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ACCOUNTING
Shelly Ryce was employed at Tele Company for 10 years. In recent times, Shelly was made redundant & as a part of her redundancy payment package, she received $2,000,000. Shelly has always loved wearing different hair extensions, & realizing how lucrative the hair business. She decided that she wants to start a hair supplies store, called “Shelly Hair.” Shelly started operations on May 1, 2021, & has been advised that even though it is a small business, it is important to keep proper accounting records.
The following transactions:
May 18 - Miss Ryce paid her cashier a cheque of $15,000 for her fortnightly salary.
- Journalize & post adjusting entries, using the following information:
- The cashier complained that she was short-paid $2,500. Investigations revealed that she was in fact short-paid for the month of May 2021.
- The insurance for "Shelly Hair" was due and payable by May 1. The
annual premium is $72,000 & the expense is incurred on a pro-rata basis.
ACCOUNTING
a). Journalize and post adjusting entries, using the following information:
- The actual light bill received from Jamaica Light Company is $10,000.
- Depreciation for the Nissan Ad Wagon has not been taken into account for the month.
- The business uses the reducing balance method to depreciate motor vehicles at a rate of 12 percent (12%) per annum.
- The furniture and point-of-sale machine in the business are to be depreciated using the straight-line method at a rate of 8%. Depreciation for furniture and point-of-sale
the machine has not been taken into account.
The following transactions were for the first month of operations:
July 1 - Miss Ryce stated business with a Nissan Ad Wagon valued at $1,200,000.
July 2 - Miss Ryce purchased store furniture from Royal Cabinets Limited using a cheque
amounting to $120,000.
July 3 Miss Ryce paid Telesales Electronics $15,000 with a cheque to set up her point-of-sale machine at the store.
July 22 - Miss Ryce paid cash for the following utility bills for the month:
Utility Company Amount
Jamaica Light Company $13,000
Explain Bhopal Gas tragedy and analyze the flaws and violations during design of gas plant.write a conclusion to avoid such tragedy in future for society safety?
Explain the significance of spirituality in shaping the modern society and environmental safety.
Using hypothetical but realistic organizations, present different scenarios that may lead to a deviation from the proper use of the following accounting standards:.
3. IAS 36 Impairment
4. IAS 37 Provisions, contingent assets
Using hypothetical but realistic organizations, present different scenarios that may lead to a deviation from the proper use of the following accounting standards:
1. IAS 16 Property, plant and equipment
2. IAS 40 Investment Property
INCREMENTAL ANALYSIS AND PRODUCT PRICING (45 Marks)
PART A Special Order for a Manufacturer
World Chemical Company recently received an order for a product that it does not normally produce. Since the company has spare production capacity, the management is considering accepting the special order. In analysing the decision, the graduate accountant is compiling the relevant costs of producing the special order. The production of the special order would require 7 000 kilograms of gelatine genotype (GG). The company does not use GG for its regular products, but the company has 7 000 kilograms of the chemical on hand from the days when it used GG regularly. GG could be sold to a chemical wholesaler for $15 000. The carrying amount of GG is $5 per kilogram. The company could buy the chemical for $6 per kilogram.
REQUIRED:
A. What is the relevant cost of the chemical for the purpose of analysing the special order decision? (5 Marks)
Using hypothetical but realistic organizations, present different scenarios that may lead to a deviation from the proper use of the following accounting standards:
1. IAS 16 Property, plant and equipment
2. IAS 40 Investment Property
3. IAS 36 Impairment
4. IAS 37 Provisions, contingent assets and contingent liabilities
5. IAS 2 Inventories
6. IAS 38 Intangible assets
7. IFRS 15 Revenue
8. IFRS 16 Leases
The entity that you create must have a name and actual transactions (with figures). Student groups are encouraged to be as creative and innovative as possible. The accounting standard in each case must first be explained in the groups own words, not as provided in the notes or plagiarised from literature, before a deviation may be discussed.
The example of deviation from the proper use of the standard must include recognition, measurement and de-recognition of the element in a particular case.
D. Describe some measures that can be used to evaluate supplier delivery performance and the quality of the supplier relationship. (5 marks)
B. Differentiate between Sunk cost, Opportunity cost, incremental analysis and outsourcing with examples? (10 Marks)
A monopolist charges different prices in the two markets where his demand functions are x1 = 21-0.1 p1 and x2 = 50 - 0.4 p2 , p1 and p2 being prices and 1 and x2
quantities demanded. His total cost function is TC = 10x + 2000, where x is total output. Find the prices that the monopolist should charge to maximize his profit. Also, verify
that higher price will be charged in the market having the lower price elasticity of demand by calculating the price elasticity of demand using the prices and the respective
demand functions.
