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2 years ago

11

Most companies with well-developed project management systems insist that a project must pass an approval of some kind to move f

rom one life cycle stage to the next.A. True
B. False

1 answer:

Romashka [77]2 years ago

8 0

Answer:

it is A. True

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Kit Company borrows $5 million at 12% on January 1, 2016, specifically for the purpose of financing the construction of a buildi

kakasveta [241]

Answer:

1. The amount of interest expense Kit would capitalize related to the construction of the building is <u>$300,000</u>.

2. The amount of interest revenue Kit would recognize is <u>$275,000</u>.

3. The amount of interest revenue Kit would capitalized as per IFRS (IAS 23) is <u>$25,000</u>.

Explanation:

1. Compute the amount of interest expense Kit would capitalize related to the construction of the building.$

Note: See part 1 of the attached excel file for the calculation of average expenses incurred for the building

Average expenses incurred for the building = $2,500,000

Interest rate = 12%

Interest expense to capitalize = $2,500,000 * 12% = $300,000

Therefore, the amount of interest expense Kit would capitalize related to the construction of the building is <u>$300,000</u>.

2. Compute the amount of interest revenue Kit would recognize.$

Note: See part 2 of the attached excel file for the calculation of the total interest revenue.

Amount of interest revenue = $275,000

Therefore, the amount of interest revenue Kit would recognize is <u>$275,000</u>.

3. Assume that Kit uses IFRS. What amount of interest would be capitalized related to the construction of the building?$

The IAS 23 Clause 12 states that to the extent that an entity borrows funds specifically for the purpose of obtaining a qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings.

Based on the above, the amount of interest that would be capitalized related to the construction of the building can be calculated as follows:

Amount of interest revenue to capitalized as per IFRS = Interest expense to capitalize - Total interest income = $3000,000 - $275,000 = $25,000

Therefore, the amount of interest revenue Kit would capitalized as per IFRS (IAS 23) is <u>$25,000</u>.

4 0

2 years ago

The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the r

Natali5045456 [20]

Answer:

$67,000

Explanation:

Miller$72,000/60%=$ 120,000 loss to eliminate capital

Tyson$72,000/20%=$ 360,000 loss to eliminate capital

Watson$19,000/20%=$ 95,000 loss to eliminate capital

Watson is the partner most vulnerable to a loss of $95,000 which will inturn eliminate Watson's capital balance

Hence:

$162,000-$95,000

=$67,000

Therefore if the loss on disposal is less than $95,000, all partners will retain positive capital balances and receive some cash in liquidation reason been that other assets which is $162,000, must be sold for any amount over $67,000 for all partners to get cash.

7 0

1 year ago

CHEGG: Schuepfer Incorporated bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows

Ksenya-84 [330]

Answer:

Total cash disbursement= $41,920

Explanation:

Giving the following information:

Number of units= 2,200

Variable selling and administrative expense= $4.50 per unit.

Budgeted fixed selling and administrative expense= $35,720 per month (depreciation of $3,700 per month)

<u>We need to calculate the cash disbursements for selling and administrative.</u>

Depreciation is not a cash expense.

Cash disbursement Selling and Administrative:

Total variable cost= 4.5*2,200= 9,900

Total fixed cost= (35,720 - 3,700)= 32,020

Total cash disbursement= $41,920

6 0

1 year ago

Cecil Jameson, Attorney-at-Law, is a proprietorship owned and operated by Cecil Jameson. On July 1, 2007, Cecil Jameson, Attorne

Kisachek [45]

Answer:

1. Determine the amount of owner’s equity (Cecil Jameson’s capital) as of July 1, 2007.

equity = assets - liabilities = $15,050 - $1,530 = $13,520

2. State the assets, liabilities, and owner’s equity as of July 1 in equation form similar to that shown in this chapter. In tabular form below the equation, indicate the increases and decreases resulting from each transaction and the new balances after each transaction.

since there is not enough room here, I used an excel spreadsheet

3. Prepare an income statement for July, a statement of owner’s equity for July, and a balance sheet as of July 31, 2007.

Cecil Jameson, Attorney-at-Law

Income Statement

For the month ended July 31, 2007

Service revenue $5,953

Expenses:

Paralegal services $1,635
Wages expense $850
Rent $1,200
Answering service expense $250
Utilities expense $325
Supplies expense $115
Miscellaneous expense $75 <u>$4,450</u>

Operating income $1,503

Cecil Jameson, Attorney-at-Law

Balance Sheet

For the month ended July 31, 2007

Assets:

Cash $6,873

Accounts receivables $2,225

Supplies $980

Land $10,000

Total assets $20,078

Liabilities:

Accounts payable $720

Paralegal fees payable $1,635

Total liabilities $2,355

Equity:

Jameson, Cecil, capital $18,723

Jameson, Cecil, drawings -$1,000

Total equity $17,723

Liabilities + Equity = $20,078

Cecil Jameson, Attorney-at-Law

Statement of Owner’s Equity

For the month ended July 31, 2007

Jameson, Cecil, capital balance July 1, 2007 $13,520

Investment during the month $3,700

Net income <u>$1,503</u>

Subtotal $18,723

Drawings <u>($1,000)</u>

Jameson, Cecil, capital balance July 31, 2007 $17,723

4. (Optional). Prepare a statement of cash flows for July.

Cecil Jameson, Attorney-at-Law

Statement of Cash Flows

For the month ended July 31, 2007

Cash flows from operating activities

Net income $1,503

Adjustments to net income:

Decrease in accounts receivables $975
Decrease in accounts payables ($810)
Increase in supplies inventory ($130)
Increase in paralegal fees payable $1,635 <u>$1,670</u>

Net increase in cash from operating activities $3,173

Cash flows from investing activities $0

Cash flows from financing activities

Additional paid in capital $3,700

Drawings <u>($1,000)</u>

Net increase in cash from financing activities $2,700

Net increase in cash $5,873

Cash balance July 1, 2007 <u>$1,000</u>

Cash balance July 31, 2007 $6,873

5 0

2 years ago

A company has budgeted direct materials purchases of $300,000 in July and $480,000 in August. Past experience indicates that the

enyata [817]

Answer: $696,000

Explanation:

Given the following;

JULY direct material purchase = $300,000

AUGUST BUDGET

direct material purchase =$480,000

Selling and administrative expenses = $48,000

Depreciation expense = $36,000

Purchase of office equipment = $72,000

Wages expenses = $150,000

Only 70% of the amount of purchases made in a month being paid that month. The remaining 30% paid the next month

Therefore, total Budgeted cash disbursement for the month of August will include ;

30% of July purchase

0.3 × $300,000 = $90,000

70% of August direct material

0.7 × $480,000 = $336,000

Wage expense = $150,000

Office equipment purchase =$72, 000

Selling and administration expenses = $48,000

= $(90,000 + 336,000+ 150,000+72,000+ 48,000) = $696,000.

3 0

1 year ago