QUESTION 8You negotiate a sale with a mill in which you sell them wheat at a basis of-10 MAR for Jan/Feb shipment picked up at your elevator (no freight). It iscurrently June (pre-harvest) and you have no ownership of wheat at thistime. Having made this sale without currently owning wheat, which ofthese circumstances would be your best alternative to purchase thebushels?Purchase wheat in Jan/Feb at +10 MAR and incur no cost-of-carry.Purchase wheat in Jan/Feb at -25 MAR and incur no cost-of-carry.O Purchase wheat in August at -45 SEP and carry the bushels todeliver in Jan and Feb. Spread SEP/MAR at 20¢ carry and incur20¢ cost-of-carryPurchase wheat in September at -45 SEP and carry the bushels todeliver in Jan and Feb. Spread SEP/MAR at 10¢ carry and incur20¢ cost-of-carry.

Profit or loss are those which are determined through taking the aggregate revenue of company as…

Answered: You negotiate a sale with a mill in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Problem 12 On January 1, GEN enters into a contract with LORD for the sale of a high-end security scanner for P630,000. The contract includes a put option the obliges GEN to repurchase the scanner machine from LORD for P567,000 on or before December 31. The market value is expected to be P495,000 on December 31. LORD pays GEN P630,000 on January 1. The transaction should be accounted for as a: A. Sale C. No sale/lease B. Lease D. Cannot be determined Problem 13 Noreen INC a truck dealer, sells a truck on January 1, 2019, to Mendoza for P3,000,000. Noreen INC agrees to repurchase the truck on December 31, 2020 for P3,630,000. 1. Assuming a 10% is imputed in the agreement, how much is the liability of Tom Co on January 1, 2019? A. 1,500,000 C. 3,000,000 B. 1,815,000 D. 3,630,000 2. Using the information above, what is the interest expense for 2019? A. None C. 330,000 B. 300,000 D. 630,000 3. How much should NOREEN INC record interest and retirement of its liability to MENDOZA INC…
QUESTION 1 A) By way of an example , state the difference between an “Exempt supply and a “Zero -rated supply” ? B) A second dealer buys a used fridge from a non-vendor for NAD 600 for resale. He pays the person NAD 400 immediately and the balance of NAD 200 in the next VAT period. Calculate the input tax that the second hand dealer will be entitled to claim ? C) A vendor purchases a VEHICLE for private purposes on 1 March 2020. The VEHICLE costs NAD228 000 including VAT (excludes finance charges and any other charges incurred). The vendor then decides to use the VEHICLE exclusively in his business for delivery of goods to his/her customers with effect from1 March 2020. At the time of introducing the VEHICLE into the business, it had an open market value of NAD205 200. Calculate input VAT to be claimed by the vendor?
Make versus Buy; Continuation of Exercise 9-22 (Chapter 9) Vista Company manufactureselectronic equipment. In 2018, it purchased from an outside supplier the special switches used ineach of its products. The supplier charged Vista $2 per switch. As an alternative, Vista’s CEO considered purchasing either machine A or machine B so the company could manufacture its own switches.The CEO decided at the beginning of 2019 to purchase machine A, based on the following data:[LO 11-2][LO 11-3]Machine A Machine BAnnual fixed cost (depreciation) $135,000 $204,000Variable cost per switch 0.65 0.30Required1. Assume that machine A has not yet been purchased. What is the annual volume (rounded up to nearest whole number) that would make the company indifferent between the two decision alternatives(i.e., purchasing and then using machine A to make the switches versus purchasing the switches fromthe outside vendor)? 2. Assume that machine A has already been purchased. Is it preferable to use machine A…
Jean Corngrower sells her corn to the elevator when she finishes harvest on October 30. She gets $6.55/bu for her corn. Jean wants to avoid storage costs and related interest costs, but she also wants to take advantage of any seasonal price movement upward. She buys a March 640 corn call for $0.35/bu. Come late January March corn futures are trading at $6.87/bu. Jean decides to get out of the call at that time. What is Jean’s realized price for the corn, not including brokerage fees or interest costs?
PROBLEM 14 (Adapted)Mimi Company has been having difficulty obtaining necessary raw materials for its manufacturing process. The company, therefore, signed a long-term noncancelable purchase commitment with its largest supplier of this raw material on Jun3 30, 2020, at an agreed price of P800,000. On December31, 2020, the raw material had declined in price to P720,000. Required:1. Assuming that on March 31, 2021, Mimi Company purchases the raw materials. During this time, the market price of the raw materials is P810,000? P780,000? P690,000?
