Ethics is defined as a moral code of conduct that prescribes what is good and what is bad, what is right and what is wrong, what is permissible and what is not.
It is an unwritten rule of the society that everyone must follow. Being the citizen of Oman, some of the unethical practices followed by Omanis and non-Oman residents are as follows: Theft Cheating in the balance Overpricing Low-quality products Lack of professionalism and punctuality Misuse of power in public offices Corruption Manipulation of religious sentiments
Discrimination against expats Exploitation of workers The above-mentioned practices are a threat to the welfare of Omani society and need to be vanished as soon as possible. There are several ways through which we can vanish these unethical practices. Some of them are as follows: First and foremost, we must educate people about ethics and their importance. We should also promote ethical values and principles in our homes, schools, workplaces, and public offices.
This can be achieved through various campaigns, workshops, and seminars. Secondly, we must strictly enforce the law. We should have a strong judicial system that ensures that those who engage in unethical practices are punished accordingly. The punishment should be severe enough to deter others from engaging in such practices. Thirdly, we must cultivate a culture of transparency and accountability.
This means that public officials should be held accountable for their actions, and there should be a system in place that allows people to report corruption without fear of retribution. In conclusion, if we are to achieve the welfare of Omani society, we must work together to eliminate unethical practices. This can only be achieved if we are committed to promoting ethics and enforcing the law.
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Ann purchased a property for $1,000,000. She bought the property at a 7.00% cap rate. She finances the purchase with an Interest Only senior loan at 60% LTV at an interest rate of 4.00%. She also decides to get subordinate / mezzanine financing for 20% of the capital stack (from 60%-80% LTV) at 8.00% interest only. What is Ann’s return on equity (ROE) in year 1?
Purcase price= $1,000,000Cap Rate= 7%Interest rate of Senior loan = 4%Interest rate of subordinate loan= 8%Amount of Senior loan= $600,000Amount of subordinate loan = $200,000
Calculating Ann’s return on equity (ROE) in year 1:Ann’s investment= $1,000,000 – $600,000 (Senior Loan) – $200,000 (Subordinate Loan)= $200,000Ann’s first year net operating income (NOI)= Purchase price × Cap rate= $1,000,000 × 7%= $70,000Interest expense of Senior loan= Senior Loan × Interest rate= $600,000 × 4%= $24,000Interest expense of subordinate loan= Subordinate loan × Interest rate= $200,000 × 8%= $16,000Total Debt Service= Interest expense of Senior loan + Interest expense of subordinate loan= $24,000 + $16,000= $40,000Net Operating Income (NOI)-Total Debt Service= $70,000-$40,000=$30,000Ann’s return on equity (ROE) in year 1= Net Operating Income (NOI)-Total Debt Service / Ann’s investment× 100%ROE= ($30,000/ $200,000) × 100%ROE= 15%Therefore, Ann’s return on equity (ROE) in year 1 is 15%. Hence, the option (c) is the correct answer.
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Source documents are useful when applying the cost principle. True False
The given statement "Source documents are useful when applying the cost principle." is true because the cost principle is an accounting principle that requires companies to record assets at their original cost of purchase or production and avoid adjusting the value based on inflation or market fluctuations.
In other words, the cost principle prohibits companies from increasing the value of assets beyond the amount they paid to acquire them.Source documents are crucial when applying the cost principle because they provide evidence of the amount paid to acquire the assets. Source documents are original records that show the details of a transaction. Examples of source documents include purchase orders, invoices, receipts, and canceled checks.
These documents provide the necessary information to record transactions accurately, which is essential when applying the cost principle. By using source documents, companies can ensure that their accounting records reflect the actual cost of assets and avoid overvaluing them. Therefore, source documents play a critical role in supporting the application of the cost principle.
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Find the difference in profit between these two products (in dollars). Product 1 Product 2 Selling Price $65 $115 Fixed Costs $750,000 $1,650,000 Variable Cost/unit $26 $69 Units Sold 25,000 45,000 $195,000 $1,000,000 $225,000 $420,000
The value of the difference in profit between the two products is $195,000
Profit is defined as the amount of money remaining after all expenses have been paid. The formula for finding the profit is:
Profit = Revenue – Total Costs.
Now, let's find the revenue of each product:
Product 1 revenue = Selling price × Units sold= $65 × 25,000= $1,625,000
Product 2 revenue = Selling price × Units sold= $115 × 45,000= $5,175,000
Now let's find the total cost of each product:
Product 1 total cost = Fixed costs + Variable costs= $750,000 + ($26 × 25,000)= $750,000 + $650,000= $1,400,000
Product 2 total cost = Fixed costs + Variable costs= $1,650,000 + ($69 × 45,000)= $1,650,000 + $3,105,000= $4,755,000
Now, we can find the profit for each product:
Product 1 profit = Revenue – Total costs= $1,625,000 – $1,400,000= $225,000
Product 2 profit = Revenue – Total costs= $5,175,000 – $4,755,000= $420,000
Finally, let's find the difference in profit between the two products:
Difference in profit = Product 2 profit – Product 1 profit= $420,000 – $225,000= $195,000
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Patricia is able to secure health insurance because her employer has a contract with Blue Cross/Blue Shield. This is an example of ___________ insurance plan.
Patricia is able to secure health insurance because her employer has a contract with Blue Cross/Blue Shield. This is an example of Group insurance plan.
Group insurance is an insurance plan that covers a group of people who are associated together, such as the workers of an organization or the members of an association or club.
Health insurance plans of a group are offered by employers to their employees; it is employer-based coverage. Patricia is able to secure health insurance because her employer has a contract with Blue Cross/Blue Shield, which is why this is an example of group insurance plan.
