Consolidated financial statements, rationale for adjustments – Lead beaters Ltd acquired all the issued shares (cum div.) of Possum Ltd

Consolidated financial statements, rationale for adjustments Lead beaters Ltd acquired all the issued shares (cum div.) of Possum Ltd on 1 July 2014. At this date the shareholders’ equity of Possum Ltd was: Share capital – 100 000 shares General reserve Asset revaluation surplus Retained earnings $ 450 000 45 000 45 000 15 000   At 1 July 2014, the accounting records of Possum Ltd contained a dividend payable of $15 000. This dividend was paid in August 2014. All the identifiable assets and liabilities at acquisition date were recorded at amounts equal to their fair values except for:   Carrying amount         Fair value Plant (cost $290 000) $220 000 $227 500 Inventory 160 000 175 000   The plant was considered to have a further 4-year life. It was sold on…

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Fantori Ltd has been in business for few years manufacturing sewing machines

Fantori Ltd has been in business for few years manufacturing sewing machines. It currently manufactures two models, the basic and advance. Last year, 2017 they made good profit and they were happy their business is running well. They are about to enter a new phase in their business, selling to an overseas buyer. However, they are a bit confused as to why the buyer is only interested to buy the advance model and not the basic or both. For product costing purposes the business uses the traditional costing system and machine hours to assign indirect cost to the sewing machines as they are fairly new in business and dont want to spend too much money to implement a more refined costing…

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DecaSport is producing high technique and specialised sport shoes

DecaSport is producing high technique and specialised sport shoes. The company has been conducting research and development of a new model, where the lower mould can automatically adjust itself to avoid foot injury. The model has been tested and the managing board is happy to launch its production if it’s financial viable. The company already spent $800,000 for research and development. The new model will have a five-year lifetime, after that the company will stop its production. The new production machines will need to be bought and are budgeted at $7.5 million but can be used for another 5 years after the production of the new product is finished. The company depreciates fixed assets on a straight line basis to zero.…

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CISM4000 – Accounting Information Systems – Contracts R US Ltd

QUESTION 1   The following employees work for Contracts R US Ltd, a public company specialising in contract labour force for different projects in construction industry. The employees are paid an hourly rate, based on their Job Classification level.  If an employee works more than 37 hours, they will be paid the overtime rate for the additional hours.   The following table summarises the classifications and level of pay per classification:   TABLE A: Classification Levels Level Hourly pay 1         30.00 2         40.00 3         50.00 4         60.00 5         70.00 6         75.00   The overtime hourly rate is $ 80 per hour for ALL employees, regardless of their classification level.   Contracts R US Ltd has…

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T318 – FIN700 – Financial Management – Assume that Dorothy Pix has a sole income

QUESTION 1.   (a) This is a two period certainty model problem. Assume that Dorothy Pix has a sole income from Oz Electronics Ltd in which she owns 15% of the ordinary share capital. Currently, she has no savings. In early December, 2018, Oz Electronics Ltd reported net profits after tax of $600,000 for the last accounting year, 2017-18 (1 October, 2017 to 30 September, 2018), and announced it expects net profits after tax for the current accounting year, 2018-19, to be 25% higher than last financial year’s figure. The company has a dividend payout ratio of 60%, which it plans to continue, and will pay the annual dividend for 2017-18 in late-January, 2019, and the dividend for 2018-19 in late-January,…

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AF314 Corporate Accounting – Nadi Ltd

AF314 Corporate Accounting Question 1 The following represented an extract from the Statement of Financial Position of Nadi Ltd for the years ending 30 June 2010 and 30 June 2011. Reporting date was 30 June. Assets 2011 2010 Liabilities 2011 2010 Cash 110 000 87 000 Accounts payable 28 500 31 700 Accounts receivables (net) 45 000 52 000 Accrued expenses 7 200 11 600 Inventory 58 000 43 000 Deferred tax liability ? 15 150 Interest receivable 8 400 5 000 Rent received in advance 12 000 – Prepaid insurance 7 000 5 000 Bank loan 50 000 50 000 Deferred tax asset ? 10 470 Provision for employee benefits 21 000 17 300 Development cost 32 000 32 000…

