You are the CFO of Black Gold Mining Ltd

You are the CFO of Black Gold Mining Ltd, which is offering an investment in two (2) large projects with the cash flows presented in the table below. Your company can only choose one of the projects (I or II), as shown in the table.     Project I Project II Cost $550 000 $640 000     Future Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5   230 000 210 000 200 600 150 000 120 000   330 000 300 000 250 000 180 000 150 000   Required:   Undertake the project evaluation and identify which project Black Gold Mining should choose, using: The Net Present Value (NPV) method with the discount rate of 12%…

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Gunna, M&N, Adam & Smith, AUS, River and Hunter Ltd

Question 1 Gunna Ltd acquired a printing machine on 1 July 2018 for $100,000. It is expected to have a useful life of 5 years, with the benefits being derived on a straight- line basis. The residual is expected to be $nil. On 1 July 2019 the machine is deemed to have a fair value of $75,000 and a revaluation is undertaken in accordance with Gunnamatta Ltd’s policy of measuring property, plant and equipment at fair value. The asset is sold for $89 000 on 1 July 2020. Required: Provide the journal entries necessary to account for transactions and events at the following date. Narrations are required. 30 June 2019 1 July 2019 30 June 2020 1 July 2020   Question…

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Roger Ltd, Catering Industry, Everest Sports and Toowoomba

Question 1 The following information was obtained from the financial records of Roger Ltd for the year ended 30 June 2020. Prepare the statement of profit or loss for the year ended 30 June 2020.   Retained earnings 1 July 2019 $90 000 Sales revenue from continuing operations for the year $600 000 Finance costs $20 000 Estimated income tax expense for the year ended 30 June 2020 $112 500 Interim dividends paid (ordinary shares) $100 000 Write off research and development costs $5 000 Share capital (1 million $2 shares) $2 000 000 Expenses from ordinary activities (excluding finance costs) $200 000   Required: Prepare the statement of profit or loss for the year ended 30 June 2020. Prepare statement…

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The Toowoomba Produce Suppliers packages and distributes

The Toowoomba Produce Suppliers packages and distributes three grades of animal feed. The material cost per tonne and estimated annual sales for each of the products are:   Product Material cost Estimated sales Super Premium $16 1000 tonnes Premium $12 1500 tonnes Economy $10 2500 tonnes   The indirect cost of operating the machinery used to package all three products is $20 000 per year. In the past, prices have been set by allocating the indirect costs to products on the basis of estimated sales in tonnes. The resulting total costs (material costs plus allocated fixed overhead) are then marked up by 100 per cent.          Required Allocate total indirect cost to each product. Determine the total cost for each…

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Everest Sports owned by Dean Jones sells sports

Everest Sports owned by Dean Jones sells sports equipment to schools and sporting clubs in Victoria. The following balances were reported in the Balance Sheet as at 30 June 2020.   Account Name Balance ($) Cash at bank 19 700 Accounts receivable    1 400 Accounts payable        600 Capital – Tim Lane  20 500   Transactions for July 2020 were as follows: July  2  Received $1400 from accounts receivable 3 Paid $500 of accounts payable 4 Paid rent for July $700 5 Sent invoice to customer $5600 7 Purchased office equipment for cash $2000 9 Recorded cash sales $800 10 Recorded credit sales $1500 14 Purchased office supplies for cash $330 23 Recorded cash sales $2000 31 Cash drawing by…

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Selected information for two companies competing in the catering industry

Selected information for two companies competing in the catering industry have been presented below.

 

Account             A Ltd                    B Ltd 
Current assets $55250 $83950
Non-current assets $125000 $149500
Current Liabilities $29300 $11750
Non-current Liabilities $44850 $72500
Equity $106100 $149200
Profit $37500 $26500

 

Required:

 

  1. Calculate the following ratios for A Ltd and B Ltd:
    1. Current ratio.
    2. Return on Assets (ROA).
    3. Return on Equity (ROE).
  2. From your calculations in part A, explain which entity is in a more favourable position.

