Question 2:

On September 30, 2017, the Radison Avenue Incorporated post-closing trial balance was as follows. The company adjusts its accounts monthly.

During October, the following transactions were completed:

Paid $2,300 to employees for salaries due, of which $1,800 is for September salaries payable and $500 for October

Issued common shares for $4,800

Received $11,200 cash from customers in payment of accounts

Received $12,700 cash for services performed in October Purchased supplies on account, $675

Paid creditors $3,200 of accounts payable due

Paid October rent, $550

Paid salaries, $2,150

Performed services on account, $3,200

Paid a cash dividend, $600

Received $1,350 from customers for services to be provided in the future

Adjustment data for the month:

1. Accrued salaries payable are $1,100

2. Unearned revenue of $850 was earned during the month

3. Income tax payable is estimated to be $600

Required:

In good format, and making whatever assumption you feel appropriate, prepare an accrual-based Income Statement and Statement of Financial Position (Balance Sheet) for the month ending October 2017.

Total has discovered a potential 1 billion barrels of “wet” gas off the coast of South Africa. The gas could be used as petrol or perhaps even converted into electricity, according to one expert. The Brulpadda gas find should mean more tax revenue and a stronger rand. How Will It Affect South Africans Firstly, government will earn more tax. Total and its partners will pay the regular 28% corporate tax on all taxable income from Brulpadda. According to the most optimistic estimates, the Brulpadda find could yield $1 trillion (R14.4 trillion) for Total and its partners, which would mean a massive tax windfall for South Africa. Certain Businesses and Skills Will Be in Demand The Brulpadda find could have a massive boost to all kinds of businesses in South Africa. Companies providing helicopters, marine services, catering supplies and transport to get supplies to the site would be required.

4.1 Assuming that government budget is at zero balance discuss the implication of the gas find in terms of government’s fiscal policy for the following economic factors:

4.1.1 Collection of revenue through taxation on personal income (6)

4.1.2 Government spending on the provision of goods and services (7)

4.2 Explain, with the aid of a diagram, the economic impact on cost-push inflation and aggregate output. (12)

4.3 Discuss the main type of unemployment that would be reduced

SmithSmith

Foods produces specialty soup sold in jars. The projected sales in dollars and jars for each quarter of the upcoming year are as? follows:

SmithSmith

anticipates selling

226 comma 000226,000

jars with total sales revenue of

$ 266 comma 000$266,000

in the first quarter of the year following the year given in the preceding table.

SmithSmith

has a policy that the ending inventory of jars must be

3030?%

of the following? quarter's sales.

Requirement

Prepare a production budget for the year that shows the number of jars to be produced each quarter and for the year in total.

Prepare the production budget by first calculating the total units? needed, then calculate the units to produce.

Enter any number in the edit fields and then click Check Answer.

1. Given Q = 560 – 10P and TC = 6000 + 5Q for an oligopolistic firm, determine mathematically the price and output at which the firm:

a. Maximizes its total profits and calculate those profits

b. Maximizes its total revenues and calculate the profits are that price and quantity

c. Maximizes its total revenue in the presence of a $480 profit constraint (20 points)

• Reference Figure 10-6 on p. 442 •

See also Sales Maximization Model on pp. 467-468

• Part (a) is the standard MR = MC procedure.

• For part (b) you are looking for the turning point of the TR function. Note that the derivative of a function measures its rate of change and when a that derivative (the Marginal Revenue) equals 0 it is at its turning point (in this case, maximum)

• The profit constraint for the sales maximizer means that he must earn at least $480 and cannot maximize sales (he will come as close as he can given the constraint). To do this write a total profit equation (TR minus TC) and set it equal to $480

• Solve the equation by turning it into a quadratic equation and use the quadratic formula to find the quantities that satisfy the equation. Since the firm is a sales maximizer, the larger of the two will be the one chosen.

• Hint: Although the question doesn’t require that you find the profit for part (c), you can check to see if you’ve done it correctly by calculating the profit. You set it equal to $480 so it should be $480

a)   Asher Corporation's equipment had an original life of 140 months, and the straight-line depreciation method is used. As of January 1, the equipment was 40 months old. The equipment will be worthless at the end of its useful life.

b)   As of the end of the month, Asher Corporation has provided services to customers for which the earnings process is complete. Formal billings are normally sent out on the first day of each month for the prior month's work. January's unbilled work is $25,000.

c)   Utilities used during January, for which bills will soon be forthcoming from providers, are estimated at $1,500.

d)   A review of supplies on hand at the end of the month revealed items costing $3,500.

e)   The $2,400 balance in prepaid insurance was for a 6-month policy running from January 1 to June 30.

f)   The unearned revenue was collected in December of 20X7. Sixty percent of that amount was actually earned in January with the remainder to be earned in February.

g)   The loan accrues interest at 1% per month. No interest was paid in January.

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

In November, the pizzeria budgeted for 1,860 pizzas at an average selling price of $17 per pizza and for 240 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

Required:

1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

In November, the pizzeria budgeted for 1,530 pizzas at an average selling price of $14 per pizza and for 210 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

Required:

1. Compute the revenue and spending variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

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Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

In November, the pizzeria budgeted for 1,830 pizzas at an average selling price of $16 per pizza and for 230 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

Required:

1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)