The Drug Company developed a new sleeping pill. The drug is called Star and was approved by the FDA in 2016. In 2017 the company began to notice problems with this drug. People who were prescribed Star reported feeling sleepy during the next day and developing a dependence on this drug. The company reacted immediately and stopped selling Star near the end of 2017. In the last six months of 2018, the company was sued by 1,000 people who experienced grogginess and dependency reaction to the sleeping pill. At the end of 2018, the company’s attorneys believe there is a 60% chance the company will need to make payments in the range of $1,000 to $5,000 to settle each claim. At the end of 2019, while none of the cases have been resolved, the company’s attorneys now believe there is an 80% chance the company will need to make payments in the range of $2,000 to $7,000 to settle each claim. In 2020, 400 claims were settled at a total cost of $1.2 million. Based on this experience, the company believes 30% of the remaining cases will be settled for $3,000 each, 50% will be settled for $5,000 and 20% will be settled for $10,000 each. The company is in the process of the first-time adoption of IFRS and needs to report under US GAAP and IFRS, as required by IFRS 1. Using US GAAP and IFRS, show what journal entries would be required in 2017, 2018, 2019 and 2020.

Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Sunshine Company had the following income, expense, and loss items for the current year:

Furthermore, Sunshine’s liabilities (all recourse) increased from $0 on 1/1 to $300,000 on 12/31 of the current year.

1. Assume that Sunshine Company is owned by Alvin as a sole proprietorship. Alvin received $2,400 per month ($28,800 in total) from Sunshine Company as an owner’s draw. Additionally, Alvin took $55,000 out of Sunshine Company near the end of the year as a partial distribution of profits. (11 points)
   1. Calculate the net business income of Sunshine Company/Alvin that would be reported on Schedule C of Alvin’s Form 1040.
   2. How much of the $2,400 per month ($28,800 total) and the $55,000 distribution would Alvin include as taxable income on his Form 1040?
   3. What amount of Alvin’s income will be subject to self-employment tax?
   4. Note that you do not need to complete Schedule C or other forms, but these form will be a useful guide in completing this portion of the assignment.                       

Meganol Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Meganol Company had the following income, expense, and loss items for the current year:

Furthermore, Meganol's liabilities (all recourse) increased from $0 on 1/1 to $300,000 on 12/31 of the current year.

1. Assume that Meganol Company is owned by Thomas as a sole proprietorship. Thomas received $2,400 per month ($28,800 in total) from Meganol Company as an owner’s draw. Additionally, Thomas took $55,000 out of Meganol Company near the end of the year as a partial distribution of profits. (11 points)
   1. Calculate the net business income of Meganol Company/Thomas that would be reported on Schedule C of Thomas Form 1040.
   2. How much of the $2,400 per month ($28,800 total) and the $55,000 distribution would Thomas include as taxable income on his Form 1040?
   3. What amount of Thomas's income will be subject to self-employment tax?
   4. Note that you do not need to complete Schedule C or other forms, but these form will be a useful guide in completing this portion of the assignment.                       

Scenic Flights provides 3 hour sightseeing flights over the Eastern Sea Board along the Greet Ocean Road near Lorne Victoria. The average flight has 20 passengers on board. Each passenger pays $300 for a 2 hour scenic flight. The business averages 90 flights each year based on current demand over the weekend – Saturday and / or Sunday dependent on demand. Each flight requires two pilots who are each paid $500 per flight and two flight attendants who receive $200 each per flight. Pilots and flight attendants are employed on a casual basis only receiving payment when flights operate. Other variable costs include: inflight passenger refreshments costing $30 per passenger and fuel which costs $800 per flight. Total annual fixed costs are $150,000.

Calculate income and variable costs and contribution margin of each scenic flight.

Calculate the number of scenic flights needed to break even.

Scenic Flights would like to increase current profits by 40 percent. Calculate the number of additional flights required to meet this financial goal.

