into another investment, which will pay you an equal income at the end of each year for 10 years.   Required:   a) Identify which option should you choose in Phase 1 by computing the effective annual interest rate (EAR)?  …

You are an experienced investor in the securities market

Question You are an experienced investor in the securities market and you have established an investment portfolio of two blue chips five years ago:  Diamond shares with current market value of $235,000 and Platinum shares with current market value of $355,000.   Required:   a) If your portfolio has provided you with returns of 10.5%, 12.6%, – 11.5%, 14.5% and 15.2% over the past five years, respectively. Calculate geometric average return of the portfolio for this period. b) Assume that data in the table below is available for your portfolio performance, calculate the expected return, variance and standard deviation of the portfolio? Diamond Platinum Expected return 16.5% 23.5% Standard Deviation of return 7% 11% Correlation of coefficient (p) 0.45   c)…

Mac, Holmes, Prime Moving, Shoe Wholesaler, Adam and Electrical

Question 1  Mac Ltd. provides legal advice to customers for fees. On 30 June 2020, Mac Ltd. completed its first year of operations. Some of the ledger account balances of the business, before any financial year end (30 June) adjustments, are provided below:   $ Fees Revenue 442,500 Rent Expense 21,960 Electricity Expense 8,460 Wages Expense 163,200 Advertising Prepaid 2,700   No adjusting entries have been made to these accounts at any time during the year. An analysis of the business records reveals the following.   The total Fees Revenue recorded includes $2,250 that was prepaid by a client as a deposit for legal advice to be provided in July 2020. The balance in Advertising Prepaid represents the amount paid for…

Treasure Island Ltd. currently has the following

Treasure Island Ltd. currently has the following capital structure:   Debt:  $3,500,000 par value of outstanding non-callable bond that pays annually 10% coupon rate with an annual before-tax yield to maturity of 8.5%. The bond issue has face value of $1,000/bond and will mature in 20 years.   Ordinary shares: 70,000 outstanding ordinary shares. The firm plans to pay a $4.50 dividend per share in the next financial year. The firm is maintaining 5% annual growth rate in dividend, which is expected to continue indefinitely.   Preferred shares: 45 000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 13%.   Company tax rate is 30%.   Required: Complete the following tasks: Calculate the current price of…

You are working as a finance manager for Fire Fox Transport Ltd

You are working as a finance manager for Fire Fox Transport Ltd. The company is considering to invest in one of the two following projects to buy a new equipment for their storage which is expected to boost the company’s revenue. Each equipment will last 5 years and have no salvage value at the end. The company’s required rate of return for all investment projects is 9.5%. The cash flows of the projects are provided below.     Equipment 1 Equipment 2 Cost $157,000 $182,000 Future Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5   67 000 82 000 78 000 64 000 56 000   83 000 94 000 80 000 77 000 73 000  …

ABC, Revaluation, JTX, Win Box, Deferred Tax, Mirvac

Question 1 ABC Ltd acquired a Machine from BAN Ltd for the following consideration: Cash    $70 000, Land in the books of ABC Ltd the land is recorded at its cost of $700 000. It has a fair value of $750 000. ABC Ltd also agrees to assume the liability of BAN Ltd bank loan of $95 000 as part of the Machine acquisition.   REQUIRED  (a) Calculate the acquisition cost of the Machine (b) Provide the journal entries that would appear in ABC Ltd’s books to account for the acquisition of the Machine   Question 2 An item of depreciable machinery is acquired on 1 July 2015 for $280 000. It is expected to have a useful life of 10…

Revaluation, Acquisition, Lease and EPS

Question 1 An asset having a cost of $200 000 and accumulated depreciation of $40 000 is revalued to $240 000 at the beginning of the year. Depreciation for the year is based on the revalued amount and the remaining useful life of eight years. Shareholders’ equity, before adjusting for the above revaluation and subsequent depreciation, is as follows:   Share capital 600 000 Revaluation surplus 90 000 Capital profits reserve 170 000 Retained earnings 140 000 Total 1 000 000   Required: Prepare journal entries to reflect the revaluation of the asset and the subsequent depreciation of the revalued asset. Which of the equity accounts would be affected directly or indirectly by the revaluation?     Question 2 ABC Ltd…