The following information relate to I M Cute Company:

Beginning Inventory

(30% complete for material B and

60% complete for conversion)           700 units

Started in process                            2,000 units

Ending Inventory                  

 (50% complete as to material B and

 80% complete for conversion)          500 units

 

            Beginning Inventory Costs:

            Material A                  $ 14,270

            Material B                  $   5,950

            Conversion                $   5,640

 

            Current Period Costs:

            Material A                  $ 40,000

            Material B                  $ 70,000

            Conversion                $ 98,100

 

Material A is added at the start of production; Material B is added uniformly throughout the process.

Assuming weighted average method of process costing is used, compute the average cost per unit for Material A.

The following information relates to A Ltd and B Ltd. Two companies that operate in the same industry and listed on the stock markets. All figures are in Ghana Cedis.

Account	Summarized Profit and Loss
	A. Ltd.	B Ltd
Operating profit	80,000	80,000
Interest paid	40,000	10,000
Profit after interest	40,000	70,000
Dividend paid	25,000	20,000
Retained Profit	15,000	50,000
Summarized Balance Sheet
	A Ltd.	B Ltd.
Total Assets less Current liabilities	600,000	600,000
Financed by:
Ghc 1.00 Ordinary shares	100,000	100,000
Reserves	100,000	400,000
10% Unsecured Loan stock	400,000	100,000
	600,000	600,000

The market price of A Ltd. Shares is Gh¢3.50 and that of B Ltd is Gh¢4.90. The 10% unsecured loan stock for both companies is currently quoted at par.

Required:

For each company calculate the following variables and using them company the performance of the two companies

1. EPS
2. P/E Ratio
3. Times Interest Earned
4. Dividend yield
5. Dividend cover
6. Net Asset per share

 

The following information relates to manufacturing overhead for Chapman Company:

Standards:

Total fixed factory overhead $450,000

Estimated production 25,000 units (100% of normal capacity)

Overhead rates are based on machine hours.

Standard hours allowed per unit produced 2

Fixed overhead rate $9.00 per machine hour

Variable overhead rate $3.50 per hour

Actual:

Fixed factory overhead $450,000

Production 24,000 units

Variable overhead $170,000

 

Compute the following: Enter favorable variances as negative numbers.

a.  Fixed factory overhead volume variance	$fill in the blank 1
b.  Variable factory overhead controllable variance	$fill in the blank 3
c.  Total factory overhead cost variance	$fill in the blank 5

The following information relates to five stocks listed in five different sectors at A Securities Exchange .The return on treasury bills is 8% and the average return in the market has been found to be 13%.

	Estimated Return(%)	Beta
Williamson tea	12	0.7
Equity Bank	8.2	1
Home Afrika	20	1.2
Bamburi Cement	5	1.4
Nation Media Group	10	-0.4

Using the capital asset pricing model (CAPM) determine the Required Rate of Return (RRR) for each stock and state whether it is undervalued or overvalued

The following information relates to the inventory of Margaret’s Megamart Ltd during December. Ignore GST.

 

Date		Units	Units cost	Total cost
1/12	Beginning inventory	700	$ 12.00	$ 8,400
10/12	Purchase	500	12.60	6,300
15/12	Purchase	300	13.20	3,960
23/12	Purchase	500	14.00	7,000
	Totals	2,000		$25,660

 

Margaret’s Megamart Ltd uses the periodic inventory system. A physical count on 31 December verified that 650 units were on hand.

 

Required:

1. Determine the Ending inventory and Cost of Sales for the month of December, using the FIFO costing method. 
2. Determine the Ending inventory and Cost of Sales for the month of December, using the weighted average costing method. 
3. Which cost flow method(s) resulted in higher gross profit on sales? a higher ending inventory? Explain your results. 

 

The following information relates to a management consultancy organisation:

$

Salary cost per hour for senior consultants 40

Salary cost per hour for junior consultants 25

Overhead absorption rate per hour applied to all hours 20

The organisation adds 40% to total cost to arrive at the final fee to be charged to a client.

