A large furniture company claims that 65% of all individuals who buy chairs from its stores choose wood chairs, 20% choose plastic chairs, and 15% choose metal chairs. To investigate this claim, researchers collected data from a random sample of the company's customers. The results were 305 wood, 121 plastic, and 74 metal. Are the data from the sample consistent with the company's claim? Conduct an appropriate statistical test at the 5% significance level to support your conclusion. Make sure to include parameters, check conditions, and show calculations before formulating a conclusion. (10 points)

A large furniture company claims that 65% of all individuals who buy chairs from its stores choose wood chairs, 20% choose plastic chairs, and 15% choose metal chairs. To investigate this claim, researchers collected data from a random sample of the company's customers. The results were 305 wood, 121 plastic, and 74 metal. Are the data from the sample consistent with the company's claim? Conduct an appropriate statistical test at the 5% significance level to support your conclusion. Make sure to include parameters, check conditions, and show calculations before formulating a conclusion. (10 points)

3. Suppose that in 2005 in Monetaria the money supply is 10,000 and the nominal GDP is 20,000.

A) Find the velocity of circulation V for 2005.

B) In 2018 the money supply was 18,850. The real GDP for 2018 was 29,370 in 2005 dollars. Find the average growth rate of the money supply and the average growth rate of real GDP. (Hint: what is the relationship between real and nominal GDP for the base year?)

C) Assuming that the velocity of circulation has stayed constant from 2005 to 2018, what was the inflation rate between those years?

D) Suppose that the real interest rate in Monetaria has been stable at 4% (0.04 as a fraction.) What was the nominal interest rate over that time frame?

1. a, b, and c agree to form a real estate investment partnership. they decide to form an equal, cash-method, general partnership, with each contributing property worth $300,000. A contributes cash in that amount; B contributes raw land purchased for $100,000 and held for two years; C contributes publicly traded stock purchased for $400,000 and held for six months. The parties anticipate a serious exploration of the real estate market and will either hold the real estate and any subsequently acquired real estate for appreciation or will construct an apartment building for rental purposes.

a. what gain or loss is recognized by each partner as a result of these contributions?

b. what is the tax basis of each partner's interest in the partnership?

c. what is the partnership's basis in each asset?

d. what is each partner's holding period for his partnership interest?

e. what is the partnership's holding period for its assets?

2. same as 1. above, expect that, two years after formation of the partnership, D acquires an interest in the partnership in exchange for contributing a parcel of land that adjoins the partnership's original property. D purchased this parcel for $200,000, and it is worth $400,000 at the time of contribution. At that time, the partnership's original land has appreciated in value to $500,000, the stock contributed by C has recovered to $400,000 in value, and the partnership continues to hold $300,000 in cash as its only other asset.

a. what is D's percentage interest in the partnership?

b. what gain or loss is recognized by D as a result of her contribution?

c. what gain or loss is recognized by the other partners as a result of D's contribution?

3. same as 1. above, except that B contributes publicly traded stock rather than land

a. what gain or loss is recognized by each partner as a result of these contributions?

b. what is the tax basis of each partner's interest in the partnership?

c. what is the partnership's basis in each asset?

d. what is each partner's holding period for his partnership interest?

e. what is the partnership's holding period for its assets?

February 1^st transaction is completed as an example:  Only include the letter of the account not the account name.

27.            $__________If January 31st cash was $10,000, what is the cash balance at the end of the day on 2/28?

Articulation Exercise

Listed below are selected account balances for Moby Corporation at December 31, Year 2 and Year 1. Also available for you is selected information from the income statement for Moby for the year ended December 31, Year 2.

Selected balance sheet accounts:       Year 2                                       Year 1

Assets:

Accounts Receivable                           $18                                           $22

Prepaid Salaries                                     8                                              7

Prepaid Rent                                         3                                              5

Property, Plant & Equipment                310                                           283

(Accumulated Depreciation)                (75)                                          (68)

Investments                                         26                                             24

Liabilities & Stockholders’

Equity:

Salaries Payable                                   12                                              9

Unearned Sales Rev.                              4                                              1

Notes Payable                                     39                                             34

Dividends Payable                                 6                                              4

Contributed Capital                              32                                             24

Retained Earnings                                42                                             39

Selected income statement information for the year ended December 31, Year 2:

Sales revenue                                     $74

Depreciation                                       18

Salaries Expense                                  27

Gain on sale of equipment                       7

Loss on sale of investments                     3

Net Income                                         21

Additional information:

1. During Year 2, Property, Plant & Equipment costing $26 was sold causing a gain.
2. During Year 2, $22 of Notes Payable were issued in exchange for Property, Plant and Equipment. This involves an exchange of Notes Payable for Property, Plant and Equipment.
3. During Year 2, the firm sold Investments for $8 cash.

Required: Determine the correct dollar amounts for each of the following items. Place your answers in the spaces provided.

