1. The percentage of automobile consumers who are under 50 years of age decreased approximately linearly from 56.1% in 1990 to 51.3​% in 2005.

a. Predict when the percentage will be 42​%.

b. Predict the percentage in 2014.

Niwot Co. sells products and service plans both separately and bundled together. Willy Loman, a Niwot Co. salesman, sold a Widgetron in year 5 for $1,000, its normal price, and told the customer he’d "throw in the 3-year service plan for free," which the company normally sells for an additional $150. The product shipped, the customer paid, and $1,000 in revenue was recognized in year 5. Is this correct? Why or why not?

Multiple Choice

• This is correct because the understanding between the seller and customer was that the product price was $1,000 and the service plan was free, which is in accordance with the principle of faithful representation.

• This is incorrect because the service revenue must be treated as a separate performance obligation, allocated a portion of the $1,000 sales price, and have revenue for it recognized over the three years of the service plan.

• This is incorrect because services must be rendered before any revenue can be recognized.

• This is correct because the product shipped and the customer paid.

The ledger of Oriole Company on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared.

An analysis of the accounts shows the following.

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly.

1. determine when the seller should recognize revenue.

2.  Explain your answer using GAAP revenue recognition guidelines.

3. Explain how each transaction would appear on the income statement and balance sheet for 2017.

Case 1: Your construction company entered into a four year contract to build a store for a fixed price of$7,000,000.  You estimated your costs at 6,200,000.  At the end of the 2nd year you estimate that you are 50% complete and your estimate to complete will be 7,500,000 because of labor problems.  What are the two alternative methods that can be used to record revenue on this multi-year project and what is the affect if:

1. You estimate a total loss on the project.

2.  You believe that the estimated costs can be reduced and you will make an overall profit on the project.

TRUE OR FALSE

1. The SCI is a picture of the results of the operations of the company as of the cut-off date.

2. The major elements of the SCI are income and expenses.

3. Cost of sales is computed as the cost of goods sold available for sales less ending inventory.

4. Goods returned by the customer are immediately deducted from the sales revenue account.

5. Expense decreases assets and therefore has credit normal balance.

6. Depreciation Expense is a line account found in an SCI prepared following the multi-step format.

7. Revenue increases equity and therefore has a credit normal balance.

8. Accumulated depreciation appears on the income statement.

9. The excess of expense over revenue is called loss.

10. The focal point of the accounting cycle is the financial statement.

Mexico Inc. has opened numerous restaurants near college campuses. Given below are student population in thousands (X) and annual revenue in millions at Taco Sell (Y) for various campuses.

a) Is this a time series or a causal relation case?

b) Please develop a regression equation for this case (write the equation clearly)

c) How good is the model (that is what can you say about the model given the r2 value)?

d) Now, the company is contemplating opening an outlet at IUP (current student population 10,000). Make a forecast of annual revenue at the IUP outlet of Taco Sell
.

During March, the Meade Consulting Corporation provides $23,000 in consulting services of which $12,000 is collected immediately and $11,000 is on account. The effects of this transaction on Meade Consulting Corporation’s accounts are:

a. Cash increases by $12,000; Accounts Receivable increases by $11,000; Revenue increases by $23,000.

b. Cash increases by $12,000; Unearned Revenue increases by $11,000; Revenue increases by $23,000

c. Accounts Receivable increases by $11,000; Revenue increases by $12,000; Contributed capital increases by $1,000

d. Accounts Receivable increases by $12,000; Accounts Payable increases by $11,000; Revenue increases by $1,000

A company has an asset account, Prepaid Insurance, with a balance of $4,000 at the beginning of the month. The company used $500 of insurance during the month. Which of the following statements is true about the month-end financial statements?  The company will have Insurance Expense of ______ and a balance in Prepaid Insurance of ______.

a.  $500; $500.

b. $500; $3,500.

c. $3,500; $500

d. $3,500; $4,000

Context

The idea that transactions in a marketplace work like an invisible hand is to some extent the idea that when a person chooses to buy an item at a given price, they are happy with the deal. There is no coercion. If the person really does not like the deal, they simply walk away.

This week's discussion will give you an opportunity to explore direct and indirect price discrimination within the context of a hypothetical scenario.

Instructions

For this discussion, use the following hypothetical scenario as the basis for your response:

• Your business partner is strongly opposed to your proposal to charge your largest customers lower prices for your web-based services than what you will charge your smaller customers. She is arguing it is unethical, unfair, and possibly illegal.

Address the following in your discussion post:

• Make a case that both groups of customers will be satisfied with the deal and that this is a perfectly legal form of pricing in a business-to-customer relationship.
  • What degree is this type of price discrimination?
  • How will the plan increase revenue?
  • Why will both groups of customers be satisfied with the deal?
  • Why is this a legal form of pricing?
• Use evidence from your textbook or other reputable sources to support your case to your business partner.