Much has been said about social stratification. Describe how the three major classes are able to interact with one another as to contribute to the dynamic outcome of the economy that is Capitalism. What overall results do such interactions yield? What is the underlying theme in the outcome of this interaction?

PoolVac, Inc. manufactures and sells a single product called the “Sting Ray,” which is a patent-protected automatic cleaning device for swimming pools. PoolVac’s Sting Ray faces its closest competitor, Howard Industries, also selling a competing pool cleaner. Using the last 30 quarters of production and cost data, PoolVac wishes to estimate its average variable costs using the following quadratic specification:

AVC = a + bQ + cQ 2

The quarterly data on average variable cost (AVC), and the quantity of Sting Rays produced and sold each quarter (Q) are presented in the data file. PoolVac also wishes to use its sales data for the last 30 quarters to estimate demand for its Sting Ray. Demand for Sting Rays is specified to be a linear function as the following:

Qd = d + eP + fM + gPH in which its price (P), average income for households in the U.S. that have swimming pools (M), and the price of the competing pool cleaner sold by Howard Industries (PH).

1.       Run the appropriate regression to estimate the average variable coast function (avc) for sting rays. Evaluate the statistical significance of the three estimated parameters using a significance level of 5 percent. Be sure to comment on the algebraic signs of the three parameter estimates.

PROBLEM: ASC 606: Revenue from Contacts with Customers, Correction of Accounting Errors, Professional Research, and Accounting Theory (Conceptual Framework)

Ian Mathews is a creator of board games. Ian will be selling his most recent game, Radical Rainbows, through his newly formed company, UPR, Inc. UPR was formed in June, 2018. Ian contributed $1,000 to UPR in exchange for 100% of UPR’s voting common stock. Ian has had unprecedented success with the first two games in his most recent game trilogy: unicorns, ponies and rainbows. Ian was looking to finance UPR’s initial production run of the third game, Radical Rainbows at a rate of 7.5% or less.   The best deal offered by several banks had an APR of 8%. That was more than Ian was willing to pay and he felt there were other sources of financing that were less expensive.

As he had done for the first two games in the series: Unstable Unicorns and Perplexed Ponies, Ian turned to Kickstarter to finance the cost of the first production run of Radical Rainbows. Normally, UPR will be selling Radical Rainbows for $50 per game. UPR offered to sell Radical Rainbows to its Kickstarter backers for $45 per game.   The Kickstarter campaign was completed in two days, and on June 1, 2018 UPR received $225,000 in exchange for a promise to deliver 5000 games to its Kickstarter backers on December 1, 2019.  

At a manufacturing cost of $30 per game, UPR will be able to produce 7500 units with the $225,000 raised in the Kickstarter campaign. The 7500 games would be ready for shipment on December 1, 2019.

On June 1, 2018, UPR’s bookkeeper made the following entry to record the receipt of cash:

On December 1, 2019, UPR was able to deliver the 5000 board games to its Kickstarter backers. UPR also sold and delivered the additional 2500 games to other customers for the normal retail price of $50 per game. UPR’s bookkeeper made the following entries to record these transactions:

UPR used the $126,000 in cash available to UPR in December, 2019 to manufacture another 4200 board games. Those games were in finished goods inventory at December 31, 2019 and were sold in January, 2020 for $50 per game

UPR’s Financial Statements at December 31, 2019 and 2018 as prepared by UPR’s bookkeeper showed the following:

*You can assume that the Cash, Inventory, Common Stock and Cost of Goods Sold amounts as shown in both the journal entries and financial statements are correct.

Your analysis of this problem will involve using ASC 606 - Revenue from Contracts with Customers. UPR adopted ASC 606 when Ian formed the company in 2018. UPR has applied ASC 606 incorrectly.

You can assume that a contract is in place and that only one performance obligation exists: the delivery of the board game to the customer. Thus, determining the Transaction Price is the issue that needs to be addressed. The principles for the determining transaction prices can be found in ASC Subtopic 606-10-32-2 through 606-10-32-27. You may also want to refer to the illustrations (examples) contained in ASC 606. A list of the illustrations can be found at ASC Subtopic 606-10-55-93.

QUESTIONS TO BE ANSWERED

You must answer the following questions:

What are the additional entries or correct entries required on the following dates? If the entries made by the bookkeeper are correct, indicate “Bookkeeper made correct entry”. Otherwise use the Journal Entry template to record your answer and then paste into your answer.:

June 1, 2018

December 31, 2018 Adjusting Journal Entry

December 1, 2019

Use the attached Excel Template, show the corrected comparative Balance Sheet and Income Statement at December 31, 2019 and December 31, 2018.   Paste the template into your answer.

Using references to ASC 606 explain how your arrived at your answers in 1. And 2. Above.

