What is crack spread and how is it calculated?

Hint: Difference between the price of jet fuel and other products produced from crude oil and the price of crude oil. Barrel of crude oil produces how much jet fuel

Suppose we consider buying oil and selling gasoline and heating oil in August. On June 2, 2004, the July futures price for oil was $39.96/barrel or $0.9513/gallon (42 gallons in a barrel). The August futures price for unleaded gasoline and heating oil were $1.2427/gallon and $1.0171/gallon. The 3-2-1 crack spread means that we can produce from 3 gallons of crude oil 2 gallons of gasoline and 1 gallon of heating oil.

Therefore the “Crack Spread” is

2 x ($1.2427) + $1.0171 – (3 x $0.9514) = $0.6482 * (42)/3 = $9.0748/barrel

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A. Fill in the blank

- cyclical - countervailing            - medium of exchange

           - expansionary        -expansionary monetary policy                 - trough

            - bank rate      - required reserve ratio                                        - frictional

              - dumping                                    - contractionary monetary policy      - automatic

             - excess reserve ratio           - store of value                          - contraction

a) Commercial banks hold a fraction of their deposits in cash in their vaults (or as deposits with the central bank). This fraction is known as the

b) The most direct way in which money replaces barter is through its use as a

c) A company of the Kenya has excess products that it does not want to sell into the Kenya market because it will bring down the domestic price and instead sells it in another country at below the cost of production. This situation is referred to as

d) The period of the business cycle in which real GDP is decreasing is called the

e) Workers at a steel plant are laid off because the economy is weak and the demand for       products         requiring         steel    has      is         an example   of unemployment.    

f) Declining oil prices from 2008 through the second quarter of 2010 has caused many economies to slow down. This has caused bank profits to decline, making Canadian banks vulnerable to a recession. The appropriate policy to be implemented is fiscal policy.

g) As housing prices began to drop and the economy slowed, the central bank began cutting its discount rate from 5.25% in June 2005 all the way to 0% by the end of 2006. With the economy still weak, it embarked on purchases of government securities from January 2007 until August 2012, for a total of $3.7 trillion. This is an example of

B. State the type of discretionary fiscal policy implemented or to be implemented by the government of Lota in the following events:

Portal ?Company, a growing? mail-order clothing and accessory? company, is concerned about its growing MSDA expenses. It therefore examined its customer ordering patterns for the past year and identified four different types of? customers, as illustrated in the following table.

Prices are set so that cost of goods sold is on average about 65% of the sales price. Customers pay actual shipping? charges, but extra processing is required for overnight deliveries. Portal has developed the following activity cost driver rates for its support? costs

Portal sends catalogs and flyers to all its customers several times a year. Orders are taken by mail or over the phone. Portal maintains a? toll-free number for customers to use when placing orders over the phone. Portal prides itself on the personal attention it provides shoppers who order over the phone. All purchases are paid for by check or credit card. Portal has a very generous return policy if customers are not satisfied with the merchandise received. Customers must pay return shipping? charges, but their purchase price is then fully refunded.

1. What journal entry would be recorded if a company received a $12,000 payment from a customer for maintenance services to be provided over the next two months:

For the past several years, you’ve been purchasing a product from a supplier at a high-volume cost and reselling the product at a lower price than your customers could buy it. However, you’d like to improve the product but the manufacturer isn’t interested in doing this. You are trying to determine if it would make sense to buy the equipment and make it yourself with better quality.

Construct two decision trees (one for each scenario), including expected money value, for the following scenario information.

Scenario A:

• Equipment = $500,000 + 100,000 for training
• Chances of a good market next year are 60%
• A good market will yield $1,000,000 in gross revenue, a poor market will yield $200,000 in gross revenue
• If you continue selling the product as you currently do, a good market will generate $300,000 in gross revenue and a poor market $50,000 in gross revenue
• Estimated costs for working with you supplier are $30,000/yr

Scenario B:

• How would this change if the probability for good market increases to 80% and the probability of a good/poor market for purchasing remain the same?

Enter the beginning cash and capital balances and post the transactions.

In this format leave REF blank need date explanation and credit or debit and balances.

For Cash, Accounts Receivable, Inventory, Supplies, Accounts Payable, Owners Capital, Sales Revenue, Sales Returns & Allowances, Sales Discounts, and Cost of Goods Sold.

