HW 2 Finance
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HW 2 JYflE_BQ@ut (?){http://www.acns.colostate.edulsingle-sign-on-using-shibboleth/#1471272725675-5603b487 -ebab) Due Oct 30 at 11:59pm Points 25 Questions 19 Available after Oct 23 at 8am Time Limit None Attempt History Attempt Time Score LATEST Attempt 1 66 minutes 24 out of 25 () Correct answers will be available on Oct 31 at 8am. Score for this quiz: 24 out of 25 Submitted Oct 30 at 3:53pm This attempt took 66 minutes. Question 1 1/1 pts You observe the following IBM annual returns over the last 3 years: 10%, -5%, 2%. What is the best description of this formula? .10—.05+-.02 3 T — r-bar is the arithmetic mean r-bar is the geometric mean r-bar is the variance r-bar is the standard deviation
Question 2 171 pts You observe the following IBM annual returns over the last 3 years: 10%, -5%, 2%. What is the best description of the formula shown below? .10—.05+.02 3 when answering this question. Assume 1 = (10 — 7)* (=05 — 7)*+(:02—7)" _ . = This is the sample variance This is the population variance This is the standard deviation This is the geometric mean Question 3 1/1 pts You observe the following IBM annual returns over the last 3 years: 10%, -5%, 2%. What is the best description of this formula? (1 +.10) (1 —.05) (1 +.02)](5) —1 This is the geometric return This is the arithmetic return This is the cumulative return over 3 years This is the additive return over 3 years
Question 4 171 pts Assume that your portfolio has an expected return of 22% and a standard deviation of returns of 41.6%. What is the 5% Value-at-Risk (VaR)? -46.22% —_— 0.22 - 1.64*0.416 = - 46.22% -23.15% 23.15% 46.31% Question 5 1.5/1.5 pts A stock has an expected return of 16% with a standard deviation of 0.20. Assume you can borrow and lend risk-free at 5%. Assume your portfolio can include this one risky asset and/or the risk-free investment. What is the expected return and standard deviation of a portfolio for an investor with 50% of her wealth in the risky asset and 50% in the risk-free investment? E[r] = 10.5%, sigma=10% ' E[r] = .5*.16 + .5*.05 = 10.5% E[r] = 10.5%, sigma=20% E[r] = 16%, sigma=10%
E[r] = 16%, sigma=20% Question 6 1.5/1.5 pts A stock has an expected return of 16% with a standard deviation of 0.20. Assume you can borrow and lend risk-free at 5%. Assume your portfolio can include this one risky asset and/or the risk-free investment. What is the expected return and standard deviation of a portfolio for an investor with 150% of her wealth in the risky asset and the rest in the risk-free investment? E[r] = 21.5%, sigma=30% ' E[r] = 1.5*.16 + -.5*.05=21.5% - sigma = 1.5%/20 = 30% E[r] = 21.5%, sigma=9% E[r] = 16%, sigma=20% E[r] = 16%, sigma=30% Question 7 1.5/1.5 pts Assume the price of a Schwab Small-Cap index fund is $45 per share, the annual expected return is 16%, and the annual standard deviation is 0.25. Assume you have $10,000 of investment equity and that you want to buy the Schwab Small-Cap fund using your money and some of the broker's money such that your total expected annual return on your portfolio is 22%. Assume you can borrow at 7% annually. What is the portfolio weight in the Small-Cap index fund such that the expected return on your portfolio is 22%7
1.66 22 = w(.16) + (1-w)(.07) w = 1.6666 — -.666 Question 8 1.5/ 1.5 pts Assume that you have $10,000 of your own money in your account. Assume you use these funds and some margin to create a portfolio with investment weights of 1.4 in a risky asset and -.4 in a risk-free asset. How much money do you need to borrow? $4,000 410,000 = 4,000 The negative sign on the .4 indicates that you are borrowing J $7,143 $10,000 $14,000 Question 9 2/ 2 pts
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July 31
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Days
Days
Days
Days
Customer
Balance
Due
Past Due
Past Due
Past Due
Past Due
Subtotals
1,050,000 600,000
220,000
115,000
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7,400
Van Epps Company
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13,000
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1,124,500 607,400
233,000
121,600
96,500
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Percentage uncollectible
1%
3%
12%
30%
75%
Allowance for Doubtful Accounts
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14,592
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Calculating Capacity
• How many machines do you need?
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Your company is considering a new project that will require $2,000,000 of new equipment at the start of the project. The equipment will have a depreciable life of 10 years and
will be depreciated to a book value of $250,000 using straight-line depreciation. The cost of capital is 12 percent, and the firm's tax rate is 21 percent Estimate the present
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Indicate the missing amount for each letter. Assume that in alltases manufacturing overhead is applied on the basis of direct labor
cost and the rate is the same. (Round overhead rate to 2 decimal places, eg. 15.25 and final answers to 0 decimal places, eg. 5,275.)
Case A
Case B
Direct materials used
2$
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$86,500
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56,000
142,700
Manufacturing overhead applied
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(d)
Total manufacturing costs
149,750
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32 Total
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balance as the Retained Earnings account?
3. Which type of income statement account has the opposite type of
balance as the Retained Earnings account?
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$ 24,850
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Consider the following transactions for the company of Powell Corporation, a small company
located in the Northern Vancouver
1)After all the posting is up to date the statement shows the cash balance (book balance) of
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Cash balance, September 1 (from a summer job)
$7,540
Purchase season football tickets in September
100
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260
Pay fall semester tuition in September
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iv. Using the information calculated and the information given about the projects;
explain which project should be selected
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Ayayai Mowers Ltd. agreed to sell the City of Halifax four riding mowers and 20 push lawn mowers. The contract price was $72,00O.
