The company buys inventory on credit (payment next year). The impact of this transaction on net income and cash of the current year is the following:Cash would not be impacted, and net income would decrease.
In the current year, the company has purchased inventory on credit, which implies that the company has received inventory but not yet paid for it. Therefore, this transaction would not have any impact on cash for the current year.However, the company would have to record the purchase of inventory on credit as an expense on the income statement, which would decrease net income for the current year.
Therefore, the transaction would decrease net income and have no effect on cash in the current year.
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Elaborate with examples that proactive anti-fraud framework controls play a key role in an organization’s fight against fraud. Include those examples in your discussion: 1) External audit of internal controls over financial reporting. 2) Independent audit committee. 3) Anti-fraud policies. 4) Fraud training for managers/executives. 5) Formal fraud risk assessment. 5) Surprise audits.
1) External audit of internal controls over financial reporting:
The external audit of internal controls over financial reporting is a proactive anti-fraud measure that plays a key role in an organization's fight against fraud. External auditors are independent professionals who assess and evaluate an organization's internal control systems to ensure their effectiveness in preventing and detecting fraudulent activities. By conducting a thorough examination of the control environment, risk assessment processes, control activities, information systems, and monitoring activities, external auditors provide an objective assessment of the organization's anti-fraud framework.
Let's consider a manufacturing company that has implemented various internal controls to mitigate fraud risks, such as segregation of duties, regular management reviews, and documented policies and procedures. The external auditor conducts an audit of the company's financial statements and also evaluates the effectiveness of these internal controls. Through this process, the auditor identifies a potential weakness in the segregation of duties, where one employee has excessive control over financial transactions. By highlighting this issue, the external auditor alerts the management to the potential risk of fraud and recommends appropriate remedial actions, such as hiring additional staff or implementing a rotation policy.
External audits of internal controls provide an independent assessment of an organization's anti-fraud framework, helping to identify weaknesses and suggesting improvements to enhance fraud prevention and detection.
2) Independent audit committee:
An independent audit committee is a proactive anti-fraud control mechanism that adds an extra layer of oversight and governance to an organization's financial reporting processes. The committee comprises independent members of the board of directors who are responsible for overseeing the integrity of financial reporting, internal control systems, and the audit process. By providing independent judgment and oversight, the audit committee helps in the detection and prevention of fraud.
Consider a publicly traded company that has an independent audit committee consisting of three external directors. The committee meets regularly to review financial statements, internal control reports, and reports from the external auditors. During one of the committee meetings, the auditors raise concerns about potential fraudulent activities related to revenue recognition. The audit committee investigates the matter by engaging forensic accountants and requesting additional information from management. As a result of their diligent oversight, the audit committee discovers a scheme involving fictitious sales and takes immediate action to address the fraud, including reporting it to regulatory authorities.
An independent audit committee provides an additional level of scrutiny and oversight, ensuring that fraud risks are effectively addressed and mitigated.
3) Anti-fraud policies:
Having well-defined anti-fraud policies is crucial for establishing a proactive anti-fraud framework. These policies outline the organization's stance on fraud prevention and detection, define acceptable behavior, and provide guidelines for reporting suspected fraudulent activities. By clearly communicating expectations and consequences, anti-fraud policies serve as a deterrent and guide for employees, management, and stakeholders.
An organization implements a comprehensive anti-fraud policy that includes guidelines on ethical conduct, conflicts of interest, and reporting procedures. As part of the policy, employees are required to attend annual anti-fraud training sessions to ensure they understand their roles and responsibilities in preventing and detecting fraud. In addition, the policy clearly states that any suspicions or evidence of fraud should be promptly reported to a designated fraud hotline or a specific individual within the organization.
Anti-fraud policies establish a culture of integrity and transparency, providing guidance to employees and stakeholders while setting clear expectations for ethical behavior and reporting suspected fraud.
4) Fraud training for managers/executives:
Providing fraud training to managers and executives is a proactive anti-fraud measure that equips them with the knowledge and skills to detect and respond to potential fraudulent activities within their areas of responsibility. By raising awareness about common fraud schemes, red flags, and internal controls, organizations empower their leaders to be vigilant and take appropriate action.
A company conducts regular fraud training sessions for its managers and executives
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Newing plc (Newing) is a construction company constructing homes and apartments. In its financial statements for the fiscal year ended on 31 December 2021, Newing recognised revenue for the following construction contract: At the beginning of 2021, Newing entered into a contract with a local government authority. The contract specified that Newing would construct an apartment building for people with disabilities on land owned by the government authority. To accommodate the preferences of the government authority, Newing arranged several meetings before the contract was signed. At these meetings, the parties discussed, for example, size of the apartments and rooms, the possibility of creating communal areas and the installation of exclusively designed equipment that some of the future tenants require. The government authority agreed to a price of £1,850,000 and will pay the entire amount upon completion. At the end of 2021, Newing has incurred costs in relation to the contract of £978,000 of which £718,000 relate to work performed in fiscal year 2021. Newing expects total costs to amount to £1,350,000 and will complete the construction of the apartment building by the end of fiscal year 2022.
Newing wants to measure progress based on costs incurred for work performed to date. Identify and explain the methods to measure progress that are allowed under IFRS 15 and provide an example of each that applies to the above construction of the apartment building.
The two methods allowed under IFRS 15 to measure progress for the apartment building construction are the Percentage of Completion (POC) method and the Output method. POC measures progress based on costs incurred, while the Output method focuses on achieving specific milestones.
Under IFRS 15, the following methods can be used to measure progress for long-term construction contracts like the apartment building:
1. Percentage of Completion (POC) Method: This method measures progress based on the proportion of costs incurred for work performed to date relative to the total estimated costs. The POC is typically determined by comparing actual costs incurred with the total estimated costs. For example, if Newing has incurred £718,000 out of the total estimated costs of £1,350,000, the POC would be (718,000 / 1,350,000) * 100 = 53.19%.
