On January 1, 2021, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $520,000 by Elmira on December 31, 2023. The effective interest rate is 8%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.): Required:

1. How much sales revenue would Wright recognize on January 1, 2021, for this transaction?

2. Prepare journal entries to record the sale of merchandise on January 1, 2021 (omit any entry that might be required for the cost of the goods sold), the December 31, 2021, interest accrual, the December 31, 2022, interest accrual, and receipt of payment of the note on December 31, 2023.

On January 1, 2021, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $531,000 by Elmira on December 31, 2023. The effective interest rate is 7%.

Required:

1. How much sales revenue would Wright recognize on January 1, 2021, for this transaction?
2. Prepare journal entries to record the sale of merchandise on January 1, 2021 (omit any entry that might be required for the cost of the goods sold), the December 31, 2021, interest accrual, the December 31, 2022, interest accrual, and receipt of payment of the note on December 31, 2023.

Consider a high school student who is given $3 every school day by her parents as “lunch money”. The student works a part time job after school, earning a small amount of “spending cash”. In addition to her lunch money, the student spends $5 from her own earnings each week on lunch. Suppose her parents reduced her lunch money by $2 per day but that she simultaneously receives a $10 per week raise at her job, requiring no extra effort on her part.

What would the rational choice model suggest should happen to her spending on lunch?

Alternatively, what does the mental accounting framework predict?

Student Case Studies

John J. is a school nurse at Jackson Elementary School, which was built in 1960. Nurse John has noticed that many students from Ms. Zee’s second grade class have come to the clinic complaining about coughing, sneezing, runny nose, and watery eyes. Nurse John has also observed that Steven Tea, the only asthmatic student in Ms. Zee’s class, has had more asthma attacks this year than he did last year. Because the rest of the school is not experiencing the same respiratory problems, Nurse John is concerned that something in Ms. Zee’s classroom is causing students to feel ill.

Nurse John decides to visit Ms. Zee’s classroom. Upon entering the classroom, one of the few located in the school’s basement, John is struck by the powerful musty smell that inhabits the room. While talking to Ms. Zee, John learns that the classroom has “smelled bad for years,” and that students from previous years have complained about respiratory problems. Nurse John notes that Ms. Zee has stuffed a blanket at the base of the classroom’s small rectangular window near the ceiling because the window does not close completely.

John suspects that Ms. Zee’s classroom walls are contaminated with mold. Upon further research, Nurse John learns that if water gets between the exterior and the interior of a building’s wall, mold can grow in the moist environment. This situation can occur as the result of construction defects in the building (e.g., leaky windows). Nurse John also learns that people who are exposed to extensive mold growth may experience allergic reactions, such as hay fever-like allergy symptoms, and that people who already have a chronic respiratory disease, such as asthma, may experience difficulty breathing when exposed to mold. Nurse John is concerned about the possible mold contamination effect on his asthmatic student, Steven.

Questions

1.   Identify the agent, host, and environment in this case study, and describe how they interacted to bring about the occurrence of disease.

2.   Is the mold contamination in Ms. Zee’s room a point-source pollutant or a non–point-source pollutant?

Central State College (CSC) is a state-supported college with a large business school. The business school offers an undergraduate degree and training programs for a local manufacturer. The state does not support the training programs, which are paid for by the manufacturer under a fixed-price contract.

The college president has asked the dean of the business school for a breakdown of costs by program. The president will be meeting with state legislators asking for an increase in support for the college’s programs. The dean has assigned you to lead the team that will develop the costs by program.

The business school’s computer lab is a major cost item. The lab is used during the day for the undergraduate program and in the evening for the training program.

Required

How will you recommend that the cost of the computer lab be allocated to the two programs? Be explicit in your description of the allocation base.

The dean tells you that the training program should not be allocated any costs other than its direct costs. She points out that the college was established for undergraduate education and the training program is an incremental activity. “After all, if we didn’t have the training program, we would still have the computer lab,” she says. Do you agree with the dean? Is the dean’s suggestion ethical?

On January 1, 2021, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $515,000 by Elmira on December 31, 2023. The effective interest rate is 8%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.):

Required:

1. How much sales revenue would Wright recognize on January 1, 2021, for this transaction?
2. Prepare journal entries to record the sale of merchandise on January 1, 2021 (omit any entry that might be required for the cost of the goods sold), the December 31, 2021, interest accrual, the December 31, 2022, interest accrual, and receipt of payment of the note on December 31, 2023.

Andy teaches high school math for the Metro School District. In 2018, she has incurred the following expenses associated with her job:

Noncredit correspondence course on history $ 800 Teaching cases for classroom use $1,900

Andy’s employer does not provide any funding for the correspondence course or teaching cases.

1. Use an available tax service to identify the amount she can deduct, if any, as a “For AGI” deduction and the amount, if any, as a “From AGI” deduction.

2. Prepare a tax research memorandum for the file.

On January 1, 2018, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $526,000 by Elmira on December 31, 2020. The effective interest rate is 7%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.):

Required:

1. How much sales revenue would Wright recognize on January 1, 2018, for this transaction?
2. Prepare journal entries to record the sale of merchandise on January 1, 2018 (omit any entry that might be required for the cost of the goods sold), the December 31, 2018, interest accrual, the December 31, 2019, interest accrual, and receipt of payment of the note on December 31, 2020.

Required 1: How much sales revenue would Wright recognize on January 1, 2018, for this transaction? (Round your final answer to nearest whole number.)  

Required 2: - Record the sale of goods on January 1, 2018 in exchange for the long term note.

- Record the interest accrual on December 31, 2018.

- Record the interest accrual on December 31, 2019.

- Record the interest revenue in 2020 and collection of the note.

The City of Leonard decides to lease school desks for its school system rather than buy them because the lessor will do all scheduled maintenance. On January 1, 2020, the school system leases 5,000 school desks for four years. After that, they will be returned to the manufacturer. Payment will be $20 per desk per year with payments on January 1, beginning on January 1, 2020. The city does not know how the lessor determined the annual charge. The city has an annual incremental borrowing rate of 8 percent. The present value of an annuity due of $1 at an 8 percent annual rate for four periods is 3.5771.

1. Make the journal entries for the City of Leonard for 2020 and 2021 in preparing government-wide financial statements.
2. Make the journal entries for the City of Leonard for 2020 and 2021 in preparing fund financial statements for its governmental funds.