Part 1

Calculate the missing values in the table below. Then answer the questions that follow it. GDP are in billions of dollars and the Consumer Price Index (CPI) is a percentage. CPI for 2001 is 98.6

Year Nominal GDP CPI RealGDP ri

2002 $10,469.58 Billion 100.0

2003 $10,971.34 Billion 102.3

2004 $11,734.30 Billion    105.0

2005 $12,601.00 Billion 108.6

All figures must be calculated to 2 decimal places and in the correct formats on a separate paper. You must show your work for all calculations in order to receive credit for the problem. DO NOT FILL IN THE TABLE. WORK PROBLEMS ON SEPARATE PAPER AND PRODUCE ANSWERS THERE!

a. Has there been any span of years, IN ONE YEAR INCREMENTS, within the table over which nominal GDP changed in one direction, but real GDP changed in the opposite direction? (Examples of what a span of years is, that are not included in this table would be 1990-1991 or 1996-1997.) Explain why or why not.

b. Has there been inflation over each span of years in the table? Explain why or why not.

Part 2

Exchange rate sample problems:

STARTING RATE LATER AFTER TIME HAS PASSED

a. Rate I: USD $1.54 = GBP £1.00 Rate II: USD $1.39 = GBP £1.00   PJeans (US Export) = USD $35.00 PSuit (UK Export) = £180.00

b. Rate I: USD $1.28 = EUR €1.00 Rate II: USD $1.45 = EUR €1.00

PDesk (US Export) = USD $345.00 PCoffee Maker (EU Export) = €50.00

c. Rate I: USD $1.00 = CNY 9.20元 Rate II: USD $1.00 = CNY 8.75 元

PBushel of Corn (US Export) = USD $45.00 PFlat-Screen TV (Chinese Export) = 12,500.00 元

Calculate the price of each nation’s exported good in terms of the other nation’s currency for BOTH EXCHANGE RATES (THERE WILL BE 4 CALCULATIONS IN EACH SECTION a, b, and c AS A RESULT). For Each Problem, based upon how the prices change from rate I to rate II, determine for each nation the impact on Net Export Spending,Total Spending, GDP, and AD. Make sure TO USE THE APPROPRIATE CURRENCY SYMBOLS FOR THE BRITISH POUND, THE EURO, AND THE CHINESE YUAN RENMINBI.

1. In November, Mazoon company., a merchandising company, had sales of $294,000, selling expenses of $27,000, and administrative expenses of $35,000. The cost of merchandise purchased during the month was $211,000. The beginning balance in the merchandise inventory account was $38,000 and the ending balance was $34,000.

Required:

Prepare a traditional format income statement for November.

2. Majan company shared the following data for a number of recent months:

Products Return

April 24 $2,972

May 23 $2,928

June 27 $3,141

July 39    $3,752

August 36   $3,569

September 35 $3,551

October   26 $3,071

November 37 $3,636

Required:
Estimate the variable cost per product return and the fixed cost per month using high-low method

A company in Melbourne sells merchandise to a company in Auckland on 3 November. The sales price is NZ$65 000 and the exchange rate on this date is A$1 = NZ$1.1. Settlement of the invoice is made by the New Zealand company in New Zealand dollars on 10 December when the rate of exchange is A$1 = NZ$1.40. On January 10, the rate of exchange is A$1 = NZ$1.2

Required

1. Give the entries in the books of the Australian company on the date of sale and date of settlement, prepared in accordance with the requirements of AASB 121.
2. Now assume that the Australian company’s reporting period ends on 31 December when the exchange rate is A$1 = NZ$1.40, and that the New Zealand company settles its account with the Australian company on 10 January. Show the closing entry as at 31 December and the settlement on 10 January in accordance with the requirements of AASB 121.
3. In your own words describe what you understand as the Functional Currency according to AASB121.

A company in Melbourne sells merchandise to a company in Auckland on 3 November. The sales price is NZ$65 000 and the exchange rate on this date is A$1 = NZ$1.1. Settlement of the invoice is made by the New Zealand company in New Zealand dollars on 10 December when the rate of exchange is A$1 = NZ$1.40.

Required

1. Give the entries in the books of the Australian company on the date of sale and date of settlement, prepared in accordance with the requirements of AASB 121.
2. Now assume that the Australian company’s reporting period ends on 31 December when the exchange rate is A$1 = NZ$1.40, and that the New Zealand company settles its account with the Australian company on 10 January. Show the closing entry as at 31 December and the settlement on 10 January in accordance with the requirements of AASB 121.
3. In your own words describe what you understand as the Functional Currency according to AASB121

It is not uncommon to see that alumni often give back to their schools. The question is, what factors influence their gratitude and goodwill and play an important role in them deciding how much to contribute? A sample of some top universities has been analyzed to determine if there is a relationship between the Alumni Giving rate (percentage of alumni who give) and factors like Graduation rate (percentage), % of class Under 20, and Student / Faculty ratio. Run a regression model to determine the relationship.  Answer the following questions based on the Excel table.    

