A team of researchers would like to find out if Country X residents, who favor a low fat diet, have significantly lower cholesterol levels compared to that of the US population. They collected data from a large sample of Country X residents and the Z statistic is calculated to be -1.34 in a one-tailed test with an alpha level of .05. What is the researchers' conclusion of the hypothesis test?
Group of answer choices
The researchers fail to reject the null hypothesis.
The researchers reject the alternative hypothesis.
The researchers reject the null hypothesis.
More information is needed to reach a conclusion.
A study was conducted on the effect of money on life satisfaction by comparing a group of people who are financially wealthy to the general population. Based on the statistical result, the researchers failed to reject the null hypothesis, so it can be concluded that ____.
Group of answer choices
the probability is high that the life satisfaction of people who are wealthy is different from the general population
life satisfaction of people who are wealthy has been proven to be the same as the general population
life satisfaction of people who are wealthy has been proven to be different from the general population
the probability is high that the life satisfaction of people who are wealthy is the same as the general population
Based on the national statistics on MPG ratings, the national average rating for sedans is 25 with a standard deviation of 5. My car has an MPG of 29, what is the percentage of sedans performing better than my car in MPG?
Group of answer choices
50 + 28.81% - 78.81%
50% - 28.81% = 21.19%
100% - 34.13% = 65.87%
100% - 34.13% = 65.86%
When using the Z table for a two-tailed hypothesis test with a preset alpha (significance) level, what is the correct sequence of the following steps (it is possible not all steps will be used):
1) Look for the corresponding Z value(s)
2) Multiply the percentage of alpha by 2 to be the "tail area
percentage"
3) Look in the "tail" column for the "tail area percentage”
4) Divide the percentage of alpha by 2 to be the "tail area
percentage"
5) Convert the alpha to percentage
Group of answer choices
5, 4, 3, 1
5, 2, 3, 1
5, 4, 3, 1, 2
1, 2, 3
How does a two-tailed test compared to a one-tailed test when given a sample statistic and a fixed alpha level?
Group of answer choices
The critical value to be compared to the statistic would be less extreme with a two-tailed test.
The critical value to be compared to the statistic would be more extreme with a two-tailed test.
The total significance area in the comparison distribution is larger in a two-tailed test.
The total significance area in the comparison distribution is smaller in a one-tailed test.
In: Statistics and Probability
Interpreting Accounts Receivable and Its Footnote
Disclosure
Following is the current asset section from the W.W. Grainger,
Inc., balance sheet.
| As of December 31 ($ 000s) | 2010 | 2009 | 2008 |
|---|---|---|---|
| Cash and cash equivalents | $ 313,454 | $ 459,871 | $ 396,290 |
| Accounts receivable (less allowances for doubtful accounts of $24,552, $25,850 and $26,481, respectively |
762,895 | 624,910 | 589,416 |
| Inventories, net | 991,577 | 889,679 | 1,009,932 |
| Prepaid expenses and other assets | 87,125 | 88,364 | 73,359 |
| Deferred income taxes | 44,627 | 42,023 | 52,556 |
| Prepaid income taxes | 38,393 | 26,668 | 22,556 |
| Total current assets | $ 2,238,071 | $ 2,131,515 | $ 2,144,109 |
Grainger reports the following footnote relating to its
receivables.
Allowance for Doubtful Accounts: The following table shows the
activity in the allowance for doubtful accounts.
| For Years ended December 31 ($ 000s) | 2010 | 2009 | 2008 |
|---|---|---|---|
| Allowance for doubtful accounts- accounts receivable | |||
| Balance at beginning of period | $ 25,850 | $ 26,481 | $ 25,830 |
| Provision for uncollectable accounts | 6,718 | 10,748 | 12,924 |
| Write-off of uncollectible accounts, less recoveries | (8,302) | (12,254) | (11,501) |
| Foreign currency exchange impact | 286 | 875 | (772) |
| Balance at end of period | $ 24,552 | $ 25,850 | $ 26,481 |
(a) What amount do customers owe Grainger at each of the year-ends
2008 through 2010?
| ($ 000s) | 2010 | 2009 | 2008 |
|---|---|---|---|
| Gross accounts receivable | $Answer | $Answer | $Answer |
(c) What percentage of its total accounts receivable does Grainger
feel are uncollectible? Hint: Percentage of uncollectible accounts
= Allowance for uncollectible accounts/Gross accounts receivable.
