'Net foreign factor income' in the national income accounts refers to the difference between
A) the income Americans gain from supplying resources abroad and the income that foreigners earn by supplying resources in the U.S
B) the value of the products sold by Americans to other nations and the value of products bought by Americans from other nations
C) the value of investments that Americans made abroad and the value of investments made by foreigners in the U.S
D) the income earned by the Americans in the US minus the income earned by foreigners in the US

In 2011, New Orleans, Louisiana experienced an aggressive recession as compared to the rest of country. With unemployment rates topping 15%, the city was faced with many challenges financially, economically, and socially.

In addition to the financial challenges, the city was also experiencing political instability and corruption. Various major city officials were being investigated for fraud, bribery, and other criminal charges.

Spark Electric, operating as a natural monopoly, was the only company in the area providing electric services to New Orleans households. Like many other companies, it was experiencing financial difficulties and could no longer continue without some intervention. This was mainly due to high operating costs, foreclosures in the area, and the fact that many households were not paying their bills.

As a result, Spark Electric came to a standstill in the latter part of 2011. Frank Goldberg, Spark Electric CEO, gathered the Board of Directors and determined that the company would need to take some sort of action in order to remain in business.

CEO Goldberg outlined four proposals and urged each board member to vote accordingly, providing justification for their chosen proposal.

The following are the four proposals made by CEO Goldberg:

1.      Choose which of the four proposals you would consider to be the most efficient and best choice for the people of New Orleans. Explain why you believe this would be the best proposal and why the other proposals would not be as effective.

2.      Is competition needed in this situation? How does competition alter the dynamics of the city? How does competition alter the dynamics of the household?

3.      Taking into account that Spark Electric is operating as a natural monopoly, what should be its goal? How should it determine its price?

4.      How should you forecast the outcome for Spark Electric?

5.      What are the different types of risk involved in your proposal choice?

6.      What types of costs should be considered for your proposal?

7.      Did a principle agent problem occur in this situation? How can it be avoided moving forward?

In 2022, Draper Company discovered errors made in 2019-2021, its first three years of operation.

Restated 2020 Net Income will be:

Select one:

a. $25,250

b. $26,600

c. $25,200

d. $24,550

e. $25,450

Exercise 14-20 At December 31, 2017, Grouper Company has outstanding three long-term debt issues. The first is a $2,050,000 note payable which matures June 30, 2020. The second is a $5,920,000 bond issue which matures September 30, 2021. The third is a $12,810,000 sinking fund debenture with annual sinking fund payments of $2,562,000 in each of the years 2019 through 2023. Prepare the required note disclosure for the long-term debt at December 31, 2017. Long-term Debt 2018 $ 2019 $ 2020 $ 2021 $ 2022 $

Lee Furniture Company manufactures office chairs. The 2020 operating budget is based on sales of 50,000 units at $65 per chair. Budgeted variable costs are $40 per unit, fixed costs are $800,000, and operating income is projected to be $450,000. Regarding actual results, 54,000 units were sold at $70 each, actual variable costs were $38 per unit and fixed costs were $750,000. Resulting in 2020 actual income of $978,000.

Required: Prepare a variance analysis report with both flexible-budget and sales-volume variances.

combos Company purchases a delivery truck for $12,000 on January 1, 2019. combos expects to use the truck only two years and to sell it for $4,000. The company’s policy is to use straight-line depreciation but depreciation in 2019 is not recorded. Rather, the accountant charges the entire cost to delivery expense in 2019. The controller discovers the error late in 2020.

REQUIRED:

Provide the 2020 entries to record depreciation and the error correction and indicate the amounts of the prior period adjustments appearing in the 2019 and 2020retained earnings sections of the statement of stockholders’ equity. The tax rate is 25%.

PEI Real Estate company believes that their average house price in 2020 of $290,000 is higher than the mean price of all houses sold in 2019 of $270,000. Assuming that their estimate was based on the first 40 sales in 2020 and the population standard deviation of $70,000, test this hypothesis at the 95% confidence interval.

1. State the hypotheses based on a one-tailed test.

2. What is the level of significance?

3. Select a test statistic.  

4. Formulate the decision rule. Sketch this on a graph.

5. Calculate the test value.

6. What is the decision?

7. Does your conclusion change if the 90% confidence interval is selected? Explain.

Trainor Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years, or 10,000 hours of operation. The equipment was purchased on January 1, 2020 and was used 2,500 hours in 2020 and 2,100 hours in 2021. On January 1, 2022, the company decided to sell the equipment for $315,000. Trainor Corporation uses the units-of- production method to account for the depreciation on the equipment.

Based on this information, the entry to record the sale of the equipment will show a gain of:

Select one:

A. $45,000

B. $72,000

C. $5,000

D. $22,000

A new van costs $25,000, has an estimated useful life of five years and an estimated salvage value of $5,000 at the end of that time. It is expected that the van will be driven 100,000 miles during its useful or service life.

The Nation Express Company purchases this van on April 1, 2019. During 2019 the van is driven 13,000 miles and during 2020 it was driven 21,000 miles. On January 1, 2021, the van is sold for $7,000.

Calculate the depreciation expense for 2019 and 2020 using:

1. Straight-line

2. Double-declining-balance

3. Units-of-production