2. Output Method: This method measures progress based on the achievement of specific outcomes or milestones. It focuses on the physical progress of the construction project rather than the costs incurred. For example, Newing could measure progress based on the completion of specific stages of the apartment building, such as the foundation, framing, or installation of equipment.
It's important to note that Newing's chosen method for measuring progress should be consistent with the pattern of transfer of control over the construction project to the customer. The method should reflect the actual progress towards completion and be reliable in representing the value of work performed at any given point in time.
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Secondary credit provided by the Fed is designed for banks that
a.qualify for a lower interest than what is available under primary credit
b.are foreign
c.are in trouble and cannot obtain a loan from anyone else
d.want to borrow without putting up collateral
Secondary credit provided by the Fed is designed for banks that are in trouble and cannot obtain a loan from anyone else.
The right response is choice C: "are in a tough situation and can't get a credit from any other person."
Optional credit given by the Central bank is a loaning program intended for banks that are encountering monetary challenges and can't get assets from different sources. It fills in as a reinforcement or final hotel loaning office to help banks that are confronting impermanent liquidity issues.
Not at all like essential credit, which is reached out to monetarily sound banks at a foreordained loan fee, optional credit is presented at a higher financing cost to mirror the higher gamble related with pained banks. It isn't planned for banks that fit the bill for a lower financing cost, are unfamiliar, or need to get without security.
The Central bank plans to give brief help to banks in trouble, assisting them with tending to transient liquidity issues and keep up with their steadiness.
By offering optional credit, the Fed guarantees that banks approach reserves when they can't get advances from other monetary establishments because of their monetary condition or financial soundness.
It's critical to take note of that optional credit is dependent upon severe agreements, and banks should meet explicit qualification necessities to get to this sort of loaning office.
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For a two-stock portfolio, which correlation coefficient between the two stocks potentially offers the least reduction in risk (use only the figures provided below):
A. +1.5
B. +1
C. −1
D. −1.5
The correlation coefficient ranges between -1 and +1, representing the strength and direction of the linear relationship between two variables. A correlation coefficient of +1 indicates a perfect positive correlation, -1 indicates a perfect negative correlation, and 0 indicates no correlation.
To find the correlation coefficient that potentially offers the least reduction in risk for a two-stock portfolio, we need to consider a positive correlation. A positive correlation implies that the two stocks tend to move in the same direction.
Among the given options, the correlation coefficient of +1 would offer the least reduction in risk. A correlation coefficient of +1 suggests a perfect positive correlation, meaning that the two stocks move in perfect synchronization. When stocks are perfectly positively correlated, their movements are identical, resulting in the least amount of risk reduction in a portfolio.
Therefore, option B (+1) potentially offers the least reduction in risk for a two-stock portfolio.
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QQQ has just completed an Initial Public Offering (IPO). The firm sold 5 million shares at an offer price of $10 per share. In addition, the existing shareholders sold 500,000 shares and kept 1.5 million shares. The underwriting spread was $0.60 per share. The price of the stock closed at $12 per share at the end of the first day of trading. The firm incurred $150,000 in legal, administrative, and other costs.
1 What were the direct costs and underpricing cost of this public issue?
2 What were the flotation costs as a fraction of the funds raised?
3 What motivates underwriters to typically try and underprice an IPO? Briefly explain.
4 Is this issue a primary offering, a secondary offering, or both? Briefly explain the concepts of primary offering and secondary offering.
After the IPO, QQQ considers the long-term growth strategy and wants to explore the private placement to issue bonds in the future.
5 What is private placement? Briefly explain this concept and discuss its two advantages in financing.
1) The direct costs and underpricing cost of this public issue is $1,000,000.
2) flotation costs as a fraction of the funds raised is 6.9%.
1. The direct costs of this public issue include the legal, administrative, and other costs incurred by the firm, which amount to $150,000. The underpricing cost refers to the difference between the offer price and the closing price at the end of the first day of trading. In this case, the underpricing cost is calculated as ($12 - $10) * (5,000,000 + 500,000) = $1,000,000.
2. The flotation costs, which represent the total costs associated with issuing and selling securities, can be calculated as the sum of the direct costs and the underwriting spread. In this case, the flotation costs are $150,000 (direct costs) + ($0.60 * 5,500,000) (underwriting spread) = $150,000 + $3,300,000 = $3,450,000. The flotation costs as a fraction of the funds raised can be calculated as $3,450,000 / (5,000,000 * $10) = 0.069 or 6.9%.
3. Underwriters are typically motivated to underprice an IPO for several reasons. Firstly, underpricing helps to generate demand and attract investors to the IPO. A lower offer price can create a perception of immediate value and potential for capital gains, increasing the likelihood of successful sales. Secondly, underpricing can help build positive aftermarket performance, which enhances the reputation of the underwriters and encourages future business. Lastly, underwriters may want to mitigate the risk of being stuck with unsold shares, which could negatively impact their own profits and reputation.
4. This issue is a primary offering. A primary offering refers to the issuance of new securities by a company to raise funds directly from the market. In this case, QQQ sold 5 million shares at the offer price of $10 per share, raising funds for the company's own use. The sale of shares by existing shareholders (500,000 shares) is known as a secondary offering. Secondary offerings involve the sale of already existing shares by shareholders, and the proceeds go to the selling shareholders rather than the issuing company.
5. Private placement is a method of raising capital through the sale of securities directly to institutional investors or accredited individuals, without conducting a public offering. In a private placement, the securities are not offered to the general public but are instead sold privately to a limited number of investors. Private placements have two advantages in financing. Firstly, they offer flexibility in terms of structure, pricing, and negotiation compared to public offerings. Secondly, they involve lower compliance costs and regulatory requirements since they are not subject to the same level of scrutiny and disclosure as public offerings.
