Twinings (a UK firm) buys £1 billion of tea leaves from India using money from its Indian bank account. It brings the tea to the UK. In the UK, it uses the tea leaves to make boxes of tea, and sells 500 million boxes back to India, each for a price of £2. It then credits the resulting revenue of £1 billion back into its Indian bank account. What happens to the UK’s balance of payments as a result of this transaction?

Please provide a full answer.

A company’s financial records report the following accounts and balances at the end of the year:

What would the company show as its total credits on its trial balance?

a) $39,800

b) $43,400

c) $36,600

d) $42,200

e) $44,400

Many taxpayers think the tax law is all black and white with no room for gray areas. What do you think? Explain your answer.

Additionally, various tax services provide Internal Revenue Code (IRC) histories for researchers who need them. What value would this provide to researchers? Why would tax preparers need to review prior tax years' laws? Is this related to the perception of gray areas in tax law? Explain your answer in detail.

1. A restaurant that records all purchases of food and beverages as an expense at the time of purchase and does not consider the end of period inventories would be violating the: . . (Hint: if the restaurant did not account for the change in inventory what happens to the computation of cost of goods sold? If Cost of Goods Sold is computed incorrectly, what happens to current period profit?)
a.Cost principle
b.Materiality concept
c.Full disclosure principle
d.Matching principle

2. Accrual accounting is based on the principle of matching sales revenue with expenses.
True/False

The Norfolk Company reported the following information at the end of the current year:

Refer to the Norfolk Company, calculate:

1. Manufacturing Overhead cost.
2. Total manufacturing costs.
3. Prime costs.
4. Conversion costs.
5. Period costs.

The Norfolk Company reported the following information at the end of the current year:

Refer to the Norfolk Company, calculate:

1. Manufacturing Overhead cost.
2. Total manufacturing costs.
3. Prime costs.
4. Conversion costs.
5. Period costs.

Marcie quit her job as a gardener, which paid an annual salary of $63,000, and became a baker. She used $15000 out of her savings account that paid a 10% annual interest rate to buy an oven and other start-up capital. In her first year of operations, she spent $2,000 on supplies and $250 a month on rent. She earned revenue of $80,000. What are Marcie’s accounting and economic profits over the course of the year?

$________ in accounting profits and $ _______ in economic profits

Striker has determined that the depreciable lives of several production machines are too long and thus do not fairly match the cost of the assets with the revenue. They, therefore, decide to reduce the depreciable lives of those machines by three years. 1. Is this change allowed? If so, is it a –Change in accounting principle –Change in accounting estimate –Correction of an error in previously issued financial statements, or –Change in reporting entity 2. In what Period should this be recognized (retrospective, current and/or prospective) 3. Is financial statement disclosure required?

•If the government decides to impose a tax of 20 cents per litre on petrol, draw a graph the impact of the tax on market equilibrium price, and discuss whether the outcome is efficient by demonstrating the change of consumer’s and producer’s surplus as a result of the tax.

•Draw a demand and supply model, with demand curve.

•Show the shift of S as a result of 20 cent tax.

•Identify new equilibrium.

•Mark the price paid by consumer and received by the seller.

Demonstrate change of consumer and producer’s surplus, tax revenue, and deadweight loss.

Draw the MR, MC, AVC, ATC, Demand, supply, MC and MR for the following situations. For each of these situations show the total revenue, total cost area, and shade the profit or loss area, and if the situation is a shut down state why it should shutdown.

a.A monopolist showing a profit

b.A monopolist showing a loss but not a shut-down

c.A monopolist at a break-even point

d.Difference between a monopolist and a perfectly competitive firm for a profit situation on the same graph space.