Question 1

Although the purely monopolistic firm is the only firm in the industry, there are some restraints on a monopoly's ability to change price and profits. Whivh one of the following is not such a restraint?

Select one:

a. A monopolistic firm is constrained by the costs of production.

b. The federal government retrict pure monopolies to making only a normal profit.

c. A monopolistic firm is constrained by demand for the product.

d. A monopolistic firm has competition from other industries that produce close substitutes.

Comparig pure competition and pure monopoly in the long run and assuming the same cost curves, which of the following is true?

Question 2

Comparig pure competition and pure monopoly in the long run and assuming the same cost curves, which of the following is true?

a. Since the purely monopolistic firm's price is higher than its marginal cost, resources are allocated inefficiently from the sicial point of view, so that consumers get less than they prefer. This is not true of the purely competitve firm.

b. The purely monopolistic firm's costs are lower than the purely competitive firm's.

c. The competitive industry's price in the long run is higher than that of purely monopolistic industry.

d. The purely monopolistic frim's price is lower and its output higher than the puely competitve firm's.

For the purely monopolistic firm during the short run, which of the following is not true?

Question 3:

For the purely monopolistic firm during the short run, which of the following is not true?

a. Price is gigher than marginal cost.

b. The firm maximizes profits and minimizes losses by producing at that point at which marginal costs are rqual tp marginal revenue.

c. The firm is faced by the same four possible profit or loss situations that confront the purely competitive firm in the short run.

d. The firms sets its price at the point at which average revenue equals averagetotal cost in all situations.

For the purely monopolistic firm in the long run, which of the following is not true?

Question 4

For the purely monopolistic firm in the long run, which of the following is not true?

a. The firm's marginal revenue curve is below its demand average revenue curve.

b. The firm is likely to obtain an economic profit.

c. The firm incur economic losses, because if the firm left the industry, the industry itself would disappear.

d. The firm usually produces at less than full capacity that is, at some scale that is less than the most efficient one.

Capwell Corporation uses a periodic inventory system. The company's ending inventory on December 31, 2018, its fiscal-year end, based on a physical count, was determined to be $338,000. Capwell's unadjusted trial balance also showed the following account balances: Purchases, $740,000; Accounts payable; $270,000; Accounts receivable, $285,000; Sales revenue, $920,000.

The internal audit department discovered the following items:

Goods valued at $44,000 held on consignment from Dix Company were included in the physical count but not recorded as a purchase.

Purchases from Xavier Corporation were incorrectly recorded at $64,000 instead of the correct amount of $46,000. The correct amount was included in the ending inventory.

Goods that cost $37,000 were shipped from a vendor on December 28, 2018, terms f.o.b. destination. The merchandise arrived on January 3, 2019. The purchase and related accounts payable were recorded in 2018.

One inventory item was incorrectly included in ending inventory as 220 units, instead of the correct amount of 1,600 units. This item cost $50 per unit.

The 2017 balance sheet reported inventory of $472,000. The internal auditors discovered that a mathematical error caused this inventory to be understated by $74,000. This amount is considered to be material. Comparative financial statements will be issued.

Goods shipped to a customer f.o.b. destination on December 25, 2018, were received by the customer on January 4, 2019. The sales price was $52,000 and the merchandise cost $28,000. The sale and corresponding accounts receivable were recorded in 2018.

Goods shipped from a vendor f.o.b. shipping point on December 27, 2018, were received on January 3, 2019. The merchandise cost $30,000. The purchase was not recorded until 2019.

Required:
1. Determine the correct amounts for 2018 ending inventory, purchases, accounts payable, accounts receivable, and sales revenue.
2. Calculate cost of goods sold for 2018.
3. What was the effect of the error in ending inventory on 2017 before-tax income

Determine the correct amounts for 2018 ending inventory, purchases, accounts payable, accounts receivable, sales revenue, and cost of goods sold.

What was the effect of the error in ending inventory on 2017 before-tax income?

