How does risk impact decision-making? List the types of risk that impact business decision-making and provide suitable examples for each type of risk in the context of an organization.

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Accounting Question

Q1. How does risk impact decision-making? List the types of risk that impact business decision-making and provide suitable examples for each type of risk in the context of an organization.

(3 Marks)

Note: Your answer must include suitable examples for each type of risk.           (Week 2, Chapter 1)

Q2. Suppose that you are working in a company as a cost manager that is making a single product. Determine the following values of your own for this product:     (3 Marks)

  • Selling price per unit
  • Variable cost per unit
  • Fixed cost
  • Target profit for next year

After determining the values for the above, find out:

  1. Break-even point in units.
  2. Break-even point in sales value.
  3. Units needed to reach target pretax profit (as decided by you in your example).
  4. Sales value required to reach target pretax profit (as decided by you in your example).

Note: You are required to assume values of your own and they should not be copied from any sources.  (Week 4, Chapter 3)

 Q3. Critically analyze the differences between the “Account Analysis Method” and the “Two-Point Method” of estimating a cost function. Provide suitable examples for each method by assuming the values of your own.  (3 Marks)   (Week 3, Chapter 2)

Q4. Referring to the concept of job costing in the manufacturing sector, identify how you will record the following journal entries:   (3 Marks)

  1. When raw materials are received.
  2. When raw materials are sent to the factory floor.
  3. When labor costs are incurred.
  4. When a job is completed.
  5. When a job is shipped to a customer.

Note: You must assume significant values for each transaction of your own and prepare the journal entries for each case.  (Week 5, Chapter 5)

Q5. Alpa Ltd. uses a process costing system for its sole processing department. There were 24,000 units in beginning WIP inventory for March and 216,000 units were started in March. The beginning WIP units were 60% complete and the 19,500 units in ending WIP were 40% complete. All materials are added at the start of processing.     (3 Mark)

Required:

  1. a) Compute the no. of units started & completed.
  2. b) Compute the EUP for DM and CC using FIFO and WA methods. (Week 5, Chapter 6)

On your own words, outline the accounting principles and assumptions and explain each one. What is the accounting cycle? Explain every step starting from analyzing transactions to preparing post-closing trial balance

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Accounting cycle

Assignment Question(s):   (Marks15)

Q1. On your own words, outline the accounting principles and assumptions and explain each one.   (Marks5)

Q2. What is the accounting cycle? Explain every step starting from analyzing transactions to preparing post-closing trial balance.    (Marks5)

Q3. Based on the following trial balance for ABC Co, prepare an income statement, statement of retained earnings and a balance sheet. The company made no additional investments in the company during the year.   (Marks5)

 

ABC Co.

Trial Balance

December 31
Cash SR 6,500  
Accounts receivable 475  
Supplies 2,500  
Equipment 17,000  
Accounts payable   SR  745
Common stock   10,000
Retained earnings   11,155
Dividends 36,000  
Revenue earned   72,000
Supplies expense 3,425  
Rent expense 6,000  
Wages expense 22,000  
Totals SR93,900 SR93,900

 

Rank the projects using the profitability index. Considering the limit on funds available, which projects should be accepted? Using the NPV, which projects should be accepted, considering the limit on funds available?

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Ranking Investment Alternatives

Problem 10-41) Grosvenor Industries has designated $1.2 million for capital investment expenditures during the upcoming year. Its cost of capital is 14 percent. Any unused funds will earn the cost of capital rate. The following investment opportunities along with their required investment and estimated net present values have been identified:

Project Net Investment NPV Project Net Investment NPV
A $200,000 $22,000 F $250,000.00 $30,000.00
B $275,000 $21,000 G $100,000.00 $7,000.00
C $150,000 $6,000 H $200,000.00 $18,000.00
D $190,000 -$19,000 I $210,000.00 $4,000.00
E $500,000 $40,000 J $250,000.00 $35,000.00

In your response, complete the following:

  • Rank the projects using the profitability index. Considering the limit on funds available, which projects should be accepted?
  • Using the NPV, which projects should be accepted, considering the limit on funds available?
  • If the available investment funds are reduced to only $1,000,000:
    • Does the list of accepted projects change from Part 2?
    • What is the opportunity cost of the eliminated $200,000?

 

 

 

 

Write a description of the research problem you propose to investigate and explain why you chose this topic. What should be considered in developing a good research idea?

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Assignment Question(s):    (Marks 15)

Question 1: The correct and complete sequence of steps in conducting research is as follows:

  • Identify broad area,
  • Select topic,
  • Decide approach,
  • Formulate plan,
  • Collect information,
  • Analyze data,
  • Present findings.

