Journalize these transactions using the perpetual inventory method

a) January 1 purchase inventory for $400 with credit term of 2/15 net 30

b) January 12 paid for the January 1 purchase in full

c) February 1 sold 10 units costing $21 to a customer for $360 on account . This sale has credit term of 1/15 net 40

d) February 9 customer returned three units from his February 1 order because he did not like the color of the goods

e) February 18 customer paid for the February 1 order ( less returns) in full

f) May 5 purchased inventory for $250 with credit terms of 2/10 net 30

g) May 6 paid special freight cost of $30 and I made this inventory purchase in cash

h) May.14 found that 50% of the goods purchased on May 5 or defective. Danner returned these goods

i) June 1 paid for a May 5 purchase (less returns) in full

j). October 1 sold $160 of goods to customer for $220 with a credit term of 1/20 net 40

k) October 14 received cash for payment in full for the October for sale

3. Crane Company manufactures its product, Vitadrink, through two manufacturing processes: Mixing and Packaging. All materials are entered at the beginning of each process. On October 1, 2020, inventories consisted of Raw Materials $26,000, Work in Process—Mixing $0, Work in Process—Packaging $251,000, and Finished Goods $290,000. The beginning inventory for Packaging consisted of 11,000 units that were 50% complete as to conversion costs and fully complete as to materials. During October, 51,000 units were started into production in the Mixing Department and the following transactions were completed.

1. Purchased $301,000 of raw materials on account.

2. Issued raw materials for production: Mixing $211,000 and Packaging $46,000.

3. Incurred labor costs of $280,900.

4. Used factory labor: Mixing $183,500 and Packaging $97,400.

5. Incurred $812,000 of manufacturing overhead on account.

6. Applied manufacturing overhead on the basis of $22 per machine hour. Machine hours were 29,000 in Mixing and 7,000 in Packaging.

7. Transferred 46,000 units from Mixing to Packaging at a cost of $980,000.

8. Transferred 54,000 units from Packaging to Finished Goods at a cost of $1,316,000.

9. Sold goods costing $1,641,000 for $2,501,000 on account.

a) Journalize the October transactions.

An eel supply company has two large vats of adolescent eels (called ’elvers’). One vat contains American eels, and the other contains European eels. An eel researcher suspects that American eels have a larger number of scales than European eels. Let µAm be the population mean for American, and µEu be the population mean for European. The species of eels can be considered independent. The researcher visits the company and uses an ingenious method to get random samples from each vat (details omitted) and counts the number of scales on each selected elver. Suppose the data from each sample supports the assumption that both species scale counts are approximately normal. The sample statistics are summarized below:

Type Sample Size Sample Mean Sample Variance

American 8 220 21

European 5 204 23

(a) Explain why a two sample t test with an equal variance assumption is reasonable to use here. List the null and alternative hypothesis.

(b) At α = 0.1, find the rejection region in the scale of t and use it to make a reject or not reject decision based on the observed test statistic. Then make a conclusion in the context of the problem.

(c) Decide the same test based on computing the p-value (by hand) and comparing it to α =0.1.

(d) Suppose we instead wanted to test: H0 : µAm −µEu =10 vs. HA : µAm −µEu > 10

If the same data is used for both tests, would the p-value for this test be larger or smaller than the p-value that was computed for the test in part (a)? Explain your answer. You do not need to actually compute either p-value to answer this question. (e) Suppose instead we choose to perform a Welch’s t test. What does that mean for the assumptions we are making? Perform a Welch’s T test for the same data (also by hand). How much do the p values differ?

THANKSGIVING SPECIAL!!! For this applied assignment we will be looking at the number of turkeys and bottles of wine sold each November, comparing the American northeast (i.e., our sample) to the total American averages (i.e., the population).

Every Thanksgiving, an average of 960,000 turkeys and 90,000 bottles of wine are sold per state. Importantly, the population variance/standard deviation is not known. Below is the number of turkeys and bottles of wine sold in each of the ten northeast states.

1. What are the upper and lower boundaries of the range of μ-values that you can say with 95% confidence contains the µ represented by our sample mean for the number of turkeys sold? For our sample mean of the number of bottles of wine sold?
2. If we are interested in whether or not the number of bottles of wine sold in the American northeast increases as the number of turkeys sold increases, how would we write the null and alternative hypotheses (using the new statistical notation for stating statistical hypotheses; see page 235)?
3. What is the strength and direction of the relationship between the number of turkeys and bottles of wine sold in the American northwest?
4. What is r-crit and r-obt for the hypothesis test stated in question #8? Is the hypothesis test significant or insignificant? Would you reject or fail to reject the null hypothesis assuming an alpha-level of 0.05?
5. If you were to use this relationship (and linear regression) to predict how many bottles of wine will be sold in a northeast state in 2018 given the number of turkeys sold in that state, how much more accurate would you be (in percent) compared to if you did not use the relationship to make this prediction (round to two decimal places)?

