South Shore Construction builds permanent docks and seawalls along the southern shore of Long Island. Although the firm has been in business only five years, revenue has increased from $308,000 in the first year of operation to $1,084,000 in the most recent year. The following data show the quarterly sales revenue in thousands of dollars: (Answer 1-3

1.Below is a simple linear regression analysis for this forecasting problem. Is this a valid model to use to forecast quarterly revenue for South Shore? Why or why not? Explain completely.

2.Based on the model in question 1, what is the forecast for Quarter 1 of Year 6?

3.Is there a seasonal trend in this data? Find the appropriate seasonal factor for Quarter 1 of Year 6 and apply it to get a new forecast for revenue in that quarter. Does this provide a better model than the one used in questions 1 and 2? Why or why not? Provide support for your answer (not necessarily numerical data).

A manufacturer of microwaves has discovered that female shoppers have little value for microwaves and attribute almost no extra value to an auto-defrost feature. Male shoppers generally value microwaves more than women do and attribute greater value to the auto-defrost feature. There is little additional cost to incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, the manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $67 and one with auto-defrost at $124, while women value a simple microwave at $57 and one with auto-defrost at $67.

Suppose the manufacturer is considering three pricing strategies:

For simplicity, assume there is only 1 man and 1 woman and that if the price of a microwave is equal to an individual's willingness to pay, the individual will purchase the microwave.

Strategy

Revenue from Men

Revenue from Women

Total Revenue from Strategy

1. Auto-Defrost Microwave only at $67

2. Auto-Defrost Microwave only at $1243. Simple Microwave at $57, Auto-Defrost Microwave at $113

Suppose that, instead of one man and one woman, the market for this microwave consisted entirely of men. For simplicity, you can assume this means that there are two men, and no women.

Under these conditions, pricing strategy   would maximize revenue for the manufacturer.

Which of the following accounts would appear in the Income Statement columns of the end-of-period spreadsheet?

Select one:

a. Unearned Revenue

b. Cash

c. Prepaid Insurance

d. Net Loss

Which of the following items is an explicit transaction?

Recognizing expense as equipment is used

Recognizing the revenue for inventory sold

Recognizing expense for prepaid insurance consumption

Accruing for audit fees at the end of the year

Discuss Tax Compliance, the IRS, and the concept of Tax Authorities. Additionally, discuss filing requirements, IRS audits, the federal court system that adjudicates federal tax law, and the Internal Revenue Code.

What are the “Dorfman-Steiner” conditions? Could you derive the formula?(Hint: You may need to look online for this answer if it is not covered in class. Write down a revenue function and take derivative.)

7. a. What is the general rule for taxation of distributions by a corporation in redemption of its stock? b. Identify the types of redemptions that will not be treated under the general rule. Attach the Internal Revenue Code Section

In early December, the Snowland Resort was paid $1,600 by a company to host its holiday party that month.

In addition to receiving the cash, the $1,600 is considered which of the following?

• Profit

• Expense

• Equity

• Revenue