Calculate Payroll

Breakin Away Company has three employees—a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee:

For the current pay period, the computer programmer worked 50 hours and the administrator worked 48 hours. The federal income tax withheld for all three employees, who are single, can be determined from the wage bracket withholding table in Exhibit 2. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and one withholding allowance is $75.

Determine the gross pay and the net pay for each of the three employees for the current pay period. If required, round your answers to two decimal places.

1. You are given the table below which contains sales figures for three industries.

Firm                Industry1        Industry2        Industry3

A                     $450                $800                $200

B                     $200                $50                  $200

C                     $150                $25                  $200

D                     $100                $25                  $200

E                     $50                  $20                  $200

All Others       5X$10            2X$40             $0

Figures in millions of current dollars.

Note that, 5X$10 in all others category for Industry 1 means 5 firms each having 10 (millions of) dollars sales figures. All others category in Industry2 should be similarly interpreted

a) Compute the 4-firm concentration ration (C4) for each industry. What does this index have to say about which industry is most concentrated?

b) Compute the Herfindahl-Hirschman Index (HHI) for each industry. What does this index have to say about which industry is most concentrated?

c) Why do you think the HHI does a better job than C4 of measuring industry concentration? Give two reasons for your answer and illustrate each one by reference to the above table.

d) In the end, which industry would you describe as the most concentrated?

The following data for Throwback Industries Inc. relate to the payroll for the week ended December 9, 20Y8:

Employees Mantle and Williams are office staff, and all of the other employees are sales personnel. All sales personnel are paid 1½ times the regular rate for all hours in excess of 40 hours per week. The social security tax rate is 6.0%, and Medicare tax is 1.5% of each employee’s annual earnings. The next payroll check to be used is No. 901.

NOK/NZD swap arrangements

(a) You are CFO for a company that borrows NOK 100M at 10% for seven years, and you swap the load into NZD at a spot rate of NOK/NZD 4 and the sevenyear swap rates of 7% (NZD) and 8% (NOK). What are the payments on the loan, on the swap, and on the combination of them? Is there a gain if you could have borrowed NZD at 9%?

(b) The swap now has three years to go and your CEO asks you to estimate the value of the swap contract. To recap, your company has now an outstanding fixed-for-fixed NOK/NZD swap for NOK 100M based on the historic spot rate of NOK/NZD 4 and initial swap rates of 7% (NZD) and 8% (NOK). With three years to go and current rates at NOK/NZD 4.5, 6% (NZD) and 5% (NOK). What is the market value of the swap contract?

(c) Use the same data as in the previous part, except that now the NZD leg is a floating rate. The rate has just been reset. What is the market value of the swap?

Visit the NASDAQ historical prices weblink. First, set the date range to be for exactly 1 year ending on the Monday that this course started. For example, if the current term started on April 1, 2018, then use April 1, 2017 – March 31, 2018. (Do NOT use these dates. Use the dates that match up with the current term.) Do this by clicking on the blue dates after “Time Period”. Next, click the “Apply” button. Next, click the link on the right side of the page that says “Download Data” to save the file to your computer.

This project will only use the Close values. Assume that the closing prices of the stock form a normally distributed data set. This means that you need to use Excel to find the mean and standard deviation. Then, use those numbers and the methods you learned in sections 6.1-6.3 of the course textbook for normal distributions to answer the questions. Do NOT count the number of data points.

Complete this portion of the assignment within a single Excel file. Show your work or explain how you obtained each of your answers. Answers with no work and no explanation will receive no credit.

1. a) Submit a copy of your dataset along with a file that contains your answers to all of the following questions.

b) What the mean and Standard Deviation (SD) of the Close column in your data set?

c) If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at less than the mean for that year? Hint: You do not want to calculate the mean to answer this one. The probability would be the same for any normal distribution.

2. If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at more than $950?
3. If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed within $50 of the mean for that year? (between 50 below and 50 above the mean)
4. If a person bought 1 share of Google stock within the last year, what is the probability that the stock on that day closed at less than $800 per share. Would this be considered unusal? Use the definition of unusual from the course textbook that is measured as a number of standard deviations
5. At what prices would Google have to close in order for it to be considered statistically unusual? You will have a low and high value. Use the definition of unusual from the course textbook that is measured as a number of standard deviations
6. What are Quartile 1, Quartile 2, and Quartile 3 in this data set? Use Excel to find these values. This is the only question that you must answer without using anything about the normal distribution.
7. Is the normality assumption that was made at the beginning valid? Why or why not? Hint: Does this distribution have the properties of a normal distribution as described in the course textbook? Real data sets are never perfect, however, it should be close. One option would be to construct a histogram like you did in Project 1 to see if it has the right shape. Something in the range of 10 to 12 classes is a good number.