1. Sales-Related Transactions, Including the Use of Credit Cards

   Journalize the entries for the following transactions:

   a. Sold merchandise for cash, $116,300. The The cost that is reported as an expense when merchandise is sold.cost of the merchandise sold was $72,000. (Record the sale first.)

   	Accounts Receivable Cash Credit Card Expense Sales Sales Discounts
   	Accounts Receivable Cash Cost of Merchandise Sold Sales Sales Discounts
   	Accounts Receivable Cost of Merchandise Sold Cash Merchandise Inventory Sales
   	Accounts Receivable Cash Cost of Merchandise Sold Merchandise Inventory Sales Discounts

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   b. Sold merchandise on account, $755,000. The cost of the merchandise sold was $400,000. (Record the sale first.)

   	Accounts Receivable Accounts Payable Merchandise Inventory Sales Sales Discounts
   	Accounts Receivable Cash Cost of Merchandise Sold Sales Sales Discounts
   	Accounts Payable Cash Cost of Merchandise Sold Sales Merchandise Inventory
   	Accounts Receivable Cash Cost of Merchandise Sold Sales Discounts Merchandise Inventory

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   c. Sold merchandise to customers who used MasterCard and VISA, $1,950,000. The cost of the merchandise sold was $1,250,000. (Record the sale first.)

   	Accounts Receivable Accounts Payable Cash Credit Card Expense Sales
   	Accounts Payable Cash Credit Card Expense Sales Sales Discounts
   	Accounts Payable Accounts Receivable Cost of Merchandise Sold Credit Card Expense Merchandise Inventory
   	Accounts Receivable Cash Cost of Merchandise Sold Credit Card Expense Merchandise Inventory

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   d. Sold merchandise to customers who used American Express, $330,000. The cost of the merchandise sold was $230,000. (Record the sale first.)

   	Accounts Receivable Cash Credit Card Expense Merchandise Inventory Sales
   	Accounts Receivable Cash Cost of Merchandise Sold Sales Sales Discounts
   	Accounts Receivable Cost of Merchandise Sold Credit Card Expense Merchandise Inventory Sales
   	Cash Cost of Merchandise Sold Credit Card Expense Merchandise Inventory Sales Returns and Allowances

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   e. Paid $81,500 to National Clearing House Credit Co. for service fees for processing MasterCard, VISA, and American Express sales.

   	Accounts Receivable Cash Cost of Merchandise Sold Credit Card Expense Merchandise Inventory
   	Accounts Receivable Cash Cost of Merchandise Sold Credit Card Expense Merchandise Inventory

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Concept for Analysis 8-10 PLEASE SHOW WORK

Concord Company is considering changing its inventory valuation method from FIFO to LIFO because of the potential tax savings. However, management wishes to consider all of the effects on the company, including its reported performance, before making the final decision.

The inventory account, currently valued on the FIFO basis, consists of 1,000,000 units at $8 per unit on January 1, 2017. There are 1,000,000 shares of common stock outstanding as of January 1, 2017, and the cash balance is $406,920.

The company has made the following forecasts for the period 2017-2019.

2017 2018 2019

Unit sales (in millions of units) 1.09 1.02 1.31

Sales price per unit $10 $12 $12

Unit purchases (in millions of units) 1.02 1.09 1.2

Purchase price per unit $8 $9 $10

Annual depreciation $300 $300 $300

(in thousands of dollars)

Cash dividends per share $0.15 $0.15 $0.15

Cash payments for additions $350 $350 $350

to and replacement of

plant and equipment (in thousands of dollars)

Income tax rate 40% 40% 40%

Operating expenses 15% 15% 15%

(exclusive of depreciation) as a

percent of sales

Common shares outstanding 1 1 1

(in millions)

(a) Compute the following data for Concord Company under the FIFO and the LIFO inventory method for 2017-2019. Assume the company would begin LIFO at the beginning of 2017. (Enter amounts in thousands. Round earnings per share values to 2 decimal places, e.g. 52.75. Round other answers to 0 decimal places, e.g. 125.)

(1)

Year-end inventory balances.

(2)

Annual net income after taxes.

(3)

Earnings per share.

(4)

Cash balance.

CVP—sensitivity analysis. Joan’s Beauty College is considering introducing a new nail design seminar to run on an annual basis with the following price and cost characteristics:

Required: Please answer 3 and 4.

2a. What enrollment enables Joan’s Beauty College to break even?

29,480/(405-185)= 134 enrollment

2b. How many students will enable Joan’s Beauty College to make an operating profit of $35,750 for the year?

