Question 1 [Calculation-based]: The Income Statement [Chapter 3 Study Questions 3.2 and Study Problems 3.1, 3.2, 3.3] (Refer to Example on page 46 of Textbook)   Construct an Income Statement. Use an Excel spreadsheet and/or tables to present your work. Show all workings. Mark Part 1 At the end of its third year of operations, the Sandifer Manufacturing Company had: ·         $4,500,000 in revenue; ·         $3,375,000 in cost of goods sold; ·         $450,000 in operating expenses, which included a depreciation expense of $150,000; ·         a tax liability equal to 30% of the firm’s taxable income. a.    Construct an Income Statement with the above data. b.    What is the net profit of the firm for the year? c.    Explain how net profit…

Cost behavior; engineered cost; committed and discretionary costs: manufacturer (10 Marks) HappyDaze T-shirts manufactures and prints customised designs on T-shirts. Below is a list of some of their major costs. (a)           Cost of daily radio advertising on the local community radio station. (b)           Cost of the fabric used to make the T-shirts. (c)           Cost of the ink used in the designs. (d)           Salary of the managing director. (e)           Wages of the production employees who sew and print the T-shirts. (f)            Cost of movie tickets provided for the Employee of the Month award each month. (g)           Depreciation of the sewing machines, calculated on a units of production basis. (h)           Cost of electricity used in the factory building. (i)            Rent of the building.…

Medina Company received its February bank statement on March 6. The statement showed a balance of $316,500. Included on the statement were memorandum showing collections from Medina customers (A/R), totalling $16,000. The statement also showed a returned check for a customer who paid the balance on his account, for $2,825. The bank charged a returned check fee of $75 for this NSF check. This $75 charge will be added to the customer's balance. There were other service charges for the monthly service charge and ATM fees, totalling $200. These are bank service charge expenses. Medina's accountant looked at her accounting records. At the end of February, the cash balance was $312,300. The statement did not reflect a deposit made late on…

Exercise 7.14 - Impairment, two CGUs Last Ltd has two divisions, Time and Leisure. Each of these is regarded as a separate CGU. At 31 December 2016, the carrying amounts of the assets of the two divisions were: Time Leisure Plant $1 500 $1 200 Accumulated depreciation (650) (375) Patent 240 Inventories 54 75 Receivables 75 82 Goodwill 25 20   The receivables were regarded as collectable, and the inventories' fair value less costs of disposal was equal to its carrying amount. The patent had a fair value less costs of disposal of $220. The plant at Time was depreciated at $300 p.a., and that at Leisure was depreciated at $250 p.a. Last Ltd undertook impairment testing at 31 December 2016,…

Accounting for defined benefit superannuation plans Some years ago, Wattle Ltd established a defined benefit superannuation plan for its employees. The company has since introduced a defined contribution plan, which all new staff join when commencing employment with Wattle Ltd. Although the defined benefit plan is now closed to new recruits, the fund continues to provide for employees who have been with the company for a long time. The following actuarial report has been received for the defined benefit plan:   2016 $ Present value of the defined benefit obligation 1 Jan. 20000000 Past service cost 2000000 Net interest ? Current service cost 800000 Benefits paid 2100000 Actuarial loss on DBO 100000 Present value of the defined benefit obligation 31 Dec.…

Question 1 [Theory]: Understanding Financial Statements [Chapter 3 Study Questions 3.1, 3.2, 3.3, 3.4]   Develop your responses by reviewing peer-reviewed articles, professional publications and/or credible texts. Part 1 Describe the content and the importance of the balance sheet and the income statement. Part 2 From the firm’s perspective, how are dividends different from interest payments? Part 3 What is a firm’s net working capital, and what does it tell you about the liquidity of a firm?   Question 2 [Calculation-based]: The Income Statement [Chapter 3 Study Questions 3.2 and Study Problems 3.1, 3.2, 3.3] (Refer to Example on page 46 of Textbook)   Construct an Income Statement. Use an Excel spreadsheet and/or tables to present your work. Show all workings.…

Question 1  During January, Microchem Ltd produced 1200 units of special product called Stylex, and the accounting records indicated the following: Direct material purchased                         36000 kilograms @ $1.30 per kilogram Direct material used                                 19000 kilograms Direct labour 4200 hours @ $17 per hour Stylex has the following standard prime costs: Direct material: 20 kilograms @ $1.20 per kilogram          $24.00 Direct labour hours: 4 hours @ $16 per hour            64.00 Standard prime cost per unit          $88.00 Required: 1              Calculate the total standard direct material costs and direct labour costs for January. (2 marks) 2              For the month of January, calculate the following variances, indicating whether each is favourable or unfavourable: a) Direct material price variance. b) Direct material quantity…

Management accounting information Natural Cosmetics Ltd (NCL) has used a conventional cost accounting system to apply quality control costs uniformly to all products at a rate of 16 per cent of direct labor cost. Monthly direct labor cost for Satin Sheen make-up is $98 000. In an attempt to distribute quality control costs more equitably, NCL is considering activity-based costing. The data on the following page relates to monthly quality control costs for Satin Sheen make-up:   Activity Cost Driver Per unit of activity driver Quantity of activity driver for enamel paint Incoming material inspection Type of material $23 per type 24 types In-process inspection Number of units $0.28 per unit 35000 units Product certification Pre-order $144 per order 50 orders…

Question 1 Cost Classifications Consider the following costs that were incurred during the current year: Tire costs incurred by Ford Motor Company. Sales commissions paid to the sales force of Dell Inc. Wood glue consumed in the manufacture of Thomasville furniture. Hourly wages of refinery security guards employed by ExxonMobil Corporation. The salary of a financial vice president of Hewlett Packard. Advertising costs of Coca-Cola. Straight-line depreciation on factory machinery of Boeing Corporation. Wages of assembly-line personnel of Whirlpool Corporation. Delivery costs on customer shipments of Ben & Jerry’s ice cream. Newsprint consumed in printing The New York Times. Plant insurance costs of Texas Instruments. Glass costs incurred in light-bulb manufacturing of General Electric.   Required: Evaluate each of the preceding…