The state of New South Wales has an unemployment rate of 5%. The state conducts monthly surveys in order to track the unemployment rate. In a recent month, a random sample of 500 people showed that 20 were unemployed.

1. If the true unemployment rate is 5%, describe the sampling distribution of the sample proportion of unemployed people? (1 pt)
2. Find the probability that the sample unemployment rate is at most 4%. (2 pts)
3. Assume the population proportion p is unknown. Based on the most recent sample, find the probability that the sample proportion will lie within 0.005 of the true proportion pof people who are unemployed. (4 pts)

Shelli graduates from the University of South next month on her 25^th birthday, and she is excited to begin her new career. Because she wants to have a comfortable living when she retires, Shelli has decided to begin planning for her retirement now. As a result, she is currently evaluating the amount she needs to contribute to a retirement fund satisfy her financial requirements at retirement. After speaking to retired friends and relatives, Shelli estimates she will need $60,000 each year to be able to live comfortably and enjoy her “twilight years.” In addition, Shelli expects that she can invest in a retirement fund that will yield 8 percent interest compounded annually for a long as she contributes to the fund. As soon as she retires, Shelli will have to move her retirement “nest egg” to another investment so she can withdraw money when she needs it. Her plans are to move the money to a fund that allows withdrawals at the beginning of each year and pays 5 percent interest compounded annually. Shelli expects to retire in 40 years, and, after taking an online “life expectancy” quiz, she has concluded that she will live another 25 years after she retires. If Shelli’s expectations are correct, how much must she contribute to the retirement fund to satisfy her retirement plans if she intends to make her first contribution to the fund one year from today and the last contribution on the day she retires?

Alvin wants to save money to pay for his college education, which he plans to start in three years. Currently, the cost per year (for everything—food, clothing, tuition, books, transportation, and so forth) to attend the college he has chosen is $15,000; but these costs are expected to increase at the same rate as inflation, which is 3 percent, each year. Alvin plans to make three equal annual deposits into his “education” investment account beginning today. These deposits will earn 8 percent interest.

a.   If he plans to finish his college degree in four years, what will be the cost of Alvin’s education each year he is in college?

b.   How much must Alvin contribute each year so that he has enough money in his education fund when he starts college in three years to pay the costs for the four years it takes him to complete his degree?

Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 12 years ago for $6 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $9.8 million. The company wants to build its new manufacturing plant on this land; the plant will cost $13.2 million to build, and the site requires $1,372,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?

1. If the change in GDP in South Korea from 2016 Quarter 3 to 2016 Quarter 4 was 6%, then we may conclude that the s.a.a.r for GDP in the same period was

1. 1.6%, because s.a.r. measures quarter-to-quarter growth
2. 3.2%, because s.a.a.r. measures the upper limit of current GDP growth
3. One-fourth of 1.6%, or 0.4%, because s.a.a.r. removes all annualized data
4. Four times 1.6%, or 6.4%, because s.a.a.r. annualizes quarterly data

2. The difference between an economic indicator being a flow variable rather than a stock variable is that

1. A flow refers to measuring a variable over time, while a stock measures a variable at a point in time
2. A flow refers to measuring a variable at a point in time while a stock measures a variable in non-monetary units
3. A flow refers to measuring a variable over time while a stock measures a variable in monetary units only
4. A stock is a measure of a variable over time while a flow measures a variable at a point in time

3. The level of potential GDP used as the benchmark comparison in assessing the long-run prospects of an economy is computed as:

1. The growth in labor force plus the growth in productivity plus the growth in hours worked
2. The growth in productivity plus the growth rate of the population
3. The growth rate of population plus the growth rate of current production
4. The growth rate of current production plus the growth rate of productivity plus the growth rate in hours worked

Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.

The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $76,500 of manufacturing overhead for an estimated activity level of $45,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:

During the year, the following transactions were completed:

1. Raw materials purchased on account, $162,000.
2. Raw materials used in production, $141,000 (materials costing $130,000 were charged directly to jobs; the remaining materials were indirect).
3. Costs for employee services were incurred as follows:

1. Rent for the year was $18,500 ($13,300 of this amount related to factory operations, and the remainder related to selling and administrative activities).
2. Utility costs incurred in the factory, $11,000.
3. Advertising costs incurred, $13,000.
4. Depreciation recorded on equipment, $21,000. ($17,000 of this amount related to equipment used in factory operations; the remaining $4,000 related to equipment used in selling and administrative activities.)
5. Manufacturing overhead cost was applied to jobs, $ ? .
6. Goods that had cost $225,000 to manufacture according to their job cost sheets were completed.
7. Sales for the year (all paid in cash) totaled $508,000. The total cost to manufacture these goods according to their job cost sheets was $219,000.

