The trial balance of Pacilio Security Services, Inc. as of January 1, Year 6, had the following normal balances: Cash $ 74,210 Accounts Receivable 13,500 Supplies 200 Prepaid Rent 3,200 Merchandise Inventory (24 @ $265; 1 @ $260) 6,620 Land 4,000 Accounts Payable 1,950 Unearned Revenue 900 Salaries Payable 1,000 Common Stock 50,000 Retained Earnings 47,880 During Year 6, Pacilio Security Services experienced the following transactions: Paid the salaries payable from Year 5. On March 1, Year 6, Pacilio established a $100 petty cash fund to handle small expenditures. Paid $4,800 on March 1, Year 6, for a one-year lease on the company van in advance. Paid $7,200 on May 2, Year 6, for one year’s office rent in advance. Purchased $400 of supplies on account. Purchased 100 alarm systems for $28,000 cash during the year. Sold 102 alarm systems for $57,120. All sales were on account. Record the cost of goods sold related to the sale from Event 7 using the FIFO method. Paid $2,100 on accounts payable during the year. Replenished the petty cash fund on August 1. At this time, the petty cash fund had only $7 of currency left. It contained the following receipts: office supplies expense, $23; cutting grass, $55; and miscellaneous expense, $14. Billed $52,000 of monitoring services for the year. Paid installers and other employees a total of $25,000 cash for salaries. Collected $89,300 of accounts receivable during the year. Paid $3,600 of advertising expense during the year. Paid $2,500 of utilities expense for the year. Paid a dividend of $10,000 to the shareholders. Adjustment There was $160 of supplies on hand at the end of the year. Recognized the expired rent for both the van and the office building for the year. (The rent for both the van and the office remained the same for Year 5 and Year 6.) Recognized the balance of the revenue earned in Year 6 where cash had been collected in Year 5. Accrued salaries at December 31, Year 6, were $1,400. The following information is available for the bank reconciliation: (1) Checks written but not paid by the bank, $8,350. (2) A deposit of $6,500 made on December 31, Year 6, had been recorded but was not shown on the bank statement. (3) A debit memo for $55 for a new supply of checks. (Hint: Use Office Supplies Expense account.) (4) A credit memo for $30 for interest earned on the checking account. (5) An NSF check for $120. (6) The balance shown on the bank statement was $80,822. Recorded any debit memos or checks not included on books as part of the bank reconciliation. Recorded any credit memos or interest received not included on books as part of the bank reconciliation.

A. Changes in SE

B. Stmt of Cash Flows

C. Bank Reconciliation

Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $28,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 32 percent this year and will be 35 percent next year, and that he can earn an after-tax rate of return of 12 percent on his investments. Use Exhibit 3.1.

a. What is the after-tax income if Hank sends his client the bill in December?

b. What is the after-tax income if Hank sends his client the bill in January? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)

EXHIBIT 3-1 Present Value of a Single Payment at Various Annual Rates of Return
4%   5%   6%   7%   8%   9%   10%   11%   12%
Year 1   .962   .952   .943   .935   .926   .917   .909   .901   .893
Year 2   .925   .907   .890   .873   .857   .842   .826   .812   .797
Year 3   .889   .864   .840   .816   .794   .772   .751   .731   .712
Year 4   .855   .823   .792   .763   .735   .708   .683   .659   .636
Year 5   .822   .784   .747   .713   .681   .650   .621   .593   .567
Year 6   .790   .746   .705   .666   .630   .596   .564   .535   .507
Year 7   .760   .711   .665   .623   .583   .547   .513   .482   .452
Year 8   .731   .677   .627   .582   .540   .502   .467   .434   .404
Year 9   .703   .645   .592   .544   .500   .460   .424   .391   .361
Year 10   .676   .614   .558   .508   .463   .422   .386   .352   .322
Year 11   .650   .585   .527   .475   .429   .388   .350   .317   .287
Year 12   .625   .557   .497   .444   .397   .356   .319   .286   .257
Year 13   .601   .530   .469   .415   .368   .326   .290   .258   .229
Year 14   .577   .505   .442   .388   .340   .299   .263   .232   .205
Year 15   .555   .481   .417   .362   .315   .275   .239   .209   .183

c. Should Hank send his client the bill in December or January?

• December

• January

d. What is the after-tax income if Hank expects his marginal tax rate to be 24 percent next year and sends his client the bill in January? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)

e. Should Hank send his client the bill in December or January if he expects his marginal tax rate to be 32 percent this year and 24 percent next year?

On January 1, Year 1, Victor Company issued bonds with a $750,000 face value, a stated rate of interest of 5%, and a 5-year term to maturity. The bonds sold at 96. Interest is payable in cash on December 31 of each year. Victor uses the straight-line method to amortize bond discounts and premiums. What is the amount of interest expense appearing on the income statement for the year ending December 31, Year 3?

On January 1, Year 1, Victor Company issued bonds with a $650,000 face value, a stated rate of interest of 6%, and a 5-year term to maturity. The bonds sold at 95. Interest is payable in cash on December 31 of each year. Victor uses the straight-line method to amortize bond discounts and premiums. What is the amount of interest expense appearing on the income statement for the year ending December 31, Year 3?

66% of all bald eagles survive their first year of life. If 35 bald eagles are randomly selected, find the probability that

a. Exactly 23 of them survive their first year of life.
b. At most 22 of them survive their first year of life.
c. At least 23 of them survive their first year of life.  
d. Between 21 and 26 (including 21 and 26) of them survive their first year of life.

78% of all bald eagles survive their first year of life. If 43 bald eagles are randomly selected, find the probability that a. Exactly 33 of them survive their first year of life. b. At most 36 of them survive their first year of life. c. At least 33 of them survive their first year of life. d. Between 31 and 37 (including 31 and 37) of them survive their first year of life.

1. What's the NPV of the following cash flows with a 8% WACC?

2. What's the payback period of the following cash flows with a 8% WACC?

3. What's the discounted payback period of the following cash flows with a 8% WACC?

4. What's the profitability index of the following cash flows with a 8% WACC?

Year 0 = 100,000

Year 1 = 10,000

Year 2 = 50,000

Year 3 = 45,000

Year 4 = 25,000

Fred has the following data r e garding an available for sale debt security:

What is the amount of debit entry to OCI when instrument is sold in year 2?

What is the amount of recognized gain on income statement when instrument is sold in year 2?

A loan of 10000$ is to be repaid with annual payments, at the end of each year, for the next 20 years. For the rst 5 years the payments are k per year ; the second 5 years, 2k per year ; the third 5 years, 3k per year ; and the fourth 5 years, 4k per year. (a) Draw two timelines describing this series of payments. (b) For each of the timelines in (a), find an expression for k in terms of annuities an.