Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $560,000 and with an expected useful life of 4 years and no residual value. For tax purposes, the deduction is 40%, 30%, 20%, and 10% in those years. Pretax accounting income the first year the equipment was used was $660,000, which includes interest revenue of $13,000 from municipal bonds. Other than the two described, there are no differences between accounting income and taxable income. The enacted tax rate is 30%.
   
Prepare the journal entry to record income taxes.

On January 1, 2018, Jones Jeans Co. buys a 8 year $600,000 face value bond from Rawlings Inc. The bonds pay semi-annual interest on January 1 and July 1. The bonds are classified as held to maturity. Prepare the following journal entries: • Find the price of the bond • Entry at acquisition. • Entry to recognize semi-annual interest revenue at 7/1/18. • Entry necessary if market value of the bond is $628,000 at 12/31/17.

stated coupon rate-12% Market Yield Rate- 10%

1.

T/F/Explain

Price elasticity of demand is measured using the slope of the demand curve.

2.

Our company, Slim ‘N Trim, Inc. sells pants for $40 a pair. After a successful year, you decide to try raising the price to $60. Your observation: sales drop from 50 pairs to 40. What is your price elasticity of demand calculated using the midpoint formula?

3.

After observing the value of your elasticity, does increasing your price increase, decrease, or have no effect on your total revenue? Why?

1. Cal sold 4,000 gallons per day at a price of $2.189 per gallon. He raised the price 1 cent to $2.199 per gallon, and revenues and profits dropped. His station sold 3,600 gallons per day at $2.199 per gallon. Fixed costs are $250 per day. What is the price elasticity of demand? Can the elasticity be characterized as elastic, inelastic, or neither? By how much did revenues increase or decrease as a result of the change in price? By how much did profits increase or decline? (Profits are revenue minus all costs.)

Discuss the importance of understanding internal control in developing an effective audit program. In that context, include in your discussion a general overall position and specifically the internal control questionnaires for either the Revenue and collection Cycle or Production (Inventory) Cycle, which also includes internal control over Inventory Transaction Processing. Matters such as seperation of duties should be part of your response.

Include in your answer several (3 would be enough) important considerations to satisfy sound internal control for each of the five assertions: OCCURRENCE, COMPLETENESS, ACCURACY, CUTOFF AND CLASSIFICATION.

Balley, Inc. produces three milk products (all are main products) from a joint process costing $200,000. Data from the current period’s operation follow:
                Units                  Sales Price                    Separable         Total Revenue After
                  Produced             at Split-Off                   Costs         further Processing
Regular            5,000                       $5                   $10,000            $ 40,000
Fat-free          15,000                          7                         16,000            120,000
2%                    30,000                          8                         5,000               250,000

If Lucerne produces and sells the best mix, what is the total gross margin?

A. $195,000

B. $210,000

C. $180,000

D. $164,000

Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $780,000 and with an expected useful life of four years and no residual value. Assume that, for tax purposes, the deduction is 40%, 30%, 20%, and 10% in those years. Pretax accounting income the first year the equipment was used was $880,000, which includes interest revenue of $25,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable income. The enacted tax rate is 25%.
   
Prepare the journal entry to record income taxes.

Franklin Construction entered into a fixed-price contract to build a freeway-connecting ramp for $38 million. Construction costs incurred in the first year were $28 million and estimated remaining costs to complete at the end of the year were $19 million. How much gross profit or loss will Franklin recognize in the first year if it recognizes revenue over time according to percentage of completion method? (Enter your answer in millions.)

How much gross profit or loss will Franklin recognize in the first year applying the completed contract method? (Enter your answer in millions.)

Three barbers work at a barbershop. Based on estimations, the barbershop is idle 1 time out of 15; 2/15 of the time there is one customer; 3 times out of 15 there are two customers; and 4/15 of the time, there are three customers. Each customer yields a net revenue of 10 dollars.

Let X be a random variable defined as the number of customers

a) Determine the probability distribution of X

b) Determine the cumulative distribution function of X

c) Calculate the probability that: i) All three barbers are working. ii) At least one of the barbers is working