Santana Rey created Business Solutions on October 1, 2019. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following chart of accounts includes the account number used for each account and any balance as of December 31, 2019. Santana Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Receivable account. This change allows the company to continue using the existing chart of accounts.

In response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms of 1/10, n/30, FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company’s new merchandising activities. Its transactions for January through March follow:

The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation:

1. The March 31 amount of computer supplies still available totals $2,205.
2. Prepaid Insurance coverage of $609 expired during this 3-month period.
3. Lyn Addie has not been paid for seven days of work at the rate of $235 per day.
4. Prepaid rent of $2,775 expired during this 3-month period.
5. Depreciation on the computer equipment for January 1 through March 31 is $1,110.
6. Depreciation on the office equipment for January 1 through March 31 is $320.
7. The March 31 amount of merchandise inventory still available totals $584.

Required:
1. Prepare journal entries to record each of the January through March transactions.

[The following information applies to the questions displayed below.]

Santana Rey created Business Solutions on October 1, 2019. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following chart of accounts includes the account number used for each account and any balance as of December 31, 2019. Santana Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single Accounts Receivable account. This change allows the company to continue using the existing chart of accounts.

In response to requests from customers, S. Rey will begin selling computer software. The company will extend credit terms of 1/10, n/30, FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company’s new merchandising activities. Its transactions for January through March follow:

The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation:

1. The March 31 amount of computer supplies still available totals $2,165.
2. Prepaid Insurance coverage of $690 expired during this 3-month period.
3. Lyn Addie has not been paid for seven days of work at the rate of $155 per day.
4. Prepaid rent of $2,685 expired during this 3-month period.
5. Depreciation on the computer equipment for January 1 through March 31 is $1,190.
6. Depreciation on the office equipment for January 1 through March 31 is $210.
7. The March 31 amount of merchandise inventory still available totals $644.

Required:
1. Prepare journal entries to record each of the January through March transactions.

A company has collected its sales data of a certain product for 10 days before and after an ad campaign was run. The sales numbers (in thousands) before and after the ad campaign are as follows: before [79, 65, 62, 61, 67, 73, 56, 74, 83, 69], after [65, 76, 75, 44, 71, 66, 57, 68, 78, 74]. The researchers do NOT believe that the underlying distributions are normal, and want to take the magnitude of the difference into account. Apply a suitable statistical test to see whether the campaign was useful. What are the correct test value and decision at a confidence level of 95%?

5. John the plumber has the following weekly demand for repairs by his business:

Q = 2,000 – 10(P)

Q = quantity of repairs demanded by customers per week.

P = average price per repair.

John chooses the price to charge to his customers (cause). The result (effect) will be the total number of repairs his customers want per week.

A.      Draw the demand curve faced by John the plumber. Numerically label its two end points.

B.      Create the table of numbers: P Q TR MR

P = average price per repair. You may skip numbers for price changes by $10 at a time.

TR = Total Revenue = PQ

MR = Marginal Revenue = (change in TR)/(change in Q)

Draw the MR curve on the diagram, as well/

C.      The MC (Marginal Cost) to John per repair is $20. What price (P) will be charged per repair, and how many repairs (Q) per week? Show it on your diagram with solved numbers.

D.      Label the Consumer Surplus on your diagram. Define Consumer Surplus, as well.

5. John the plumber has the following weekly demand for repairs by his business: Q = 2,000 – 10(P) Q = quantity of repairs demanded by customers per week. P = average price per repair. John chooses the price to charge to his customers (cause). The result (effect) will be the total number of repairs his customers want per week.

A. Draw the demand curve faced by John the plumber. Numerically label its two end points.

B. Create the table of numbers: P Q TR MR P = average price per repair. You may skip numbers for price changes by $10 at a time. TR = Total Revenue = PQ MR = Marginal Revenue = (change in TR)/(change in Q) Draw the MR curve on the diagram, as well/

C. The MC (Marginal Cost) to John per repair is $20. What price (P) will be charged per repair, and how many repairs (Q) per week? Show it on your diagram with solved numbers.

D. Label the Consumer Surplus on your diagram. Define Consumer Surplus, as well.

5. John the plumber has the following weekly demand for repairs by his business: Q = 2,000 – 10(P) Q = quantity of repairs demanded by customers per week. P = average price per repair. John chooses the price to charge to his customers (cause). The result (effect) will be the total number of repairs his customers want per week.

A. Draw the demand curve faced by John the plumber. Numerically label its two end points. B. Create the table of numbers: P Q TR MR P = average price per repair. You may skip numbers for price changes by $10 at a time. TR = Total Revenue = PQ MR = Marginal Revenue = (change in TR)/(change in Q) Draw the MR curve on the diagram, as well/ C. The MC (Marginal Cost) to John per repair is $20. What price (P) will be charged per repair, and how many repairs (Q) per week? Show it on your diagram with solved numbers. D. Label the Consumer Surplus on your diagram. Define Consumer Surplus, as well.