49. Malcolm owns an empty shop unit. Following long negotiations with Urquhant plc, which operates a chain of shops branded UpandGO, Urquhart plc has agreed for Malcolm to use its brand and marketing expertise and to sell only its products in his shop. Malcolm has agreed to pay Urquhart plc an annual fee and to order a minimum level of UpandGo goods monthly, at a discount to the wholesale price. What is the nature of arrangement that Malcolm and Urquhart plc have entered into ? A joint venture A franchise A strategic alliance A partnership 50. As part of its risk analysis process. Kidsway plc has identified a risk to its key business process which is unlikely to occur but which would have catastroplic effects should it do so. If it wishes to control the risk as far as possible, what should Kidsway plc’s main risk responeses be ? Sharing and reduction Avoidance and acceptance Sharing and acceptance Avoidance and reduction
15. Malcolm owns an empty shop unit. Following long negotiations with Urquhant plc, which operates a chain of shops branded UpandGO, Urquhart plc has agreed for Malcolm to use its brand and marketing expertise and to sell only its products in his shop. Malcolm has agreed to pay Urquhart plc an annual fee and to order a minimum level of UpandGo goods monthly, at a discount to the wholesale price. What is the nature of arrangement that Malcolm and Urquhart plc have entered into ? A joint venture A franchise A strategic alliance A partnership 16. Wide-ranging new government regulations have just been passed in relation to the industry in which Abrada plc operates. The company’s directors wish to ensure that they understand these regulations and that this understanding informs the company’s strategy Which of the following techniques should Abrada plc’s directors therefore use in their strategic planning process ? Stakeholder analysis PESTEL analysis Value chain analysis BCG analysis
PROBLEM 14 (Adapted)Mimi Company has been having difficulty obtaining necessary raw materials for its manufacturing process. The company, therefore, signed a long-term noncancelable purchase commitment with its largest supplier of this raw material on Jun3 30, 2020, at an agreed price of P800,000. On December 31, 2020, the raw material had declined in price to P720,000. Required:1. What entry would you make on December 31, 2020, to recognize these facts?2. Assuming that on March 31, 2021, Mimi Company purchases the raw materials. During this time, the market price of the raw materials is P810,000? P780,000? P690,000?
Provide a better solution On January 1, 2021, VVV received from ABC 300 pieces of bread toaster. VV was to sell these on consignment at 50% above original cost, for a 15% commission on the selling price. After selling 200 pieces, VVV had the remaining unsold units repaired for some electrical defects which he spent P2,000. ABC subsequently increased the selling price of the remaining units to P330 per unit. On January 31,2021, VVV remitted P64,980 to ABC after deducting the 15% commission, P850 for delivery expenses of sold units, and P2,000 for the repair of 100 units. The consignment goods cost ABC P200 per unit, and P900 had been paid to ship them to VVV shop. All expenses in connection with the consignment were reimbursable to the consignee. Determine the value inventory to be presented in the statement of financial position.
25. The PX Company manufactures automobiles. Nonmanagement employees of the company can buy a new automobile for PX's cost plus 2%. The automobiles are sold to dealers at cost plus 20%. Generally, management employees of Local Dealer, Inc., are allowed to buy a new automobile from the company at the dealer's cost. Which of the following statements is correct? a.None of the employees who take advantage of the fringe benefits described above are required to recognize income. b.The nonmanagement employees who buy automobiles at a discount are not required to recognize income from the purchase. c.Employees of Royal are required to recognize as gross income 18% (20% – 2%) of the cost of the automobile purchased. d.All of these choices are correct.
Problem 8 On November 23, 2019, Guava Company entered intoa non-cancellable commitment to purchase 120,000 barrels of aviation fuel for P35 per barrel on March 14, 2020. By December 31, 2019 the purchase price had fallen to P25 per barrel. However, by March 14, 2020, when the entity took delivery of the 120,000 barrels the price had risen to P40 per barrel. How much is the recovery of loss on purchase commitment on March 14, 2020?
Problem 13NOREEN INC, a truck dealer, sells a truck on January 1, 2019, to MENDOZA INC for P3,000,000. NOREEN agrees to repurchase the truck on December 31, 2020 for P3,630,000 Using the information above, what is the interest expense for 2019?2.A. None C. 330,000 B. 300,000 D. 630,000

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