Table 8.4 The Furniture Super Mart is a furniture retailer in Evansville, Indiana. The Marketing Manager wants to prepare a media budget based on the next quarter's business plan. The manager wants to decide the mix of radio advertising and newspaper advertising needed to generate varying levels of Weekly Gross Revenue. The manager has collected data for the past five weeks, and has recorded the following average Weekly Gross Revenues and expenditures for Weekly Radio (X1) and Newspaper (X2) advertising:

The Manager uses the multiple regression model in OM Explorer and obtains the following results:

Solver - Regression Analysis

R-squared 0.840

R 0.916

Constant 20.5

Standard Error of Estimate 6.755

Trial X1 Value 7 X1 Coefficient 6.500

Trial X2 Value 4 X2 Coefficient 3.750

Trial X3 Value X3 Coefficient 0.000

Trial X4 Value X4 Coefficient 0.000

Trial X5 Value X5 Coefficient 0.000

Predicted Y value 81.000

a) Use the information provided in Table 8.4. Adding $1,000 of Weekly Radio Advertising (X1) can be expected to increase Weekly Gross Revenues by what amount? (Assume all other variables are held constant.)

$20,500 $3,750 $10,250 $6,500

b) Use the information provided in Table 8.4. Adding $1,000 of Weekly Newspaper Advertising (X2) can be expected to increase Weekly Gross Revenues by what amount? (Assume all other variables are held constant.)

$6,500 $20,500 $10,250 $3,750

c) Use the information provided in Table 8.4. What amount of Weekly Gross Revenue can be expected for a week in which no radio or newspaper advertising is purchased? (Assume all other variables are held constant.)

$6,500 $20,500 $10,250 $3,750

d) Use the information provided in Table 8.4. What is the estimated Weekly Gross Revenue if $7,000 is spent on Radio Advertising (X1) and $4,000 is spent on Newspaper Advertising (X2)?

$81,000 $15,000 $60,500 $45,500

6.

The following accounts and balances were drawn from the records of Barker Company at December 31, 2018:

Required

Use the accounts and balances from Barker Company to construct an income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows (show only totals for each activity on the statement of cash flows).

1

2

3

4

Cullumber Construction Company uses the percentage-of-completion method of accounting. In 2020, Cullumber began work under a non-cancellable contract #E2-D2, which provided for a contract price of $2,178,000. Other details follow:

How much revenue should be recognized in 2020 and in 2021?

Assuming the same facts as those above except that Cullumber uses the completed-contract method of accounting, how much revenue should be recognized in 2021?

Prepare a complete set of journal entries for 2020. (using the percentage-of-completion method. Use Materials, Cash, Payables for costs incurred to date.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Which of the following funds should be used if resources provided by a federal grant must be segregated and used for counseling of youthful offenders?

A) Private-purpose trust fund.

B) Enterprise fund.

C) Internal service fund.

D) Special revenue fund.

2) Which of the following funds would record depreciation of capital assets?

A) Special revenue fund.

B) Permanent fund.

C) Internal service fund.

D) Custodial fund.

3) Under GASB standards which of the following funds can report a positive amount for unassigned fund balance?

A) Capital projects fund.

B) Special revenue fund.

C) General Fund.

D) All of the options.

4) Which of the following statements is not a true statement about expenses that are directly related to a government function or program?

A) They are reported in the government-wide statement of activities at the government-wide level.

B) They include expenses that are specifically associated with a function or program.

C) They include interest on general long-term liabilities.

D) They include depreciation expense on capital assets that are clearly identified with a function or program.

5) Which of the following is not a category of program revenue reported on the statement of activities at the government-wide level?

A) General program revenues.

B) Charges for services.

C) Operating grants and contributions.

D) Capital grants and contributions.

6) Which of the following items would not appear in a statement of revenues, expenditures, and changes in fund balances prepared for a governmental fund?

A) Depreciation expense.

B) Interfund transfers in.

C) Revenues from property taxes.

D) Expenditures for employee salaries.

7) Which of the following would not appear on a governmental fund balance sheet?

A) Accounts receivable.

B) Inventory of supplies

C) Vouchers payable.

D) Bonds payable.

8) According to GASB standards, which of the following is not classified as a budgetary account?

A) Encumbrances.

B) Encumbrances Outstanding.

C) Estimated Revenues.

D) Appropriations.

9) When the budget for the General Fund is recorded, the required journal entry will always include:

A) A credit to Estimated Revenues.

B) A debit to Encumbrances.

C) A credit to Appropriations.

D) A credit to Budgetary Fund Balance.

10) The Estimated Revenues control account of a government is credited when:

A) Choice A.

B) Choice B.

C) Choice C.

D) Choice D.

1. Journalize the March transactions. The Triquel records admission revenue as service revenue, concession revenue as rent revenue, and film rental expense as rent expense. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

2. Post the March journal entries to the ledger. (Post entries in the order of information presented in the question.)

3. Prepare a trial balance on March 31, 2017.

The following accounts and balances were drawn from the records of Barker Company at December 31, 2018:

Required

Use the accounts and balances from Barker Company to construct an income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows (show only totals for each activity on the statement of cash flows).

