You recently received a bonus of $8,000 and are thinking of investing this sum of money

Question 1 You recently received a bonus of $8,000 and are thinking of investing this sum of money for your retirement 20 years later. Sandy Chen, your financial planner, approached you recently an offered two investment products.   Product Aee will earn an annual return of 5% per year for the first 5 years. If there is no recession in Singapore during the first 5 years, all amounts invested will earn an annual return of 7% for the next 10 years, otherwise, returns will be 3% per year. Alternatively, Product Bee allows you to invest $800 per year (at the beginning of each year) for the next 10 years. It will earn a return of 5% per year. This product will…

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ABC Co. Ltd. specialises in manufacturing electronic products

ABC Co. Ltd. specialises in manufacturing electronic products. The range comprises of 2 products, Personal Computers (‘PC’) and Video Players (‘VP’). The company’s products have the data shown below.   Products                              PC           VP Maximum  monthly demand         Unit                10,000         20,000 Direct labour hours per unit      hr                  2             4 Selling Price                      $                 1,200        1,600 Unit variable costs Direct Material                  $                 600          800 Direct Labour                   $                 200          400 Other variable O/H              $                 200          200   The company has adopted the OAR in term of direct labour hour. The total estimated fixed cost and direct hours during the year is $2.4m and 30,000 hours respectively.   The company is planned to manufacture a new product, I-Phone (‘IP’) with estimated contribution of $600 per unit.  …

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Below is the monthly share price data for Australian mining giant BHP for the 2018

Below is the monthly share price data for Australian mining giant BHP for the 2018 calendar year (source: https:// au.finance.yahoo.com/quote/BHP.AX). Date Open Close Dividends (100% Franked) Jan 29.57 30.2 Feb 30.2 30.5 Mar 30.5 28.21 0.705852 Apr 28.21 30.95 May 30.95 32.79 Jun 32.79 33.91 Jul 33.91 34.86 Aug 34.86 33.21 Sep 33.21 34.63 0.855978 Oct 34.63 32.21 Nov 32.21 30.69 Dec 30.69 34.23   i. Calculate the 2018 monthly returns (in both $ and %) for BHP. ii. Calculate the average monthly return (%) for BHP. iii. Using the data provided calculate the annual holding period return (in both $ and % terms) for an international (non-Australian) shareholder of BHP. iv. Calculate the annual holding period return (in both $…

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Harvard Square Inc., a leading manufacturing company has two main lines of products

Harvard Square Inc., a leading manufacturing company has two main lines of products: Traditional and Modern with unit sales prices of $400 and $550.  Currently manufacturing overheads are applied as $580 per direct labor hours. Below is some internal company information. Harvard Square Partial budgeted statement of gross margin 2019   Products Traditional Modern Total Sales in units 12500 12500 25000 Beginning inventory $                     600,000.00 $                 750,000.00 $                   1,350,000.00 Direct material $                 2,500,000.00 $             4,375,000.00 $                6,875,000.00 Direct labor $                     462,962.50 $                 231,482.50 $                    694,445.00 Ending inventory $                     600,000.00 $                 750,000.00 $                   1,350,000.00   Overhead breakdown in percentage Machining 50.00% Assembly 25.00% Material Handling 7.00% Inspection 18.00% Total 100.00%   Products Cost pool info for 2019 Traditional Modern Direct labor hours…

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Consolidation of Spectre plc, Skyfall Ltd and Moonraker Ltd

Portfolio Question 4 Set out below are the statements of financial position of Wolff plc, Bannon plc and Rex Ltd. at 31 March 2018.   Statements of financial position as at 31 March 2018      Wolff  plc  Bannon plc           Rex Ltd €’m €’m €’m €’m €’m €’m Non current assets  Property, plant and equipment    Land and Buildings 26,400 24,200 7,200    Plant and equipment 18,350 16,100 4,400 44,750 40,300 11,600   Investments     Investment in Bannon plc 14,000     Investment in Rex Ltd 1,250     Loan to  Bannon plc 5,000     65,000 40,300 11,600 Current assets    Inventory 12,200 7,200 4,200    Trade receivables 14,400 6,100 3,700    Amount due from Bannon plc 2,100    Amount due from…

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On 1 July 2017, Positive Ltd acquired all the issued shares of Smart Ltd

