Question 1 (35 marks: ) Cereal Limited, is a manufacturer of different cereals, breakfast bars and mueslis and is listed on the main board of the JSE Securities Exchange. Mr Sharp Dude is the newly appointed financial manager of Cereal Limited who wants to make a good impression to the Board. There are 2 transactions of particular interest to him where he wants to effect changes to present an "improved" set of financial statements. Transaction 1 Cereal Limited developed the Special U brand of cereal about twenty years ago. The brand was legally registered upon development and has gained increasing popularity in South Africa. Cereal Limited launched the Special U cereal throughout Africa during 2021 and the success of the brand has exceeded the company’s wildest expectations. In order to establish a fair value for the Special U brand, Mr Dude employed the expertise of Estimators Inc. the internationally renowned US-based intangible asset valuators. Estimators Inc. valued the Special U brand at R150 million. Mr Dude included the Special U brand at R150 million in Cereal Limited’s statement of financial position at 31 December 2021, with a corresponding (R150 million) credit to profit or loss for the year ended 31 December 2021. Transaction 2 Cereal Limited entered into a contract with Rent a Space Limited for the lease of retail space for a new speciality cereal store. The retail space is specified, and the lessor cannot require Cereal Limited to move to a different retail space. Cereal Limited also makes all decisions relating to the retail space. • The commencement date of the lease was 1 January 2019 and the lease term is 5 years. • The lease payments are R525 000 per year payable in advance. • Commission and legal fees of R18 500 were incurred by Cereal Limited and paid for in cash at the inception of the lease. • The contract contains an option for Cereal Limited to extend the contract for a further 5 years with lease payments of R550 000 per year payable in advance. These rentals are at market rates.
Answers
Transaction 1:In the above-mentioned case of the Cereal Limited, Mr Dude was employing the expertise of Estimators Inc., the internationally renowned US-based intangible asset valuator to value the Special U brand at R150 million. However, in the year ended on 31 December 2021, Mr Dude included the Special U brand at R150 million in Cereal Limited’s statement of financial position.
Therefore, Mr. Dude tried to effect changes to present an "improved" set of financial statements.According to the Generally Accepted Accounting Principles (GAAP), intangible assets should be included in the financial statements only when they are acquired by the company and a cost can be assigned to them.However, in the case of Cereal Limited, the Special U brand was developed within the company.
Therefore, as per the Accounting Standards for Private Entities (ASPE), the cost of an internally generated intangible asset cannot be recognized as an asset in the financial statement. Therefore, Mr. Dude violated the Generally Accepted Accounting Principles (GAAP) by including the Special U brand at R150 million in Cereal Limited’s statement of financial position.
As a result, it would mislead the investors and the stakeholders about the financial situation of Cereal Limited.
Transaction 2:In the above-mentioned case of the Cereal Limited, it has entered into a contract with Rent a Space Limited for the lease of retail space for a new speciality cereal store. As per the contract, the lease payments are R525 000 per year payable in advance, commission and legal fees of R18 500 were incurred by Cereal Limited and paid for in cash at the inception of the lease.
The lease term is 5 years and the commencement date of the lease was 1 January 2019. As per the Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS), the lease payment should be recognized as an expense over the lease term and should be included in the income statement.
Therefore, in this case, Cereal Limited should recognize R525 000 as an expense for each year of the lease in the income statement.Further, the contract contains an option for Cereal Limited to extend the contract for a further 5 years with lease payments of R550 000 per year payable in advance.
These rentals are at market rates. In this case, Cereal Limited should recognize the option period in the lease term if it is reasonably certain that the option will be exercised. Further, the lease payments of R550 000 per year should be recognized as an expense in the income statement.
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Related Questions
Economic importance
of
rivers
Answers
Answer:
Traditionally, rivers have been valued primarily as water sources to drive the economic engines of irrigation and hydropower. However, rivers provide a broader set of services that deliver immense benefits to people, economies and nature, which include, but exceed, the value of the water they carry.
Explanation:
As a salaried employee, Richard Hernandez earns $776 each week. In one week, he worked 50 hours. What is his gross pay for that week?
