Question
A. Describe how the two types of asset are valued for balance sheet purposes, using as an example the following assets owned by a company
A. Describe how the two types of asset are valued for balance sheet purposes, using as an example the following assets owned by a company that writes and sells software packages:
a stock of 500 user manuals for version 1 of a package, version 2 of which is to appear shortly. The company paid 5,000 to have 1,000 manuals printed and has been selling them at 25 per copy;
a file server costing 15,000 that is used by the software development teams.
[10 Marks]
B. Employees of Syniad Software plc work a five-day week. They are entitled to 20 days holiday a year in addition to public holidays. On average, each employee loses 10 working days per year through sickness. Syniad aims to allow each employee 15 days per year for training. Experience shows that employees spend an average of five days a year unproductively, as a result of scheduling problems. In accordance with government regulations, employers must pay social security contributions equal to 6 per cent of salary. Calculate the average direct cost of one days work from an employee earning 20,000 per year. State explicitly any assumptions you make.
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