The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys debt securities, not intending to profit from short-term differences in price and not necessarily to hold debt securities to maturity, but to have them available for sale in years when circumstances warrant. Ornamental’s fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020.

(Hint: Interest must be accrued.)

Required:
1. Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year end. For any sales, prepare entries to update the fair-value adjustment, record any reclassification adjustment, and record the sale.
2. Indicate any amounts that Ornamental Insulation would report in its 2021 income statement, 2021 statement of comprehensive income, and 12/31/2021 balance sheet as a result of these investments. Include totals for net income, comprehensive income, and retained earnings as a result of these investments.

Journal entry worksheet

• Record the acquisition of 5% Distribution Transformers Corporation bonds costing $600,000 at face value.

Note: Enter debits before credits.

• Record the acquisition of $1,200,000 of American Instruments’ 7% bonds at face value.

Note: Enter debits before credits.

• 
  Record the entry for the semiannual interest received on the Distribution Transformers bonds.

Note: Enter debits before credits.

• Record the entry to adjust to fair value on the date of sale of the Distribution Transformers bonds.

Note: Enter debits before credits.

• 
  Record the entry for the reclassification adjustment on the date of sale.

Note: Enter debits before credits.

• 
  Record the entry for sale of Distribution Transformers bonds for $645,000.

Note: Enter debits before credits.

• 
  Record the acquisition of $1,600,000 of M&D Corporation 3% bonds at face value.

Note: Enter debits before credits.

• 
  Record the interest accrual for American Instruments bonds.

Note: Enter debits before credits.

• 
  Record the interest accrual for M&D bonds.

Note: Enter debits before credits.

• 
  Record the entry to adjust fair value of the investments at year-end.

Note: Enter debits before credits.

46. Producer surplus is the difference between the

A. price and the willingness to pay for the good.

B. willingness to pay for the good and the marginal cost of producing the good summed over the quantity sold.

C. marginal benefit of consuming the good and the marginal cost of producing the good summed over the quantity sold.

D. price and the marginal cost of producing the good summed over the quantity sold.

48. A deadweight loss is created

A. only if the last unit produced has a marginal social benefit greater than its marginal social cost.

B. if for the last unit produced, marginal social cost is greater than its marginal social benefit or if its marginal social benefit is greater than its marginal social cost.

C. only if the last unit produced has a marginal social cost greater than its marginal social benefit.

D. only if the last unit produced has a marginal social benefit equal to its marginal social cost.

52. Consider the market for wheat in America. The demand function is given by q_d= 20 – p, and the supply function by q_s= p – 10. The equilibrium price for wheat is ___________________.

A. Cannot be determined

B. $15

C. $30

D. $2

53. Consider the market for wheat in America. The demand function is given by q_d= 20 – p, and the supply function by q_s= p – 10. The equilibrium quantity fir wheat is _____________.

A.15 units

B. 2 units

C. 30 units

D. 5 units

54. Consider the market for wheat in America. The demand function is given by q_d= 20 – p, and the supply function by q_s= p – 10. What is the value of the consumers’ surplus at the equilibrium price?

A. $12.5

B. $25

C. Cannot be determined

D. $0

55. Consider the market for wheat in America. The demand function is given by q_d= 20 – p, and the supply function by q_s= p – 10. What is the value of the producers’ surplus at the equilibrium price?

A. $25

B. $12.5

C. Cannot be determined

D. $0

56. Consider the market for wheat in America. The demand function is given by q_d= 20 – p, and the supply function by q_s= p – 10. Suppose the government imposes a price floor of floor of $18 on this market. What is the value of the consumer's surplus given the price floor of $18?

A. $0

B. $2

C. $6

D. $4

1. Does Early Language Reduce Tantrums? A recent headline reads “Early Language Skills Reduce Preschool Tantrums, Study Finds,” and the article offers a potential explanation for this: “Verbalizing their frustrations may help little ones cope.” The article refers to a study that recorded the language skill level and the number of tantrums of a sample of preschoolers.
   
   1. Is this an observational study or a randomized experiment?
   2. Assuming the sample is representative of the population of all toddlers, can we conclude that “Early Language Skills Reduce Preschool Tantrums”? Why or why not?
   3. Give a potential confounding variable. Explain how your confounding variable is associated with both the explanatory and the response variables.

The heights of American women 18 to 29 are normally distributed with a mean of 65 inches and a standard deviation of 3.5 inches. An American woman in this age bracket is chosen at random.

What is the probability that she is more than 68 inches stall?

What is the probability that she is less than 64 inches tall?

What is the probability that she is between 63 and 67 inches tall?

What is the probability that an American woman's height differs from the mean by more than 2.5 inches?

It is known that 40% of American Idol winners become famous. A sample of 50 American Idol winners are randomly selected.

(a) [1] What is the probability that exactly 25 of them become famous?

(b) [1] Find the probability that at least 20 of them become famous.

(c) [2] What is the probability that between 17 and 27 (including both 17 and 27) of them become famous.

(d) [2] Find the expected number of American Idol winners become famous in this sample and its standard deviation.

1) Why is the American president often called the most powerful leader in the world? If that is true, what special responsibilities does this reality entail? Should we limit the president’s role in world affairs? Why or why not? 2. Are the responsibilities of the most powerful leader in the world, the American president, too large a job for one person? Why has the American presidency as an institution grown so large? Are there any powers you think should be taken away from the president?

The following information is available for three companies:

Required
a. Determine the annual before-tax interest cost for each company in dollars.

b. Determine the annual after-tax interest cost for each company in dollars. (Round your answers to the nearest dollar amount.)

c. Determine the annual after-tax interest cost for each company as a percentage of the face value of the bonds. (Round your answers to 1 decimal place.)

The Campbell Soup Company manufactures and markets food products throughout the world. The following sales and receivable data (in millions) were reported by Campbell Soup for two recent years:

Assume that the accounts receivable (in thousands) were $635 million at the beginning of Year 1.

American Eagle Outfitters, Inc. sells clothing, accessories, and personal care products for men and women through its retail stores. American Eagle reported the following data (in millions) for two recent years:

Assume that the accounts receivable (in millions) were $74 million at the beginning of Year 1.

Use the above information to analyze the accounts receivable turnover ratios of American Eagle Outfitters and Campbell Soup.

a. Compute the average accounts receivable turnover ratio for Campbell Soup and American Eagle Outfitters for Year 2 and Year 1. Round interim calculations and final answers to two decimal places.

Refer to the Baseball 2016 data, which reports information on the 2016 Major League Baseball season. Let attendance be the dependent variable and total team salary be the independent variable. Determine the regression equation and answer the following questions.

Draw a scatter diagram. From the diagram, does there seem to be a direct relationship between the two variables?

What is the expected attendance for a team with a salary of $100.0 million?

If the owners pay an additional $30 million, how many more people could they expect to attend?

At the .05 significance level, can we conclude that the slope of the regression line is positive? Conduct the appropriate test of hypothesis.

What percentage of the variation in attendance is accounted for by salary?

Determine the correlation between attendance and team batting average and between attendance and team ERA. Which is stronger? Conduct an appropriate test of hypothesis for each set of variables.

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