P10.6 On June 28, 2020, in relocating to a new town, Kerr Corp. purchased a property consisting of two hectares of land and an unused building for $225,000 plus property taxes in arrears of $4,500. The company paid a real estate broker a fee of $12,000 for finding the property and legal fees on the purchase transaction of $6,000. The closing statement indicated that the assessed values for property tax purposes were $175,000 for the land and $35,000 for the building. Shortly after acquisition, the building was demolished at a cost of $24,000.

Kerr Corp. then entered into a $1.3-million fixed-price contract with Maliseet Builders Inc. on August 1, 2020, for the construction of an office building on this site. The building was completed and occupied on April 29, 2021, as was a separate maintenance building that was constructed by Kerr's employees. Additional costs related to the property included:

As an incentive for Kerr to locate and build in the town, the municipality agreed not to charge its normal building permit fees of $36,000. This amount was included in the $1.3-million contract fee. Kerr uses the cost reduction method for any government grants, such as the waiving of these permit fees. The contract amount of $1.3 million was reduced by this grant. The building and the maintenance building are estimated to have a 40-year life from their dates of completion and will be depreciated using the straight-line method with no residual value.

Kerr is a private company with an April 30 year end, and the company accountant is currently analyzing the new Buildings account that was set up to capture all the expenditures and credits explained above that relate to the property.

Instructions

a. Prepare a schedule that identifies the costs that would be capitalized and included in the new Buildings account on the April 30, 2021 statement of financial position, assuming the accountant wants to comply with ASPE but tends to be very conservative in nature; in other words, she does not want to overstate income or assets. Briefly justify your calculations. How would your answer change if Kerr were to comply with IFRS?

b. Prepare a schedule that identifies the costs that would be capitalized and included in the new Buildings account on the April 30, 2021 statement of financial position, assuming the accountant wants to comply with ASPE, but is aware that Kerr needs to report increased income to support a requested increase in its bank loan next month. Briefly justify your calculations.

c. Comment on the difference in results for parts (a) and (b). Calculate the total expenses related to the building under both scenarios. What else should be considered in determining the amount to be capitalized?

Suppose you are interested in buying a new Lincoln Navigator or Town Car. You are standing on the sales lot looking at a model with different options. The list price is on the vehicle. As a salesperson approaches, you wonder what the dealer invoice price is for this model with its options. The following data are based on a random selection of these cars of different models and options. Let y be the dealer invoice (in thousands of dollars) for the given vehicle. x 32.4 34.5 36.1 44.0 47.8 y 29.6 31.4 32.0 42.1 42.2

(a) Verify that Σx = 194.8, Σy = 177.3, Σx2 = 7764.06, Σy2 = 6439.37, Σxy = 7067.1, and r ≈ 0.978. Σx Σy Σx2 Σy2 Σxy r

(b) Use a 10% level of significance to test the claim that ρ > 0. (Use 2 decimal places.) t critical t

(c) Verify that Se ≈ 1.4904, a ≈ -0.1182, and b ≈ 0.9132. Se a b

(d) Find the predicted dealer invoice when the list price is x = 41 (thousand dollars). (Use 2 decimal places.)

(e) Find a 95% confidence interval for y when x = 41 (thousand dollars). (Use 2 decimal place.) lower limit upper limit

(f) Use a 10% level of significance to test the claim that β > 0. (Use 2 decimal places.) t critical t

(g) Find a 95% confidence interval for β and interpret its meaning. (Use 3 decimal places.) lower limit upper limit

Hi, this is Miss Wheeler over at Meals on Wheels. Here in New Town, we have a very diverse group of people for whom we provide meals every day. They represent 1) Jewish, 2) Muslim, 3) Ethiopian, 4)Chinese, 5)Native Americans, 6) Indian, and 7) Iranian cultural groups as well as our American and African American clients. We really need some help in figuring out how to plan meals for so many different cultural groups. Could you help us? Since we depend heavily on the food pantry for supplies that our volunteers prepare, we need to figure out how to use many of our common supplies but still meet the diverse needs. If we need to supplement that supply please let us know exactly what is important so we can ask for donations or for funds to purchase the items. If you could come up with ONE WEEK EVENING MEAL ONLY that meets the needs of our different cultural groups (may need to be multiple menus), it would be really great.

Willowbrook School

Chapter 6

Willowbrook School is a small private school that has retained your services as a systems analyst to assist in the development of a new information system for the school’s administrative needs.

Background

You have developed a logical model of the proposed billing system. Now you will continue the

systems analysis phase by creating an object-oriented model of the billing system. Use the

logical model that you prepared in Chapter 5 as a reference.

Tasks

1. Design at least four class objects for Willowbrook’s new system including attributes and methods. See Figure in your text for object attributes/methods illustrations.

2. Create an object relationship diagram for the system classes that you identified in Task 1 (above).

Listed below are weights (hectograms or hg) of randomly selected girls at birth. Use the sample data to construct a 95% confidence interval for the mean weight of girls.

33 28 33 37 31 32 31 28 43 28 33 26 30 31 28

Address the following questions:

What is alpha

What is Z_{α/2  or tα/2}

Which formula did you use and what is the Confidence Interval?

Identify each of the following statements as either positive or normative: *please explain why

E. Signing the Free Trade of the Americas agreement will lower prices and increase access to a wide variety of goods and services for US consumers.

F. Signing the Free Trade of Americas agreement will result in major US corporations moving their manufacturing facilities to poor Latin American countries where wages are lower and environmental regulations are less stringent.

G. The US should sign the free trade of the Americas agreement because it will be good for the environment.

H. The US should NOT sign the Free trade of the Americas agreement because it will be bad for the environment.

I. Charging a fee to drivers in New York City streets will reduce traffic congestion.

J. New York City should charge a fee to drivers fro access to drive on downtown streets.

Suppose that there is an urgent need for new school buildings and teachers that emerged after hurricane Harvey in Houston, Texas. Answer the following questions about grants.

a. Explain why a block grant, in comparison with a matching grant, would result in less consumption education services (e.g., school buildings and teachers) but more of other goods according to your textbook.

b. Explain how a matching grant (for school buildings and teachers), in comparison with a block grant, would have a further impact via the spending multiplier?

The inverse demand function in a market is given by p=32-Q where Q is the aggregate quantity produced. The market has 3 identical firms with marginal and average costs of 8. These firms engage in Cournot competition.

1. a) How much output does each firm produce?

2. b) What is the equilibrium price in the market?

3. c) How much profit does each firm make?

4. d) Consider a merger between two firms. Assuming that due to efficiency gains from the merger, the merged firm is able to produce at a marginal and average cost of 5. However, the non-merged firm (outsider) still produces at a marginal and average cost of 8. How much does each firm produce after the merger?

5. e) Demonstrate whether or not this merger is profitable for the parties involved.

6. f) Demonstrate how the merger affects the profits of the outsider not involved in the merger.

7. g) How does the merger affect consumer surplus?

World Enterprises is determined to report earnings per share of $2.67. It therefore acquires the Wheelrim and Axle Company. There are no gains from merging. In exchange for Wheelrim and Axle shares, World Enterprises issues just enough of its own shares to ensure its $2.67 earnings per share objective.

a. Complete the table below for the merged firm.
b. How many shares of World Enterprises are exchanged for each share of Wheelrim and Axle?
c. What is the cost of the merger to World Enterprises?
d. What is the change in the total value of the World Enterprises shares that were outstanding before the merger?