Please include the problem number with every answer, thank you.

During the month of October of the current year, Dan’s Accounting Service was opened. The following transactions occurred.

Oct 1   Dan sold $70,000 worth of stock (50 shares) to start the business.

Oct 1   Dan purchased $9,500 worth of office equipment on account from Keene’s

            Furniture Supply.

Oct 1   Dan paid October’s rent on the office. He wrote a check for $2,500.

Oct 2   Dan purchased $400 worth of office supplies for cash.

Oct 4   The telephone was installed. We paid $95 (Utilities Expense).

Oct 4 Dan placed an advertisement in the Anoka County Shopper. It cost $150 (cash).

Oct 4   Dan started a petty cash fund with $50 for a fund balance.

Oct 5   We purchased (for cash) $45 worth of stamps (Miscellaneous Expense).

Oct 5   A three-month umbrella insurance policy was purchased for $720 (cash).

Oct 7   Bebus’s Automotive Supply Company paid us $2,800 (cash) for setting up their

            books.

Oct 9   We earned $3,200 from Dietz’s Fine Furniture Company for setting up their

books. They will pay us later.

Oct 12 We paid a part-time employee $90 for running errands. There are no taxes to be

withheld.

Oct 14 Smith’s Food Service, Inc. paid us $1,700 for helping them with their taxes.

            The actual bill was for $3,500. They will pay us the rest next month.

Oct 19 We paid our part-time employee $80 for running errands. There are no taxes to be

withheld.

Oct 23 We sent a check for $1,000 to Keene’s Furniture Supply for the office equipment

            purchased on October 1st.

Oct 26 We earned $800 for consulting with Anderson’s Clothing Outlet. They will pay

us later.

Oct 26 We paid our part-time employee $50 for running errands. There are no taxes to

be withheld.

Oct 30 Dietz’s Fine Furniture Company paid us $900 on account for the work we did

            for them on October 9.

Oct 30 Dan paid the stockholders $600 in dividends.

Oct 31 Dan paid the electric bill which was $90.

Oct 31 Dan replenished the petty cash fund. He had used $12 for office supplies and $18

for miscellaneous expenses.

REQUIRED:

1)Journalize the following entries using the accounts from the Chart of Accounts.

Be sure to use asset accounts instead of expense accounts whenever possible.

2)Post the transactions to the ledger. (Use T- Accounts.)

3)Prepare a trial balance as of October 31 of the current year.

4)Journalize the following adjusting entries:

A)Ed determines that there was $250 worth of supplies still on hand.

B)One month of insurance was been used.

C)The depreciation on our office equipment is $250.

D)Our part-time employee has earned $40 so far this week. She will be paid next month for the full week’s work.

5)Post the adjusting entries.

6)Prepare an adjusted trial balance.

7)Prepare an Income Statement (don’t forget the Earnings Per Share), Statement of Retained Earnings and a Classified Balance Sheet.

8)Journalize the closing entries.

9)Post the closing entries.

10)Prepare a post-closing trial balance.

DAN’S ACCOUNTING SERVICE

CHART OF ACCOUNTS

101 Cash

102 Petty Cash

108      Accounts Receivable

112 Office Supplies

118 Prepaid Insurance

201 Office Equipment

202 Accumulated Depreciation—Office Equipment

301      Accounts Payable

308      Wages Payable

511      Contributed Capital

512 . Retained Earnings

513 . Dividends

611 . Professional Fees

810      Advertising Expense

815 . Depreciation Expense

820      Insurance Expense

825      Miscellaneous Expense

830      Office Supplies Expense

835 Rent Expense

840 . Utilities Expense

845      Wages Expense

On October 15, 2017, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On January 1, 2018, 32 million stock options were granted, exercisable for 32 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 $20. The fair value of the 32 million options, estimated by an appropriate option pricing model, is $3 per option. Ensor chooses the option to recognize forfeitures only when they occur.

Ten percent (3.2 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 $31 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.

1. Consider the following bond which pays coupon semiannually on October 15 and April 15. It is being sold for settlement on August 10, 2020.

Calculate its flat price, accrued interest, and full price.

A company takes a short position in 10 futures contracts on soybean on October 2, 2020. The initial futures price is $10.175 per bushel. Suppose on December 31, 2020 the futures price is $10.02 per bushel. On March 20, 2021 it is $9.89 per bushel. The contracts are closed out on March 20, 2021. What gain is recognized (taxable) in the accounting year January 1 to December 31, 2021 if the company is classified as a hedger? Each contract is on 5,000 bushels of soybean.

A company takes a long position in 5 futures contracts on soybean on October 2, 2020. The initial futures price is $10.19 per bushel. Suppose on December 31, 2020 the futures price is $10.25 per bushel. On March 20, 2021 it is $10.42 per bushel. The contracts are closed out on March 20, 2021. What gain is recognized (taxable) in the accounting year January 1 to December 31, 2021 if the company is classified as a speculator? Each contract is on 5,000 bushels of soybean.

Luby’s Inc. has derivatives transactions with four different counterparties A, B, C, D which are worth $8 million, -$17 million, $20 million and -$32 million, respectively to Lucy’s. The transactions are cleared centrally through the same CCP and the CCP requires a total initial margin of $10 million. How much margin or collateral does Luby’s have to provide?

Suppose a trader who owns 320,000 pounds of commodity A decides to hedge the value of her position with the futures contracts. One futures contract is for the delivery of 40,000 pounds of commodity B. The price of commodity A is $21.20 and the futures price is 18.30 (both dollars per pound). The correlation between the futures price and the price of commodity A is 0.92. The volatilities of commodity A and the futures are 0.31 and 0.38 per year, respectively. What is the minimum variance hedge ratio?

