Should US consumers increase spending by more than the increase in personal income?
Instruction: You could use an example from your life or another example to relate to this topic.

1. Having read the case on sovereign risk, what are the economic and political challenges that Europe face due to the Pandemic that are different from what we face here in the US? (10 points)

The jersey numbers of 11 players randomly selected from the football team. Find the range , variance and standard devation for the given sample data and what the result tell us? 29,51,46,90,32,1,16,44,99,10,49

1. How does a tariff lead to production cost inefficiencies?

2. What would happen to the US standard of living if the United States withdrew completely from international trade?

Sunny Corporation expects to have the following balances on July 1, 2020: Cash, $3,000; Accounts receivable, $135,000; and Accounts payable, $100,000. Its budgeted sales, merchandise purchases, and various expenses for the next three months follow.

20% of the sales are for cash. Of the remaining credit sales, 30% are collected in the same month as the sale, and 70% are collected the month following the sale.

All merchandise is purchased on credit. 20% of the balance is paid in the month of the purchase, and the remaining 80% is paid in the month following the purchase. All other cash expenses are paid in the month incurred. Included in the payroll, rent, and other expenses is $10,000 of depreciation expense.

The company requires a minimum cash balance of $10,000. If cash falls below $10,000, the company borrows on a line of credit with an annual rate of interest of 12% to bring the balance to $10,000. If cash is above $10,000, the company repays as much as possible on any outstanding line of credit but does not allow cash to fall below $10,000. On July 1, the line of credit has a $0 balance.

Complete the following blanks to prepare the cash budget. If a blank has an amount of $0, you are required to enter 0. Note: You have schedules provided below the cash budget that will need to be completed to enable you to prepare certain calculations needed for the cash budget.

Sunny Corporation

Cash Budget

July, 2020 - September, 2020

Schedule to Calculate Cash Sales and Credit Sales

Cash Receipts

Cash payments for Merchandise Purchases

Allan set up a trading business, buying and selling goods. The following transactions took place in the first month of its trading, July 2020.

1. Allan introduced $500,000 cash into the business bank account.
2. The business bought a motor vehicle with price of $60,000. The payment was by cheque.
3. The business bought some inventory for $30,000. The payment was by cheque.
4. The entire inventory purchased in transaction #3 was sold $65,000 in cash.
5. Additional inventory was purchased amounting to $100,000 on credit.
6. 50% of the inventory purchased in transaction #5 was sold for $80,000. All these sales were on credit.
7. A payment of $30,000 was made to a supplier for some of the purchases.
8. A payment of $40,000 was received from a customer for some of the sales on credit.
9. Allan draw $10,000 from the bank account for his personal use.
10. The business paid $2,000 for the motor vehicle maintenance using a cheque.
11. The business paid $15,000 by cheque for the premium of one-year insurance policy.
12. The business received a bank loan of $100,000, repayable in two years.
13. Depreciation for motor vehicles should be allocated 10% per annum on costs.

You are required:

1. Post all the transactions to ledger accounts (including the necessary adjustment entries).
2. Prepare a trial balance as at 31 July 2020.

3. Prepare a statement of comprehensive income for the month ended 31 July 2020 and a statement of financial position as at 31 July 2020. (Assume that Allan has closing inventory of $47,000).

Omer, single, age 35, has one dependent (Maria, a qualifying child, age 7) that lived with Omer for all of 2020. Omer paid all costs of maintaining the household for himself and Maria. Omer’s sister, Zelda, also lived with Omer for all of 2020. Zelda had no income, and Omer provided all of her support.

