On January 1, 2020, Blossom Inc. agrees to buy 3 kg of gold at
$32,000 per kilogram from Golden Corp on April 1, 2020, but does
not intend to take delivery of the gold. On the day that the
contract was entered into, the fair value of this futures contract
that trades on the Futures Exchange was zero. On January 1, 2020,
Blossom is required to deposit $66 with the stockbroker as a
margin. The fair value of the futures subsequently fluctuated as
follows:
| Date | Fair Value of Futures Contract | |
|---|---|---|
|
January 20, 2020 |
$455 | |
|
February 6, 2020 |
$130 | |
|
February 28, 2020 |
$362 | |
|
March 14, 2020 |
$750 |
On the settlement date, the spot price of gold is $33,000 per
kilogram. Assume that Blossom complies with IFRS.
QUESTION:
1) Prepare the journal entry for the day the futures contract was signed.
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
January 1, 2020 |
enter an account title | enter a debit amount | enter a credit amount |
| enter an account title | enter a debit amount | enter a credit amount |
2) Prepare the journal entries to recognize the changes in the fair value of the futures contract.
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
| transaction date | enter an account title | enter a debit amount | enter a credit amount |
| enter an account title | enter a debit amount | enter a credit amount | |
| transaction date | enter an account title | enter a debit amount | enter a credit amount |
| enter an account title | enter a debit amount | enter a credit amount | |
| transaction date | enter an account title | enter a debit amount | enter a credit amount |
| enter an account title | enter a debit amount | enter a credit amount | |
| transaction date | enter an account title | enter a debit amount | enter a credit amount |
| enter an account title | enter a debit amount | enter a credit amount |
3) Prepare the journal entry that would be required if Blossom settled the contract on a net basis on April 1, 2020.
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
April 1, 2020 |
enter an account title | enter a debit amount | enter a credit amount |
| enter an account title | enter a debit amount | enter a credit amount | |
| enter an account title | enter a debit amount | enter a credit amount | |
| enter an account title | enter a debit amount | enter a credit amount |
In: Accounting
A five-year loan is being repaid with level monthly installments, one at the end of each month beginning on 1/1/2018 and ending on 12/31/2022. A 12% nominal annual interest rate compounded monthly was used to determine the amount of each monthly installment.
In which of the following periods does the outstanding loan balance first fall below one-half of the original amount of the loan?
a) January 2018 through March 2020
b) April 2020 through June 2020
c) July 2020 through September 2020
d) October 2020 through December 2020
e) January 2021 through December 2022
In: Finance
Determining Market-Based and Negotiated Transfer Prices
Clanahan, Inc., has a number of divisions around the world. Division US (in the United States) purchases a component from Division N (in the Netherlands). The component can be purchased externally for $25.10 each. The freight and insurance on the item amount to $2.50; however, commissions of $2.50 need not be paid.
Required:
Round your answers to the nearest cent.
1. Calculate the transfer price using the
comparable uncontrolled price method.
$ per unit
2. Suppose that there is no outside market for
the component that Division N transfers to Division US. Further
assume that Division US sells the component for $31.20 and normally
receives a 30 percent markup on cost of goods sold. Calculate the
transfer price using the resale price method.
$ per unit
3. Now assume that there is no external market
for the component transferred from Division N to Division US, and
that the component is used in the manufacture of another product
(i.e., it is not resold). Calculate the transfer price using the
cost-plus method. Further assume that Division N’s manufacturing
cost for the component is $18.10.
$ per unit
4. What if commissions avoided were $2.75 per unit?
What would be the comparable uncontrolled price?
$ per unit
What affect would this have on the resale price?
What affect would this have on the cost-plus price?
In: Accounting
| raceethnicity |
COUNTA of raceethnicity |
| Arab-American | 3 |
| Asian/Pacific Islander | 21 |
| Black | 266 |
| Hispanic/Latino | 183 |
| Native American | 24 |
| Unknown | 22 |
| White | 574 |
| Grand Total | 1093 |
Perform a hypothesis test to examine the claim that the proportion of Hispanic/Latino people killed by police in the US is different from 16.4% (the 2014 demographic percentage for Hispanic/Latino Americans in the US population).
