Comprehensive Accounting Cycle Review

15.ACR  Quigley Corporation's trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below.

Unrecorded transactions and adjustments:

• 1.On January 1, 2020, Quigley issued 1,000 shares of $20 par, 6% preferred stock for $22,000.
• 2.On January 1, 2020, Quigley also issued 1,000 shares of common stock for $23,000.
• 3.Quigley reacquired 300 shares of its common stock on July 1, 2020, for $49 per share.
• 4.On December 31, 2020, Quigley declared the annual cash dividend and a $1.50 per share dividend on the outstanding common stock, all payable on January 15, 2021.
• 5.Quigley estimates that uncollectible accounts receivable at year-end is $5,100.
• 6.The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,000.
• 7.The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,000.
• 8.The unearned rent was collected on October 1, 2020. It was the receipt of 4 months' rent in advance (October 1, 2020 through January 31, 2021).
• 9.The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded.

Instructions

(Ignore income taxes.)

(c)  

Prepare a multiple-step income statement for the year ending December 31, 2020.

(d)  

Prepare a retained earnings statement for the year ending December 31, 2020.

(e)  

Prepare a classified balance sheet as of December 31, 2020.

Total assets $273,400

1. What is the chemical composition of the core of a one solar mass star during the red super giant (asymptotic giant) phase? a) mainly carbon and oxygen b) mainly helium c) mainly hydrogen 2. What kind of stellar remnant will be left when the sun dies? a) red giant b) black hole c) white dwarf d) neutron star Which of the following Is not true of the cosmic background radiation? a) it is nearly equally bright in all directions b) it is starlight c) It was produced about a million years after the beginning of the expansion d) It is brightest in the radio (microwave) part of the spectrum 2. Which spatial geometry implies a finite universe a) closed b) flat c) open 3. A photon leaving a region of extremely strong gravity a) will be unaffected b) will lose energy and thus slow down c) will lose energy and thus be redshifted d) will gain energy and thus be blueshifted 4. As a degenerate gas is heated it will a) expand substantially b) contract substantially c) neither expand nor contract substantially d) alternate between expansion and contraction 5.How far away from sun, in light years in the closest star? a) 4.3 light years b) 1.4 light years c) 0.3 light years d) 6.2 light years

A 58-year-old man was admitted for abdominal surgery. He was extremely agitated and had several questions for the health care team. He often asked the same question in a different way. Following surgery, he was lethargic but seemed to be resting comfortably. Shortly after transfer back to the floor, he awoke in pain and was quite agitated. After receiving medication for his pain, he was able to rest. On the third day postoperatively, his wife was obviously upset when she came to visit, although she was trying to hide her feelings. Eventually, she admitted that a notice had arrived in the mail notifying him that his employer had declared bankruptcy and closed down. The patient became very distressed. Later, after his wife left, he became despondent, complaining of a headache and wondering how long he would have to remain in hospital. He told the nurse that he was worried about his benefit plan and whether his hospital costs would be covered.

1. Based on the patient history and the signs and symptoms, discuss the stages of stress response that the patient is experiencing and might experience in the future. (See Three Stages in Stress Response—GAV.)

2. Discuss other problems that this patient might experience as a result of stress and the underlying physiological cause of these problems. (See Stages in Stress Response, Significant Effects of the Stress Response.)

Andretti Company has a single product called a Dak. The company normally produces and sells 82,000 Daks each year at a selling price of $56 per unit. The company’s unit costs at this level of activity are given below:

Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period.

a. How much total contribution margin will Andretti forgo if it closes the plant for two months?

b. How much total fixed cost will the company avoid if it closes the plant for two months?

c. What is the financial advantage (disadvantage) of closing the plant for the two-month period?

1)

In a small open economy, the increase in aggregate demand resulting from an increase in government spending is _____ if the exchange rate is ______ than if it is _______ .

