The following table presents selected details from the balance sheet of Davis Corporation:

Additional information:

• Sold land with a book value of 145,000 for 170,000
• Bonds with a net book value of 175,000 were paid off early by paying 172,500 cash
• Stock option compensation expense was 1,000
• Purchased trading securities for 15,000
• Equipment costing $25,000 with a book value of 5,000 was sold for 3,500
• Amortization of bond premium was 3,000
• Issued new common stocks for 100,000
• Paid cash dividends of $24,000
• Net income was $58,000

Present the 2020 CFO (indirect method). List all items and total. Indicate next to each item whether it is a cash inflow (I), a cash outflow (O), a reversal of non-cash revenue/gain (RR), or a reversal of non-cash expense/loss (RE).

Assume an economy with a car manufacturer, a car seller, and some consumers (there is no government). The consumers are workers who earn a wage to finance their consumption. In a given year, the car manufacturer produces 200, 000 cars and sells them for $10, 000 per car. The workers’ wages take up 70 percent of the car manufacturer’s revenue. All the materials used for producing cars are imported from other countries at a cost of $1, 000 per car. Half of the manufactured cars are exported oversea and the remaining cars are sold to the domestic car seller. The car seller sells the domestic cars and imported cars at the same price of $15, 000 per car. The car seller sells all of the domestic cars and 5, 000 units of the imported cars to domestic consumers. After paying $5, 000 for the cost of an imported car, the remaining sales revenue is equally distributed between wages and profits.

(a) Calculate GDP using

i. the product approach,

ii. the expenditure approach, and

iii. the income approach.

(b) Suppose that the car manufacturer is a foreign entity and all its profits belong to foreigners. What would GNP and GDP in this economy be in this case?

Question 3

A union can influence the demand for labor by:

requiring union fees.

raising union fees.

effective advertising that convinces customers to buy the "union label."

all of these.

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Question 4

The supply curve that monopsonists face is different from the supply curves that firms in competitive labor markets face because with a monopsony,

d and e.

the supply curve of labor is relatively flat.

offering a wage lower than the market wage means having no workers.

the employer faces the market supply curve.

the firm does not take the wage as given.

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Question 8

Marginal revenue product of labor measures the extra revenue generated to the firm from the employment of an additional worker.

True

False

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Question 11

Suppose there are 100 identical firms producing package delivery services. One of the firms finds that when it has to pay a wage rate of $7, it hires 20 delivery people. The firm charges an average price of $10 to deliver a package. From this information, we know that the package delivery industry is hiring a total of:

100 workers.

200 workers.

700 workers.

2,000 workers.

10,000 workers.

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A company that manufactures and sells consumer video cameras sells two versions of their popular hard disk​ camera, a basic camera for ​$500​, and a deluxe version for ​$1200. About 55​% of customers select the basic camera. Of​ those, 30​% purchase the extended warranty for an additional ​$100. Of the people who buy the deluxe​ version, 50​% purchase the extended warranty. Complete parts a through d below. ​a) Sketch the probability tree for total purchases. Warranty 0.3 Basic and Warranty 0.165 Basic 0.55 No Warranty 0.7 Basic and No Warranty 0.385 Warranty 0.5 Deluxe and Warranty 0.225 Deluxe 0.45 No Warranty 0.5 Deluxe and No Warranty 0.225 ​(Type integers or​ decimals.) ​b) What is the percentage of customers who buy an extended​ warranty? 39​% ​(Type an integer or a​ decimal.) ​c) What is the expected revenue of the company from a camera purchase​ (including warranty if​ applicable)? The expected revenue from a camera purchase is ​$ nothing. ​(Type an integer or a​ decimal.) ​d) Given that a customer purchases an extended​ warranty, what is the probability that he or she bought the deluxe​ version? The probability is nothing. ​(Round to three decimal places as​ needed.)

On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,050,000. During 2021, costs of $2,020,000 were incurred, with estimated costs of $4,020,000 yet to be incurred. Billings of $2,524,000 were sent, and cash collected was $2,270,000.

In 2022, costs incurred were $2,524,000 with remaining costs estimated to be $3,630,000. 2022 billings were $2,774,000, and $2,495,000 cash was collected. The project was completed in 2023 after additional costs of $3,820,000 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 2021 to record the transactions described (credit "various accounts" for construction costs incurred).
2b. Prepare journal entries for 2022 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, 2021.
3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2022.

Consider a profit-maximising firm that has the good fortune of being a monopolist. The firm sells output in a domestic market and exports to a foreign market as well. The domestic market demand curve given as ??(?)=20−2?? and the foreign market demand curve is given as ??(?)=20−??. Total output is ?=??+??. The monopolist faces a cost function given by ?=12?2+20.

a) Derive the firm’s marginal cost and average cost functions and draw these on a diagram. Clearly label the axes and the curves. [3 marks]

b) Derive the firm’s marginal revenue functions. Draw the marginal revenue and the market demand functions on the diagram. Clearly label the curves. [4 marks]

Note: If it is easier, you may use separate graphs for the domestic market and the foreign market.

c) Without doing any calculations, will it be optimal for the monopolist to sell its output at the same price in both markets? Explain. [1 mark]

d) Write down the profit maximisation problem faced by the monopoly. What output will be supplied to each market? What price will the monopolist will charge in each market? Clearly label these output levels and prices on your graph. [6 marks]

Rosie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation:

Events Affecting Year 1

Provided $25,990 of cleaning services on account.

Collected $20,792 cash from accounts receivable.

Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.

Events Affecting Year 2

Wrote off a $195 account receivable that was determined to be uncollectible.

Provided $30,330 of cleaning services on account.

Collected $26,842 cash from accounts receivable.

Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.

Required
a. Record the events for Year 1 and Year 2 in T-accounts.
b. Determine the following amounts:

(1) Net income for Year 1.

(2) Net cash flow from operating activities for Year 1.

(3) Balance of accounts receivable at the end of Year 1.

(4) Net realizable value of accounts receivable at the end of Year 1.

c. Repeat Requirements b for the Year 2 accounting period.

The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2020, the last day of its fiscal year. The enterprise fund was established this year through a transfer from the General Fund.

Required:
a. Prepare the closing entries for December 31.
b. Prepare the Statement of Revenues, Expenses, and Changes in Fund Net Position for the year ended December 31.
c. Prepare the Net Position section of the December 31 balance sheet. (Assume that the revenue bonds were issued to acquire capital assets and there are no restricted assets.)

The recent balance sheet for Starbucks shows $24 billion in assets, $23 billion in liabilities, and $1 billion in Owners' Equity. (Another way to state it is $24,000,000,000 in assets, $23,000,000,000 in liabilities, and $1,000,000,000 in Owners' Equity.) Their recent income statement shows $25 billion in revenue, $20 billion in expenses, and $5 billion in net income. Please number your answers as you address each of the following requirements.

- Does the company's balance sheet balance according to the fundamental accounting equation? Support your answer by using the dollar amounts above.

- Describe at least two examples of an asset and two examples of a liability that Starbucks might show on its balance sheet. Please go beyond simply stating the name of the account by also describing what the account represents (for example, "furniture" is an asset account and represents the cost of furniture used in the business such as tables and chairs at Starbucks).

- Using the information provided above, describe how Starbucks calculated net income on the income statement, and show dollar amounts to support your answer.

- Describe at least two examples of products that Starbucks might sell to earn revenue, and two expenses Starbucks might incur.

Below is an alphabetical list of account balances of Crazy Corporation as of December 31, 2019 and 2018 prior to the preparation of closing entries and financial statements.

Question: Prepare a Statement of Cash Flows Using the Indirect Method.