Sample annual salaries​ (in thousands of​ dollars) for employees at a company are listed.

51

34 

59

52 

27

27

51  

34

59

31  

52

51

41

​(a) Find the sample mean and sample standard deviation.

​(b) Each employee in the sample is given a

66​%

raise. Find the sample mean and sample standard deviation for the revised data set.

​(c) To calculate the monthly​ salary, divide each original salary by 12. Find the sample mean and sample standard deviation for the revised data set.

​(d) What can you conclude from the results of​ (a), (b), and​ (c)

Problem 3-29 (LO 3-1, 3-3a, 3-3b, 3-4)

Following are separate financial statements of Michael Company and Aaron Company as of December 31, 2018 (credit balances indicated by parentheses). Michael acquired all of Aaron’s outstanding voting stock on January 1, 2014, by issuing 20,000 shares of its own $1 par common stock. On the acquisition date, Michael Company’s stock actively traded at $34 per share.

On the date of acquisition, Aaron reported retained earnings of $440,000 and a total book value of $570,000. At that time, its royalty agreements were undervalued by $60,000. This intangible was assumed to have a six-year remaining life with no residual value. Additionally, Aaron owned a trademark with a fair value of $50,000 and a 10-year remaining life that was not reflected on its books. Aaron declared and paid dividends in the same period.

1. a. Using the preceding information, prepare a consolidation worksheet for these two companies as of December 31, 2018.

2. b. Assuming that Michael applied the equity method to this investment, what account balances would differ on the parent's individual financial statements?

Scroll down to complete all parts of this task. For each of the following independent situations, select from the option list provided the appropriate effect, if any, on Company A's December 31, Year 3, financial statements. Each choice may be used once, more than once, or not at all. Situation Effect 1. On December 31, Year 3, Company A incurred a probable loss that can be reasonably estimated between $50,000 and $300,000. No amount within the range appears to be a better estimate than any other. Accrual of a liability of $50,000 2. The occurrence of a gain contingency is probable and its amount can be reasonably estimated as $300,000. Disclosure in the notes but not an accrual 3. On December 1, Year 3, one of Company A's customers filed a lawsuit against the company. Company A's management concludes that $300,000 is the reliable estimate of the costs that would result from the unfavorable ruling against the company. The company's management and legal counsel agree that the likelihood of an unfavorable ruling is remote. Neither an accrual nor a disclosure 4. On December 1, Year 3, one of Company A's employees sued the company for damages caused by unsafe working conditions. At the end of Year 3, management concludes that it is probable Company A will be held liable for damages, and that $300,000 would be a reasonable estimate of the amount to be paid to the employee to settle the lawsuit. Company A's $1 million comprehensive liability insurance policy has a $50,000 deductible clause. Accrual of a liability of $50,000 5. On December 31, Year 3, Company A's management and legal counsel agree that it is probable that the company will have to pay $300,000 to settle a lawsuit against the company. Accrual of a liability of $300,000 6. On December 31, Year 3, Company A's management and legal counsel conclude that it is reasonably possible that Company A will be held liable in a lawsuit that was brought by the local government for environmental damages, and that the reasonable estimate of the amount the company will need to pay to settle the suit is between $50,000 and $300,000.

The information below for questions (a) and (b) Toyoda Inc. is a Japanese firm located in Tokyo. The firm collected JPY 190,000 from customers in 2018. Of the amount collected, JPY 40,000 was from revenue accrued from services performed in 2017, and JPY 20,000 was received in advance for 2019 revenue. Furthermore, the firm incurred JPY 78,000 of expenses in 2018, which will not be paid until 2019. The firm also incurred JPY 29,000 of expenses in 2018 which had been paid in 2017. The firm paid JPY 150,000 for expenses in 2018. Of the amount paid, JPY 50,000 was for expenses incurred on account in 2017, JPY 22,000 was paid in advance for 2019 expenses. The firm also earned JPY 60,000 of revenue in 2018, which will not be collected until 2019. The firm also earned JPY 25,000 of revenue in 2018 which had been collected in 2017.