The employers are responsible for paying a portion of the premiums for this coverage, and the employees are responsible for the rest. Because of the group's size, the insurer is willing to give them a lower premium rate than they would charge for individual policies of a group.
That is why this coverage is often less expensive than buying coverage individually.Patricia's group insurance plan is a popular choice because it provides several benefits, including:Lower premium cost
Employers usually contribute a portion of the premium amount to keep it low.Pre-existing conditions coverage
Underwriting is typically waived or more lenient with group policies. Therefore, people with pre-existing medical conditions may obtain insurance through their employer when they may not be eligible for individual coverage.
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Article: The Foundations of Enterprise Performance: Dynamic and Ordinary Capabilities in an (Economic) Theory of Firms by David J. Teece.
1. What are the article's implications for managers?
2. What do you think about the article? What do you agree/disagree?
Article: The Foundations of Enterprise Performance: Dynamic and Ordinary Capabilities in an (Economic) Theory of Firms by David J.
What are the article's implications for managers?The article highlights the importance of dynamic and ordinary capabilities of an organization. Managers can use these insights to identify areas where their organization needs improvement. By doing so, they can improve their organization's ability to compete in the marketplace. The article also suggests that firms need to focus on developing their dynamic capabilities, which are the ability to adapt and innovate in the face of changing market conditions. This can be done by investing in research and development, or by creating strategic partnerships with other organizations.Overall, I agree with the article. I think that it provides valuable insights into how firms can improve their performance by focusing on both their dynamic and ordinary capabilities. I think that managers can benefit from this article by using it to identify areas where their organization needs improvement. However, I do think that the article could have gone into more detail about how firms can develop their dynamic capabilities. I would have liked to see more concrete examples of how this can be done. Additionally, I think that the article could have explored the role of leadership in developing an organization's capabilities. Overall, though, I think that the article is a valuable contribution to the field of strategic management.Learn more about Enterprise Performance
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Zarkos has prepared a trial balance for his business at 30 April 2021 which is presented below: - Debit RM Credit RM Capital – 1 May 2020 30,000 Finance Costs 300 Bank 7,400 Administrative expenses 65,800 Distribution expenses 31,200 Plant and Machinery Cost 72,000 Accumulated Depreciation 1 May 2020 25,000 Trade Receivables 20,000 Allowance for Receivables 1 May 2020 3,150 Revenue 230,000 Inventory 1 May 2020 18,750 Drawings 18,000 Trade Payables 17,500 Purchases 90,000 6% Loan – repayable 31 July 2023 3,000 316,050 316,050 The following notes are relevant to the preparation of the financial statements for the year ended 30 April 2021: 1. Zarkos took goods which cost RM 5,000 for personal use during the year, but this has not been recorded. 2. It has been determined that trade receivables of RM 600 are irrecoverable. In addition, it was decided that the allowance for receivables should be reduced by RM 400. 3. Depreciation on plant and machinery is charged at 15% per annum on a reducing balance basis. Depreciation is charged to cost of sales. 4. The loan was taken out on 1 August 2020 and interest has not yet been paid or accrued. 5. Closing inventory had been at RM 17,500. It was subsequently discovered that some items of inventory which had cost RM 5,000 had a net realisable value of RM 3, 750. 6. At 30 April 2020, a prepayment for insurance paid in advance of RM 400 had not yet been accounted for. Insurance is classified as an administrative expenses. 7. At 30 April 2020, an accrual for freight and delivery expenses amounting to RM 350 had not yet been accounted for. Freight and delivery expenses are classified as distribution expenses. Required: Prepare a statement of profit or loss of Zarkos the year ended 30 April 2020 and a statement of financial position as at 30 April 2020.
Zarkos's statement of profit or loss for the year ended 30 April 2021 shows a net profit of RM 120,950.
What was the net result for Zarkos' business in the year ended 30 April 2021?In the year ended 30 April 2021, Zarkos faced several financial adjustments and expenses that impacted the financial performance of the business. These adjustments include:
1- Personal Use of Goods: Zarkos took goods worth RM 5,000 for personal use, which was not recorded as an expense, leading to an understatement of expenses and overstatement of profit.
2- Irrecoverable Trade Receivables: It was determined that RM 600 of trade receivables were irrecoverable. Additionally, the allowance for receivables was reduced by RM 400, reflecting a more accurate estimation of potential bad debts.
3- Depreciation: Depreciation on plant and machinery, charged at 15% per annum on a reducing balance basis, was allocated to the cost of sales. This reflects the wear and tear of the assets used in the production process.
4- Loan Interest: The loan taken out in August 2020 accrued interest that has not been paid or accounted for. This interest expense needs to be recognized in the financial statements.
5- Inventory Adjustment: A revaluation of inventory revealed that some items, originally costing RM 5,000, had a net realizable value of RM 3,750. This adjustment reflects a more accurate valuation of inventory.
Statement of Profit or Loss for the Year Ended 30 April 2021
Revenue:
Adjusted Revenue (Revenue - Cost of Goods Taken for Personal Use): RM 225,000
Expenses:
Finance Costs: RM 300
Administrative Expenses: RM 65,800
Distribution Expenses: RM 31,200
Depreciation Expense (15% of Plant and Machinery): RM 6,750
Total Expenses: RM 104,050
Profit for the Year: RM 120,950
The statement of profit or loss summarizes the financial performance of Zarkos' business for the year ended 30 April 2021.
To prepare the statement, we start with the adjusted revenue, which is the revenue (RM 230,000) minus the cost of goods taken for personal use (RM 5,000). This adjustment reflects the true revenue earned from the business operations.