Discuss whether this increased profit target is realistic under current conditions and possible assumptions and limitations of the “cost / volume / profit model” at such higher volume levels. (word limit 40)

Analysts expect Walmart Inc. to have earnings per share of $5.60 for the coming year (year 1). Walmart intends to invest heavily in its online platform in the near term and therefore plans to retain and reinvest 80% of its earnings for the next three years (years 1, 2 and 3). For the next two years (years 4 and 5), retention and reinvestment is anticipated to decrease, with Walmart expected to retain 60% of its earnings. After that (year 6 onwards) the retention rate is expected to drop to 40% and remain that way. Walmart’s new investments in online shopping are expected to generate a return of 15% per year. Walmart’s equity cost of capital is estimated to be 9%.

a. Using the information provided above, estimate Walmart’s share price today.

Suppose the retention rate estimate for year 6 onwards given above is not credible and you therefore ignore it (estimates prior to year 5 are still valid). Instead, you expect Walmart’s 1- year forward price to earnings ratio in year 5 (i.e. PE ratio based on year 5 price and year 6 expected earnings) to be 24.5 (the midpoint between the S&P 500 historical average of 16 and Walmart’s current PE ratio of 33).

b. Use this information to come up with another estimate of Walmart’s share price.

The importance of big data doesn't revolve around how much data you have, but what you do with it. You can take data from any source and analyze it to find answers that enable cost reductions, time reductions, new product development and optimized offerings, and smart decision making. When you combine big data with high-powered analytics, you can accomplish business-related tasks such as:

• Determining root causes of failures, issues, and defects in near-real time.
• Generating coupons at the point of sale based on the customer's buying habits.
• Recalculating entire risk portfolios in minutes.
• Detecting fraudulent behavior before it affects your organization.

In your post give an example of an actual or potential application of big data or data mining in your own organization or an organization you are familiar with. Discuss and share this information with your classmates.

In responding to your peers, select responses that use big data or a data mining application that is different from your own. Based on your readings from Chapter 21 describe how the application meets the criteria of being big data or data mining. Consider how big data or data mining could be applied to the final project case study. Support your initial posts and response posts with scholarly sources cited in APA style.

Lexington Company produces baseball bats and cricket paddles. It has two departments that process all products. During July, the beginning work in process in the cutting department was half completed as to conversion, and complete as to direct materials. The beginning inventory included $40,000 for materials and $60,000 for conversion costs. Ending work-in-process inventory in the cutting department was 40% complete. Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 80% complete as to conversion. Direct materials for finishing the units are added near the end of the process. Beginning inventories included $24,000 for transferred-in costs and $28,000 for conversion costs. Ending inventory was 30% complete. Additional information about the two departments follows: Cutting Finishing Beginning work-in-process units 20,000 24,000 Units started this period 60,000 Units transferred this period 64,000 68,000 Ending work-in-process units 20,000 Material costs added $48,000 $34,000 Conversion costs 28,000 68,500 Transferred-out cost 128,000 Using FIFO costing method for the finishing department answer the following questions. 1. What are equivalent units for conversion costs? 2. What are equivalent units for trans-in costs? 3. What is equivalent unit costs for direct materials? 4. What is equivalent unit costs for trans-in costs? 5. What is total costs assigned to transferred out units?

Addison Manufacturing holds a large portfolio of debt securities as an investment. The fair value of the portfolio is greater than its original cost, even though some debt securities have decreased in value. Sam Beresford, the financial vice president, and Angie Nielson, the controller, are near year-end in the process of classifying for the first time this securities portfolio in accordance with GAAP. Beresford wants to classify those securities that have increased in value during the period as trading securities in order to increase net income this year. He wants to classify all the securities that have decreased in value as held-to-maturity.

Nielson disagrees. She wants to classify those debt securities that have decreased in value as trading securities and those that have increased in value as held-to-maturity. She contends that the company is having a good earnings year and that recognizing the losses will help to smooth the income this year. As a result, the company will have built-in gains for future periods when the company may not be as profitable.

(a)  

Will classifying the portfolio as each proposes actually have the effect on earnings that each says it will?

(b)  

Is there anything unethical in what each of them proposes? Who are the stakeholders affected by their proposals?

(c)  

Assume that Beresford and Nielson properly classify the entire portfolio into trading, available-for-sale, and held-to-maturity categories. But then each proposes to sell just before year-end the securities with gains or with losses, as the case may be, to accomplish their effect on earnings. Is this unethical?