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RECORDING BUSINESS TRANSACTIONS

PART A  Jill commences trading 1st September 2017 preparing accounts to 30th September 2018. Her transactions in first month were as follows: 1/09 Started business with £3,000 in the Bank and £800 cash 2/09 Purchased goods £900 on credit from Ron 3/09 Bought Computer £800 paying by cheque 5/09 Sold goods for £500 and received the money in Bank 6/09 Bought goods on cash £400 from C Jones 10/09 Paid rent by cheque £300 12/09 Bought stationery £100 paying in cash 18/09 Goods returned to Ron £100 21/09 Let off part of the premises receiving rent by cheque £100 23/09 Sold goods on credit to Bill £400 23/09 Sold goods of £1500 and received cash 24/09 Bought a car for business…

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Westpac Banking Corporation (WBC.AX) and Commonwealth Bank of Australia (CBA.AX)

Westpac Banking Corporation (WBC.AX) and Commonwealth Bank of Australia (CBA.AX) are amongst four big banks in Australia. These two companies are having the highest capitalisation within the Financial Sector. Find the monthly holding period returns for the 2017/18 financial year for Westpac (WBC), Commonwealth (CBA), and the market (MKT) as proxied by the All Ordinaries index. The monthly holding period return is the return you would receive if you bought an asset on the first day of the month (opening price) and sold it on the last day of the month (closing price). Using Excel, conduct a line graph with all three monthly returns included. The line graph will allow easy comparison of the performance of WBC, CBA and the MKT…

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Andrew Brown opened Nundle Services, a small business offering maintenance services

On 1 Oct 2018, Andrew Brown opened Nundle Services, a small business offering maintenance services in New South Wales. During the month of October, the business incurred the following transactions: 2 Oct, Andrew invested $50,000 cash in the business, which is organised as a sole trader. 3 Oct, got a 5 year loan for $30,000 from the ANZ bank, interest is 5% pa. 4 Oct, purchased and paid for equipment worth $51,000. Monthly depreciation will be $850. 5 Oct, purchased supplies for $6,500 on credit. 8 Oct, paid Oct office rent of $7,200. 10 Oct, Brown withdrew $2,000 for personal purposes. 17 Oct, paid an invoice of $4,500 for advertising 25 Oct, paid one year of insurance for $5,600   Additional…

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DAM561: Applied Accounting and Budgeting

Question 1 ABC Company Ltd uses the periodic inventory system. At 1 April 2016 the company had 170* units as opening stock valued at $22 each. During the year ended 31 March 2017 the Company sold 2,765* units for $105,070. ABC Company made the following purchases during the year: 30 May 2016 500* units for $23 each 31 August 2016 400* units for $21 each 30 November 2016 1,000* units for $24 each 28 February 2017 1,000* units for $23 each   At 31 March 2017 ABC Company Ltd had 305* units as closing stock. Required: Calculate the closing inventory, cost of sales and gross profit using the: FIFO method. Weighted Average method.   Question 2 ABC Company Ltd has just…

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Jayne Saxby is considering buying a new house for

Question 1 a.Jayne Saxby is considering buying a new house for $500,000 and needs to borrow money from a bank. Currently, ANZ bank offers a 30-year loan. She can choose to pay weekly at an interest rate of 4.55% pa, or fortnightly at 4.75% pa. (i) Which payment option should Jayne choose? (ii) If Jayne wants to pay $1,000 a week, how long will it take her to pay off the loan? b.Jennifer Jean is 30 years old and has just had a baby son. She and her husband want to open a “Bump” savings account with Westpac for their baby and save up to $200,000 by the time he is 18 years old. Westpac’s savings rate is currently at 2.5%…

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Cost Accounting – Mullins Corporation uses the FIFO method in its process costing system

Use the following to answer questions 1-7 (provide step by step solution): Mullins Corporation uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work in process inventory:   Units in beginning work in process inventory                                           700 Materials costs                                                                                   $11,500 Conversion costs                                                                                $22,200 Percentage complete with respect to materials                                       75% Percentage complete with respect to conversion                       …

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