On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,100,000. During 2018, costs of $2,040,000 were incurred, with estimated costs of $4,040,000 yet to be incurred. Billings of $2,548,000 were sent, and cash collected was $2,290,000.

In 2019, costs incurred were $2,548,000 with remaining costs estimated to be $3,660,000. 2019 billings were $2,798,000, and $2,515,000 cash was collected. The project was completed in 2020 after additional costs of $3,840,000 were incurred. The company’s fiscal year-end is December 31. This project does not qualify for revenue recognition over time.

Required:
1. Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years.
2a. Prepare journal entries for 2018 to record the transactions described (credit "various accounts" for construction costs incurred).
2b. Prepare journal entries for 2019 to record the transactions described (credit "various accounts" for construction costs incurred).
3a. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2018.
3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2019.

2018/

2019/

On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,100,000. During 2018, costs of $2,040,000 were incurred, with estimated costs of $4,040,000 yet to be incurred. Billings of $2,548,000 were sent, and cash collected was $2,290,000.

In 2019, costs incurred were $2,548,000 with remaining costs estimated to be $3,660,000. 2019 billings were $2,798,000, and $2,515,000 cash was collected. The project was completed in 2020 after additional costs of $3,840,000 were incurred. The company’s fiscal year-end is December 31. This project does not qualify for revenue recognition over time.

Required:
1. Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years.
2a. Prepare journal entries for 2018 to record the transactions described (credit "various accounts" for construction costs incurred).
2b. Prepare journal entries for 2019 to record the transactions described (credit "various accounts" for construction costs incurred).
3a. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2018.
3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2019.

2018/

2019/

How much needs to be invested today if your goal is to have $100,000 five years from today? The return on the investment is expected to be 10% and will be compounded semi-annually. (Use Table 1) (Round "PV Factor" to 4 decimal places and final answer to nearest dollar amount.)

$61,390

$62,090

$66,667

$50,000

2.

The following is a partial list of account balances from the books of Probst Enterprise at the end of 2010:

    
Based solely upon these balances, what is the quick ratio? (Round your final answer to 2 decimal places.)

0.76

1.15

0.26

0.79

3.

SRJ Corporation had the following transactions:

• The accrual of interest expense on a six-month note payable.
• Collected cash for services to be provided within the next six months.
• The accrual of revenue.

Which of the above transactions resulted in an increase in working capital?

The accrual of interest expense.

Collecting cash for services to be provided in the future.

The accrual of revenue.

Both the accrual of revenue and the collection of cash for future services.

4.

The following is a partial list of account balances from the books of Probst Enterprise at the end of 2010:

    
Based solely upon these balances, what is the quick ratio? (Round your final answer to 2 decimal places.)

0.76

1.15

0.26

0.79

On January 1, 2017, Blossom Company's accounting records contained these liability accounts.

During January, the following selected transactions occurred.

During January, the company’s employees earned wages of $78,300. Withholdings related to these wages were $5,990 for Social Security (FICA), $5,593 for federal income tax, and $1,678 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages earned during January will be paid during February. Wages or payroll tax expense have not been recorded as of January 31.

Bal

Jan 1

Jan 5

Jan 12

Jan 14

Jan 20 Adj.

Jan 31

Jan 31

Jan 31

Bal

Part I and Part II are independent. Please answer both parts.

Part I: During a year of operation, a firm collects $450,000 in revenue and spends $100,000 on labor expense, raw materials, rent and utilities. The firm’s owner has provided $750,000 of her own money instead of investing the money and earning a 10 percent annual rate of return.

1A. The accounting costs of the firm are

1B. The opportunity cost is

1C. Total economic costs are

1D. Accounting profits are

1E. Economic profits are  

The answers I have for these are:

1A. The accounting costs of the firm are                                                      $100,000

The accounting costs of the firm, or the explicit costs were

expressed in the question as $100,000.                          

1B. The opportunity cost is                                                                        $75,000

The opportunity cost, or implicit cost is calculated as the owner’s

own money*the rate of return (both expressed in the question).

$750,000*.10=$75,000

1C. Total economic costs are                                                                     $175,000

The total economic cost is calculated as the implicit cost (1B)

+ the explicit cost (1A).

$75,000+$100,000=$175,000

1D. Accounting profits are                                                                         $350,000

Accounting profits are calculated as the revenue

(from the question)-explicit cost (1A).

$450,000-$100,000=$350,000

1E. Economic profits are                                                                           $275,000

Economic profits are calculated as revenue

(from the question)-economic cost (1C).

$450,000-$175,000=$275,000

Part II: Higher personal taxes in the U.S. will affect personal disposable income which in turn will affect the domestic demand for goods and services. Costs of production and inputs however continue declining. What do you expect the U.S. output and prices in the near future. Assume we are moving from the old equilibrium to a new equilibrium. Please state clearly your assumptions and include a graph to support your answer.