1. Cash paid for salaries in Year 2.                                                                  $_________                                              
2. Payments for the purchase of Investments in Year                                        $_________           

3. Notes Payable paid off in Year 2.                                                                 $_________                                                           

4. Cash dividends paid in Year 2                                                                     $_________                      
5. Cash received from the sale of Property, Plant and Equipment in Year 2              $_________                                                           
6. Cash paid for Property, Plant & Equipment in Year 2                                      $_________           

7. Cash collected from customers in Year 2                                                         $_________

Articulation Exercise

Listed below are selected account balances for Moby Corporation at December 31, Year 2 and Year 1. Also available for you is selected information from the income statement for Moby for the year ended December 31, Year 2.

Selected balance sheet accounts:       Year 2                                       Year 1

Assets:

Accounts Receivable                           $18                                           $22

Prepaid Salaries                                     8                                              7

Prepaid Rent                                         3                                              5

Property, Plant & Equipment                310                                           283

(Accumulated Depreciation)                (75)                                          (68)

Investments                                         26                                             24

Liabilities & Stockholders’

Equity:

Salaries Payable                                   12                                              9

Unearned Sales Rev.                              4                                              1

Notes Payable                                     39                                             34

Dividends Payable                                 6                                              4

Contributed Capital                              32                                             24

Retained Earnings                                42                                             39

Selected income statement information for the year ended December 31, Year 2:

Sales revenue                                     $74

Depreciation                                       18

Salaries Expense                                  27

Gain on sale of equipment                       7

Loss on sale of investments                     3

Net Income                                         21

Additional information:

1. During Year 2, Property, Plant & Equipment costing $26 was sold causing a gain.
2. During Year 2, $22 of Notes Payable were issued in exchange for Property, Plant and Equipment. This involves an exchange of Notes Payable for Property, Plant and Equipment.
3. During Year 2, the firm sold Investments for $8 cash.

Required: Determine the correct dollar amounts for each of the following items. Place your answers in the spaces provided.

1. Cash paid for salaries in Year 2.                                                                  $_________                                              
2. Payments for the purchase of Investments in Year                                        $_________           

3. Notes Payable paid off in Year 2.                                                                 $_________                                                           

4. Cash dividends paid in Year 2                                                                     $_________                      
5. Cash received from the sale of Property, Plant and Equipment in Year 2              $_________                                                           
6. Cash paid for Property, Plant & Equipment in Year 2                                      $_________           

7. Cash collected from customers in Year 2                                                         $_________

Consider the following scenario:

The privately owned Baker Company was founded in 1960. The company manufactures kitchen cabinets and has been very successful, expanding from one facility to twelve facilities in the same and other states. All facilities but the original are located near interstate highways. The original facility, which is no longer the headquarters, is in a downtown area of a major city (which grew up around it) with relatively high real-estate taxes. It has had a negative contribution margin and a net loss for the last five years. The founder is retired and three of his children want to close the facility. The fourth does not, because it "was Dad's first place and I went there every day after school." She believes they can bring the facility back to profitability if the city's downtown revitalization project succeeds and they dedicate the first floor of the facility to retail.

Consider:

• Your definition for "negative contribution margin."
• Whether the fact that the facility is not near an interstate makes a difference in the decision.
• Would it make a difference if the company were publicly traded?
• Might there be additional costs, in addition to revenues, to convert the first floor of the facility to retail?
• What risks may be associated with leasing to retail stores?
• What is your recommendation? Close and sell the facility or modify the first floor to be able to lease to retail stores.

Store Closing?

For this discussion, consider the following scenario:

The privately owned Baker Company was founded in 1960. The company manufactures kitchen cabinets and has been very successful, expanding from one facility to twelve facilities in the same and other states. All facilities but the original are located near interstate highways. The original facility, which is no longer the headquarters, is in a downtown area of a major city (which grew up around it) with relatively high real-estate taxes. It has had a negative contribution margin and a net loss for the last five years. The founder is retired and three of his children want to close the facility. The fourth does not, because it "was Dad's first place and I went there every day after school." She believes they can bring the facility back to profitability if the city's downtown revitalization project succeeds and they dedicate the first floor of the facility to retail.

• Your definition for "negative contribution margin."
• Whether the fact that the facility is not near an interstate makes a difference in the decision.
• Would it make a difference if the company were publicly traded?
• Might there be additional costs, in addition to revenues, to convert the first floor of the facility to retail?
• What risks may be associated with leasing to retail stores?
• What is your recommendation? Close and sell the facility or modify the first floor to be able to lease to retail stores.

A 335-room hotel property recorded in 2004 a 66.6% occupancy and an ADR of $117.98. What is the property’s franchise fee (1) on a per available room basis and (2) as a percentage of rooms revenue if the agreement required the hotel to pay a reservation fee of $7.65 per available room per month; a royalty fee of 5% of rooms revenue; an advertising fee of 2.3% of rooms revenue; and a frequent traveler program fee of $5.00 per occupied room. The hotel had frequent stay guests totaling 6% of the occupied rooms. The initial fee is a minimum of $45,000 plus $300 per room for each room over 150.

1. Please use the information from Question 1 to calculate the Total franchise fee.

              Total franchise fee (round to a whole number) $ ___

2. Please use the information from Question 1 to calculate the Franchise fee on PAR basis.

             Franchise fee on PAR basis (round to two decimal places) $___ PAR/yea

3.Please use the information from Question 1 to calculate the Franchise fee as a % of revenue.

             Franchise fee as a % of revenue (round to two decimal places) ___%