Answers
Answer:
He would get paid $38,800 he will get $38,800 because I multiplied $776 and the 50 hours and that's how I got $38,800.
you are an administrative assistant in the purchasing department. Another administrative assistant is getting married in three weeks. Rumor has it that after the wedding, she will not be returning, and two of your peers have come to you asking if it is true because they want to apply for her job. you have not seen an official announcement, however, the assistant did tell you that she plans not to come back. What should you say to your two coworkers?
Answers
In this situation, You should tell your coworkers that you are unsure and that it is not yet official announced.
Co - workers.
Co workers refers a person with whom one works, typically someone in a similar role or at a similar level within an organization.
Given,
Here we have given that, you are an administrative assistant in the purchasing department. And another administrative assistant is getting married in three weeks. There is a rumor has it that after the wedding, she will not be returning, and two of your peers have come to you asking if it is true because they want to apply for her job. Now, you have not seen an official announcement, however, the assistant did tell you that she plans not to come back.
Here we need to find how you should handle this situation.
While we looking into the given question, we have identified the following,
There are 2 administrative assistant in your company.
One is you and another one is a girl and she get married in three weeks. And she also planned to resign after her marriage but this resignation is not officially confirmed.
So, in this situation, two of your peer interested for the position and asking you about the recruitment process.
Here you have to reply the co workers that the resignation is not conformed and if it is officially announced they you have the option to apply for that position.
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Quintin's supervisor asks him to use predictive modeling in his decision-making process. What would Quintin's task MOST likely include based on this
directive?
O A. the creation of a decision tree
O B.
O C.
O D.
a conversation with his colleagues
an analysis of data charts
a written list of pros and cons
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If Quintin's supervisor asks him to use predictive modeling in his decision-making process, Quintin's task would most likely include: A. the creation of a decision tree.
What is predictive modeling?Predictive modelling frequently uses decision trees to assist see and analyse the potential effects of a decision.
They offer a methodical technique to weigh the advantages and disadvantages of many options and can aid in determining the best course of action.
Therefore choosing option A is the most likely response. Option B, a discussion with his coworkers, Option C, a review of data charts, and Option D, a written list of advantages and disadvantages, are all potential tasks that may be engaged in decision-making, albeit they may not be explicitly related to predictive modelling.
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the ability of one company or economy to produce more of a particular product is a(n) advantage.
Answers
Answer:Comparative advantage
Explanation:
The ability of one company or economy to produce more of a particular product is a(n) advantage.
What role do funds (money) play in the circular flow model? a. They are what households or firms pay for products or resources. b. They are the means by which trade creates value. c. They enable firms and households to interact with foreign firms and households. d. They enable firms and households to pay their taxes
Answers
Answer:
a. They are what households or firms pay for products or resources.
Explanation:
The circular flow model shows how money flows in the society, from producers to workers in the form of wages, and back to the producers as money paid for products thereby providing exchange between the household and the firm.
The household work for firms in exchange for money to pay for goods and services offered by the firm while the firm sell there goods to the household so as to be able to generate profits.
The value of a levered firm will be than the value of an identical unlevered firm because the levered firm's taxes will be
Answers
Answer:
higher
Explanation:
hope this helps
A lender estimates that the closing costs on a $312,500 home loan will be $12,500. The actual closing costs were 4. 25% of the loan amount. Determine if the closing costs were higher or lower than the estimate and by what percent. A. Higher by 0. 125% b. Higher by 0. 25% c. Lower by 0. 125% d. Lower by 0. 25% Please select the best answer from the choices provided A B C D.
Answers
Answer:
B
Explanation:
Because i belive that is would be lower due to the cost of the homes total.
Z Space, Incorporated, is a new company and currently has negative earnings. The company's sales are $2.4 million and there are 138,000 shares outstanding. a. If the benchmark price-sales ratio is 5.8, what is your estimate of an appropriate stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What if the price-sales ratio were 5.2?
Answers
With a price-sales ratio of 5.2, the estimated appropriate stock price for Z Space, Incorporated would be approximately $90.27.