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An owner can lease her building for $120,000 per year for three years. The explicit cost of maintaining the building is $40,000. and the Implicit cost is $55.000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 4 percent, determine the present value of the stream of: Instructions: Do not round intermediate calculations. Round your final calculation to two decimal places.
a. Accounting profits. $
b. Economic profits. $
The present value of the stream of: a. Accounting profits is $222,222.64 b. Economic profits is $69,469.22
Present Value = Cash Flow / (1 + Interest Rate)^n
- Cash Flow is the annual profit
- Interest Rate is the discount rate
- n is the number of years
Let's calculate the present value for both accounting profits and economic profits:
a. Accounting profits:
Year 1: $120,000 - $40,000 = $80,000 (revenue - explicit cost)
Year 2: $120,000 - $40,000 = $80,000
Year 3: $120,000 - $40,000 = $80,000
Present Value of Accounting Profits =
($80,000 / (1 + 0.04)^1) + ($80,000 / (1 + 0.04)^2) + ($80,000 / (1 + 0.04)^3)
b. Economic profits:
Year 1: $120,000 - $40,000 - $55,000 = $25,000 (revenue - explicit cost - implicit cost)
Year 2: $120,000 - $40,000 - $55,000 = $25,000
Year 3: $120,000 - $40,000 - $55,000 = $25,000
Present Value of Economic Profits =
($25,000 / (1 + 0.04)^1) + ($25,000 / (1 + 0.04)^2) + ($25,000 / (1 + 0.04)^3)
Let's calculate the present values:
a. Accounting profits:
Present Value of Accounting Profits =
($80,000 / 1.04^1) + ($80,000 / 1.04^2) + ($80,000 / 1.04^3)
= $76,923.08 + $74,074.07 + $71,225.49
= $222,222.64
b. Economic profits:
Present Value of Economic Profits =
($25,000 / 1.04^1) + ($25,000 / 1.04^2) + ($25,000 / 1.04^3)
= $24,038.46 + $23,148.15 + $22,282.61
= $69,469.22
Therefore, the present value of the stream of:
a. Accounting profits is $222,222.64
b. Economic profits is $69,469.22
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Which of the following statements is not always true? a. When output price rises, the long run increase in labour input use will be larger than the short run increase in labour input use. b. If a monopolist has zero marginal and fixed costs and faces a market demand curve with constant price elasticity -1, then any quantity is profit maximising. c. If labour and capital are perfect complements in production, short run supply curves involve a vertical segment. d. In two-input production models, constant returns to scale imply horizontal marginal cost curves
If labour and capital are perfect complements in production, short-run supply curves involve a vertical segment, this statement is not always true. So, C is the correct option.
The statement that is not always true is:c. If labour and capital are perfect complements in production, short run supply curves involve a vertical segment.
In the case where labor and capital are perfect complements in production, the short-run supply curve does not involve a vertical segment.
Perfect complements refer to inputs that are used together in fixed proportions, meaning that one unit of labor requires one unit of capital, and vice versa. In this scenario, the short-run supply curve will not be vertical.
The vertical segment in a short-run supply curve typically occurs when there is a fixed input, such as a fixed amount of capital or a binding production constraint. In such cases, the quantity supplied cannot change even if the price changes, resulting in a vertical segment of the supply curve.
Therefore, the statement that is not always true is c. If labour and capital are perfect complements in production, short-run supply curves involve a vertical segment.
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By saving and making investments you’ve been able to set aside
$450,000 in an annuity for retirement. If your account earns 3.25% interest,
compounded monthly, how much will you be able to withdraw each month if
you want to be able to make withdrawals for 25 years?
Therefore, the monthly withdrawals required for 25 years is $2,305.63.
Given details
Annuity for retirement = $450,000
Interest rate = 3.25%
Compounding frequency = Monthly Withdrawals required for 25 years
Formula used for calculations
Using the formula to find out the monthly withdrawals required for 25 years:
A = (P * r) / (1 - (1 + r)^-n)
Where, A = Monthly withdrawals required
P = Principal amount (annuity for retirement) = $450,000
r = Monthly interest rate = Annual interest rate / 12
r = 3.25% / 12
n = Total number of payments
n = 25 years * 12
n = 300
calculations
Substituting the values in the formula
A = (450000 * 0.00270833) / (1 - (1 + 0.00270833)^-300)
A = $2,305.63
Note: Monthly interest rate is obtained by dividing the annual interest rate by 12.
This is because the interest is compounded monthly.
Also, the number of payments is obtained by multiplying the number of years by 12 because there are 12 months in a year.
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Which of the following is not typically considered to be part of the business cycle?
Group of answer choices
One year of increasing GDP after two years of falling GDP.
The GDP growth decreases from 3% per year for the previous decade to 1% per year for the next decade.
GDP continues to rise after surpassing the previous peak in GDP set 1.5 years earlier.
One year of decline in GDP following 5 years of rising GDP.
The GDP growth decreases from 3% per year for the previous decade to 1% per year for the next decade.
The business cycle refers to the fluctuations in economic activity over time. It typically consists of four phases: expansion, peak, contraction, and trough. Each phase is characterized by different trends in GDP, employment, and other economic indicators.
The s provided describe various scenarios related to GDP growth and its changes over time. However, one of the s does not align with the typical understanding of the business cycle.
The statement "The GDP growth decreases from 3% per year for the previous decade to 1% per year for the next decade" does not directly indicate any specific phase of the business cycle. It describes a long-term change in GDP growth rate without explicitly mentioning any peaks, troughs, or cycles.
The other s describe patterns that are more commonly associated with the business cycle. These include periods of increasing or declining GDP, surpassing previous peaks, and sequences of rising or falling GDP over multiple years.
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A firm has multiple net cash inflow return options from an investment of $24 million. Find the best option that would be aligned with the principal goal of Financial Management. Show your calculations to support your selection. The required rate of return for the firm is 14.36 percent.
Option (i): Cash inflows at the end of Year-1 $5 million, Year-4 $12 million and Year-5 $8 million;
Option (ii): Cash inflows of $5.78 million at the beginning of each year for the next 4 years;
Option (iii): Cash inflows of $1.62 million at the end of each quarter for the next 4 years;
Option (iv): Cash inflows of $5.86 million at the end of each year for the next 4 years;
Option (v): Cash inflows of $0.4 million at the end of each month that will continue forever.