In 2020, Omer had the following income items:

• Salary: $75,000

• Interest on savings account (investment income): $2,500

• Ordinary dividends (investment income; not qualified dividends): $1,500

• Unemployment Compensation: $10,000

• Gift from Omer’s father: $10,000

• Alimony from ex-wife (divorce finalized in 2014): $10,000

  Omer paid the following expenses in 2020:

• Federal income taxes withheld on wages: $4,000

• State & local income taxes withheld on wages: $1,000

• Sales tax: $9,000

• Property tax: $3,000

• Medical expenses: $1,000

• Food and clothes for Maria: $4,000

• Investment interest: $5,000

• Food and clothes for himself: $5,000

• Childcare expenses so Omer can work: $2,000

• HSA Contribution (Omer has a HDHP): $2,000

• Charitable contribution (cash): $2,500

• Unreimbursed employee business expenses: $500

• Car payment: $6,000

• Mortgage interest on $300,000 mortgage used to purchase primary residence: $3,000

QUESTION: What is Omer’s total itemized deductions?

Omer, single, age 35, has one dependent (Maria, a qualifying child, age 7) that lived with Omer for all of 2020. Omer paid all costs of maintaining the household for himself and Maria. Omer’s sister, Zelda, also lived with Omer for all of 2020. Zelda had no income, and Omer provided all of her support.

In 2020, Omer had the following income items:

• Salary: $75,000

• Interest on savings account (investment income): $2,500

• Ordinary dividends (investment income; not qualified dividends): $1,500

• Unemployment Compensation: $10,000

• Gift from Omer’s father: $10,000

• Alimony from ex-wife (divorce finalized in 2014): $10,000

  Omer paid the following expenses in 2020:

• Federal income taxes withheld on wages: $4,000

• State & local income taxes withheld on wages: $1,000

• Sales tax: $9,000

• Property tax: $3,000

• Medical expenses: $1,000

• Food and clothes for Maria: $4,000

• Investment interest: $5,000

• Food and clothes for himself: $5,000

• Childcare expenses so Omer can work: $2,000

• HSA Contribution (Omer has a HDHP): $2,000

• Charitable contribution (cash): $2,500

• Unreimbursed employee business expenses: $500

• Car payment: $6,000

• Mortgage interest on $300,000 mortgage used to purchase primary residence: $3,000

QUESTION:

1. What is Omer’s taxable income? Omer has no QBI deduction.

Omer, single, age 35, has one dependent (Maria, a qualifying child, age 7) that lived with Omer for all of 2020. Omer paid all costs of maintaining the household for himself and Maria. Omer’s sister, Zelda, also lived with Omer for all of 2020. Zelda had no income, and Omer provided all of her support.

In 2020, Omer had the following income items:

• Salary: $75,000

• Interest on savings account (investment income): $2,500

• Ordinary dividends (investment income; not qualified dividends): $1,500

• Unemployment Compensation: $10,000

• Gift from Omer’s father: $10,000

• Alimony from ex-wife (divorce finalized in 2014): $10,000

  Omer paid the following expenses in 2020:

• Federal income taxes withheld on wages: $4,000

• State & local income taxes withheld on wages: $1,000

• Sales tax: $9,000

• Property tax: $3,000

• Medical expenses: $1,000

• Food and clothes for Maria: $4,000

• Investment interest: $5,000

• Food and clothes for himself: $5,000

• Childcare expenses so Omer can work: $2,000

• HSA Contribution (Omer has a HDHP): $2,000

• Charitable contribution (cash): $2,500

• Unreimbursed employee business expenses: $500

• Car payment: $6,000

• Mortgage interest on $300,000 mortgage used to purchase primary residence: $3,000  

  • QUESTION: What is Omer’s total itemized deductions?

  • QUESTION: What is Omer’s taxable income? Omer has no QBI deduction.

  • ​​​​​​​

The financial statements for Waverley Ltd are provided below:

Waverley Ltd

Comparative Balance Sheet

As at 30 June 2019 and 2020

Waverley Ltd

Income Statement

For the Year Ended at 30 June 2020

Required:

Prepare an extract of the Cash Flow Statement for the year ended 30 June 2020 showing Cash Flows from Operating Activities AND Cash Flows from Financing Activities. Show all workings.