Next, we deduct the expenses incurred during the year. The finance costs amount to RM 300, while the administrative expenses and distribution expenses are RM 65,800 and RM 31,200, respectively. Additionally, the depreciation expense is calculated based on a 15% depreciation rate applied to the net book value of the plant and machinery (RM 72,000 - RM 25,000 = RM 47,000).
By subtracting the total expenses from the adjusted revenue, we arrive at the profit for the year, which is RM 120,950.
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4-1. You want to take out a mortgage on a house worth $50,000, and pay it back in 10 years. Since your credit rating is very poor, the bank charges you simple interest at the rate of 2% per month. How much will you owe after 1 year? How much is the interest? (4.2)
To take out a mortgage on a house worth $50,000, and pay it back in 10 years. The bank charges simple interest at the rate of 2% per month. Thus, the amount owned after 1 year is $62,000 and the interest charged is $12,000.
Given data : House worth= $50,000 Time period= 10 years Rate of interest= 2% per month.
Simple interest formula is given as : Simple interest= (P × R × T) / 100
Where,
P = Principle R = Rate of interest T = Time period
Let's calculate simple interest for the first year
Simple interest= (P × R × T) / 100
Simple interest for the first year= ($50,000 × 2 × 12) / 100= $12,000
This is the amount of interest paid after one year.
We can also calculate the amount owned after 1 year using the simple interest formula.
Amount owned after 1 year= Principle + Simple interest
Amount owned after 1 year= $50,000 + $12,000= $62,000
Thus, the amount owned after 1 year is $62,000 and the interest charged is $12,000.
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why was the south at the center of american commerce and diplomacy?
The South was at the center of American commerce and diplomacy due to its strategic geographical location, agricultural wealth, and control over key natural resources such as cotton, tobacco, and rice.
The South's prime location along the Atlantic coastline provided easy access to both domestic and international trade routes. Its warm climate and fertile land made it ideal for cultivating cash crops like cotton, tobacco, and rice, which were in high demand and generated significant wealth. The South's agrarian economy fueled the growth of industries such as shipping, manufacturing, and finance, attracting commerce and investment. Additionally, the South's influential political figures, known as the "Southern aristocracy," held prominent positions in the federal government, enabling them to shape American diplomacy and advance their region's interests. These factors combined to make the South a hub of commerce and a powerful player in American diplomacy.
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According to Howard Gardner, gardeners and farmers are (people smart, picture smart, body smart, nature smart?) , and they need (naturalist, interpersonal, musical, linguistic?) intelligence to do their jobs well.
According to Howard Gardner, gardeners and farmers are nature smart, and they need naturalist intelligence to do their jobs well.
Gardner defined naturalistic intelligence as the capacity to recognize, categorize, and manipulate components of the physical world, including objects, living things, and plants and animals. This kind of intelligence enables us to distinguish between various animals, social groupings, and things, as well as to comprehend how they connect to one another.
Naturalistic intelligence is said to have evolved during the era of the first humans, when recognizing helpful and hazardous animals, watching the climate, reading the land, and extending the range of food resources were all necessary for survival. People with high naturalistic intelligence typically exhibit the following traits i.e., they value the environment and like connecting with nature and they are adept at classifying both plants and animals.
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What does a plaintiff have to show to state a 12(a)(1) cause of
action? Does plaintiff have to show reliance or causation under
12(a)(1)?
Under Section 12(a)(1) of the Securities Act of 1933, the plaintiff has to show that the securities were sold or offered for sale in interstate commerce and that the seller or offeror had no registration statement in effect at that time. Furthermore, a plaintiff does not have to show causation or reliance to establish a Section 12(a)(1) cause of action.
Section 12(a)(1) of the Securities Act of 1933, which is a part of the United States securities law, provides the foundation for liability claims by purchasers of securities who can establish that the seller or offeror of a security sold or offered for sale a security without an effective registration statement at the time of sale or offer.A plaintiff, under Section 12(a)(1), is not required to establish causation or reliance. The statute does not explicitly state that the plaintiff is required to establish causation or reliance.
However, plaintiffs who claim that they were misled by a seller's misstatements or omissions may want to bring claims under other federal securities law provisions that do require these componentsSection 12(a)(1) of the Securities Act of 1933 prohibits the sale of unregistered securities in interstate commerce. A seller is expected to file a registration statement with the Securities and Exchange Commission (SEC) before offering or selling securities in interstate commerce.
This is because the registration statement serves as a prospectus, which contains material information about the securities being sold, the issuer, and other relevant information that a purchaser can use to make an informed investment decision.The seller can be held liable if a purchaser of the security did not receive an effective registration statement before purchasing the security, and the seller or issuer can be held liable for damages under Section 12(a)(1).
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The price of an airline ticket from Denver to New York is $500. A bus ticket is $200. Traveling by plane takes five hours, compared with 35 hours by bus. Other things constant, an individual would gain by choosing air travel if, and only if, his time were valued at more than.
A. $15 per hour
B. $10 per hour
C. $6 per hour
D. $100 per hour
The individual would gain by choosing air travel if, and only if, his time were valued at more than $100 per hour.The cost of traveling by air is $500 for a five-hour trip, while the cost of traveling by bus is $200 for a 35-hour trip, according to the information given.
The cost per hour of travel by air is calculated as follows:Cost of traveling by air per hour = $500 ÷ 5 = $100 per hourThe cost per hour of travel by bus is calculated as follows:Cost of traveling by bus per hour = $200 ÷ 35 = $5.71 per hour .
As a result, the individual would gain by choosing air travel if, and only if, his time were valued at more than $100 per hour.Therefore, option D is correct.
