Questions
Whispering Inc. issues 500 shares of $10 par value common stock and 100 shares of $100...

Whispering Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $118,000.

Prepare the journal entry for the issuance when the market price of the common shares is $180 each and market price of the preferred is $225 each
Prepare the journal entry for the issuance when only the market price of the common stock is known and it is $206 per share.

In: Accounting

Vaughn Inc. issues 500 shares of $10 par value common stock and 100 shares of $100...

Vaughn Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $108,000.

(a) Prepare the journal entry for the issuance when the market price of the common shares is $164 each and market price of the preferred is $205 each.
(b) Prepare the journal entry for the issuance when only the market price of the common stock is known and it is $186 per share.

In: Accounting

The 1-week call options on the Alibaba stock with strike prices of $185, $190, and $195...

The 1-week call options on the Alibaba stock with strike prices of $185, $190, and $195 are $10, $7, and $5.5, respectively. An investor longs a butterfly spread using these three options. Specifically, he longs 100 call options with the strike price $185, shorts 200 call options with the strike price $190, and longs 100 call options with the strike price 195. What is the investor's maximum gain from this strategy?

In: Finance

Beltway Shoe Company sells luxury leather shoes in the United States. The company monitors its shoe...

Beltway Shoe Company sells luxury leather shoes in the United States. The company monitors its shoe sales by collecting randomly chosen data from store locations throughout the country. They record original price, sale price, and number of days it takes to sell each unit. Each pair of shoes is classified as “Eastern Region" if it is sold in the Eastern part of the United States, or as “Western Region" if it is sold in the Western part of the country. Randomly chosen samples provided sales data for 50 Western Region and 50 Eastern Region pairs of shoes. The complete data set is in the file named Shoes, linked at the bottom of the page.

Managerial Report
Prepare a report (see below) that summarizes your assessment of the nature of the shoe market in each region. Be sure to include the following seven (7) items in your report.

Descriptive statistics (mean, median, range, and standard deviation) to summarize each of the three variables for the 50 Western Region shoes. Are there any outliers in the data set for any of the three variables? If there are any outliers in any category, please list them and state for which category they are an outlier. Describe which method you used to make your determination.

Descriptive statistics (mean, median, range, and standard deviation) to summarize each of the three variables for the 50 Eastern Region shoes. Are there any outliers in the data set for any of the three variables? If there are any outliers in any category, please list them and state for which category they are an outlier. Describe which method you used to make your determination.

Compare your summary results from #1 and #2. Discuss any specific statistical results that would help the Beltway Shoes Marketing Department understand the regional shoe market.

Develop a 90% confidence interval estimate of the population mean sales price and population mean number of days to sell for pairs of Beltway Shoes in the Eastern Region. Interpret your results.

Develop a 90% confidence interval estimate of the population mean sales price and population mean number of days to sell for pairs of Beltway Shoes in the Western Region. Interpret your results.

Assume a branch sales manager requested estimates of the mean selling price of Western Region shoes with a margin of error of $5 and the mean selling price of Eastern Region shoes with a margin of error of $4. Using 90% confidence, how large should the sample sizes be for each?

A Western Region store manager just placed on display a pair of Beltway Shoes, with an original price of $120. Also, an Eastern Region store manager just placed on display a pair of Beltway Shoes, with an original price of $125. For each pair of shoes, what is your estimate of the final selling price (based on the percent difference for the sale and list price) and number of days required to sell each of these units?

Western Region Eastern Region
Original Price Sale Price Days to Sell Original Price Sale Price Days to Sell
82 60 20 148 139 33
140 123 26 103 89 59
80 70 16 112 100 189
89 50 72 81 61 145
135 120 18 136 100 91
146 143 109 112 89 66
80 80 79 121 100 81
125 100 130 83 60 65
70 60 100 99 80 100
81 52 96 93 65 15
103 95 14 98 70 34
118 100 33 106 100 102
136 100 101 109 99 45
101 50 55 102 89 166
140 75 69 96 96 50
73 42 120 103 40 56
135 99 90 84 60 102
89 40 40 96 50 71
144 60 130 125 75 45
109 45 23 136 100 80
145 100 106 103 103 33
81 50 133 82 60 25
136 70 62 149 100 23
110 88 74 92 88 45
137 137 101 111 100 77
132 50 96 148 70 100
75 42 98 98 68 65
71 62 189 102 82 34
109 89 122 109 100 144
130 119 108 137 137 2
108 89 19 85 65 34
146 100 125 94 84 45
98 80 15 141 141 100
82 50 7 131 120 8
79 79 1 130 120 10
138 99 17 107 80 45
95 79 23 113 80 120
136 129 30 142 100 100
74 34 17 105 60 36
139 100 25 140 70 75
143 89 120 83 43 69
120 109 35 97 90 45
75 75 25 95 90 38
136 69 15 129 99 56
124 100 75 93 60 71
132 69 25 118 100 34
91 79 33 89 80 55
80 50 49 73 60 67
54 54 100 79 60 78
68 58 75 103 70 114

In: Economics

THE INVENTORY VALUATION ISSUE IS SOLVED BY USING DIFFERENT COST FLOW ASSUMPTIONS (METHODS): Introduction: Pretend you...

