Suggested Plan for Writing Article Critique Report Assignment 2 – ACC00106 Contemporary Issues in Accounting

Executive Summary (1/2 separate page placed before Table of Contents)

Provide an executive summary with 5 features – brief overview of the purpose of the report and an effective summary of report content

Table of Contents

1.0 Introduction (10% of word length=100-120 words)

Introduce contemporary issue in accounting as important influences in business; outline main points to be developed; give a statement telling the reader what your report will cover (thesis statement)

2. 3. 4. 5. 6.

Attachments:

ACC00106Ass2g….docx

Academicwriti….docx

CSR-1.pdf

CSR-2.pdf

CSR-3.pdf

Five years ago, Highland, Inc. issued a corporate bond with an annual coupon of $7,000, paid at the rate of $3,500 every six months, and a maturity of 25 years. The par (face) value of the bond is $1,000,000. Recently, however, the company has run into some financial difficulty and has restructured its obligations. Today’s coupon payment has already been paid, but the remaining coupon payments will be postponed until maturity. The postponed payments will accrue interest at an annual rate of 7.5% per year and will be paid as a lump sum amount at maturity along with the face value. The discount rate on the renegotiated bonds, now considered much riskier, has gone from 7.0% prior to the renegotiations to 14.5% per annum with the announcement of the restructuring. What is the price at which the new renegotiated bond should be selling today? Recall that the compounding interval is 6 months and the YTM, like all interest rates, is reported on an annualized basis.

Updraft Systems, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Activity Rate Supporting manufacturing $18 per direct labor-hour Order processing $184 per order Custom designing $255 per custom design Customer service $426 per customer ————————————– Management would like an analysis of the profitability of a particular customer, Eagle Wings, which has ordered the following products over the last 12 months: Standard Model : Custom Design Number of gliders 13 : 3 Number of orders 2 : 3 Number of custom designs 0 : 3 Direct labor-hours per glider 29.50 : 32 Selling price per glider $1,725 : $2,350 Direct materials cost per glider $478 : $576 ————————————– The company’s direct labor rate is $18 per hour. Using the company’s activity-based costing system, compute the customer margin of Eagle Wings.

In 2016 The ZSG Company entered into a construction contract. At the projectAc€?cs beginning the company estimated that it will take 3 years to complete and will cost $4,315,200 to complete. The contract price is $6,472,800 which will be paid to The ZSG Company by the purchaser over the course of the construction.

The following information was accumulated during the construction period:

Instructions, using EXCEL:

1. Compute the estimated gross profit that should be recognized in each year of the construction period using the percentage of completion method.

2. Compute the estimated gross profit that should be recognized in each year of the construction period using the completed contract method.

E13-12 Sales Warranty Accrual Method On August 1, 2007 Pereira Corporation has ready for sale 2,000 Wiglow instru- ments. During the next 5 months, 1,600 Wiglows are sold at $460 each with a one-year warranty. Pereira estimates that the warranty cost on each Wiglow will probably average $10 per unit. In this period, Pereira incurred warranty costs of $9,200. Costs for 2008 were $7,000.

Required

1.      Prepare the journal entries for the preceding transactions, using the sales warranty accrual method.

2.      Show how the items would be reported on the December 31, 2007 balance sheet.