Assignment number 789 took 54 hours of a senior consultant’s time and 110 hours of junior consultants’

time.

What is the final fee to be charged for Assignment 789?

The following information relates to the intangible assets of Lettuce Express:
a. On January 1, 2021, Lettuce Express completed the purchase of Farmers Produce, Inc., for $1,600,000 in cash. The fair value of the identifiable net assets of Farmers Produce was $1,440,000.
b. Included in the assets purchased from Farmers Produce was a patent for a method of processing lettuce valued at $49,500. The original legal life of the patent was 20 years. There are still 17 years left on the patent, but Lettuce Express estimates the patent will be useful for only 9 more years.
c. Lettuce Express acquired a franchise on July 1, 2021, by paying an initial franchise fee of $216,000. The contractual life of the franchise is eight years.

Required:
1. Record amortization expense for the intangible assets at December 31, 2021.
2. Prepare the intangible asset section of the December 31, 2021, balance sheet.

The following information relates to Redwood City during its fiscal year ended December 31, 2019:
a. On October 31, 2019, to finance the construction of a city hall annex, Redwood issued 8%, 10-year general obligation bonds at their face value of $600,000. Construction expenditures during the period equaled $364,000.
b. Redwood reported $109,000 from hotel room taxes, restricted for tourist promotion, in a special revenue fund. The fund paid $81,000 for general promotions and $22,000 for a motor vehicle.
c. 2019 general fund revenues of $104,500 were transferred to a debt service fund and used to repay $100,000 of 9%, 15-year term bonds and $4,500 of interest. The bonds were used to acquire a citizens’ center.
d. At December 31, 2019, as a consequence of past services, city firefighters had accumulated entitlements to compensated absences valued at $140,000. General fund resources available at December 31, 2019, are expected to be used to settle $30,000 of this amount, and $110,000 is expected to be paid out of future general fund resources.
e. At December 31, 2019, Redwood was responsible for $83,000 of outstanding general fund encumbrances, including $8,000 for the following supplies.
f. Redwood uses the purchases method to account for supplies. The following information relates to supplies:

Inventory:
January 1, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 39,000
December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . 42,000
Encumbrances outstanding:
January 1, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000
December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Purchase orders during 2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190,000
Amounts credited to vouchers payable during 2019 . . . . . . . . . . . . . 181,000

1. The amount of 2019 general fund operating transfers-out is ___________.
2. The 2019 general fund liabilities from entitlements for compensated absences are ___________.
3. The 2019 nonspendable amount of the general fund balance for inventory is _____________.
4. The 2019 capital projects fund balance is _____________.
5. The 2019 fund balance on the special revenue fund for tourist promotion is ____________.
6. The amount of 2019 debt service fund expenditures is _____________.
7. The amount to be included in the general fixed assets account group for the cost of assets acquired in 2019 is _____________.
8. The amount by which 2019 transactions and events decreased the general long-term debt account group is _____________.
9. The amount of 2019 supplies expenditures using the purchases method is _____________.
10. The total amount of 2019 supplies encumbrances is _____________.

1. The following information relates to Wal-Mart Corporation for the past accounting period

 

Cost     Direct 

Center        Cost Proportion of Services used by:

 

S1 S2 S3 P1 P2 P3

 

S1 P120,000 .10 .30 .25 .20 .15

S2     80,000 .20 .40 .20 .20

S3     45,000 .60 .35 .05

P1     78,000

P2     99,000

P3     45,000

__________26. Under the step method which department will allocate its direct cost first?

__________27. Under the step method which department will allocate its direct cost last?

__________28. Using the algebraic method, how much is the total costs to be allocated by S1 to all departments?

__________29. Using algebraic method, how much is the cost to be allocated by S3 to S2?

__________30. What is the total cost to be allocated by the servicing departments to producing departments?

 

The following information relates to the Blending Department of Old_Curry_Puffs Products (OCPP) for the month of May. OCPP uses a weighted-average process costing system.
 

