he following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash $ 8,200 Accounts receivable $ 22,800 Inventory $ 43,800 Building and equipment, net $ 128,400 Accounts payable $ 26,175 Capital stock $ 150,000 Retained earnings $ 27,025 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) $57,000 April $73,000 May $78,000 June $103,000 July $54,000 c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. d. Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold. e. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory. f. Monthly expenses are as follows: commissions, 12% of sales; rent, $3,000 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $963 per month (includes depreciation on new assets). g. Equipment costing $2,200 will be purchased for cash in April. h. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Required: Using the data above: 1. Complete the following schedule. 2. Complete the following: Budgeted cost of goods sold for April = $73,000 sales × 75% = $54,750. Add desired ending inventory for April = $58,500 × 80% = $46,800. 3. Complete the following cash budget: (Borrow and repay in increments of $1,000. Cash deficiency, repayments and interest should be indicated by a minus sign.) 4. Prepare an absorption costing income statement for the quarter ended June 30. 5. Prepare a balance sheet as of June 30.

Please give a brief justification for the correct answer you select:

1. Which of the following is NOT included in 2004’s GDP?

1. The value of a car produced in the United States and exported to England.
2. The profit earned in 2004 from selling a stock that you purchased in 2001.
3. The value of a computer chip that is used in the production of a personal computer.
4. The commission earned by an employment counsellor when she locates a job for a client.

2. Gross National Product is the total market value of

1. All final and intermediate goods and services produced by resources owned by a country in a given year.
2. All final and intermediate goods and services produced in a country in a given year, regardless of who owns the resources.
3. All final goods and services produced in a country in a given year, regardless of who owns the resources.
4. All final goods and services produced by resources owned by a country, regardless of where production takes place.

3. Which of the following is included in both the U.S. GDP and GNP?

1. The value of all cars produced by Ford in Mexico.
2. The value of all cars produced by General Motors in the US.
3. The value of all cars produced by Toyota in the US.
4. The value of cars produced by Nissan in Japan and the US.

4. The value of what Pizza Hut produces in Italy is included in the U.S. ____________ and in the Italian ____________.

1. GDP;GDP
2. GNP;GNP
3. GNP;GDP
4. GDP;GNP

5. The GDP of the U.S. in 2002 was around $10 trillion. This means

1. That the value of output in 2002 was around $10 trillion.
2. That total income in 2002 was around $10 trillion.
3. That total spending in 2002 was around $10 trillion.
4. All of the above

6. In 2004 the change in business inventories is $50 billion and GDP is $160 billion. Final sales in 2004

1. Are $110 billion.
2. Are $200 billion.
3. Are 210 billion.
4. Cannot be determined from this information.

Assume there are two competitor firms, ABC and XYZ. ABC had no credit losses last year, but 2% of XYZ’s accounts receivable proved to be uncollectible and resulted in losses. Should XYZ fire its credit manager and hire ABC’s? Defend your response. (2pts)

Indicate by a (+), (-), or (0) whether each of the following events would probably cause A/R, sales, and profits to increase, decrease, or be affected in an indeterminate manner. Also provide an explanation for each event and the affects. (7pts)

AR Sales Profit

a.   The firm tightens its credit

standards.                                             __                 __               __

b.   The terms of trade are

changed from 2/10, net 30,

to 3/10, net 30.                                     __                 __               __

c.   The terms are changed from            

2/10 net 30, to 3/10, net 40.                   __                __               __                                     

d.   The credit manager gets tough

with past-due accounts                        __                 __               __

On March 1, Minnerly Motors obtains business loan from a local bank. The loan is a $25,000 interest-only loan with a nominal rate of 11%. Interest is calculated on a simple interest basis with a 365-day year. What is Minnerly’s interest charge for the first month (assuming 31 days in the month)? You must show calculations to receive full credit. (2pts)

Cost of Bank Loans. Del Hawley, owner of Hawley’s Hardware, is negotiating with First City Bank for a 1-year loan of $50,000. First City has offered Hawley the alternatives listed below. Calculate the effective annual interest rate for each alternative. You must show calculations to receive full credit. (6pts)

A 12% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year.

A 9% annual rate on a simple interest loan, with a 20% compensating balance required and interest due at the end of the year.

An 8.75% annual rate on a discounted loan, with a 15% compensating balance.