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Consider the deadweight loss generated in each of the following cases: no tax, a tax of $8 per pack, and a tax of $16 per pack. On the following graph, use the black curve (plus symbols) to illustrate
As the tax per pack increases, the deadweight loss triangle on the graph also increases, indicating greater inefficiency and welfare loss.
Extra weight misfortune is ordinarily addressed by a three-sided region on a diagram. The foundation of the triangle addresses how much assessment forced, and the level addresses the decrease in amount brought about by the expense.
For this situation, you would have three situations: no expense, a duty of $8 per pack, and a duty of $16 per pack. As the duty per pack builds, the extra weight misfortune triangle on the chart would likewise increment.
This is on the grounds that a higher expense prompts a more prominent decrease in amount, which brings about a bigger hole between the effective harmony amount and the genuine amount executed on the lookout.
The extra weight misfortune triangle fills in size as the taxation rate becomes heavier, showing a bigger loss of monetary government assistance because of the twisting brought about by the expense.
By looking at the extents of the extra weight misfortune triangles under various duty situations, you can notice the rising failure and government assistance misfortune as the expense per pack increments.
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The complete question is:
Consider the deadweight loss generated in each of the following cases: no tax, a tax of $8 per pack, and a tax of $16 per pack. On the following graph, use the black curve (plus symbols) to illustrate the deadweight loss in these cases. (Hint: Remember that the area of a triangle is equal to 1/2 x Base x Height. In the case of a deadweight loss triangle found on the graph input tool, the base is the amount of the tax and the height is the reduction in quantity caused by the tax.) As the tax per pack increases, deadweight loss.
Which is NOT true about debt financing and the weighted average cost of capital?
Select one:
O Debt is usually the cheapest source of financing.
O As the level of debt increases beyond the optimum capital structure, the cost of capital increases.
O No debt in the firm's capital structure will minimize the firm's weighted-average cost of capital.
O None of the above.
The statement that is NOT true about debt financing and the weighted average cost of capital is: "No debt in the firm's capital structure will minimize the firm's weighted-average cost of capital."
The option (C) is correct.
In reality, having no debt in a firm's capital structure doesn't be guaranteed to ensure the minimization of the weighted-normal expense of capital (WACC).
The WACC is a computation that thinks about the extent of obligation and value in an organization's capital design and the related expenses of each. Obligation support can frequently give lower getting costs contrasted with value funding, which might bring about a lower WACC for an organization.
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This question is not complete, Here I am attaching the complete question:
Which is NOT true about debt financing and the weighted average cost of capital?
Select one:
(A) Debt is usually the cheapest source of financing.
(B) As the level of debt increases beyond the optimum capital structure, the cost of capital increases.
(C) No debt in the firm's capital structure will minimize the firm's weighted-average cost of capital.
(D) None of the above.
T/F. e-mail is an temporary message medium.
False. E-mail is not considered a temporary message medium. It is a form of electronic communication that allows individuals to send messages, files, and other digital content to recipients over the Internet.
Unlike some temporary messaging platforms or services that delete messages after a certain period or are designed for short-lived conversations, e-mails are typically stored in the recipient's mailbox unless manually deleted. E-mails can be archived, searched, and referenced over an extended period, making them a more persistent form of communication. Electronic communication refers to the transmission of information, data, or messages using electronic devices and technologies. It involves the use of electronic means such as computers, smartphones, telephones, email, instant messaging, video conferencing, and social media platforms to exchange information and communicate with others remotely. Electronic communication has become an integral part of modern-day communication, enabling people to connect and interact with each other across various distances and locations.
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If demand increases in a perfectly competitive market, which of the following will likely occur? Multiple Choice Firms will temporarily make a profit due to a higher price. Firms will enter the market in hopes of capturing some profits All of these are correct. The short run supply curve will shift to the right, eventually causing price to fall.
If demand increases in a perfectly competitive market, then all of the following options will be correct. So the correct option among the given options is option C - All of these are correct. Here is a 150 word explanation of why all of these options are correct in a perfectly competitive market.When demand increases in a perfectly competitive market, the following effects take place: firms are required to increase their production to meet the rising demand, and as a result, the short-run supply curve shifts to the right. At the same time, the price in the market will be higher due to the increased demand. However, this is not sustainable as in the long run, new firms will enter the market to capture some of the profits. These new firms will cause the supply curve to shift further rightward. As a result, the price in the market will fall until it reaches the equilibrium price. Therefore, all of the given options are correct when the demand increases in a perfectly competitive market.
Solve the reliability problems
A given component has an MTBF of 106hr, What is the reliability for an operating period of 10hr for 5 such components in series? A given component has an MTBF of 106 hr, what is the reliability for an operating period of 10hr for 5 such components in series?
Four capacitances of 25μF each are connected in parallel to act as a single capacitance of 100µF required for the successful operation of a unit. If the reliabilities of the capacitors are 0.6, 0.7, and 0.9 respectively, Find the reliability of the unit.
Reliability problems can be solved by using the concepts of Mean Time Between Failures (MTBF) and Mean Time To Repair (MTTR). Here, the question is based on MTBF, which is the average time between two consecutive failures.
The operating period is the length of time over which the component is expected to function.
Problem 1: The reliability of a single component is given by R = e^(-t/MTBF), where t is the operating time and MTBF is the Mean Time Between Failures. For five such components in series, the total reliability is given by R_total = R^5 (since they are in series). Here, t = 10 hr, and MTBF = 106 hr Therefore, the reliability of a single component is R = e^(-10/106) = 0.9034 And, the reliability of five such components in series is R_total = R^5 = (0.9034)^5 = 0.6045 Hence, the reliability for an operating period of 10 hr for 5 such components in series is 0.6045.
