Exercise 17-27

On August 15, 2016, Splish Co. invested idle cash by purchasing a call option on Counting Crows Inc. common shares for $504. The notional value of the call option is 560 shares, and the option price is $56. The option expires on January 31, 2017. The following data are available with respect to the call option.

Date
Market Price of Counting
Crows Shares
Time Value of Call
Option
September 30, 2016 $67 per share $252
December 31, 2016 $64 per share 91
January 15, 2017 $66 per share 42

Prepare the journal entries for Splish for the following dates.

(a) Investment in call option on Counting Crows shares on August 15, 2016.
(b) September 30, 2016—Splish prepares financial statements.
(c) December 31, 2016—Splish prepares financial statements.
(d) January 15, 2017—Splish settles the call option on the Counting Crows shares.

(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.
Date
Account Titles and Explanation
Debit
Credit
(a)

Aug. 15, 2016
Sep. 30, 2016
Dec. 31, 2016
Jan. 15, 2017
(b)

Aug. 15, 2016
Sep. 30, 2016
Dec. 31, 2016
Jan. 15, 2017
(To record the change in intrinsic value.)
(To record the time value change.)
(c)

Aug. 15, 2016
Sep. 30, 2016
Dec. 31, 2016
Jan. 15, 2017
(To record the change in intrinsic value.)
(To record the time value change.)
(d)

Aug. 15, 2016
Sep. 30, 2016
Dec. 31, 2016
Jan. 15, 2017
(To record the time value change.)
(To record settlement of call option.)

( X, τ ) is normal if and only if for each closed subset C of X and each open
set U such that C ⊆ U, there exists an open set V satisfies C ⊆ V ⊆clu( V) ⊆ U

Rebecca and Walter Bunge have been married for 5 years. They live at 883 Scrub Brush Street, Apt. 52B, Las Vegas, NV 89125. Rebecca is a homemaker and Walt is a high school teacher. Rebecca's Social Security number is 222-43-7690 and Walt's is 700-01-0002. Walt's earnings from teaching are:

The Bunges incurred the following expenses during their move from Maine to Nevada in January of 2016:

The school district reimbursed Walter $500 for moving expenses. These are reflected on his W-2. Walter’s previous job, as a high school teacher in Maine, was only 5 miles from his home. Rebecca was unemployed prior to the move.

The Bunges own a ski condo located at 123 Buncombe Lane, Brian Head, UT 84719. The condo was rented for 185 days during 2016 and used by the Bunges for 15 days. Pertinent information about the condo rental is as follows:

The above amounts do not reflect any allocation between rental and personal use of the condo. The Bunges are active managers of the condo.

Click here to access the tax table to use for this problem.

Required:

Complete the Bunge's federal tax return for 2016. Use Form 1040, Schedule E, Form 3903, and Form 8582 to complete their tax return.

If an amount box does not require an entry or the answer is zero, enter "0". Do not round any percentages. If required, round your answers to the nearest dollar. If required, enter a "loss" as a negative number on the tax form. Do not enter deductions as negative numbers.

Note: Special instructions for Form 8582 - If required, use the minus sign to enter a "loss" as a negative number on the lines 1d, 4 and 16. However, per the instructions on the tax return, enter all numbers in Part II as positive amounts.

Simon spends his income, $100, on food (f) and video games (v) with prices p_f= 7 and p_v = 1. Assume that f ≥ 0, v ≥ 0. His preferences are given by u(f, v) = f^0.7 *v^0.3 . Paul’s Marshallian demand is . (a) (11, 23) (b) (5, 65) (c) (10, 30) (d) (10, 25)

Read chapter 18 and pick ONE of the cases in this chapter to discuss: Anderson v. Country Life Insurance, Mendenhall v. Hanesbrands, INC., O'Brien v. Ohio State University, or Hoosier Energy Rural Electric cooperative, INC. v. John Hancock Life Insurance Co. Share with the class your impression of the case and why you agree or disagree with the court's holding.

The pressure p and volume v of a given mass of gas are connected by the relation

k=(p+a\v^2)(v-b)

where a, b, and k are constants.

Using the composite trapezoidal method, write a MatLab script to approximate the work done by the gas in expanding from an initial volume to a final volume. Express p in terms of v.

Where W = Integral (Pdv)

Let V be a vector space of dimension 1 over a field k and choose a fixed nonzero element voe V, which is therefore a basis. Let W be any vector space over k and let woe W be an arbitrary vector. Show that there is a unique linear transformation T: V → W such that T(v)= wo. [Hint: What must T(Avo) be?)

A stellar object that is at a great distance emits a stream of matter at velocity v towards an observer obliquely, forming an angle θ with the observation line. For the observer the jet appears to have been emitted laterally at speed V.
Show that for certain angles the speed measured by the observer may exceed the speed of light.

V = sin θ (1 / v - cos θ) ⁻¹

1. Stacy and Leslie are playing a very simple gambling game. They toss a coin and Stacy wins if it comes up “heads” while Leslie wins if it comes up “tails.” After 12 hours of gambling, Leslie begins to suspect that Stacy has been cheating because Stacy has won more games. Leslie accuses Stacy, but Stacy pleads innocent and proposes to test Leslie’s claim by doing an experiment in which the coin is tossed 14 times.

1. State the null and alternative hypotheses for this experiment.
2. If α = .01, what is the rejection region?
3. They do the experiment and “heads” occurs 8 times. What can they conclude? What if heads comes up 12 times?
4. Let’s assume that Stacy actually is cheating because she is using a coin that is biased to come up “heads” 55% of the time. What was the power of the experiment they did?
5. Given the power of the experiment, was Stacy clever or stupid to propose it as a test to Stacy?

Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow.

Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow.

Required:

a. Compute the unit costs for the two products V-1 and V-2 using the current costing system at Upriver (using machine hours as the allocation basis). (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b. Compute the unit costs for the two products V-1 and V-2 using the proposed ABC system at Upriver. (Do not round intermediate calculations. Round your answers to 2 decimal places.)