Broussard Skateboard's sales are expected to increase by 25% from $8.0 million in 2019 to $10.00 million in 2020. Its assets totaled $2 million at the end of 2019. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 3%, and the forecasted payout ratio is 55%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.

Broussard Skateboard's sales are expected to increase by 25% from $8.8 million in 2019 to $11.00 million in 2020. Its assets totaled $2 million at the end of 2019.

Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 60%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.

WHICH STORE SHOULD BE CLOSED AND WHY?

Simple Regression Models Case Study: Mystery Shoppers

Chic Sales is a high-end consignment store with several locations in the metro area. The company noticed a decrease in sales over the last fiscal year. Research indicated customer satisfaction had decreased and the owner, Pat Turner, decided to create a mystery shopper program.

The mystery shopper program lasted over a 6-month period, employing several loyal and new customers assigned to each location. Surveys were on a 100-point scale and involved categories such as “Staff Attitude,” “Store Cleanliness,” “Product Availability,” and “Display(s) Appeal.”

After the mystery shopper period concludes, Mrs. Turner sends you the following e-mail:

From: Pat Turner
Sent: Thursday, July 7, 2016 8:57 a.m.
Subject: Mystery Data Shopper Stats and Store Performance?

Good morning! Welcome back from vacation J I hope you had a wonderful Fourth of July.

The last mystery shopper surveys came in and I have the final numbers. I am interested in whether there is a way to predict the final average based on the initial survey score. Also, is there a statistically significant relationship between how stores initially performed and what the overall average is?

The initial survey score and the final average data for all seven store locations is in the table below:

Also, how good is the relationship between Initial Survey Score and the Final Average? Could I use an Initial Survey Score to predict a Final Average? In fact, could I predict a Final Average if I have an Initial Survey Score of 90?

If you could have this to me before the weekend, that would be great.

Thanks so much!

Pat Turner, Owner

Chic Sales Consignment, LLC

1.          What is the amount of Taxpayer’s interest deduction that would be allowable for the current year assuming Taxpayer incurred the following, and assuming that Taxpayer itemizes deductions?

a.             $27,000

b.             $6,000

c.             $27,500

d.             $21,000

2.         On April 10, 2018 Cathy closed on the purchase of a house (her principal residence) that cost $2,000,000, paying $500,000 down and borrowing the other $1,500,000 at 5% interest. If her interest expense for the year is $75,000, what amount may Cathy deduct for interest expense?

a.             $75,000

b.             $50,000

c.             $37,500

d.             $0

3.          Assume the following taxes are paid by the Taxpayer in 2018: real estate taxes on Taxpayer’s home in the amount of $2,000; state income taxes in the amount of $4,500; city sales tax in the amount of $2,800; state sales taxes of $210 paid while on vacation to states other than the state in which Taxpayer resides; state gasoline tax (personal use of automobile) in the amount of $400; dog licenses in the amount of $20; and real estate taxes on the home of and owned by Taxpayer’s mother in the amount of $1,450. Assuming also that Taxpayer itemizes deductions on Taxpayer’s 2018 Federal income tax return, the allowable amount of Taxpayer’s deduction for taxes is which of the following?

a.             $9,960

b.             $6,500

c.             $9,510

d.             $10,380

4.          Taxpayer purchased a personal residence in 2017 for $266,000. The fair market value of the residence was $280,000 when it was damaged by a flood on June 10, 2018 that resulted from not turning off the bath water before leaving for vacation. The fair market value of the residence after the flood was $240,000 and insurance proceeds totaled $15,000. What is the net amount of casualty loss Taxpayer may deduct for 2018 as an itemized deduction if Taxpayer’s adjusted gross income is $120,000?

a.             0

b.             $25,000

c.             $24,900

d.             $8,500

e.             $12,900

Variable Costing, Absorption Costing

During its first year of operations, Snobegon, Inc. (located in Lake Snobegon, Minnesota), produced 40,600 plastic snow scoops. Snow scoops are oversized shovel-type scoops that are used to push snow away. Unit sales were 38,600 scoops. Fixed overhead was applied at $0.75 per unit produced. Fixed overhead was underapplied by $2,700. This fixed overhead variance was closed to Cost of Goods Sold. There was no variable overhead variance. The results of the year’s operations are as follows (on an absorption-costing basis):

Required:

1. Calculate the cost of the firm’s ending inventory under absorption costing. Round unit cost to five decimal places. Round your final answer to the nearest dollar.
$

Feedback

Determine the number of units in ending inventory first. Calculate unit cost after determining unadjusted COGS (before adjustment for underapplied fixed overhead).

What is the cost of the ending inventory under variable costing? Round unit cost to five decimal places. Round your final answer to the nearest dollar.
$

Feedback

Take unit cost under absorption less fixed overhead amount per unit to get variable cost per unit for variable costing.

2. Prepare a variable-costing income statement. Round the unit cost to five decimal places, when required. Round your final answers to the nearest dollar. Use the rounded values in subsequent computations.

