QUESTION 1 Solarcity Ltd, a company specialising in the creation of electricity using renewable energy is looking to the establishment of a new facility in order to take advantage of the new energy plan authorised by the government. A report is to be presented to the shareholders at the next AGM (annual general meeting). YEAR 1 2 3 4 CASH FLOWS R (18 500 000) R12 000 000 increase from Year 1 R5 500 000 Increase of 25% from year 3
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- 1. Sun City Ltd commences construction of a multi purpose water park on 1 July 2022 for Pretoria Ltd. Sun City Ltd signs a fixed-price contract for total revenues of $50 million. The project is expected to be completed by the end of 2025 and Pretoria Ltd controls the asset throughout the period of construction. The expected cost as at the commencement of construction is $38 million. The estimated costs of a construction project might change throughout the project – in this example, they do change. The following data relates to the project (the financial years end on 30 June): Particulars 2023($m) 2024 ($m) 2025($m) Costs for the year 10 18 12 Costs incurred to date 10 28 40 Estimated costs to complete 28 12 - Progress billings during the year 12 20 18 Cash collected during the year 11 19 20 Prepare the journal entries for the 2023 financial year, assuming that the measure of progress on the contract cannot be reliably…(M1). Lion Company Limited revalued its land and buildings at the start of the year 2020 to $100m ($30 million for the land). The property cost $50 million ($10 million for the land) ten years prior to the revaluation. The total expected useful life of 50 years is unchanged. The company policy is to make an annual transfer of realized amounts to retained earnings, show the effects of the above on the financial statements for the yearStag, a public limited company, is preparing its financial statements for the year ending 31 December 2021. The exhibits contain information relevant to the question Exhibit 2 – Research and Development Stag plc started a project on 1 January 2021. The initial costs of setting up the project incurred before 2021 were £2 million. From 1 January 2021 to 31 March 2021 ongoing project costs were £15,000 per month. On 1 April 2021, the project was considered to be technically feasible and commercially viable and from this date, project costs increased to £65,000 per month. From 1 July 2021 to 30 August 2021, additional £1.5 million was spent for the design and construction of a pilot for the project. This pilot is not capable of operating on a scale economically feasible for commercial production. From 1 September 2021 to 31 December 2021, additional £350,000 were also spent for testing of the pilot. Between 1 April 2021 and 31 December 2021, Stag spent £140,000 on research staff, £50,000…
- A company completed development of a product on 31 December 20X0. The development cost was £100 million. Sales commenced on 1 January 20X1, and expected future profits at that date were £60 million (excluding development expenditure). You should assume the life of the product is 5 years with sales and profits spread equally over that period. What is the value of capitalised development expenditure (after amortisation) in the statement of financial position at 31 December 20X1? A. 48 million B. 60 million C. 100 million D. 80 millionSubject : Accounting Samson Ltd is considering replacing equipment. The cost on 1.1.2023 will be £3m. The expected economic life of the equipment will be 4 years. The company depreciates its equipment using the straight-line methods. The company expects to sell this equipment for £400,000, after the end of its useful economic life. There are expected cost savings arising from this investment of £1,200,000 in each of years 1 and 2 and £800,000 in each of years 3 and 4. What is the payback of this investment? Select one answer: 2 years 3 years 2 years and 9 months 3 years and 2 monthsWITH COMPUTATION-SOLUTION 65. On December 31, 2019, an entity sold an equipment with an estimated remaining useful life of 10 years. At the same time, the entity leased back the equipment for 2 years. Sale price at above fair value 7,500,000 Fair value of equipment on date of sale 6,000,000 Carrying amount of equipment 5,000,000 What amount of gain should be reported in the income statement for 2019?a. 2,500,000b. 1,500,000c. 1,000,000d. 1,750,000
- Nylon have assigned $1.5 million dollars to purchase the asset(s). Nylon's WACC is 8%. Years Asset L Asset M Asset N Initial Costs $700,000 $800,000 $500,000 Expected Cash Inflows: 2018 300,000 200,000 2019 250,000 200,000 200,000 2020 200,000 200,000 200,000 2021 150,000 200,000 150,000 2022 200,000 150,000 Requirement: Recommend which Asset(s) the company should purchase based on the Payback and Net Present Value Capital Budgeting Techniques. If the funds allow for the purchase of more than one asset, rank them from most favourable to least and select the ones to be purchased.profile-image Time remaining: 00 : 09 : 41 Accounting We have the following data for a power plant: 1 MW CENTRAL ECONOMIC BALANCE Power: 1 Mwa Maintenance cost: 3% per year Initial cost of operation: 5% per year Regulated Rate: $0.015/kWh (20 years) Project cost = $750,000.00 Plant factor= 60% Energy: 5256000 KWh Income from regulated tariff: 78840 Annual revenue increase: 6% Initial maintenance cost/year of annual maintenance (2% installation): $ 22,500.00 Annual maintenance increase: 5% Initial cost of operation/year (1% Installation) $ 37,500.00 Annual operation increase: 3% It is assumed that in year 10, an equipment update will be carried out whose cost will be 25% of the value of the investment = $187,500.00 SOLVE: In what year will the investment be recovered?Question One Benson Limited is constructing a Power Plant which was completed on 31st December 2019. The company obtained a bank loan of R1,000,000 at a rate of 15% per annum to construct the Power Plant on 1st January 2019. As of 31st December 2019, Benson Limited also had the following loans outstanding: I. 18% 5-year loan Note of R1,500,000 II. 14% Debentures of R1,000,000 Expenditures on the project were made as follows: I. On the 31st March 2019, R600,000 was incurred; II. R800,000 was incurred on 30th June 2019; III. The final expenditure incurred was R300,000 on 31st December 2019. During the year Benson Limited invested R400,000 of the bank loan for 2 months at an interest of 9% per annum. Required: Determine the amount of borrowing costs to be capitalized and expensed.
- Question 3What is the proper solution for this problem? B. On August 1, 2021, the board of directors of LL Co. voted to approve the disposal of one of its B division.The sale is expected to occur in June of next year. The B division's revenue and expenses for the period from January 1 to July 31 amounted to P14,000,000 and P10,000,000, respectively. For the period from August 1 to December 31, B Division's revenue amounted to P5,000,000 while expenses totaled P4,500,000. The carrying amount of B Division's net assets on December 31, 2021 was P21,000,000 and the fair value less cost of disposal was P25,000,000. The sale contract requires the company to pay termination cost of affected employees in the amount of P1,200,000 to be paid on September 30, 2022. The income tax rate is 30%. Required:25 – 27. Determine the income (loss) net of tax from discontinued operation.Ch 6. Seeing Red has a new project that will require fixed assets of $935,000, which will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, and 11.52 percent, respectively. The company has a tax rate of 28 percent. What is the depreciation tax shield for Year 3? Round to the nearest cent and format answer as "XX,XXX.XX"Question Content Area Falkland, Inc., is considering the purchase of a patent that has a cost of $51,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 12%. The patent is expected to generate the following amounts of annual income and cash flows: Year 1 Year 2 Year 3 Year 4 Net income $5,100 $6,500 $6,300 $3,000 Operating cash flows 16,800 18,500 18,200 14,750 (Click here to see present value and future value tables) A. What is the NPV of the investment? Round your present value factor to three decimal places and final answer to the nearest dollar. $fill in the blank 1 B. What happens if the required rate of return increases? If the required rate of return increases, .
