Note: This problem is for the 2018 tax year. Logan B. Taylor is a widower whose wife, Sara, died on June 6, 2016. He lives at 4680 Dogwood Lane, Springfield, MO 65801. He is employed as a paralegal by a local law firm. During 2018, he had the following receipts: Salary $ 80,000 Interest income— Money market account at Omni Bank $300 Savings account at Boone State Bank 1,100 City of Springfield general purpose bonds 3,000 4,400 Inheritance from Daniel 60,000 Life insurance proceeds 200,000 Amount from sale of St. Louis lot 80,000 Proceeds from estate sale 9,000 Federal income tax refund (for 2017 tax overpayment) 700 Logan inherited securities worth $60,000 from his uncle, Daniel, who died in 2018. Logan also was the designated beneficiary of an insurance policy on Daniel's life with a maturity value of $200,000. The lot in St. Louis was purchased on May 2, 2013, for $85,000 and held as an investment. Because the neighborhood has deteriorated, Logan decided to cut his losses and sold the lot on January 5, 2018, for $80,000. The estate sale consisted largely of items belonging to Sara and Daniel (e.g., camper, boat, furniture, and fishing and hunting equipment). Logan estimates that the property sold originally cost at least twice the $9,000 he received and has declined or stayed the same in value since Sara and Daniel died. Logan's expenditures for 2018 include the following: Medical expenses (including $10,500 for dental) $11,500 Taxes— State of Missouri income tax (includes withholdings during 2018) $4,200 Property taxes on personal residence 4,500 8,700 Interest on home mortgage (Boone State Bank) 5,600 Contribution to church (paid pledges for 2018 and 2019) 4,800 Logan and his dependents are covered by his employer's health insurance policy for all of 2018. However, he is subject to a deductible, and dental care is not included. The $10,500 dental charge was for Helen's implants. Helen is Logan's widowed mother, who lives with him (see below). Logan normally pledges $2,400 ($200 per month) each year to his church. On December 5, 2018, upon the advice of his pastor, he prepaid his pledge for 2019. Logan's household, all of whom he supports, includes the following: Social Security Number Birth Date Logan Taylor (age 48) 123-45-6787 08/30/1970 Helen Taylor (age 70) 123-45-6780 01/13/1948 Asher Taylor (age 23) 123-45-6783 07/18/1995 Mia Taylor (age 22) 123-45-6784 02/16/1996 Helen receives a modest Social Security benefit. Asher, a son, is a full-time student in dental school and earns $4,500 as a part-time dental assistant. Mia, a daughter, does not work and is engaged to be married. Federal income tax of $4,500 was withheld from his wages. Required: Compute Logan's income tax for 2018. If Logan has any overpayment on his income tax, he wants the refund sent to him. Assume that the proper amounts of Social Security and Medicare taxes were withheld. Logan does not want to contribute to the Presidential Election Campaign Fund. Make realistic assumptions about any missing data. Enter all amounts as positive numbers except any losses. Use the minus sign to indicate a loss. If an amount box does not require an entry or the answer is zero, enter "0". It may be necessary to complete the other tax schedules before completing Form 1040. Use the included tax rate schedules to compute the tax. When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.

Review the content on people and power in communities, social support networks, and empowerment and communities. Read the scenario below and answer the subsequent questions:

1.        In what ways does Chuck have power and in what ways does he not? (Power may involve information, wealth, reputation, high status, holding a decision-making position, laws and policies, connections.)

2.        What social support networks might be developed or enhanced for Chuck to empower himself?

3.        In what other ways might Chuck’s involvement with the community be enhanced?

SCENARIO: A concerned neighbor, Al, referred Chuck, 77, to the Hustlebustle County Older Adults Protective Services Unit. Chuck lives in his small rundown two-story home in an urban neighborhood. Al reported that twice he found Chuck had fallen helplessly on the ground while walking out to get his mail. Both times Al had to practically carry Chuck back into the house. Chuck has rheumatoid arthritis which makes it very difficult to walk even with his two canes. Additionally, his eyesight is very poor. Al also raised questions about Chuck's ability to shop and cook for himself.

Chuck’s wife Vicki died two years ago after a long bout with intestinal cancer. Since her death, Chuck has remained isolated and alone. He has three sons. Only his oldest son Mike, 48, lives in the area 12 miles away and owns a small delicatessen. Mike works long hours to keep his business afloat and has little time to spend with his own family, let alone with Chuck. Mike and his wife Jane have three teenage daughters. Chuck is proud of his grandchildren and looks forward to seeing them on holidays. Jane works part-time in the deli to help out whenever she can. Jane calls Chuck every few weeks to see how he’s doing. Sometimes, she drives him to medical appointments or to pick up some groceries.