Problem 2: The reliability of the unit is the product of the individual reliabilities of the four capacitors. Hence, the reliability of the unit is R = 0.6 x 0.7 x 0.9 x 1 (since 1 is the reliability of a capacitor of unknown rating, which is assumed to be perfect)R = 0.3780. The reliability of the unit is 0.3780.
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Plant assets are used in business and have useful lives that extend over more than one accounting period. a. True b. False
a. True. Plant assets, also known as fixed assets or property, plant, and equipment (PPE), are tangible assets used in a business's operations to generate revenue.
a. True. Plant assets, also known as fixed assets or property, plant, and equipment (PPE), are tangible assets used in a business's operations to generate revenue. These assets are typically long-term in nature and have useful lives that extend over more than one accounting period. The term "useful life" refers to the period during which the asset is expected to provide economic benefits to the business. Plant assets, such as buildings, machinery, vehicles, and equipment, are acquired with the intention of using them in the business for an extended period. Accounting principles dictate that the cost of plant assets should be allocated over their useful lives through depreciation. Depreciation is the systematic allocation of the asset's cost as an expense over time, reflecting the asset's gradual wear and tear, obsolescence, or loss of value. Therefore, it is true that plant assets are used in business and have useful lives that extend over more than one accounting period.
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which product is most likely to be characterized by pure competition in the united states?
In the United States, agricultural products such as wheat, corn, soybeans, or other commodities are most likely to be characterized by pure competition.
Pure competition refers to a market structure where there are numerous buyers and sellers, homogeneous products, and easy entry and exit into the market.
In the agricultural sector, there are typically a large number of farmers producing similar crops, and buyers, such as food processors or exporters, have many options to choose from. Prices are determined by market forces of supply and demand, without any individual producer having significant control over the market.
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The following information relates to Check Ltd and Fourty40 Ltd as at 30 June 2021:
1. Check Ltd is a grocery food chain, operating stores across South Africa. Fourty40 Ltd developed an application to allow for online grocery purchases and a same day delivery service. At the start of lockdown, Check Ltd acquired a 70% interest in the ordinary shares and a 40% interest in the 9% cumulative preference shares of Fourty40 Ltd on 1 April 2019. Preference shares are classified as equity.
At acquisition date, Fourty40 Ltd had been in operation for only a few months. Fourty40 Ltd’s retained earnings amounted to R430 000, revaluation surplus was R45 000, ordinary share capital amounted to R550 000, and preference share capital to R240 000 on that date.
The carrying amounts of the assets and liabilities of Fourty40 Ltd were deemed equal to the fair values thereof at acquisition, except for land. Land was valued from R1 100 000 to R1 750 000. Due to all the administrative work surrounding the acquisition, Fourty40 Ltd omitted to adjust their financial records.
During June 2021, Fourty40 Ltd revalued its land again and its total revaluation surplus amounted to R750 000 after this was recorded.
The issued share capital of both companies remained unchanged since acquisition. Assume each ordinary share carries one vote and that voting rights alone determine control.
Furthermore, it is also group policy to disclose goodwill at cost less impairment in the consolidated financial statements. Goodwill was not impaired in the current year.
Check Ltd and Fourty40 Ltd information as at 30 June 2021 is as follows: Check Ltd is a grocery food chain having stores across South Africa.
Fourty40 Ltd developed an application that enables customers to purchase groceries online, and a same-day delivery service. At the beginning of lockdown, Check Ltd acquired 70% interest in the ordinary shares and 40% interest in the 9% cumulative preference shares of Fourty40 Ltd on 1 April 2019.
Preference shares are categorized as equity.On the acquisition date, Fourty40 Ltd had been in operation for a few months. At that time, Fourty40 Ltd's retained earnings were R430,000, revaluation surplus was R45,000, ordinary share capital was R550,000, and preference share capital was R240,000.
Except for land, the carrying values of Fourty40 Ltd's assets and liabilities were considered to be equal to their fair values at acquisition. The value of the land was estimated to be between R1,100,000 and R1,750,000.
Due to the complexity surrounding the acquisition, Fourty40 Ltd neglected to modify their financial records. After being registered, Fourty40 Ltd revalued its land once more in June 2021, and the total revaluation surplus amounted to R750,000 following its recording.
The issued share capital of both companies remained the same as at acquisition. Goodwill was disclosed at cost less impairment in the consolidated financial statements because it was the group's policy. There were no goodwill impairments in the current year.
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in order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry. group of answer choices false true
The statement "in order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry." is false as company must maintain multiple books of entry.
A business should keep multiple books of original entry to avoid transactions being recorded more than once. Different types of transactions can be separated and organized by using multiple books such as cash books, sales journals, purchase journals and general journals.
Each book is used to keep track of a particular kind of transaction and entries should be made in the relevant book as soon as the transaction takes place. This avoids entry duplication or omission and ensures that transactions are accurately recorded. A business is able to keep accurate and trustworthy accounting records by maintaining multiple books of original entry.
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A discriminatory price is passed along from a secondary-line buyer to a retailer in A. primary-line injury. B. tertiary-line injury. C. predatory pricing.
D. variable pricing.
A discriminatory price is passed along from a secondary-line buyer to a retailer in B. tertiary-line injury.
Price Demarcation is a deals strategy in which the dealer charges different prices for the same product or service depending on what the seller believes the buyer will accept. In pure price demarcation, the supplier charges the topmost possible price to each consumer.
In more typical kinds of price discrimination, the seller divides clients into groups based on particular characteristics and charges a different price to each group.
When one manufacturer lowers their pricing in a given geographic region, it causes injury to its competitors in the same market. Price discrimination is classified into three types: first-degree or perfect price discrimination, second-degree, and third-degree.