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The following information was obtained from the financial records of Roger Ltd

The following information was obtained from the financial records of Roger Ltd for the year ended 30 June 2020. Prepare the statement of profit or loss for the year ended 30 June 2020.   Retained earnings 1 July 2019 $90 000 Sales revenue from continuing operations for the year $600 000 Finance costs $20 000 Estimated income tax expense for the year ended 30 June 2020 $112 500 Interim dividends paid (ordinary shares) $100 000 Write off research and development costs $5 000 Share capital (1 million $2 shares) $2 000 000 Expenses from ordinary activities (excluding finance costs) $200 000   Required: Prepare the statement of profit or loss for the year ended 30 June 2020. Prepare statement of changes…


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The following company provides a single product and have provided their summary

The following company provides a single product and have provided their summary forecast data shown below relating to its product for 2020.

Selling price per unit $55
Variable manufacturing costs $23
Annual fixed manufacturing costs $450000
Variable, marketing, distribution and administration costs $9
Annual fixed non-manufacturing costs $229000
Annual volume 50000

 

  1. Calculate the contribution margin per unit.
  2. Calculate the contribution margin ratio.
  3. Calculate the break-even in units and sales dollars for 2020.
  4. Calculate the profit earned in 2020.

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Hudson Books, an online book retailer, has two operating departments

Hudson Books, an online book retailer, has two operating departments – corporate sales and consumer sales – and two support departments – human resources and information systems.  Each sales department conducts merchandising and marketing operations independently. Hudson Books uses number of employees to allocate human resources costs and processing time to allocate information systems costs.  The following data are available for September 2019.   Support Departments Operating Departments Human Resources Information Systems Corporate Sales Consumer Sales Budgeted costs incurred before any inter department cost allocations $72,700 $234,000 $998,270 $489,860 Support work supplied by human resources department Budgeted number of employees – 21 42 28 Support work supplied by information systems department Budgeted processing time (in minutes) 320 – 1,920 1,600  …


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Khadka Manufacturing manufactures work benches for local

Khadka Manufacturing manufactures work benches for local and domestic markets. Materials and labour used in the manufacturing process are directly allocated to different jobs as the company uses a job costing system.  Costs incurred in the manufacturing support department are indirect in nature and allocated to different jobs on the basis of direct labor-hours. Khadka estimates 2019 manufacturing-support costs to be $1,700,000 and 2019 direct labor-hours to be 50,000. At the end of 2019, Khadka collects the cost-related data of different jobs that were started and completed in 2019 for comparison. They are as follows: Iron benches Wooden benches Production period Jan-May 2019 May-Sept 2019 Direct material costs $39,145 $47,325 Direct labour costs $12,723 $16,376 Direct labour-hours 420 480   Direct…


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Your local hotel has a dining room which has the capacity to seat 140 guests

Your local hotel has a dining room which has the capacity to seat 140 guests.  It is opened for breakfast and lunch seven days a week and fully expects to be at capacity at these times.  During January 2021, management has forecast the seat turnover for breakfast will be 3 times and for lunch 2 times, with the average bill to be $28 for breakfast and $58 for lunch.  Beverage revenue is usually 12 per cent of the breakfast revenue and 28 per cent of the lunch revenue.

 

Calculate budgeted total revenue of food and beverage for the 31 days of January 2021. Express your answer as a daily food and beverage outcome and also a monthly figure.


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Green Ltd purchased 80 per cent of the issued capital for consideration

Green Ltd purchased 80 per cent of the issued capital for consideration of $4 000 000 and in the process gained control over Maroon Ltd on 1 July 2015. The fair value of the net assets of Maroon Ltd at purchase was represented by:

 

Share capital              $3 220 000

Retained earnings       740 000

Total                           3 960 000

 

At acquisition date all the identifiable assets and liabilities of Maroon Ltd were recorded at amounts equal to fair value.

At 1 July 2015, the fair value of the non-controlling interest was $1 000 000 and Green Ltd adopts the full goodwill method.

 

Required: Prepare acquisition analysis on 1 July 2015.


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