5. John the plumber has the following weekly demand for repairs by his business:

Q = 2,000 – 10(P)

Q = quantity of repairs demanded by customers per week.

P = average price per repair.

John chooses the price to charge to his customers (cause). The result (effect) will be the total number of repairs his customers want per week.

A.      Draw the demand curve faced by John the plumber. Numerically label its two end points.

B.      Create the table of numbers: P Q TR MR

P = average price per repair. You may skip numbers for price changes by $10 at a time.

TR = Total Revenue = PQ

MR = Marginal Revenue = (change in TR)/(change in Q)

Draw the MR curve on the diagram, as well/

C.      The MC (Marginal Cost) to John per repair is $20. What price (P) will be charged per repair, and how many repairs (Q) per week? Show it on your diagram with solved numbers.

D.      Label the Consumer Surplus on your diagram. Define Consumer Surplus, as well.

Roland had a taxable estate of $16.3 million when he died this year.

a. Roland’s prior taxable gifts consist of a taxable gift of $1 million in 2005.

-Estate Tax Due

b. Roland’s prior taxable gifts consist of a taxable gift of $1.5 million in 2005.

-Estate Tax Due

c. Roland made a $1 million taxable gift in the year prior to his death.

-Estate tax due

d-i especially!

Canada and the US trade apples. The Canadian domestic demand (Qd C) and supplycurves (QsC) are: ??? = 850 − 10?1 ??? = −20 + 35?1 The US domestic demand (QdU) and supply curves (QsU) are: ??? = 150 − 5?2 ??? = −35 + 20?2

a. Assume that there is no trade allowed. What are the equilibrium autarky prices and quantities of apples in Canada and the US? Which country is likely to export and which will import. Explain why.

b. Now liberalize trade and assume that there are no wedges between prices in Canada and the US (i.e. ?1 = ?2). What are the equilibrium prices, quantities produced, consumed, and traded in each country?

c. Calculate the effects on consumer and producer surplus in each country and compare the impacts between autarky and liberalized trade.

d. Suppose there is a transportation cost of $5 per unit. Calculate the new equilibrium prices, quantities consumed, produced and traded.

e. Introduce a 20% ad valorem tariff in Canada. Calculate the new equilibrium prices, quantities consumed, produced and traded.

f. Introduce a $7 per unit export subsidy in the US. Calculate the new equilibrium prices, quantities consumed, produced and traded.

g. Introduce a $5 per unit producer subsidy in the US. Calculate the new equilibrium prices, quantities consumed, produced and traded.

h. Introduce a $5 per unit consumer subsidy in the Canada. Calculate the new equilibrium prices, quantities consumed, produced and traded

i. In all the questions above we assumed that both countries had the same currency. Now suppose that the Canadian currently appreciates by 20%. (Hint: P1=0.8*P2). Calculate the new equilibrium prices, quantities consumed, produced and traded.

The Comic Book Publication Group (CBPG) specializes in creating, illustrating, writing, and printing various publications. It is a small but publicly traded corporation. CBPG currently has a capital structure of $12 million in bonds that pay a 5% coupon, $5 million in preferred stock with a par value of $35 per share and an annual dividend of $1.75 per share. The company has common stock with a book value of $6 million. The cost of capital associated with the common stock is 10%. The marginal tax rate for the firm is 33%.

The management of the company wishes to acquire additional capital for operations purposes. The chief executive officer (CEO) and chief financial officer (CFO) agree that another public debt offering (corporate bonds) in the amount of $10 million would suffice. They believe that due to favorable interest rates, the company could issue the bonds at par with a 4% coupon.

Before the Board of Directors convenes to discuss the debt Initial Public Offering (IPO), the CFO wants to provide some data for the board of directors’ meeting notebooks. One point of the analysis is to evaluate the debt offering’s impact on the company’s cost of capital. To do this:

• Solve for the current cost of capital of CBPG on a weighted average basis
• Solve for the new cost of capital, assuming the $10 million bond issued at par with a 4% coupon.
• Describe how you approached these calculations. Also discuss the tax shield advantage that debt capital provides, and briefly explain the cost of capital and WACC
• Provide a Table(s) to present answers (Students can transfer their EXCEL Table if utilized)

Summarize findings

Superior papers will explain the following elements when responding to the assignment questions:

• Provide narrative and solve for the current cost of capital of CBPG on a weighted average basis (WACC)
• Provide narrative and solve for the new cost of capital (WACC)
• Provide accurate WACC calculations for both scenarios
• Provide a Table(s) to present answers (there is a difference between performing calculations and presenting the supporting data and solved answers)
• Provide narrative on tax shield implications for both scenarios
• Provide narrative briefly explaining the cost of capital and WACC
• Provide a clear, logical conclusion