AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,500 plus $31 per job, and the actual mobile lab operating expenses for February were $8,680. The company expected to work 140 jobs in February, but actually worked 146 jobs.

Required:

Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February

These financial statement items are for Ivanhoe Company at year-end, July 31, 2022.

1. Prepare an income statement for the year. Ivanhoe Company did not issue any new stock during the year. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

2. Prepare a retained earnings statement for the year. Ivanhoe Company did not issue any new stock during the year.

3. Prepare a classified balance sheet at July 31. (List Current Assets in order of liquidity.)

AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:

The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,700 plus $34 per job, and the actual mobile lab operating expenses for February were $9,640. The company expected to work 150 jobs in February, but actually worked 152 jobs.

Required:

Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February

2. The Larson Company prepared the following income statement using the cash basis of
accounting:

THE LARSON COMPANY
Income Statement, Cash Basis
Year Ended December 31, 2017
Service revenue $460,000
Expenses 220,000
Profit $240,000

Additional data:
1. Service revenue includes $40,000 collected from a customer for whom services
were provided in 2016, and who was billed in 2016.
2. There are an additional $15,000 of expenses that were incurred on account, for
which payment will not be made until 2018.
3. Depreciation on a company automobile for the year amounted to $7,000. This
amount is not included in the expenses above.
4. On December 1, 2017, paid $1,600 for two months' rent (December and January).
This amount is included in the expenses above.

Instructions
a) Prepare Larson's income statement on the accrual basis in conformity with
generally accepted accounting principles. Show calculations and explain each change.
b) Explain which basis (cash or accrual) provides a better measure of profit.

13. In an imaginary economy, consumers buy only hot dogs and hamburgers. The fixed basket consists of 10 hot dogs and 6 hamburgers. A hot dog cost $3 in 2006 and $5.40 in 2007. A hamburger cost $5 in 2006 and $6 in 2007. Which of the following statements is correct?

a. When 2006 is chosen as the base year, the consumer price index is 90 in 2007.

b. When 2006 is chosen as the base year, the inflation rate is 50 percent in 2007.

c. When 2007 is chosen as the base year, the consumer price index is 100 in 2006.

d. When 2006 is chosen as the base year, the inflation rate is 50 percent in 2007.

14. The CPI was 120 in 2000 and 132 in 2001. Dorgan borrowed money in 2000 and repaid the loan in 2001. If the nominal interest rate on the loan was 12 percent, then the real interest rate was

a. 2 percent.

b. 10 percent.

c. 12 percent.

d. 22 percent

15. By not taking into account the possibility of consumer substitution, the CPI

a. understates the cost of living.

b. overstates the cost of living.

c. may overstate or understate the cost of living, depending on how much prices rise.

d. may overstate or understate the cost of living, regardless of the extent to which prices rise

16. You know that a candy bar cost five cents in 1962. You also know the CPI for 1962 and the CPI for today. Which of the following would you use to compute the price of the candy bar in today's prices?

a. five cents × (1962 CPI/ today's CPI)

b. five cents × (1962 CPI/(today's CPI - 1962 CPI))

c. five cents × (today's CPI/1962 CPI)

d. five cents × today's CPI - five cents × 1962 CPI.

17. The nominal interest rate tells you

a.   how fast the number of dollars in your bank account rises over time.

b.   how fast the purchasing power of your bank account rises over time.

c.   the number of dollars in your bank account today.

d.   the purchasing power in your bank account today.

18. Consider two countries. Country A has a population of 1,000, of whom 800 work 8 hours a day to make 128,000 final goods. Country B has a population of 2,000 of whom 1,800 work 6 hours a day to make 270,000 final goods

a.   Country A has higher productivity and higher real GDP per person than country B.

b.   Country A has lower productivity and lower real GDP per person than country B.

c.   Country A has higher productivity, but lower real GDP per person than country B.

d.   Country B has lower productivity, but higher real GDP per person than country B.

19. The Peapod Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital?

a. The owner's knowledge of how to prepare vegetarian entrees.

b. The money in the owner's account at the bank she borrowed money from.

c. The tables and chairs in the restaurant.

d. The land the restaurant was built on.

20. In a particular country in 1998, the average worker needed to work 25 hours to produce 40 units of output. In that same country in 2008, the average worker needed to work 40 hours to produce 68 units of output. In that country, the productivity of the average worker

a. decreased by 1. 7 percent between 1998 and 2008.

b. remained unchanged between 1998 and 2008.

c. increased by 4. 75 percent between 1998 and 2008.

d. increased by 6. 25 percent between 1998 and 2008

Previously issued securities are traded among investors in the:

A. primary market B. IPO market C. secondary market D. demand market

(TCO E & F) A forward contract is

marked to market.

has significant default risk.

is standardized.

is traded over the counter.

is highly liquid.

What is Kula? What was the purpose of kula? what was traded between the islanders? where in the world did Kula take place, and documented the process?

The North Central Water Company has finalized its financial statements for the 2019 financial year. The Company's board of directors has asked you, their cost accountant, to look at the financial results and to compare the financial performance for the 2019 fiscal year to the results of the 2018 financial year. The board would also like you to project the revenues and expenses for the 2020 financial year based on several key assumptions. They have asked you to submit an excel file containing the financial results and budget projections as well as a one page memorandum of your findings.

