(1) A company manufacturer pipes which was sent out to
customers in losts of 1000.The manufacturer operates a sampling
scheme whereby a random sample 10 is taken from each lot ready for
despatch and they are released only if the number of defective
pipes in the sample is less than 3.Otherwise, the whole lot of 1000
is rejected and reprocessed using the Binomial p.d.f.
(I) if 5% of all the pipes produced are known to be defective, how
many lots will be rejected out of 1000 lots processed?
(ii)If the producer replaces his entire pipe producing machines
causing the number of defective pipes to drop to only 1% and
releases lots if the number of defective pipes in the sample of 10
less than 2.How many lots per 1000 will he expect to save?
(b) The demand for a particular type pump at an
isolated place is random and independent of previous occurrences,
but the average demand in a week (7dsys) is for 2.8 pumps .Further
supplies are ordered each Tuesday morning and arrive on weekly plan
on Friday morning . Last Tuesday morning only one pumps was in the
stock, so the stores man ordered six more to come on Friday morning
.
(I) Find the probability that one pump will still be in stock on
Friday morning when new stock arrives,
(ii) Find the probability that stock will be exhausted and there
will be unsatisfied demand for at least one pump by Friday.
(iii) Find the probability that one pump will be in stock this
Friday morning and at least five will be in stock next Tuesday
morning.
In: Statistics and Probability
Raintree Cosmetic Company sells its products to customers on a
credit basis. An adjusting entry for bad debt expense is recorded
only at December 31, the company’s fiscal year-end. The 2017
balance sheet disclosed the following:
| Current assets: | ||||||
| Receivables, net of allowance for uncollectible accounts of $30,000 | $432,000 | |||||
During 2018, credit sales were $1,750,000, cash collections from
customers $1,830,000, and $35,000 in accounts receivable were
written off. In addition, $3,000 was collected from a customer
whose account was written off in 2017. An aging of accounts
receivable at December 31, 2018, reveals the following:
| Percentage of Year-End | Percent | ||||
| Age Group | Receivables in Group | Uncollectible | |||
| 0–60 days | 65 | % | 4 | % | |
| 61–90 days | 20 | 15 | |||
| 91–120 days | 10 | 25 | |||
| Over 120 days | 5 | 40 | |||
Required:
1. Prepare summary journal entries to account for
the 2018 write-offs and the collection of the receivable previously
written off.
2. Prepare the year-end adjusting entry for bad
debts according to each of the following situations:
3. For situations (a)–(c) in requirement 2 above,
what would be the net amount of accounts receivable reported in the
2018 balance sheet?
In: Accounting
Raintree Cosmetic Company sells its products to customers on a
credit basis. An adjusting entry for bad debt expense is recorded
only at December 31, the company’s fiscal year-end. The 2020
balance sheet disclosed the following:
| Current assets: | ||
| Receivables, net of allowance for uncollectible accounts of $34,000 | $ | 452,000 |
During 2021, credit sales were $1,770,000, cash collections from customers $1,850,000, and $39,000 in accounts receivable were written off. In addition, $3,400 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following:
| Percentage of Year-End | Percent | |||
| Age Group | Receivables in Group | Uncollectible | ||
| 0−60 days | 60 | % | 3 | % |
| 61−90 days | 10 | 5 | ||
| 91−120 days | 20 | 25 | ||
| Over 120 days | 10 | 45 | ||
Required:
1. Prepare summary journal entries to account for
the 2021 write-offs and the collection of the receivable previously
written off.
2. Prepare the year-end adjusting entry for bad
debts according to each of the following situations:
3. For situations (a)−(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2021 balance sheet?
In: Accounting
Raintree Cosmetic Company sells its products to customers on a
credit basis. An adjusting entry for bad debt expense is recorded
only at December 31, the company’s fiscal year-end. The 2020
balance sheet disclosed the following:
| Current assets: | ||
| Receivables, net of allowance for uncollectible accounts of $45,000 | $ | 507,000 |
During 2021, credit sales were $1,825,000, cash collections from customers $1,905,000, and $54,000 in accounts receivable were written off. In addition, $4,500 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following:
| Percentage of Year-End | Percent | |||
| Age Group | Receivables in Group | Uncollectible | ||
| 0−60 days | 70 | % | 5 | % |
| 61−90 days | 20 | 15 | ||
| 91−120 days | 5 | 20 | ||
| Over 120 days | 5 | 40 | ||
Required:
1. Prepare summary journal entries to account for
the 2021 write-offs and the collection of the receivable previously
written off.
