9. Taxation - An algebraic approach

Suppose the supply of a good is given by the equation QS=100P−100QS=100P−100, and the demand for the good is given by the equation QD=350−50PQD=350−50P, where quantity (Q) is measured in millions of units and price (P) is measured in dollars per unit.

The government decides to levy an excise tax of $3.00 per unit on the good, to be paid by the seller.

Calculate the value of each of the following, before the tax and after the tax, to complete the table that follows:

Given the information you calculated in the preceding table, the tax incidence on consumers is   per unit of the good, and the tax incidence on producers is   per unit of the good.

The government receives   in tax revenue from levying an excise tax of $3.00 per unit on this good.

True or False: The price ultimately received by the seller (that is, the amount of money that the seller gets to keep after receiving payment from the buyer and paying any applicable taxes) would have been different if the tax had been levied on buyers instead.

True

False

Pick the best choice

A researcher examined if a new prep-course has an effect on the final exammm scores among BCX students. He selected 20 BCX students and ask them to complete the prep-course for three weeks before the final exammm. After analyzing the sample data, the one-sample t-statistics was 2.08. With α = .05, the two-tailed test, what can he conclude?

*Failed to reject the null hypothesis and conclude that the new-prep course has no effect.
*Reject the null hypothesis and conclude that the prep-course had an effect.
*Reject the null hypothesis and conclude that the new-prep course has no effect.
*Failed to reject the null hypothesis and conclude that the new-prep course has an effect.

A researcher compared a sample of XDS students (n = 8) and a sample of XDS students (n = 10) on the GPA. After computing the difference between the two groups, he found t= 1.75.

-Reject the null hypothesis, and there is no difference between two groups on the GPA.
-Failed to reject the null hypothesis, and there is no difference between two groups on the GPA.
-Reject the null hypothesis, and there is a difference between two groups on the GPA.
-Failed to reject the null hypothesis, and there is a difference between two groups on the GPA.

Which of the following research situations would be most likely to use an independent-measures design?
*Examine the long-term effectiveness of a stop-smoking treatment by interviewing subjects 2 months and 6 months after the treatment ends.
*Compare the blood-pressure readings before medication and after medication for a group a patients with high blood pressure.
*Compare the mathematics skills for 9th-grade boys versus 9th-grade girls.
*Examine the development of vocabulary as a group of children mature from age 2 to age 3.

Which of the following research situations is most likely to use an independent design?
*Evaluate the effectiveness of a pain reliever by measuring how much pain is reduced after taking the medication.
*Evaluate the difference in self-esteem between student athletes and non-athletes
*Evaluate the developmental change of verbal skills as a sample of 30 girls matures from age 2 to age    3.
*Evaluate the effectiveness of a cholesterol medication by comparing cholesterol levels before and after the medication.

When n is small (less than 30), how does the shape of the t distribution compare to the normal distribution?

-It is perfectly normal.
-It is flatter and more spread out than the normal distribution.
-It is taller and narrower than the normal distribution.
-None of the options

company uses the following accounts:

Cash Income Taxes Payable Accounts Receivable Capital Stock Prepaid Rent Retained Earnings Unexpired Insurance Dividends Office Supplies Income Summary Rental Equipment Rental Fees Earned Accumulated Depreciation: Salaries Expense Rental Equipment Maintenance Expense Notes Payable Utilities Expense Accounts Payable Rent Expense Interest Payable Office Supplies Expense Salaries Payable Depreciation Expense Dividends Payable Interest Expense Unearned Rental Fees Income Taxes Expense

Dec. 1 Issued to John and Patty Driver 20,000 shares of capital stock in exchange for a total of 400.000 cash.

Dec. 1 Purchased for 260.000 11 of the equipment formerly owned by Rent-It. Paid 160.000 cash and issued a one-year note payable for $100,000.

Dec. 1 Paid 15.000 to Shapiro Realty as three months' advance rent on the rental yard and office formerly occupied by Rent-It.

Dec. 4 Purchased office supplies on account from Modern Office Co., 3000 Payment due in 30 days. (These supplies are expected to last for several months; debit the Office Supplies asset account.)

Dec. 8 Received 10.000 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Rental Fees.)

Dec. 12 Paid salaries for the first two weeks in December 10.200 Dec. 15 Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to 28.000, of which $12,000 was received in cast

Dec. 17 Purchased on account from Earth Movers, Inc 1.600 in parts needed to repair a rental tractor (Debit an expense account.) Payment is due in 10 days.

Dec. 23 Collected 6.000 of the accounts receivable recorded on December 15.

Dec. 23 Rented a backhoe to Mission Landscaping at a price of $250 per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoc for about two or three weeks.

Dec. 26 Paid biweekly salaries.10.200

Dec. 27 Paid the account payable to Earth Movers, Inc. 1,600

Dec. 28 Declared a dividend of 20 cents per share, payable on January 15, 2010.
Comprehensive problem 245

Dec. 29 Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co-defendant in a $25,000 lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the rented backhoe in a fenced construction site owned by Collier Construction. After working hours on December 26, Davenport had climbed the fence to play on parked construction equipment. While playing on the backhoe, he fell and broke his arm. The extent of the company's legal and financial responsibility for this accident, if any, cannot be determined at this time. (Note: This event does not require a journal entry at this time, but may require disclosure in notes accompanying the statements.