Work in process, beginning (May 1):
Units in process	30,000
Percent complete with respect to materials	100%
Percent complete with respect to conversion	10%
Units completed and transferred out during May	290,000
Work in process, ending (May 31):
Units in process	17,000
Percent complete with respect to materials	100%
Percent complete with respect to conversion	80%

 
What are the Blending Department’s equivalent units related to conversion costs for May?

	1)  $266,400
	2)  $290,400
	3)  $293,400
	4)  $303,600

The following information relates to the inventory of Margaret’s Megamart Ltd during December.
Ignore GST.
Date Units Units cost Total cost
1/12 Beginning inventory 700 $ 12.00 $ 8,400
10/12 Purchase 500 12.60 6,300
15/12 Purchase 300 13.20 3,960
23/12 Purchase 500 14.00 7,000
Totals 2,000 $25,660
Margaret’s Megamart Ltd uses the periodic inventory system. A physical count on 31 December
verified that 650 units were on hand.
Required:
a) Determine the Ending inventory and Cost of Sales for the month of December, using the FIFO costing method. 
b) Determine the Ending inventory and Cost of Sales for the month of December, using the weighted average costing method. 
c) Which cost flow method(s) resulted in higher gross profit on sales? a higher ending inventory? Explain your results. 

The following information relates to the debt securities investments of Sunland Company.

(a)

Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities. (Note to instructor: Some students may debit Interest Receivable at date of purchase instead of Interest Revenue. This procedure is correct, assuming that when the cash is received for the interest, an appropriate credit to Interest Receivable is recorded.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)

The following information relates to the inventory of Margaret’s Megamart Ltd during December. Ignore GST.

 

Date		Units	Units cost	Total cost
1/12	Beginning inventory	700	$ 12.00	$ 8,400
10/12	Purchase	500	12.60	6,300
15/12	Purchase	300	13.20	3,960
23/12	Purchase	500	14.00	7,000
	Totals	2,000		$25,660

 

Margaret’s Megamart Ltd uses the periodic inventory system. A physical count on 31 December verified that 650 units were on hand.

 

Required:

1. Determine the Ending inventory and Cost of Sales for the month of December, using the FIFO costing method. (3 marks)
2. Determine the Ending inventory and Cost of Sales for the month of December, using the weighted average costing method. (3 marks)
3. Which cost flow method(s) resulted in higher gross profit on sales? a higher ending inventory? Explain your results. (2 marks)

The following information relates to the inventory of Margaret’s Megamart Ltd during December. Ignore GST. Date Units Units cost Total cost 1/12 Beginning inventory 700 $ 12.00 $ 8,400 10/12 Purchase 500 12.60 6,300 15/12 Purchase 300 13.20 3,960 23/12 Purchase 500 14.00 7,000 Totals 2,000 $25,660 Margaret’s Megamart Ltd uses the periodic inventory system. A physical count on 31 December verified that 650 units were on hand. Required: a) Determine the Ending inventory and Cost of Sales for the month of December, using the weighted average costing method. b) Which cost flow method(s) resulted in higher gross profit on sales? FiFO Costing method or Weighted average ?

The following information related to a real estate asset investment that is fully financed using REITS equity
Project costs:
Land. Ksh 300000
Buildings. Ksh 2500000
Total costs. Ksh 2800000
Operating data:
Initial rent Ksh 522100
Growth in rent. 8% per year
Vacancy rate. 6% of gross rent
Other income. 1% of gross rent
Operating expenses. 16% of gross rent for one year
Growth in expenses. 7% per year
Growth in resale price. 6%
Selling expenses. 5% of resale price
Depreciation (straight line 27.5 years, mid-month convention
Put at service at beginning of the year)
Holding period. 5 years
Marginal tax rate. 30%
Capital gains tax rate. 15%
Depreciation recovery tax rate. 25%
Estimated sale price. Ksh 3747032
Selling expenses. Ksh 187352

Required:
a). Operating cash flows for the first 5 years
b). After tax cash flows from the sale of property
c). Net present value assuming cost of capital of 15%
d). What are the factors that will be considered before investing in the asset

