1. Which of the following describes how a merchandise income statement is different from a service income statement?

1. The revenue from a merchandise business is reported as fees earned.
2. The program and production expenses are subtracted from gross profit to arrive at operating income.
3. Depreciation and amortization expenses are added to the cost of goods sold.
4. A merchandise business shows a gross profit line.

2) Which of the following statements is false?

1. The accounting equation is reflected in the balance sheet.
2. The balance sheet is classified to categorize the various items within the statement.
3. Classifying items help the user see where a company gets its resources.
4. Classifying items on a balance sheet helps show the company's earnings potential.

3)Which of the following statements is true?

1. The sale of goods and services results in expenses.
2. The costs of operating a company are called revenue.
3. A company must generate net income in order to be sustainable.
4. The income statement reports the financial position of a company at a specific point in time.

4) Which statement summarizes and explains the changes in retained earnings during the accounting period?

1. Balance Sheet
2. Income Statement
3. Retained Earnings Statement
4. Trial Balance

Golden Manufacturing Company started operations by acquiring $150,000 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that cost $120,000 cash, had an expected useful life of five years, and had an estimated salvage value of $4,000. Golden Manufacturing earned $72,000 and $83,000 of cash revenue during Year 1 and Year 2, respectively. Golden Manufacturing uses double-declining-balance depreciation.

What is Golden's straight line rate?

What is the Depreciation Expense for Year 1?

What is Net Income for Year 1?

What is the Book Value of the equipment at the end of Year 1?

What are the Cash Flows from Operating Activities for Year 1?

What is the Depreciation Expense for Year 2?

What is Net Income for Year 2?

What is the book value of the equipment at the end of Year 2?

What are the Cash Flows from Operating Activities for Year 2?

Facts for Questions 19 & 20:
Roberto and Maria are general partners in a general partnership. They have entered into a partnership agreement which provides as follows: 1. Roberto is to contribute $100,000 to the partnership. 2. Maria is to contribute $200,000 to the partnership. 3. Roberto is to have a 1/3 ownership interest; and Maria is to have a 2/3 ownership interest. 4. Roberto is to receive 40% of all profits earned by the partnership, and Maria is to receive 60% of all profits. 5. Roberto and Maria are to each be responsible for 50% of all losses or other obligations of the partnership. Roberto has a net worth of about $400,000, all in bank accounts. Maria has a net worth of about $4 Million, all in a stock-brokerage account.

In Year 1 of operations, the company has a disastrous year financially! They lose $500,000. Roberto and Maria each contribute another $250,000, to make up for the loss, reducing Roberto’s net worth down to $150,000, and Maria’s net worth down to $3.75 Million. In Year 2, they lose another $400,000! Roberto pays into the business all that he can - $150,000. Maria pays in the other $250,000, so the company can keep going. In Year 3, the company finally breaks even, but a customer sues for $2 Million in physical harm when the product they sell explodes and results in the customer losing both of his legs. The customer wins in court, and gets a judgment against the partnership for the full $2 Million. The company has virtually no assets left.

19. The customer can take his judgment and:
a.   claim $2 Million of Maria’s stocks. Maria will have to seek reimbursement from Roberto for his 50% responsibility.

b.   claim $1 Million of Maria’s stocks. The customer will have to get the rest from Roberto when (and if) Roberto ever gets any more net worth.

c.   claim $1 Million of Maria’s stocks. The customer will have a claim on any assets that Roberto gets in the future, until his $1 Million is paid off. In the meantime, the customer can get a portion of Roberto’s monthly paychecks by turning in a “garnishment” order to his payroll office.

20. True or False     If Maria and Roberto had set up a corporation or LLC, instead of a general partnership, they could have limited their individual liability for debts of the company, to just what they had invested.

Email from Michael Munch, board member of Sugar Rush Inc company.

-------- Original message --------

From: Michael Munch

To: BOD

CC: N. Sweet

Subject: Discrimination Allegation @SRI

Good morning,

It is with great trepidation that I write to you on this occasion. As we are aware, there has been a very serious allegation of discrimination lodged against SRI. We have always endeavored to hire the best qualified professional for each and every position. It appears we have a young talented African American male who applied for our Customer Service Supervisor position and was turned away for whatever reason. Ladies and gentlemen, we employ a zero tolerance policy toward this type of behavior. I am not saying because someone cries wolf we need to acquiesce to their demands. The fact remains we do not have a Referral Policy but everyone who is referred or everyone we looked at was a white male. That alone sounds suspicious. Even the HR Policy we have in place is silent on certain matters. While I would like to not believe it occurred, perhaps we need to focus on Ms. Cocoa and her ability to be in a management position at SRI. This complaint can have a detrimental effect on us and can cost SRI in the end. As a Board Member, I would like to call for an emergency meeting and decide how best to address this matter. We need to focus our attention on preserving our good name and perhaps taking serious action against Ms. Cocoa. We are a Company that prides itself on variety. It should apply to our recruitment activities as well. Thank you for your time and consideration.

