Exercise 4-3

Stockholders’ equity in TransWorld Inc. on December 31, 2010, is shown below:

Stockholder equity accounts were affected by the following transactions in 2011:

Jan 1   TransWorld purchased 2,000 treasury shares at $24/share.
Jan 7   Declared a $3/share dividend, payable on Feb 15 to the Feb 28 stockholders of record.
Feb 15   Paid the dividend (Jan 7 declaration).
May 7   Sold 800 of treasury shares for cash at $27/share.
Aug 15   Sold 1200 of treasury shares for cash at $21/share.
Sep 20   Declared a $3/share dividend, payable on Oct 15 to the Sep 30 stockholders of record.
Oct 15   Paid the dividend (Sep 20 declaration).
Dec 31   Closed the credit balance of $188,000 (from net income) in the Retained Earnings Income Summary account.

1.   Use the information provided to prepare the following:

a.   Journal entries for the 2011 transactions.
b.   December 31, 2011, retained earnings statement.
c.   For distinguished performance, prepare the investors’ equity section of TransWorld’s December 31, 2011, balance sheet.

Let (X,dX),(Y,dY ) be metric spaces and f: X → Y be a continuous bijection. Prove that if (X, dX ) is compact, then f is a homeomorphism. (Hint: it might be convenient to use that a function is continuous if and only if the inverse image of every open set is open, if and only if the inverse image of every closed set is closed).

Suppose A and B are subsets of R, and define:
d(A,B) = inf{|a−b| : a ∈ A,b ∈ B}.

(a) Show that if A∩B 6= ∅, then d(A,B) = 0.

(b) If A is compact, B is closed, and A∩B = ∅, show d(A,B) > 0.

(c) Find 2 closed, disjoint subsets of R (say A and B) with d(A,B) = 0

Please answer ALL of the questions below:

1. Suppose China and Japan produce only two goods A and B, and the relative price of A to B in China is lower than that in Japan without trade between the two economies. Then, China can be said to have a comparative advantage in producing the good (a. A/ b. B), and Chinese relative productivity in good A is (a. higher/ b. lower) than that of Japan.

2. According to the Ricardian model of international trade, an economy tends to export a good whose relative price (a. goes up/ b. remain the same/ c. goes down) when joining international trade. International trade benefits a country (a. only/ b. partly) because it can specialize more in producing a good with comparative advantage.

3. Trade is beneficial (a. if/ b. only if/ c. whether or not) a country has high international competitiveness in production. The more competitive a country is in the world, the (a. higher/ b. lower) is its wage level.

4. Suppose Chinese labor productivities in two goods, i.e. automobile and computer chips are 15% and 50% of those of the US, respectively. Then, the theory of comparative advantage tells us that China tends to import (a. automobile/ b. computer chips) from the US and that the Chinese wage level is (a. higher/ b. lower/ c. either higher or lower) than that of the US.

5. Suppose that Japan is better at producing high-technology goods than low-technology goods, and that labor is immobile and only capital is mobile between sectors. Then, a rise in the price of the high-technology goods in the world will always benefit (a. unskilled labor/ b. skilled labor/ c. capital owner) in Japan and (a. unskilled labor/ b. skilled labor/ c. capital owner) in the rest of the world.

The table below gives information on the CPI and the monthly take-home pay of Bill Jones, an employee at the Ford Canada.

(a) What is the purchasing power of the dollar for 2007 based on the period 2002? (Round the final answer to 5 decimal places.)

(b) Determine Mr. Jones’ "real" monthly income for 2007. (Round the final answer to 2 decimal places.) .

(c) What is the purchasing power of the dollar for 2010 based on the period 2002? (Round the final answer to 5 decimal places.)

(d) Determine Mr. Jone's "real" monthly income for 2010. (Round the final answer to 2 decimal places.)

Year (2002 = 100) Consumer Price Index (CPI) Mr. Martins Monthly Take-Home Pay ($) 2002 100.0 2300 2007 111.5 2700 2010 116.5 2900 2013 122.8 3100

The table below gives information on the CPI and the monthly take-home pay of Bill Jones, an employee at the Ford Canada.

(a) What is the purchasing power of the dollar for 2007 based on the period 2002? (Round the final answer to 5 decimal places.)

(b) Determine Mr. Jones’ "real" monthly income for 2007. (Round the final answer to 2 decimal places.) .

(c) What is the purchasing power of the dollar for 2010 based on the period 2002? (Round the final answer to 5 decimal places.)

(d) Determine Mr. Jone's "real" monthly income for 2010. (Round the final answer to 2 decimal places.)

Year (2002 = 100) Consumer Price Index (CPI) Mr. Martins Monthly Take-Home Pay ($) 2002 100.0 2300 2007 111.5 2700 2010 116.5 2900 2013 122.8 3100

The Johnson Corporation sells 1,000 bonds; each bond has a face (par) valueof $1,000. The Bonds are sold on January 1, 2010. The face interest rate of each bond is 4.5%, with interest being paid twice per year, July 1st and January 1st. The bonds are 5-year bonds.

The market interest rate (yield) for these types of bonds (securities) at the time the bonds are sold (January 1, 2010) is 4% annually.

Requirements:

a. What is the total amount of interest paid to the bondholders over the life of the bonds?

b. What is the present value of the interest payments over the life of the bonds?

c. What amount is paid the bondholders to retire the bonds at the end of 10 years?

d. What is the present value of the face amount of the bonds on January 1, 2010?

e. What is the total amount the bonds sold for on January 1,2010?

1. Use the financial information below to construct a 2010 income statement and balance sheets for both 2009 and 2010. The firm’s average tax rate is 40% and its plowback ratio is 60%. Find the firms’ cash flows (OCF, NCS, change in NWC, FCF, CFC, CFS).

4.1

cg

Respond to this post at least 125 words

" Over the centuries, there have been many attempts by religious philosophers to prove the existence of God, and a canon of classic arguments has been developed. Not all of these arguments have their origins in Christian philosophy; Jewish and Muslim philosophers have made significant contributions to the philosophy of religion, and both Plato and Aristotle have influenced its development" (Holt,T.)(2010) The response that Augustine had was " that God will make our resurrection counterparts by reassembling precisely the pieces of matter of which we are made." (Holt,T)(2010) For the Christian theology the Christians believe "According to the Christian tradition, the dead will eventually be raised, judged, and either punished for misdeeds or declared righteous and welcomed into heaven." (Holt,T)(2010) So both of these religions have sort of the same concept of what they think will happen in the afterlife.

Q1. Discuss in your words the purpose of a bank reconciliation. (1 point)

Q2. Prepare general journal entries for the following transactions of this company for the current year: (2 points).

Q3. A company purchased mining property containing 7,350,000 tons of ore for SAR 1,837,500. In 2009 it mined and sold 857,000 tons of ore and in 2010 it mined and sold 943,000 tons of ore. (2 points).

a. Calculate the depletion expense for 2009 and 2010.

b. What was the book value of the property at the end of 2010?

Q4. Define liabilities and explain in your words the differences between current and long-term liabilities. (2 points).