The budget director for Adams Cleaning Services prepared the following list of expected selling and administrative expenses. All expenses requiring cash payments are paid for in the month incurred except salary expense and insurance. Salary is paid in the month following the month in which it is incurred. The insurance premium for six months is paid on October 1. October is the first month of operations; accordingly, there are no beginning account balances.

Required

Complete the schedule of cash payments for S&A expenses by filling in the missing amounts.

Determine the amount of salaries payable the company will report on its pro forma balance sheet at the end of the fourth quarter.

Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter. Complete this question by entering your answers in the tabs below.

Req A

Req B and C

Complete the schedule of cash payments for S&A expenses by filling in the missing amounts.

Determine the amount of salaries payable and prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter.

Exercise 14-11 Preparing a schedule of cash payments for selling and administrative expenses LO 14-4

The budget director for Munoz Cleaning Services prepared the following list of expected selling and administrative expenses. All expenses requiring cash payments are paid for in the month incurred except salary expense and insurance. Salary is paid in the month following the month in which it is incurred. The insurance premium for six months is paid on October 1. October is the first month of operations; accordingly, there are no beginning account balances.

Required

1. Complete the schedule of cash payments for S&A expenses by filling in the missing amounts.

2. Determine the amount of salaries payable the company will report on its pro forma balance sheet at the end of the fourth quarter.

3. Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter.

Req A

Complete the schedule of cash payments for S&A expenses by filling in the missing amounts.

• Req B and C

Determine the amount of salaries payable and prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter.

Q1. The dataset jj.txt contains quarterly earnings per share for Johnson & Johnson.
There are 84 quarters (21 years) measured from the first quarter of 1960 to the last quarter of 1980.
1. Make a time plot of the Johnson & Johnson data by using R. Describe the data based on the
graph.

2. Take a logarithm of the Johnson & Johnson data. Make a time plot of the log-
transformed data and describe it.

3. Denote the Johnson & Johnson data at time t as vt. Let xt = log(vt). Fit the regression
model xt = βt + α1Q1t + α2Q2t + α3Q3t + α4Q4t + µt;
where Qit = 1 if time t corresponds to quarter i = 1; 2; 3; 4, and zero otherwise. The Qit's are
called indicator variables. We will assume for now that µt is a Gaussian white noise sequence.
(Hint: Below is an example of R codes for this regression model t. You are welcome to use these
to make your own codes. You are strongly recommended to run each line one at a time and verify
the result.)

4. What is the interpretation of the parameters β, α1, α2, α3, and α4 in the following
regression model?
xt = βt + α1Q1t + α2Q2t + α3Q3t + α4Q4t + µt;

5. What are the least-squares estimates of the parameters β, α1, α2, α3, and α4? Interpret
the values of these estimates in the context of the study.

6. What happens if you include an intercept term in the model in part 3? Write an identifiable regression model in this case. Also, what is the interpretation of the regression parameters in this model?

7. Graph the log-transformed data xt, and superimpose the fitted values, say ^xt, on the
graph.

8. Examine the residuals (xt-^xt), and state your conclusions. Does it appear that the
model fits the data well (do the residuals look white)?

Q1. The dataset jj.txt contains quarterly earnings per share for Johnson & Johnson.
There are 84 quarters (21 years) measured from the first quarter of 1960 to the last quarter of 1980.
1. Make a time plot of the Johnson & Johnson data by using R. Describe the data based on the
graph.

2. Take a logarithm of the Johnson & Johnson data. Make a time plot of the log-
transformed data and describe it.

3. Denote the Johnson & Johnson data at time t as vt. Let xt = log(vt). Fit the regression
model xt = βt + α1Q1t + α2Q2t + α3Q3t + α4Q4t + µt;
where Qit = 1 if time t corresponds to quarter i = 1; 2; 3; 4, and zero otherwise. The Qit's are
called indicator variables. We will assume for now that µt is a Gaussian white noise sequence.
(Hint: Below is an example of R codes for this regression model t. You are welcome to use these
to make your own codes. You are strongly recommended to run each line one at a time and verify
the result.)