Using our Saudi Digital library (SDL) you should find two papers in accounting field and determine for each paper the steps described above.                                                                                                [4marks]

  Paper  1 Paper 2
1.The broad area of the paper    
2.The topic    
3.Approach used    
4.Data source    
5. Data analysis    
6.Findings    

 Question 2: Write a description of the research problem you propose to investigate and explain why you chose this topic.     [2 marks]

 Question 3: What should be considered in developing a good research idea? [2 marks]

 Question 4: What are the five categories of research methods?  [2mark]

Question 5: Differentiate between Quantitative vs. Qualitative research. [2.5 mark]

 Question 6: Define ANOVA and Regression Analysis [2.5 mark]

 

 

 

What is the coupon rate if coupon payments are $20 per year? At what discount rate would the value of the bond be “at par”. Explain your reasoning.

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PRESENT VALUE AND BOND VALUATION Case 2

Case Assignment
Download the Case 2 Template. You will type your answers into this document. Save the document with your last name and submit to the dropbox.

Note that you will get partial credit if you show your work even if the answers are incorrect.

1. Compute the future value for the following:
a. $2,000 after being invested for two years in a savings account with 3% interest rate
b. $5,000 after being invested for ten years in a savings account with a 1% interest rate
c. $3,500 after being invested for nine years in a savings account with an 11% interest rate

2. Compute the present value for the following:
a. $3,000 to be paid in one year with a 9% discount rate
b. $3,000 to be paid in three years with a 9% discount rate
c. $4,000 to be paid in ten years with a 5% discount rate

3. Compute the present value for the following:
a. An investment that will pay you $1,000 in one year, another $1,000 in two years, and a third payment of $1,000 in three years (e.g., three payments of $1,000 to be paid once a year for three years). The discount rate is 4%.

b. The same three $1,000 payments as in part a) above, but with a 6% discount rate
c. An investment that will pay you $2,000 in one year, another $1,500 in two years, and a third payment of $3,000 in three years. The discount rate is 4%.

4. Compute the value of the following bonds assuming a 3% discount rate (required rate of return):

a. A zero-coupon bond that pays $1,000 in five years

b. A bond that pays $1,000 in five years, with five annual coupon payments of $20 each

c. What is the coupon rate if coupon payments are $20 per year? At what discount rate would the value of the bond be “at par” (e.g., be worth $1,000?). Explain your reasoning.

5. This part of the assignment is purely conceptual with no computations required. Explain the following with references to the required readings:

a. What is likely to happen to interest rates if the rate of inflation suddenly increases?

b.Suppose there are two bonds each with coupon payments of $50. The first bond pays $1,000 in five years, and the other one pays $1,000 in ten years. If interest rates increased, would the value of the bonds increase or decrease? Which of the two bonds would have their value change more after the increase in interest rates? Explain your reasoning.

Assume you are an investor willing to accept average market risk (the Beta of the stock should be around 1). Buy at least $10,000 worth of a company’s stock that is appropriate given your risk preference.

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PRESENT VALUE AND BOND VALUATION SLP 2

Virtual Stock Exchange Project
Module 2 SLP Assignment

Make 3 stock purchases and provide information about the purchases

Download the Module 2 SLP template. You will type your answer into this Excel workbook. When finished with the SLP assignment,save the document with your last name and submit to the dropbox.

1. Purchase 4: Assume you are a very risk averse investor (you don’t like risk). Buy at least $10,000 worth of a company’s stock that is appropriate given your risk preference.

2. Purchase 5: Assume you are a very risk loving investor (you LOVE risk). Buy at least $10,000 worth of a company’s stock that is appropriate given your risk preference.

3. Purchase 6: Assume you are an investor willing to accept average market risk (the Beta of the stock should be around 1). Buy at least $10,000 worth of a company’s stock that is appropriate given your risk preference.

You are free to make additional purchases, but you only need to explain the reasoning behind your required purchases 4 through 6.

4. You will need to include the following information for each stock in this workbook:

  • Company Name
  • Ticker Symbol
  • Reason for Buying
  • Current Price
  • Previous Close Price
  • 52-week High
  • 52-week Low
  • Beta
  • Market Cap
  • P/E Ratio

How many units are in ending inventory? What is the equivalent units of material? What is the equivalent units of conversion? What is the material cost per unit?

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Salmon Company Analysis

Your company is Salmon Company

Given the following information answer the questions below:

Beginning Inventory: 974 Units
Cost of Materials in Beginning Inventory $          5,108
Cost of Conversion in Beginning Inventory $          3,134
Units Started into Production 6118 Units
Cost of Materials added this period $        29,289
Cost of Conversion added this period $        18,414
Units transferred out to next process Ending Inventory: 5319 Units
Materials Complete 100%
Conversion Complete 68.42%

Questions:

A)  How many units are in ending inventory?

B)  What is the equivalent units of material?

C)  What is the equivalent units of conversion?

D)  What is the material cost per unit?

E)  What is the conversion cost per unit?

F)  Journal the transfer of completed products to the next process (Use WIP This Process & WIP Next Process)

G)  What is the value of ending inventory?