Monitoring of Receivables. The Russ Fogler company, a small manufacturer of cordless telephones, began operations on January 1. Its credit sales for the first 6 months of operations were as follows:

Month              Credit Sales

January             $ 50,000

February           100,000

March               120,000

April                 105,000

May                 140,000

June                 160,000

Throughout this entire period, the firm’s credit customers maintained a constant payments pattern; 20% paid in the month of sale, 30% paid in the first month following the sale, and 50% paid in the second month following the sale.

What was Fogler’s receivables balance at the end of March and at the end of June? (You must show calculations to receive full credit. (2pts)

Assume 90 days per calendar quarter. What were the ADS and DSO for the first and second quarter? You must show calculations to receive full credit. (3pts)

Construct an aging schedule as of June 30. Use account ages of 0-30, 31-60, and 61-90 days. You must show calculations to receive full credit. (3pts)

Construct the uncollected balances schedule for the second quarter as of June 30. You must show calculations to receive full credit. (3pts)

The following information is taken from the accounts of Latta Company. The entries in the T-accounts are summaries of the transactions that affected those accounts during the year.

The overhead that had been applied to production during the year is distributed among Work in Process, Finished Goods, and Cost of Goods Sold as of the end of the year as follows:

For example, of the $58,000 ending balance in work in process, $27,840 was overhead that had been applied during the year.

Required:

1. Identify reasons for entries (a) through (d).

2. Assume that the underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare the necessary journal entry.

3. Assume that the underapplied or overapplied overhead is closed proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the necessary journal entry.

Complete this question by entering your answers in the tabs below.

Required 1

Required 2

Required 3

Identify reasons for entries (a) through (d).

Assume that the underapplied or overapplied overhead is closed to Cost of Goods Sold. Prepare the necessary journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

Record the adjustment of manufacturing overhead account to COGS.

Note: Enter debits before credits.

Assume that the underapplied or overapplied overhead is closed proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the necessary journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

Journal entry worksheet

Record the allocation of any balance in the manufacturing overhead account to other accounts.

Note: Enter debits before credits.

Fuqua Company’s sales budget projects unit sales of part 198Z of 10,300 units in January, 12,600 units in February, and 13,800 units in March. Each unit of part 198Z requires 3 pounds of materials, which cost $4 per pound. Fuqua Company desires its ending raw materials inventory to equal 40% of the next month’s production requirements, and its ending finished goods inventory to equal 20% of the next month’s expected unit sales. These goals were met at December 31, 2019.

(a)

Prepare a production budget for January and February 2020.

3. The following data show the average Home Price Index over a​six-quarter period.

Quarter   Price
Q1 2017   185.9
Q2 2017   190.1
Q3 2017   196.1
Q4 2017   196.1
Q1 2018   198.3
Q2 2018   203.7

a. Forecast the price index for Q3 2018 using a​ two-period simple moving average. (Round to two decimal places as​needed.)

b. Calculate the MAD for the forecast in part a. ​(Round to two decimal places as​ needed.)

c. Forecast the price index for Q3 2018 using a​ three-period simple moving average. (Round to two decimal places as​needed.)

d. Calculate the MAD for the forecast in part c. ​(Round to two decimal places as​ needed.)

You need to prepare the budget forYellow tree for the quarter ending June2018. The budget must be preparedmonthly. The quarter consists of 13weeks. The forecasted sales are as follows:

Sales Units

1,250

1,500

1,750

1,800

The company’s policy changed theinventory policy to keep closing inventoryof completed units at 25% of thefollowing month’s sales. Openinginventory on the 1st of April was 475units.  The labour information is as follows:

Normal workinghours

8 hours per day

Weekend work

None, only if overtimeis required.

Number of employees

20 currently

Additional 10employees will beemployed for themonth of June

Normal time rate

R32.50 per hour

Overtime rate

30% above normaltime rate per hour

Hours per unit

3 hours

Required:

1.    Calculate the production budgetfor the quarter.                                                      (3)

2.    Calculate the budgeted labourhours per month. Split the hoursbetween normal time andovertime.                                                                                                           (9)

3.    Calculate the budgeted labourcost monthly. Split the costbetween normal time and overtime.                                                                                                                  (6

A state is spending $30 million on disability programs in schools and the federal government promises to give that state $25 million to spend on disability programs in schools. Explain the type of grant being promised to the state and how it will affect state spending on disability programs in schools.

Explain each in-depth and why.

How do consumption and investment spending affect aggregate expenditures and output over the business cycle?

Which is more responsible for volatility - consumption or investment spending or both?

How do government actions affect consumption and investment?

Explain each of the factors that you would consider in choosing a suitable location for a car manufacturer The factors should be presented in order of importance (most important first) and justified.