Question 3

Information pertaining to Yekstop Corp.'s sales revenue is presented below:

Management estimates that 3% of credit sales are eventually uncollectible. Of the collectible credit sales, 60% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 75% of the sales projected for the month. All purchases of inventory are on open account; 20% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 50% of the selling prices.

Total budgeted inventory purchases in November by Yekstop Corp. are:

Multiple Choice

• $222,375.

• $272,625.

• $402,000.

• $423,375.

• $535,782.

Information pertaining to Yekstop Corp.'s sales revenue is presented below:

Management estimates that 5% of credit sales are eventually uncollectible. Of the collectible credit sales, 60% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 70% of the sales projected for the month. All purchases of inventory are on open account; 30% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 50% of the selling prices.

Budgeted January cash payments for December inventory purchases by Yekstop Corp. are:

Multiple Choice

• $61,035.

• $88,650.

• $142,415.

• $206,850.

• $274,040.

3. What benchmark would you use to calculate materiality? Why? ((a)Net Income, (b) Assets, (c) Revenue, or (d)Equity.) (Pick 1 letter & Explain why)

a. 5 percent to 10 percent of net income before taxes.

b. ½ percent to 1 percent of total assets.

c. ½ percent to 1 percent of total revenues.

d. ½-1 percent of total equity.

4. Would you use a higher percentage or a lower percentage for the benchmark you selected in Q3 above. (EX: 5% of Net Income vs 10% of Net Income)? Explain why?

5. Using the choices from Q3 & Q4 above calculate “overall materiality” for your audit for 2019? (ex: Benchmark %(1%) * Assets ($25m)= $250K (Overall Materiality)).

American Airlines revenue is as follows:

- What is the trend analysis for American Airlines in the past three years?

- the projection of its revenue growth in the coming two years?

- The trend of American Airlines profitability in the past 3 years

Following are selected transactions of Danica Company for 2016 and 2017.

2016

2017

Complete the table to calculate the interest amounts and use those calculated values to prepare your journal entries

• M Lee Note

Complete the table to calculate the interest amounts.

• Tomas Co Note

First, complete the table below to calculate the interest amounts.

• H Cheng Note

First, complete the table below to calculate the interest amounts.

• General Journal

Use those calculated values to prepare your journal entries.

Journal entry worksheet

• Received Lee’s payment for principal and interest on the note dated December 13. Assume no reversing entries were prepared.

Note: Enter debits before credits.

• Accepted a $8,000, 8%, 90-day note dated March 3 in granting a time extension on the past-due account receivable of Tomas Company.

Note: Enter debits before credits.

• Accepted a $6,000, 30-day, 8% note dated March 17 in granting H. Cheng a time extension on his past-due account receivable.

Note: Enter debits before credits.

• H. Cheng dishonored his note when presented for payment.

Note: Enter debits before credits.

• Wrote off the H. Cheng account against the Allowance for Doubtful Accounts.

Note: Enter debits before credits.

• Received the Tomas payment for principal and interest on the note dated March 3.

Note: Enter debits before credits.

Problem 4: House Prices

Use the “Fairfax City Home Sales” dataset for parts of this problem.

a) Use StatCrunch to construct an appropriately titled and labeled relative frequency histogram of Fairfax home closing prices stored in the “Price” variable. Copy your histogram into your document.

b) What is the shape of this distribution? Answer this question in one complete sentence.

c) Assuming the population has a similar shape as the sample with population mean $510,000 and population standard deviation $145,000; calculate the probability that in a random sample of size 10, the mean of the sample will be greater than $600,000. You may assume a random sample was taken and the sample came from a big population. However, be sure to check the central limit theorem condition of a large sample size before completing this problem using one complete sentence. If this condition is not met, you cannot complete the problem.

d) Assuming the population has a similar shape as the sample with population mean $510,000 and population standard deviation $145,000; calculate the probability that in a random sample of size 36, the mean of the sample will be greater than $600,000. You may assume a random sample was taken and the sample came from a big population. However, be sure to check the central limit theorem condition of a large sample size before completing this problem using one complete sentence. If this condition is not met, you cannot complete the problem.

Data:

