Journal Entries for Credit Losses At the beginning of the year, Whitney Company had the following accounts on its books:

The following transactions, among others, occurred during the year:

Required

a. Prepare journal entries to record the credit sales, the collections on account, and the preceding transactions and adjustment.
b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet.

a.

b.

A 3 year old boy is brought to the pediatrician with a 102' F fever, cough, a runny nose, and red, watery eyes that have lasted three days. His mother is concerned because the fever is not getting better and her son is in obvious discomfort. The doctor suspects that it is a viral cold and instructs the mother to give an over the counter decongestant, an antihistamine, and ibuprofen for fever.

Two days later the same boy is brought to the Emergency Room. His symptoms have continued and now his face has blotchy, red spots on it. The responding doctor suspects Fifth Disease.

1. What is the etiological agent of Fifth's disease?
2. What symptoms do you think led to that diagnosis?
3. What is the incubation period for the disease?
4. How is it transmitted?
5. What is the treatment?
6. Are there any known complications?
7. What demographic is most likely infected?

Consider a project with a 5-year life. The initial cost to set up the project is $100,000. This amount is to be linearly depreciated to zero over the life of the project and there is no salvage value. The required return is 13% and the tax rate is 34%. You've collected the following estimates: Base case Pessimistic Optimistic Unit sales per year (Q) 8,000 6,000 10,000 Price per unit (P) 50 40 60 Variable cost per unit (VC) 20 35 15 Fixed costs per year (FC) 30,000 50,000 20,000

Attempt 3/5 for 10 pts. Part 1 What is the annual free cash flow in the base case?

Attempt 1/5 for 10 pts. Part 2 What is the NPV in the base case?

Attempt 1/5 for 10 pts. Part 3 What is the NPV in the pessimistic case?

Attempt 2/5 for 10 pts. Part 4 What is the NPV in the optimistic case?

Consider a project with a 6-year life. The initial cost to set up the project is $100,000. This amount is to be linearly depreciated to zero over the life of the project and there is no salvage value. The required return is 11% and the tax rate is 34%.

The price per unit is $50, variable costs are $20 per unit and fixed costs are $30,000 per year. You've collected the following estimates for unit sales:

Attempt 2/5 for 8 pts.

Part 1

What is the NPV in the base case?

Attempt 1/5 for 10 pts.

Part 2

What is the NPV in the pessimistic case?

Attempt 1/5 for 10 pts.

Part 3

What is the NPV in the optimistic case?

Assume there are three companies that in the past year paid exactly the same annual dividend of ​$2.88 a share. In​ addition, the future annual rate of growth in dividends for each of the three companies has been estimated as​ follows:

(Click on the icon located on the​ top-right corner of the data table below in order to copy its contents into a​ spreadsheet.)

Assume also that as the result of a strange set of​ circumstances, these three companies all have the same required rate of return (r=14%).

a. Use the appropriate DVM to value each of these companies.

b. Comment briefly on the comparative values of these three companies. What is the major cause of the differences among these three​ valuations?

a. For​ Buggies-Are-Us, the value of the​ company's common shares is $___. (Round to the nearest​ cent.)

For Steady​ Freddie, Inc., the value of the​ company's common shares is $__. (Round to the nearest​ cent.)

For Gang Buster​ Group, the value of the​ company's common shares is $___. (Round to the nearest​ cent.)

b. Comment briefly on the comparative values of these three companies. What is the major cause of the differences among these three​ valuations?​(Select the best choice​ below.)

A.The value of​ Buggies-Are-Us is $20.57 compared to $62.80 for Steady​ Freddie, Inc., and $70.45 for Gang Busters Group. The difference in values is caused by the difference in dividend growth rates. The​ Buggies-Are-Us dividends do not​ grow, resulting in the lowest value. The dividends of Steady​ Freddie, Inc., grow at a constant rate of 9​% forever, whereas Gang Busters​ Group's dividends grow at approximately​ 12% for the first four years and 14​% from year five to the foreseeable future. The higher growth in dividends in the earlier years causes the stock of Gang Busters Group to be worth more than Steady​ Freddie, Inc., stock.