Z Space, Incorporated is a new company with negative earnings. To estimate an appropriate stock price, we can use the price-sales ratio. The price-sales ratio is the market price per share divided by the sales per share.
a. With a benchmark price-sales ratio of 5.8, we can calculate the estimated stock price as follows:
Sales per share = Total sales / Number of shares outstanding
Sales per share = $2,400,000 / 138,000 = $17.39
Estimated stock price = Price-sales ratio * Sales per share
Estimated stock price = 5.8 * $17.39 = $100.62
Therefore, with a price-sales ratio of 5.8, the estimated appropriate stock price for Z Space, Incorporated would be approximately $100.62.
b. If the price-sales ratio were 5.2, we can repeat the calculation:
Sales per share = $17.39 (from part a)
Estimated stock price = 5.2 * $17.39 = $90.27
The price-sales ratio is a valuation metric used to estimate the value of a stock relative to its sales. By dividing the market price per share by the sales per share, we get the price-sales ratio. In this case, we used the benchmark price-sales ratio to estimate the appropriate stock price for Z Space, Incorporated. The estimated stock price varies depending on the price-sales ratio used. A higher price-sales ratio indicates a higher estimated stock price, and vice versa.
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what is the difference between the FBI and the CIA
Answers
Answer:
The CIA (Central Intelligence Agency) mostly operates outside the United States to gather intelligence via a network of spies whereas the FBI (Federal Bureau of Investigation) predominantly operates within the U.S. to both gather intelligence as well as tackle federal crimes.
Explanation:
which of the following is true of opinion leaders? multiple choice they are seen as important by firms but are ignored by consumers. they can influence what products and brands people buy. they are of little concern to marketing managers. they are from the highest social class. they are wealthier and better educated than other consumers
Answers
Second option is true of opinion leaders. They can influence what products and brands people buy. Opinion leaders are individuals who are seen as knowledgeable and influential in a particular area of interest.
They can influence the attitudes and behaviors of others. Opinion leaders are not necessarily the wealthiest, best-educated, or from the highest social class. However, they may have a wider reach than other individuals in their social network.They may have a more significant social network or be more involved in social activities. Because of their status, opinion leaders can influence what products and brands people buy, and they can provide recommendations that others may follow. For these reasons, opinion leaders are essential to marketing managers. They are not ignored by consumers, and they may be seen as more reliable sources of information than traditional advertising. Therefore, it is important for firms to identify and engage opinion leaders in their marketing strategies.
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national economies, regardless of industry, are measured through what?
A) Aggregate output,
B) Output per capita,
C) Standard of living,
D) Inflation rates,
E) Gross national product.
Answers
National economies, regardless of industry, are typically measured through various economic indicators. One such indicator is aggregate output, which refers to the total value of all goods and services produced within a country's borders.
This measurement provides a broad overview of the size and growth of the economy and is often used to compare the economic performance of different countries.
Another common measurement is output per capita, which calculates the average level of economic output per person within a given country. This measurement is useful for understanding the distribution of economic activity and determining how well a country's economy is serving its citizens.
The standard of living is also frequently used as a measure of national economies. This term refers to the quality of life enjoyed by the population of a country, taking into account factors such as income, healthcare, education, and access to basic necessities.
Inflation rates are another important economic indicator, as they reflect the rate at which the general level of prices for goods and services is increasing over time. High inflation rates can indicate economic instability, while low rates can indicate a healthy and stable economy.
Finally, gross national product (GNP) is another commonly used measure of national economies. GNP is similar to gross domestic product (GDP) but includes income earned by a country's citizens abroad while excluding income earned by foreign nationals within the country.
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Which of the following summarizes the essence of field work standards of GAAS?
A. Quality of professionals that perform an audit
B. Criteria for judging the quality of audit work
C. Whether the auditor was independent in conducting the audit
D. Whether the auditor reviewed the client's financial statements for adherence to GAAP
Answers
The correct answer is B. Criteria for judging the quality of audit work.
How does GAAS define field work standards?The answer is B. Criteria for judging the quality of audit work. Field work standards of Generally Accepted Auditing Standards (GAAS) establish the criteria by which the quality of audit work is assessed.
These standards guide auditors in planning, executing, and documenting their work to ensure a high level of quality and reliability. The field work standards focus on factors such as sufficient evidence gathering, proper application of auditing procedures, adequate supervision and review, and professional skepticism.
By adhering to these standards, auditors aim to obtain reasonable assurance about the accuracy and integrity of financial statements, providing stakeholders with confidence in the reliability of the audit process and the resulting financial information.
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What do you want to be when you a grow up? I want to be a model or a fitness model or a boxer or a professional tahitian dancer or belly dancer you?