)Dec. 29 Purchased a 12-month public liability insurance policy for $9,600. This policy protects the company against liability for injuries and property damage caused by its equipment. However, the policy goes into effect on January 1, 2010, and affords no coverage for the injuries sustained by Kevin Davenport on December 26.

Dec. 31 Received a bill from Universal Utilities for the month of December, $700. Payment is due in 30 days.

Dec. 31 Equipment rental fees earned during the second half of December amounted to $20,000, of which $15,600 was received in cash. Data for Adjusting Entries Doonmhar 1 covered a period of three months.
no coverage for the injuries sustained by Kevin Davenport on December 26. January 1, 2010, and affords

Dec. 31 Received a bill from Universal Utilities for the month of December, $700. Payment is due in 30 days.

Dec. 31 Equipment rental fees earned during the second half of December amounted to $20,000, of which $15,600 was received in cash. Data for Adjusting Entries

a. The advance payment of rent on December 1 covered a period of three months.

b. The annual interest rate on the note payable to Rent-It is 6 percent.

c. The rental equipment is being depreciated by the straight-line method over a period of eight years.

d. Office supplies on hand at December 31 are estimated at $600

. e. During December, the company earned $3,700 of the rental fees paid in advance by McNamer Construction Co. on December 8.

f. As of December 31, six days' rent on the backhoe rented to Mission Landscaping on December 23 has been earned. g. Salaries earned by employees since the last payroll date (December 26) amounted to $1,400 at month-end.

h. It is estimated that the company is subject to a combined federal and state income tax rate of 40 percent of income before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in 2010. Instructions a. Perform the following steps of the accounting cycle for the month of December: Tournalize the December transactions do not record adiusting entries at this point.

only adjusted trial balance and balance sheet please

Case: No. 2: The Invisible Global Retailer and Its Re-entry into US Markets

Which corporation owns 123 companies, operates in twenty-seven countries, and has been in the mobile-phone business for over a decade? If you don’t know, you’re not alone. Many people haven’t heard of the Otto Group, the German retailing giant that’s second only to Amazon in e-commerce and first in the global mail-order business. The reason you’ve likely never heard of the Otto Group is because the firm stays in the background while giving its brands the spotlight. This strategy has worked over the company’s almost eighty-year history, and Otto continues to apply it to new moves, such as its social, Two for Fashion. “They are talking about fashion, not about Otto, unless it suits,” explained Andreas Frenkler, the company’s division manager of new media and e-commerce, about the site’s launch in 2008.

he site is now one of the top fashion blogs in Germany and is an integral part of the retailer’s marketing strategy. Leading through Passion, Vision, and Strategy Today, the Otto Group consists of a large number of companies that operate in the major economic zones of the world. The Otto Group’s lines of business include financial services, multichannel retail, and other services. The financial services segment covers an international portfolio of commercial services along the value chain of retail companies, such as information-, collection-, and receivable-management services. The multichannel retail segment covers the Otto Group’s worldwide range of retail offerings; goods are marketed across three distribution channels—catalogues, e-commerce, and over-the-counter (OTC) retail. The third segment combines the Otto Group’s logistics, travel, and other service providers as well as sourcing companies. Logistics service providers and sourcing companies support both the Otto Group’s multichannel retail activities and non-Group clients. Travel service providers offer customers travel offerings across all sales channels. Unique to the Otto Group is the combination of travel agencies, direct marketing, and Internet sites. The combined revenue of these three ventures is growing rapidly, even during the global economic downturn. The travel service revenues for 2010 were 10 billion euros, or about $12 billion.

Even though it operates in a variety of market segments, business ideas, and distribution channels—not to mention its regional diversity—the Otto Group sees itself as a community built on shared values. Otto’s passion for success is based on four levels of performance, which together represent the true strength of the Otto Group: “Passion for our customers, passion for innovation, passion for sustainability, and passion for integrated networking.” Each one of these performance levels is an integral element of the Otto Group’s guiding principle and self-image.

Future growth is guided by the Otto Group’s Vision 2020 strategy, which is based on achieving a strong presence in all key markets of the three largest regions—Europe, North America, and Asia. In doing so, the Otto Group relies on innovative concepts in the multichannel business, on current trends in ecommerce, on OTC retail, and on developments in mobile commerce. In keeping with that vision, its focus for near-term expansion is on expanding the Group’s strong position in Russia and increasing market share in other economic areas, such as the Chinese and Brazilian markets. Investment options in core European markets are continually being reviewed to strengthen the multichannel strategy. As a global operating group, Otto aims to have a presence in all major markets and will continue to expand OTC retailing.