The best aligned with the principal goal of Financial Management is Option
Option (i).
To determine the best , we need to calculate the present value (PV) of each and select the one with the highest PV.
Option (i) cash inflows:
Year 1: $5 million
Year 4: $12 million
Year 5: $8 million
Using the required rate of return of 14.36%, we can calculate the present value for each year and sum them up:
PV1 = $5 million / (1 + 0.1436)¹ = $4.370 million
PV4 = $12 million / (1 + 0.1436)⁴ = $7.695 million
PV5 = $8 million / (1 + 0.1436)⁵ = $4.892 million
Total PV for Option (i) = PV1 + PV4 + PV5 = $4.370 million + $7.695 million + $4.892 million = $16.957 million
Now let's calculate the PV for the other s:
Option (ii): PV = $5.78 million / (1 + 0.1436) + $5.78 million / (1 + 0.1436)² + $5.78 million / (1 + 0.1436)³ + $5.78 million / (1 + 0.1436)⁴ = $16.141 million
Option (iii): Since the cash inflows occur quarterly, we need to adjust the required rate of return. The quarterly rate is 14.36% / 4 = 3.59%. PV = $1.62 million / (1 + 0.0359) + $1.62 million / (1 + 0.0359)² + $1.62 million / (1 + 0.0359)³ + $1.62 million / (1 + 0.0359)⁴ = $6.594 million
Option (iv): PV = $5.86 million / (1 + 0.1436) + $5.86 million / (1 + 0.1436)² + $5.86 million / (1 + 0.1436)³ + $5.86 million / (1 + 0.1436)⁴ = $16.062 million
Option (v): Since the cash inflows are perpetual, we can use the perpetuity formula. PV = $0.4 million / 0.1436 = $2.785 million
Comparing the PVs, we can see that Option (i) has the highest value of $16.957 million, making it the best aligned with the principal goal of Financial Management.
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In some circumstances, a firm will continue to operate even if it incurs negative profits (or lossos). Which of the following conditions ch. a. P=MC. where P>AVC, but PP=MCπAVC c. P=MC, where P>AC, but PdP=MC=AC
A firm will continue to operate even if it incurs negative profits (or losses). The condition that allows a firm to continue operating despite negative profits is c. P = MC, where P > AC, but P ≥ AVC.
The condition that P = MC (price equals marginal cost) ensures that the firm is operating at the point where the marginal cost of producing an additional unit is equal to the price at which it can be sold. This condition ensures that the firm is maximizing its profit or minimizing its losses.
When P > AC (price is greater than average cost), it means that the price at which the firm can sell its product is higher than the average cost of producing each unit. Even if the firm incurs negative profits, it can cover its variable costs and some portion of its fixed costs, allowing it to continue operating in the short run.
However, if P ≥ AVC (price is greater than or equal to average variable cost), it means that the firm can cover all of its variable costs, including labor, materials, and other variable expenses. In this case, the firm can continue operating in the short run, even if it incurs losses, as long as it can cover its variable costs.
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A Nutrition Coach can provide clients non-medical nutrition information and behavior guidance.
Yes, that's correct. A nutrition coach is a professional who can provide non-medical nutrition information and behavior guidance to clients. They typically work with individuals or groups to help them achieve their health and wellness goals through proper nutrition and lifestyle changes.
Nutrition coaches are trained in various aspects of nutrition, including macronutrients (carbohydrates, proteins, and fats), micronutrients (vitamins and minerals), dietary guidelines, meal planning, and healthy eating habits. They can offer advice on portion control, food choices, meal timing, and strategies for developing sustainable habits.
In addition to nutrition education, a nutrition coach also focuses on behavior guidance. They help clients identify and address the underlying factors that contribute to their eating habits and lifestyle choices. This may involve discussing emotional eating, stress management, goal setting, and creating personalized strategies to overcome challenges.
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ABC Corp.'s shares currently offers 16.5% in returns. The current risk-free rate is 3.1%, and ABC Corp.'s shares has the Beta of 1.61. What is ABC Corp.'s Reward to Risk Ratio? 5.53% 7.12% 8.61% 8.32%
ABC Corp.'s Reward to Risk Ratio is approximately 8.32%.
To calculate ABC Corp.'s Reward to Risk Ratio, we need to subtract the risk-free rate from the stock's return and divide it by the stock's beta.
Reward to Risk Ratio = (Stock's Return - Risk-free Rate) / Beta
Given:
Stock's Return = 16.5%
Risk-free Rate = 3.1%
Beta = 1.61
Plugging in the values,
Reward to Risk Ratio = (16.5% - 3.1%) / 1.61
= 13.4% / 1.61
≈ 8.32%
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What should Sophie do it company policy appears to conflict with
the firm's corporate culture? in Business Ethics
Sophie should address the conflict between company policy and corporate culture by first understanding the underlying reasons for the conflict.
She can then communicate her concerns to relevant stakeholders, such as supervisors or HR, to seek clarification or propose changes to the policy. If necessary, she can initiate discussions with colleagues to gauge their perspectives and gather support for potential modifications. By actively engaging with the issue, Sophie can foster a dialogue that aligns the policy with the firm's corporate culture, ensuring ethical conduct and maintaining a positive work environment. Sophie's actions demonstrate her commitment to ethical decision-making and the well-being of the organization. Through open communication and collaboration, she can contribute to a resolution that balances compliance with the policy and upholds the values and norms of the corporate culture. This approach promotes integrity and helps maintain a cohesive and ethical business environment.
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Parnell Company acquired construction equipment on January 1, 2020, at a cost of $70,100. The equipment was expected to have a useful life of six years and a residual value of $14,000 and is being depreciated on a straight-line basis. On January 1, 2021, the equipment was appraised and determined to have a fair value of $64,600, a salvage value of $14,000, and a remaining useful life of five years. In measuring property, plant, and equipment subsequent to acquisition under IFRS, Parnell would opt to use the revaluation model in IAS 16.
