On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $15 and its retail selling price is $90 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred.

2016

2017

1.2. How much warranty expense is reported for November 2016 and for December 2016?

1.3. How much warranty expense is reported for January 2017?

1.4. What is the balance of the Estimated Warranty Liability account as of December 31, 2016?

Johnson Corporation began 2016 with inventory of 10,000 units of its only product. The units cost $8 each. The company uses a periodic inventory system and the LIFO cost method. The following transactions occurred during 2016:

a. Purchased 50,000 additional units at a cost of $10 per unit. Terms of the purchases were 2/10, n/30, and 100% of the purchases were paid for within the 10-day discount period. The company uses the gross method to record purchase discounts. The merchandise was purchased f.o.b. shipping point and freight charges of $.50 per unit were paid by Johnson.

b. 1,000 units purchased during the year were returned to suppliers for credit. Johnson was also given credit for the freight charges of $.50 per unit it had paid on the original purchase. The units were defective and were returned two days after they were received.

c. Sales for the year totaled 45,000 units at $18 per unit.

d. On December 28, 2016, Johnson purchased 5,000 additional units at $10 each. The goods were shipped f.o.b. destination and arrived at Johnson's warehouse on January 4, 2017.

e. 14,000 units were on hand at the end of 2016.

Required:

1. Determine ending inventory and cost of goods sold for 2016.

2. Assuming that operating expenses other than those indicated in the above transactions amounted to $150,000, determine income before income taxes for 2016.

Convertible Preferred Stock, Convertible Bonds, and EPS

Francis Company has 31,200 shares of common stock outstanding at the beginning of 2016. Francis issued 3,900 additional shares on May 1 and 2,600 additional shares on September 30. It also has two convertible securities outstanding at the end of 2016. These are:

1. Convertible preferred stock: 3,250 shares of 9.0%, $50 par, preferred stock were issued on January 2, 2013, for $60 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared and paid. To date, no preferred stock has been converted.
2. Convertible bonds: Bonds with a face value of $325000 and an interest rate of 5.0% were issued at par in 2015. Each $1000 bond is convertible into 25 shares of common stock. To date, no bonds have been converted.

Francis earned net income of $79000 during 2016. The income tax rate is 30%.

Required:

1. Compute the number of shares of common stock that Francis should use in calculating basic earnings per share for 2016.

Weighted average shares outstanding:  shares

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2. Calculate basic earnings per share for 2016. If required, round your answer to two decimal places.

Basic earnings per share: $

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3. Calculate diluted earnings per share for 2016 and the incremental EPS of the preferred stock and convertible bonds. If required, round your answers to two decimal places.

Diluted earnings per share: $

6. A standard drug is used to treat a certain disease. The probability with which the drug is effective is 0.85. A new drug is developed and it is desired to determine if the new drug performs better than the standard. An experiment was conducted with which 300 people are given the new drug.

a. State symbolically the null and alternative hypotheses.

b. What is the critical value and rejection region of the proposed test?

c. If in fact, the success rate of the drug is 0.9, what is the power of the test?

d. When the experiment was actually carried out, it was found that the new drug was effective in 269 of the patients. Find the p-value of the test.

6. A standard drug is used to treat a certain disease. The probability with which the drug is effective is 0.85. A new drug is developed and it is desired to determine if the new drug performs better than the standard. An experiment was conducted with which 300 people are given the new drug.

a. State symbolically the null and alternative hypotheses.

b. What is the critical value and rejection region of the proposed test?

c. If in fact, the success rate of the drug is 0.9, what is the power of the test?

d. When the experiment was actually carried out, it was found that the new drug was effective in 269 of the patients. Find the p-value of the test.

1.A Five hours after the start of an experiment, there were 700 bacteria, and 4 hours after that there were 1200 bacteria. Write a formula for N, the number of bacteria t hours after the start of the experiment, assuming that N is an exponential function.

1.B Let g(x) = 500e.^.06x.Write the inverse of g and specify its domain.

1C. For an investment to double in 20 years, what is the percentage rate of growth(to the nearest percent) necessary? ] Use P = e^rt

1.D. An isotope has a half-life of 7 hours, how much will be left after one day?

During a hiking trip in northern Minnesota, you pull out your pocket microscope and notice that one lake with high acidity levels has a high abundance of water fleas (Daphnia) and a low abundance of a species of zooplankton predator, while another lake with low acidity has few water fleas and many of the predator. You note that Minnesota has many lakes with different acidity levels. You hypothesize that zooplankton do worse in high acidity, allowing Daphnia to flourish. Design tests of this hypothesis using 1) an experimental manipulation, 2) a natural experiment, and 3) a microcosm experiment.

1. In a simple experiment, you are going out there to the duck pond to seine out one redbreast sunfish at random, determine its sex, and put it back in the pond and then, after 30 minutes, repeat this process. Assuming that the sex ratio for redbreast in the pond is 1:1, develop and plot the pmf of the random variable X, defined as the number of females in the two fish observed.
2. 1. Is the distribution of X symmetric or asymmetric?
   2. Explain why the result in (a) was obtained.
   3. Describe a simple experiment (at most 2-3 sentences) that you would perform to determine whether the sex ratio is really 1:1.

We may determine the corresponding equilibrium constant by evaporating acetic acid in a container that is subsequently sealed and weighed. In one experiment, acetic acid was evaporated in a container of volume 21.45 cm3 at 437 K. The pressure of the vapor was 101.9 kPa. The mass of acid in the sealed container was 0.0519 g. The experiment was repeated with the same container (same volume and pressure) at a temperature of 471 K; the mass of acid in the second container was 0.0380 g.

Compute the equilibrium constant for dimerization at each of these temperatures.

Determine the standard reaction enthalpy for this process.

Determine ΔG° and ΔS° for the dimerization reaction at 437 K.