When using FIFO, a company

a) Applies the costs of the first items purchased to ending inventory, which means the costs of the last items purchased go to Cost of Goods Sold.

b) None of these answers is correct.

c) Applies the costs of the first items purchased to Cost of Goods Available for Sale, which means the costs of the last items purchased go to Cost of Goods Sold.

d) Applies the costs of the first items purchased to Cost of Goods Sold, which leaves the costs of the last items purchased in Ending Inventory.

calculate an independent t-test and describe the results.

You are a researcher examining student success at Kern County colleges and universities. You noticed that majority of students in Kern County are not performing as well as the students in Los Angeles County and San Luis Obispo County. Therefore, you decided to research factors that influence student success. One factor repeated in several literatures is a support system. Previous literature indicated that students who have a support system that values education will perform better in higher education than students who do not have a support system that values education. You decided to assess the support system of students in Kern County. Your independent variable is “support system.” You have two levels for your support system “students with a support system that values education” and “students without a support system that values education.” Your dependent variable that you are measuring is “college success.” You are measuring college success by assessing the student’s GPA. You interview 80 students with and without support systems and measured their GPAs. You obtained 41 student participants with a support system and 39 students without a support system. With the results obtained from the data, you will be able to generalize from the sample of 41 Kern County colleges and universities students to the population of all students in Kern County colleges and universities. Here is the GPA data that you obtained:

1.) Why does a temporary increase in government spending cause the current account to fall by a smaller amount than does a permanent increase in government spending? Explain with reference to a DD-AA graph with an XX line included.

(Hint: Draw an XX line which shows every combination of E and Y at which the current account is balanced, i.e. X = IM and NX = 0. Assume we start at an equilibrium E and Y on that line. Now, make the necessary changes in DD and/or AA due to the fiscal expansion to show where the equilibrium ends up relative to that XX line.)

2.) Suppose the Fed engages in contractionary monetary policy. Assume that contracts fix the volume of goods traded for at least a year.

      Draw the J-curve which shows what will happen over time.

(c. Does the source of funding matters – whether by a gift from the World Bank? a loan from the IMF? Or increased government spending financed by borrowing? Does it matter if the economy were in “full employment”? )

B. Would your answer to part c be different if the question were related to a local region or a state within the general economy with free mobility of resources? Why or why not? As an example consider an increase in autonomous spending in the Buffalo Metropolitan area as a result of 1. The World University Games (which lasted only a couple of weeks). 2. The increased bridge crossing of Ontario residents into Buffalo in search of goods and services as a result of increased Provincial sales taxes in Ontario and a rise in the value of the Canadian dollar relative to the USD dollar that have lasted for a good number of years?

Morris Buttermaker is a baseball coach and owns the following assets:

1.       A $1,000,000 life insurance policy on his own life, no beneficiary is named.

2.       $125,000 in an IRA account naming his nemesis baseball coach Roy Turner as beneficiary and a baseball pitcher Amanda Whurlizer as contingent beneficiary.

3.       $100,000 in bank account titled jointly with his girlfriend Joyce. Both Morris and Joyce contributed equally to the account.

4.       A 1/3 interest in a beach house owned as tenants in common with Morris’s sister Phyllis. The FMV of the beach house is $300,000.

5.       A life estate in a home (where he currently lives) given to him by his father Ben. Morris’s brother Jose holds the remainder interest. The house has a FMV of $250,000.

6.       A solely-owned time-share for a week’s stay at Sundance Ski Resort in Utah every year. The FMV of the time-share is $15,000

Morris has 2 adult children: Tanner who has two children (Morris’s grandchildren) and Ahmad who has four children (Morris’s grandchildren). Morris executes a will naming his friend Jimmy as executor and the will contains the following bequests:

1.       A specific bequest leaving his home to his son Tanner.

2.       A specific bequest leaving the time-share to his girlfriend Joyce.

3.       A general bequest that leaves $500,000 “to my children that survive me, or if a child has predeceased me, to his issue”   

4.       There are no residuals bequests.

Morris executes a will because someone has been murdering baseball coaches in the area recently. From the most recent murder of Roy Turner (Buttermaker’s nemesis) the Police learn a crazed parent is murdering little league championship coaches. Before the police can arrest the suspect, the suspect confronts Ahmad and Morris. Ahmad is killed in the encounter as he tries to protect Morris. Morris then flees and dies of a heart attack from the emotional stress and physical exertion.