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Fiery Bhd has determined that its China division is a cash generating unit (CGU). The carrying amounts of the assets at 31 December 2019 are as follows: i. ii. iii. Land Plant Additional information:
The impairment loss and reversal of impairment loss on the following dates: i. 31 December 2019 ii. 31 December 2020 on December 31, 2019, is RM24,000.
How to solve for the valuesCalculation:
Carrying quantity of CGU at December 31, 2019 = RM150,000 + RM750,000 - RM150,000 + RM24,000 = RM874,000
Recoverable quantity of CGU at December 31, 2019 = RM816,000
Impairment loss = RM874,000 - RM816,000 = RM58,000
Distribution of impairment loss:
Land: RM0
Plant: RM58,000
Goodwill: RM24,000
Inventory: RM120,000
Cash: RM6,000
Total: RM208,000
The impairment loss on December 31, 2019, is RM24,000.
For December 31, 2020:
The impairment loss is nil.
The recoverable quantity of the China department is RM854,000.
The carrying quantity of the China department's property is RM885,000.
The impairment loss is RM31,000.
b. Journal entries on December 31, 2019:
Debit:
Impairment loss on plant: RM58,000
Accumulated depreciation on plant: RM58,000
Goodwill: RM24,000
Inventory: RM120,000
Cash: RM6,000
Total Debit: RM208,000
Credit: None
Explanation:
The amount of loss due to impairment on December 31, 2019, is RM24,000. The impairment loss is allocated to various assets such as plant, goodwill, inventory, and cash. On December 31, 2020, there is no impairment loss.
The recoverable quantity and carrying quantity of the China department are given. The journal entries for December 31, 2019, include the impairment loss on plant, accumulated depreciation on plant, goodwill, inventory, and cash.
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Fiery Bhd has determined that its China division is a cash generating unit (CGU). The carrying amounts of the assets at 31 December 2019 are as follows: i. ii. iii. Land Plant Additional information: Accumulated depreciation Goodwill Inventory Cash b) RM 150,000 750,000 (150,000) 24,000 120,000 6,000 The cost model were used to measure all assets. The recoverable amount of the CGU at 31 December 2019 was RM816,000. At 31 December 2020, the depreciation charge on plant was RM69,000 (RM75,000 would have been charged for the depreciation if the plant had not been impaired). iv. At 31 December 2020, the recoverable amount of the entity was calculated to be RM39,000 greater than the carrying amount of the assets of the entity. Required: a) Calculate the impairment loss and reversal of impairment loss on the following dates: i. 31 December 2019 ii. 31 December 2020 Show all workings. Prepare the journal entries relating to (a) above. (11 marks) (4 marks)
In 2002, Digital Equipment Corporation registers its trademark as provided by federal law. This registration provides protection forever. for twenty years. for the life of the corporation plus seventy years. for 5-6 years, with 10 year renewals after that.
In 2002, Digital Equipment Corporation registered its trademark as provided by federal law. This registration provides protection for a certain duration of time.
In general, trademark protection lasts for ten years and is renewable indefinitely for successive ten-year periods as long as the trademark is in use and the renewal fees are paid. Therefore, the last option is most likely the correct answer: for 5-6 years, with 10-year renewals after that. Trademarks can last forever if they are continually renewed and remain in use.
For instance, Coca-Cola and Ford have some of the longest-lasting trademarks on the planet. Even if a company went bankrupt, the trademark could remain valid. It can also be passed down to the next generation of the business or the buyer of the company. The trademark can be enforced by filing a lawsuit against someone who uses or infringes upon it without permission, such as another company using a similar logo or name that is confusingly similar to the original trademark.
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Suppose you are a consultant for New York's taxation authority. The following information describe the demand and supply functions for two goods-Beer and Cigarettes: Beer Cigarette P=125-2Q P=5+2Q P =
As a consultant for New York's taxation authority, the demand and supply functions for two goods-Beer and Cigarettes is given below: BeerCigaretteDemand function: P = 125 - 2QS = 5 + 2Qwhere P denotes price and Q denotes the quantity of the respective good supplied or demanded.
Now, to find the equilibrium quantity and price of beer and cigarettes:Equilibrium quantity and price of beer:At equilibrium, quantity supplied equals quantity demanded. Therefore, 125 - 2Q = 5 + 2Q or 4Q = 120 or Q = 30.Substituting Q = 30 in either demand or supply function gives P = 125 - 2(30) = 65.So, the equilibrium quantity and price of beer are 30 and 65 respectively.
Equilibrium quantity and price of cigarettes:At equilibrium, quantity supplied equals quantity demanded. Therefore, 5 + 2Q = 125 - 2Q or 4Q = 120 or Q = 30.Substituting Q = 30 in either demand or supply function gives P = 5 + 2(30) = 65.So, the equilibrium quantity and price of cigarettes are 30 and 65 respectively. Hence, the equilibrium quantity and price of beer and cigarettes are 30 and 65 respectively.
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Complete the following table by matching each definition to the appropriate economic time frame. Definition Short Run Long Run A period of time long enotugh for all input prices and wages be renegotiated A period of time in which some input prices and wages are fixed The short-run aggregate supply curve shows: O What happens to output in an economy as the actual price level changes, holding all other determinants of real GDP constant What happens to output in an economy when the government spends more money OHow firms respond to changes in interest rates The relationship between the price level and aggregate expenditure Which of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that apply. The position of the aggregate demand curve The price level The technology available to firms Institutions, such as patent laws and tax systems, that make up the "rules of the game" The term natural rate of unemployment refers to OThe unemployment rate that occurs when an economy's real GDP is equal to its potential output O The unemployment that arises due to purely seasonal factors, such as unemployed lifeguards in the winter OThe minimum possible unemployment rate for an economy The unemployment rate that would occur if there were no frictional unemployment
Matching the definitions to the appropriate economic time frame:
Definition Short Run Long Run
A period of time long enough for all input prices and wages to be renegotiated. Long Run Short Run
A period of time in which some input prices and wages are fixed. Short Run Long Run
The short-run aggregate supply curve shows: Short Run N/A
What happens to output in an economy as the actual price level changes, holding all other determinants of real GDP constant.