Round your answers to two decimal places.
| ($ 000s) | 2010 | 2009 | 2008 |
|---|---|---|---|
| Percentage of uncollectible accounts to gross accounts receivable | Answer % | Answer % | Answer % |
(d) What amount of bad debts expense did Grainger report in its income statement for each of the years 2008 through 2010?
| ($ 000s) | 2010 | 2009 | 2008 |
|---|---|---|---|
| Bad debts expense (titled Provision for Uncollectible Accounts) | $Answer | $Answer | $ Answer |
The allowance for uncollectible accounts remained relatively the same as a percentage of gross accounts receivable.
The allowance for uncollectible accounts has decreased as a percentage of gross accounts receivable.
The allowance for uncollectible accounts has increased as a percentage of gross accounts receivable.
(d) If Grainger had kept its 2010 allowance for uncollectible
accounts at the same percentage of gross accounts receivable as it
was in 2008, by what amount would its profit have changed (ignore
taxes)? HINT: Use rounded answer from part b. to calculate. Round
answer to the nearest thousands.
Profit would Answerincreasedecrease
by $Answer
($ 000s)
In: Accounting
The corporation performs adjusting entries monthly. Closing entries are performed annually on December 31. During December, the corporation entered into the following transactions.
| Dec. | 1 | Issued to John and Patty Driver 27,000 shares of capital stock in exchange for a total of $270,000 cash. | |
| Dec. | 1 | Purchased for $201,600 all of the equipment formerly owned by Rent-It. Paid $138,000 cash and issued a 1-year note payable for $63,600. The note, plus all 12 months of accrued interest, are due November 30, Year 2. | |
| Dec. | 1 | Paid $9,300 to Shapiro Realty as three months’ advance rent on the rental yard and office formerly occupied by Rent-It. | |
| Dec. | 4 | Purchased office supplies on account from Modern Office Co., $1,200. Payment due in 30 days. (These supplies are expected to last for several months; debit the Office Supplies asset account.) | |
| Dec. | 8 | Received $8,500 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Rental Fees.) | |
| Dec. | 12 | Paid salaries for the first two weeks in December, $4,900. | |
| Dec. | 15 | Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18,600, of which $12,100 was received in cash. | |
| Dec. | 17 | Purchased on account from Earth Movers, Inc., $600 in parts needed to repair a rental tractor. (Debit an expense account.) Payment is due in 10 days. | |
| Dec. | 23 | Collected $2,200 of the accounts receivable recorded on December 15. | |
| Dec. | 26 | Rented a backhoe to Mission Landscaping at a price of $250 per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoe for about two or three weeks. | |
| Dec. | 26 | Paid biweekly salaries, $4,900. | |
| Dec. | 27 | Paid the account payable to Earth Movers, Inc., $600. | |
| Dec. | 28 | Declared a dividend of 10 cents per share, payable on January 15, Year 2. | |
| Dec. | 29 | Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co-defendant in a $24,000 lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the rented backhoe in a fenced construction site owned by Collier Construction. After working hours on December 26, Davenport had climbed the fence to play on parked construction equipment. While playing on the backhoe, he fell and broke his arm. The extent of the company’s legal and financial responsibility for this accident, if any, cannot be determined at this time. (Note: This event does not require a journal entry at this time, but may require disclosure in notes accompanying the statements.) | |
| Dec. | 29 | Purchased a 12-month public liability insurance policy for $9,120. This policy protects the company against liability for injuries and property damage caused by its equipment. However, the policy goes into effect on January 1, Year 2, and affords no coverage for the injuries sustained by Kevin Davenport on December 26. | |
| Dec. | 31 | Received a bill from Universal Utilities for the month of December, $680. Payment is due in 30 days. | |
| Dec. | 31 | Equipment rental fees earned during the second half of December amounted to $20,600, of which $15,900 was received in cash. |
Data for Adjusting Entries
The advance payment of rent on December 1 covered a period of three months.
The annual interest rate on the note payable to Rent-It is 6 percent.
The rental equipment is being depreciated by the straight-line method over a period of eight years.
Office supplies on hand at December 31 are estimated at $620.
During December, the company earned $4,600 of the rental fees paid in advance by McNamer Construction Company on December 8.
As of December 31, six days’ rent on the backhoe rented to Mission Landscaping on December 26 has been earned.
Salaries earned by employees since the last payroll date (December 26) amounted to $1,900 at month-end.
It is estimated that the company is subject to a combined federal and state income tax rate of 40 percent of income before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in Year 2.
Comprehensive Problem 1 Part 3
Complete the 10-column worksheet for the year ended December 31. (For accounts where multiple Adjustments are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Round your final answers to the nearest whole dollar.)
