SHOW ALL WORK

1) The air pollutant NO is produced in automobile engines from the high-temperature reaction, N2 (g) + O2 (g) ⇌ 2 NO (g); Kc = 1.7 × 10-3 at 2300K . If the initial concentrations of N2 and O2 at 2300 K are both 1.4 M, what are the concentrations of NO, N2, and O2 when the reaction mixture reaches equilibrium? Show your work (20 points).

2) For each of the following equilibria, use LeChatelier’s principle to predict the direction of reaction when the volume is increased. (15 points)

(a) CO(g) + H2(g) ⇌ C(s) + H2O(g)

(b) 2H2(g) + O2 (g) ⇌ 2 H2O(g)

(c) Fe2O3(s) + 3 H2(g) ⇌ 2Fe(s) + 3 H2O(g)

3) Will the concentration of NO2 increase, decrease, or remain the same when the equilibrium of the exothermic reaction, NOCl(g) + NO2(g) ⇌ NO2Cl (g) + NO(g) is disturbed by the following changes? (15 points)

(a) adding NOCl

(b) adding NO

(c) Removing NO

(d) Adding argon

(e) addition of a catalyst

4) Calculate [H+] of a solution prepared by dissolving 4.25 grams of lithium hydroxide (24 g/mole) in water (18 g/mole) to give 350.0 mL of solution. (12 points) Kw = 1.0 × 10-14

5) Lactic acid (C3H6O3), which occurs in sour milk and foods such as sauerkraut, is a weak monoprotic acid. The [H+] of a 0.10 M solution of lactic acid is 4.57 × 10-3. What is the value of Ka for lactic acid? (16 points)

6) Write a chemical reaction for each of the following ions reacting with water. Demonstrate with this reaction whether they give neutral, acidic, or a basic solution. (16 points)

(a) F-

(c) NH4+

(d) K(H2O)6+

(e) SO32-

7) Calculate the percent dissociation of 0.10 M hydrazoic acid (HN3; Ka = 1.9 ×10-5) in the presence of 0.10 M HCl, and explain if this dissociation is more, the same, or less than if the HCl was not present. (16 points)

Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below:

The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:

Required:

1. Compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system.

2. The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing overhead to the following four activity cost pools (the Other cost pool includes organization-sustaining costs and idle capacity costs):

Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system.

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.

Complete this question by entering your answers in the tabs below.

Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system. (Round your intermediate calculations to 2 decimal places.)

6. Which of the following is an example of systematic risk?
(a) The earnings of a company drop.
(b) The chief executive officer resigns.
(c) A legal suit against a company for environmental pollution.
(d) Changes in the level of interest rates.
(e) The development of a new product line.

7. Suppose a company had earnings per share of $2 over the past year. The industry average PE ratio is 10. Use this information to value this company’s stock price.
(a)$5 (b) $8 (c) $10 (d) $20 (e) $25

8. Which one of the following portfolios should have the most systematic risk?
(a) 50 percent invested in U.S. Treasury bills and 50 percent in a market
index mutual fund
(b) 20 percent invested in U.S. Treasury bills and 80 percent invested in a
stock with a beta of .80
(c) 10 percent invested in a stock with a beta of 1.0 and 90 percent invested
in a stock with a beta of 1.40
(d) 100 percent invested in a mutual fund which mimics the overall market
(e) 100 percent invested in U.S. Treasury bills

9. Which of the following is correct if markets have weak form efficiency?
I) If markets are efficient in the weak form, then it is impossible to make consistently superior profits by using trading rules based on past returns
II) If the markets are efficient in the weak form, then prices will adjust immediately to public information
III) If the markets are efficient in the weak form, then prices reflect all information
(a) I only (b) II only (c) I and II only (d) II and III only (e) I and III only

10. The market rate of return is 12 percent and the risk-free rate of return is 3 percent. Lexant stock has 3 percent less systematic risk than the market and has an actual return of 12 percent. This stock:
(a) is underpriced.
(b) is correctly priced.
(c) will plot below the security market line.
(d) will plot on the security market line.
(e) will plot to the right of the overall market on a security market line graph.

QUESTION: Paraphrase this article into your own words.

Article: Assessing the Allowance for Doubtful Accounts

This article describes three techniques for assessing allowance for doubtful accounts estimates and complying with Statement on Auditing Standards (SAS) no. 57 and AU section 342, Auditing Accounting Estimates, which suggest auditors compare prior accounting estimates with subsequent results to evaluate the reliability of the process used to develop estimates.

TECHNIQUES FOR ANALYZING THE ESTIMATE-GENERATING

The techniques use historical data, they give an indication of the effectiveness of past.

Technique 1: Compare bad debt expense (BDE) to write-offs (WO)

Bad debt expense recorded in a specific year implies the necessity for write-offs during that year and subsequent years. While it is unrealistic to expect estimated bad debt expense to perfectly match actual write-offs in a given year, it is reasonable to expect the ratio of bad debt expense to write-offs to be close to 1.0 over an extended period.