Respectfully yours,

Michael Munch

You have been hired by Nick Sweet as an HR Executive Consultant for Sugar Rush Inc. You will be asked to provide your evaluation and recommendation as to how to handle the issues that the Company is presently dealing with. Here is what is expected in your Final Project:

Question:

1- You will need to advise how to respond and handle the email from Michael Munch. (See email above). Be specific please.

2- You will need to Write an email response to Mr. Munch.

In a simple exchange two-good-two-individual world where there are 90 units of good x and 100 units of good y in total, two individuals are trying to maximize their own utility. Individual A’s utility function is U (x_A,y_A)=x_A^0.7y_A^0.3, while individual B is with the utility function U (x_B,y_B)= 4x_B + y_B.

Suppose that the endowment of individual A is 40 units of x and 45 units of y.

1）Individual B is endowed with （ ） units of x and （ ） units of y.  With the endowment, the MRS of Individual A is （ ） and the MRS of Individual B is （ ）. (MRS is defined as the number of y per unit of x. Please round your results to the nearest hundredth.)

2) The above calculation shows that ________Select one:

a. Individual A values x more than Individual B does.

b. Individual A values x less than Individual B does.

c. Individual A and B values good x equally.

3)The above calculation shows that ________Select one:

a. The endowment is Pareto efficient.

b. Allocating more x to A in exchange for more y to B can be a Pareto Improvement.

c. Allocating more y to A in exchange for more x to B can be a Pareto Improvement.

4) Allocation A (42,72) and B(48, 28) is Pareto Efficient. Select one:

a. True

b. False

Allocation A (42,72) and B(48, 28) is in the contract curve. Select one:

a. True

b. False

Moving from the endowment to the allocation in the previous question is a Pareto Improvement. Select one:

a. True

b. False

University loan funds can readily be accounted for within the general framework applicable to not-for-profit organizations.

Bronxville College maintains a loan fund of approximately $1 million (including receivables). The funds are invested in stocks and bonds, and all investment income must be added to the balance in the fund. The fund, however, is not restricted inasmuch as it was established by the college itself, not by donors.

Prepare journal entries to record the following events and transactions that took place during the year.

1. The college directed an additional $75,000 of donor contributions to the loan fund.
2. The fund made new student loans of $200,000. It estimated that approximately 10 percent will be uncollectible.
3. It earned interest and dividends of $6,000. In addition, the market value of its investments increased by $3,000.
4. It collected $140,000 in loan repayments, plus an additional $40,000 in interest.
5. It wrote off $20,000 of loans as uncollectible.

The following scenarios involve predicting the location of a stroke from symptoms. For each of the following scenarios involving stroke, indicate on a diagram of the brain (outside side‐view) where the stroke might have occurred.For scenarios 4 and 5, remember that connections involved in sensation and movement are crossed so you have to be careful about the side‐view of the brain you show (left or right hemisphere).

1. Following a stroke, the individual has impaired vision.

2. Following a stroke, the individual has difficulty making decisions.

3. Following a stroke, the individual is unable to understand language.

4. Following a stroke, the individual loses sensation on the left side of her body.

5. Following a stroke, the individual is unable to move her right arm.

The University is predicting at least a 15% reduction in its revenues in the Fall 2020 semester due to reduced demand for university education caused by a global pandemic. Assume a decreasing return to scale technology and a competitive market. Also, assume that the market was in the long run equilibrium prior to the pandemic outbreak.

Discuss the short run and long run implications of this reduction for:

1. the choice of the output by the university

2. capital and labour choices by the university

Caroline and Mia are alumni of Fulton-Dash University and Mia promises to give $2,000 to the university for scholarships in 6 months. Caroline tells Fulton-Dash University that she will give the university $100,000 if the novel she is in the process of writing makes it on to the Amazon Best Seller List.

Evaluate the two donations to determine if:

a) the donation is conditional or unconditional

b) a promise to give exists

c) what type of restriction, if any, was placed on the donation.

5. If you have the chance to meet the new Vice Chancellor of the University of Namibia, what advice (strategies) will you give him, that could enable university to compete on an international stage with institutions of higher learning.   5. If you have the chance to meet the new Vice Chancellor of the University of Namibia, what advice (strategies) will you give him, that could enable university to compete on an international stage with institutions of higher learning.