Feedback

Use a contribution margin format income statement that groups costs according to behavior (variable and fixed)

What is the difference between the two income figures?
$

1. If we use symbol U_sys to represent the energy (also referred as internal energy) contained in the system, what is a reasonable symbol to represent the energy of the surroundings? Provide an expression relating the total energy of the Universe, U_univ to the energy of the system and energy of the surroundings? Explain your answer

2. Now consider the system undergoes a process, let DU_sys represent the change in system’s energy, DU_univ represents the change in energy of the universe. Provide an expression for DU_univ in terms of energy change of the system and the surrounding. Explain your answer.

3. Consider your answer in (2), what would be the reasonable sign for DU_univ? Explain.

4. Consider your answer in (2), what would be the reasonable sign for DU_sys? Explain

5. Let q and w represent two ways to exchange energy between system and surrounding. What is a reasonable expression that relates the internal energy change DU_sys with q and w?

6. Consider burning of propane gas (propane and oxygen gases are our interested system), is this an exothermic reaction? What is the sign of q? what is the sign of DU_sys ? Describe in your own words what happened to the internal energy of the system?

7. Identify each energy exchange as heat or work and determine the sign of heat or work is positive or negative

(a) An ice cube melts and cools the surrounding beverages (ice cube is the system here)

(b) A metal cylinder is rolled up a ramp (the metal cylinder is the system)

(c) Steam condenses on skin causing a burn (the condensing steam is the system)

8. Consider a closed container that contains some hydrogen gas (H₂) and oxygen gas (O₂). These gases reacted (burned) and formed water vapor.

(a) Write a balanced chemical equation to represent this process (reaction)

(b) Do you expect this is an exothermic or endothermic reaction? What is the sign of q?

(c)What is the sign of internal energy change DU for this reaction?

(d) List the types of energy stored in the system before and after reactions. How do you explain the sign of internal energy DU observed in part (c)?

Let me know if the Adjusted trial balance on December 31, 20X6 is needed to answer the below as I can provide it. Thank you!

Questions 4 through 10 are based on the following December 31, 20X6 year-end account balances for XYZ Co. after adjusting entries had been prepared but before the books were closed for the year.                                                 

                Cash……………..…………………………….250,000

                Accounts receivable…………………….……..680,000

                Marketable securities…………………………...60,000

                Prepaid insurance……………………………….35,000

                Prepaid rent….………………………………….30,000

                Office equipment…………………………….....620,000

                Accumulated depreciation: equipment………...200,000

                Land……………………………………………750,000

                Accounts payable………………………………306,000

                Dividends payable……………………………… 50,000

                Interest payable…………………………………... 8,750

                Income tax payable……………………………...30,000

                Unearned client service revenue………………..180,000

                Notes payable (long-term).……………………..350,000

                Common stock………………………………….750,000

                Retained earnings….…………………………....315,200

                Dividends…………………………………….......75,000

                Client service revenue………………………...1,200,000

                Travel expense………………………………..…..28,000

                Office supplies expense…………………………..20,000

                Advertising expense………………………………45,000

                Salary expense…………………………………...400,000

                Utility expense………………………………….....40,000

                Depreciation expense: equipment…………………25,000

                Interest expense……………………………….…...17,500

                Insurance expense……………………………….....52,000

                Rent expense……………………………………..175,000

                Income tax expense………………………………..87,450

Using the data for question 4, prepare the income statement for the year ended December 31, 20X6.  Attach your response in an excel or word file.

Using the data from Question 4, Prepare the statement of retained earnings for the year ended December 31, 20X6. Attach your response in an excel or word file.

Using the data in Question 4,  Prepare the statement of financial position as of December 31, 20X6. Attach your response in an excel or word file.

1. Using the data in Question 4, Determine the working capital on December 31, 20X6.

   	a.	$350,756
   	b.	$480,250
   	c.	$580,520
   	d.	$574,750

1. Using data from Question 4,  Determine the current ratio on December 31, 20X6.

   	a.	1.8356
   	b.	3.4781
   	c.	2.8749
   	d.	1.1355

1. Based on data from Question 4,  Determine the acid-test (quick) ratio on December 31, 20X6.

   	a.	4.5586
   	b.	2.5000
   	c.	1.7225
   	d.	3.6752

Use the following information to answer questions 1-5.

The Aggie Graphics Company was organized on January 1, 2017.

The trial balance before adjustment at December 31, 2017 contained the following account balances:

Analysis reveals the following additional data: (Assume the books are only closed at year end)

(A)    The $2,700 balance in Supplies Expense represents supplies purchased in January. At December 31,  there was $1,200 of supplies on hand.

(B)    The note payable was issued on September 1. It is a 3% 6-month note.

(C)    The balance in Prepaid Insurance is the premium paid on a one-year policy, dated March 1, 2017.

(D)    Consulting Fees are credited to revenue when received. At December 31, consulting fees of $1,000 contracted for January, 2017 have yet to be performed.

(E)    The equipment was purchased on January 1, 2017. It has a 10-year useful life and no salvage value.

The entry to record (A) above would include a debit to: (Assume the company is only making one adjusting entry to record this information)

1 points   

QUESTION 2

What is the balance in the interest payable account after adjustment?

