1. The lower the price in a market, the higher the consumer surplus in that market.

True

False

2. The marginal cost curve always crosses  

3. Suppose that a firm in a perfectly competitive market sells 400 units of output at a price of $4 each. Which of the following statements is correct?

4. For a particular good, a 7 percent increase in price causes a 28 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?

5. Which one of the following statements is a normative statement?

6. When quantity demanded responds strongly to changes in price, demand is said to be

7. It is reasonable to expect the cross-price elasticity of demand for coffee and milk to be positive.

True

False

8. Price is equal to marginal revenues in both competitive markets and monopolies.

True

False

9. A binding minimum wage (price floor) above the equilibrium creates a surplus of labor.

True

False

10. Suppose buyers of computers and printers regard those two goods as complements. Then an decrease in the price of computers will cause

Questions: PF2

22 - Given ·the following information from the payroll register, calculate the net pay and prepare a journal entry for the month of February for Northern Publishers.

23 - Which type of account shows the owners’ or shareholders’ worth or interest in the organization?

• Equity
• Asset
• Liability
• Revenue

24 - Which of the following dates will determine the proper remittance date?

• The payroll processing date
• The pay period end date
• The date the statement of wages is delivered to employees
• The payroll cheque date

25 - The Canada Revenue Agency requires mandatory electronic filing when employers file a total of more than:

• 25 of each type of information slips
• 25 various in information slips
• 50 of each type of information slips
• 50 various information slips

26 - In which province is tile group benefits premium subject to the Retail Sales Tax?

• Manitoba
• Nova Scotia
• Northwest Territories
• British Columbia

27 - The salaries and wages incurred, for employees who actually perform the work or provide the service or sell goods, are referred to as:

• direct labour costs
• indirect labour costs
• employee benefits expenses
• commission expenses

28 - Which of the following items appear on a Balance Sheet?

• Net Profit
• Expenses
• Revenue
• Liabilities

29 - If the administration of the pension plan contribution remittance is outsourced to a third-party plan administrator, who is responsible for making sure the remittance deadlines are being met under the requirements of the legislation in each pl.an member's jurisdiction?

• The employer
• The provincial, government
• The payroll service provider
• The plan administrator

Lydo Cinema Chain based in Melbourne, owns three cinemas in the suburbs of Camberwell, South Yarra and Ringwood. It has prepared budgets for the coming year based upon a ticket price of $20.

Included in the overhead figures are the Head Office fixed costs that amount to $750,000, these have been allocated to each cinema based on budgeted ticket receipts. All other costs are variable. The top management is concerned about the Ringwood cinema and the fact that it is showing a budgeted loss and is considering closing the cinema and selling the site to a Property Developer.

Required:

1. Prepare marginal costing income statements to show contributions for each cinema and contribution and profit for the overall chain based on the original budget.

2. Prepare marginal costing income statements to show contributions for each cinema and contribution and profit for the overall chain assuming Ringwood cinema is closed.

3. Based on your calculations in requirement (b) above, do you think that Ringwood cinema should be closed? Justify your answer with appropriate explanation.

4. What is the contribution per ticket sale at each cinema?

5. What is the margin of safety in revenue for the chain at the budgeted level of activity if the Ringwood cinema is kept open?

6. What is the margin of safety in revenue for the chain at the budgeted level of activity if the Ringwood cinema is closed?

7. If the Ringwood cinema is kept open, management would like to increase its profitability. One suggestion is that ticket sales at Ringwood cinema can be increased by 60% by an advertising campaign directed at Ringwood that will add $20,000 to the chain's fixed costs. Do you think that the advertising campaign should be undertaken to improve the cinema's profitability? Give reasons for your decision.

Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business using the following financial data. BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2019 Computer services revenue $ 25,307 Net sales 18,693 Total revenue 44,000 Cost of goods sold $ 14,052 Depreciation expense—Office equip. 400 Depreciation expense—Computer equip. 1,250 Wages expense 3,250 Insurance expense 555 Rent expense 2,475 Computer supplies expense 1,305 Advertising expense 600 Mileage expense 320 Repairs expense—Computer 960 Total expenses 25,167 Net income $ 18,833 BUSINESS SOLUTIONS Comparative Balance Sheets December 31, 2018, and March 31, 2019 Mar. 31, 2019 Dec. 31, 2018 Assets Cash $ 68,057 $ 48,372 Accounts receivable 22,867 5,668 Inventory 704 0 Computer supplies 2,005 580 Prepaid Insurance 1,110 1,665 Prepaid rent 825 825 Total current assets 95,568 57,110 Office equipment 8,000 8,000 Accumulated depreciation—Office equip. (800 ) (400 ) Computer equipment 20,000 20,000 Accumulated depreciation—Computer equip. (2,500 ) (1,250 ) Total assets $ 120,268 $ 83,460 Liabilities and Equity Accounts payable $ 0 $ 1,100 Wages payable 875 500 Unearned computer service revenue 0 1,500 Total current liabilities 875 3,100 Equity Common stock 98,000 73,000 Retained earnings 21,393 7,360 Total liabilities and equity $ 120,268 $ 83,460 Required: Prepare a statement of cash flows for Business Solutions using the indirect method for the three months ended March 31, 2019. Owner Santana Rey contributed $25,000 to the business in exchange for additional stock in the first quarter of 2019 and has received $4,800 in cash dividends. (Amounts to be deducted should be indicated with a minus sign.)

