A steel mill in Canada has inverse demand function p = 100 – q (so its revenue function is given by R = 100q – q²) and cost function is C = 80 + 4q.

a) What is the firm’s output under each of the following three regimes?

i) Profit maximization.

ii) Revenue maximization.

iii) Output maximization subject to nonnegative revenue.

b) If MC = 0, which of the above three regimes (profit-maximizing, revenue-maximizing or output maximizing) is likely to yield higher total surplus (or be closer to competitive equilibrium)? Explain briefly without any calculation.

On January 1, 2018, your company purchases a bond investment. The facts are as follows: Face amount $820,000 Cost of bonds $780,913 Stated rate 12% Term 3 years Market rate 14% Interest is recorded semi-annually June 30, 2018. Record the entry for the semi-annual interest revenue.

Date Account Debit Credit 6/30:

Cash

Discount on Bonds Investment

Interest Revenue

December 31, 2018 Record the entry for the semi-annual interest revenue. Date Account Debit Credit 12/31

Cash

Discount on Bonds Investment

Interest Revenue

The City of San Antonio is considering various options for providing water in its 50-year plan, including desalting. One brackish aquifer is expected to yield desalted water that will generate revenue of $4.1 million per year for the first 5 years, after which less production will decrease revenue by 10% per year each year. If the aquifer will be totally depleted in 23 years, what is the present worth of the desalting option revenue at an interest rate of 5% per year?

The present worth of the desalting option revenue at an interest rate of 5% per year is determined to be $

1.Given the following adjusted trial balance, determine the company's net income for the year:

a) $496

b) $270.

c) $324.

d)$98.

e) $220

2.A company has the following adjusted trial balance:

After closing entries have been journalized and posted, the balance in the company's retained earnings account will be

a) $8,450.

b) $4,350.

c) $4,550.

d) $5,050.

e) $4,700.

3. Which of the following accounts will not appear in the post-closing trial balance because it has been closed?

a) Cash

b) Unearned Revenue

c) Service Revenue

d) Accounts Payable

e) Common Stock

On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $410 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):

2018  

Costs incurred during the year $ 50

Estimated costs to complete as of December 31 $200

2019  Costs incurred during the year $ 150

Estimated costs to complete as of December 31 $50

2020 Costs incurred during the year $ 45

Estimated costs to complete  —

Required:

1. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion.

2. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time.

3. Suppose the estimated costs to complete at the end of 2019 are $200 million instead of $50 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method.

Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time. (Enter your answers in millions. Loss amounts should be indicated with a minus sign.)

Suppose the estimated costs to complete at the end of 2019 are $200 million instead of $50 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method.  (Enter your answers in millions. Use percentages as calculated and rounded in the table below to arrive at your final answer.)

On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $260 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):

Required:
1. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion.
2. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time.
3. Suppose the estimated costs to complete at the end of 2019 are $110 million instead of $60 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method.

Required 1

Required 2

Required 3

Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. (Enter your answers in millions. Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.)

2.

Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time. (Enter your answers in millions. Loss amounts should be indicated with a minus sign.)

3.

Suppose the estimated costs to complete at the end of 2019 are $110 million instead of $60 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method. (Enter your answers in millions. Use percentages as calculated and rounded in the table below to arrive at your final answer.)

Problem 1 SG operates a booth at a local mall, selling watches. Current monthly sales revenue is $24,000 with total variable costs (wholesale cost of watches) of $9,000. SG currently pays $2,000 a month to rent the space and pays two full-time employees to each work 160 hours a month at $15 per hour. The manager is paid a monthly salary of $4,000.

1.Calculate how much sales revenue SG needs to break even.

2.If SG wants to earn an operating income of $6,300 per month, then how much sales revenue does it need to generate? 3.Calculate operating income if SG achieves sales revenue of $30,000.

4.Assume SG can choose to pay rent at a rate of 10 percent of revenue. Note that this option would lower the CM ratio by 0.10 and lower fixed costs by $2,000 per month. SG can choose to pay rent either 1) as 10% of its revenue, or 2) as a monthly payment of $2,000. At what sales levels would SG prefer to pay a fixed amount of monthly rent (i.e., $2,000 per month), and at what sales levels would SG prefer to pay 10% of its monthly revenue as rent?

The Wilton is an all-inclusive spa and hotel in the heart of Brooklyn and uses guests as its measure of activity. During June, The Wilton budgeted for 2,000 guests, but it actually hosted 2,100 guests. The hotel used the following revenue and cost formulas in its budgeting, where q is the number of guests:

Revenue: $62.90q
Personnel expenses: $28,500 + $20.40q
Food and beverage supplies: $1,400 + $9.90q
Occupancy expenses: $8,200 + $3.30q
Spa expenses: $4,000 + $0.40q

The hotel reported the following actual results for June:

Revenue                                       $129,450

Personnel expenses                      $ 74,770

Food and beverage supplies           $ 22,940

Occupancy expenses                     $ 14,640

Spa expenses                                   $   4,740

Required:
a. Prepare a flexible budget performance report showing The Wilton’s revenue and spending variances and activity variances for June. Label each variance as favorable (F) or unfavorable (U), filling out the shaded squares. (22 points)

b. Describe at least two potential reasons for the revenue, spa expenses and food/beverage supplies variances found above. Are any of the variances related? Describe. (6 pts)

Write on the similarities and differences between the following terms

Public Accounts                                            Private Accounts                                          

Government Accounting                            Commercial Accounting                              

Cash Accounting Basis                                Accrual Accounting Basis                             

Revenue                                                        Income                                                           

Tax Revenue                                                 Non Tax Revenue                                         

The Executive                                               The Legislative                                              

Government Budget                                    Incremental Budget                                     

Recurrent Expenditure                               Capital Expenditure                                     

Internal Audit                                               External Audit   

IPSAS 1                                                           IAS 1