Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandise inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200.

The following transactions, relating to the “Italia” brand were completed during the quarter:

October 5 Purchased 15 pairs of lamps at a cost of $17,020 per pair.

October 14 Sold 18 pairs of lamps to Muller Furnishings at $22,250 per pair

October 22 Purchased 24 pairs at a cost of $18,175 per pair but the supplier gave a 4% quantity discount.

November 10 Sold 15 pairs of lamps to Orion Household Ltd and 10 pairs to Brown’s Furnishings which yielded total sales revenue of $589,750.

November 12 Owing to an increased demand for this product, 30 pairs of lamps were purchased on account at a cost of $17,612 per pair. In addition, Esperado paid $288 in cash on each pair of lamps to have the inventory shipped from the vendor’s warehouse to Esperado’s showroom.

November 27 Sold 23 pairs of lamps to Middletown Company at a price of $25,080 per pair.

November 30 An actual count of inventory was carried out which revealed that there were 15 pairs of the “Italia” brand in the warehouse.

December 2 In preparation for the festive season, Esperado purchased 25 pairs of lamps at a total cost of $474,500.

December 15 5 pairs of the lamps purchased on December 2 were returned to the supplier, as they were not of the brand ordered.

December 30 Sold 22 pairs of lamps to two customers (Omega Traders & Middleton Furnishings) at a selling price of $26,550 per pair. All purchases were on account and received on the dates stated. Required:

A) Prepare a perpetual inventory record for Esperado Furnishings, using the first in, first out (FIFO) method to determine the value of ending inventory at December 31, 2018, and the total amount to be assigned to cost of goods sold for the period.

B) Given that selling, distribution and administrative costs for the quarter were $23,445, $10,250 and$75,435 respectively, prepare an income statement for Esperado Furnishings for the period, to determine the net profit for the quarter, assuming the perpetual inventory system.

c) You are told that 8 pairs of lamps sold on November 27, 2018 were on account. State the journal entries necessary to record the transactions on November 12 and November 27, assuming the business uses a: - Perpetual inventory system - Periodic inventory system

D) Assuming that Esperado sold 86 pairs of “Italia” brand of lamps during the quarter; determine the value of ending inventory and cost of goods sold assuming the business used the periodic system and the LIFO method?

A random survey was conducted at Disneyland to determine how long park guests waited in line for Space Mountain (in minutes). The collected data is provided below:

65 67 54 57 72 64 55

71 64 60 84 54 74 76

62 60 71 59 58 53 63

65 68 69 90 74 59 75

63 51

The posted wait time was listed to be 60 minutes. At the 1% significance level, perform and interpret a hypothesis test to determine if the actual wait time for Space Mountain was more than 60 minutes.

Use RStudio. To test if a middle school class on geography is working, a pre- and post-test were given to students at the start and end of the semester. Assume that the scores were randomly selected from the two tests. Also, assume that that they are pairs of scores for ten students. Use the following data to test if the class improved students’ knowledge of geography. (hint: use “var.equal=TRUE” in your argument)

Scores

Pre-test:     77, 56, 64, 60, 57, 53, 72, 62, 65, 66

Post-test: 88, 74, 83, 68, 58, 50, 76, 64, 74, 60

FIFO and LIFO Costs Under Perpetual Inventory System

The following units of a particular item were available for sale during the year:

The firm uses the perpetual inventory system, and there are 13 units of the item on hand at the end of the year.

a. What is the total cost of the ending inventory according to FIFO?
$

b. What is the total cost of the ending inventory according to LIFO?
$

When answering each of the following, the random variable Y is normally distributed with a mean of 65 and a standard deviation of 4.