In: Accounting
The corporation performs adjusting entries monthly. Closing entries are performed annually on December 31. During December, the corporation entered into the following transactions.
| Dec. | 1 | Issued to John and Patty Driver 27,000 shares of capital stock in exchange for a total of $270,000 cash. | |
| Dec. | 1 | Purchased for $201,600 all of the equipment formerly owned by Rent-It. Paid $138,000 cash and issued a 1-year note payable for $63,600. The note, plus all 12 months of accrued interest, are due November 30, Year 2. | |
| Dec. | 1 | Paid $9,300 to Shapiro Realty as three months’ advance rent on the rental yard and office formerly occupied by Rent-It. | |
| Dec. | 4 | Purchased office supplies on account from Modern Office Co., $1,200. Payment due in 30 days. (These supplies are expected to last for several months; debit the Office Supplies asset account.) | |
| Dec. | 8 | Received $8,500 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Rental Fees.) | |
| Dec. | 12 | Paid salaries for the first two weeks in December, $4,900. | |
| Dec. | 15 | Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18,600, of which $12,100 was received in cash. | |
| Dec. | 17 | Purchased on account from Earth Movers, Inc., $600 in parts needed to repair a rental tractor. (Debit an expense account.) Payment is due in 10 days. | |
| Dec. | 23 | Collected $2,200 of the accounts receivable recorded on December 15. | |
| Dec. | 26 | Rented a backhoe to Mission Landscaping at a price of $250 per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoe for about two or three weeks. | |
| Dec. | 26 | Paid biweekly salaries, $4,900. | |
| Dec. | 27 | Paid the account payable to Earth Movers, Inc., $600. | |
| Dec. | 28 | Declared a dividend of 10 cents per share, payable on January 15, Year 2. | |
| Dec. | 29 | Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co-defendant in a $24,000 lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the rented backhoe in a fenced construction site owned by Collier Construction. After working hours on December 26, Davenport had climbed the fence to play on parked construction equipment. While playing on the backhoe, he fell and broke his arm. The extent of the company’s legal and financial responsibility for this accident, if any, cannot be determined at this time. (Note: This event does not require a journal entry at this time, but may require disclosure in notes accompanying the statements.) | |
| Dec. | 29 | Purchased a 12-month public liability insurance policy for $9,120. This policy protects the company against liability for injuries and property damage caused by its equipment. However, the policy goes into effect on January 1, Year 2, and affords no coverage for the injuries sustained by Kevin Davenport on December 26. | |
| Dec. | 31 | Received a bill from Universal Utilities for the month of December, $680. Payment is due in 30 days. | |
| Dec. | 31 | Equipment rental fees earned during the second half of December amounted to $20,600, of which $15,900 was received in cash. |
Data for Adjusting Entries
The advance payment of rent on December 1 covered a period of three months.
The annual interest rate on the note payable to Rent-It is 6 percent.
The rental equipment is being depreciated by the straight-line method over a period of eight years.
Office supplies on hand at December 31 are estimated at $620.
During December, the company earned $4,600 of the rental fees paid in advance by McNamer Construction Company on December 8.
As of December 31, six days’ rent on the backhoe rented to Mission Landscaping on December 26 has been earned.
Salaries earned by employees since the last payroll date (December 26) amounted to $1,900 at month-end.
It is estimated that the company is subject to a combined federal and state income tax rate of 40 percent of income before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in Year 2.
1. Record the entry to close revenue earned to income summary.
2. Record the entry to close all expense accounts to income summary.
3. Record the entry to transfer net income earned in Year 1 to the retained earnings account.
4. Record the entry to transfer dividends declared in 2015 to the retained earnings account.
In: Accounting
Fanning Company produces two products. Budgeted annual income
statements for the two products are provided here:
|
Power |
Lite |
Total |
||||||||||||||||||||||
|
Budgeted |
Per |
Budgeted |
Budgeted |
Per |
Budgeted |
Budgeted |
Budgeted |
|||||||||||||||||
|
Number |
Unit |
Amount |
Number |
Unit |
Amount |
Number |
Amount |
|||||||||||||||||
|
Sales |
190 |
@ |
$ |
590 |
= |
$ |
112,100 |
760 |
@ |
$ |
560 |
= |
$ |
425,600 |
950 |
$ |
537,700 |
|||||||
|
Variable cost |
190 |
@ |
350 |
= |
(66,500 |
) |
760 |
@ |
390 |
= |
(296,400 |
) |
950 |
(362,900 |
) |
|||||||||
|
Contribution margin |
190 |
@ |
240 |
= |
45,600 |
760 |
@ |
170 |
= |
129,200 |
950 |
174,800 |
||||||||||||
|
Fixed cost |
(19,000 |
) |
(73,000 |
) |
(92,000 |
) |
||||||||||||||||||
|
Net income |
$ |
26,600 |
$ |
56,200 |
$ |
82,800 |
||||||||||||||||||
Required:
a. Based on budgeted sales, determine the relative sales mix between the two products.
b. Determine the weighted-average contribution margin per unit.
c. Calculate the break-even point in total number of units.
d. Determine the number of units of each product Fanning must sell to break even.
e. Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products.
f. Determine the margin of safety based on the combined sales of the two products.
