Cournot Oligopoly and Number of Firms In a Cournot oligopoly, each firm assumes that its rivals do not change their output based on the output that it produces. Illustration: A Cournot oligopoly has two firms, Y and Z. Y observes the market demand curve and the number of units that Z produces. It assumes that Z does not change its output regardless of the number of units that it (Y) produces, so chooses a production level that maximizes its profits. The general effects of a Cournot oligopoly do not depend on the size of the firms, the shape of the market demand curve, or the shape of the marginal cost curve. The mathematics is easiest for firms of the same size, linear demand curves, and flat marginal cost curves. Suppose an industry has two firms, a linear demand curve, and marginal costs, and no fixed costs: Demand curve: Q = " – $ P Marginal cost curve: MC = k In a competitive industry, what is the equilibrium quantity for the industry? (Setting price equal to marginal cost gives Q = " – $ × k. Since the industry is competitive, price equals marginal cost, and the supply curve for the industry is P = k; this gives the same result.) What is the equilibrium quantity for the firm? (With two identical firms, each produces half the industry quantity.) If the two firms merge into a monopoly, what is the monopoly price? (Show that the marginal revenue curve is MR = " – 2 $ P, by setting total revenue = P × Q and differentiating with respect to Q. Setting marginal revenue equal to marginal cost gives k = " – 2 $ P A P = (" – k) / 2$ Q = " – $ P = " – ½ (" – k) = ½ " + ½ k A total of 2,400 units are produced. If there were three firms in this Cournot oligopoly, how many units would be produced? 1,800 units 2,400 units 2,700 units 3,000 units 3,600 units (In a two Cournot oligopoly, each firm produces a the competitive quantity; in a three firm Cournot oligopoly, each firm produces ¼ the competitive quantity.)

The following income statement items appeared on the adjusted trial balance of CoronaCorporation for the year ended December 31, 2019($ in 000s):

sales revenue, $22,600;

cost of goods sold, $14,650;

selling expense, $2,330;

general and administrative expense, $1,230;

dividend revenue from investments, $230;

interest expense, $330.

Income taxes have not yet been accrued. The company's income tax rate is 25% 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 2019($ in 000s). All transactions are material in amount.

1)Investments were sold during the year at a loss of $330. Corona also had an unrealized loss of $230 for the year on investments. The unrealized loss represents a decrease in the fair value of debt securities and is classified as part of other comprehensive income.

2)One of the company's factories was closed during the year. Restructuring costs incurred were $2,300.

3)During the year, Coronacompleted the sale of one of its operating divisions that qualify as a component of the entity according to GAAP regarding discontinued operations. The division had incurred an operating income of $830 in 2019 prior to the sale, and its assets were sold at a loss of $1,740.

4)A positive foreign currency translation adjustment for the year totaled $570.

Required. Prepare Corona's single, continuous statement of comprehensive income for 2019, including earnings per share disclosures. Use a multiple-step income statement format. Three million shares of common stock were outstanding throughout the year.

(Present your answers in thousands of dollars, except earnings per share. Amounts to be deducted should be indicated with parentheses. Round Earnings per share answers to two (2) decimal places.)

Additional information:
⦁   An unpaid salaries and wages as at 31 December 2019 is RM18,000.
⦁   A tenant of an office space has not yet pay a rental for December 2019 amounting RM3,000.
⦁   The company returned defect merchandise bought from supplier and was refunded RM3,500 in cash. The company use perpetual inventory system and this transaction has not yet been recorded.
⦁   The company received RM35,000 in cash from a customer on 30 December 2019 and recorded as sales revenue. However the company only managed to supply the merchandise on 3 January 2020.
⦁   Payment for a one-year insurance coverage was made on 1 July 2019.
⦁   Annual depreciation for building and equipment are based on straight line depreciation basis over a period of 50 years and 10 years respectively with no scrap value.
⦁   30% of the notes payable is due next year. The note payable interest rate is 8% per annum.

REQUIRED:
⦁   Journalise the adjusting entries on 31 December 2019.

Problem 1: Dodson Company

The Dodson Company manufactures and distributes three types of electronic products, Zymol, Zybat and Zycot. The following details the unit sales, selling prices and manufacturing costs of the three electronic devices:

Selling, general and administrative (SG&A) expenses are $1,170,000. SG&A expenses are currently being allocated based upon sales revenue for the three products.

The Dodson Company is considering allocating SG&A expenses under an activity based costing methodology as follows:

• Upon further investigation of the SG&A expenses, (50 percent) are shown to be for marketing and advertising. Each product has its own advertising and marketing budget , administered by one of the three marketing managers. Zycot, the premier product, is advertised heavily. Sixty percent of the marketing and advertising budget goes toward Zycot, twenty percent to Zymol and twenty percent to Zybat.