Clearly state the null and alternative hypotheses to test, both as sentences and using symbols.
Are the conditions (independent data and large enough sample size) met?
Use technology to calculate the test statistic and the P-value.
Make a sketch showing the distribution and the P-value.
Using significance level 0.05, do you reject the null hypothesis or not?
Communicate the conclusion of your hypothesis test in context.
2. Now perform a hypothesis test to examine the claim that the proportion of Black people killed by police in the US is different from 12.6% (the 2014 demographic percentage for Black Americans in the US population).Clearly state the null and alternative hypotheses to test, both as sentences and using symbols.
Are the conditions (independent data and large enough sample size) met?
Use technology to calculate the test statistic and the P-value.
Make a sketch showing the distribution and the P-value.
Using significance level 0.05, do you reject the null hypothesis or not?
Communicate the conclusion of your hypothesis test in context.
In: Statistics and Probability
Determining Market-Based and Negotiated Transfer Prices
Clanahan, Inc., has a number of divisions around the world. Division US (in the United States) purchases a component from Division N (in the Netherlands). The component can be purchased externally for $24.60 each. The freight and insurance on the item amount to $2.45; however, commissions of $2.60 need not be paid.
Required:
Round your answers to the nearest cent.
1. Calculate the transfer price using the
comparable uncontrolled price method.
$ fill in the blank 1per unit
2. Suppose that there is no outside market for
the component that Division N transfers to Division US. Further
assume that Division US sells the component for $27.30 and normally
receives a 30 percent markup on cost of goods sold. Calculate the
transfer price using the resale price method.
$ fill in the blank 2per unit
3. Now assume that there is no external market
for the component transferred from Division N to Division US, and
that the component is used in the manufacture of another product
(i.e., it is not resold). Calculate the transfer price using the
cost-plus method. Further assume that Division N’s manufacturing
cost for the component is $18.50.
$ fill in the blank 3per unit
4. What if commissions avoided were $2.90 per unit?
What would be the comparable uncontrolled price?
$ fill in the blank 4per unit
What affect would this have on the resale price?
What affect would this have on the cost-plus price?
In: Accounting
Suppose the US domestic demand for bicycles can be described as the following demand function: QD=25000-150P. The supply function of bicycles is assumed to be QS=15000+50P.
1. We assume that the bicycle market is competitive. What is the equilibrium price and its equilibrium quantity?
2. Calculate the consumer surplus, producer surplus, and the total surplus.
3. Suppose that due to a trade agreement, the US bicycle market now welcomes foreign bicycles and starts importing bicycles from other countries. The world market is competitive, and its price is at $40, i.e. each imported bicycle will cost a US consumer $40 and the supply of imported bicycles is sufficiently large. The trade agreement impacted the market and it has moved to a new equilibrium. What is the new equilibrium price for the US market?
4. At the new equilibrium, what is the quantity demanded for bicycles now? How many bicycles will domestic producers produce? And how many bicycles are from imports?
5. What is the total surplus in this market now? Compare your answer to the total surplus calculated in part 2. What is the net gain in social welfare?
6. Has the U.S. as a whole benefited by opening up trade to the rest of the world? If it has not, explain why. If it has, does it imply that EVERYONE wins in this event? Who might have losses?
In: Economics
8. Upon reviewing former CEO Jeff Swartz’s final blog post, do you agree or disagree with his finding that the business world has shifted to sustainability
In: Finance
Discusses four reasons that firms should care about sustainability. Which one of the reasons would the CEO of Enbridge use to explain why Enbridge cares about Sustainability?
In: Economics
In the Enron case, the CEO was found guilty. However, it affected the workers more than it affected him. Would you agree? What are your thoughts on this case and how it ended?
In: Finance
In: Finance