Question 7

Who loses from inflation? Please describe carefully.

Write short notes on:

(a) Real property.

(b) Personal property.

Write short notes on:

(a) vicarious liability;

(b) negligence.

performance of execution?

Statement 1:

if NOT EXISTS ( select * from publishers where state = 'NY')

begin

SELECT 'Sales force needs to penetrate New York market'end

else

begin

SELECT 'We have publishers in New York'

end

Statement 2:

if EXISTS ( select * from publishers where state = 'NY')

begin

SELECT 'We have publishers in New York'

end

else

begin

SELECT 'Sales force needs to penetrate New York market'

end

The summary Balance Sheet of Billy Trading Company on 1 April 2003 was as follows:

＄

Equipment (at cost) 180,000

Less: Provision for depreciation (68,400)

Stock 38,600

Debtors 50,000

Total assets 200,200

Financed by:

Share Capital 70,000

Revenue Reserves 50,000

10% debentures 70,000

Proposed dividends 2,200

Bank overdraft 8,000 200,200

Additional information:

1. The following sales, purchases and payment transactions are expected to occur in the next three months:

Sales Purchases Expenses

＄ ＄ ＄

April 360,000 180,000 60,000

May 370,000 200,000 70,000

June 360,000 190,000 80,000

2. All sales are on credit basis and the collection pattern is expected as follows:

(a)80% of the money will be collected in the month of sales. It is estimated that 5% cash discount will be given for collections in this period.

(b)The remaining 20% of the money will be collected in the month subsequent to sales.

3. Payment to creditors is made in the month of purchases in order to take the advantage of 10% discount which is calculated on the gross purchase figures.

4. Depreciation of tide equipment is calculated at a rate of 15% per annum on cost. Depreciation charges have been included in the estimation of expenses for each month from April to June 2003.

5. Expenses are paid in the month in which they are incurred.

6. Stock levels are expected to remain unchanged throughout the period.

7. The proposed dividend will be paid in May 2003.

8. The debentures interest for the three months will be paid in July 2003.

Required:

(a)Prepare a Budgeted Profit and Loss Account for the three months ended 30 June 2003.

(b)Prepare a Cash Budget for each of the three months from April to June 2003.

(c)Prepare a Budgeted Balance Sheet as at 30 June 2003.

After the first year of trading, Mr. Wong provided you the following list of ledger balances as at 31 December 2003:

＄

Stock, 1 January 2003 3,300

Stock, 31 December 2003 25,200

Sales 160,000

Purchases 100,000

Premises 142,600

Fixtures & Fittings 45,200

Motor Vehicles 42,500

Returns Inwards 1,500

Returns Outwards 2,600

Carriage Inwards 1,000

Carriage Outwards 250

Debtors 30,500

Creditors 41,500

Wages 17,495

Rent and Rates 3,900

Lighting & Heating 18,455

Insurance 10,600

Motor Vehicle Expenses 2,400

Cash at Bank 4,700

Bank Loan 29,000

Loan Interest 2,300

Drawing 6,400

You are further given the following information:

1.Wages owing are ＄550.

2.Prepaid rent is ＄600.

3.Depreciation of Fixtures & Fittings is 10% per annum on cost.

4.Depreciation of Premises is based on a 10-year lease.

5.Depreciation of Motor Vehicles is 50% life using the reducing balance method.

6.Stock taken for Mr. Wong's own use is ＄1,100. Such a transaction has not yet been recorded.

7.It is estimated that one-third of the driving time is for private purposes.

8.5% of the outstanding accounts at the year end is thought to be uncollectible.

9.There was no error made in the recording of business transactions for the year.

Required:

(a)Prepare a Trading and Profit and Loss Account for the year ended 31 December 2003.

(b)Prepare a Balance Sheet as at 31 December 2003.

(c)Explain the meaning and the significance of Working Capital.

Explain: "Equal increases in government spending and tax revenues of n dollars will increase the equilibrium GDP by n dollars". Does this hold true regardless of the size of the MPS?

Joey Balder, CFA, was approached by the management of Flagship Investment Managers about becoming Flagship’s Southtown branch supervisor. Balder is reluctant to accept the position because certain compliance procedures have not been adopted in that branch. To comply with the Standards, Balder should most appropriately:

A.discuss his concerns with management and tell them he will not accept the position unless and until he is given authority over compliance procedures.

B.accept the position on condition that the procedures be adopted immediately.

C.accept the position and use his best efforts to get the procedures implemented as soon as possible.

D.decline in writing to accept the supervisory position until the firm adopts appropriate procedures.

What is the Phillips curve? What does it purport to show? Why might we be interested in the relationship suggested by the Phillips curve? Explain.

(a)write short notes on the following:

(i)CAMEL

(ii)Market Risk Exposure

(iii)STET

(iv)Code of Banking Practice

(b)What travel facilities do banks provide to their customers?