2. Prepare the year-end adjusting entry for bad
debts according to each of the following situations:
3. For situations (a)−(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2021 balance sheet?
In: Accounting
Raintree Cosmetic
Company sells its products to customers on a credit basis. An
adjusting entry for bad debt expense is recorded only at December
31, the company’s fiscal year-end. The 2017 balance sheet disclosed
the following:
| Current assets: | ||||||
| Receivables, net of allowance for uncollectible accounts of $30,000 | $432,000 | |||||
During 2018, credit sales were $1,750,000, cash collections from
customers $1,830,000, and $35,000 in accounts receivable were
written off. In addition, $3,000 was collected from a customer
whose account was written off in 2017. An aging of accounts
receivable at December 31, 2018, reveals the following:
| Percentage of Year-End | Percent | ||||
| Age Group | Receivables in Group | Uncollectible | |||
| 0–60 days | 65 | % | 4 | % | |
| 61–90 days | 20 | 15 | |||
| 91–120 days | 10 | 25 | |||
| Over 120 days | 5 | 40 | |||
Required:
1. Prepare summary journal entries to account for
the 2018 write-offs and the collection of the receivable previously
written off.
2. Prepare the year-end adjusting entry for bad
debts according to each of the following situations:
Bad debt expense is estimated to be 3% of credit sales for the year.
Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable.
Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is determined by an aging of accounts receivable.
3. For situations (a)–(c) in requirement 2 above,
what would be the net amount of accounts receivable reported in the
2018 balance sheet?
In: Accounting
MNBA is a company that sells chem-lab supplies. In the past, customers had spent an average of $6,800 annually, but management believes that the number has decreased in the last year. In order to test this, one manager looks at a sample of 40 customers' spending last year. The results can be found in the file ASpending, Hypothesis Testing. The manager would like to test her hypothesis at an alpha level of 0.1. She also believes that the standard deviation has not changed, so she is using a population standard deviation value of 1450.
data points
| 5,001 |
| 3,769 |
| 7,746 |
| 4,300 |
| 7,338 |
| 8,621 |
| 6,868 |
| 8,117 |
| 5,674 |
| 8,083 |
| 7,489 |
| 6,136 |
| 5,450 |
| 6,185 |
| 3,708 |
| 8,101 |
| 7,628 |
| 6,392 |
| 9,234 |
| 6,907 |
| 6,009 |
| 8,083 |
| 4,662 |
| 6,089 |
| 4,483 |
| 5,637 |
| 7,369 |
| 6,196 |
| 6,358 |
| 6,387 |
| 6,140 |
| 9,358 |
| 7,168 |
| 5,385 |
| 4,939 |
| 6,254 |
| 5,799 |
| 4,642 |
| 5,773 |
| 5,650 |
1. What would be appropriate hypotheses?
Ho: μ≥6800
Ha: μ<6800
Ho: x≥6800
Ha: x<6800
Ho: μ≥6378.2
Ha: μ<6378.2
Ho: x≥6378.2
Ha:
2. What type of test is this?
Left (lower) tailed
Right (upper) tailed
3 tailed
2 tailed
3. What is the critical value, z, the test statistic, and the p-value?
4. Conclusion fill in blanks. Since p is blank 1 ["less than", "greater than"] alpha, blank 2 ["accept", "do not reject", "reject"] the null hypothesis. There blank 3 ["is not", "is"] enough evidence to conclude that the amount customers spend annually blank 4 ["is more than$ 6378.2", "is less than $6800.", "is less than $6378.2", "is more than $6800."]
In: Statistics and Probability
|
Bird's Eye Treehouses, Inc., a Kentucky company, has determined that a majority of its customers are located in the Pennsylvania area. It therefore is considering using a lockbox system offered by a bank located in Pittsburgh. The bank has estimated that use of the system will reduce collection time by 2 days. Assume 365 days a year. |
| Average number of payments per day | 780 | ||
| Average value of payment | $ | 730 | |
| Variable lockbox fee (per transaction) | $ | .15 | |
| Annual interest rate on money market securities | 4.2 | % | |
| a. |
What is the NPV of the new lockbox system? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| b. | Suppose in addition to the variable charge that there is an annual fixed charge of $5,000 to be paid at the end of each year. What is the NPV now? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| Q1 | Q2 | Q3 | Q4 | |||||||||
| Sales | $ | 180 | $ | 200 | $ | 220 | $ | 250 | ||||
|
Sales for the first quarter of the following year are projected at $195 million. Accounts receivable at the beginning of the year were $77 million. Wildcat has a 45-day collection period. |
|
Wildcat’s purchases from suppliers in a quarter are equal to 50 percent of the next quarter’s forecast sales, and suppliers are normally paid in 36 days. Wages, taxes, and other expenses run about 25 percent of sales. Interest and dividends are $10 million per quarter. |
|
Wildcat plans a major capital outlay in the second quarter of $85 million. Finally, the company started the year with a $81 million cash balance and wishes to maintain a $40 million minimum balance. |
| a-1. |
Assume that Wildcat can borrow any needed funds on a short-term basis at a rate of 3 percent per quarter and can invest any excess funds in short-term marketable securities at a rate of 2 percent per quarter. Complete the following short-term financial plan for Wildcat. (Enter your answers in millions. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| a-2. |
What is the net cash cost for the year under this target cash balance? (A negative answer should be indicated by a minus sign. Enter your answer in millions. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| b-1. |
Complete the following short-term financial plan assuming that Wildcat maintains a minimum cash balance of $20 million. (Enter your answers in millions. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| b-2. |
What is the net cash cost for the year under this target cash balance? (Enter your answer in millions. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Accounting
A manager for an insurance company believes that customers have the following preferences for life insurance products: 30% prefer Whole Life, 30% prefer Universal Life, and 40% prefer Life Annuities. The results of a survey of 330 customers were tabulated. Is it possible to refute the sales manager's claimed proportions of customers who prefer each product using the data?