Amanda Whurlizer, shocked by the deaths of her friends, worries about her mental stability. Since there is also a history of dementia that runs in her family, she fears that she will eventually lose her mind. She has read on the internet about durable powers of attorney, health care proxies, and living wills. She is confused about the differences between these documents and comes to you for advice and clarification.

Questions:

1.       What is the first thing Jimmy has to do to probate Morris’s will? (1 point)

2.       What is the size (in terms of dollars) of Morris’s probate estate? (please show work) (3 points)

3.       What is the size (in terms of dollars) of Morris’s gross estate? (please show work) (3 points)

4.       Will Jimmy have sufficient amount of assets to probate the estate assuming taxes, debts and expenses total $100,000? (1 point)

5.       After Jimmy has assembled the assets and paid the taxes, debts and expenses he can then distribute assets to Morris’s heirs. How will the house be distributed? (2 points)

6.       Who will receive the IRA account (1 point)?

7.       How will Jimmy distribute Morris’s general bequest of $500,000 to Morris’s children and grand-children assuming it is left to them “per stirpes” (please show work)? (3 points)

8.       How will Jimmy distribute Morris’s general bequest of $500,000 to Morris’s children and grand-children assuming it is left to them “per capita” (please show work)? (3 points)

9.       If Joyce does not want to take possession of the time-share left to her by Morris, where will the time-share go? (2 points)

10.   If we assume that Morris had no taxes, debts and expenses, what is the size of the residual estate? (3 points)

11.   How will the residual estate be distributed? (2 points)

12.   Amanda is confused about the different durable powers of attorney. She asks you what is the difference between a durable power of attorney and a springing durable power of attorney? What do you tell her? (3 points)

13.   She is also confused about the difference between a health care proxy and living will. What is the difference between the two? (3 points)

3.         A country wants to stimulate its economy by increasing government spending (fiscal policy).  The economy is an open economy with flexible exchange rates.

What will be the impact of the increased spending?

Consumption will ______________ (increase / decrease).

Investment by businesses will ______________ (increase / decrease).

Aggregate demand will ______________ (increase / decrease).

Real GDP and income in the country will ______________ (increase / decrease).

Imports of goods will _____________ (increase / decrease) as income increases.

The current account will ___________________ (increase / decrease).

So, based on the domestic effects above, income will _____________ (increase / decrease) and the current account will __________________ (increase / decrease).

The increased government spending will generate changes on the international side of the economy.

Interest rates in the country will ____________ (increase / decrease) as the economy expands, which will ____________ (increase / decrease) demand for the currency.

The exchange rate will ______________________ (appreciate / depreciate).

Exports will ___________________ (increase / decrease) and imports will ______________ (increase / decrease).   The current account will ________________  (increase / decrease).

As exports __________________ (increase / decrease), aggregate demand will ________________ (increase / decrease).

So, based on the international effects above, income will _____________ (increase / decrease) and the current account will __________________ (increase / decrease).

Overall, income and GDP in the economy will ______________________ (increase / decrease / be unknown) and the current account will ________________ (increase / decrease / be unknown).

You and your partner have become very interested in cross-country motorcycle racing and wish to purchase entry-level equipment. You have identified two alternative sets of equipment and gear. Package K has a first cost of $220,000, an operating cost of $8,500 per quarter, and a salvage value of $50,000 after its 2-year life. Package L has a first cost of $170,000 with a lower operating cost of $3,900 per quarter and an estimated $27,000 salvage value after its 4-year life. Which package offers the lower present worth analysis at an interest rate of 8% per year, compounded quarterly?

The present worth of package K is $ ???

that of package L is $ ???

Which package offers the lower present worth, K or L???

You and your partner have become very interested in cross-country motorcycle racing and wish to purchase entry-level equipment. You have identified two alternative sets of equipment and gear. Package K has a first cost of $200,000, an operating cost of $9,000 per quarter, and a salvage value of $30,000 after its 2-year life. Package L has a first cost of $260,000 with a lower operating cost of $3,000 per quarter and an estimated $20,000 salvage value after its 4-year life. Which package offers the lower present worth analysis at an interest rate of 12% per year, compounded quarterly?

The present worth of package K is $......... and that of package L is $..........

(Click to select)  Package K or Package L  offers the lower present worth.