Use the accounts and balances from Barker Company to construct an income statement.

Use the accounts and balances from Barker Company to construct statement of changes in stockholders’ equity.

Use the accounts and balances from Barker Company to construct balance sheet.

Use the accounts and balances from Barker Company to construct statement of cash flows (show only totals for each activity on the statement of cash flows). (Amounts to be deducted and cash outflows should be indicated with a minus sign.)

Adjustments needed

ABC Corporation      
Unadjusted Trial Balance      
December 31, 2014      
      
   Debit   Credit
Cash   $975,232   
Short term investments   167,000   
Fair value adjustment (Trading)   -   
Accounts receivable   190,300   
Allowance for doubtful accounts       $-
Inventory   -   
Purchases   350,000   
Prepaid insurance   24,600   
LT (Debt) investments (HTM)   177,824   
Land   75,000   
Building   150,000   
Accumulated depreciation: building       4,000
Equipment   60,000   
Accumulated depreciation: equipment       20,000
Patent   37,500   
Accounts payable       75,240
Notes payable       235,000
Income taxes payable       63,800
Unearned rent revenue       36,000
Bonds Payable       800,000
Premium on Bonds Payable       61,771
Common stock       86,000
PIC In Excess of Par-Common Stock       13,000
Retained earnings       -
Treasury stock   49,000   
Dividends   41,000   
Sales Revenue       1,192,945
Advertising expense   8,400   
Wages expense   67,600   
Office expense   21,700   
Amortization expense   -   
Depreciation expense   24,000   
Utilities expense   31,000   
Insurance expense   73,800   
Income taxes expense   63,800   
   $2,587,756    $2,587,756
1   On March 1, ABC purchased a one-year liability insurance policy for $98,400.                                      
   Upon purchase, the following journal entry was made:                                      
       Dr Prepaid insurance           98,400                      
           Cr Cash           98,400                  
   The expired portion of insurance must be recorded as of 12/31/14.                                      
   Notice that the expired portion from March through November has been recorded already.                                      
   Make sure that the Prepaid Insurance balance after the adjusting entry is correct.                                      
                                          
                                          
2   Depreciation expense must be recorded for the month of December.                                      
   The building was purchased with cash on February 1, 2014 for $150,000 with a remaining useful life of 30 years and a salvage value of $6,000.                                        
       The method of depreciation for the building is straight-line.                                    
   The equipment was purchased with cash on February 1, 2014 for $60,000 with a remaining useful life of 5 years and a salvage value of $3,000.                                       
       The method of depreciation for the equipment is double-declining balance.                                  
   Depreciation has been recorded for the building and equipment for months February through November.                                      
                                          
                                          
3   On December 1, XYZ Co. agreed to rent space in ABC's building for $12,000 per month,                                      
   and XYZ paid ABC on December 1 in advance for the first three months' rent.                                      
   The entry made on December 1 was as follows:                                      
       Dr Cash           36,000                      
           Cr Unearned rent revenue           36,000                  
   The unearned revenue account must be adjusted to reflect the amount earned as of 12/31/14.                                      

Agnew Manufacturing produces and sells three models of a single product, Standard, Superior, and DeLuxe, in a local market and in a regional market. At the end of the first quarter of the current year, the following income statement (in thousands of dollars) has been prepared.

Management has expressed special concern with the regional market because of the extremely poor return on sales. This market was entered a year ago because of excess capacity. It was originally believed that the return on sales would improve with time, but after a year, no noticeable improvement can be seen from the results as reported in the preceding quarterly statement.

In attempting to decide whether to eliminate the regional market, the following information has been gathered.

All administrative costs and fixed manufacturing costs would not be affected by eliminating the regional market. Marketing costs that are not listed as variable are fixed for the period and separable by market. Fixed marketing costs assigned to the regional market would be saved if that market were eliminated.

Required:

a. Assuming there are no alternative uses for Agnew's present capacity, would you recommend dropping the regional market?

b. Prepare the quarterly income statement showing contribution margins by products. Do not allocate fixed costs to products.

c. It is believed that a new model can be ready for sale next year if Agnew decides to go ahead with continued research. The new product would replace DeLuxe and can be produced by simply converting equipment presently used in producing the DeLuxe model. This conversion will increase fixed costs by $117,000 per quarter. What must be the minimum contribution margin per quarter for the new model to make the changeover financially feasible?