On 1 June, 2019, immediately after payment of the interest due that day, Tim Shaw bought two bonds each with a face value of $100,000 and a coupon rate of 8% p.a., paid half-yearly. The first bond will mature on 1 December 2021 and the second bond will mature on 1 December 2025. At the date of purchase, both bonds were selling at par. Since then, yields on bonds have risen by 2% pa, compounded half-yearly. Tim now intends to sell the bonds and put a deposit on a house.

a. Calculate the price he will receive from each bond if he sells on 1 September, 2019 at the new yield. (Hint: There are 92 days from 1 June, 2019 to 1 September, 2019, and 183 days from 1 June, 2019 to 1 December, 2019 – in both cases, ignoring the first day and including the last day of the period.)

b. Explain the relative price movements in the two bonds, as evidenced in your answer to part a above.

4. You want to buy a house valued at $1.2 million. For a house this valuable, the lenders demand a down payment of 25% and insist that the monthly payment on the 25 year mortgage loan is no more than 30% of your monthly gross income. The quoted rate on a 25 year fixed rate mortgage loan is 2.94% per year. Assume that you can make the down payment.

(a): What is the least amount of your yearly gross income for you to qualify for the loan?

(b): Suppose you qualify for the loan, buy the house on September 1, 2020, and make the first monthly payment on October 1, 2020. What percentage of the house do you own at the end of year 2025 assuming that there has been no change in the value of the house?

The marketing manager has recently completed a sales forecast. She believes the company’s sales will increase by 1 percent each month over the previous month’s sales from December 2015 through March 2016. Then sales are expected to remain constant for several months. Helping Hand’s projected balance sheet as of December 31, 2015 is as follows: Cash $ 60,000 Accounts receivable 172,530 Marketable securities 10,000 Inventory 39,784 Buildings and equipment (net of accumulated depreciation) 600,000 Total assets $ 882,314 Accounts payable $ 111,940 Sales commissions payable 4,040 Bond interest payable 8,000 Property taxes payable 0 Bonds payable (4%; due in 2020) 600,000 Common stock 100,000 Retained earnings 58,334 Total liabilities and stockholders' equity $ 882,314 The following information has been accumulated to assist with preparing the master budget for the first quarter of 2016: 1) Projected sales for November 2015 are $200,000. Credit sales are typically 90% of total sales.

5).Helping Hand’s credit experience indicates that 13% of credit sales are collected during the month of sale, 75% in the month following the sale, and 10% in the second month following the sale. Experience shows the remaining credit sales are uncollectible. 2 Helping Hand’s board of directors has indicated an intention to declare and pay dividends of $150,000 on the last day of each quarter.

6) The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Helping Hand’s bonds is paid semiannually on February 28 and August 31 for the preceding sixmonth period.

7) Property taxes are paid quarterly on March 31, June 30, September 30, and December 31 for the preceding three-month period.

Required: Build a model to forecast Helping Hand Corp’s cash balance at March 31, 2016. Your model must contain the following master budget schedules. Round all amounts to the nearest dollar. Your model should allow you to change any of the assumptions provided above and easily recalculate the ending cash balance at March 31, 2016. The assumptions may be on a separate worksheet but all of the schedules below must be on one worksheet. 1) Sales budget: 2015 2016 November December January February March 1st Quarter Total sales Cash sales Sales on account

2) Cash receipts budget: 2016 January February March 1st Quarter Cash sales Cash collections from credit sales made during current month Cash collections from credit sales made during preceding month Cash collections from credit sales made during 2nd preceding month Total cash receipts

3) Purchases budget: 2015 2016 December January February March 1st Quarter Budgeted cost of goods sold Add: Desired ending inventory Total goods needed Less: Expected beginning inventory Purchases

4) Cash disbursements budget: 2016 January February March 1st Quarter Inventory purchases: Cash payments for purchases during the current month Cash payments for purchases during the preceding month Total cash payments for inventory purchases Other expenses: Sales salaries Advertising and promotion Administrative salaries Interest on bonds Property taxes Sales commissions Total cash payments for other expenses Total cash disbursements

.5) Summary cash budget:    2016    January February March 1st Quarter Cash receipts (sch 2)       Less: Cash disbursements (sch 4)       Change in cash balance during period due to operations                                                                                        Sale of marketable securities (1/2/16)       Proceeds from bank loan (1/2/16)       Purchase of equipment       Repayment of bank loan (3/31/16)       Interest on bank loan       Payment of dividends       Change in cash balance during the month       Beginning cash balance       Ending cash balance      