Answers
-Interior designer
-Psychology counseling
-Fashion designer
-Small business owner (cafe?)
-Or something in the cosmetic indestry
Answer:
I love to read and write. So, I want to become an author. I want to entertain people with my stories. I also want to be a media specialist. I love being part of the library and the books.
Explanation:
Cheng is making a trip to her safe deposit box. what is she most likely planning to do? a. pay a monthly credit card bill at a bank. b. put her marriage license in a secure location. c. register for an updated driver’s license. d. ask for help with her recent tax return.
Answers
Since Cheng is going to her safe deposit box, the most likely thing she's planning to do is to put her marriage license in a secure location. Therefore, the correct answer is option B.
Safe deposit box is a box, locked and stored in a vault. The vault is generally located in post offices, banks, or other institutions. Safe deposit boxes are used to store valuable possession. Customers can store various things in it, such as luxury goods, important documents, or computer data. The size of the safe deposit box usually ranges from 3 by 5 inches to 10 by 10 inches.
Attached below is a picture of the safe deposit boxes inside a Swiss Bank.
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Partnership business can't be successful without mutual understanding?
Answers
Answer:
yes that's so true,it helps a lot in business
Customers have different expectations when they purchase a Lexus than when they purchase a Hyundai. These expectations affect ________.
Answers
Customers have different expectations when they purchase a Lexus than when they purchase a Hyundai. These expectations affect customer satisfaction and brand perception.
Lexus is a luxury brand that is known for its high-quality materials, sophisticated styling, and advanced technology features.
Customers who purchase a Lexus are likely to have high expectations for these features, as well as for superior performance and reliability. They may also expect a higher level of customer service and a more personalized buying experience.
In contrast, Hyundai is a more affordable brand that is known for its reliability, practicality, and value for money. Customers who purchase a Hyundai may have different expectations, such as a balance of features and affordability, fuel efficiency, and low maintenance costs.
They may also prioritize practicality and reliability over luxury and advanced features.
These different expectations can have a significant impact on customer satisfaction and brand perception. If a customer's expectations are met or exceeded, they are likely to be more satisfied with their purchase and have a positive perception of the brand.
On the other hand, if a customer's expectations are not met, they may be dissatisfied with their purchase and have a negative perception of the brand.
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The professional qualifications standards provided by the __________ are a valuable tool for establishing positions, developing KSAs, advertising and hiring, and determining base salaries that are in line with jobs with comparable skill levels.
Answers
The NFPA - National Fire Protection Association is responsible for coming up with professional qualifications standards.
They are set up with the purpose of preventing and or reducing the occurrence of death, loss of lives, property and businesses arising from fire, electrical hazards, and similar risks.
It is the belief of the NFPA that employing rightly is critical to the attainment of these objectives.
Knowledge, Skills, and Abilities (KSA) must also be developed perperly if existing and incumbent staff are to remain efficient at their jobs.
As with every other job/organization that bears directly on life and property, the NFPA's processes are held to very high standards.
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How important is money
Answers
Answer:
very important
Explanation:
money is a global income source for everyone. we all have different types but it is all still money. now say one country got rid of money and had people pay for stuff using other things. if china did that lots of different countries wouldn't be able to get stuff from there unless they had so much of that product they could just give it up.
1. Use the following 10 terms to fill in the blanks in the two sentences below. Use
each term only once. (10 points total: Part I - 1 point each; Part II - I point
each)
buys
more
decrease
sells
from
smaller
increase
larger
Answers
An increase in demand typically results in a larger quantity of goods being sold, while a decrease in supply can lead to a smaller amount available for purchase.
When the demand for a product increases, the market usually responds by selling more of that product. This increase in sales leads to a larger quantity being bought by consumers. On the other hand, when there is a decrease in the supply of a product, it can result in a smaller amount of that product being available for purchase. Consequently, buyers may need to look for alternative options or buy from different sources.
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_____ is part of the ________ process and occurs when the company is trying to increase its inventory.
Answers
Considering the accounting principles, the Make-to-stock; is part of the production process and occurs when the company is trying to increase its inventory.
This is because Make to Stock, otherwise referred to as MTK, is a method business owner often use to ensure the product is readily available and delivered at the point of purchase.