1. The value of z for being able to determine P(Y ≤ 62) is _______

The P(Y ≤ 62) is ________

2. The 2 values of z for being able to determine P( 69 ≤ Y ≤ 74) are _______ and ________

The P( 69 ≤ Y ≤ 74) is _________

3. The value of z for being able to determine P(Y ≥ 72) is _______

The P(Y ≥ 72) is ________

4. The value of z for being able to determine the value of y such that 10% of the values Y are less than that y

Is ________

         The value of y such that 10% of the values Y are less than that y is _________

Taylor’s is a popular restaurant that offers customers a large dining room and comfortable bar area. Taylor Henry, the owner and manager of the restaurant, has seen the number of patrons increase steadily over the last two years and is considering whether and when she will have to expand its available capacity. The restaurant occupies a large home, and all the space in the building is now used for dining, the bar, and kitchen, but space is available on the property to expand the restaurant. The restaurant is open from 6 p.m. to 10 p.m. each night (except Monday) and, on average, has 27 customers enter the bar and 52 enter the dining room during each of those hours. Taylor has noticed the trends over the last 2 years and expects that within about 4 years, the number of bar customers will increase by 50% and the dining customers will increase by 20%. Taylor is worried that the restaurant will be not be able to handle the increase and has asked you to study its capacity. In your study, you consider four areas of capacity: the parking lot (which has 82 spaces), the bar (56 seats), the dining room (102 seats), and the kitchen. The kitchen is well-staffed and can prepare any meal on the menu in an average of 12 minutes per meal. The kitchen, when fully staffed, is able to have up to 20 meals in preparation at a time, or 100 meals per hour (60 min/12 min × 20 meals).

To assess the capacity of the restaurant, you obtain the additional information: Diners typically come to the restaurant by car, with an average of 3 persons per car, while bar patrons arrive with an average of 1.5 persons per car. Diners, on average, occupy a table for an hour, while bar customers usually stay for an average of 2 hours. Due to fire regulations, all bar customers must be seated. The bar customer typically orders one drink per hour at an average of $9 per drink; the dining room customer orders a meal with an average price of $20; the restaurant’s cost per drink is $3, and the direct costs for meal preparation are $3.

Required: 1-a. Given the current number of customers per hour, what is the amount of excess capacity in the bar, dining room, parking lot, and kitchen? 1-b. Calculate the expected total throughput margin for the restaurant per day, and month (assuming a 26-day month). 2-a. Given the expected increase in the number of customers, determine if there is a constraint for any of the four areas of capacity. What is the amount of needed capacity for each constraint? 2-b. If there is a constraint, reduce the demand on the constraint so that the restaurant is at full capacity (assume some customers would have to be turned away). Calculate the expected total throughput margin for the restaurant per day, and month (assuming a 26-day month).

Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information:

Each T-shirt is expected to sell for $17.

The purchasing manager buys the T-shirts for $7 each.

The company needs to have enough T-shirts on hand at the end of each quarter to fill 27 percent of the next quarter’s sales demand.

Selling and administrative expenses are budgeted at $84,000 per quarter plus 14 percent of total sales revenue.

Required:
1. Determine budgeted sales revenue for each quarter.



2. Determine budgeted cost of merchandise purchased for each quarter.



3. Determine budgeted cost of good sold for each quarter.



4. Determine selling and administrative expenses for each quarter.



5. Complete the budgeted income statement for each quarter.

3. Your investment banking client Uber is about to go public. You have gathered the following information concerning comparable companies whose stock is publicly traded:

IPO Pricing

1. Calculate the average values for each multiple.
2. Using these average multiples estimate the implied price for Uber’s shares assuming Uber’s earnings per share are $0.50, cash flow per share are $1.00, revenue per share is $4.90, and book value per share is $7.10.
3. Assuming all five companies are equally reliable comparables, estimate a fair value for Uber’s shares assuming they are trading in the market.
4. Deduct a 10% discount from this [freely traded] price to arrive at a price for Uber’s IPO. What is the purpose behind the 10% discount?

Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information:

• Each T-shirt is expected to sell for $17.
• The purchasing manager buys the T-shirts for $7 each.
• The company needs to have enough T-shirts on hand at the end of each quarter to fill 27 percent of the next quarter’s sales demand.
• Selling and administrative expenses are budgeted at $84,000 per quarter plus 14 percent of total sales revenue.

Required:
1.Determine budgeted sales revenue for each quarter.



2. Determine budgeted cost of merchandise purchased for each quarter.



3. Determine budgeted cost of good sold for each quarter.



4. Determine selling and administrative expenses for each quarter.



5. Complete the budgeted income statement for each quarter.

Thompson Garage Doors is a company that installs automatic garage door openers. It charges an average price of $500 per installation. Variable costsexcluding wages for workers amount to $200 per installation. In addition, you are given the following information about the productivity of the workers:

a)Complete the table.

b)If each worker receives $1400 per week, how many will the owner hire? Explain.

c)How many workers would be hired at $1,800 per week? Explain.