Financial Results:

Total Number of Customers       26,000 25,000

2019    % of Total Revenues   2018    % of Total Revenues

Revenues:

Water Sales $1,162,000 ? $1,200,000 ?

Late Fees 87,000 ? 68,000 ?

Fire Hydrant Fees    114,500 ? 122,000 ?

  Total Revenues $1,363,500 100% $1,390,000 100%

Expenses:

Cost of Water Sold $512,000 ? $278,000 ?

Payroll Expense 608,000 ? 450,000 ?

Overhead Expense 292,050 ?    200,000 ?

Miscellaneous Expenses 64,075. ? 78,000    ?

   Total Expenses $1,476,125 ? $1,006,000    ?

Net Income (Loss) <$112,625> ?    $ 384,000 ?

I. Excel Analysis (Please submit your answers with the excel file provided for you in Ilearn entitled "North Central Financial Results- Student Copy".

Based on the financial results provided above, complete the excel spreadsheet file provided to you and submit your file in Ilearn. Please include include your name in the filename.

.

Required:

1. Calculate each revenue and expense item as a percentage of total revenues in 2019 and 2018 (show percentages out to TWO decimal places for all revenues and expenses, but round total revenue's percentage to ZERO decimal places- see examples in spreadsheet).

2. Calculate the water sales per customer for 2019 and 2018 (show number out to TWO decimal places- see example in spreadsheet).

3. Calculate the company's budgeted financial performance for 2020 based on the assumptions listed below for each revenue and expense item. Then calculate each item as a percentage of total revenues just like you did for 2019 and 2018. Then calculate the water sales per customer for 2020 just as you did for 2019 and 2018- see examples in spreadsheet.

4. Finally, calculate the differences in each revenue and expense item between 2020 and 2019, and 2019 and 2018- see example in spreadsheet. This will provide you with some insight about the year-to-year changes and help you with your business memo which is the second part of this project.

You must use formulas in the excel spreadsheet rather typing-in calculated numbers to get

full credit. You will also run into rounding errors unless you use formulas. Some formulas

and calculated numbers have already been included in the spreadsheet to help you. YOU

SHOULD HAVE AN ANSWER WHEREVER YOU SEE A QUESTION MARK (?)

ASSUMPTIONS:

Assume that the water company expects that in 2020:

a. The number of customers will increase by 5%.

b. Water sales will increase by 4% and late fees will increase by 1% due to increased customer demand.

c. Hydrant fees will decrease by 1% because several older hydrants will be taken out of service.

d. The cost of water sales will increase by 8% because of higher chemical costs.

e. Payroll expenses will increase by 5.5% due to wage increases and higher medical

insurance expenses.

f. Overhead expense will decrease by 4% because of efforts to reduce costs.

g. Miscellaneous expenses are expected to double because of the purchase of building supplies in anticipation of a major waterline project in 2020.

Here are some check figures to help you out:

2020 Total Revenue=1,409,705

2020 Total Expense=1,602,918

2020 Water Sales per customer= $44.27

Total Income<loss> 2020 vs 2019= <$80,588>

Total Income<loss> 2019 vs 2018=<$496,625>

Total Income <loss> as a percentage of total revenue in 2020=-13.71% Total Income <loss> as a percentage of total revenue in 2019=-8.26%

In this problem, assume that the distribution of differences is approximately normal. Note: For degrees of freedom d.f. not in the Student's t table, use the closest d.f. that is smaller. In some situations, this choice of d.f. may increase the P-value by a small amount and therefore produce a slightly more "conservative" answer.

Are America's top chief executive officers (CEOs) really worth all that money? One way to answer this question is to look at row B, the annual company percentage increase in revenue, versus row A, the CEO's annual percentage salary increase in that same company. Suppose a random sample of companies yielded the following data:

Do these data indicate that the population mean percentage increase in corporate revenue (row B) is different from the population mean percentage increase in CEO salary? Use a 5% level of significance. (Let d = B ? A.)

(a) What is the level of significance?


State the null and alternate hypotheses.

H₀: ?_d = 0; H₁: ?_d < 0H₀: ?_d > 0; H₁: ?_d = 0     H₀: ?_d ? 0; H₁: ?_d = 0H₀: ?_d = 0; H₁: ?_d > 0H₀: ?_d = 0; H₁: ?_d ? 0

(b) What sampling distribution will you use? What assumptions are you making?

The Student's t. We assume that d has an approximately normal distribution.The Student's t. We assume that d has an approximately uniform distribution.     The standard normal. We assume that d has an approximately uniform distribution.The standard normal. We assume that d has an approximately normal distribution.

What is the value of the sample test statistic? (Round your answer to three decimal places.)


(c) Find the P-value. (Round your answer to four decimal places.)


Sketch the sampling distribution and show the area corresponding to the P-value.

(d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level ??

Since the P-value ? ?, we reject H₀. The data are statistically significant.Since the P-value > ?, we fail to reject H₀. The data are not statistically significant.     Since the P-value > ?, we reject H₀. The data are not statistically significant.Since the P-value ? ?, we fail to reject H₀. The data are statistically significant.

(e) Interpret your conclusion in the context of the application.

Reject H₀. At the 5% level of significance, the evidence is sufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Fail to reject H₀. At the 5% level of significance, the evidence is insufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.     Fail to reject H₀. At the 5% level of significance, the evidence is sufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Reject H₀. At the 5% level of significance, the evidence is insufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.