Required:

1. Prepare journal entries to record the transactions for the year.

2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts).

3A. Is Manufacturing Overhead underapplied or overapplied for the year?

3B. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

4. Prepare an income statement for the year. All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.

a) Kasapreko Company Limited is a wholly Ghanaian-owned company with branches in Nigeria, South Africa and Germany. With relevant examples, explain the eclectic paradigm that Kasapreko might have fulfilled, before venturing international.

b) Knowing that accounting and reporting laws differ widely around the world thereby posing risks for the international business, briefly explain for each how physical asset valuation (PAV) and research and development (R&D) costs are likely to pose risks?

Visit Jeju ~ In South Korea, “Jeju” is a famous holiday destination with breathtaking scenic views. A travel agent in Jeju wants to know the satisfaction levels of tourists who visit the island. The travel agent surveyed 45 tourists at random and constructed a 95% confidence interval for the proportion of tourists who were extremely satisfied with their Jeju visit to be (0.5289, 0.8044).

Which of the following statements are true? Select all the that apply.

Question 17 options:

Thomas Homes Limited is an independent furniture and homewares retailer, with branches throughout the South East of England. Abbreviated results for the last two years are given below. Statement of Profit or Loss for the year ended 31 December:

2018 2019 £000 £000 Sales 803 858 Cost of sales (509) (513) Gross profit 294 345 Operating expenses (237) (244) Operating Profit 57 101 Investment income - 4 Finance costs (14) (24) Profit before taxation 43 81 Taxation (17) (33) Profit for the year 26 48 Statement of financial position as at 31 December: 2018 2019 £000 £000 Assets Non-current assets Property, plant and equipment 399 507 Long Term Investments 9 18 408 525 Current assets Inventory 111 113 Trade receivables 154 114 Prepayments 8 6 Bank 32 29 305 262 Total assets 713 787 Equity and liabilities Equity Ordinary share capital 186 186 Retained earnings 203 170 389 356 Non-current liabilities Long term loans 198 289 Current liabilities Trade payables 68 73 Accruals 31 27 Bank loan 27 42 126 142 Total equity and liabilities 713 787

Required: (a) Calculate the following ratios for Thomas Homes Limited for each of the years 2018 and 2019: i. Current ratio ii. Inventory turnover (Inventory at 31st December 2017, £105,000) iii. Accounts receivable days iv. Accounts payable days v. Gearing ratio vi. Interest cover

(b) Comment on the company’s liquidity position using the information in the question and your calculations in (a).

(c) List and briefly explain the limitations of analysing the performance of companies using financial statements.

TOTAL: 25 MARKS

Transit Airlines provides regional jet service in the Mid-South. The following is information on liabilities of Transit at December 31, 2018. Transit’s fiscal year ends on December 31. Its annual financial statements are issued in April.

Transit has outstanding 5.5% bonds with a face amount of $73 million. The bonds mature on July 31, 2027. Bondholders have the option of calling (demanding payment on) the bonds on July 31, 2019, at a redemption price of $73 million. Market conditions are such that the call option is not expected to be exercised.

A $22 million 7% bank loan is payable on October 31, 2024. The bank has the right to demand payment after any fiscal year-end in which Transit’s ratio of current assets to current liabilities falls below a contractual minimum of 1.9 to 1 and remains so for 6 months. That ratio was 1.75 on December 31, 2018, due primarily to an intentional temporary decline in parts inventories. Normal inventory levels will be reestablished during the sixth week of 2019.

Transit management intended to refinance $59 million of 5% notes that mature in May of 2019. In late February 2019, prior to the issuance of the 2018 financial statements, Transit negotiated a line of credit with a commercial bank for up to $53 million any time during 2019. Any borrowings will mature two years from the date of borrowing.

Transit is involved in a lawsuit resulting from a dispute with a food caterer. On February 13, 2019, judgment was rendered against Transit in the amount of $45 million plus interest, a total of $46 million. Transit plans to appeal the judgment and is unable to predict its outcome though it is not expected to have a material adverse effect on the company.

Required:
1. How should the 5.5% bonds be classified by Transit among liabilities in its balance sheet?
2. How should the 7% bank loan be classified by Transit among liabilities in its balance sheet?
3. How should the 5% notes be classified by Transit among liabilities in its balance sheet?
4. How should the lawsuit be reported by Transit?
5. Calculate the total current liabilities, total long-term liabilities, and total liabilities of a classified balance sheet for Transit Airlines at December 31, 2018. Transit's accounts payable and accruals were $51 million.