The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared by the company’s controller. As accounting manager for Sanderson, you are attempting to reconstruct and revise the balance sheet.

Additional information ($ in 000s):

1. Certain records that included the account balances for the patent and shareholders’ equity items were lost. However, the controller told you that a complete, preliminary balance sheet prepared before the records were lost showed a debt to equity ratio of 1.2. That is, total liabilities are 120% of total shareholders’ equity. Retained earnings at the beginning of the year was $5,200. Net income for 2021 was $1,850 and $650 in cash dividends were declared and paid to shareholders.
2. Management intends to sell the investments in the next six months.
3. Interest on both the notes and the bonds is payable annually.
4. The notes payable are due in annual installments of $1,300 each.
5. Deferred revenue will be recognized as revenue equally over the next two fiscal years.
6. The common stock represents 500,000 shares of no par stock authorized, 310,000 shares issued and outstanding.
   

Required:
Prepare a complete, corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

Rocky Guide Service provides guided 1–5 day hiking tours throughout the Rocky Mountains. Wilderness Tours hires Rocky to lead various tours that Wilderness sells. Rocky receives $1,900 per tour day, and shortly after the end of each month Rocky learns whether it will receive a $190 bonus per tour day it guided during the previous month if its service during that month received an average evaluation of "excellent" by Wilderness customers. The $1,900 per day and any bonus due are paid in one lump payment shortly after the end of each month.

• On July 1, based on prior experience, Rocky estimated there is a 40% chance it will earn the bonus for July tours. It guided a total of 10 days from July 1–July 15.
• On July 16, based on Rocky’s view that it had provided excellent service during the first part of the month, Rocky revised its estimate to an 90% chance it would earn the bonus for July tours. Rocky also guided customers for 15 days from July 16–July 31.
• On August 5 Rocky learned it did not receive an average evaluation of “excellent” for its July tours, so it would not receive any bonus for July, and received all payment due for the July tours.

Rocky bases estimates of variable consideration on the expected value it expects to receive.

1.) Prepare Rocky's July 15 journal entry to record revenue for tours given from July 1 - July 15

2.) Prepare Rocky's July 31 journal entry to record revenue for tours given from July 16 - July 31 and any adjustment needed for July 1 – July 15

3.) Prepare Rocky's August 5 journal entry to record the receipt of payment from Wilderness

4.) Prepare Rocky's August 5 journal entry to record any necessary adjustments to revenue

Assume that Riverbed reports using ASPE. Prepare a schedule showing the intangible assets section of Riverbed’s statement of financial position at December 31, 2020. (Round answers to 0 decimal places, e.g. 5,275. Enter account name only and do not provide descriptive information.)

Compute the total amount of expenses resulting from the transactions that would appear on Riverbed’s income statement for the year ended December 31, 2020.

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 61 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

For example, administrative expenses should be $3,600 per month plus $44 per course plus $7 per student. The company’s sales should average $900 per student.

The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 55 students. The actual operating results for September appear below:

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (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.)

Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business using the following financial data.

BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2020 Computer services revenue $ 25,007 Net sales 17,893 Total revenue 42,900 Cost of goods sold $ 14,652 Depreciation expense—Office equipment 370 Depreciation expense—Computer equipment 1,250 Wages expense 2,950 Insurance expense 475 Rent expense 1,575 Computer supplies expense 1,285 Advertising expense 580 Mileage expense 260 Repairs expense—Computer 860 Total expenses 24,257 Net income $ 18,643 BUSINESS SOLUTIONS Comparative Balance Sheets December 31, 2019, and March 31, 2020 Mar. 31, 2020 Dec. 31, 2019 Assets Cash $ 77,407 $ 57,102 Accounts receivable 23,767 4,868 Inventory 694 0 Computer supplies 2,085 500 Prepaid insurance 1,030 1,605 Prepaid rent 805 805 Total current assets 105,788 64,880 Office equipment 7,500 7,500 Accumulated depreciation—Office equipment (740 ) (370 ) Computer equipment 19,000 19,000 Accumulated depreciation—Computer equipment (2,500 ) (1,250 ) Total assets $ 129,048 $ 89,760 Liabilities and Equity Accounts payable $ 0 $ 1,200 Wages payable 945 500 Unearned computer service revenue 0 2,400 Total current liabilities 945 4,100 Equity Common stock 106,000 78,000 Retained earnings 22,103 7,660 Total liabilities and equity $ 129,048 $ 89,760

Required: Prepare a statement of cash flows for Business Solutions using the indirect method for the three months ended March 31, 2020. Owner Santana Rey contributed $28,000 to the business in exchange for additional stock in the first quarter of 2020 and has received $4,200 in cash dividends. (Amounts to be deducted should be indicated with a minus sign.)

The following errors in the corporation’s accounting have been discovered:

(a1)

Calculate the following adjusted balances.