Technique 2: Compare beginning allowance for doubtful accounts (BADA) to write-offs (WO)

This ratio is computed each year using the beginning-of-year allowance for doubtful accounts as the numerator and write-offs of accounts receivable recorded during the year as the denominator. The beginning-allowance-to-write-offs ratio indicates how adequately the allowance accommodated subsequent write-offs. Lower ratios suggest the beginning-of-year allowance may not have been large enough to absorb impending write-offs, while inordinately high ratios might indicate the entity was accumulating excessive allowances.

Technique 3: Assess the allowance exhaustion rate

Exhaustion rates indicate the time (expressed in years) taken to use the beginning-of-year allowance in the form of actual write-offs.

Assessing the effectiveness of past estimates provides a potential basis for confidence in future estimates. The techniques illustrated in this article are designed to help with and clarify assessment of an entity’s past success in estimating its allowance for doubtful accounts. While economic circumstances vary, historical trends provide useful information about the process used to form estimates.

KUMA makes three products X, Y, and Z. All three products must be offered for sale each month in order to provide a complete market service. The products are fragile and their quality deteriorates rapidly once they are manufactured.

The products are produced on two types of machine and worked on by a single grade of direct labour. Five direct employees are paid Ghc 8 per hour for a guaranteed minimum of 160 hours each per month.

All of the products are first molded on a machine type 1 and then finished and sealed on a machine type 2.

The machine hours requirements for each of the products are as follows.

The capacity of the available machine type 1 and 2 are 600 hours and 500 hours per month respectively.

Details of the selling price, unit cost and monthly demand for the three products are as follows

Although KUMA uses marginal costing and contribution analysis as the basis for its decisionmaking activities, profits are reported in the monthly management accounts using the absorption costing basis. Finished goods inventories are valued in the monthly management accounts at full absorption cost.

Required:

1. Calculate the machine utilization rate for each machine each month and explain which of the machine is the bottleneck/limiting factor                                           (7 marks)
2. Using the current system of marginal costing and contribution analysis, calculate the profit maximizing monthly output of the three products.                               (8 marks)

"Wonderful! Not only did our salespeople do a good job in meeting the sales budget this year, but our production people did a good job in controlling costs as well,” said Kim Clark, president of Martell Company. “Our $29,250 overall manufacturing cost variance is only 1.0% of the $2,925,000 standard cost of products made during the year. That's well within the 3% parameter set by management for acceptable variances. It looks like everyone will be in line for a bonus this year." The company produces and sells a single product. The standard cost card for the product follows: Inputs (1) Standard Quantity or Hours (2) Standard Price or Rate Standard Cost (1) × (2) Direct materials 2.50 feet $ 3.30 per foot $ 8.25 Direct labor 2.3 hours $ 10 per hour 23.00 Variable overhead 2.3 hours $ 3.00 per hour 6.90 Fixed overhead 2.3 hours $ 5.00 per hour 11.50 Total standard cost per unit $ 49.65 The following additional information is available for the year just completed: The company manufactured 25,000 units of product during the year. A total of 60,000 feet of material was purchased during the year at a cost of $3.70 per foot. All of this material was used to manufacture the 25,000 units produced. There were no beginning or ending inventories for the year. The company worked 60,000 direct labor-hours during the year at a direct labor cost of $9.60 per hour. Overhead is applied to products on the basis of standard direct labor-hours. Data relating to manufacturing overhead costs follow: Denominator activity level (direct labor-hours) 55,000 Budgeted fixed overhead costs $ 275,000 Actual variable overhead costs incurred $ 186,000 Actual fixed overhead costs incurred $ 270,000 Required: 1. Compute the materials price and quantity variances for the year. 2. Compute the labor rate and efficiency variances for the year. 3. For manufacturing overhead compute: a. The variable overhead rate and efficiency variances for the year. b. The fixed overhead budget and volume variances for the year.

As a firm takes on more debt, its probability of bankruptcy_______. (Increases or Decreases) Other factors held constant, a firm whose earnings are relatively volatile faces a________(Greater or Lower) chance of bankruptcy. Therefore, when other factors are held constant, a firm whose earnings are relatively volatile should use_______(Less or More) debt than a more stable firm. When bankruptcy costs become more important, they __________(Increase or Reduce) the tax benefits of debt.

Green Goose Automation Company currently has no debt in its capital structure, but it is considering using some debt and reducing its outstanding equity. The firm’s unlevered beta is 1.25, and its cost of equity is 11.75%. Because the firm has no debt in its capital structure, its weighted average cost of capital (WACC) also equals 11.75%. The risk-free rate of interest (rRFrRF) is 3%, and the market risk premium (RP) is 7%. Green Goose’s marginal tax rate is 35%.

Green Goose is examining how different levels of debt will affect its costs of debt and equity, as well as its WACC. The firm has collected the financial information that follows to analyze its weighted average cost of capital (WACC). Complete the following table.