4. What is the interpretation of the parameters β, α1, α2, α3, and α4 in the following
regression model?
xt = βt + α1Q1t + α2Q2t + α3Q3t + α4Q4t + µt;

5. What are the least-squares estimates of the parameters β, α1, α2, α3, and α4? Interpret
the values of these estimates in the context of the study.

6. What happens if you include an intercept term in the model in part 3? Write an identifiable regression model in this case. Also, what is the interpretation of the regression parameters in this model?

7. Graph the log-transformed data xt, and superimpose the fitted values, say ^xt, on the
graph.

8. Examine the residuals (xt-^xt), and state your conclusions. Does it appear that the
model fits the data well (do the residuals look white)?

After watching the Superbowl, Steve is convinced that the referees are often blind, blowing calls that greatly influence teams’ chances of winning. To test his idea, Steve chooses ten NFL teams at random and watches every single game in a season for those ten teams. He records the number of blown calls going against each team (regardless of whether he is a fan of the team!). He also records the winning percentages of each of those ten teams at the end of the season. He is most interested in knowing whether the number of blown calls going against each team predicts those teams’ winning percentages. Using Steve’s dataset below, provide your hand calculations to answer the questions that follow.

Steve’s favorite team had only 60 blown calls against them this season. What would you predict Steve’s team’s winning percentage to be?

Today is 1 July 2020, William plans to purchase a corporate bond with a coupon rate of j2 = 2.18% p.a. and face value of 100. This corporate bond matures at par. The maturity date is 1 January 2025. The yield rate is assumed to be j2 = 3.99% p.a. Assume that this corporate bond has a 2.3% chance of default in any six-month period during the term of the bond. Assume also that, if default occurs, William will receive no further payments at all. Calculate the purchase price for 1 unit of this corporate bond. Round your answer to three decimal places.

Select one: a. 73.706

b. 75.856

c. 92.971

d. 92.407

Today is 1 July 2020, William plans to purchase a corporate bond with a coupon rate of j₂ = 2.19% p.a. and face value of 100. This corporate bond matures at par. The maturity date is 1 January 2025. The yield rate is assumed to be j₂ = 3.62% p.a. Assume that this corporate bond has a 7.1% chance of default in any six-month period during the term of the bond. Assume also that, if default occurs, William will receive no further payments at all. Calculate the purchase price for 1 unit of this corporate bond. Round your answer to three decimal places.

Select one:

a. 46.866

b. 50.266

c. 95.139

d. 93.470

On January 2, 2016, Prebish corporation issued $1,500,000 of 10% bonds to yield 11% due December 31, 2025. Interest on the bonds is payable annually each December 31. The bonds are callable at 101 ( at 101% of face amount), and on January 2, 2019, Prebish called $1,000,000 face amount of the bonds and retired them

A. Determine the price of the Prebish bonds when issued on Janurary 2, 2016?

B. Prepare an amortization schedule for 2016-2020 for the bonds?

C. Ingoring income tax, compute the amount of loss, if any, to be recongized by Prebish as an result of retiring the $1,000,000 of bonds on Janurary 2, 2019, and prepare the journal entry to record the retirement?

Today is 1 July 2020, William plans to purchase a corporate bond with a coupon rate of j2 = 4.57% p.a. and face value of 100. This corporate bond matures at par. The maturity date is 1 January 2025. The yield rate is assumed to be j2 = 3.90% p.a. Assume that this corporate bond has a 7.5% chance of default in any six-month period during the term of the bond. Assume also that, if default occurs, William will receive no further payments at all. Calculate the purchase price for 1 unit of this corporate bond. Round your answer to three decimal places.

Select one: a. 103.965 b. 101.339 c. 51.715 d. 54.714

Calculate the missing numbers that follow the list of account balances. Enter the digits only - no dollar signs or commas. Retained earnings at the beginning of the year is zero.
Supplies expense = 5800
Wages expense = 15500
Intangibles = 22300
Service revenue = 52000
Rent expense = 20600
Supplies = 2960
Accounts payable = 9200
Prepaid expense = 6580
Loan payable due in 2025 = 10800
Accounts receivable = 6840
Deferred revenue = 4100
Advertising expense = 5100
Owner's capital = 16800
Wages payable = 3300
Dividends = 1600
Cash = 8920

1. Total liabilities and equity?
2 . Total assets?
3 . Total liabilities?
4. Total equity?