B. The value of​ Buggies-Are-Us is $20.57 compared to $62.80 for Steady​ Freddie, Inc., and $70.45 for Gang Busters Group. The difference in values is caused by the difference in dividend growth rates. The​ Buggies-Are-Us dividends do not​ grow, resulting in the lowest value. The dividends of Steady​ Freddie, Inc., grow at a constant rate of 9​% forever; whereas Gang Busters​ Group's dividends grow at approximately​ 12% for the first four years and 9​% from year five to the foreseeable future. The higher growth in dividends in the earlier years causes the stock of Gang Busters Group to be worth more than the Steady​ Freddie, Inc., stock.

California TrueFarms produces and sells a lot of oranges each year. The oranges are collected at the company’s two farms and transported to the company’s two warehouses. Then they are distributed to four major retailers to be sold to local supermarkets. The shipping costs (per ton) are shown in the tables below:

Farms 1 and 2 can produce up to 500 and 300 tons of oranges in each month, respectively. The cost of producing each ton of orange at Farm 1 is $35, whereas the cost at Farm 2 is $47 because of limited water availability. The four retailers show average monthly demands of 200, 100, 150, and 200 tons, respectively. Because of limited truck capacities, at most 250 tons of orange can be transported between Farm 1 and Warehouse 1.  

a)    Formulate a linear program that determines optimal amounts of production at each farm as well as optimal shipping of oranges in the network to satisfy demands at lowest possible (production + shipping) cost. Clearly define your variables, and write the objective function and all constraints in algebraic form.

b)    Create a spreadsheet model for this problem in Excel and solve with Solver. (Attach three snapshots:  Final setup, Formula view, Solver Menu)

c)     What is the optimal solution? What is the total cost of this production and distribution plan?

d)    Assume TrueFarms can use another truck company to provide additional assistant on the shipments from Farm 1 to Warehouse 1 (so it can ship beyond 250 tons). How much should TrueFarm be willing to pay to the new truck company to carry each additional ton of oranges? (Explain how you came up with that price).

e)    Assume that some oranges perish while being kept at warehouses. In particular, assume that 5% of oranges at Warehouse 1, and 10% of oranges at Warehouse 2 go bad in storage and need to be discarded (before shipping out to retailers). How would this change your algebraic formulation in part (a)? Clearly write down the changes in formulation in algebraic form. Update your Excel setup accordingly, re-solve the problem, and provide a snapshot of the new setup with solutions (no need to get Formula view and Solver menu again)

Following are the individual financial statements for Gibson and Davis for the year ending December 31, 2018:

Gibson acquired 60 percent of Davis on April 1, 2018, for $603,900. On that date, equipment owned by Davis (with a five-year remaining life) was overvalued by $84,000. Also on that date, the fair value of the 40 percent noncontrolling interest was $402,600. Davis earned income evenly during the year but declared the $40,000 dividend on November 1, 2018.

1. Prepare a consolidated income statement for the year ending December 31, 2018.

2. Determine the consolidated balance for each of the following accounts as of December 31, 2018:

• Goodwill
• Equipment (net)
• Common stock
• Buildings (net)
• Dividends declared

Your investment firm is offering you payments of $55,000 a year, at a price of $310,000. If your required return is 5.5%, what is the minimum length of time you must receive these payments to make it a good deal for you?

The stockholders’ equity section of Stellar Inc. at the beginning of the current year appears below. Common stock, $10 par value, authorized 1,043,000 shares, 321,000 shares issued and outstanding $3,210,000 Paid-in capital in excess of par—common stock 562,000 Retained earnings 624,000 During the current year, the following transactions occurred.

1. The company issued to the stockholders 109,000 rights. Ten rights are needed to buy one share of stock at $30. The rights were void after 30 days. The market price of the stock at this time was $32 per share.

2. The company sold to the public a $204,000, 10% bond issue at 104. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common stock at $28 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $8.

3. All but 5,450 of the rights issued in (1) were exercised in 30 days.

4. At the end of the year, 80% of the warrants in (2) had been exercised, and the remaining were outstanding and in good standing.

5. During the current year, the company granted stock options for 10,800 shares of common stock to company executives. The company, using a fair value option-pricing model, determines that each option is worth $10. The option price is $28. The options were to expire at year-end and were considered compensation for the current year.

6. All but 1,080 shares related to the stock-option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract.

Prepare general journal entries for the current year to record the transactions listed above.

GDP measures the: