1. Assume the money sector can be described by the following two equations:

           md = (1/4)Y - 10i   and ms = 400.

     In the expenditure sector only investment spending (I) is affected by the interest rate (i), and the equation of the IS-curve is: Y = 2,000 - 40i.

1. Assume the size of the expenditure multiplier is a = 2. What is the effect of an increase in government purchases by DG = 200 on income and the interest rate?   

2. Can you determine how much investment is crowded out as a result of this increase in government purchases?

3. If the money demand equation were changed to md = (1/4)Y, how would your answers in a. and b. change?

Apple has recently split its stock on a 4-for-1 basis. After this transaction, which of the following did really happened: *

Number of outstanding shares changed

Total share holder's equity changed

Apple's balance sheet total changed

This transaction required a journal entry

4. Given Pseudocode:

Algorithm3(n):

y = 0

for i = 1 to n do

y = 1

while y < i² do

y=2y

return y

a. What's the output of Algorithm3(n) as a function of n?

b. What's the running time of Algorithm3(n) as a function of n? Represent this as a summation.

c. Prove the running time to be O(n log n).

(Round the final answer to 4 decimal digits) 1. A brand name has a 70% recognition rate. Assume the owner f the brand wants to verify that rate by begging with a small sample of 6 randomly select consumers. a. What is the probability that exactly 4 of the selected consumers recognize the brand name?

b. What is the probability that all of the selected consumers recognize the brand name?

c. What is the probability that at least 5 of the selected consumers recognize the brand name?

d. What is the probability that at most 2 of the selected consumers recognize the brand name?

2) . The lengths of pregnancies are normally distributed with a mean of 272 days and a standard deviation of 15 days. If 35 women are randomly selected, find the probability that they have a mean pregnancy between 271 days and 275 days.

3) The body temperatures of adults are normally distributed with a mean of 98.6° F and a standard deviation of 0.50° F. If 25 adults are randomly selected, find the probability that their mean body temperature is greater than 98.4° F.

4) The average number of pounds of red meat a person consumes each year is 190 with a standard deviation of 24 pounds (Source: American Dietetic Association). If a sample of 60 individuals is randomly selected, find the probability that the mean of the sample will be Less than 192 pounds.

Each day in April, you have an independent 1/4 chance of deciding to take a 6am run.

1. (a) What is the probability you go on exactly 12 runs in the month of April (which has

   30 days)?

2. (b) What is the expected number of days you go running during April?

3. (c) What is the probability that you go running at least once during April 1–7?

4. (d) What is the probability that that your first run of the month occurs on April 5?

5. (e) What is the probability that your first run of the month occurs on or before April 20?

4. On January 1, 2019, Roberts Inc. purchased 10% of the outstanding 1,000,000 common shares of Sunk for $200,000. Roberts Inc. considers this investment to be a non-strategic investment. At the

December 31, 2020-year end, the fair value of this investment was $208,000. Sunk's profit in 2020 was $100,000. Sunk paid a dividend of $.60 per common share. On January 1, 2021, Robert decided to buy an additional 25% of Sunk's 1,000,000 common shares for $500,000. This second purchase allowed Robert to significantly influence Sunk. In 2021, Sunk's profit was $140,000. Sunk paid dividends of $.50 per common share in 2021.

For 2020, the investment is considered to be a fair value through profit and loss investment:

Required:

1. Make journal entries for 2020 and 2021 on Robert’s books with respect to the Investment in Sunk.

For 2020, the investment is considered to be a fair value through profit and loss inv.

2. Which method of Investment Accounting is Robert Inc using? Justify your response.

Question 4

Snow International Inc. is founded on October 1 and is preparing inventory worksheet for auditor’s review. Due to bad weather conditions, Snow is forced to close down as of October 17, 20x9, and bad weather continues till November 2, 20x9. Therefore, the last day of Snow operation is October 16, 20x9.   Since Snow is selling a new innovative product and there is no market data, thus Snow can assume that there is no inventory valuation impairment in October. Snow accountant prepares some data below:

20x9 Inventory data (Units in thousands)

Sales data:

Purchase data:

Required:

1. Assuming that perpetual records are kept in dollars, compute the inventory at October 31, using FIFO and LIFO on perpetual system.                                
2. After the bad weather, Snow has to repair major damages in the building, and repair work is completed in December 1, 20x9, and Snow does not operate for the month of November. When the accountant prepares inventory for November 20x9 closing, she finds out that the net realizable value of the single product now was $6.00 per unit, replacement cost is $7.70 per unit, cost and profit per unit together was $0.45. Does Snow report impairment under LIFO and FIFO in November 20x9? Please show calculations.     

Chapter 4 – Continuing Case CC4-1 Modified

Adjusting the Accounting Records and then Some

Assume it is now December 31, 2017 and Nicole has just completed her first year of operations at Nicole’s Getaway Spa. After looking through her trial balance, she noticed that there are some items that have either not been recorded or are no longer up-to-date.

Nicole’s Getaway Spa is renting its space at a cost of $600 per month. On September 1, 2017, Nicole paid eight months’ rent in advance using cash. This prepayment was recorded in the account Prepaid Rent back in September.

The building, purchased at the beginning of the year for $47,000 cash, has estimated depreciation of $2,000 for 2017, but none has been recorded yet.

The Equipment purchased in Chapter 3 (i.e. May 30^th) for $18,500, has estimated depreciation of $5,000 for 2017, but none has been recorded yet.