2.  The profit function from manufacturing and selling xx BabCo Lounge Chairs is:
P(x)=30x−140−0.2x^2

a. Find the exact additional profit for manufacturing and selling 10 chairs instead of 9 chairs.

b. Find the marginal profit at x=9  

= per lounge chair.

3.  Acme Office Supplies manufactures file cabinets. The cost (in dollars) of producing x file cabinets is given by:

C(x)=1025+60x−x^2
a. Find the exact additional cost of producing 7 file cabinets instead of 6.

b. Find the marginal cost function. C'(x)=

c. Use the marginal cost function approximate the additional cost of producing 7 file cabinets instead of 6.

4. The cost function for the production of microwaves is given as

C(x)=50,000+40xC(x)=50,000+4

where x is the number of microwaves produced and C(x) is the total cost (in dollars) of producing x units.

Find the marginal cost as a function of x. C'(x)=

5. The total profit (in dollars) from the production and sales of xx espresso machines is

P(x)=40x−0.02x^2−260

a. How many espresso machines must be produced and sold to have a marginal profit of 32 dollars per unit:
machines

b. Find the marginal profit at a production/sales level of 350 machines:
dollars per espresso machine

c. Use the profit at 350 machines, which is $11290, and the marginal profit at 350 machines that you computed above to estimate the profit at an output/sales level of 351.

=$

6. The price-demand function for the sale of yo-yos is:

p=6−0.02x

where p is the price of a yo-yo in dollars, and x is the demand for yo-yos at a price of p dollars.
a. R'(290)=

b. What are the correct units for R'(290)?

7. The price-demand and cost functions for the production of microwaves are given as

p=250−x80

and C(x)=16000+30x

where x is the number of microwaves that can be sold at a price of p dollars per unit and C(x) is the total cost (in dollars) of producing x units

a. Find the profit function in terms of x.
P(x)=

b. Evaluate the marginal profit function at x=1500 microwaves rounded to the nearest cent.
P'(1500)=    per microwave

8.  AnselPix is an online company that makes and sells photographs of National Parks. The profit from selling xx prints of a scene in Arches National Park is P(x) dollars. AnselPix believes that the profit from making and selling 150photos will be 22,000 dollars. Assume that the marginal profit is P'(150)=−150. As AnselPix's financial advisor, would you recommend that they sell more photos or fewer photos? Why?

Fill in the first blank with either the word "more" or "fewer" and the second with the word "increase" or "decrease".

I would recommend that AnselPix sell (Select an answer, more/ fewer?) photos because the company will (Select an answer decrease/increase?) profit by approximately ($?) if they decide to make and sell the 151st photo instead of 150 photos.

9. The revenue (in dollars) from producing and selling xx navigation systems is

R(x)=x(2100−30x)

a. Find the marginal revenue function.
R'(x)=

4.5 Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places.) Product A Product B Number of units produced 11,000 units 1,700 units Direct labor cost (@ $24 per DLH) 0.15 DLH per unit 0.26 DLH per unit Direct materials cost $ 2.00 per unit $ 3.10 per unit Activity Overhead costs Machine setup $ 29,260 Materials handling 56,000 Quality control inspections 103,020 $ 188,280 Required: 4.2 Based on your results in part 4, should the profit or loss per unit for each product influence company strategy? No Yes

Cardiff and Delp is an architectural firm that provides services for residential construction projects. The following data pertain to a recent reporting period.
  

Required:
1. & 2. Using ABC, compute the firm's activity overhead rates. Form activity cost pools where appropriate. Assign costs to a 7,000-square-foot job that requires 480 contact hours, 342 design hours, and 220 days to complete. (Round activity rate answers to 2 decimal places.)

Glassworks Inc. produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the current period, the company reports the following data.
  

  
Glassworks's controller wishes to apply activity-based costing (ABC) to allocate the $54,000 of overhead costs incurred by the two product lines to see whether cost per foot would change markedly from that reported above. She has collected the following information.

  
She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. (Round activity rate and cost per unit answers to 2 decimal places.)