Athletic world began October with merchandise inventory of 72 crates of vitamins that cost a total of $3600 During the month Athletic world purchased and sold merchandise on account as follows

Data Table

Oct 5th Purchase 120 crates @ 78 each

13 Sale 130 crates @ 98 each

18 Purchase 124 crates @ 90 each

26 Sale 130 crates @ 102 each

The goods-trade gap was £8.3bn, compared with £7.6bn in October, the Office for National Statistics said today. Economists predicted £7.5bn, according to a Bloomberg News survey. The Bank of England last week cut the benchmark interest rate to 1.5pc, the lowest in its history, to combat the recession. Policy makers said that the world economy ``appears to be undergoing an unusually sharp and synchronised downturn'' which will hurt global trade. “We see another rate cut in February,'' said David Page, an economist at Investec Securities. ``The bank is aware that we're going through a particularly sharp adjustment in global demand.'' Exports fell 5.8pc on the month while imports dropped 1.8pc, the statistics office said. Overseas sales of oil, chemicals, cars and other commodities slipped. The goods trade gap with countries outside the European Union widened to 5.3bn pounds in November, the most on record. The trade surplus with the U.S. narrowed to £301m, the smallest since February 2007, the statistics office said today. Oxford, England-based Electrocomponents Plc, a supplier of 350,000 products from cables to calculators, said last month sales worsened on weaker demand in Europe, the Asia-Pacific region and the U.S. The International Monetary Fund forecasts recessions in the US, Japan and the euro area. The UK economy contracted 0.6pc in the third quarter after stalling in the second, government data show.

a) What has been the recent performance of the UK trade balance?

b) What has been the reaction of the Bank of England to the current economic recession?

c) Which was the economic rationale behind the BoE decisions?

d) How effective was monetary policy?

On October 23, 2019 Bill’s warehouse, located along the Dallas North Tollway, was damaged by a tornado. Bill’s tax basis in this warehouse at the time of the tornado was $800,000. Bill received insurance proceeds of $1,700,000. Complete the following:

If Bill wants to just keep the money, what will he report in 2019?

If Bill wants to replace the warehouse, and he expects that it will cost $1,900,000 to do so:

Does Bill need to report any gain in 2019? If not, why not?

By when does Bill need to replace the warehouse by if he does not want to report gain?

On October 15, 2017, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On January 1, 2018, 21 million stock options were granted, exercisable for 21 million shares of Ensor's $1 par common stock. The options are exercisable between January 1, 2021, and December 31, 2023, at 90% of the quoted market price on January 1, 2018, which was $10. The fair value of the 21 million options, estimated by an appropriate option pricing model, is $4 per option. Ensor chooses the option to recognize forfeitures only when they occur. Ten percent (2.1 million) of the options were forfeited when an executive resigned in 2019. All other options were exercised on July 12, 2022, when the stock’s price jumped unexpectedly to $20 per share. Required: 1. When is Ensor’s stock option measurement date? 2. Determine the compensation expense for the stock option plan in 2018. (Ignore taxes.) 3. & 5. Prepare the necessary journal entries.

Information from the financial statements of Ames Fabricators, Inc., included the following:
  

Ames’s net income for the year ended December 31, 2021, is $900,000. The income tax rate is 25%. Ames paid dividends of $5 per share on its preferred stock during 2021.

Required:

Compute basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands (For example, 100,000 should be entered as 100). Do not round intermediate calculations.)

Desert Rat Farms reports the following results for the month of October:

Sales (50,000 units)                                              $1,750,000

Variable Cost                                                             $1,225,000

Contribution Margin                                           $1,525,000

Fixed Cost                                                                   $800,000

Net Income                                                                $725,000

Management is considering the following independent courses of action to increase net income (*independent+ start w/ original #’s for each consideration)

A. Increase selling price by 20% w/ no change to variable cost.

B. Reduce variable cost to 62% of sales

C. Reduce fixed cost by $100,000

Show what the net income would be for each A, B and C. Which is the best course of action to increase net income.

On October 1, 2017, Sharp Company (based in Denver, Colorado) entered into a forward contract to sell 230,000 rubles in four months (on January 31, 2018) and receive $119,600 in U.S. dollars. Exchange rates for the ruble follow:

Sharp's incremental borrowing rate is 12 percent. The present value factor for one month at an annual interest rate of 12 percent (1 percent per month) is 0.9901. Sharp must close its books and prepare financial statements on December 31.

Part 1. Prepare journal entries, assuming that Sharp entered into the forward contract as a fair value hedge of a 230,000 ruble receivable arising from a sale made on October 1, 2017. Include entries for both the sale and the forward contract.

Part 2. Prepare journal entries, assuming that Sharp entered into the forward contract as a fair value hedge of a firm commitment related to a 230,000 ruble sale that will be made on January 31, 2018. Include entries for both the firm commitment and the forward contract. The fair value of the firm commitment is measured by referring to changes in the forward rate.

Bell Company, a manufacturer of audio systems, started its production in October 2020. For the preceding 3 years, Bell had been a retailer of audio systems. After a thorough survey of audio system markets, Bell decided to turn its retail store into an audio equipment factory.

Raw material costs for an audio system will total $77 per unit. Workers on the production lines are on average paid $15 per hour. An audio system usually takes 7 hours to complete. In addition, the rent on the equipment used to assemble audio systems amounts to $6,000 per month. Indirect materials cost $5 per system. A supervisor was hired to oversee production; her monthly salary is $3,800.

Factory janitorial costs are $2,200 monthly. Advertising costs for the audio system will be $9,200 per month. The factory building depreciation expense is $6,000 per year. Property taxes on the factory building will be $9,600 per year.

Assuming that Bell manufactures, on average, 1,000 audio systems per month, enter each cost item on your answer sheet, placing the dollar amount per month under the appropriate headings. Total the dollar amounts in each of the columns.