Emily Dao, 27, just received a promotion at work that increased her annual salary to $37,000. She is eligible to participate in her employer’s 401(k) retirement plan in which the employer matches, dollar for dollar, workers’ contributions up to 5 percent of salary. However, Emily wants to buy a new $25,000 car in three years, and she wants to have enough money to make a $7,000 down payment on the car and finance the balance. Fortunately, she expects a sizable bonus this year that she hopes will cover that down payment in three years. A wedding is also in her plans. Emily and her boyfriend, Paul, have set a wedding date two years in the future, after he finishes medical school.…

Question 1 Morning Star Ltd was registered on 1 July 2021, as a company with a constitution limiting the shares that could be offered to 5 000 000 Ordinary shares (including all classes) and 2 000 000 preference shares. The company issued a prospectus dated 1 July 2021 inviting the public to apply for 2 000 000 Ordinary A class shares at $7.00 per share. The terms of the shares on issue are $4.00 on application, $2.00 on allotment and a future call of $1.00 with date to be determined. If the issue is oversubscribed the directors will make a pro-rata issue of shares and the excess application money will be applied to allotment and calls before any refunds will be…

Your group is working in Finance Department of a production company. Your company is considering a new investment project. In the new project, the company will buy a new machinery that enable to launch a new product. It is expected an annual sale of 20,000 products for an average price of $450 per unit for 5 years. The new investment project has the initial cost of $1,850,000, a residual value of $350,000 at the end of the project. The company will need to add $400 000 in working capital which is expected to be fully retrieved at the end of the project. Other information is available below: Depreciation method: straight line Variable cost per unit: $270 Cash fixed costs per year:…

Question 1  Big Bang Ltd is considering to invest in one of the two following projects to buy a new equipment. Each equipment will last 5 years and have no salvage value at the end. The company’s required rate of return for all investment projects is 8%. The cash flows of the projects are provided below.   Equipment 1 Equipment 2 Cost $186,000 $195,000 Future Cash Flows Year 1 Year 2 Year 3 Year 4 Year 5   86 000 93 000 83 000 75 000 55 000   97 000 84 000 86 000 75 000 63 000   Big Bang’s net income in current year is $450,000. The company maintains a capital structure of 55% in equity funding and…

Question 1 ABC Ltd has the following land and buildings in its financial statements as at 30 June 2022:   Residential land, at cost 2 000 000 Factory land, at valuation 2020 1 800 000 Buildings, at valuation 2020 1 600 000 Accumulated depreciation (200 000)   At 30 June 2022, the balance of the revaluation surplus is $800 000, of which $600 000 relates to the factory land and $200 000 to the buildings. On this same date, independent valuations of the land and buildings are obtained. In relation to the above assets, the assessed fair values at 30 June 2022 are:   Residential land, previously recorded at cost 2 200 000 Factory land, previously revalued in 2020 1 400…

The income statement of Price Ltd for the year ended 31 December 2020, reported the following condensed information: Revenue from fees                            $600,000 Operating expenses                          360,000 Income from operations                    240,000 Income tax expense                           60,000 Net income                                       $180,000   Price's balance sheet contained the following comparative data at December 31:   .                                                       2020            …

York Ltd. was registered on 1 July 2020. The next day, the directors issued a disclosure document inviting applicants for 700,000 ordinary shares with an issue price of $1. The shares were payable 20¢on application and 40¢ on allotment. By the end of July, the company had received exactly 700,000 applications, together with the correct application monies. The directors allotted these shares on 1 August. The correct allotment monies were received by the end of September. On 1 October 2020, the directors made a call of 25¢ per share. Call monies were due and payable by 31 October, and were received by then except in respect of one parcel of 10,000 shares.   Required: Prepare journal entries with explanations to record…

Question 1   Brandy Corporation owns 60 percent of Downer's voting shares. During 20X3, Brandy produced 50,000 computer desks at a cost of $82 each and sold 20,000 of them to Downer for $94 each. Downer sold 14,000 of the desks to unaffiliated companies for $130 each prior to December 31, 20X3, and sold the remainder in early 20X4 for $140 each. Both companies use perpetual inventory systems. Tax rate is 30 percent. Required What amounts of cost of goods sold did Brandy and Downer record in 20X3? What amount of cost of goods sold must be reported in the consolidated income statement for 20X3? Prepare the necessary journal entry to eliminate the intra-gorup sales and cost of goods sold.   Question…

The bank statement balance and cash account balance do not agree. The owner of E-Bite Limited has requested to prepare a bank reconciliation to reconcile these balances. For this purpose, the following information is given.   Deposits in transit are $9,800. Outstanding cheques totalled are $3200. The bank service charge is $24. The collection of note by the bank is $800. The bank statement balance is $9,000. The cash account balance is $14,824.