Creative Computing sells a tablet computer called the Protab. The $830 sales price of a Protab Package includes the following:

• One Protab computer.
• A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months.
• A coupon to purchase a Creative Probook e-book reader for $360, a price that represents a 50% discount from the regular Probook price of $720. It is expected that 25% of the discount coupons will be utilized.
• A coupon to purchase a one-year extended warranty for $55. Customers can buy the extended warranty for $55 at other times as well. Creative estimates that 40% of customers will purchase an extended warranty.
• Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $810.

All Protab sales are made in cash.

Required:
1. & 2. Indicated below whether each item is a separate performance obligation and allocate the transaction price of 90,000 Protab Packages to the separate performance obligations in the contract.
3. Prepare a journal entry to record sales of 90,000 Protab Packages (ignore any sales of extended warranties).

Indicated below whether each item is a separate performance obligation and allocate the transaction price of 90,000 Protab Packages to the separate performance obligations in the contract.

part 1 & 2

Prepare a journal entry to record sales of 90,000 Protab Packages (ignore any sales of extended warranties). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

part 3

Question 1(a) “Chain Saw”AL and Sunbeam (1995-1998)AL Dunlop was proud of the fact that he was at the bottom of his West Point class (he did graduate). Afrightening thought worthy of Dr.Strangelove is that as an officer he was assigned to a missile silo and the missiles were armed with nuclear weapons.He was chosen to turn around Scott Paper company. Within six months he had dismissed 11,200 employees including 50 percent of all managers and 70 percent of all corporate staff and paid off a significant amount of Scott’s long term debt. He then sold the company to Kimberly-Clark making over $100 million from his stock options.In the spring of 1995 AL Dunlop gave a talk at the Johnson School in Professor Bierman’s finance course. He received a standing ovation for his talk which stressed that managers should increase shareholder value.That night there was a dinner in his honour at Renees attended by Charles Elson (law school professor and friend of AL), Bob Gibbons, Jerry Hass and Hal Bierman(the last three wereJohnson School professors). It was a dinner from hell. Dunlop insisted on using profanity continuously and incorrectly and insulting each of the professors in sequence. Attempts at peace making were turned into profane tirades. He was actually an unintelligent, dislikeable and uninformed man. The next day a group of students came to Professor Bierman’s office and advocatedALDunlop for Dean of the School. Bierman suggested that they approach the tenth person they met incollegetown and offer the job to that person since he would perform better.July 18, 1996 Dunlop (now 59) was made Chairman of the Board of the Sunbeam Corporation, a company in need of help. On July 17, the stock price was $12.25. By July 19, the stock reached a price of $19.50. This wasthe biggest gain prompted by a chief executive announcement in the history of theNew York Stock Exchange. Professor Bierman took it as a matter of honour to sell the stock short.

Sunbeam paid Dunlop a salary of $1 million a year,2.5 million options to buy at $12.25 and one million shares of restricted stock(worth $18 million). The total package has a value in excess of $38 million.By August 8, he had dismissed the president of Sunbeam’s household products group, the chief financial officer, the chief operating officer North America, and the vice president of strategic planning for North America. Sunbeam had 60 staff people at its Fort Lauderdale headquarters. The market expected headcount reductions. Dunlop sent the following press release “I set as an initial goal the quick appointment of a highly focused management team to provide leadership in the transition to the Sunbeam Corporation”. He also stated “if you can’t rum a company around in a year, you can’t do it at all”.In November 1996, Dunlop announced a major restructuring.Headcount will be reduced by 50% to 6,000. Some of the reductions willbe the result of divestitures. In January 1997, Sunbeam sold its clock, timers, and thermometer units to CIT Group Holdings for $8 million (the units generated $20 million in annual revenues). By the first quarter of 1997, Sunbeam had a positive (but small) profit, Sales were almost as high as in 1995 but not as high as the first halfof 1996.But some critics pointed out that there were last minute sales drives in the first quarter of 1997, including deliveries when the orders had been cancelled because of failure to deliver in time.Dunlop said “we are definitely on schedule and we will probably deliver better results than we expected “.The stock price broke through $30.Professor Bierman sold short more shares.By December 1997,the stock price reached $41.Professor Biermancovered his short position having lost all faith in the efficiency of the stock market.by the end of 1997,the stock reacheda high of $50 7/16 and the company reported net earnings of $109.4 million ($1.41 per share) for the year.In the fall of 1997, Dunlop hired Morgan Stanley to sell Sunbeam. The $50 stock price precluded any bids. Dunlop decided if he could not sell then he would buy. In March1998, Sunbeam purchased Coleman Corporation for $2.2 billion and Signature Brands and First Alert for $425 million. Now Sunbeam had over $2 billion of in debt and itsnet worth was a negative $600 million.