DISCUSS GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) AND THEIR IMPORTANCE TO THE ECONOMY. EXPLAIN THE BALANCE SHEET IDENTITY AND WHY A BALANCE SHEET MUST BALANCE.

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DISCUSS GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) AND THEIR IMPORTANCE TO THE ECONOMY.

EXPLAIN THE BALANCE SHEET IDENTITY AND WHY A BALANCE SHEET MUST BALANCE.

DESCRIBE HOW MARKET-VALUE BALANCE SHEETS DIFFER FROM BOOK-VALUE BALANCE SHEETS.

IDENTIFY THE BASIC EQUATION FOR THE INCOME STATEMENT AND THE INFORMATION IT PROVIDES.

UNDERSTAND THE CALCULATION OF CASH FLOWS FROM OPERATING, INVESTING, AND FINANCING ACTIVITIES REQUIRED IN THE STATEMENT OF CASH FLOWS.

EXPLAIN HOW THE FOUR MAJOR FINANCIAL STATEMENTS DISCUSSED IN THIS CHAPTER ARE RELATED.

IDENTIFY THE CASH FLOW TO A FIRM’S INVESTORS USING ITS FINANCIAL STATEMENTS.

DISCUSS THE DIFFERENCE BETWEEN AVERAGE AND MARGINAL TAX RATES.

Determine the present value of each year’s payment for each proposal, as well as the total present value of each proposal. For each proposal, compute two different outcomes, one with a discount rate of 5% and one with a discount rate of 10%.

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Present Value

The director of marketing of your organization asks for your advice regarding sponsorship deals she is contemplating. She has to choose from the following: a 15-year sponsorship paying $100,000 per year, a 15-year sponsorship initially paying $75,000 per year and increasing 5% each year, and a 15-year sponsorship initially paying $45,000 per year but increasing 12% each year.

Case Questions

  1. Determine the present value of each year’s payment for each proposal, as well as the total present value of each proposal. For each proposal, compute two different outcomes, one with a discount rate of 5% and one with a discount rate of 10%.

 

 

Based on your findings in part b, discuss how the treatments and disclosures for impairment for the year ended 30 June 2021 meet the fundamental characteristics of financial reporting as per the Conceptual Framework?

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Financial accounting research report

In June 2022, Australian Securities and Investments Commission (ASIC) issued the following media release:22-124MR ASIC highlights focus areas for 30 June 2022 reporting where they focused on Asset value and impairment testing.

The link to the media release is provided below:

22-124MR ASIC highlights focus areas for 30 June 2022 reporting | ASIC – Australian

Securities and Investments Commission (If the above link is not working, copy the link and paste it in the browser.)

In the 22-124MR, ASIC raised concerns about the assessments of the recoverability of the carrying values of assets, including goodwill and property, plant and equipment.

You were lucky to get an internship with the Australian Securities & Investments Commission’s (ASIC) Financial Reporting Surveillance Program that aims to improve the quality of financial reporting by reviewing the annual financial reports of a selection of listed companies and other significant entities, to monitor compliance with the Corporations Act and Australian Accounting Standards.

The Head of the Financial Reporting Surveillance Program (your boss for the time of your internship), Zachary King*, plans for the next review round to focus on the quality of financial information in the annual reports of listed companies to ensure that asset values are appropriately reflected and disclosed in these companies’ latest annual reports. For preliminary research into this matter, he asks you to provide a report which highlights the current compliance with AASB136 Impairment of Assets by one listed company in this regard.

For this, you must research into a listed ASX300 company of your choice and write a report addressing the following:

  1. A critical analysis of some of the complexities and key issues involved in impairment testing especially in light of the COVID-19 pandemic. In your analysis, you can refer to one or more publications issued by the ‘Big 4’ firms, accounting professional bodies or academic journals. (10 marks)
  2. Provide a detailed explanation of the impairment write-down(s) made by your chosen company in the year ended 30 June 2021. Your explanation should include a discussion of:
  3. the asset/s that were impaired;
  4. the type of estimations required to record the impairment;

iii. the amount of the impairment write-down; and

  1. relevant disclosures in the 30 June 2021 financial report in relation to impairment testing. (15 marks)
  2. Based on your findings in part b, discuss how the treatments and disclosures for impairment for the year ended 30 June 2021 meet the fundamental characteristics of financial reporting as per the Conceptual Framework? (15 marks)

You need to attach a copy of the relevant parts of the annual report showing the disclosures made by the company for asset values and impairment. Do not attach the entire annual report.

To complete this assignment, you will need to select a suitable company yourself that meets the following criteria:

  • The company must be a constituent of the S&P/ASX 300 index (www.asx300list.com).
  • The company must publish audited annual financial reports in English, fully complying with IFRS or AASB standards. and
  • The company must have a 30 June year end.
  • Choose the annual report for the financial year ended 30 June 2021.
  • The company should be from an industry that has been impacted by COVID- 19