(a) Compute 2018 Toyoda Inc.’s cash-basis net income! (2 points)

(b) Compute 2018 Toyoda Inc.’s accrual-basis net income! (3 points)

(c) Kishida-san is the CEO of Hyakuen Inc. He asks you, as the firm's accounting manager, regarding cash issues that he was confused. He was unsure whether cash equivalents are the same as cash. He was also unsure of how the restricted cash funds shall be reported on the balance sheet. Explain! (3 points)

(d) Herr Lahm is the CEO of Danke Mobile Inc. Danke Mobile Inc. is a German firm located in Munich. You were hired as the Danke Mobile Inc.'s accounting manager. You have just presented the GAAP of receivables. However, Herr Lahm could not understand why cash realizable value does not decrease when an uncollectible account is written off under the allowance method. You are required to explain this point to Herr Lahm! (2 points)

Reliable Supply Company sells only two products, Product A and Product B.

Reliable Supply sells 4 units of Product A for each 3 units it sells of Product B. Reliable Supply has a tax rate of 20%.

Required:

a.   What is the breakeven point in units for each product, assuming the sales mix is 4 units of Product A for each 3 units of Product B?

b.   How many units of each product would be sold if Reliable Supply desired an after-tax net income of $380,000, using its tax rate of 20%?

It is now the end of Dec 2020. Risk-free interest rate is 10% p.a. for all maturities (continuous compounding). Entries in the table below (in italics) represent European put option prices on the stock of FGH. The current stock price of FGH is $21.00. FGH does not pay dividends.

Note K=Exercise price

Is the following put option on FGH’s shares mispriced? Clearly explain why and show reasoning/working

- Option expiring end of June 2021 with K=$30.00? If this option is mis-priced also clearly state how you would exploit any arbitrage opportunity and any expected arbitrage profit. If required assume long or short sales of shares are allowed and that you can borrow or lend at the risk free rate. Ignore all transaction costs other than the cost of borrowing and lending.

Pirates Incorporated had the following balances at the beginning of September. PIRATES INCORPORATED Trial Balance September 1 Accounts Debits Credits Cash $ 6,100 Accounts Receivable 2,100 Supplies 7,200 Land 10,800 Accounts Payable $ 7,100 Notes Payable 2,600 Common Stock 8,600 Retained Earnings 7,900 Totals $ 26,200 $ 26,200 The following transactions occur in September. September 1 Provide services to customers for cash, $4,300. September 2 Purchase land with a long-term note for $6,000 from Crimson Company. September 4 Receive an invoice for $460 from the local newspaper for an advertisement that appeared on September 2. September 8 Provide services to customers on account for $5,600. September 10 Purchase supplies on account for $1,000. September 13 Pay $3,600 to Crimson Company for a long-term note. September 18 Receive $4,600 from customers on account. September 20 Pay $860 for September's rent. September 30 Pay September's utility bill of $1,800. September 30 Pay employees $3,600 for salaries for the month of September. September 30 Pay a cash dividend of $1,000 to shareholders. 2. & 3. Post each transaction to the appropriate T-accounts and calculate the balance of each account on September 30. (Hint: Be sure to include the balance at the beginning of September in each T-account.)

COMPREHENSIVE PROBLEM (Completing the Accounting Cycle – Chapters 1-3)

Murfee Delivery Service is a delivery service company that delivers anything to anyone anywhere. The company intends to stand out due to its strict confidentiality policy forbidding any disclosure of its customers’ personal information, for a profit or otherwise. The company also adds, as part of its robust confidentiality policy, it will never poke fun or humiliate its customers for the ridiculous, and sometimes even embarrassing, items they choose to have delivered.   Murfee Delivery Service began operations on December 1, 2019.