By June 8, 1998, the business press wondered whether Dunlop had manufactured Sunbeam’s 1997 earnings by accelerating the bookings of sales and various accounting tricks .one author estimated the inflation in profits to be $120 million. This estimate was probably too low.On Saturday, June 13, 1998, AlbertJ. Dunlop was fired by Sunbeam. The motion to remove Dunlop was made by Charles Elson, Dunlop’s good friend and staunch alley in the pursuit of shareholders rights. Elson was an honourable person who voted on behalf of Sunbeam’s shareholders and against his friend. Sunbeam’s stock had fallen to $18.0625 on Friday, June 12. The stock continued to fall to $11.25 by June 29. The stock price decline continued with the stock price falling below ten in July (Biermann was right, if poorer).On April 22, 1999, Sunbeam reported a loss of $898 million for 1998. Its warehouses were full of finished goods inventories. The stock sold for $5.375. Finally, AL Dunlop announced that he was ready to another corporation.Required:(i)ALDunlop was a great success at Scott Paper selling out to Kimberly-Clark at a fine profit. Why was he a failure at Sunbeam?(ii)With hindsight we know AL at Sunbeam was a disaster. What hints were there that maybe he was not going to be a success at Sunbeam?(iii)What generalizationsare there?(iv)Sunbeam reported $109.4 million of income for the year 1997. What accounting related actions could Sunbeam have taken that would inflate 1997 income?(v)What real actions in 1996 and 1997 would tend to increase income? Which of these actions are desirable?(vi)As a consultant hired in 1996 would you doas Dunlop wants you to do or would you do what you think is best for Sunbeam? Assume Dunlop’s actions will harm Sunbeam’s stockholders and employees.

Consider the following hypothesis test. H0: μ = 100 Ha: μ ≠ 100 A sample of 65 is used. Identify the p-value and state your conclusion for each of the following sample results. Use α = 0.05. (a) x = 104 and s = 11.5 Find the value of the test statistic. (Round your answer to three decimal places.)

Find the p-value. (Round your answer to four decimal places.)

State your conclusion.

Do not reject H0. There is sufficient evidence to conclude that μ ≠ 100.

Do not reject H0. There is insufficient evidence to conclude that μ ≠ 100.

Reject H0. There is sufficient evidence to conclude that μ ≠ 100.

Reject H0. There is insufficient evidence to conclude that μ ≠ 100.

(b) x = 96.5 and s = 11.0 Find the value of the test statistic. (Round your answer to three decimal places.)

Find the p-value. (Round your answer to four decimal places.) p-value =

State your conclusion.

Do not reject H0. There is sufficient evidence to conclude that μ ≠ 100.

Do not reject H0. There is insufficient evidence to conclude that μ ≠ 100.

Reject H0. There is sufficient evidence to conclude that μ ≠ 100.

Reject H0. There is insufficient evidence to conclude that μ ≠ 100.

(c) x = 102 and s = 10.5 Find the value of the test statistic. (Round your answer to three decimal places.)

Find the p-value. (Round your answer to four decimal places.) p-value =

State your conclusion.

Do not reject H0. There is sufficient evidence to conclude that μ ≠ 100.

Do not reject H0. There is insufficient evidence to conclude that μ ≠ 100.

Reject H0. There is sufficient evidence to conclude that μ ≠ 100.

Reject H0. There is insufficient evidence to conclude that μ ≠ 100.

Question 3

Warwick is a suburb in the Southern Downs Region of Queensland. Warwick has a population of 12,223 people and 32.29% of its occupants live in rental accommodation. A real estate office claims that the average rental price in Warwick is less than $400 per week. To test if this belief is correct, a random sample of 96 rental properties is selected. The mean of the weekly rental price computed from the sample is $385. Assume that the population standard deviation of weekly rental price is $100.

a) You were recently hired as a junior data analyst working for the real estate office. Assist the office in performing a hypothesis test at a 3% level of significance to check whether the claim made is justified. Display the six steps process (involving drawing the rejection region/s and determining the critical value/s for the decision rule) in performing the test.

b) Calculate the p-value of the test above. Display working. State the decision rule of the test should you want to use the p-value method hypothesis testing.

c) This hypothesis test is conducted on the basis that the sampling distribution of the sample mean is approximately normally distributed. Specify the required condition to ensure this.

d) Identify which one of these two types of error (Type I or Type II) you could make when drawing the conclusion in part a). Briefly explain your selection.