Price Year, Days, TLArea, Acres

369900   1922   44   1870   0.39

373000   1952   0   1242   0.27

375000   1952   8   932   0.15

375000   1950   2   768   0.19

379000   1952   31   816   0.21

380000   1941   53   1092   0.19

385000   1951   5   984   0.27

387700   1953   5   975   0.36

395000   1954   18   957   0.29

395000   1951   12   1105   0.22

399900   1954   29   1206   0.28

399900   1951   6   1226   0.18

400000   1954   31   957   0.27

410000   1949   6   1440   0.2

410000   1954   17   1344   0.23

412500   1954   4   1008   0.25

415000   1953   17   1371   0.28

420000   1954   2   957   0.25

426000   1952   3   1694   0.25

430000   1953   19   975   0.23

434900   1950   5   1128   0.18

435000   1954   32   1252   0.24

440000   1960   3   1161   0.26

440000   1954   2   1036   0.28

440000   1955   12   1645   0.28

440000   1960   5   1746   0.31

441000   1952   133   1062   0.23

442000   1961   4   1414   0.32

443000   1951   26   962   0.2

444900   1955   4   1122   0.19

446500   1953   3   962   0.26

450000   1952   2   1488   0.15

450000   1955   49   1122   0.23

450000   1979   0   1092   0.28

450000   1951   70   962   0.2

450000   1957   23   1300   0.51

451000   1947   12   1325   0.34

455000   1952   7   2267   0.81

455000   1962   4   1050   0.31

460000   1955   5   997   0.3

460000   1954   10   1125   0.17

465000   1954   77   1288   0.46

465900   1947   21   1309   0.19

469000   1963   153   1149   0.27

474000   1959   5   1319   0.32

475000   1955   4   1530   0.28

475000   1953   29   1008   0.2

475000   1955   6   1530   0.28

475000   1956   116   1345   0.5

475000   1956   1   1530   0.28

480000   1960   27   1236   0.27

480000   1959   133   1527   0.24

485000   1955   4   1008   0.24

485000   1956   74   977   0.24

488000   1960   11   1972   0.33

500000   1963   0   2145   0.25

500000   1953   14   1758   0.54

500500   1955   6   1630   0.28

510000   1959   5   1680   0.34

512000   1963   0   1968   0.22

519000   1961   1   1312   0.29

520000   1954   15   1492   0.25

520000   1958   80   1443   0.33

520000   1963   122   1822   0.32

530000   1962   6   1393   0.29

540000   1962   12   1414   0.25

543600   1962   4   1414   0.24

560000   1967   5   1530   0.28

560000   1961   16   1438   0.53

565000   1947   6   1510   0.25

565500   1967   5   1217   0.26

589000   1954   32   2368   0.3

593000   1954   9   2044   0.25

610000   1978   140   2091   0.09

655000   1976   180   2728   0.24

660000   1947   10   2635   0.22

665000   1950   37   2645   0.57

685000   1982   120   2752   0.09

795000   2002   259   3402   0.12

852000   2000   4   3215   0.11

895000   2000   63   3230   0.11

930000   2015   135   3175   0.15

940000   1860   42   3038   0.57

968500   1850   74   3630   0.34

1100000   2004   161   3640   0.19

On January 1, 2021, the general ledger of Dynamite Fireworks includes the following account balances:

During January 2021, the following transactions occur:

The following information is available on January 31.

• Rent for the month of January has expired.
• Supplies remaining at the end of January total $3,900.
• By the end of January, $4,025 of services has been provided to customers who paid in advance on January 17.
• Unpaid salaries at the end of January are $5,030.

Record the purchase of rental space for one year in advance, $9,300 ($775/month).

Record the purchase of additional supplies on account, $4,600.

Record the providing of services to customers on account, $26,600.

Record the receipt of cash in advance from customers for services to be provided in the future, $4,800.

Record the payment of cash for salaries, $12,600.

Record the receipt of cash on accounts receivable, $25,200.

Record the payment of cash on accounts payable, $5,100.

Record the adjusting entry for rent. Rent for the month of January has expired.

Record the adjusting entry for supplies. Supplies remaining at the end of January total $3,900.

Record the adjusting entry for services provided to customers who paid in advance. By the end of January, $4,025 of services has been provided to customers who paid in advance on January 17.

Record the adjusting entry for salaries payable. Unpaid salaries at the end of January are $5,030.

Record the entry to close the revenue accounts.

Record the entry to close the expense accounts.

How has General Motors performed in terms of revenue and profit this past year? (has revenue grown, did profit slip)

How has net income performed in the past 4 quarters and 5 years? What is the market capitalization for the company? Has it grown in the past year?

Please cite sources.

Thanks!

Why is it important for protocol information to be published? What can you do if the protocol that you are working on does not have any publicly available information? Is there any one tool that is better than the rest? If so, why is it better? If not, how do you choose which tool to use when there are so many options?

Question 1

You currently have $7,500 to invest. You can invest the full amount now for a period of 9 years at which time you want to have $15,000. Approximately what rate of return is needed to accomplish this investment goal?

Question 2

If four years of college tuition cost $15,000 in 1990, what did it cost in 1965 if tuition increased at 7% per year between 1965 and 1990?

Question 3

You have the choice of receiving $15,000 today or $25,000 in six years as a down payment from someone who wants to purchase your rental property. If you could expect to earn 11 percent on invested money (i.e. your time value of money = 11%), which would you choose?

Question 4

Five years from now, you would like to have $25,000 for a down payment on a home. Assuming you could earn 9% interest, how much money would you need to invest today as a lump sum to meet your goal?

Question 5

What would you be willing to pay (on January 1, 2006) for an investment which you could sell on January 1, 2036 for $45,000? Assume that the interest rate between 2006 and 2036 will be 9% annually.