How am I to determine this answer if Chick fil A does not file a 10K

​

1) Chick fil A may experience a decline in its Current Ratio if:

a. its adherence to biblical principles increases Customer Goodwill.

b. its support of family values compels it to enrich its future Employee Pension Plan benefits.

c. its closure on Sundays reduces credit card Accounts Receivable.

d. its aggressive growth policy compels it to assume more long term mortgage debt.

​

2) Chick-fil-A may experience a decline in its Net Profit (or Net Income) Ratio if:

a. its closure on Sundays reduces Revenue.

b. its popularity with the evangelical Christian market increases Revenue.

c. its reliance on part-time employees reduces Expenses.

d. its shift from chicken to beef products increases Revenue.

​

3) Chick-fil-A’s Christian beliefs:

a. have no significant impact on any of its financial results.

b. may have a significant impact on its profitability because of its closure on Sundays.

c. have been abandoned in its quest to optimize its financial results.

d. prevent it from competing directly with Shake Shack.

​

4) Use appropriate analytical conclusions about the two organizations.

Shake Shack 10K 2018:

a. is in danger of running short of resources to pay its debts next year.

b. has been unprofitable for the past two years.

c. always produces more than enough operating cash to fully cover its investing activities each year.

d. appears to be a fiscally sound firm.

The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2018 ($ in 000s): sales revenue, $18,300; cost of goods sold, $7,700; selling expenses, $1,450; general and administrative expenses, $950; interest revenue, $230; interest expense, $320. Income taxes have not yet been recorded. The company’s income tax rate is 20% on all items of income or loss. These revenue and expense items appear in the company’s income statement every year. The company’s controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2018 ($ in 000s). All transactions are material in amount.

1. Investments were sold during the year at a loss of $370. Schembri also had unrealized gains of $470 for the year on investments.
2. One of the company’s factories was closed during the year. Restructuring costs incurred were $1,800.
3. During the year, Schembri completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP. The division had incurred a loss from operations of $710 in 2018 prior to the sale, and its assets were sold at a gain of $1,700.
4. In 2018, the company’s accountant discovered that depreciation expense in 2017 for the office building was understated by $350.
5. Negative foreign currency translation adjustment for the year totaled $420.

Required:
1. Prepare Schembri’s single, continuous multiple-step statement of comprehensive income for 2018, including earnings per share disclosures. One million shares of common stock were outstanding at the beginning of the year and an additional 200,000 shares were issued on July 1, 2018.
2. Prepare a separate statement of comprehensive income for 2018.
  

Soda: P = 110 − Qd and P = 4+ 2Qs
where the unit for Q is measured in thousands of cans, and the unit for P (price per can)

Candy: P=210−4Qd and P=25+Qs
where the unit for Q is measured in thousands of packs, and the unit for P (price per pack)

Suppose you can choose only ONE of the two goods to apply an excise tax on the producer side of the particular market.

Option 1 Apply the excise tax of $15/can to Soda and Option 2 Apply the excise tax of $15/pack to Candy

When analyzing a taxation on each good for the appropriate option, you must know the equilibrium traded price and quantity after taxation, the price that producers receive at the new equilibrium, tax revenue, consumer’s tax incidence, producer’s tax incidence and deadweight loss for both options. (incidence refers to the share of the tax burden).

1. What is the equilibrium price and quantity in each market before any tax is introduced? What is the consumer and producer surplus in each case?
2. What would be the equilibrium price and quantity in each market once the tax is introduced?
3. What is the consumer surplus, producer surplus and deadweight loss in each case? Draw and show the same in separate graphs.
4. What is the tax incidence in each case, that is how much of the tax is passed on to the con- sumers and producers in each case?
5. What is the government revenue in each case?
6. Which optionshould the tax authority choose if they want to(a) maximize revenue,(b)min- imize the tax burden on consumers, (c) minimize the tax burden on producers, (d) minimize deadweight loss?

Question -2

A state government wants to construct an International Airport. The proposed Airport would be completed in three phases (spread over 10 years) and operations would start after completion of the first phase in next three years. Expected cost of the first phase is Rs 5500 crores. You have been hired by the State Government to consult them on various stages of the bidding process to select an agency/developer that would build, own, operate, and transfer the airport. Please briefly enumerate all the stages of choosing such an agency/bidder right from the very beginning to the finalization of bid process. Also tell the salient features of all the stages enumerated by you.                                                                           

Question -3

Assume that you are heading the HR department in your company. Please enlist any four labour laws you comply with. Please also explain the salient features such as returns submitted, coverage, compliance, benefit details, and authorities concerned (these are indicative only; please mention any specific feature you want to mention) for each law.

Question-4

Please fill in the blanks in the following table. Also mention how you have arrived at a particular result.                                                                                                  

[1] Currency unit is US Dollars

[2] The reference year for our purpose