6) Prepare a memo to the president of Helping Hands Corp with at least two recommendations on how the company can ensure it completes the first quarter of 2016 with the minimum required cash balance. You should provide a plan to support your recommendation. For example, if you recommend an increase in sales, how can this be attained. Be specific. You should provide specific financial information for your recommendations utilizing your model (include a model for each of your recommendations). For example, if the company does X, the change in ending cash will be Y. Your model will become the property of Helping Hands Corp. and should be easy

he printout of the Revenues and Appropriations subsidiary ledger accounts for the General Fund of the City of Augusta for the first quarter of the fiscal year appeared as follows: Revenues Ledger Est. Revenues Revenues Balance Account Ref. Account Title Dr(Cr) Cr(Dr) Dr(Cr) 3/4020 Taxes—Real Property 101 Budget Authorization 764,000 764,000 102 Received in Cash 212,600 551,400 3/4050 Licenses and Permits 101 Budget Authorization 114,000 114,000 102 Received in Cash 11,400 102,600 3/4070 Intergovernmental Revenue 101 Budget Authorization 64,000 64,000 102 Received in Cash 16,400 47,600 103 13,900 61,500 Appropriations, Expenditures, and Encumbrances Ledger Encumbrances Increase Encumbrances Decrease Encumbrances Balance Expenditures Expenditures Balance Appropriation Balance Account Ref Account / Description Dr (Cr) Dr(Cr) Dr(Cr) Dr(Cr) Cr(Dr) Cr(Dr) 5/6/7020 General Government 101 Budget Authorization 649,000 649,000 102 Purchase Order Issued 7,100 7,100 641,900 102 Payroll 162,600 162,600 479,300 102 Goods Received 5,400 1,700 5,350 167,950 479,350 5/6/7030 Public Safety 101 Budget Authorization 139,000 139,000 102 Payroll 31,400 31,400 107,600 103 52,800 160,400 5/6/7050 Culture and Recreation 101 Budget Authorization 99,000 99,000 102 Purchase Order Issued 1,900 1,900 97,100 102 Goods Received 1,900 0 1,700 1,700 97,300 102 Payroll 15,700 17,400 81,600 5/6/7070 Miscellaneous 101 Budget Authorization 16,400 16,400

Required

Assuming that there are no other General Fund revenue or expenditure transactions, answer the following questions. What were the original approved budget amounts for Estimated Revenues and for Appropriations? (1) Was the budget adjusted during the year? (2) If so, which accounts if any were adjusted and by how much? (3) In total, has Budgetary Fund Balance increased, decreased, or remained the same during the first fiscal quarter?\ (1) What are the current balances of the Estimated Revenues and Appropriations control accounts? (2) What are the current balances of the Revenues, Encumbrances, and Expenditures control accounts?

Elton Electronics leases testing equipment to Startup Corporation. The equipment is not specialized and is delivered on January 1, 2019. The fair value of the equipment is $90,000. The cost of the equipment to Elton is $85,000 and the expected life of the testing equipment is 8 years. The lease term for the equipment is 8 years, with the first payment due upon delivery, and seven subsequent annual payments beginning on December 31, 2019 and ending on December 31, 2025. Elton's implicit rate is 8% and they expect that collection of the eight payments of $14,500 payments is probable. Assume there are no initial direct costs with this lease. There are also no nonlease components.

The present value of the lease payments is $89,992.

1. Using the five Group I criteria, how will Elton classify this lease?
2. Prepare the journal entries for the lessor to record the commencement of the lease and receipt of the first payment on January 1, 2019.
3. Prepare an amortization table for Elton's net investment through December 31, 2021

   1. Date	Payment	Interest	Reduction in Principal	Balance
      Commencement
      1-Jan-19
      31-Dec-19
      31-Dec-20
      31-Dec-21

4. What is the journal entry for the lessor at the end of the first year on 12/31/19?

The 3.8% additional Medicare surtax is paid by employees on their wages in excess of $250,000 MFJ ($200,000 Single, $125,000 MFS), while the 0.9% additional Medicare tax is paid on the lesser of net investment income or modified adjusted gross income (MAGI) over certain threshold amount (MFJ $250k, MFS $125k, Single $200k).

True

False

If the Ka of a monoprotic weak acid is 3.8 × 10-6, what is the pH of a 0.11 M solution of this acid?

two dots are at a distance of 3.8 nm. the radiation we will have to use in order to be able to see the two dots clearly must have a wavelength of:

For a hypothetical country, assume the current unemployment rate is 3.8% and the NRU is 4.5%. Actual GDP is $612 billion but Potential (full-employment) GDP is $600 billion. Assume prices are flexible upward but inflexible downward. It has been noted that there is a $7.50 change in consumption spending for every $10 change in income (real GDP).

a. In what phase of the business cycle is this economy? Explain. What do you expect is occurring with the rate of inflation?

b. What specific (increase or decrease; $ amount) discretionary fiscal policy changes could Congress pass to achieve full employment GDP?

i. G:

ii. T:

iii. Combination

c. Under the original conditions, in what way would the built-in stabilizers (automatic fiscal policy) change the federal budget (toward deficit or surplus)?

d. What specific monetary policy changes might the Fed consider in order to stabilize the economy:

i. Open Market Transactions: Buy or Sell? As a result, what happens to the Fed Funds rate?

ii. Reserve Requirement: Increase or Decrease? How likely is the Fed to change this? Why?

iii. Discount Rate: Increase or Decrease?

iv. Interest on Bank Reserves Deposited at the Fed: Increase or Decrease?

e. Briefly describe how the open market transactions you chose (buy or sell) would work to affect the economy.