Assume that Parnell Company is a U.S.-based company that is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.
Required:
Prepare journal entries for this equipment for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS.
Prepare the entry(ies) that Parnell would make on the December 31, 2021, conversion worksheet to convert U.S. GAAP balances to IFRS.
Journal entries for the equipment under U.S. GAAP and IFRS:
Under U.S. GAAP:
December 31, 2020:
Depreciation Expense 9,350
Accumulated Depreciation 9,350
December 31, 2021:
Depreciation Expense 9,350
Accumulated Depreciation 9,350
Under IFRS:
December 31, 2020:
Depreciation Expense 11,420
Revaluation Surplus 2,070
Accumulated Depreciation 9,350
December 31, 2021:
Depreciation Expense 11,420
Revaluation Surplus 2,070
Accumulated Depreciation 9,350
The journal entries reflect the depreciation expense for the equipment for the respective years under both U.S. GAAP and IFRS. Under U.S. GAAP, the equipment is depreciated on a straight-line basis using the original cost, useful life, and residual value. Therefore, the depreciation expense remains constant at $9,350 for both years.
Under IFRS, Parnell Company chooses to use the revaluation model in IAS 16 for subsequent measurement of property, plant, and equipment. This means that the equipment is revalued to its fair value at the end of each reporting period, and the depreciation expense is based on the adjusted carrying amount. In this case, the fair value of the equipment is $64,600, and the revaluation surplus is the difference between the fair value and the carrying amount. The depreciation expense under IFRS is higher at $11,420 for both years due to the increased carrying amount after revaluation.
Step 3: On the December 31, 2021, conversion worksheet to convert U.S. GAAP balances to IFRS, the following entry would be made:
Revaluation Surplus 2,070
Accumulated Depreciation 2,070
This entry recognizes the revaluation surplus resulting from the difference in carrying amount under U.S. GAAP and IFRS. The accumulated depreciation is adjusted accordingly to reflect the higher carrying amount after revaluation under IFRS.
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For a two-firm industry, use a graph to show
that the total cost of production must necessarily increase when
marginal costs are not equal. PLEASE USE A GRAPH. PLEASE
EXPLAIN LABELS
In a two-firm industry, when marginal costs are not equal, the total cost of production must necessarily increase. This can be illustrated using a graph that shows the cost curves for the two firms.
In the graph, the horizontal axis represents the quantity of output produced, while the vertical axis represents the cost of production. Each firm's cost curve consists of two components: the average total cost (ATC) curve and the marginal cost (MC) curve. The ATC curve is U-shaped, reflecting economies of scale at low levels of output and diseconomies of scale at high levels of output. The MC curve, on the other hand, is upward-sloping and intersects the ATC curve at its lowest point.
When the two firms have equal marginal costs, their MC curves will overlap, indicating that they face the same cost of producing additional units of output. In this case, the total cost of production for the industry will be minimized because each firm is operating at its lowest average total cost. However, when the marginal costs are not equal, the MC curves will be different for each firm.
If one firm has a lower marginal cost than the other, its MC curve will be below the MC curve of the other firm. This means that the first firm can produce additional units of output at a lower cost compared to the second firm. As a result, the total cost of production for the industry will increase because the second firm will have to produce at a higher cost in order to match the output of the first firm.
In summary, when marginal costs are not equal in a two-firm industry, the total cost of production will increase. This can be observed in a graph where the MC curves for the two firms are not overlapping. The firm with a lower marginal cost can produce additional units of output at a lower cost, leading to an overall increase in the industry's total cost of production.
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The Coney Bath project did not contribute any revenue to iStar during fiscal year \( 2018 . \) True False
The statement "The Coney Bath project did not contribute any revenue to iStar during fiscal year (2018)" is false.
In 2018, iStar had multiple development projects underway, including the Coney Bath project, which contributed revenue to the company.
Let's dig in a bit deeper into the details:
iStar Inc. is a real estate investment trust (REIT) that invests in value-add commercial and residential properties, and targets three primary real estate verticals: ground lease, senior housing, and creative office. iStar has a varied portfolio of assets that they develop, own and operate.
In fiscal year 2018, the Coney Bath project did contribute revenue to iStar. The project was one of the multiple development projects iStar was undertaking that year.
Hence, the given statement is false and can be contradicted by the fact that iStar earned revenue from the Coney Bath project during the fiscal year 2018.
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The left side of the balance sheet lists a company’s assets.
True or False
The statement "The left side of the balance sheet lists a company's assets" is true. On the left side of the balance sheet, assets are listed.
They are classified into two categories: current assets and noncurrent assets. The balance sheet is a financial statement that represents the financial position of a company at a specific moment. It shows a company's assets, liabilities, and equity. It is a snapshot of the company's financial performance and health at a certain point in time. The balance sheet is divided into two parts: the left side and the right side. On the left-hand side, a company's assets are listed, while on the right-hand side, liabilities and equity are listed.
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Draw the demand curve for a good whose price elasticity of
demand is equal to zero. Be sure to label both axes. Explain what
the graph represents.
The demand curve for a good whose price elasticity of demand is equal to zero is a perfectly inelastic demand curve.
The perfectly inelastic demand curve is vertical, i.e. it is straight and perpendicular to the horizontal axis. Such a demand curve means that no matter how much the price changes, there is no change in the quantity demanded. Therefore, the demand is totally unresponsive to price changes.
The x-axis of the graph represents quantity demanded, whereas the y-axis represents the price of the good. The graph shows that as the price of the good increases, the quantity demanded remains the same, and vice versa. In other words, the graph represents a situation in which the price of the good has no effect on the quantity demanded.
Therefore, we can conclude that the demand for goods whose price elasticity of demand is equal to zero is totally insensitive to changes in price. If the price of such goods changes, there will be no change in the quantity demanded, so the total revenue of sellers of such goods will not change.
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The information strategy tool most used by business is: Select one: O a. Direct communication. O b. Lobbying. O c. Legal challenges. d. Political contributions.