School   State     Graduation Rate   % of Classes Under 20   Student / Faculty Ratio   Alumni Giving Rate
Boston College   MA   85   39   13   25%
Brandeis University    MA   79   68   8   33%
Brown University   RI   93   60   8   40%
California Institute of Technology   CA   85   65   3   46%
Carnegie Mellon University   PA   75   67   10   28%
Case Western Reserve University   OH   72   52   8   31%
College of William and Mary   VA   89   45   12   27%
Columbia University   NY   90   69   7   31%
Cornell University   NY   91   72   13   35%
Dartmouth College   NH   94   61   10   53%
Duke University   NC   92   68   8   45%
Emory University   GA   84   65   7   37%
Georgetown University   DC   91   54   10   29%
Harvard University   MA   97   73   8   46%
John Hopkins University   MD   89   64   9   27%
Lehigh University   PA   81   55   11   40%
Massachusetts Inst. of Technology   MA   92   65   6   44%
New York University   NY   72   63   13   13%
Northwestern University   IL   90   66   8   30%
Pennsylvania State University   PA   80   32   19   21%
Princeton University   NJ   95   68   5   67%
Rice University   TX   92   62   8   40%
Stanford University   CA   92   69   7   34%
Tufts University   MA   87   67   9   29%
Tulane University   LA   72   56   12   17%
U. of California-Berleley   CA   83   58   17   18%
U. of California-Davis   CA   74   32   19   7%
U. of California-Irvine   CA   74   42   20   9%
U. of California-Los Angeles   CA   78   41   18   13%
U. of California-San Diego   CA   80   48   19   8%
U. of California-Santa Barbara   CA   70   45   20   12%
U. of Chicago   IL   84   65   4   36%
U. of Florida   FL   67   31   23   19%
U. of Illinois-Urbana Champaign   IL   77   29   15   23%
U. of Michigan-Ann Arbor   MI   83   51   15   13%
U. of North Carolina-Chapel Hill   NC   82   40   16   26%
U. of Notre Dame   IN   94   53   13   49%
U. of Pennsylvania   PA   90   65   7   41%
U. of Rochester   NY   76   63   10   23%
U. of Southern California   CA   70   53   13   22%
U. of Texas-Austin   TX   66   39   21   13%
U. of Virginia   VA   92   44   13   28%
U. of Washington   WA   70   37   12   12%
U. of Wisconsin-Madison   WI   73   37   13   13%
Vanderbuilt University   TN   82   68   9   31%
Wake Forest University   NC   82   59   11   38%
Washington University - St. Louis   MO   86   73   7   33%
Yale University   CT   94   77   7   50%
1.  Do you think this model is good?  That is, do you see an evidence of relationship? Pick the right option.  
2. What proportion of the variation in Alumni giving is explained by the three variables?
3. Suggest 2 variables (reasons) not in the table that can also be affecting the alumni giving rate.   
3. The coefficient for student / faculty ratio is negative in Excel output.  Give a reason as to why this is the case.  
5.  Find the alumni giving rate for Carnegie-Mellon from the table.  Compare this to your results in Q4.  What is the residual (error)?  

scholars increasingly view technological change at work as social (and managerial) processes in which social agency – in the form of workplace cultures, structures, and politics – shapes how technology is designed, implemented, and used’ (Badham, 2005: 1155)

a. In view of the above observation, propose how technology change today is affecting or can affect the culture of the organisation you work with.

b. What practical considerations should your organisation make to protect its interest.

Use the information below to answer questions 25-30.

Aggie Oil owns a 100% WI in Lease A.Lease A is burdened with a 1/6 royalty.During the month of October, Aggie Oil estimated a total of 10,000 barrels of oil were produced and sold.Assume the selling price of the oil was $80/bbl and the production tax was 5%.

Additionally, Aggie Oils books estimates until actual can be obtained at settlement.Settlement typically occurs two months after the sale.Upon settlement, Aggie Oil determined that 9,000 volumes were sold in October.Assume Aggie Oil distributes all royalty and tax payments.

25. During which month will you initially record revenue related to this sale (type out the whole month; do not abbreviate)?

QUESTION 26

During which month should cash received be recorded for this sale?

QUESTION 27

In December, determine the amount of serverance tax payable to be reversed from the October estimates.

QUESTION 28

In December, determine the amount of LOE for production (severance) tax to be reversed from the October estimates.

QUESTION 29

In December, determine the amount of oil revenue to be recorded for actuals from the October sale.

QUESTION 30

In December, determine the amount of royalty payable to be recorded for actuals from the October sale.

The Economic Growth​ Model's Prediction of​ Catch-Up

The economic growth model makes predictions about an​ economy's initial level of real GDP per capita relative to other economies and how fast the economy will grow in the future.

a. Consider the statistics in the following table. Are these statistics consistent with the economic growth​ model? Briefly explain.

b. Now consider the statistics in the following table. Are these statistics consistent with the economic growth​ model? Briefly explain.

c. Construct a new table that lists all nine​ countries, from the lowest real GDP per capita in 1960 to the​ highest, along with their growth rates. Are the statistics in your new table consistent with the economic growth​ model?

Discuss the basic accounting problem that arises in handling each of the following situations.

(a) Assets purchased by issuance of capital stock.

(b) Acquisition of plant assets by gift or donation.

(c) Purchase of a plant asset subject to a cash discount.

(d) A group of assets acquired for a lump sum.

(e) An asset traded in or exchanged for another asset.

Suppose you have a demand curve of P = 10 - Q and a supply curve of P = 2 + Q. If the government imposes a tax of $8 per unit of quantity sold on the sellers in this market, then what is the market quantity traded as a result of the tax? Then, what are the consumer surplus, producer surplus, and deadweight loss (after the $8 tax)?