A perfectly competitive market can only make normal profits because there are many price taker firms in the industry and absence of barriers in on entry and exit of new firms and can maximizes its profits when the marginal revenue is equal to the marginal cost. Also a perfectly competitive firm will always produce till a output where marginal revenue equals to, marginal cost and the firm can only incur profit by producing fewer than the equilibrium quantity as marginal revenue and equilibrium price are greater than marginal cost. The firm can also focus on increasing efficiency and reduce costs so that it can produce a higher level of output at the marginal cost which equals price, (Principles of Managerial Economics, n.d). Product differentiation is a marketing process that has the objective of making customers perceive the product of a specific firm as unique or superior to any other product belonging to the same group, and so creating a sense of value. Several models have been developed to analyses these two strategies, the most famous being Hotelling’s linear city model and its extension, the Salop’s circular city model, for horizontal differentiation and the Shaked-Sutton’s model for vertical differentiation. As a product becomes more differentiated and unique for consumers, it will become more difficult to compare it to other products and it will move competition with other products to non-pricing factors, (Policonomics, 2017).

What can be done differently?

Three retail giants, Best Buy, Amazon, and Target each use a different inventory costing method. Best Buy uses weighted-average cost, Amazon uses FIFO, and Target uses LIFO.

Assume that all three retailers sell a popular shirt that retails for $30. To compare the impact of inventory costing method, we will also assume that all three retailers have the following inventory and sales data for the same period:

• Beginning inventory: 40 units @ $7.00
• Purchases: 35 units @ $10.00
• Sales: 50 units
• Ending inventory: 25 units

Questions

1. Calculate sales revenue, cost of goods sold, gross profit, and cost of ending inventory for Best Buy using the weighted-average inventory costing method. (Only numerical answers needed; round to the nearest cent– 4pts)
2. Calculate sales revenue, cost of goods sold, gross profit, and cost of ending inventory for Amazon using the FIFO inventory costing method. (Only numerical answers needed – 4pts)
3. Calculate sales revenue, cost of goods sold, gross profit, and cost of ending inventory for Target using the LIFO inventory costing method. (Only numerical answers needed – 4pts)
4. If your suppliers increase the price they charge you to buy inventory over a given period of time, would FIFO or LIFO result in the highest net income? Explain. (3pts)

Shown below is the trial balance for Dunbar Corporation as at June 30, 2017, the company's year end. The company owner provides you with the following additional information:

-No interest has been paid yet on the note payable. The note has been outstanding since April 1 and the interest rate is 12%

-The equipment originally cost $200,000 and has an estimated residual value of $10,000 and a useful life of 10 years.

- On June 1 the company renewed its insurance policy and paid a $1800 premium for the year. It was correctly recorded at that time as prepaid insurance.

-On October 1, 2016 the company sold a 12-month service contract to a client for $200,000 and recorded it as Unearned Revenue because at that point they had not yet provided any service to the client.

DUNBAR CORPORATION

TRIAL BALANCE

AS AT JUNE 30, 2017

Required

Prepare any adjusting entired required.

1. Silver Lake Resort opened for business on July 1 with eight air-conditioned units. Its trial balance before adjustment on December 31 in as follows. (100 points)

Other data for the adjustments (assuming no monthly adjustments before the fiscal year end):

Prepare adjusting journal entries for the following items.

1. Prepaid insurance of $6,000 was recorded on Sep 1, 2014 and the Insurance expires at the rate of $1,000 per month

2. A count of supplies on December 31 shows $300 on hand.

3. Depreciation for the period is $4,500 on buildings.

4. Unearned rent revenue of $4,000 out of previous balance $7,400 was now earned for services performed prior to December 31.

5. Salaries of $1,000 were unpaid at December 31.

6. Rentals of $4,000 were due from tenants at December 31 (use Accounts Receivables) [not yet received].

Prepare the adjusted trial balance, income statement, statement of retained earnings, and balance sheet. (you may use a separate sheet)

1. & 2. The following data are taken from the unadjusted trial balance of the Westcott Company at December 31, 2017. Complete the work sheet following adjustment. (Enter their balances in the correct Debit or Credit column.)
  
Use the following adjustment information to complete the work sheet.

1. Depreciation on equipment, $22
2. Accrued salaries, $14
3. The $25 of unearned revenue has been earned
4. Supplies available at December 31, 2017, $17
5. Expired insurance, $13

-really struggling with this chart. I have a few filled out, but I am stuck, please help! thank you

The manufacturing firm Rebo is considering a new capital investment project. The project will last for five years. The anticipated sales revenue from the project is $3 million in year 1 and $4.2 million in each of years 2 – 5. The cost of materials and labour is 50% of sales revenue and other expenses are $1 million in each year. The project will require working capital investment equal to 20% of the expected sales revenue for each year. This investment must be in place at the start of each year. Working capital will be recovered at the end of the project’s life.

The project will require $2.5 million to be spent now on new machinery which will have zero value at the end of the project and will be depreciated each year at 20% of the original cost. The tax rate is 25%. Rebo uses a discount rate of 11% to evaluate its capital investment projects.

What is the net income in each year?

(ii) What is the free cash flow in each year and the net present value (NPV)?

(iii)You discover the following additional information:

• The project will utilise a building that the firm leases. No other activities take place in it. If this project does not go ahead the firm will terminate the lease in one year’s time if no other use for it has been found.

• Part of each year’s cash flows from the project will be used to increase the dividend payment to shareholders.

For each of these items, explain briefly whether or not you would incorporate the information into your analysis of the project’s value.

The adjusted trial balance of Monona Inc. as of December 31, 2020, follows.

a. Prepare the income statement for the year ended December 31, 2020.
b. Prepare the statement of stockholders’ equity for the year ended December 31, 2020. Assume that the common stock was issued prior to 2020.
c. Prepare the balance sheet on December 31, 2020

1. The following sample observations were randomly selected (numbers may be different from previous problems):

What is the predicted value of Y when X=7?

Select one:

a. 7.47

b. 26.73

c. -22.53

d. 6.31

2. A business is evaluating their advertising budget, and wishes to determine the relationship between advertising dollars spent and changes in revenue. They have compiled the information in the table below, and want to perform regression.

What is the independent data?

Select one:

a. Weekly Revenue

b. TV Advertising

c. Radio Advertising

d. Newspaper Advertising

e. All Advertising

3. The following sample observations were randomly selected (numbers may be different from previous problems):

What is the y-intercept of the regression equation?

Select one:

a. 3.38

b. 7.00

c. 5.80

d. 5.30