(29480+35750)/(405-185)=297 enrollments

2c. Assume that the projected enrollment for the year is 350 students for each of the following situations:

(1) What will be the operating profit for 350 students?

((405-185)x350)-29,480= $47520

(2) What would be the operating profit and changecompared to the results from c(1)if the tuition per student (that is, sales price) (show amount change & %)

(i).decreased by 10 percent?

47520-(405 x 350 x .1)= 33,345

                                                (47520-33345)/47520= 29.8%

Operating profit- $33,345   Operating profit change in amount= $14,175

(ii). Increased by 20 percent?

                                                47520+(405x350x.2)= $75,870

Operating profit increase= (28350)/47520= 59.7%

Operating profit= $75,870

OP change in amount= $28,350

(3) What would be the operating profit and changecompared to the results from c(1)if variable costs per student (show amount change & %)

(i) increased by 10 percent?

(ii) Decreased by 20 percent?

(4) Suppose that fixed costs for the year are 10 percent lower than projected, whereas variable costs per student are 20 percent higher than projected. What would be the operating profit(loss)for the year?

After doing some deep analysis, you find that shares of Bank of America (BAC) are over-priced and the expected return on these shares is 7.2%, while shares of Morgan Stanley (MS) are under-priced and the expected return on these shares is 12.3%.

You want to create an arbitrage portfolio (not following the book recipe) where you will buy MS and short-sell BAC. In particular, your weights will be +100% for MS, and -100% for BAC.

What is the expected return of this arbitrage portfolio?

Note here that you have an arbitrage portfolio where the sum of weights = 0%. However, a portfolio return is a portfolio return. So just compute the expected portfolio return as usual.

{Give your answer as a percentage with 1 decimals, e.g., if the answer is 0.0345224 (or 3.45224%) , enter 3.5 as your answer.}

a) With lockdowns currently imposed across Europe and North America until mid-April, even in
the best-case scenario it will take at least until mid-June for market confidence to be restored in
these economies. The implication is that nearly six million workers in Bangladesh’s formal sector
– which is largely manufacturing – will be without steady work for an extended period.

Which part of the production function do you think the issue mentioned above will affect? Draw
two diagrams to show Real GDP and LRAS is affected in the long run.

b) “The government should also consider an unconditional cash transfer program for an initial
period of three months at a rate of $95 per month, which corresponds to the minimum wage for
the formal sector in Bangladesh. This would cost the government roughly $14 billion, or 4% of
GDP. While this sort of cash transfer program always suffers from targeting issues, Bangladesh
enjoys a highly sophisticated mobile financial services network, which could improve the cover
of the program. A concerted effort involving the non-governmental organizations working in the
informal sector, mobile financial service providers, and the government could be developed to
deliver this urgently needed social assistance.”

Which type of environment under institutions is the above extract referring to? Explain.

Amazon Beverages produces and bottles a line of soft drinks using exotic fruits from Latin America and Asia. The manufacturing process entails mixing and adding juices and coloring ingredients at the bottling plant, which is a part of Mixing Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each.

Because the appearance of the bottle heavily influences sales volume, Amazon developed a unique bottle production process at the company’s container plant, which is a part of Container Division. Mixing Division uses all of the container plant’s production. Each division (Mixing and Container) is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer price to use for the bottles produced for Mixing Division.

At your request, Container Division’s general manager asked other bottle manufacturers to quote a price for the number and sizes demanded by Mixing Division. These competitive prices follow:

^a An equivalent case represents 24 bottles.

Container Division's cost analysis indicates that it can produce bottles at these costs:

These costs include fixed costs of $850,000 and variable costs of $4.50 per equivalent case. These data have caused considerable corporate discussion as to the proper price to use in the transfer of bottles from Container Division to Mixing Division. This interest is heightened because a significant portion of a division manager’s income is an incentive bonus based on profit center results.

Mixing Division has the following costs in addition to the bottle costs:

The corporate marketing group has furnished the following price–demand relationship for the finished product:

Required:

a. Amazon Beverages has used market price–based transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.35 million cases (Enter your answers in thousands of dollars.)

a-1. Calculate operating profits for Container Division.

a-2. Calculate operating profits for Mixing Division.

a-3. Calculate operating profits for Amazon Beverages.

b-1. Calculate operating profits for Container for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)

Which volume of production is the most profitable for Container?

b-2. Calculate operating profits for Mixing for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)

Which volume of production is the most profitable for Container?

b-2. Calculate operating profits for Mixing for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)

Which volume of production is the most profitable for Mixing?

b-3. Calculate operating profits for Amazon Beverages for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)

Which volume of production is the most profitable for Amazon Beverages?