Question 1   Topic 1: Consolidation: Principles and accounting requirements On 1 July 2017, Positive Ltd acquired all the issued shares of Smart Ltd for $123,000. At the date of acquisition, the shareholder’s equity of Smart Ltd was as follows.   $ Share capital                               65,000 General reserve                          25,000 Retained earnings                      20,250 Total                                           110,250   All the assets and liabilities of Smart Ltd were recorded at amounts equal to their fair values at the acquisition date, except for some assets detailed below.    Carrying amount      Fair value                                                                                         $                       $ Plant (cost $115,000)                                                   100,000           105,000 Land                                                                             50,000             60,000 Inventories                                                                    15,000             19,000     Additional information:   The inventory was all sold by 30 June 2018. The land was sold on 1 February…

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Vadercat Limited issued $30 million 7.5 percent

Question 1 Vadercat Limited issued $30 million 7.5 percent, 5 year bonds on October 1, 2018. The market rate of interest on the date of the issue was 8 percent. Interest is payable semi-annually on April 1 and October 1. The company’s year-end is December 31. Required: Prepare journal entries to record all transactions during the first year the bonds are outstanding. The company uses the straight-line method of amortizations. Indicate how the bond obligation would be shown on the company’s year-end statement of financial position. How much interest expense is shown on the 2018 year end income statement? How much interest expense will be shown on the 2019 year end income statement? Question 2 Bella Ltd issued $25,000,000 of bonds…

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Budgeted Income Statement and Supporting Budgets – The budget director of Feathered Friends Inc.

The budget director of Feathered Friends Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for December: Estimated sales for December: Bird house 3,200 units at $50 per unit Bird feeder 3,000 units at $70 per unit   Estimated inventories at December 1: Direct materials: Wood 200 ft. Plastic 240 lbs. Finished products: Bird house 320 units at $27 per unit Bird feeder 270 units at $40 per unit   Desired inventories at December 31: Direct materials: Wood 220 ft. Plastic 200 lbs. Finished products: Bird house 290 units at $27 per unit Bird feeder 250 units at $41 per unit   Direct materials…

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Minden Company is a wholesale distributor of premium European chocolates

Minden Company is a wholesale distributor of premium European chocolates. It buys and sells the chocolate per box. The company’s balance sheet as of April 30 is given below: Minden Company Balance Sheet March 31 (in Bhd) Assets Cash     9,000 Accounts receivable 54,000 Inventory 0 Buildings and equipment, net of depreciation    207,000 Total assets 270,000 Liabilities and Stockholders’ Equity Accounts payable   63,000 Note payable 14,500 Common stock 180,000 Retained earnings     12,500 Total liabilities and stockholders’ equity 270,000   The company is in the process of preparing a budget for April to June  and has assembled the following data.   Based on historical data, selling price per box is Bhd110. The premium European chocolates cost per box is Bhd100 and monthly…

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Bezos Ltd is developing departmental overhead rates based on machine hours

Bezos Ltd is developing departmental overhead rates based on machine hours for its moulding department and direct labour hours for its assembly department. The moulding department has 20 machines that each run for 2,000 hours per year. The assembly department employs 80 people, who each work 2,000 hours per year. The production related overhead costs distributed to the moulding and assembly departments are budgeted at $500,000 and $740,000 respectively. Two support departments, repairs and engineering, directly support the two production departments, moulding and assembly. These support departments have budgeted costs of $100,000 and $580,000 respectively. The production departments’ overhead rate cannot by determined until the support department costs are allocated. The following schedule reflects use of the output of the repairs…

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ACST201 Financial Modelling – Spreadsheet Project Task 1 – S1 2019

In order to fund its short-term operations, the Chief Financial Officer (CFO) of Best Company has decided use short-term money market instruments. The CFO has asked you to advise the company of the best course of action. After a lengthy discussion with the CFO, it was decided to issue bank accepted bills of exchange (bank bills). In order to obtain board approval, the CFO has asked you to create a simple spreadsheet to illustrate the immediate factors (such as interest rates, fees and charges) that affect the amount of funds raised, and ultimate effective cost to Best Company of issuing the bank bills. Create a simple spreadsheet for calculating bank bill prices and the effective cost of raising funds through the…

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Aus Car Exes (ACE) is set up as a sole trader and is analyzing whether to enter the discount used rental car market

Aus Car Exes (ACE) is set up as a sole trader and is analyzing whether to enter the discount used rental car market. This project would involve the purchase of 100 used, late-model, mid-sized cars at the price of $9500 each. In order to reduce their insurance costs, ACE will have a LoJack Stolen Vehicle Recovery System installed in each car, at a cost of $1000 per vehicle. ACE will also utilize one of its abandoned lots to store the vehicles. If ACE does not undertake this project, it could lease this lot to an auto-repair company for $80000 per year. The $20000 annual maintenance cost on this lot will be paid by ACE whether the lost is leased or used for this project. In addition, if…

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