Salaries and wages to the support staff at Nicole’s Getaway Spa have been paid up to December 26, 2017. The support staff worked both December 27^th and 28^th and will be paid on January 5, 2018. Salaries and wages amount to $1,000 per day. The spa was closed December 29-31^st.

The insurance policy, purchased on June 1^st for $3,000 cash, provides coverage for 12 months. The insurance coverage since June has been used up.

The unadjusted amount in the Spa Supplies account was $2,000 at December 31, 2017 for supplies purchased on account. A year-end count showed $700 of supplies remain on hand.

The Note Payable from Chapter 3 (i.e. May 30^th) is due June 1, 2018 has estimated Interest Expense thru December 31, 2017 of $1,000, but none has been recorded yet.

On the last day of December, a customer obtained spa services by using a $90 gift certificate that was purchased earlier in the month. Use of the gift certificate to pay for these services had not yet been recorded.

Board of Directors declared a cash dividend in the amount of $1,000 on December 31, 2017 to be paid on January 15, 2018. This dividend has not been recorded.

Required:

For each of the items listed above, identify whether an accrual adjustment, a deferral adjustment, or no adjustment is required.

For each of the deferral adjustments, prepare the initial journal entry that would have been recorded.

Prepare the adjusting journal entries that should be recorded for Nicole’s Getaway Spa at December 31, 2017, assuming that the items have not been adjusted prior to December 31, 2017.

Post the deferral adjustments (i.e. Part 2) and the Adjusting Journal Entries (i.e. Part 3) to the General Ledger (i.e. T-Accounts below).

Prepare an Adjusted Trial Balance (see below).

Now prepare the Income Statement, Statement of Retained Earnings & Balance Sheet in good form.

General Ledger Balances at December 31, 2017 (a.k.a. T-Accounts)

Question 1)

For safety reasons, 4 different alarm systems were installed in the vault containing the safety deposit boxes at a Beverly Hills bank. Each of the 4 systems detects theft with a probability of 0.82 independently of the others.

The bank, obviously, is interested in the probability that when a theft occurs, at least one of the 4 systems will detect it. What is the probability that when a theft occurs, at least one of the 4 systems will detect it?

Your answer should be rounded to 5 decimal places.

__________________________________________________________________________

Question 2

According to the information that comes with a certain prescription drug, when taking this drug, there is a 15% chance of experiencing nausea (N) and a 46% chance of experiencing decreased sexual drive (D). The information also states that there is a 10% chance of experiencing both side effects.

What is the probability of experiencing neither of the side effects?

Your answer should be to two decimal places.

_____________________________________________________________________________________________________________

Question 3

According to the information that comes with a certain prescription drug, when taking this drug, there is a 18% chance of experiencing nausea (N) and a 50% chance of experiencing decreased sexual drive (D). The information also states that there is a 11% chance of experiencing both side effects.

What is the probability of experiencing nausea or a decrease in sexual drive?

Your answer should be rounded to 2 decimal places.

______________________________________________________________________________________________

Question 4

An engineering school reports that 55% of its students are male (M), 39% of its students are between the ages of 18 and 20 (A), and that 34% are both male and between the ages of 18 and 20.

What is the probability of a random student being chosen who is a female and is not between the ages of 18 and 20?

Your answer should be to two decimal places.

_________________________________________________________________________________

Question 5

An engineering school reports that 53% of its students were male (M), 36% of its students were between the ages of 18 and 20 (A), and that 28% were both male and between the ages of 18 and 20.

What is the probability of choosing a random student who is a female or between the ages of 18 and 20? Assume P(F) = P(not M).

Your answer should be given to two decimal places.

______________________________________________________________________________________

Question 6

An engineering school reports that 54% of its students were male (M), 39% of its students were between the ages of 18 and 20 (A), and that 25% were both male and between the ages of 18 and 20.

What is the probability of a random student being male or between the ages of 18 and 20?

Your answer should be rounded to two decimal places.

_______________________________________________________________________________________________

Question 7

Let A and B be two independent events such that P(A) = 0.14 and P(B) = 0.76.

What is P(A or B)?

Your answer should be given to 4 decimal places.

_____________________________________________________________________________

Question 8

Let A and B be two independent events such that P(A) = 0.3 and P(B) = 0.6.

What is P(A and B)?

Your answer should be given to 2 decimal places.

_______________________________________

Question 9

Let A and B be two disjoint events such that P(A) = 0.24 and P(B) = 0.33.

What is P(A and B)?

____________________________________________________

Question 10

Let A and B be two disjoint events such that P(A) = 0.08 and P(B) = 0.54.

What is P(A or B)

__________________________________________________

Question 11

The following probabilities are based on data collected from U.S. adults. Individuals are placed into a weight category based on weight, height, gender and age.

Based on this data, what is the probability that a randomly selected U.S. adult weighs more than the healthy weight range?

Your answer should be given to 3 decimal places.

_______________________________________________________________________

Question 12

The probabilities for the amount that can be won on a lottery game are given in the table below. Find the missing probability X.

X =

____________________________________________________

Question 4 .

1.     The balance sheet for Colt Corp. provided the following summarized pretax data:

Year 2015            Year 2016

            Deferred tax liability                $376,000            $248,000

Tax expense as reported on the 2016 Income Statement was $493,000.

Calculate the amount of income taxes payable for 2016?