Please assist on the below:
Required A
Based on budgeted sales, determined, the relative sales mix between the two products.
What is the Relative percentage for Power ? %
What is the Relative percentage for Life ? %
Required B
Determine the weighted- average contribution margin per unit.
What is the weighted-average contribution margin per unit?
Required C
Calculate the break-even point in the total number of units.
What is the Break-even point in units?
Required D
Determine the number of units of each product Fanning must sell to break even.
What is the required sales of power in units?
What is the required sales for Lite in units
Required E
Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products.
|
Power |
Lite |
Total |
|
|
Sales |
|||
|
Variable costs |
|||
|
Contribution margin |
|||
|
Fixed cost |
|||
|
Net income (Loss) |
Required F
Determine the margin of safety based on the combined sales of the two products. (Round your answer to 1 decimal place.(i.e., .234 should be entered as 23.4))
What is the Margin of safety = ? %
In: Accounting
Departmental Income Statement
Perkins Appliance & Furniture Company has two departments,
appliances and furniture. Operating information for 2016 appears
below.
| Alliance Department | Furniture Department | ||||
|---|---|---|---|---|---|
| Inventory, January 1, 2016 | $146,000 | $116,000 | |||
| Inventory, December 31, 2016 | 49,600 | 22,000 | |||
| Net sales | 1,120,000 | 760,000 | |||
| Purchases | 640,000 | 480,000 | |||
| Purchases discounts | 8,000 | 6,000 | |||
| Transporation in | 18,000 | 16,000 | |||
| Traceable departmental expenses | 179,600 | 62,000 |
Common operating expenses of the firm were $180,000.
a. Prepare a departmental income statement showing departmental contribution to common expenses and net income of the firm. Assume an overall effective income tax rate of 40%. Perkins uses a periodic inventory system.
Do not use negative signs with any of your answers below.
| Perkins Appliance &
Furniture Company Departmental Income Statement For the Year Ended December 31, 2016 |
||||||
|---|---|---|---|---|---|---|
| Appliance Department | Furniture Department | Total | ||||
| Net sales | $Answer | $Answer | $Answer | |||
| Cost of goods sold: | ||||||
| Inventory, January 1, 2016 | Answer | Answer | Answer | |||
| Purchases | Answer | Answer | Answer | |||
| Purchases discounts | Answer | Answer | Answer | |||
| Transportation in | Answer | Answer | Answer | |||
| Cost of goods available for sale | Answer | Answer | Answer | |||
| Inventory, December 31, 2016 | Answer | Answer | Answer | |||
| Cost of goods sold | Answer | Answer | Answer | |||
| Gross Profit | Answer | Answer | Answer | |||
| Traceable department expenses | Answer | Answer | Answer | |||
| Contribution to common expenses | Answer | Answer | Answer | |||
| Common expenses | Answer | |||||
| Income before tax | Answer | |||||
| Income tax expense | Answer | |||||
| Net income | $Answer | |||||
b. Calculate the gross profit percentage for each department.
Round to the nearest whole percentage.
Appliance department
Answer
%
Furniture department
Answer
%
c. If the common expenses were allocated 70% to the appliance department and 30% to the furniture department, what would the net income be for each department?
Do not use negative signs with any of your answers below.
| Appliance Department | Furniture Department | Total | ||||
|---|---|---|---|---|---|---|
| Contribution to common expenses | $Answer | $Answer | $Answer | |||
| Common expenses | Answer | Answer | Answer | |||
| Income before tax | Answer | Answer | Answer | |||
| Income tax expense | Answer | Answer | Answer | |||
| Net income | $Answer | $Answer | $Answer | |||
In: Accounting
California Incorporated (CI) is a private company that has historically reported its results in accordance with ASPE. To fund its significant growth, the company issued common shares to another investor. In conducting its due diligence on the company before buying the shares, the new investor closely reviewed CI’s financial records. The three issues identified are listed below:
1. Long-term contracts: CI accounts for revenue from long-term contracts using the completed contract method, as all contracts are completed in two years or less. The new investor knows that most companies in the industry use the percentage of completion method and believes that adopting this method would result in financial statements that provide more reliable and relevant information. Income under the completed contract method was $1,500,000 for 20x1 and $2,150,000 for 20x2. If the percentage of completion method had been used, revenue of $2,200,000 would have been recognized in 20x1 and $1,850,000 in 20x2. The existing owners have agreed to make the change.