1 points   

QUESTION 3

The correct entry to record (E) above is:

In recent years, professional sports have incorporated the use of instant replay in order to dispute questionable calls by the referees. For example, in the National Basketball Association (NBA) a head coach is allowed to challenge the referees’ decision on whether a shot was made before time expired in the game. In order for the referees to reverse their original decision, the instant replay must exhibit clear evidence to the contrary.

Suppose the referees rule that the last shot of the game was made after the clock had expired. The coach of the team that made the shot believes the shot was made before time had expired, and the coach challenges the referees’ decision.

The referees will review all available evidence (video taken from different camera angles) and make a decision. If there is evidence beyond a reasonable doubt that their original call was incorrect, the basket will count. However, if there is no clear evidence to contradict the original call, the basket won’t count.

Notice the similarity between the decision to change a call and the decision to reject the null hypothesis in a hypothesis test. The process involves collecting convincing evidence that the original call or the null hypothesis is not true. The referee only rejects the call if the instant replay exhibits clear evidence to the contrary, just as a researcher only rejects the null hypothesis if the study results provide clear evidence to the contrary. In both cases, not changing the call and not rejecting the null hypothesis doesn’t mean that the original call or the null hypothesis was correct; it means that not enough evidence was provided to the contrary.

To formulate the process as a hypothesis test, the null hypothesis is that the player   , and the alternative hypothesis is that the player   . The testing procedure then assumes that the player   , with a goal of determining whether there is enough evidence to infer that the player   .

After the referees review video of all possible camera angles, according to the process of a hypothesis test, what two possible decisions can the referees make? (Hint: Remember that there are two possible decisions from a hypothesis test: you can either reject the null hypothesis or fail to reject the null hypothesis. Rejecting the null hypothesis means you have convincing evidence that the null hypothesis is false and the alternative hypothesis is true. Failing to reject the null means you do not have convincing evidence that the null hypothesis is false.) Check all that apply.

Conclude that the player made the shot after time expired

Conclude that they have convincing evidence to support the hypothesis that the player made the shot before time expired

Conclude that they have convincing evidence to support the hypothesis that the player made the shot after time expired

Conclude that they do not have convincing evidence to support the hypothesis that the player made the shot after time expired

Conclude that they do not have convincing evidence to support the hypothesis that the player made the shot before time expired

A Type I error occurs when you   a   null hypothesis. In this case, a Type I error corresponds to the referees concluding that they   evidence to support the hypothesis that the player   when the player actually   .

A Type II error occurs when you   a   null hypothesis. In this case, a Type II error corresponds to the referees concluding that they   evidence to support the hypothesis that the player   when the player actually   .

Create a PowerPoint Presentation that includes a capital budget analysis, an interpretation of the analysis, and your recommended strategy for the Deluxe Corporation.

Deluxe Corporation is a large chain of retail stores operating in the USA. It sells top-of the- range, expensive clothes to a wealthy clientele throughout the country. Currently, Deluxe only operates in the USA. Its current market capitalization is $760 million and the current market value of debt is $350 million.

At last month’s management meeting the marketing director explained that sales volume had increased slightly in the previous year, largely due to heavy discounting in most of its stores. The finance director expressed concern that such a strategy might damage the image of the company and reduce profits over the longer term.

An alternative strategy to increase sales volume has recently been proposed by the marketing department. This would involve introducing a new range of clothing specifically aimed at the middle-income market. The new range of clothing would be expected to be attractive to consumers in Canada and Europe.

Assume your represent the financial management of Deluxe and have been asked to evaluate the marketing department’s proposal to introduce a new range of clothing. An initial investigation into the potential markets has been undertaken by a firm of consultants at a cost of $100,000 but this amount has not yet been paid. It is intended to settle the amount due in three months’ time. With the help of a small multi-department team of staff you have estimated the following cash flows for the proposed project:

• The initial investment required would be $46 million: This comprises $30 million for fixed assets and $16 million for net current assets (working capital).

• For accounting purposes, fixed assets are depreciated on a straight line basis over three (3) years after allowing for a residual value of 10%.

• The value of net current assets at the end of the evaluation period can be assumed to be the same as at the start of the period.

• Earnings before taxes are forecast to be $14 million in 2018, $17million in 2019 and $22 million in 2020.

The following information is also relevant:

The proposed project is to be evaluated over a three-year time horizon. The firm uses Net Present Value and Internal Rate of Return methods to evaluate projects.

Deluxe usually evaluates its investments using an after-tax discount rate of 8%. The proposed project is considered to be riskier than average and so a risk-adjusted rate of 9% will be used for this project.

Corporate tax is 25%.

Ignore inflation.

Prepare a Sensitivity Risk Analysis with the following variables: Earnings Before Taxes, Project Discount Rate, and Tax Rate. Your margins of variance are plus/ minus 10%, 20%, 30%.

Your Sensitivity work should include a graph analysis.

***What would you recommend provide capital budget analysis, risk analysis, SWOT analysis, as part of your evaluation.***