Chuck’s second son Horace, 42, is a pop artist in San Francisco. The youngest, Henry, 35, is a worm farmer in Idaho. Both are single. Chuck usually talks to them on the phone every month or two. Chuck used to attend church regularly. However, the church is located four blocks from his home and he finds it too difficult to walk there. He no longer can drive.

Chuck considers himself an intelligent, independent man who worked hard all of his life as a carpenter. However, since his arthritis took a turn for the worse ten years ago, he has had to stop working. He is now facing financial difficulties. He has experienced many years of little income and high health costs for both him and his wife. He is becoming increasingly depressed at his failing health. However, he clings doggedly to the notion he must remain in his home. To do otherwise, he thinks to himself, would mean giving up and accepting certain death. Chuck is aware of the Happy Heavenly Health Care Center, a nursing home five blocks from his home. He has sadly watched some of his friends enter it and dreads the thought of having to go himself.

In summary, Chuck’s problems include: failing health involving arthritis, poor eyesight, and intestinal distress (the last of which he does not like to talk about); loneliness; having few activities to keep him busy; and feeling unwanted and unimportant. Strengths include: intelligence; independence; ownership of his home; having concerned children; and an outgoing, sociable personality. Some of Chuck’s likes include: a love of reading classical novels (on bright days when his eyesight improves slightly); seeing his children; playing stud poker; and drinking beer (not light, because he thinks it tastes like colored water).

Case Monopoly power and competition policy We have seen that a monopoly creates a social loss compared to a perfectly competitive market. If it is possible to increase the level of competition in a monopolized market, then society is better off since social surplus increases. Competition policy (also known as antitrust policy) deals with markets where competition can arise; however, given the behaviour of some firms in those markets, competition is restricted. There are markets in which increasing the level of competition is not feasible, so competition policy does not apply. This is the case of a natural monopoly, which will be discussed at the end of this chapter. Broadly speaking, competition policy can be divided into policies to deal with monopoly power that already exists, and policies to deal with mergers that may increase monopoly power. While mergers will be discussed in the next chapter, here we discuss policies to address existing monopoly power. Since the UK belongs to the European Union, EU competition law takes precedence where it is relevant, essentially in the case of larger businesses with significant European or global activities. The original Common Market was created by the 1956 Treaty of Rome. The modern and enlarged EU is largely underpinned by the 1999 Treaty of Amsterdam. Article 81 of this treaty prohibits anti-competitive agreements (called cartels) that have an appreciable effect on trade between EU member states and which prevent or distort competition within the EU. Article 82 prohibits the abuse of any existing dominant position. A firm has a dominant position in a given market if it has a large market share in that market. For example, Microsoft has a dominant position in the market for operating systems (OS) for PCs, with a market share of around 90 per cent. Article 82 prohibits the abuse of a dominant position not the dominant position itself. A firm can become a dominant firm simply because it is more productive than the others and this is fine for competition policy. What is not fi ne is a firm that uses its dominant position to restrict competition in the market. Responsibility for enforcement of these articles lies with the European Commission. Although global businesses are increasingly subject to transnational competition law, many businesses still operate primarily within one country; national decisions are then appropriate. Within the UK, these are governed by the Competition Act 1998 and the Enterprise Act 2002. The latter made it a criminal offence, punishable by a jail sentence, to engage in a dishonest cartel. Two key institutions addressing UK competition policy are the Office of Fair Trading (OFT) and the Competition Commission. In particular, the OFT has the power to refer cases in which existing monopoly power may be leading to a ‘substantial lessening of competition’ to the Competition Commission for detailed investigation. Prior to the Enterprise Act 2002, the Competition Commission was asked instead to evaluate whether or not a monopoly was acting ‘in the public interest’, without any presumption that monopoly was bad, and many previous judgements of the Commission concluded that companies were acting in the public interest, for example because they had an excellent record of innovation, despite having a monopoly position.

Questions on case study:

1. Explain the ways in which a monopolist can abuse its power when compared to a perfect competitor.

2. In light of your answer to question 1, explain why it is important for monopolists to be regulated to protect the interests of consumers, as done by the OFT and the Competition Commission.

3. Discuss how monopolists can be beneficial to the economy and consumers.

Please compute the following ratios

using 237.65b market cap (if needed)

Asset turnover

Operating profit margin

Long-term debt to equity ratio

Current ratio

Please calculate the following ratios:

Market value added

Market to book ratio

Return on Asset

Exercise 11-47
Preparing the Statement of Cash Flows

The comparative balance sheets for Beckwith Products Company are presented below.

