Bond Investment Transactions

Starks Products uses the cost method to account for investments in bonds. Journalize the entries to record the following selected bond investment transactions for Starks Products:

If an amount box does not require an entry, leave it blank.

a. Purchased for cash $150,000 of Iceline, Inc., 6% bonds at 100 plus accrued interest of $1,500.

b. Received first semiannual interest payment.

c. Sold $90,000 of the bonds at 102 plus accrued interest of $900.

There are 2 different catalogs sent to customers. One of the catalogs costs 50 cents to make and is 50 pages long. The conversion rate for the catalog is 5% and each customer brings in 315 dollars. The second catalog costs 95 cents to make, is 100 pages long and each customer brings in 300 dollars from it. The profit margin is 30%. What should the conversion rate for the second catalog be to make at least the same amount of profit as the first one.

Abdullah is a batsman who has played 10 matches in a local cricket club. Take user input in a 2D array to store his score in first row and second row for balls he has faced in each match.

Calculate and display the strike rate (SR) of Mr. Abdullah in all 10 matches he has played.

SR=score/number of balls faced×100

Count and display the number of 50s and 100s he has score.

On April 1, 20X1, Abe Company purchased $50,000 of Greer Corp’s 12% bonds at 100 plus accrued interest. On June 30, 20X1, Abe Co. received its first semiannual interest. On February 28, 20X3, Abe decided to sell half his bonds to Cao Inc. at 99 plus accrued interest.

Prepare the journal entries for the following transactions:

The purchase of the bonds

The receipt of all interest

The sale of the bonds to Cao Inc.

Create a C structure which stores information about a student. Each student should be represented by a student ID (integer), first name, last name, day, month and year of birth, and program code (string). Write a C program which creates an array of 100 of these structures, then prompts the user to enter data from the keyboard to fill the array. If an ID of 0 is entered, data entry should finish, and the list of students should be printed to the screen.

Sturdley Corporation has 20,000 shares of $100 par value, 7% cumulative preferred stock outstanding and 100,000 of its $1 par value common stock outstanding. In their first four years of operation they paid the following cash dividends:

2016 -0-

2017 $240,000

2018 $280,000

2019 $180,000

Determine the total cash dividends paid during the four years with preferred stock as cumulative and then calculate it again with the preferred stock as non-cumulative.

2. Consider an inverse demand curve and inverse supply curve given by Q D = 52, 000 − 200P Q S = −8, 000 + 400P a. Find equilibrium price. b. Find equilibrium price. c. Now solve for producer surplus at equilibrium. Show your work! HINT: You will need to know find what price is when the supply curve crosses the y-axis. d. And do the same for consumer surplus at equilibrium. Show your work! e. What if the government instead mandates a policy that imposes a price ceiling of $120 (so can’t charge above $120). What happens first to producer surplus, and then to consumer surplus? Show your work! HINT: Don’t overthink it!

We have the following information on the shares prices of Papa Smirph Corporation over the last five years. Calculate the total dollar return and percentage return on each share.

Select one:

a. $12; 60%

b. $19.7; 61.6%

c. $19.7; 98.5%

d. $12; 38.5%

e. $3.94; 15.3%

Given the following share price history, what is the arithmetic average return per share?

Select one:

a. 13.64%

b. 4.05%

c. 3.24%

d. 5.36%

e. 32.75%

Given the following share price and Consumer Price Index history, what is the average real return per share?

Select one:

a. 12.59%

b. 4.49%

c. 3.55%

d. 5.16%

e. 5.59%

Suppose that the retail market for widgets has inverse demand curve P = 100 – Q. Widget retailing is controlled by a monopoly retailer, R Inc., which obtains its widgets from the monopoly wholesaler W Inc. at a wholesale price of w per widget. In addition R Inc. incurs a cost of $2 per widget to promote the product and sell to consumers. Wholesaler W Inc. obtains the widgets in from monopoly manufacturer M Ltd. at a manufacturing price of m per widget. Wholesaler W incurs an additional cost of $1 per unit to stock its inventory. M Ltd., the manufacturer incurs a unit production cost of $9 per unit in making widgets.

1) What is the equilibrium widget price to consumers, P, the equilibrium wholesale price w, and the equilibrium manufacturing price m? What is the profit earned by each firm at these prices?

2) Why would vertical integration by any two of these firms increases profit and could benefit consumers?

3) If all three sectors were perfectly competitive industries what would be the final consumer price? If all three sectors were vertically integrated what would be the final price.

6. Assume an industry with two firms facing an inverse market demand of P = 100 - Q. The product is homogeneous, and each firm has a cost function of 600 + 10q + 0.25q2. Assume firms agree to equally share the market. a. Derive each firm’s demand curve. b. Find each firm’s preferred price when it faces the demand curve in part a. Now assume that firm 1’s cost function is instead 25q + 0.5q2 while firm 2’s is as before. c. Find each firm’s preferred price when it faces the demand curve in part a. d. Compute each firm’s profit when firm 1’s preferred price is chosen. Do the same for firm 2’s preferred price. Which price do you think firms would be more likely to agree upon? Why? e. Show that neither price maximizes joint profits. f. Find the price that maximizes joint profits. Hint: It is where marginal revenue equals both firms’ marginal cost. g. Would firm 1 find the solution in part f attractive? If not, would a side payment from firm 2 to firm 1 of $500 make it attractive?