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f ﬁ/ / “10. See transaction 8 and make the March 31 adjustment of depreciation expense on a
straight—line basis. The estimated life of the fixtures and equipment is 10 years with no expected terminal scrap value.
11. Cash dividends of Rs.4,000 were declared and disbursed to stockholders on March 30. , 1:
P’ 1:43 Prepare the T-accounts and construct the balance sheet and the profit and loss statement.
What advice would you offer the owners based on the information compiled in the ﬁnancial
statements? ( l 0) Question 3 (a)
The Saha Hosiery Company provides you with the following miscellaneous data regarding
operations in 2005. « Gross proﬁt: Rs. 20,000
Net loss: (5000) 6 0
Direct material used: 35,000
Direct labour: 25,000
Fixed manufacturing overhead: . 15,000
Fixed-selling and administrative expenses: 10,000 There are no beginning or ending inventories. Compute (1) variable selling‘and administrative
expenses, (2) contribution margin, (3) variable manufacturing overhead, (4) break-even point, and
(5) manufacturing cost of goods sold. (5) Question 3 (b)
Atithi Hotels Corporation operates many hotels throughout the world. One of its hotels is facing
difficult times because of the opening of several new competing hotels. To accommodate its ﬂight personnel, Akash Airlines has offered Atithi a contract for the coming
year that provides a rate of Rs.500 per night per room for a minimum of50 rooms for 365 nights. Atithi manager has mixed feelings about the contract. On several peak nights during the year the
hotel could sell the same Space for Rs.1,000 per room. Find thefo-llowing: 1. Suppose the Atithi manager signs the contract. What is the opportunity cost on
December 28, when only 10 of these rooms would be expected to be rented at an average
rate of R5900? 2. If the year-round rate per room averaged R3900, what percentage of occupancy of the 50
rooms in question would have to be rented to make Atithi indifferent about accepting the offer? - (2.5+2,5) Question 4 -A new highway is to be constructed. Design A calls for a coacrete pavement costing R5900 per
meterwith a 2-0»year life, and three box culverts every kilometer, each costing Rs.90,000 and
having a 20-year life. Annual maintenance will cost Rs. 18,000 per kilometer. The culverts must
be cleaned every ﬁve years at a cost of Rs.4,500 each per km. . m;
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- Spring '13