The information strategy tool most commonly used by businesses is a. direct communication.
Direct communication is a widely utilized information strategy tool in the business world. It involves the exchange of information, ideas, and messages between individuals or groups directly, without intermediaries or third parties. This tool enables businesses to convey their messages, establish relationships, and gather feedback in a timely and targeted manner. Whether through face-to-face interactions, phone calls, emails, or video conferences, direct communication allows businesses to effectively disseminate information and build strong connections with their stakeholders.
Direct communication plays a crucial role in the success of businesses across various industries. By directly interacting with stakeholders such as customers, employees, suppliers, and investors, businesses can effectively communicate their objectives, strategies, and updates. Face-to-face communication is often considered the most powerful form, as it allows for non-verbal cues, active listening, and immediate feedback. However, technological advancements have expanded the scope of direct communication, with tools like email, video conferencing, and instant messaging enabling remote and efficient interactions.
Direct communication facilitates effective decision-making, problem-solving, and conflict resolution within organizations. It helps leaders convey their visions and goals, ensuring alignment among team members. It also allows for immediate clarification of doubts, reducing the chances of misinterpretation or misunderstanding. In customer-oriented businesses, direct communication helps gather feedback, address concerns, and build trust. By actively engaging with customers, businesses can gain insights into customer preferences, identify areas for improvement, and enhance their products or services accordingly.
Moreover, direct communication enables businesses to establish and maintain strong relationships with stakeholders. Personalized interactions help nurture trust and loyalty, fostering long-term partnerships. By actively listening to stakeholders' perspectives and addressing their needs, businesses can enhance their reputation and maintain a competitive edge. Effective direct communication also plays a vital role in crisis management, as it allows businesses to promptly address concerns and maintain transparency.
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final presentation
Final Sales Presentation Project Phase 1 PRODUCT CONCEPT Product concept What product, benefits and value are you selling? Select an existing product or ideate a new product to fulfill unmet needs. Id
Product Concept: The product that is selected for this final sales presentation project is "Electric cars".
Electric cars have numerous benefits and values associated with them. They are eco-friendly, efficient and have less maintenance costs. The value proposition that electric cars provide is a healthy and safe environment. The product features are that the car does not require any fuel, they have regenerative braking and can travel a considerable distance on a single charge.
The competitors for electric cars are fuel-powered cars and hybrid cars. The company that manufactures electric cars is Tesla Inc., which has a competitive advantage over other brands by producing luxurious electric cars with advanced technology.
The market mix for the product "Electric cars" is as follows:
Product: The product has features such as regenerative braking, less maintenance costs, and eco-friendliness. The benefits of the product include a safer and healthy environment. Price: Electric cars are expensive compared to fuel-powered cars, but over time, they have lower maintenance costs.Place: The product will be available through various car dealerships and online platforms. Promotion: The product will be promoted through social media platforms, advertisements, and influencers.The target market for electric cars is environmentally conscious individuals who want to contribute to the welfare of the environment.
In the B2B segment, the target organization can be government institutions that are working towards reducing pollution levels in the country. For B2C, the consumer persona can be an individual who is earning more than $60,000 annually and wants to contribute to the environment by using eco-friendly products.
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Assume that the amount of one of a company’s fixed expenses in its flexible budget is $46,000. The actual amount of the expense is $50,000 and the amount in the company’s planning budget is $46,000. The spending variance for this expense is:
Multiple Choice
$0.
$4,000 U.
$4,000 F.
$8,000 U.
The spending variance for the company's fixed expense is $4,000 U (Unfavorable).
The spending variance measures the difference between the actual amount spent and the amount budgeted for a specific expense. In this case, the actual amount of the expense is $50,000, while the amount in the planning budget is $46,000. The formula to calculate the spending variance is:
Spending Variance = Actual Expense - Budgeted Expense
Substituting the values, we have:
Spending Variance = $50,000 - $46,000 = $4,000 U
Since the actual expense exceeds the budgeted expense, the spending variance is unfavorable (U). Therefore, the correct answer is $4,000 U.
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Hypothesis: A newly recruited Bank advisor wants to understand the account registration feature from the account management software & has received the credentials: 1. For New Account – Click on Client onboarding button and apply the financial data logistic by Type – Company Account, Individual Account & Group Accounts available with both Credit and debit card generation. a) Company Account: Click on New Company button & fill the mandatory information and link the financial account. b) Individual Account: Click on New Individual button & fill the mandatory information and link the KYC. c) Group Account: Click on New Group button & fill the mandatory information and link nomination form. 2. For customer forms: First check the service contract validity by clicking validate button. Generate the report in either of the format .pdf, .csv & .xls format. 3. You can also enable the communication preference for the new customers (any type) - daily, weekly & monthly basis bank product communications. 4. Click on Visualize icon to generate the report with line, bar, pie & stock diagrams and with summary sections for To-Do actions list, tasks, events and sales data associated with the account. 5. Upon finishing account forms (any type), it should be sent to Branch manager for approval. 6. A Welcome to bank email should be automatically sent to customer when Manager clicks approve button. Regret email in the case of rejection. Use flow chart technique to communicate the business process.
A new bank advisor must click Client onboarding, fill account details, generate reports, set communication preferences, visualize data, submit forms for approval, and send welcome/regret emails.
A freshly hired bank adviser is supposed to be aware of the account registration option in the account management software. The following actions must be taken when the adviser has received credentials: 1. To apply the financial data logic for a new account, the advisor should click the Client onboarding button, select the type of account (Company, Individual, or Group), and select between Credit and Debit card creation. Specific data must be entered for each type of account and linked to the corresponding financial account, KYC, or nomination form. 2. The adviser should generate a report in PDF, CSV, or XLS format after validating the service contract validity on customer forms by clicking the validate button. 3. The New clients can choose their communication settings so they get bank product communications once per day, once per week, or once per month. 4. By selecting the Visualize icon, the adviser can create a report that includes different diagrams (line, bar, pie, and stock) and summary sections that show the account's to-do items, tasks, events, and sales information. 5. The account paperwork should be submitted to the branch manager for approval after completion. 6. The consumer should receive a Welcome to bank email automatically upon approval, and a regret email in the event of rejection.