THE INVENTORY VALUATION ISSUE IS SOLVED BY USING DIFFERENT COST FLOW ASSUMPTIONS (METHODS):

Introduction: Pretend you are at the drug store waiting in line. There is a basket filled with one particular brand of candy all in identical wrappers. But suppose the candy was purchased by the drug store on different dates in a rising economy and at different costs, say a lot of 100 units was purchased at .04 cents/per unit, and another lot of 150 units was purchased at .05 cents per unit, and a third lot of 200 units was purchased at .06 cents per unit, then how does the drug store track the different costs of this identical product in the basket for purposes of calculating profit or loss? It has to first identify the cost of the product it sold. But it doesn't really know whether the one candy item was originally purchased at a cost of .04, .05 or .06 cents.

There is a point where it is not economically feasible to track similar items separately. So to resolve, the accounting world devised and relies on certain COST FLOW ASSUMPTIONS or methods to place a value on its inventory.


Note the characteristics used in each calculation as applied in the FIFO and LIFO methods below:


EXAMPLES: Using the following beginning inventory, purchases, and sales data for cell phones for March, note how Ending Inventory is calculated differently using First-In, First-out, Last-in, First-out, and the Lower of Cost or Market methods.

March 1: Beginning inventory: 1,000 units at $40

Purchases during March:
March 5: 500 units at $42
March 20: 450 units at $44

Sales during March:
March 8: 700 units
March14: 600 units
March 31: 300 units
===============================

FIRST-IN, FIRST-OUT (FIFO) METHOD: Assumes the oldest purchase was the first used or sold. Thus your remaining balance would be valued at the more recent remaining costs.
Example #1: Assume that the perpetual inventory system is used, costing by FIFO method, determine the cost of merchandise sold for each sale and the inventory balance after each sale for the above data. For understanding, study and trace the transactions through in the example provided.


LAST-IN, FIRST-OUT (LIFO) METHOD: Assumes the newest purchase was the first used or sold. Thus the remaining balance would be valued at the costs of the older remaining products.
Example #2: Using the same data above, now assume that the perpetual inventory system is used, costing by LIFO method, determine the cost of merchandise sold for each sale and the inventory balance after each sale. For understanding, study and trace the transactions through in the example provided.


LOWER OF COST OR MARKET METHOD (LCM) METHOD: This method might be used for diamonds, or minerals or the like where the market price changes daily or more frequently. Conservative accounting philosophies dictate to value such items at either the lower of the price (cost) when the merchandise was purchased or at its current market value(which is the price the item is currently being sold at). Hence if on the last day of the month, an item purchased earlier in the month by the company, say at $500 per unit was then selling at $600 per unit, the inventory value used in the accounting records at the end of the month would be $500. (i.e. the lower of the cost or the market price).
Using the data below, apply the LCM method to calculate Ending Inventory:
Commodity Quantity Unit Cost Unit Market Price

Aquarius 20 $80 $92
Capricorn 50 70 65
Leo 8 300 280
Scorpio 30 40 30
Taurus 100 90 94


Example #3: Calculate the lower of cost or market for each item above and total those amounts to calculate final inventory value. For understanding, study and trace the amounts through in the example provided.

In: Accounting

When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every...

When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $10. Based on actuarial tables, “Joltin’ Joe” could expect to live for 25 years after the actress died. Assume that the EAR is 9.4 percent. Also, assume that the price of the flowers will increase at 4 percent per year, when expressed as an EAR. Assume that each year has exactly 52 weeks, and Joe began purchasing flowers the week after Marilyn died.

  

What is the present value of this commitment? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

In: Finance

When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every...

When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former baseball player thought appropriate for the star cost about $9. Based on actuarial tables, “Joltin’ Joe” could expect to live for 20 years after the actress died. Assume that the EAR is 9.5 percent. Also, assume that the price of the flowers will increase at 3.6 percent per year, when expressed as an EAR. Assume that each year has exactly 52 weeks, and Joe began purchasing flowers the week after Marilyn died.

  

What is the present value of this commitment? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

In: Finance

Consider the game of rolling a fair die, and winning the face value if it is...

Consider the game of rolling a fair die, and winning the face value if it is 1, 2, 3, 4, or 5, and losing $14 if it rolls 6.

Simulate this in Excel. One way would be to write "=trunc(rand()*6)+1" in A1, and write "=IF( A1=6 , -14, A1)" in B1 (i.e. if A1 is 6, value is -14, else, value is whatever A1 is).

Copy the above row to five thousand rows below. Find the average of the value in the second column.

Enter the value of the average, to two decimal places.

In: Finance

There are three budget constraints, one where an individual has an income of $1000 per month with which they buy the composite good with a price of $1 and food with a price of $2/unit of food

  1. Continuing with the budget constraints you drew in Homework 2, Question 3. There are three budget constraints, one where an individual has an income of $1000 per month with which they buy the composite good with a price of $1 and food with a price of $2/unit of food, a second in which they receive $100 in food stamps from the government, and a third in which they receive $100 in cash from the government.

    (a) (20 Points) Would the consumer prefer to get $100 in food stamps or $100 in cash? You need to justify your answer thinking through the possible optimal consumption bundles for the consumer.

In: Economics

Suppose the market supply for Good X is given by QXS = -100 + 5PX. Compute...

  1. Suppose the market supply for Good X is given by QXS = -100 + 5PX. Compute and illustrate with completely labelled diagram the producer surplus if the equilibrium price of X is $100 per unit (show the relevant calculation).
  1. The daily market demand and supply for chicken in Kuala Lumpur is given by:

Qd= 16,000 – 1,000P

Qs=   2,000 + 1,000P

The quantity and price are measured in tonnes and RM, respectively.

  1. Determine the equilibrium quantity and price in the above market,
  2. Explain what will happen if the government imposes a price ceiling of RM10 on the chicken.

In: Economics