• The remaining SG&A expenses consist of distribution and administrative costs (25 percent) and selling costs (25 percent). The distribution and administration department is responsible for arranging shipping and for billing the customers. Customers pay transportation charges directly to the common carrier. Upon analysis, each electronic product places equal demands on the distribution and administration department and each consumes about the same resources as the others. Selling costs consist primarily of commissions paid to independent salespeople. The commissions are based upon gross margin on the product (ie: sales revenue less manufacturing costs).

Required:

1. Prepare an income statement for each of the three electronic products with SG&A expenses allocated based upon sales revenue for the three products. Identify the most and least profitable products.

2. Prepare an income statement for each of the three electronic products with SG&A expenses allocated based upon activity based costing for the three products. Identify the most and least profitable product

Refer to Notes to Consolidated Financial Statements.

Review Coca-Cola's financial statements and answer the following questions:

1. How are Coke's numbers reported (in what denomination)?

For items 2-4, enter the answers as presented (e.g. $24,088 not $24,088,000).

2. What is Coke's net operating revenue for 2008?
$

3. What is Coke's cost of goods sold for 2008?
$

4. What is Coke’s net income 2008?
$

5. What is Coke’s percent of interest expense to net operating revenue on its 2008 income statement? Rounding your answer to two decimal places.
%

6. What is Coke's percent of increase in net operating revenue from 2007 to 2008? Rounding your answer to one decimal place.
%

Guidelines:

Create an excel workbook with two tabs:

Statement of Operations (1^st tab)

Balance Sheet (2^nd tab)

Use the word bank provided to create the rows of your statements. For the statement of operations, create columns for 2017 (current year) -2020. The ASC is projected to open in January 2018. Use the financial statement exhibits from your textbook reading as a guideline.

Once you have sorted out the word list into financial statements in Excel, insert formulas to show how you would calculate various items (such as Current Assets or Total Personnel Expense). You do not need to plug in values, but show how you would calculate them in Excel.

Submit your assignment as an excel (.xlsx) file.

Grading:

100 points based on the correctness of your answer.

Due Date: This part of the Course Project is due on the last night of week 2.

Word Bank: Section headings are in Mixed Case Italics Bold, totals are in UPPERCASE BOLD.

For the year ended December 31, 2021, Pearl Enterprises Ltd. had the following revenues and expenses: Sales, $740,000; Cost of Goods Sold, $425,000; Operating Expenses, $130,000; and Income Tax Expense, $33,500. The company also declared $25,000 of dividends to the common shareholders on December 27 to be paid on January 15, 2022.

Prepare closing entries for Pearl on December 31, 2021. (Credit account titles are automatically indented when the 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.)

Use current public financial statements for Wing Stop to determine the following:

1. What is their sustainable growth rate based on earnings?

2. How has their historical growth compared to sustainable growth and what methods do they appear to have used to reduce the gap between the two?

3. Assuming the company’s growth doubles from recent trends, what challenges will the organization encounter and what is your recommendation to achieve growth?

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made. The pizzeria’s cost formulas appear below: Fixed Cost per Month Cost per Pizza Cost per Delivery Pizza ingredients $ 4.00 Kitchen staff $ 6,270 Utilities $ 790 $ 0.10 Delivery person $ 2.90 Delivery vehicle $ 810 $ 2.10 Equipment depreciation $ 544 Rent $ 2,230 Miscellaneous $ 910 $ 0.05 In November, the pizzeria budgeted for 2,100 pizzas at an average selling price of $17 per pizza and for 240 deliveries. Data concerning the pizzeria’s actual results in November appear below: Actual Results Pizzas 2,200 Deliveries 220 Revenue $ 38,130 Pizza ingredients $ 10,450 Kitchen staff $ 6,210 Utilities $ 975 Delivery person $ 638 Delivery vehicle $ 1,022 Equipment depreciation $ 544 Rent $ 2,230 Miscellaneous $ 898 Required: 1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Required information [The following information applies to the questions displayed below.] On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $14 and its retail selling price is $60. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred. Nov. 11 Sold 70 razors for $4,200 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 14 razors that were returned under the warranty. 16 Sold 210 razors for $12,600 cash. 29 Replaced 28 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. Jan. 5 Sold 140 razors for $8,400 cash. 17 Replaced 33 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. 1. Prepare journal entries to record above transactions and adjustments.

Record the sales revenue of 70 razors for $4,200 cash.

Record the cost of goods sold for 70 razors.

Record the estimated warranty expense at 8% of November sales.

Record the replacement of 14 razors that were returned under the warranty.

Record the sales revenue of 210 razors for $12,600 cash.

Record the cost of goods sold for 210 razors.

Record the replacement of 28 razors that were returned under the warranty.

Record the estimated warranty expense at 8% of December sales.

Record the sales revenue of 140 razors for $8,400 cash.

Record the cost of goods sold for 140 razors.

Record the replacement of 33 razors that were returned under the warranty.

Record the adjusting entry for warranty expense for the month of January.