Using this info:

Problem 5-02A a-c (Part Level Submission) (Video) Sunland Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Sunland showed Cash of $4,500 and Owner’s Capital of $4,500. May 1 Purchased merchandise on account from Braun's Wholesale Supply $3,900, terms 2/10, n/30. 2 Sold merchandise on account $2,500, terms 1/10, n/30. The cost of the merchandise sold was $1,600. 5 Received credit from Braun's Wholesale Supply for merchandise returned $400. 9 Received collections in full, less discounts, from customers billed on sales of $2,500 on May 2. 10 Paid Braun's Wholesale Supply in full, less discount. 11 Purchased supplies for cash $300. 12 Purchased merchandise for cash $1,300. 15 Received refund for poor quality merchandise from supplier on cash purchase $150. 17 Purchased merchandise from Valley Distributors $1,200, FOB shipping point, terms 2/10, n/30. 19 Paid freight on May 17 purchase $170. 24 Sold merchandise for cash $3,500. The merchandise sold had a cost of $2,100. 25 Purchased merchandise on account from Lumley, Inc. $700, FOB destination, terms 2/10, n/30. 27 Paid Valley Distributors in full, less discount. 29 Made refunds to cash customers for defective merchandise $70. The returned merchandise had a fair value of $40. 31 Sold merchandise on account $1,000, terms n/30. The cost of the merchandise sold was $600. Sunland Hardware’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 301 Owner’s Capital, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

Latona Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Latona showed Cash of $4,500 and Common Stock of $4,500. May 1 Purchased merchandise on account from Gray's Wholesale Supply $4,500, terms 2/10, n/30. 2 Sold merchandise on account $2,000, terms 1/10, n/30. The cost of the merchandise sold was $1,400. 5 Received credit from Gray's Wholesale Supply for merchandise returned $250. 9 Received collections in full, less discounts, from customers billed on sales of $2,000 on May 2. 10 Paid Gray's Wholesale Supply in full, less discount. 11 Purchased supplies for cash $300. 12 Purchased merchandise for cash $1,400. 15 Received refund for poor quality merchandise from supplier on cash purchase $150. 17 Purchased merchandise from Amland Distributors $1,300, FOB shipping point, terms 2/10, n/30. 19 Paid freight on May 17 purchase $120. 24 Sold merchandise for cash $3,500. The merchandise sold had a cost of $1,900. 25 Purchased merchandise from Horvath, Inc. $750, FOB destination, terms 2/10, n/30. 27 Paid Amland Distributors in full, less discount. 29 Made refunds to cash customers for defective merchandise $60. The returned merchandise had a fair value of $30. 31 Sold merchandise on account $1,500, terms n/30. The cost of the merchandise sold was $500.

Latona Hardware’s chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 126 Supplies, No. 201 Accounts Payable, No. 311 Common Stock, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold.

a) Enter the beginning cash and common stock balances and post the transactions.

2. Hal Smith opened Smith’s Management Company on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books:

1. Smith invested $10,000 cash in the business.
2. The company paid $5,200 for salaries for the month.
3. The company paid $1,600 cash to rent office space for the month.
4. Smith withdrew $5,000 for his personal use from the company.
5. The company received $19,000 cash for management services provided during March.
6. The company provided $12,000 of management services to customers on account.
7. The company paid cash of $500 for monthly utilities.
8. The company received $3,100 cash in advance of providing management services to a customer.

Based on this information, accrual basis net income for March would be:

_____________________

Based on this information, cash basis net income for March would be:

_____________________

this is multiple choice question, this is my mid term question, please do not give the answers by guessing because these marks really improtant to me, answer only if you are 100% sure, Thank you so much.
1) Which of the following is not a type of auditor's opinion?
a) Qualified
b)Adverse
c) Unmodified
d)Disclaimer of opinions
e) Ordinary

2) Which of the following is least likely to be considered a covered member for the purpose of this year auditing of ABC Inc. by the Atlanta branch of a national CPA firm ?
a) A partner of the Atlanta office who only worked on audits of past years of ABC INC. but currently has no repsonisibilitie with this year's audit
b) a partner in charge of the Atlanta office of the CPA firm
c) a partner in charge of the entire CPA firm
d) A partner of the houston pffice branch of the CPA firm but who has a small , immaterial investment in ABC Inc.

3) Which of the following family relations is most likely to impair an Auditor;s independence with respect to a particular client on which the auditor works as a covered member?
a) an uncle who has an immaterial investment in the client of which the auditor is aware.
b) an uncle who has a material investment in the client of which the auditor is not aware
c) the auditor's spouse participates in a 401(K) retirement plan sponsored by the client.
d) the auditor's uncle is president of the client.

4) The Sarbanes-Oxley Act requires that auditors of large publicly traded companies in the U.S. perform an Integrated Audit that includes an audit report on the entity's internal control and which of the following
a) compliance with lawas and regulations
b) financial statements and compliances with laws and regulations
c) financial statements
d) neither financial statements nor compliance with laws and regulations

5)An analytical procedure that involves comparing an entity's ratios with other companies in the same industry is
a) comparison analysis
b) cross sectional analysis
c) horizontal analysis
d) vertical analysis