Poulsen Industries is analyzing an average-risk project, and the following data have been developed. Unit sales will be constant, but the sales price should increase with inflation. Fixed costs will also be constant, but variable costs should rise with inflation. The project should last for 3 years. Under the new tax law, the equipment for the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. At the end of the project’s life, the equipment will have no salvage value. No change in net operating working capital (NOWC) would be required for the project. This is just one of many projects for the firm, so any losses on this project can be used to offset gains on other firm projects. The marketing manager does not think it is necessary to adjust for inflation since both the sales price and the variable costs will rise at the same rate, but the CFO thinks an inflation adjustment is required. What is the difference in the expected NPV if the inflation adjustment is made versus if it is not made? Do not round the intermediate calculations and round the final answer to the nearest whole number. WACC 10.0% Equipment cost $200,000 Units sold 54,000 Average price per unit, Year 1 $25.00 Fixed op. cost excl. depr. (constant) $150,000 Variable op. cost/unit, Year 1 $20.20 Expected annual inflation rate 4.0% Tax rate 25.0% Group of answer choices $12,621 $13,648 $15,409 $16,437 $18,345

Poulsen Industries is analyzing an average-risk project, and the following data have been developed. Unit sales will be constant, but the sales price should increase with inflation. Fixed costs will also be constant, but variable costs should rise with inflation. The project should last for 3 years. Under the new tax law, the equipment for the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. At the end of the project’s life, the equipment will have no salvage value. No change in net operating working capital (NOWC) would be required for the project. This is just one of many projects for the firm, so any losses on this project can be used to offset gains on other firm projects. The marketing manager does not think it is necessary to adjust for inflation since both the sales price and the variable costs will rise at the same rate, but the CFO thinks an inflation adjustment is required. What is the difference in the expected NPV if the inflation adjustment is made versus if it is not made? Do not round the intermediate calculations and round the final answer to the nearest whole number.

Suppose you purchase a 10-year callable bond issued by ABC Corp. with annual
coupons of $20. Its redemption amount is $100 at the ends of years 2-4, is $80 at
the ends of years 5-7, is $60 at the ends of years 8-10. The market annual effective
interest rate is i = 5%. In the following, t represents the time immediately after the
t-th coupon is paid.
(a) Calculate the highest price at time t = 0 guaranteeing a yield rate no less than
5%.
(b) Calculate the highest price at time t = 6 guaranteeing a yield rate no less than
5%.
(c) Suppose the bond is called at the end of 8 years (i.e., t = 8). At t = 8, to replicate
the cash inflows that you would have received at the end of years 9 and 10 (had
the bond not been called earlier), you can purchase zero-coupon bonds (ZCBs).
Two ZCBs available in the market are (#1) 1-year ZCB and (#2) 10-year ZCB.
Suppose you can purchase each ZCB for any face value that you would like and
sell them at any time at a price calculated by the yield rate i = 5%. Design two
strategies by using
(i) both ZCBs
(ii) ZCB #2 only

Five Seasons Hotel is a chain with 10 hotels. Strategically, the chain implements a cookie-cutter approach to building and running its hotels, in that all hotels are practically identical. Five Seasons invested $150 million in acquiring the land for all hotels and $500 million in building and furnishing the 10 hotels to a guest-ready stage. Each hotel has 150 rooms. Each room has a rack rate of $200 per night but the hotel gives an average of discount of $30 per night off this base price. Each hotel costs $1 million in materials to run, and is staffed by 58 employees, each paid an average compensation of $50,000 a year. This staffing level implies a certain service level, which together with the rack rate and discount, determines the chain’s average occupancy rate—the percent of available rooms sold—in this approximate way:
Chain-wide average occupancy rate = 0.01 ? number of employees per hotel
? ( 0.0015 ?base Price ) + ( 0.01 ? discount),
subject to a maximum of 100% and minimum of 0% (base Price and discount are expressed in [$]). The company operates 365 nights a year.
1. Draw the ROIC tree and discuss its structure.
2. Use this tree to compute the current ROIC?
3. Reducing the number of employees reduces staffing costs, but it also reduces the occupancy rate when service level drops. What is the ROIC if Five Seasons reduces the number of employees to 50 per hotel?

1. a) If population 16 or older = 208 million and labor force participation rate (LFPR) = 65%, what is the size of the labor force?

            0.65*208,000,000 = 135,200,000

b) In a given year, there are 10 million unemployed workers and 120 employed workers the country of Landia. Calculate the unemployment rate in Landia.

120/10,000,000 = 0.0012%

1-0.0012 = 0.9988

0.9988*100 = 99.88

Unemployment rate = 99.88%

Show all your calculations for full credit.

2. Use either a shift in demand of supply to GRAPHICALLY represent each of the following situations. Also, label the graphs correctly and indicate the changes in equilibrium in each case.

1. Beef market:  Increases in the cost of cattle feed.
2. Air travel market: Reduced number of travelers due to Covid-19 pandemic.
3. SUV market: Reduced gasoline prices.
4. Smartphone market: Technology improvements reduced the cost of manufacturing smartphones.

Four separate graphs please.

3. a) How would economic contraction brought about by Covid – 19 slowdown be represented using production possibilities curve?

b) Repeat a) for improved technology which results in increased productivity?

4. Good                Quantity           Price in 1999                Price in 2000

X                      10                    $5                                $6

Y                      20                    $10                              $10

Z                      5                      $6                                $10

1. Calculate the market basket value for each year. What is the consumer price index in 1999?
2. What is the inflation rate between 1999 and 2000?

Show all calculations for full credit.