From the point of view of a potential investor or lender to UPR, do the corrected financial statements or the original financial statements prepared by UPR’s bookkeeper better reflect the economics of UPR during its initial two years in business? Why?             

1) Under accrual basis accounting, we record revenue when ________.

A) cash is received from customers

B) cash is received for any reason

C) it meets the criteria for revenue recognition

D) a company receives cash from a customer on account

2) Under accrual basis accounting, we record expenses when ________.

A) a company pays cash to a supplier

B) a company incurs a liability

C) a company uses resources

D) a company pays cash to anyone

3) Which of the following is(are) a deficiency(deficiencies) of cash-basis accounting?

A) it omits key revenues and expenses from the balance sheet

B) it fails to match revenues and expenses to measure economic performance

C) it omits key assets and key liabilities from the balance sheet

D) B and C

4) In the United States, Generally Accepted Accounting Principles are developed primarily by ________.

A) International Accounting Standards Board

B) Financial Accounting Standards Board

C) Securities and Exchange Commission

D) International Accounting Federation

5) An audit guarantees that there are absolutely no mistakes in the financial statements. (T / F)

6) Generally Accepted Accounting Principles in the United States are developed by the International Accounting Standards Committee. (T / F)

Answer the following questions:

Q.1) Is collecting cash from customers accounts receivable an expense or revenue or neither ?

Q.2) Are cash receipts recorded as revenues?

Q.3) Is paying for accounts payable an expense?

Laundry detergent and bags of ice—products of industries that seem pretty mundane, maybe even boring. Hardly! Both have been the center of clandestine meetings and secret deals worthy of a spy novel. In France, between 1997 and 2004, the top four laundry detergent producers (Proctor & Gamble, Henkel, Unilever, and Colgate-Palmolive) controlled about 90 percent of the French soap market. Officials from the soap firms were meeting secretly, in out-of-the-way, small cafés around Paris. Their goals: Stamp out competition and set prices.

Around the same time, the top five Midwest ice makers (Home City Ice, Lang Ice, Tinley Ice, Sisler’s Dairy, and Products of Ohio) had similar goals in mind when they secretly agreed to divide up the bagged ice market.

If both groups could meet their goals, it would enable each to act as though they were a single firm—in essence, a monopoly—and enjoy monopoly-size profits. The problem? In many parts of the world, including the European Union and the United States, it is illegal for firms to divide up markets and set prices collaboratively.

These two cases provide examples of markets that are characterized neither as perfect competition nor monopoly. Instead, these firms are competing in market structures that lie between the extremes of monopoly and perfect competition. Discuss the market conditions based on the above scenario.

Q2. It’s no secret that small businesses play a vital role in the US economy. However, most non-employer small businesses average just $44,000 a year in annual revenue, with many of these companies earning $25,000 or less. While various factors can affect a business’ revenue potential, one of the most important is the pricing strategy utilized by its owners.

Good pricing strategy helps you determine the price point at which you can maximize profits on sales of your products or services. When setting prices, a business owner needs to consider a wide range of factors including production and distribution costs, competitor offerings, positioning strategies and the business’ target customer base.

While customers won’t purchase goods that are priced too high, your company won’t succeed if it prices goods too low to cover all of the business’ costs. Along with product, place and promotion, price can have a profound effect on the success of your small business.

Here are some of the various strategies that businesses implement when setting prices on their products and services. Analyze pricing strategies.

Denise is conducting a study related to consumer loyalty toward three different retail formats (i.e., department stores, specialty stores, and off-price retailers). After gathering background information, she decides to focus the study on three research streams; retail service quality, consumer satisfaction, and consumer loyalty. Denise is interested in identifying factors (i.e., retail service quality) that may contribute to consumer satisfaction and consumer loyalty toward these retailers. According to the literature, consumer satisfaction is a uni-dimensional construct and consumer loyalty consists of two dimensions; word-of-mouth and behavioral intention.

Hi! I am looking for a response regarding how best to identify factors that contribute to the two variables, customer satisfaction and customer loyalty in the following:

Construct the null and alternative hypothesis

What are the dependent and independent variables

What statistical test would you run in SPSS

A new project is expected to generate annual sales of $74 million, annual expenses of $42 million, and an annual depreciation expense of $10 million. The firm's tax rate is 35%. Calculate the OCF (Operating Cash flow) for the year by using any of the three methods discussed in the chapter 9

An experiment is conducted to determine if classes offered in an online format are as effective as classes offered in a traditional classroom setting. Students were randomly assigned to one of the two teaching methods. Data below.

a. Test the claim that the standard deviations for the two groups are equal. What is the p-value of the test?

b. Construct a 95% confidence interval on the difference in expected final exam scores between the two groups. Does the data support the claim that there is no difference?