The grade appeal process at a university requires that a jury be structured by selecting four individuals randomly from a pool of thirteen students and nine faculty. (a) what is the probability of selecting a jury of all students? (b) what is the probability of selecting a jury of all faculty? (c) what is the probability of selecting a jury of two students and two faculty?

Raul Martinas, a professor of languages at Eastern University, owns a small office building adjacent to the university campus. He acquired the property 10 years ago at a total cost of $669,500—that is, $90,500 for the land and $579,000 for the building. He has just received an offer from a realty company that wants to purchase the property; however, the property has been a good source of income over the years, and so Martinas is unsure whether he should keep it or sell it. His alternatives are as follows:

1. Keep the property. Martinas’s accountant has kept careful records of the income realized from the property over the past 10 years. These records indicate the following annual revenues and expenses: Martinas makes a $14,475 mortgage payment each year on the property. The mortgage will be paid off in eight more years. He has been depreciating the building by the straight-line method, assuming a salvage value of $86,850 for the building, which he still thinks is an appropriate figure. He feels sure that the building can be rented for another 15 years. He also feels sure that 15 years from now the land will be worth three times what he paid for it.

2. Sell the property. A realty company has offered to purchase the property by paying $222,000 immediately and $28,750 per year for the next 15 years. Control of the property would go to the realty company immediately. To sell the property, Martinas would need to pay the mortgage off, which could be done by making a lump-sum payment of $117,500.

Click here to view Exhibit 10-1 and Exhibit 10-2, to determine the appropriate discount factor(s) using tables.

Required:

Assume that Martinas requires a 12% rate of return. Compute net present value in favor of (or against) keeping the property using the total-cost approach. (Round discount factor(s) to 3 decimal places and other intermediate calculations to the nearest dollar amount.)

Would you recommend that he keep or sell the property?

multiple choice

• Keep the property

• Sell the property

The ledger accounts given below, with an identification number for each, are used by Screetch Company.

Instructions: Prepare appropriate adjusting entries for the year ended December 31, 2012, by replacing the appropriate identification number(s) in the debit and credit columns provided and the dollar amount in the adjoining column. Item 0 is given as an example.

Entry Information Debited Credited Amount

0. Interest of $300 is accrued on a note receivable at December 31 , 2012. 3    12 $300

1 . A customer paid Screetch $16,000 on December 1, 2012, for services to be rendered from December 1 through January 31, 2013. The receipt was credited to a liability account.

2. Screetch has two employees who each earn $110 per day. At December 31, four days' salaries have been earned but not paid

3. Screetch provided services to a customer in 2012 at a fee of $1 ,000. This fee has not yet been received or billed.

4. Screetch purchased equipment costing $28,000 on January 1, 2011. Monthly depreciation is $400.

5. Screetch borrowed $8,000 by signing a three-month, 6% interest, note payable on November 1, 2012.

6. Screetch paid $9,000 for a three-year insurance policy on July 1, 2012, debiting an asset account at that time.

7. Screetch started the year with no supplies%on hand. They purchased $4,000 in supplies during the year and have $1 ,800 on hand at December 31. Supplies were debited to an asset account when purchased.

8. Screetch purchased short-term investments on October 1, 2012. Interest of $200 per month has been earned but not received prior to December 31.

Listed below are several misstatements of inventory, accounts payable, and accrued liabilities accounts. Design a substantive audit procedure that provides reasonable assurance of detecting each misstatement.

1. A bonus earned by the president of the company has not been recorded.

2. Several accounts payable to vendors that the company has never purchased from before are omitted from the accounts payable listing.

3. When client employees counted the physical inventory, they included a number of items that were consigned to, but do not belong to, the company.

4. There is no disclosure in the financial statements that a large accounts payable is due to a related party.

5. Accrued payroll is understated.

6. One-third of the inventory of diamond jewelry is actually cubic zircona or white sapphires.

7. The client paid the same vendor invoice twice, although it is still shown as an account payable.

8. Client personnel informed the auditors that underground petroleum tanks contained an inventory of high-octane gasoline when they actually contained water.

9. The client failed to record warranty expenses incurred after year-end applicable to sales made before year-end.

10. Inventory in one corner of the warehouse is overlooked and not counted during the client’s physical inventory count.

Listed below are several misstatements of inventory, accounts payable, and accrued liabilities accounts. Design a substantive audit procedure that provides reasonable assurance of detecting each misstatement.

1. A bonus earned by the president of the company has not been recorded.

2. Several accounts payable to vendors that the company has never purchased from before are omitted from the accounts payable listing.

3. When client employees counted the physical inventory, they included a number of items that were consigned to, but do not belong to, the company.

4. There is no disclosure in the financial statements that a large accounts payable is due to a related party.

5. Accrued payroll is understated.

6. One-third of the inventory of diamond jewelry is actually cubic zircona or white sapphires.

7. The client paid the same vendor invoice twice, although it is still shown as an account payable.

8. Client personnel informed the auditors that underground petroleum tanks contained an inventory of high-octane gasoline when they actually contained water.

9. The client failed to record warranty expenses incurred after year-end applicable to sales made before year-end.

10. Inventory in one corner of the warehouse is overlooked and not counted during the client’s physical inventory count.

The following list of transactions for Len Hanson occurred during the month of April 2014: April

01 Started business with $7 800 in the bank.

05 Bought on credit from Yazmin Company, goods with a total list price of $1 800.

06 Sold goods valued at $290 to Jon, who paid $120 by cheque, with the balance to be paid later.

10 Len Hanson took $60 worth of goods from the business to give to his friend as a birthday gift.

15 Purchased equipment on credit from Equipo Company, $3 500.

16 Returned goods to Yazmin Company with a list price of $160.

20 Returned $250 worth of equipment to Equipo Company.

25 Settled the account with Yazmin Company by cheque.

28 Settled the account with Equipo Company by cheque

(a) From 01 April 2014, analyze and record EACH of the transactions above in appropriate accounts in the General Ledger provided (Round off all figures to the nearest whole number and balance accounts as well.)

b. Extract a Trial Balance for Len Hanson at 30 April 2014

On January 1, Year 1, Jing Company purchased office equipment that cost $15,700 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $1,800. The equipment had a five-year useful life and a $6,200 expected salvage value. Assume that Jing Company earned $21,400 cash revenue and incurred $13,500 in cash expenses in Year 3. The company uses the straight-line method. The office equipment was sold on December 31, Year 3 for $10,400. What is the company’s net income (loss) for Year 3?

• ($1,620)

• $5,320

• $2,820

• $4,680