ACST2001 Financial Modelling – Yolanda

Question 1 Yolanda bought a 180-day $100000 bank bill 74 days ago for $98300.00.She sold it to George today and received $99000.00. Draw a cash flow diagram that captures the details of Yolanda’s transactions. Calculate the purchase yield (simple interest rate) and sale yield (simple interest rate) of this bill (as a percentage, rounded to 2 decimal places). Without any further calculations, explain how the selling price will change if George accepts a lower yield. Calculate capital gain or capital loss component of Yolanda’s investment (in dollars and cents, to the nearest cent). Assuming Yolanda borrowed to purchase the bond, what is the break-even rate of interest of borrowing (simple interest, as a percentage, rounded to 2 decimal places)? If the…

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ACT202 Management Accounting – John Smith and Warsaw Ltd

Q1 John Smith, a college student, plans to sell CD players over the internet & by mail order during the semester to help pay his expenses. He buys the players for $29 & sells them for $50. If payment by cheque accompanies the mail order (estimated to be 40% of sales), he gives 10% discount. If customers include a credit card number for either internet or mail order (estimated 30% of sales), they receive 5% discount. The remaining collections are estimated as follows: One month following 15% Two months following 8% Three months following 5% Uncollectable 2%   Sales forecast are as follows: September 150 units October 250 units November 350 units December 450 units January Business terminated   John plans…

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HA2011 – 2020 – Management Accounting

Question 1 Refer to the following information listed below: Direct material used $150,000 Selling costs $5,000 Indirect labour $7,000 Administrative costs $10,000 Depreciation on factory equipment $70,000 Direct labour $40,000 Overtime premiums paid $20,000 Indirect materials $45,000   Based on the information provided above, calculate the period costs: $15,000 $20,000 $190,000 $372,000   Question 2 Yang Manufacturing makes a product called Yin. The relevant range of operations is between 2,500 units and 10,000 units of Yin per month. Per unit costs at two activity levels are as follows: 5,000 units at $17.00 per unit; 7,500 units at $13.00 per unit. Determine the cost formula that expresses the behaviour of Yang’s total costs.   Question 3 The following information relates to Wells…

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Electro Motors (Electro) is considering a new project to produce electric vehicles

Electro Motors (Electro) is considering a new project to produce electric vehicles for the Australian domestic market and international markets. It has identified a property/plant that was formerly used to build petrol fuelled motor vehicles that could be refitted at minimal cost to manufacture the new electric vehicles. Electro is targeting Australian metropolitan centres for initial sales and expanding into regional centres over the next five years. International demand for electric vehicles is being driven by China and Electro has been in negotiation to provide vehicles to the Chinese market in 2025.   Electro has made the following projections: In the first year 2,000 units will be sold and growing at 10% pa. The price for each unit in the first year…

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HI5001 – 2020 – Accounting for Business Decisions

Question 1 Financial data for Safety Hire as of 30 June 2019 are: Accounts receivable $ 63 000 Wages expense $ 75 000 Equipment hire income 170 000 Advertising expense 30 000 Accounts payable 40 000 Land 75 000 Michael Donato, Capital ? Hire equipment 180 000 Cash at bank 45 000 Loan payable 50 000 Mortgage payable 130 000 Electricity expense 18 000 Building 85 000 Telephone expense 7 500   Required: Prepare an income statement for the month of June and a balance sheet in account format for Safety Hire as at 30 June 2019.   Question 2 On 1 July 2018 Nicole Andreou opened a beauty parlour. The following transactions occurred during the first month of operations (ignore…

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ACC5CRE – The statement of comprehensive income of Jonathon Ltd

The statement of comprehensive income of Jonathon Ltd for the year ended 30 June 2020 shows the profit before tax amounted to $240,000, including revenue and expense items.                                                                                             $ Entertainment costs (no-deductible)   7 200 Annual leave expense 12 000 Depreciation expense – Equipment 20 000 Depreciation expense – buildings (non-deductible)   3 200 Rent revenue 12 000 Bad debt expense 24 000 Long service leave expense   6 000   Assets and liabilities as disclosed in the Statement of Financial Position as 30 June 2020.     2020 2019 Assets     Cash 32 000 34 000 Inventories 68 000 62 000 Accounts receivables 200 000 192 000 Allowance for doubtful debts (22, 000) 16 000 Office supplies…

FINM202 – Contact Manufacturing Ltd is considering two alternative investment proposals

Contact Manufacturing Ltd is considering two alternative investment proposals. The first proposal calls for a major renovation of the company’s manufacturing facility. The second involves replacing just a few obsolete pieces of equipment in the facility. The company will choose one project or the other this year, but it will not do both. The cash flows associated with each project appear below and the firm discounts project cash flows at 15%. Year   Renovate   Replace 0 –$9,000,000 –$2,400,000 1 3,000,000 2,000,000 2 3,000,000 800,000 3 3,000,000 200,000 4 3,000,000 200,000 5 3,000,000 200,000   Assignment Calculate the payback period of each project and based on this criterion, indicate which project you would recommend for acceptance. Calculate the net present value…

HI5001 – Elliot Painting Services – Accounting for Business Decisions

Question Worksheet and closing entries The adjusted trial balance columns in the worksheet of Elliot Painting Services are as follows. ELLIOT PAINTING SERVICES Worksheet (Partial) for the year ended 30 June 2019 Account Adjusted trial balance Income statement Balance sheet Debit Credit Debit Credit Debit Credit Cash at Bank                    1,230 Accounts Receivable                 75,600 Prepaid Rent                    1,800 Office Supplies                    8,320 Equipment               160,000 Accumulated Depreciation                 25,000 Accounts Payable                 54,000 Salaries Payable                    8,760 Unearned Revenue                    3,430 F. Elliot, Capital               101,500 F. Elliot, Drawings                 22,000 Painting Revenue               219,650 Salaries Expense               106,000 Rent Expense                    6,050 Depreciation Expense                    8,040 Telephone Expense                    4,020 Office Supplies Used                 10,080 Sundry Expenses                    9,200…

HI5001 Accounting for Business Decisions – Tutorial Questions

Question 1 Cash versus accrual accounting During March, Thuy Bui’s business performed services for a specific customer for which the fee was $9000. Payment was received in the following April. Was the revenue earned in March or April? What journal entries should be recorded under accrual accounting in March and April? What journal entries should be recorded under cash accounting in March and April?   Question 2 Adjusting entries  The financial year for Drip Dry Cleaning Services ends on 30 June. Using the following information, make the necessary adjusting entries at year-end. Ignore GST. On 15 February, Danielle Drip’s business borrowed $16 000 from Northern Bank at 8% interest. The principal and interest are payable on 15 August. Rent of $3600…

Principles of Finance 1 – Present and Future Values

Assume that you purchase a 6-year, 12 percent savings certificate for $1,000. If interest is compounded annually, what will be the value of the certificate when it matures?   If the interest in the previous problem is compounded quarterly. What is the difference between the ending value of the savings certificate compounded quarterly and the one compounded annually?   A friend promises to pay you $600 two years from now if you loan him $500 today. What annual interest rate is your friend offering?   At an inflation rate of 9 percent, the purchasing power of $1 would be cut in half in just over 8 years. How long, to the nearest year, would it take for the purchasing power of…