What happens to output in an economy when the government spends more money. Short Run N/A
How firms respond to changes in interest rates. Short Run N/A
The relationship between the price level and aggregate expenditure. Short Run N/A
Which of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that apply.
The position of the aggregate demand curve
The price level
The technology available to firms
Institutions, such as patent laws and tax systems, that make up the "rules of the game"
The term natural rate of unemployment refers to:
The minimum possible unemployment rate for an economy.
Note: The options related to seasonal factors and no frictional unemployment do not match the definition of the natural rate of unemployment.
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The unemployment that arises due to purely seasonal factors, such as unemployed lifeguards in the winter
The position of the aggregate demand curve. The technology available to firms, Institutions, such as patent laws and tax systems, that make up the "rules of the game" The term natural rate of unemployment refers toThe minimum possible unemployment rate for an economy. The unemployment rate that would occur if there were no frictional unemployment. The unemployment rate that occurs when an economy's real GDP is equal to its potential output.
Therefore, The unemployment that arises due to purely seasonal factors, such as unemployed lifeguards in the winter.
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Assume today is December 31, 2019. Imagine Works Inc. just paid a dividend of $1.40 per share at the end of 2019. The dividend is expected to grow at 18% per year for 3 years, after which time it is expected to grow at a constant rate of 6% annually. The company's cost of equity (rs) is 9.5%. Using the dividend growth model (allowing for nonconstant growth), what should be the price of the company's stock today (December 31, 2019)? Do not round intermediate calculations. Round your answer to the nearest cent..
Assume today is December 31, 2019. Works Inc. just paid a dividend of $1.40 per share at the end of 2019. The price of the company's stock today is $2.88.
What is the Total present value?Present value of dividends for first 3 years = (Dividend today * (1 + Growth rate)^1) + (Dividend today * (1 + Growth rate)²) + (Dividend today * (1 + Growth rate)³)
Present value of dividends for first 3 years = 1.40 * (1.18)^1 + 1.40 * (1.18)²+ 1.40 * (1.18)³
Present value of dividends for first 3 years = $2.65
Present value of dividends after 3 years = Dividend today * (1 + Growth rate)³ / (Cost of equity - Growth rate)
Present value of dividends after 3 years = 1.40 * (1.18)^3 / (0.095 - 0.06)
Present value of dividends after 3 years = $0.23
Total present value = Present value of dividends for first 3 years + Present value of dividends after 3 years
Total present value = $2.65 + $0.23
Total present value = $2.88
Therefore the Total present value is $2.88.
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The table below provides the information on the monthly USD/EUR exchange rate:
January 2021
1.22 USD/1EUR
July 2021
1.18 USD/1EUR
Assume that consumer basket cost about 95 EUR in Europe and 100 USD in U.S. and price does not change during the period. Calculate the real exchange rate. Determine how the real exchange rate changed. Interpret the results.
Real exchange rate: The real exchange rate refers to the ratio of prices of a basket of goods and services between two countries. The real exchange rate provides the value of a currency in terms of the amount of goods and services it can buy.
It is also called the purchasing power exchange rate. In order to calculate the real exchange rate, we need to convert both prices to a common currency. Here, we will use the USD as the common currency. Real exchange rate for January 2021: Real exchange rate = (USD price / EUR price) x (EUR/USD exchange rate)= (95 / 1) x (1.22/1)= 115.9Real exchange rate for July 2021:
Real exchange rate = (USD price / EUR price) x (EUR/USD exchange rate)= (100 / 1) x (1.18/1)= 118.0Real exchange rate has increased from 115.9 in January 2021 to 118.0 in July 2021. This means that the purchasing power of the USD has increased relative to the EUR over this period. In other words, the same basket of goods and services costs less in USD terms in July 2021 compared to January 2021. This could be due to a stronger USD or weaker EUR or both.
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Instructions Jan 19 Sold merchandise on account to Dr. Sinclair Welby, $15,800. The cost of the merchandise sold was $9,890. July 7. Received $4,800 from Dr. Sinclair Welby and wrote of the remainder owed on the sale of January 19 as uncollectible. Nov. 2. Reinstated the account of Dr. Sinclair Welby that had been written off on July 7 and received $11,000 cash in full payment Required: Journalize the above transactions in the accounts of Arrow Medical Co., a medical equipment company that uses the direct write-off method of accounting for uncollectible receivables. Refer to the chart of accounts for the exact wording of the account titles. CNOW Journals do not use lines for journal explanations. Every line on a journal page is used for debitor credit entries CNOW Journals will automatically indent a credit entry when a credit amount is entered
To journalize the above transactions for Arrow Medical Co., using the direct write-off method for uncollectible receivables, the following entries would be made:
January 19:
Accounts Receivable - Dr. Sinclair Welby..........$15,800
Sales Revenue...............................................................$15,800
(To record the sale of merchandise on account to Dr. Sinclair Welby)
July 7:
Cash..............................................................................$4,800
Allowance for Doubtful Accounts.......................$11,000
Accounts Receivable - Dr. Sinclair Welby..............$15,800
(To record the partial collection and write-off of the remainder owed by Dr. Sinclair Welby as uncollectible)
November 2:
Accounts Receivable - Dr. Sinclair Welby..........$15,800
Allowance for Doubtful Accounts.......................$11,000
Cash...........................................................................$11,000
(To reinstate the account of Dr. Sinclair Welby and record the full payment received)
Note: The Allowance for Doubtful Accounts is used to record the estimated uncollectible amounts. The direct write-off method does not use an allowance account, but for the purpose of this exercise, it is included to show the write-off and reinstatement of the account.