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The potential increase in loss frequency or severity is considered A. an uninsurable loss exposure. B. an ordinary loss exposure. C. a hazard. D. a peril.
The potential increase in loss frequency or severity is considered as "hazard."
What is a hazard?A hazard is defined as any real or potential condition or event that can cause an injury, property damage, or any other kind of loss.
What is a peril?Peril is a term used to refer to the actual cause of a loss (a hazard's immediate cause). A peril can be defined as an occurrence that could result in a loss of life or property.
Peril can be categorized into the following groups:
1;Physical perils (earthquakes, floods, hurricanes, and tornados)
2.Moral perils (deception, lies, and cheating)
3.Morale perils (lack of concern or carelessness)
What is a loss exposure?A loss exposure is a term used to describe the potential for a loss to occur.
*Types of loss exposures:
Property,Liability,Personal,Business
What is a loss frequency?Loss frequency refers to the number of losses incurred during a particular time period. Loss severity refers to the amount of damage caused by a specific loss event.
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1. The Sime Darby Company faces its first challenge in the form of a desire to implement a new innovation on the plantation that they operate. They want to harvest fresh fruit bunches (FFB) from the oil palm tree, and their current methods involve a skilled harvester cutting FFB from the tree using a long harvesting pole attached to a sickle. In order to identify and cut ripe FFB, they require workers who are physically strong, skilled, and experienced. Their greatest challenges consist of decreasing their reliance on manual labour, maintaining compliance with safety guidelines, and increasing harvesting output.
Question, what is the Recommendations to Overcome this Challenges in the International Marketing
To overcome the challenges faced by Sime Darby in implementing a new innovation for harvesting fresh fruit bunches (FFB) from oil palm trees, here are some recommendations in the context of international marketing:
1. Invest in Research and Development: Allocate resources towards research and development to explore innovative technologies and techniques for harvesting FFB. This could involve collaborating with agricultural experts, engineers, and technology providers to develop efficient and automated harvesting solutions. By staying at the forefront of technological advancements, Sime Darby can reduce reliance on manual labor while increasing productivity.
2. Collaborate with Industry Partners: Form strategic partnerships with technology companies, agricultural research institutions, and equipment manufacturers to leverage their expertise and access cutting-edge tools and machinery. This collaboration can help Sime Darby identify and adopt the most suitable technologies for FFB harvesting, ensuring compliance with safety guidelines and increasing efficiency.
3. Employee Training and Transition: Provide comprehensive training programs to upskill and transition existing workers from manual harvesting methods to operating and managing automated equipment. By investing in their workforce and enabling a smooth transition, Sime Darby can retain experienced employees while equipping them with the necessary skills for operating and maintaining the new technologies.
4. Compliance with Safety Standards: Ensure that the new harvesting methods and equipment comply with international safety guidelines and standards. Conduct regular safety audits and implement necessary measures to mitigate risks associated with automated machinery and equipment. Demonstrating a commitment to worker safety will enhance Sime Darby's reputation in the international market and foster trust among stakeholders.
5. Marketing and Communication: Effectively communicate the innovative changes in harvesting methods to key stakeholders, including customers, suppliers, and investors. Highlight the benefits of the new technology, such as increased efficiency, improved product quality, and reduced environmental impact. Utilize various marketing channels, including digital platforms, trade shows, and industry publications, to showcase Sime Darby's commitment to sustainability, technological advancements, and meeting market demands.
6. Sustainability and Certification: Emphasize sustainability practices throughout the supply chain, including responsible land management, environmental protection, and fair labor practices. Seek internationally recognized certifications, such as Roundtable on Sustainable Palm Oil (RSPO) certification, to showcase Sime Darby's commitment to sustainability and responsible business practices. This can enhance the company's reputation and attract environmentally conscious customers and partners.
By implementing these recommendations, Sime Darby can successfully overcome the challenges of reducing reliance on manual labor, maintaining safety compliance, and increasing harvesting output. This will position them as an innovative and sustainable player in the international market, attracting customers and partners who value efficiency, quality, and responsible business practices.
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A family currently live in an apartment whose moethly rent is $950. They are thinking of buying a house which would cost $220,000. They plan to live in this hocke for 5 years and sell if at the end of the 5 th year. They woald put a downpayment of $20,000 and finance the balance through a mortgage at 3.50 interest rate. The mortgage is to be repaid in 5 annual installments (which inclade both principal and interest) at the exd of each year for the next 5 years The house will have the following additional expenses: annual maintenaoce. 51500 ; Froperty taxes 5500 , Invirance 51200 , Assume they are in tax bracket of 20% and the price of home, reat and expenditure increases by 2.5% peryear, Their opportanity cost or required rate of tetum is 5\% per year. Note that propery taxes ate tax deductible and there no tax puyable on capital gains. Use annual compounding for anortination schedule of mongage Calculate the Poit tax Mortgage Cost (principal repayment plus after tax iaterest cost) for year 4.
a $42,925
b $43,207
c $43,679
d $44,978
None of the given answer options (a, b, c, d) match the correct value. The correct answer is $45,600, representing the total cost of the mortgage in year 4, including principal repayment and after-tax interest cost.
The Point-to-Point Mortgage Cost for year 4 is an important calculation to determine the total cost of the mortgage, including principal repayment and after-tax interest. In this scenario, the family is considering buying a house with a mortgage amount of $200,000 and an annual interest rate of 3.50%. They plan to repay the mortgage in 5 annual installments.
To calculate the principal repayment for year 4, we divide the mortgage amount by the number of installments, which is $200,000 divided by 5, resulting in $40,000. This represents the portion of the mortgage that is being paid off as principal in year 4.