| Product | Number |
|---|---|
| Whole | 109 |
| Universal | 96 |
| Annuities | 125 |
Step 1 of 10:
State the null and alternative hypothesis.
Answer
H0H0: Preferences for life insurance products are not as per the manager's belief.
HaHa: Preferences for life insurance products are as per the manager's belief.
H0H0: Preferences for life insurance products are as per the manager's belief.
HaHa: Preferences for life insurance products are not as per the manager's belief.
Step 2 of 10:
What does the null hypothesis indicate about the proportions of customers who prefer each insurance product?
Answer
The proportions of customers who prefer each insurance product are all thought to be equal.
The proportions of customers who prefer each insurance product are different for each category (and equal to the previously accepted values).
State the null and alternative hypothesis in terms of the expected proportions for each category.
H0H0: pWhole=pWhole=, pUniversal=pUniversal=, pAnnuities=pAnnuities=HaHa: There is some difference amongst the proportions.
Step 4 of 10:
Find the expected value for the number of customers who prefer Whole Life. Round your answer to two decimal places.
ind the expected value for the number of customers who prefer Universal Life. Round your answer to two decimal places.
Step 6 of 10:
Find the value of the test statistic. Round your answer to three decimal places
Step 7 of 10:
Find the degrees of freedom associated with the test statistic for this problem.
Find the critical value of the test at the 0.05 level of significance. Round your answer to three decimal places.
Make the decision to reject or fail to reject the null hypothesis at the 0.05 level of significance.
Fail to Reject Null Hypothesis Reject Null Hypothesis
Step 10 of 10:
State the conclusion of the hypothesis test at the 0.05 level of significance.
There is not enough evidence to refute the manager's claim about the proportions of customers who prefer each product.
There is enough evidence to refute the manager's claim about the proportions of customers who prefer each product.
In: Statistics and Probability
Cantel Company produces cleaning compounds for both commercial and household customers. Some of these products are produced as part of a joint manufacturing process. For example, GR37, a coarse cleaning powder meant for commercial sale, costs $2.30 a pound to make and sells for $2.40 per pound. A portion of the annual production of GR37 is retained for further processing in a separate department where it is combined with several other ingredients to form SilPol, which is sold as a silver polish, at $6.00 per unit. The additional processing requires 1/4 pound of GR37 per unit; additional processing costs amount to $4.40 per unit of SilPol produced. Variable selling costs for SilPol average $0.40 per unit. If production of SilPol were discontinued, $4,800 of costs in the processing department would be avoided. Cantel has, at this point, unlimited demand for, but limited capacity to produce, product GR37.
Required
1. Calculate the minimum number of units of SilPol that would have to be sold in order to justify further processing of GR37.
2. Assume that the cost data reported for GR37 are obtained at a level of output equal to 6,900 pounds, which is the maximum that the company can produce at this time. What is the expected operating income (loss) under each of the following scenarios: (a) all available capacity is used to produce GR37, but no SilPol; (b) 6,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 8,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 10,000 units of SilPol are produced, with the balance of capacity devoted to the production and sale of GR37.
In: Accounting
Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company’s fiscal year-end. The 2015 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $33,000 $447,000 During 2016, credit sales were $1,765,000, cash collections from customers $1,845,000, and $38,000 in accounts receivable were written off. In addition, $3,300 was collected from a customer whose account was written off in 2015. An aging of accounts receivable at December 31, 2016, reveals the following: Percentage of Year-End Percent Age Group Receivables in Group Uncollectible 0–60 days 70 % 5% 61–90 days 20 15 91–120 days 5 20 Over 120 days 5 40 Required: 1. Prepare summary journal entries to account for the 2016 write-offs and the collection of the receivable previously written off. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Prepare the year-end adjusting entry for bad debts according to each of the following situations: a. Bad debt expense is estimated to be 4% of credit sales for the year. b. Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable. c. Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is determined by an aging of accounts receivable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 3. For situations (a)–(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2016 balance sheet?
In: Accounting