A) larger, flexible, fixed

B) smaller, fixed, flexible

C )always zero

D) larger, fixed, flexible

2)

In a small open economy, the increase in aggregate demand resulting from an increase in the money supply is _____ if the exchange rate is ______ than if it is _______ .

A) larger, fixed, flexible

B) smaller, flexible, fixed

C) larger, flexible, fixed

D) always zero

3)

This chapter explains that expansionary monetary policy reduces the interest rate and thus stimulates demand for investment goods. How does such a policy also stimulate the demand for net exports?

The demand for net exports is stimulated by expansionary monetary policy through the____________ (exchange rate effect/ Money supply effect) . The decline in the interest rate___________ (increase / Decrease) net capital outflow and causes the exchange rate to________ (go up or go down).

4)

Suppose the Bank of Canada contracts the money supply in an effort to reduce aggregate demand by a particular amount, say $10 billion. Assume Canada is a closed economy. The amount by which the Bank of Canada would need to reduce the supply of money to accomplish this goal would be ________ (greater / smaller) than the amount it would need to reduce the supply of money if Canada was an open economy with a flexible exchange rate.

Q1. Florida Enterprises, Inc. is considering a new project whose data are shown below. The equipment that will be used has a 3-year class life and will be depreciated by the MACRS depreciation system. Revenues and Cash operating costs are expected to be constant over the project's 10-year life. What is the Year 1 after-tax net operating cash flow?

Q2. Thomson Media is considering investing in some new equipment whose data are shown below. The equipment has a 3-year class life and will be depreciated by the MACRS depreciation system, and it will have a positive pre-tax salvage value at the end of Year 3, when the project will be closed down. Also, some new working capital will be required, but it will be recovered at the end of the project's life. Revenues and cash operating costs are expected to be constant over the project's 3-year life. What is the project's NPV?

Fiberform Industries produces a line of motorboats. The assembly department programs computerized equipment to shape and bend the metal railings for each boat. This equipment is capable of producing 40 railings per hour. The department typically produces only 30 railings per hour. The plant operates two (8-hour) shifts, 6 days a week. The shape and bend of the railings are critical, and the firm currently discards 9,600 completed railings a year because of poor shape and bend. The plant is closed for 12 vacation days and 10 holidays per year. The equipment is also shut down for one day every 2 months for regular maintenance. The assembly department’s average production of good railings for the past 5 years is 130,000 a year. The department expected to produce 120,000 good boat railings this year. However, the actual production was 105,000 railings. For this problem, assume the 365th day is a Sunday. Further assume any difference between actual sales and production under current conditions is idle marketable capacity.

1. Using the CAM-I model, determine the amount of equipment time that falls into each of the following categories: (i) rated; (ii) idle; (iii) nonproductive; and (iv) productive. As part of your solution attempt to determine what types of idle and nonproductive capacity exists. (Note: You may have to back into one type of idle capacity.)

10. Michelle Wightman was driving toward a railroad crossing at which the gates were down and the lights flashing. Wightman noted a stopped train a short distance from the gate. Believing the stopped train to be the cause of the closed gate, she drove around the gate and was struck and killed by a train that suddenly appeared from behind the stopped train. The stopped train had blocked her view of the oncoming train. Both trains were owned and operated by Consolidated Rail Corporation (CRC). Wightman's mother brought a wrongful death lawsuit and a survivorship action against CRC. In response, CRC claimed that Wightman's action of driving around the gates, in violation of both state and city law regarding the operation of a motor vehicle at a railroad crossing, constituted negligence on her part. Furthermore, CRC argued that if Wightman had not crossed the tracks, she would not have been struck by the train. Therefore, her actions were the sole cause of the accident, and the railroad corporation should not be held liable for her death. The attorney for the plaintiff argued that the placement of the first train, blocking the view of the other track, contributed to the accident and that CRC should be held liable for Wightman's death. Should Wightman's own negligence be a complete bar to the plaintiff's recovery of damages in this case? Explain. [See: Wightman v. Consolidated Railroad Corporation, 640 N.E.2d 1160 (OH).]