Suppose an initially empty stack S has performed a total of 15 push operations, 12 top operations, and 13 pop operations ( 3 of which returned null to indicate an empty stack ). What is the current size of S?

Question 1 options:

Question 2 (1 point)

Saved

What values are returned during the following series of stack operations, if executed upon an initially empty stack? push(5), push(3), pop(), push(2), push(8), pop(), pop(), push(9), push(1), pop(), push(7), push(6), pop(), pop(), push(4), pop(), pop().

seperate by commas ie: 1, 2, 3, 4, 5, 6, 7, 8, 9

Question 2 options:

Question 3 (1 point)

Saved

What values are returned during the following sequence of queue operations, if executed on an initially empty queue? enqueue(5), enqueue(3), dequeue(), enqueue(2), enqueue(8), dequeue(), dequeue(), enqueue(9), enqueue(1), dequeue(), enqueue(7), enqueue(6), dequeue(), dequeue(), enqueue(4), dequeue(), dequeue().

seperate by commas ie: 1, 2, 3, 4, 5, 6, 7, 8, 9

Question 3 options:

Question 4 (1 point)

Saved

What values are returned during the following sequence of deque ( double ended queue ) ADT operations, on an initially empty deque? addFirst(3), addLast(8), addLast(9), addFirst(1), last( ), isEmpty( ), addFirst(2), removeLast( ), addLast(7), first( ), last( ), addLast(4), size( ), removeFirst( ), removeFirst( ).

seperate by commas ie: 1, 2, 3, 4, 5, 6, 7, 8, 9

Question 4 options:

Question 5 (1 point)

Saved

Suppose an initially empty queue Q has performed a total of 30 enqueue operations, 10 first operations, and 15 dequeue operations, 5 of which returned null to indicate an empty queue. What is the current size of Q?

Question 5 options:

At the Three Little Pigs Processing Plant, the cooling step is a CCP and the critical limit is 1.5 hours to get from 130 to 80°F. Develop a corrective action record for the following deviation, a monitor finds one lot of hot dogs required 3 hours to cool from 130 to 80F. Detail what you have to/would do - be as detailed as possible.

The Harding Corporation has $50 million of bonds outstanding that were issued at a coupon rate of 10.25 percent seven years ago. Interest rates have fallen to 9 percent. Preston Alter, the vice-president of finance, does not expect rates to fall any further. The bonds have 18 years left to maturity, and Preston would like to refund the bonds with a new issue of equal amount also having 18 years to maturity. The Harding Corporation has a tax rate of 25 percent. The underwriting cost on the old issue was 2.5 percent of the total bond value. The underwriting cost on the new issue will be 1.8 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with an 8 percent call premium starting in the sixth year and scheduled to decline by one-half percent each year thereafter (Consider the bond to be seven years old for purposes of computing the premium). Use Appendix D. (Round "PV factor" to 3 decimal places.)

a. Compute the discount rate. (Round the final answer to 2 decimal places.)

Discount rate            6.75 6.75 Correct %

b. Calculate the present value of total outflows. (Do not round intermediate calculations. Enter the answers in whole dollars, not in millions. Round the final answer to nearest whole dollar.)

Total outflows           $ 3436284 3436284 Incorrect

c. Calculate the present value of total inflows. (Do not round intermediate calculations. Enter the answers in whole dollars, not in millions. Round the final answer to nearest whole dollar.)

Total inflows           $ 4801477 4801477 Correct

d. Calculate the net present value. (Do not round intermediate calculations. Round the final answer to nearest whole dollar.)

Net present value           $ Not attempted

e. Should the Harding Corporation refund the old issue?

