On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $15 and its retail selling price is $90 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred.

2016

2017

1.2. How much warranty expense is reported for November 2016 and for December 2016?

1.3. How much warranty expense is reported for January 2017?

1.4. What is the balance of the Estimated Warranty Liability account as of December 31, 2016?

On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $14 and its retail selling price is $70 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred.

2016

2017

1.1 Prepare journal entries to record above transactions and adjustments for 2016.
  

1.2 Prepare journal entries to record above transactions and adjustments for 2017.
  

On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $13 and its retail selling price is $80 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 6% of dollar sales. The following transactions and events occurred.

2016

2017

2. How much warranty expense is reported for November 2016 and for December 2016?
  

On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $13 and its retail selling price is $80 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 6% of dollar sales. The following transactions and events occurred.

2016

2017

5. What is the balance of the Estimated Warranty Liability account as of January 31, 2017?
  

On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $13 and its retail selling price is $80 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 6% of dollar sales. The following transactions and events occurred. 2016 Nov. 11 Sold 80 razors for $6,400 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 16 razors that were returned under the warranty. 16 Sold 240 razors for $19,200 cash. 29 Replaced 32 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 2017 Jan. 5 Sold 160 razors for $12,800 cash. 17 Replaced 37 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. 1.1 Prepare journal entries to record above transactions and adjustments for 2016. 1.2 Prepare journal entries to record above transactions and adjustments for 2017.

On October 29, 2017, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $15 and its retail selling price is $80 in both 2017 and 2018. The manufacturer has advised the company to expect warranty costs to equal 6% of dollar sales. The following transactions and events occurred.

2017

2018

Problem 9-4A Part 1

1a. Prepare journal entries to record above transactions and adjustments for 2017.
1b. Prepare journal entries to record above transactions and adjustments for 2018.

2. How much warranty expense is reported for November 2017 and for December 2017?

3. How much warranty expense is reported for January 2018?

4. What is the balance of the Estimated Warranty Liability account as of December 31, 2017?
5. What is the balance of the Estimated Warranty Liability account as of January 31, 2018?

On October 29, 2017, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company’s cost per new razor is $20 and its retail selling price is $75 in both 2017 and 2018. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred.

2017

2018

Problem 9-4A Part 1

1a. Prepare journal entries to record above transactions and adjustments for 2017.
1b. Prepare journal entries to record above transactions and adjustments for 2018.

1a.

• Nov. 11: Record the sales revenue of 105 razors for $7,875 cash.

• Nov. 11: Record the cost of goods sold for 105 razors.

• Nov. 30: Record the estimated warranty expense at 8% of November sales.

• Dec. 09: Record the replacement of 15 razors that were returned under the warranty.

• Dec. 16: Record the sales revenue of 220 razors for $16,500 cash.

• Dec. 16: Record the cost of goods sold for 220 razors.

• Dec. 29: Record the replacement of 30 razors that were returned under the warranty.

• Dec 31: Record the estimated warranty expense at 8% of December sales.

  1b. Prepare journal entries to record above transactions and adjustments for 2018.

• Jan. 05: Record the sales revenue of 150 razors for $11,250 cash.

• Jan. 05: Record the cost of goods sold for 150 razors.

• Jan. 17: Record the replacement of 50 razors that were returned under the warranty.

• Jan. 31: Record the adjusting entry for warranty expense for the month of January 2018.

A stock price is currently $50. Over each of the next two three-month periods, it is expected to increase by 10% or fall by 10%. Consider a six month American put option with a strike price of $49.5. The risk free rate is 6%. Work out the the two step binomial option pricing fully and fill in the asked questions. (Work out using 4 decimals and then enter your answers rounding to two decimals without $ sign)

a) S0uu= Blank 1

b) ƒuu= Blank 2

c)  S0dd= Blank 3

d) ƒdd= Blank 4

e)  S0u= Blank 5

f) ƒu= Blank 6

g)  S0d= Blank 7

h) ƒd= Blank 8

i) Option price today (ƒ) = Blank 9

j) At which node will American put option exercised early? (Enter A, B, C or None) Blank 10

Merck inc. is mainta8n the investment management cell and attempting to value call option and put option with maturity of 90 days with common exercise price of 40. The price of stock in market in market is $38.75, which is also paying the dividend on quarterly basis
that is $0.48 bi-monthly. Considering the risk fee rate of 4.6% and implied volatility of 30%.

a. Based on the Black Scholes, Estimate the value of the call and put options.

b. how the dividend paying effects the value of put and call value and Why this effect is substantial?

c. repeat part a and part b with the settings of American call option. Evaluate the difference between answer.

d. Based on technique of the pseudo-American call option, determine whether such technique effects the valuation of call option and put options.

e. With call and put which option has greater chance of early exercise and why. the answer should be calculative

The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $57,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

a.    If the cost of capital is 11 percent, what is the net present value of selecting a new machine? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

What is the Net present value? ________________

b..

what is the internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

What is the Internal rate of return? _______________%

c, Should the project be accepted? Yes or No.

Please give a calculated solution using a calculator. Thanks!