In 2010, for instance, the Otto Group continued to develop its activities in the growth markets of Central and Eastern Europe. Through takeovers and the acquisition of further shares in various distance-selling concepts, including Quelle Russia, the Otto Group has continued to build on its market leadership in Russian mail order. A further major goal for the future is to expand OTC retail within the multichannel retail segment, making it one of the pillars of Otto

alongside its e-commerce and catalogue businesses. The foundations of value oriented corporate management are reflected in the uncompromising customer orientation evident in business activities with both end consumers and corporate clients.

The strategy envisages targeted investments that provide the Otto Group with “Best in Class” business models. Otto not only draws on an excellent range of customer services as the basis for its success in its core business of multichannel retailing but also offers an array of retail-related services for its corporate clients. In the future, the company is looking to expand these

services, moving beyond its core business. The buying organization of the Otto Group has been repositioned under the name Otto International and is now a firm fixture in the world’s key sourcing markets. Otto International’s corporate clients stand to benefit directly from the market power of the Otto Group while providing the volumes to make their own contribution to its growth.

The US Market Re-entry Initiative Germany remains the Otto Group’s most-important regional sales market, followed by France, the rest of Europe, North America, and Asia. In the United States, Otto set up a greenfield division called Otto International and quietly launched Field & Stream 1871, a brand of outdoor clothing, outerwear, footwear, and accessories, in 2010. The products are available only on the Field & Stream e-commerce site. As always, the Otto name is almost nowhere on the site, being visible only on the site’s privacy policy page. Industry experts thought it surprising that Otto launched the clothing line because it had previously left the US market after its acquisition of Eddie Bauer’s parent company, Spiegel, failed in 2009.

Still, the Otto Group has received much acclaim for its innovations in the retail arena. For example, according to a Microsoft case study, Otto was the first company (1) to use telephone ordering, (2) to produce a CD-ROM version of its catalogue in the 1990s (to deal with slow dial-up connections), and (3) to build one of the largest collections of online merchandise. So the

Otto Group may have other innovations planned for Field & Stream. But the US fashion market is saturated with competitors. As WWD reported, Otto may do better to focus on growing its own retail brands and utilizing its impressive in house manufacturing and logistics divisions, which are now Otto’s fastest growing segment. Otto could use these divisions to build other retail operations—while keeping a low profile, of course.

Case Questions:

How do non-German markets figure into the Otto Group’s strategy?

What do you think the firm has had to do to plan for this level of international expansion?

Which country-entry modes does the firm appear to prefer? Does it vary these modes?

After the Otto Group failed in its first effort to enter the US market with Spiegel, why would it try again?

How does this latest effort to enter the US market differ from its prior attempt?

b) As at 30 June 2018, T&P Ltd’s equity accounts are as follow:

400  000 ‘A’ ordinary shares, issued at $2.50 each, fully paid $ 1 000 000

75  000  6% cumulative preference shares, issued at $3 and paid to $2 $ 150  000

Accumulated losses (12 750)

As the company had incurred a loss for the year ended 30 June 2018, no dividends were declared for that year. The following transactions and events occurred during the year ended 30 June 2020.

Required: Prepare general journal entries to record the above transactions.

Suppose we all agree that the emission of carbon into the atmosphere is a policy problem
.Further, assume we know that the private marginal cost of a ton of Co2 is $17
while the true social marginal cost of a ton of carbon is $32. Clearly layout a policy of
carbon taxes that would result in the socially optimal level of carbon emissions.
Demonstrate your argument graphically and carefully explain. Evaluate the relative costs
and benefits of carbon taxes relative to emission targets/restrictions. How would your
analysis change if you believed innovation in carbon saving technologies was going to
improve in the near future?

QUESTION 38

1. With regard to the ability of humans to grow very large crop yields to feed very large populations, what innovation had the biggest effect?

   		domestication of large animals
   		cross breeding of different strains of cereal grains and rice to increase yields
   		The Haber-Bosch process (artificial nitrogen fixation)
   		crop irrigation

10 points   

QUESTION 39

1. From an economics and conservation perspective, how does being a vegetarian benefit the biosphere?

   	1.	energy efficiency
   	2.	increased biodiversity
   	3.	increased health and lifespan of the consumer
   	4.	it is a strictly ethical consideration: eating animals is not ethical

Read the Sands case study by By Shinyong Jung and Sungsik Yoon

In this case study, you will discuss the internal and external influences impacting Sands Eco360 program.

Questions:

1. What are the best practices in promoting ECO 360 to existing and potential meeting clients?
2. How can LVS encourage more customers to participate and engage in sustainability practices?
3. What are the challenges in operating the global Eco 360 program in different states/countries?
4. How do technology innovation and global movements impact the program?
5. What should LVS do in order to move the program forward and make the program sustainable in the long term?

A company such as Intel has a complex design and manufacturing process. This should lead Intel management to be concerned with scale of production and learning curves.

When do you think managers should be more concerned with large-scale production runs, and when do you think they should be most concerned with practices that would foster or hinder the hiring, training, and retention of key employees?

Describe a firm you think has been highly innovative. Which of the four types of innovation— radical, incremental, disruptive, or architectural— did it use? Did the firm use different types over time?