As a business advisor, your client James Romano operates a strawberry farm in the Dandenong mountains east of Melbourne and seeks your assistance in compiling monthly budgets for the 2020 financial year. He starts the year with $400,000 in the business bank account.   About the Strawberry Industry Strawberries are grown in Queensland during the winter months, and in Victoria during the summer. Australian consumers can enjoy domestically grown produce all year round, even though strawberries are seasonal.   Victorian growers can harvest strawberries for eight months of the year, with the vast majority available during the summer months. James estimates the following distribution of sales:   Distribution of sales Sep               Oct               Nov               Dec               Jan                Feb…

Everything Umbrella Inc. is considering producing a new type of umbrella. This new pocket-sized umbrella would fit into a coat pocket or purse. Prepare a table with three columns to include the following information: Classify the costs of this new product as direct materials, direct labor, manufacturing overhead, selling, or administrative. Classify the costs listed as either product costs or period costs. List of expenses incurred by Everything Umbrella Inc. Cost of advertising the product. Fabric used to make the umbrellas. Maintenance of cutting machines used to cut the umbrella fabric so it will fit the umbrella frame. Wages of workers who assemble the product. President’s salary. The salary of the supervisor of the people who assemble the product. Wages of…

Alba Ltd hires out equipment and furniture for parties. The unadjusted trial balance of the business appears as shown below.   ALBA LTD Unadjusted Trial Balance as at 30 June 2018   Account Debit Credit Cash at bank Accounts receivable GST receivable Prepaid insurance Party equipment Accumulated depreciation –          party equipment Furniture Accumulated depreciation – furniture Accounts payable GST payable E. Johns, Capital E. Johns, Drawings Hire fees revenue Salaries expense Rent expense Maintenance expense Electricity expense $ 5 200 2  400 3  300 1 200 31 400   47 300         18 310   26 500 5 700 3 100  1 400           $           17 600  …

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…

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…

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.…

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…

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,…

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…