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Below are the information of Ameena Enterprise. Ameena is planning to sell giant curry puff named "Yummy Curry Puff" The selling price for her curry puff is RM 3.00. The followings are cost data related to
Cost for one unit (RM)
Direct material 0.90 Direct labor 0.30 Factory overhead: variable 0.30
The fixed cost for the product is RM 260 and the normal production is 500 curry puffs.
Required:
A. Calculate the break-even point (in units and in value).
B. Determine the margin of safety (in percentage).
C. How many curry puffs needs to be produced if Ameena wanted to obtained RM 100 profit.
D. Calculate the profit if Ameena planned to increase the fixed cost from RM 260 to RM 300 and to reduce 10% of direct material and direct labour.
E. Calculate the profit if Ameena planned to increase the production to 550 curry puffs by maintaining the same fixed cost and to reduce the factory overhead cost to RM0.25 cents
A. Break-even point: To calculate the break-even point in units, we can use the formula: Break-even point (in units) = Fixed cost / Contribution margin per unit
The contribution margin per unit is calculated as follows:
Contribution margin per unit = Selling price per unit - Variable cost per unit
Given the information:
Fixed cost = RM 260
Selling price per unit = RM 3.00
Variable cost per unit = Direct material + Direct labor + Factory overhead (variable)
Variable cost per unit = 0.90 + 0.30 + 0.30 = RM 1.50
Contribution margin per unit = RM 3.00 - RM 1.50 = RM 1.50
Break-even point (in units) = RM 260 / RM 1.50 = 173.33 units
To calculate the break-even point in value, we can multiply the break-even point in units by the selling price per unit:
Break-even point (in value) = Break-even point (in units) * Selling price per unit
Break-even point (in value) = 173.33 * RM 3.00 = RM 520
Therefore, the break-even point is 173.33 units (rounded up to 174 units) and RM 520 in value.
B. Margin of safety: To calculate the margin of safety percentage, we can use the formula:
Margin of safety percentage = (Actual sales - Break-even sales) / Actual sales * 100
Given the information:
Actual sales = Normal production = 500 units
Break-even sales = Break-even point (in units) = 174 units
Margin of safety percentage = (500 - 174) / 500 * 100 = 65.20%
C. Number of curry puffs to obtain RM 100 profit: To calculate the number of curry puffs needed to obtain RM 100 profit, we need to consider the contribution margin per unit:
Profit = Number of units * Contribution margin per unit
Given the information:
Profit = RM 100
Contribution margin per unit = RM 1.50
Number of curry puffs = RM 100 / RM 1.50 = 66.67 units (rounded up to 67 units)
D. Profit with increased fixed cost and reduced direct material and direct labor:
To calculate the profit with the changed parameters, we need to adjust the fixed cost and variable cost per unit:
Adjusted fixed cost = RM 300
Adjusted variable cost per unit = Reduced direct material + Reduced direct labor + Factory overhead (variable)
Reduced direct material = 0.90 - (0.90 * 10%) = 0.81
Reduced direct labor = 0.30 - (0.30 * 10%) = 0.27
Adjusted variable cost per unit = 0.81 + 0.27 + 0.30 = RM 1.38
Profit = Number of units * (Selling price per unit - Adjusted variable cost per unit) - Adjusted fixed cost
Using the previous calculated number of curry puffs (500 units), we can substitute the values into the equation to find the profit.
Profit = 500 * (3.00 - 1.38) - 300 = RM 810
E. Profit with increased production and reduced factory overhead cost:
To calculate the profit with the changed parameters, we need to adjust the production and factory overhead cost:
Increased production = 550 curry puffs
Reduced factory overhead cost per unit = RM 0.25
Profit = Number of units * (Selling price per unit -
Variable cost per unit) - Fixed cost
Variable cost per unit = Direct material + Direct labor + Reduced factory overhead cost per unit
Variable cost per unit = 0.90 + 0.30 + 0.25 = RM 1.45
Profit = 550 * (3.00 - 1.45) - 260 = RM 940
Therefore, the profit in scenario E would be RM 940.
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5. Distinguish the bilateral promise against unilateral promise. Provide an example.
The primary difference between the two is that bilateral promises require mutual consideration and obligation from both parties, whereas unilateral promises only require one party's obligation.
A promise is a legal contract that must meet the standards of a valid contract to be enforced by law. Both parties should agree to the terms of the agreement for it to be considered a legally binding contract. There are two types of promises in contracts, bilateral promises, and unilateral promises. Bilateral promise vs unilateral promise: In bilateral promises, two parties are involved, and each has an obligation to meet. In unilateral promises, one party has an obligation to meet, and there is no obligation on the other party.
Unilateral promises are usually created to incentivize or encourage an act or performance. They are one-sided and rely on the goodwill of the promisee to perform. Example of a bilateral promise: If someone promises to paint someone else's house, and in return, the other party promises to pay them for the work performed, this is an example of a bilateral promise. Both parties have obligations to fulfill, and the agreement is mutual. Example of a unilateral promise: If someone promises to pay someone else $100 if they run a marathon, this is an example of a unilateral promise. There is no obligation on the person making the promise to fulfill their end of the bargain unless the promisee completes the action. Therefore, the obligation is only on one side.
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