Make to Stock is a traditional method of production that is carried out in the hope that consumers will soon come and buy the products. Thereby, the company produces huge products at a given time and stores them as inventory.
Hence, in this case, it is concluded that the correct answer is "Make to stock; production, " respectively.
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14. Inequality to employees is one of the major demerits of
multinational
company. Explain
Answers
The correct answer to this open question is the following.
Although there are no options attached we can say the following.
Inequality to employees is one of the major demerits of a multinational company. This quote can be explained in the following way.
When multinational companies open offices or branches in other countries, regularly they do it in developing nations. The reason why is because in those developing countries these compies can pay cheaper salaries. That is why they leave their native country and open fabrics in regions such as Latin America, Central America, India, or Africa. Labor is cheaper than in the United States or European countries.
So there it is the inequality. Workers labor the same hours or more than workers in developed countries, but h¿they receive less money for their work and fewer perks.
when the Vat rate is 15% a customer pays Rs 1610 to buy an electric iron . Find the cost of the iron without Vat.
Answers
is this a real answer what the actual f
2. Suppose that there are five different lemonade stands in the same neighborhood. Explain
how the lemonade stands meet most of the conditions of perfect competition
Answers
Answer:
Eventually prices will equalize at all five lemonade stands.
Explanation:
Perfect competition is accomplished when, in an appropriate business, all firms have identical price arrangements and there is an adequately substantial amount of these same firms so that the production arrangement of any one firm has no obvious influence on the cost at which it commodity is marketed.
The lemonade made are similar in taste, thus they are identical products. Thus, if a lemonade seller increases the price of their good, buyers can patronise another lemonade seller. As a result, the price of lemonades would be the same among the five sellers.
Also, there is little or no barriers to entry for lemonade sellers.
A perfect competition is a market were there are numerous buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
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I NEED HELP ;((((((
please someone
Answers
The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is.
Answers
The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is nonexistent.
When reporting financial data, businesses and other organizations must abide by accounting principles. Any set of accounting principle' main objective is to make sure that a company's financial statements are accurate, reliable, and comparable. Investors will find it simpler to examine and glean valuable information from the company's financial records as a result, including historical trend data. The term "goods" in economics refers to things that fulfill human needs and offer utility, such as to a customer buying a fulfilling product. The terms "transferable commodities" and "transferable services" are frequently used interchangeably.
When it comes to whether they are excludable, non-excludable, rival, or nonrival, the fundamental sorts of goods vary.
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What is a disadvantage of using a checking account instead of other types of
accounts?
A. You will likely not have federal protection for your money.
B. You will pay a fee if you make too many transactions.
C. You will generally not receive interest.
D. You will pay a penalty if you withdraw your money.
Answers
Answer:
you will generally not receive interest
Explanation:
took the quiz
logical fallacy Well, what form of government do you want, a government by liberal do-gooders ready to spend your hard-earned dollars or a government led by business minds that understand how to live within a tight budget and generate jobs that put people to work. Group of answer choices
Answers
Answer:
i don´t nou sorry
Explanation:
what benefits and limitations of businesses specializing in the prodution and supply of just one type of good
Answers
Answer:
Limited market: If the demand for the product decreases or the market becomes saturated, the business may struggle to sell its products.
Dependence on a single product: If something goes wrong with the production of the product, the business may struggle to continue operating.
Lack of diversification: Specializing in just one product means that the business is not diversified and may be more vulnerable to market fluctuations.
Hello,
I hope you and your family are doing well!
The benefits of specializing in the production and supply of just one type of good include achieving economies of scale, developing expertise in a specific market, and reducing costs. Limitations include limited market opportunities, dependence on a single product, and difficulty diversifying.
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Happy Holidays!
Analyst why the mobility of labour may increase over time.
Answers
The mobility of labor may increase over time due to the following:
Increase in tradeIncrease in resourcesGrowth of industries.What is meant by mobility of labor?This is the term that is used to refer to the way that workers that are within a nation are able to move in their country or in nations that are outside their own.
There are several reasons for this. When industries are growing, there would be the need for ,ore people to be hired to make up the work force in the economy. Another reason is when there are increased resources such as capital in the nation.
The mobility tells us the ease with which these workers are able to move around in the economy. This is one of the core principles of economics as it tells us the way that Labor is able to affect growth in the economy as well as the production of goods and services.
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