2. Inventory: CI neglected to properly apply the lower of cost and net realizable value test to ending inventory in 20x1. Upon review, the inventory balance for 20x1 should have been reduced by $120,000. At December 31, 20x2, the recorded cost of the inventory was $150,000 higher than its net realizable value.
3. Building depreciation: CI’s building, acquired at the beginning of 20x1 at a cost of $1,500,000, was depreciated last year using the 10% declining balance method. The company and the investor both agree that the straight-line method would better reflect the consumption of the asset. Based on discussions, the building’s useful life has been estimated to be a total of 20 years and its salvage value to be $0. Depreciation expense of $135,000 has already been recorded for 20x2.
All amounts are considered material. The tax rate for CI is 30%.
As the December 31, 20x2 financial statements have not yet been finalized and income tax expense has yet to be recorded.
Required –
a) For each of the above situations, identify the type of change and the proper accounting treatment.
b) Prepare journal entries for December 31, 20x2, to properly record the changes described.
In: Accounting
Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2019 and 2020 (in thousands of dollars):
| 2019 | 2020 | ||||||
| Sales | $ | 15,600 | $ | 19,600 | |||
| Materials inspection | 260 | 56 | |||||
| In-process (production) inspection | 156 | 121 | |||||
| Finished product inspection | 210 | 66 | |||||
| Preventive equipment maintenance | 16 | 56 | |||||
| Scrap (net) | 460 | 260 | |||||
| Warranty repairs | 660 | 410 | |||||
| Product design engineering | 146 | 230 | |||||
| Vendor certification | 24 | 56 | |||||
| Direct costs of returned goods | 235 | 76 | |||||
| Training of factory workers | 36 | 136 | |||||
| Product testing—equipment maintenance | 56 | 56 | |||||
| Product testing labor | 170 | 86 | |||||
| Field repairs | 66 | 36 | |||||
| Rework before shipment | 200 | 196 | |||||
| Product-liability settlement | 320 | 56 | |||||
| Emergency repair and maintenance | 160 | 71 | |||||
Required:
1. Classify the cost items in the table into cost-of-quality (COQ) categories.
2. Calculate the ratio of each COQ category to revenues in each of the 2 years.
Classify the cost items in the table into cost-of-quality (COQ) categories. Calculate the ratio of each COQ category to revenues in each of the 2 years. (Enter amounts in thousands, not in whole dollar. Round your "Percentage" answers to 2 decimal places.)
|
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In: Accounting
Given the makeup of the human body, what compound do you think accounts for the high percentage of oxygen?
In: Biology
Kingston Kiteboards Incorporated (KKI) has been experiencing very strong demand for its products as kite-boarding continues to take away market share from windsurfing. The company is considering a new facility to manufacture an improved line of kites and another facility to produce a new line of boards. The company estimates that the new kite facility will cost $1,350,000 to construct in Year 0 with a salvage value of $160,000 in Year 15. The board manufacturing facility will cost $1,700,000 in Year 0 with a salvage value of $180,000 in Year 15. Combined annual revenue for the new kites and boards is expected to be $750,000 with annual combined operating costs of $270,000 each year. Management has identified a piece of land where both facilities could be built that could be purchased for $550,000 in Year 0. The management team estimates that the land may be sold for the same value of $550,000 at the end of Year 15. The company uses a discount rate of 9% and a tax rate of 30%. Assume that the CCA rate of 20% can be applied to the land and the manufacturing facilities.
a. Use the present value tax shield approach to determine the net present value (NPV) of combined project involving both new manufacturing facilities. Should KKI proceed with the investment using these assumptions?
b. The management team at KKI has decided to take a more conservative approach with some of its estimates. The team feels that the facilities may only last for 13 years and the operating costs may amount to $300,000 per year. However, the company has successfully negotiated a construction cost of $1,200,000 for the kite facility and $1,400,000 for the board facility. (Assume the salvage values are unchanged.) Using the present value tax shield approach, what is the total NPV with these assumptions? Should the company proceed under these revised assumptions?
In: Finance