Suppose a trader who owns 320,000 pounds of commodity A decides to hedge the value of her position with the futures contracts. One futures contract is for the delivery of 40,000 pounds of commodity B. The price of commodity A is $21.20 and the futures price is 18.30 (both dollars per pound). The correlation between the futures price and the price of commodity A is 0.92. The volatilities of commodity A and the futures are 0.31 and 0.38 per year, respectively. Should the trader take a long or short futures position?

On October 15, 2017, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On January 1, 2018, 18 million stock options were granted, exercisable for 18 million shares of Ensor's $1 par common stock. The options are exercisable between January 1, 2021, and December 31, 2023, at 80% of the quoted market price on January 1, 2018, which was $15. The fair value of the 18 million options, estimated by an appropriate option pricing model, is $6 per option. Ensor chooses the option to recognize forfeitures only when they occur.

Ten percent (1.8 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 $37 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.

Question 2:

In October 2018 marijuana became legal in Canada, and since then marijuana is legal for adults to own and use it. As it became legal some Canadians invested in growing marijuana and some retail stores opened to sell this product.

1. Use the AS-AD model in the SR to discuss the impact of this policy on the short-run and long-run equilibrium in Canada.
2. Use the AS-AD model in the LR to discuss the impact of this policy on the short-run and long-run equilibrium in Canada.

Sarah has a craft shop that sells items online on Etsy. Once a year, in October, she must plan for her special items sales for Valentine’s day. Her best seller for Valentine’s day is a heart-shaped keychain with the lovers’ names carved on it. Sarah does the carving right before shipping, but she must order all keychains from her supplier in October, to have them ready in January. She offers the keychain in her shop from January 15 to February 14. After February 14, people have no interest in buying the Valentine’s keychain anymore. The estimated demand during the selling period is normally distributed with a mean of 44 items and a standard deviation of 26 items considering that Sarah sells the keychains at $25 per unit and it costs her $5 per unit, please answer the following questions.

If Sarah decides to set the order quantity of Valentine’s day keychain to be 47:

Question 1

What would be the expected number of units short under this policy?

What would be the Item Fill Rate under this policy?

Question 2

Sarah has realized that her order quantity is not optimal and asks you to calculate the optimal value in order to maximize profit. How many keychains should Sarah order in October to maximize profit ?

Question 3

Sarah has hired a supply chain specialist to cross-check the order quantity that you have proposed. The supply chain specialist suggested to use an order quantity of 80. To show that your order quantity is truly the optimal value, you decided to calculate the expected profit for the order quantity that you proposed (in Question 2); and the expected profit for the order quantity recommended by the supply chain specialist.What is the expected profit using the order quantity that you proposed in Question 2?

What is the expected profit using the order quantity recommended by the supply chain specialist ?

Question 4

After doing some market research, Sarah discovers that she could sell the leftover inventory of keychains after Valentine’s day if the selling price is drastically reduced. She decides that she will be selling the remaining keychains after Valentine’s day at a discount price of $2 per unit. Considering this information, how many keychains should Sarah order in October to maximize profit ?

The Thompson Corporation, a manufacturer of steel products, began operations on October 1, 2019. The accounting department of Thompson has started the fixed-asset and depreciation schedule presented below. You have been asked to assist in completing this schedule. In addition to ascertaining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

1. Depreciation is computed from the first of the month of acquisition to the first of the month of disposition.
2. Land A and Building A were acquired from a predecessor corporation. Thompson paid $772,500 for the land and building together. At the time of acquisition, the land had a fair value of $103,200 and the building had a fair value of $756,800.
3. Land B was acquired on October 2, 2019, in exchange for 2,600 newly issued shares of Thompson’s common stock. At the date of acquisition, the stock had a par value of $5 per share and a fair value of $21 per share. During October 2019, Thompson paid $10,000 to demolish an existing building on this land so it could construct a new building.
4. Construction of Building B on the newly acquired land began on October 1, 2020. By September 30, 2021, Thompson had paid $170,000 of the estimated total construction costs of $260,000. Estimated completion and occupancy are July 2022.
5. Certain equipment was donated to the corporation by the city. An independent appraisal of the equipment when donated placed the fair value at $14,400 and the residual value at $1,600.
6. Equipment A’s total cost of $102,000 includes installation charges of $510 and normal repairs and maintenance of $10,600. Residual value is estimated at $5,000. Equipment A was sold on February 1, 2021.
7. On October 1, 2020, Equipment B was acquired with a down payment of $3,600 and the remaining payments to be made in 10 annual installments of $3,600 each beginning October 1, 2021. The prevailing interest rate was 7%.

Required:
Supply the correct amount for each answer box on the schedule. (Round your intermediate calculations and final answers to the nearest whole dollar.)

Bonita Distribution markets CDs of the performing artist Unique. At the beginning of October, Bonita had in beginning inventory 2,000 of Unique’s CDs with a unit cost of $7. During October, Bonita made the following purchases of Unique’s CDs.

During October, 10,950 units were sold. Bonita uses a periodic inventory system.

Determine the cost of goods available for sale.

eTextbook and Media

Calculate cost per unit. (Round answer to 2 decimal places, e.g. 2.25.)

eTextbook and Media

Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). (Round answers to 0 decimal places, e.g. 1,250.)

eTextbook and Media

Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of goods sold for the income statement?