1.Party Animal

Charlie is throwing another wild party, so he hires Mike to arrange for the food, drink, entertainment, fireworks, and other arrangements. Charlie pays Mike $50,000 (it’s a wild party!), and Mike promises to have everything ready for the party on July 4^th. Because Charlie trusts Mike, he decides not to hire Peter, who would have done the job for $60,000.

Charlie spends $1,000 to advertise the party, and sells $80,000 worth of tickets. He also buys himself a fancy new suit for $4,000 because the host should always look sharp at a party. A group of trucks from California is arranged to bring all the party fixings to Maryland for the big night, and everything is set. Charlie pays a $2,000 fee for the truckers on their journey.

All seems good, but a week before the party, the trucks all get caught in a flooding Mississippi River. They call to tell Mike and Charlie that they won’t be there in time for the party. Panicked, Charlie calls Lifan, who says he can arrange for the party, but for $100,000. Charlie pays Lifan.

Meanwhile, Mike is stuck with the unused party goods. They arrive in Maryland, but too late for the 4^th of July. So Mike sells everything from the trucks for $5,000.

How would you measure expectation damages for Mike’s breach of contract with Charlie? Explain.

How would you measure reliance damages? Explain.

How would you measure opportunity-cost damages? Explain.

Discuss efficiency and what type of damages you would recommend and why.

Personal Budget

At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c. What are the budget implications for Priscilla Wescott?

Priscilla can see that her present plan   sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $   at the end of December, with no time left to adjust.

Personal Budget

At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c. What are the budget implications for Priscilla Wescott?

Priscilla can see that her present plan sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $ at the end of December, with no time left to adjust.

8. (This problem is required to submit) Bank of America’s Consumer Spending Survey collected data on annual credit card changes in seven different categories of expenditures: transportation, groceries, dining out, household expenses, home furnishings, apparel, and entertainment. Using data from a sample of 42 credit card accounts, assume that each account was used to identify the annual credit card charges for groceries (population 1) and the annual credit card charges for dining out (population 2). Using the difference data, the sample mean difference was 850 $d (Note: d = difference = groceries – dining out charges) and the same standard deviation was 1123 $ds . d = Difference = groceries charges – dining out charges. 10

a. Use math symbol to formulate the null and alternative hypotheses to test for no difference between the population mean credit card charges for groceries and the population mean credit card charges for dining out. (10%)

b. Use a 0.05 level of significance. What is the p-value? Use the p-value approach, can you conclude that the population means differ? (10%) (Note: without calculation process, explanation, and conclusion, no credit)

c. Which category, groceries or dining out, has a higher population mean annual credit card charge? What is the point estimate of the difference between the population means? What is the 95% confidence interval estimate of the difference between the population means? (10%) (Note: without calculation process and explanation, no credit)

Enter the following transactions: Use your current date and year.

Sold 3 rock foundations on account to the customer, Amy's Bird sanctuary, $825 plus 8% sales tax, total $891.

Sold 20 sprinkler heads on account to the customer, Sushi by Katsuyuki, $40 plus 8% sales tax; total $43.20

Complete 4 hours of installation of landscape design for Kookies by Kathy, received $200.

Complete 3 hours of custom design work for Cool Cars, received $225. Payments method, check, deposit to, checking, product/service, design, no sales tax.

Complete 10 hours of custom design work on account for customer, John Melton, $750.

Received a bill from Lee Advertising, $250, for local paper advertising.

Received a bill from Cal Telephone for $56.50, for telephone expense.

Received a bill from PG&E for $86.44, for utilities gas and electric expense.

Received a bill from Hall Properties for $900, for building lease.

Issued check No. 71 from the Checking account to Chin's Gas and Oil, $48.05 for automobile fuel, type the amount c$48.05. Since you restarted the sample company, default check number is 71.

Issued check No. 72 to Ellis Equipment rental, from the checking account $115, for equipment rental expense. In the account field. select equipment rental, an expenses account.

Issued check No. 73 to Red Rock Diner, from the checking account, for $23.37, for meals and entertainment.

Classifying Costs

The following is a list of costs incurred by several businesses. Classify each of the following costs as product costs or period costs. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense.

Renée is a 28-year-old occupational therapist living in the Annex district of Toronto. She recently graduated from the University of Toronto and now works as an independent contractor assessing the legitimacy of claims made by car accident victims. Like many students, Renée accumulated a large student debt during her years at university and plans to pay it off within the next five years.

Using Renée’s financial statements, compute the following ratios: (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

Scenario: The product is a portable multimedia center to be marketed in the U. S. market, called “Media Popup” made by the start-up company Porttron, Inc. The multimedia center is a glossy compact entertainment box 10”X12” and includes a screen with optional additional screen extension that pops out of the right side, computer keyboard that folds down, 4 surround sound mini-speakers that can be adhered to any hard surface with the stick strips at the back of each speaker, and includes a subscription to streamed movies, music, and videos for two years for $499. It is available in 3 different colors (black, silver, white).

Business Memo: You are a marketing assistant at Porttron Inc. tasked with providing a business memo (i.e., an internal company document) to the United States (U.S.) executive management team of Porttron Inc. concerning the checklist items provided below.

Write a minimum 500-word original business memo. In a concise manner, describe to executive management the data you will analyze to determine a potential market for this product. State your purpose in the opening paragraph and provide sufficient information to explain the required items. Finally, provide a concluding paragraph to summarize your suggestions.

Checklist:

Identify either a consumer or business market.

Describe your bases for segmenting the market (Ex. – Demographics).

Identify segmentation descriptors (Ex. – Age, occupation, income).

Explain your rationale for the segmentation descriptors.

Describe the selected target market for the scenario product.

Identify a marketing mix (Product, place, promotion, and price).

Waterway Services Ltd. follows ASPE and had earned accounting income before taxes of $518,000 for the year ended December 31, 2020.

During 2020, Waterway paid $80,000 for meals and entertainment expenses.

In 2017, Waterway’s tax accountant made a mistake when preparing the company’s income tax return. In 2020, Waterway paid $9,700 in penalties related to this error. These penalties were not deductible for tax purposes.

Waterway owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2020, Waterway rented the building to Trung Inc. for two years at $56,000 per year. Trung paid the entire two years’ rent in advance.

Waterway used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $311,600. For tax purposes, Waterway claimed the maximum capital cost allowance of $465,300. This asset had been purchased at the beginning of the year for $3,069,000.

In 2020, Waterway began selling its products with a two-year warranty against manufacturing defects. In 2020, Waterway accrued $294,000 of warranty expenses: actual expenditures for 2020 were $90,600 with the remaining $203,400 anticipated in 2021.

In 2020, Waterway was subject to a 25% income tax rate. During the year, the federal government announced that tax rates would be decreased to 23% for all future years beginning January 1, 2021.

Prepare the journal entries to record current and future income taxes for 2020

At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c. What are the budget implications for Priscilla Wescott?

Priscilla can see that her present plan (will provide/will not provide?) sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $________? (over/short?) at the end of December, with no time left to adjust.