• Yes

• No

The Harding Corporation has $50 million of bonds outstanding that were issued at a coupon rate of 10.25 percent seven years ago. Interest rates have fallen to 9 percent. Preston Alter, the vice-president of finance, does not expect rates to fall any further. The bonds have 18 years left to maturity, and Preston would like to refund the bonds with a new issue of equal amount also having 18 years to maturity. The Harding Corporation has a tax rate of 25 percent. The underwriting cost on the old issue was 2.5 percent of the total bond value. The underwriting cost on the new issue will be 1.8 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with an 8 percent call premium starting in the sixth year and scheduled to decline by one-half percent each year thereafter (Consider the bond to be seven years old for purposes of computing the premium). Use Appendix D. (Round "PV factor" to 3 decimal places.) a. Compute the discount rate. (Round the final answer to 2 decimal places.) Discount rate 6.75 6.75 Correct % b. Calculate the present value of total outflows. (Do not round intermediate calculations. Enter the answers in whole dollars, not in millions. Round the final answer to nearest whole dollar.) Total outflows $ 3436284 3436284 Incorrect c. Calculate the present value of total inflows. (Do not round intermediate calculations. Enter the answers in whole dollars, not in millions. Round the final answer to nearest whole dollar.) Total inflows $ 4801477 4801477 Correct d. Calculate the net present value. (Do not round intermediate calculations. Round the final answer to nearest whole dollar.) Net present value $ Not attempted e. Should the Harding Corporation refund the old issue? Yes No The The Harding Corporation has $50 million of bonds outstanding that were issued at a coupon rate of 10.25 percent seven years ago. Interest rates have fallen to 9 percent. Preston Alter, the vice-president of finance, does not expect rates to fall any further. The bonds have 18 years left to maturity, and Preston would like to refund the bonds with a new issue of equal amount also having 18 years to maturity. The Harding Corporation has a tax rate of 25 percent. The underwriting cost on the old issue was 2.5 percent of the total bond value. The underwriting cost on the new issue will be 1.8 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with an 8 percent call premium starting in the sixth year and scheduled to decline by one-half percent each year thereafter (Consider the bond to be seven years old for purposes of computing the premium). Use Appendix D. (Round "PV factor" to 3 decimal places.) a. Compute the discount rate. (Round the final answer to 2 decimal places.) Discount rate 6.75 6.75 Correct % b. Calculate the present value of total outflows. (Do not round intermediate calculations. Enter the answers in whole dollars, not in millions. Round the final answer to nearest whole dollar.) Total outflows $ 3436284 3436284 Incorrect c. Calculate the present value of total inflows. (Do not round intermediate calculations. Enter the answers in whole dollars, not in millions. Round the final answer to nearest whole dollar.) Total inflows $ 4801477 4801477 Correct d. Calculate the net present value. (Do not round intermediate calculations. Round the final answer to nearest whole dollar.) Net present value $ Not attempted e. Should the Harding Corporation refund the old issue? Yes No

Two stars of mass M_?1 and M_?2<M_?1 are orbiting eachother in a circular orbit. The heavy star experiences a supernova explosion, losing most of its mass in a spherically symmetric outflow (i.e. without losing angular momentum) and leaving behind a small neutron star of mass M??_NS. Show that if the mass lost is larger then half of the total mass of the system, the binary is disrupted.

4-22 (Objectives 4-5 , 4-7) Each of the following situations involves a possible violation of the AICPA Code of Professional Conduct. For each situation, state the applicable rule of conduct and whether it is a violation.

1. Emrich, CPA, provides tax services, management advisory services, and bookkeeping services and also conducts audits for the same nonpublic client. Because the firm is small, the same person often provides all the services.

2. Steve Custer, CPA, set up a casualty and fire insurance agency to complement his auditing and tax services. He does not use his own name on anything pertaining to the insurance agency and has a highly competent manager, Jack Long, who runs it. Custer often requests Long to review the adequacy of a client’s insurance with management if it seems underinsured. He believes that he provides a valuable service to clients by informing them when they are underinsured.

3. Seven small Seattle CPA firms have become involved in an information project by taking part in an interfirm working paper review program. Under the program, each firm designates two partners to review the audit files, including the tax returns and the financial statements, of another CPA firm taking part in the program. At the end of each review, the auditors who prepared the working papers and the reviewers have a conference to discuss the strengths and weaknesses of the audit. They do not obtain authorization from the audit client before the review takes place.

4. Franz Marteens is a CPA, but not a partner, with three years of professional experience with Roberts and Batchelor, CPAs. He owns 25 shares of stock in an audit client of the firm, but he does not take part in the audit of the client, and the amount of stock is not material in relation to his total wealth.

5. A nonaudit client requests assistance of M. Wilkenson, CPA, in the installation of a local area network. Wilkenson has no experience in this type of work and no knowledge of the client’s computer system, so he obtains assistance from a computer consultant. The consultant is not in the practice of public accounting, but Wilkenson is confident of his professional skills. Because of the highly technical nature of the work, Wilkenson is not able to review the consultant’s work.

6. In preparing the personal tax returns for a client, Sarah Milsaps, CPA, observed that the deductions for contributions and interest were unusually large. When she asked the client for backup information to support the deductions, she was told, “Ask me no questions, and I will tell you no lies.” Milsaps completed the return on the basis of the information acquired from the client.

7. Roberta Hernandez, CPA, serves as controller of a U.S.-based company that has a significant portion of its operations in several South American countries. Certain government provisions in selected countries require the company to file financial statements based on international standards. Roberta oversees the issuance of the company’s financial statements and asserts that the statements are based on international financial accounting standards; however, the standards she uses are not those issued by the International Accounting Standards Board.

8. Archer Ressner, CPA, stayed longer than he should have at the annual holiday party of Ressner and Associates, CPAs. On his way home he drove through a red light and was stopped by a police officer, who observed that he was intoxicated. In a jury trial, Ressner was found guilty of driving under the influence of alcohol. Because this was not his first offense, he was sentenced to 30 days in jail and his driver’s license was revoked for one year.