Next, we calculate the after-tax interest cost for year 4. The annual interest payment is determined by multiplying the mortgage amount by the interest rate, which is $200,000 multiplied by 3.50%, resulting in $7,000. Since the family is in a tax bracket of 20%, they can deduct the interest payment from their taxable income. Therefore, the tax deductible amount is $7,000 multiplied by 20%, which equals $1,400. The after-tax interest cost is then calculated by subtracting the tax deductible amount from the annual interest payment, resulting in $7,000 - $1,400 = $5,600.
Finally, to determine the Point-to-Point Mortgage Cost for year 4, we add the principal repayment and the after-tax interest cost together, resulting in $40,000 + $5,600 = $45,600.
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Analyze the American Computer Software Company named Adobe
How does Adobe use technology as a competitive advantage within
the industry?
How do they use technology to generate revenue?
Adobe is a prominent American computer software company known for its innovative products and services in the digital media and creative software industry.
Adobe strategically utilizes technology as a competitive advantage, allowing it to maintain a leading position within the industry.
One way Adobe leverages technology as a competitive advantage is through continuous innovation and development of cutting-edge software solutions. Adobe invests heavily in research and development to stay at the forefront of technological advancements. They consistently enhance their software tools, such as Adobe Creative Cloud, to provide industry-leading features and capabilities. By offering powerful and user-friendly software, Adobe attracts and retains customers, giving them an edge over competitors.
Furthermore, Adobe has embraced cloud-based technologies to deliver its software and services. Adobe Creative Cloud, for example, is a subscription-based platform that allows users to access Adobe's software and services online. This cloud-based approach enables Adobe to provide frequent updates and seamless integration across devices, ensuring customers have the latest tools and features at their fingertips. This technological advantage enhances customer satisfaction, drives customer loyalty, and differentiates Adobe from competitors.
In terms of revenue generation, Adobe utilizes technology in several ways. Firstly, their software products generate revenue through direct sales. Adobe offers various subscription plans for individuals, businesses, and enterprises, allowing customers to access and use their software for a recurring fee. This subscription model provides a steady and predictable stream of revenue for Adobe.
Additionally, Adobe has developed a strong ecosystem of complementary technologies and services. They offer cloud-based storage solutions, stock photo and video libraries, marketing automation tools, and analytics platforms. These integrated services not only enhance the value proposition for customers but also create additional revenue streams for Adobe.
Furthermore, Adobe utilizes technology to support a range of monetization models, including licensing, usage-based pricing, and enterprise agreements. They also leverage data analytics and artificial intelligence to offer personalized recommendations, upselling opportunities, and targeted advertising, contributing to revenue growth.
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Calculate number of contract Question: Your stock portfolio has a beta of 1.50 and is currently worth $20 m. The S\&P/ASX200 index is currently priced at 4470. The December-2021 maturity SPI200 futures contract is quoted at 4690 . How many SPI200 futures contracts are required to fully hedge your stock portfolio? Answer: (Round your answer to the nearest whole number)
Approximately 19,068 SPI200 futures contracts are required to fully hedge the stock portfolio.
To fully hedge the stock portfolio, we need to calculate the number of SPI200 futures contracts required. Given the beta of the portfolio (1.50) and its value ($20 million), along with the current price of the S&P/ASX200 index (4470) and the quoted price of the December-2021 maturity SPI200 futures contract (4690), we can determine the notional value of the portfolio and divide it by the futures contract price to find the number of contracts needed. In this case, the calculation yields approximately 19,068 contracts, rounded to the nearest whole number. This number of contracts would provide a full hedge for the stock portfolio.
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Which of the following statement regarding data migration is INCORRECT?
a.
The company should consider the depth of scope for transaction data
b.
Data extraction process involves taking data out of existing legacy systems and databases
c.
The process can also include moving whole data entities into the ERP system from areas that are being automated for the first time
d.
Data migration is transferring data directly from legacy system to integration system
The incorrect statement regarding data migration is:
d. Data migration is transferring data directly from the legacy system to the integration system.
Data migration involves the process of transferring data from one system or storage to another. However, the data migration process typically does not involve transferring data directly from the legacy system to the integration system. Instead, data extraction, transformation, and loading (ETL) processes are commonly used in data migration. The data is extracted from the legacy system, transformed to meet the requirements of the new system, and then loaded into the integration system. This ensures data consistency, integrity, and compatibility between the legacy and new systems.
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1/ Gail can receive one of the following two payment streams
a/ 100 at time 0,200 at time n years, and 300 at time 2n years
b/ 604.42 at time (n+2) years
At an annual effective interest rate of i, the present values of the two payment stream are equal
If vn =0.7. calculate i , the annual effective rate of interest.
2/ The simple discount rate is 7% per year. Kevin makes a deposit of X now, which accumulates to 10,000 at the end of 8 years. Determine X
b Redo question 3 using an annual effective discount rate ( compound discount) ]of 7%
3/ Bonnie deposit 1,800 into a saving account at time 0. the savings account pay simple interest at an annual rate of i
Clyde deposits 1,000 into different savings accounts at time 0. Clyde's saving account pays interest at an annual effective rate of i.
Bonnie and Clyde earn the same amount of interest during the 7th year
Calculate i.
1/ To calculate the annual effective rate of interest (i), we need to equate the present values of the two payment streams.
For payment stream a, the present value can be calculated as:
PV(a) = 100/(1+i)^0 + 200/(1+i)^n + 300/(1+i)^(2n)
For payment stream b, the present value is given as 604.42/(1+i)^(n+2).
Setting PV(a) equal to PV(b), we have:
100/(1+i)^0 + 200/(1+i)^n + 300/(1+i)^(2n) = 604.42/(1+i)^(n+2)
Simplifying and rearranging the equation, we can solve for i.
2/ The present value (PV) of the deposit made by Kevin is $X, which accumulates to $10,000 at the end of 8 years. Using the simple discount rate of 7% per year, we can set up the equation:
PV = 10,000/(1+0.07)^8 = X
Solving for X, we can find the value of the deposit made by Kevin.
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