Doug’s Sky Diving Supply Store
Bank Reconciliation
June 30, 20–
Bank statement balance		$fill in the blank 1
Deduct deposits in transit:	$fill in the blank 3
	fill in the blank 4	fill in the blank 5
		$fill in the blank 6
	$fill in the blank 9
	fill in the blank 11
	fill in the blank 13	fill in the blank 14
Adjusted bank balance		$fill in the blank 15
Book balance		$fill in the blank 16
		fill in the blank 18
		$fill in the blank 19
	$fill in the blank 22
	fill in the blank 24
	fill in the blank 26	fill in the blank 27
Adjusted book balance		$fill in the blank 28

The following information relates to the first two months’ trading of Dana, who is in business as a

hairdresser. All transactions are on a cash basis.

 2 March Dana paid $525 into the business

16 March Purchased supplies for $300

24 March Paid miscellaneous expenses $60

29 March Cash from customers $450

 6 April Received $450 from Radok as a loan repayable in two year’ time

 8 April Purchased supplies $300

 9 April Receipts from customers $225

22 April Paid establishment costs $75

30 April Receipts from customers $450.

 

Extract a trial balance for EACH month

The following information relates to a company which prepares financial statements to 31^st December each year:

(a) On 1^st January 2017, the company acquired new plant costing Ghs10million. This plant will require a complete overhaul after five years of use, at an estimated cost of Ghs1million. Accordingly, the company wishes to make a provision of Ghs200,000 for plant overhaul costs in its financial statement for the year to 31^st December 2017 and then to increase this provision by Ghs200,000 every year for the next four years. This will have the effect of spreading the overhaul costs yearly over the years 2017 to 2021.

(b) On 31^st December 2017, the company moved from leased premises into new freehold premises. The lease on the old premises will continue for three more years at an annual cost of Ghs100,000. The lease cannot be cancelled and the premises cannot be sublet or used for any other purpose. The company wishes to make a provision of Ghs300,000 in its financial statements for the year to 31^st December 2017.

(c) In November 2017, the company decided to sell off one of its operations. No buyer had been found at 31^st December 2017 but the sale is expected to result in a loss of Ghs500,000 when it occurs. The company wishes to provide for this loss in the financial statements for the year to 31^st December 2017.

Required

According to the rules of IAS 37, Explain whether any of these three provisions be made?

The following information relates to a company’s accounts receivable: gross accounts receivable balance at the beginning of the year, $300,000; allowance for uncollectible accounts at the beginning of the year, $25,000 (credit balance); credit sales during the year, $1,500,000; accounts receivable written off during the year, $16,000; cash collections from customers, $1,450,000. Assuming the company estimates that future bad debts will equal 10% of the year-end balance in accounts receivable.
 
1. Calculate bad debt expense for the year.
2. Calculate the year-end balance in the allowance for uncollectible accounts.

The following information relate to I M Cute Company:

Beginning Inventory

(30% complete for material B and

60% complete for conversion)           700 units

Started in process                            2,000 units

Ending Inventory                  

 (50% complete as to material B and

 80% complete for conversion)          500 units

 

            Beginning Inventory Costs:

            Material A                  $ 14,270

            Material B                  $   5,950

            Conversion                $   5,640

 

            Current Period Costs:

            Material A                  $ 40,000

            Material B                  $ 70,000

            Conversion                $ 98,100

 

Material A is added at the start of production; Material B is added uniformly throughout the process.

Assuming a FIFO method of process costing, compute the cost per EUP for Conversion.

The following information relates to a business for the year ended 31 December 2019:

Trade receivables at 1 January 2019 289,376
Trade payables at 1 January 2019 301,972
Discounts received 21,069
Cash sales 69,589
Cash from credit customers 795,373
Irrecoverable debts to be written off 9,550
Discounts allowed 12,956
Returns inwards 7,000
Amounts paid to suppliers 475,353
Returns outwards 3,525
Credit sales 626,575
Receivables to be allowed for
(additional to those to be written off)9,527
What is the balance on the trade receivables ledger control account at 31 December 2019?

A $81,545
B $91,072
C $104,028
D $101,501