Ayayai normally sells its riding mowers for $14,400 and its push lawn mowers for $960. The contract required the City of Halifax to
pay Ayayai once all of the merchandise has been delivered to the city's public works yard. Ayayai's management does not expect any
returns or any issues with payment.
Ayayai delivered all four of the riding mowers and 14 of the push mowers on April 26. The remaining six push mowers were delivered
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Required:
Calculate the amount recognised as expenses and amount disclosed as equity.
QUESTION 4
At 1.1.2017, KAZA Bhd grants 80,000 share appreciation rights to employee, with service
condition that the employee will still be employed in KAZA for three years. grant date,
KAZA's share price is RM3.00. The rights grants have a life of five years. At 31.12.2019,
employee will be received cash by KAZA based on the value of the rights on that date. At the
end of years 2020 and 2021, KAZA will pay the further cash to the employee if the rights have
appreciated in value. Fair value of the share appreciation rights for the five-years are as
follows:
Year
Share price RM
Dividend yield
%
Value of rights
RM
0
3.00
1
0.81
2017…
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Return to the original data. Monk Builders has just signed a contract with the state government to replace the windows in low-
income housing units throughout the state. Monk needs 80,000 windows to complete the job and has offered to buy them from
Wilson at a price of $120.00 per window. Monk will pick up the windows at Wilson's plant, so Wilson will not incur the $2 per
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Samuelson and Messenger (SAM) began 2021 with 200 units of its one product. These units were purchased near the end of 2020 for
$25 each. During the month of January, 100 units were purchased on January 8 for $28 each and another 200 units were purchased
on January 19 for $30 each. Sales of 125 units and 100 units were made on January 10 and January 25, respectively. There were 275
units on hand at the end of the month. SAM uses a perpetual inventory system.
Required:
1. Complete the below table to calculate ending inventory and cost of goods sold for January using FIFO.
2. Complete the below table to calculate ending inventory and cost of goods sold for January using average cost.
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BP22603 FINANCIAL ACCOUNTING AND REPORTING III
SEM 2, 2021/2022
QUESTION 3
On 1.1.2016 the management of ANDY Bhd granted its 100 employees in the production units
options to buy 100 shares each. If production increased by a minimum of 10%, the options
granted would increase by 10% and if the production increased by 20% or more the options
granted would increase by 20%. The options would vest at the end of the third year.
In 2016, the company estimated that production would not increase and that ten employees
would leave before the end of year 2018. In year 2017, five employees left and the company
estimated that productivity would increase by 15% only and only 75 employees would remain
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SEM 2, 2021/ZUZZ
TUTORIAL QUESTION 5
QUESTION 1
On 1 January 2016, the management of ZAIDY granted an option for 3,000 shares to an
employee on condition that he stays in the employment of ZAIDY for three years. Also, the
option cannot be exercised till the share price has increased to RM20 per share by the end of
the third year.
The fair value of the option on 1 January 2016 was RM5 each and was estimated to rise to
RM6.50 each by 31 December 2018. The fair value is determined taking into consideration
that the share price will rise to more that RM20 each.
Required:
Calculate the amount recognized in the statement of profit or loss and the amount disclosed
as equity in the statement of financial position.
QUESTION 2
On 1 January 2017, SURDIN granted 100 share…
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On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first
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April 2 Nozomi invested $36,000 cash and computer equipment worth $35,000 in the company in exchange for its common
stock.
167 Computer Equipment
168 Accumulated Depreciation-Computer Equipment.
209 Salaries Payable
307 Common Stock
318 Retained Earnings
319 Dividends
@
April 3 The company rented furnished office space by paying $2,200 cash for the first month's (April) rent.
April 4 The company purchased $1,800 of office supplies for cash.
2
April 10 The company paid $2,880 cash for a 12-month insurance policy. Coverage begins on April 11.…
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Stock
Number of Shares
Price
W
825
$ 50
12%
725
27
16
Y
475
63
14
700
48
15
What is the expected return of your portfolio? (Do not round intermediate calculations
and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Expected return
%
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Use only the appropriate accounts to prepare an income statement.
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You deposit $850 in an account paying an annual simple interest rate of 7.8%. Find the future value of the investment (in dollars) after 1 year.
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Calculate the simple interest due (in dollars) on a 40-day loan of $1,600 if the annual interest rate is 9%. (Use 360 days in 1 year.)
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QUESTION 6
On 1.1.2017, MEERA Bhd grants to an employee the right to choose either 12,000 shares or
cash payment equal to the value of 10,000 shares (phantom shares). The grant conditional
upon the employee remaining in the company's employ for three years. If the employee
chooses the share alternative, the shares must be held for three years after vesting date.
At grant date, the company's share price is RM5.00. At the end of year 2017, 2018 and 2019,
the share price is RM5.20, RM5.60 and RM6.20, respectively. After taking into account the
post-vesting transfer restrictions, the grant date fair value of the share alternative is RM4.90.
MEERA shares have a nominal value of RM1 each.
Required:
a) Compute the amounts of expense and the related liability and equity…
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Fighting Irish Incorporated pays its employees $3,360 every two weeks ($240/day). The current two-week pay period ends on
December 28, 2024, and employees are paid $3,360. The next two-week pay period ends on January 11, 2025, and employees are
paid $3,360.
Required:
1. Record the adjusting entry on December 31, 2024.
2. Calculate the 2024 year-end adjusted balance of Salaries Payable (assuming the balance of Salaries Payable before adjustment in
2024 is $0).
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Record the adjusting entry on December 31, 2024. (If no entry is required for a particular transaction/event, select "No Journal Entry
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