Additional Information:

1. Net income for 2019 was $58,400.
2. Cash dividends of $25,000 were declared and paid during 2019.
3. During 2019, Beckwith issued $50,000 of notes payable and repaid $35,000 principal relating to notes payable.
4. Common stock was issued for $50,000 cash.
5. Depreciation expense was $18,650, and there were no disposals of equipment.

Required:

1. Prepare a statement of cash flows (indirect method) for Beckwith Products for 2019. Use a minus sign to indicate any decreases in cash or cash outflows.

Feedback

1. Use proper form with company name, statement title, and date. Complete three sections for cash flows; operating, investing and financing.
For operating activities, start with net income and consider any noncash items as well as gains or losses. Next, analyze the changes in the balance sheet accounts to determine their effect on cash. (Remember to restate the fundamental accounting equation in terms of changes, separate the cash and noncash assets, and isolate the change in cash.)
Finally, total to determine the net cash flow for operating assets.
For investing activities, analyze the balance sheet changes and additional information for items that may be classified as an investing activity. Make T-accounts for any changes and determine if there was an associated inflow or outflow of cash for each account affected.
For financing activities, analyze the balance sheet changes and additional information for items that may be classified as a financing activity. Make T-accounts for any changes and determine if there was an associated inflow or outflow of cash for each account affected.

2. Compute the following cash-based performance measures:

1. Free cash flow
2. Cash flow adequacy (Note: Assume that the average amount of debt maturing over the next 5 years is $85,000.)

Round ratio to two decimal places. Enter negative values as negative numbers.

In the following problems , give a complete hypothesis test for each problem. Use the method described. Make sure you include the original claim in symbols, The null and alternative hypothesis, the significance level, the actual formula and calculation of the test statistic, give the p-value and a  drawing of critical region ,the decision concerning the null hypothesis and a conclusion stated in non technical terms

1. In a recent year, of the 109,857 arrests for Federal Offenses, 31968 were for drug offenses. Use a 0.01 significance level to test the claim that the drug offense rate is less than 30%.

2. In a previous test baseballs were dropped 24 ft. onto a concrete surface, and they bounced an average of 984 in. In a test of a sample of 40 new balls, the bounce heights had a mean of 92.67 in. with a standard deviation of 1.79 in. Use a 0.05 significance level to determine whether there is significant evidence to support the claim that the new balls have bounce heights with a mean different from 92.84.

3. A communications industry spokesperson claims that over 80% of Americans either own a smart phone or have a family member that does.  In a random survey of 1036 Americans, 956 said that they or a family member owns a smart phone. Test the spokesperson’s claim at the  level.

4. A large university says the mean number of classroom hours per week for full-time faculty is more than 9. A random sample of the number of classrooms hours for full-time faculty for one week is listed. At  test the university’s claim. Assume normality

10.7     9.8       11.6     9.7       7.6       11.3     14.1     8.1       11.5     8.5       6.9

5. USA Today ran a report about a University of North Carolina poll of 1248 adults from the southern United States. The poll asked them if they believed that Elvis was alive. 99 of the 1248 adults believed that Elvis still lives. The article began with the claim that almost 1 out of 10 Southerners still think Elvis is alive. At the 0.01 significance level, test the claim that the true percentage is less than 10%.

6. The FDA regulates that fish that is consumed is allowed to contain 1.0 mg/kg of mercury. In Florida, bass fish were collected in 53 different lakes to measure the amount of mercury in the fish. The data for the average amount of mercury in each lake is in table below Do the data provide enough evidence to show that the fish in Florida lakes has more mercury than the allowable amount? Test at the 10% level.

7. The Kyoto Protocol was signed in 1997, and required countries to start reducing their carbon emissions. The protocol became enforceable in February 2005. In 2004, the mean CO₂ emission was 4.87 metric tons per capita. The data below are a random sample of CO₂ emissions in 2010. Is there enough evidence to show that the mean CO₂ emission is lower in 2010 than in 2004? Test at the 1% level.

Determine earnings before interest and taxes, net income, and also the cash flow from operations for the following firm: $500,000 sales, $10,000 cash dividends, $300,000 cost of goods sold, $20,000 administrative expense, $20,000 depreciation expense, $40,000 interest expense, $10,000 purchase of productive equipment, no changes in working capital, and a tax rate of 35%.

You will have a tuition payment this time next year, payable in US dollars. Will you take any action, to cover changes in exchange rates? If so, what would you do, and why? For US students, assume you will spend a semester abroad, in the Euro zone, and will need to pay tuition in the local currency, so you have the same challenge.

An investor is an avid bond purchase. He requires a 5% return on his bond purchases, yet, the bonds today currently yield 4% as a AA rated bond. How can he achieve a 5% return on his bond purchases in the future?

Please explain also how he can reduce changes in bond prices that are part of his portfolio