The following transactions occurred during the month of December:

Dec 1    Sold $22,000 of common stock to Eddie Murfee, the founder of the company.

Dec 1    Purchased a $9,000 delivery van by signing a note, agreeing to repay principle and interest in 2 years. The van was purchased from Eddie’s cousin’s boyfriend, Christopher Farleigh. The van           was in great condition, especially considering that Christopher lived in the van down by the river            for a short period of time while he was looking for an apartment.

Dec 1    Paid $600 in advance for a six-month general liability insurance policy from Ned Ryerson            Insurance Group.

Dec 1    Hired 2 delivery drivers, Clark Griswold and Van Wilder. Surprisingly, both drivers passed their    drug tests and background checks, and they were able to begin working immediately.

Dec 4    Purchased $750 of office supplies from Dunder Mifflin Office Supply Store on account.

Dec 12 Delivered a “Get Well” Deluxe Wellness Kit to Ferris Bueller and received $2,200 cash.

Dec 15 Delivered 243 cases of wine for the annual Catalina Wine Mixer in California. Willis Ferrill was    billed $3,300 on account for services rendered.

Dec 18 Paid employee salaries to Clark and Van totaling $2,400.

Dec 20 Received $10,600 payment for services from Owen Wilzen for delivering wedding gifts to all the couples of weddings he has attended (uninvited) since 2005.

Dec 22 Collected $2,200 in advance from Billy Muree to have Punxsutawney Phil delivered from his       home in Calabasas, California, to Punxsutawney, Pennsylvania, in time for a special appearance on February 2^nd.

Dec 25 Collected $3,300 from Willis Ferrill for the December 15^th delivery.

Dec 27 Received a bill for $150 from Frankenstein Electric Company for December utilities, due on         January 10.

Dec 29 Paid office rent, $2,800, to the property manager, Jim Halpert, for December and January Rent.

Dec 30 Paid $150 to Frankenstein Electric Company for the bill received on December 27^th.

Dec 31 Paid cash dividends of $2,500 to stockholders.

Requirements:

1. Record all necessary journal entries for the December transactions. Note: Not all transactions in December require a journal entry. If no entry is required, you may choose to simply omit the transaction, or you may choose to record the date of the transaction and write “NO ENTRY” in the space where the accounts & amounts would normally be written.
2. Post the journal entries to the T-Accounts.
3. Prepare an Unadjusted Trial Balance as of December 31, 2019.
4. Record the adjusting entries as of December 31, 2019. Additional information necessary for adjusting entries is below:
   1. Accrued Salaries for the last two weeks in December, $2,400, will be paid in January.
   2. The prepaid insurance policy began on December 1.
   3. Office Supplies on hand are $450.
   4. The Note Payable on December 1 has an interest rate of 7%. Interest and principle are due in 2 years.
   5. Weekly deliveries made to Liyam Hemmensworth in the month of December totaling $8,000 have not been invoiced.
5. Post the adjusting entries to the T-Accounts. Note: You will be adding to the T-accounts you created in Step 2.
6. Prepare an Adjusted Trial Balance as of December 31, 2019.
7. Prepare the income statement and statement of stockholders’ equity for the month ended December 31, 2019. Prepare the classified balance sheet as of December 31, 2019.
8. Record the closing entries as of December 31, 2019.
9. Post the closing entries to the T-Accounts. Note: You will be adding to the T-accounts you created in Step 2 and updated in Step 5.
10. Prepare a Post-Closing Trial Balance as of December 31, 2019.

CHECK FIGURES:

Unadjusted Trial Balance Debit & Credit Totals $50,050

Adjusted Trial Balance Debit & Credit Totals $60,503

***(Note: Interest Exp. & Interest Pay. is rounded up)***

Net Income $17,297

Retained Earnings $14,797

Total Assets $51,200

Total Liabilities $14,403

Total Stockholders' Equity $36,797

Post-Closing Trial Balance Debit & Credit Totals $51,200