Georgie Smythe commenced business as a mechanical engineer trading as GS Engineering. She has provided the first month's business transactions for March 2017. a) You are required to record the following transactions into the transaction analysis chart (template provided). March 1                     Invested $80,000 of her own funds into a business bank account and took out a personal loan for $20,000, also deposited into the business account. 2                        Purchased a small property located in an industrial estate for $250,000. Georgie paid a 10% deposit and the balance was financed through a mortgage with Gotcha Banking Corporation. 3                     Georgie purchased engineering equipment for $10,000 cash. A three-month subscription for specialist engineering software was purchased for $2,400 cash. 4                     Office furniture and fittings were purchased…

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Karges Coffee Inc. manufactures a line of single-cup brewing machines for home and office use that brew a cup of coffee, tea, or hot chocolate in less than a minute. The machines use specially packaged portions of coffee, tea, or hot chocolate that can be purchased online directly from Karges or at specialty coffee shops licensed to distribute the company's products. The appeal of the brewing machines is twofold. First, they offer a high level of convenience. The use of prepackaged coffee servings means no grinding of coffee beans and no mess. Also, the brewing machines have a water reservoir that for some models is large enough to make up to 20 cups of coffee. Second, the taste of each cup…

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Use the following information for Questions 1 and 2: Boehm Corporation has had stable earnings growth of 8% a year for the past 10 years and in 2013 Boehm paid dividends of $2.6 million on net income of $9.8 million. However, in 2014 earnings are expected to jump to $12.6 million, and Boehm plans to invest $7.3 million in a plant expansion. This one­time unusual earnings growth won't be maintained, though, and after 2014 Boehm will return to its previous 8% earnings growth rate. Its target debt ratio is 35%. Calculate Boehm's total dividends for 2014 under each of the following policies: (a) Its 2014 dividend payment is set to force dividends to grow at the long-run growth rate in (b)…

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Question 1 Suppose that General Motors Acceptance Corporation issued a bond with ten years until maturity, a face value of $1,000 and a coupon rate of 7% (annual payments). The yield to maturity on this bond when it was issued was 6%. a) What was the price of this bond when it was issued? b) Assuming the yield to maturity remains constant, what is the price of the bond immediately before it makes its first coupon payment? c) Assuming the yield to maturity remains constant what is the price of the bond immediately after it makes its first coupon payment? Question 2 DFB, Inc expects earnings this year of $5 per share and it plans to pay a $3 dividend to shareholders. DFB will retain…

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Question 1: Metropolitan Furniture               Peter works in the accounts unit of the Metropolitan Furniture Manufacturing.  He was asked to prepare a proposed budget for the forthcoming quarter.  He consults with the sales manager and finds that:   Estimated sales are as follows: February $265,000 April $290,000 March $255,000 May $250,000 June $280,000 In consultation with the production manager he estimates that the cost of goods sold is to be budgeted at 45% of the sales figure.  The salaries are expected to be $65,000 per month. When sales exceed $260,000 in any one month, the sales team is entitled to an additional 5% commission on the excess sales over this figure. Other expenses are estimated to…

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Q1. Briefly describe who should be responsible for preparing an operating budget and why. Q2. a) The Vice President of the Plastics Division of Vandelay Industries prepared a budget for the current period.  Volume and cost data for the budget are provided at left along with actual volume and cost data for the period. Compute the master budget, the sales volume, and the selling price (flexible budget) variances for the Plastics Division's revenues for the current period. Show your work. Interpret what the sales volume variance tells management. Vandelay Industries Actual Budget Volume 11,000 10,500 Revenues per unit $667.25 $675.00 Direct materials per unit $134.50 $132.40 Direct labor per unit $105.75 $109.50 Other variable costs per unit $63.00 $62.25 Total fixed…

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You work as a Manager for Happy Kids Ltd, a company that manufactures toys, infant products and electronic games. These products are sold through sub-contracted Sales Agents, who currently earn a commission of 17% on sales. The following is the most recent set of Management Accounts you have received from the Accountant: INCOME STATEMENT for the year ended 30 June 2016 Sales $ 36,000,000 Cost of goods sold $ 17,910,000 Variable $ 12,300,000 Fixed $     5,610,000 GROSS PROFIT $ 18,090,000 Selling and admin costs $ 10,245,000 Variable sales commissions $     6,120,000 Fixed advertising costs $        900,000 Fixed admin costs $     3,225,000 OPERATING INCOME $     7,845,000 Fixed interest expenses $     1,200,000 PROFIT BEFORE TAX $     6,645,000 Income tax $     1,777,500 NET PROFIT…

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1.Joe Edmonds, CPA, was retained by Fox Cable to prepare financial statements for April 2012. Edmonds accumulated all the ledger balances per Fox’s records and found the following. FOX CABLE Trial Balance 30 April 2012 Dr.       Cr. Cash    $4,200 Accounts Receivable   3,300 Supplies           900 Equipment       10,700 Accumulated Depreciation                $1,450 Accounts Payable                   2,200 Salaries Payable                     710 Unearned Revenue                990 Manion, Capital 13,000 Service Revenue                    5,550 Salaries Expense         3,400 Advertising Expense    610 Miscellaneous Expense           290 Depreciation Expense 500         $23,900   $23,900   Joe Edmonds reviewed the records and found the following errors.   Cash received from a customer on account was recorded as $840 instead of $480.   A payment of $75 for advertising…

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Group Accounting –  Consolidation   On 1 July 2016, ASD Ltd purchased 80% of EPY Ltd’s shares for $1,300,000 cash. On that day, the equity of EPY Ltd was: Share capital                           $700,000 Retained earnings                     500,000 $1,200,000 At the time of acquisition, EPY Ltd recorded all its assets at their fair values except for an item of plant and some land. ASD Ltd considered that an item of plant shown in the accounts of EPY Ltd was less than the fair value. The fair value should be 80,000 not 62,000 as shown in EPY Ltd's accounts. The plant was assessed to have a remaining useful life of 5 years and was to be depreciated on a straight-line basis.  The land was recorded…

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