Problem 2a)What is the Law of SupplyHow do we illustrate the L.pdf

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Problem 2: a)What is the Law of Supply? How do we illustrate the Law of Supply? Give an example of the Law of Supply use two to four sentences to explain your example. b) Indicate whether the following are considered a change in supply or a change in quantity supplied and why: i. Cold weather in Florida destroys a lot of the orange crop. Therefore, there are fewer oranges in the supermarket. ii. The price of leather goes up. This induces manufacturers of leather shoes to decrease production. Solution 1. law of supply states that other factors remaining constant, higher the price, greater the quantity supplied and lower the price, lower the quantity supplied. according to law of supply, price and quantities supplied are positively related. in simple words it means that if the price of a product is higher, the supply of the product will be higher and vice versa. it states the relationship between price of a product and the quantity supply of a product. b. i. because of the bad weather in Florida, the supply of orange will be drastically declines, means the supply of oranges are decreased. the reason is bad weather. ii. the cost of raw material goes up, and it leads to increase the cost of production. if so, the product price has to be increased and it leads to decrease the demand for the product. according to the principle of law of demand \"if the price of a product is higher the demand for the product will be low\". here, the quanity supply will be decline, because the cost of inputs is increased..

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Problem 12-9A ODGERS INC. Comparative Balance Sheets December 31 Assets 2014 2013 $ 155,944 $ 93,412 169,454 73,340 217,125 198,501 54,812 50,180 266,340 210,370 550,050 468,025 (96,500 ) (100,360 ) $1,317,225 $993,468 Liabilities and Stockholders’ Equity $ 196,860 $ 129,889 31,845 40,530 212,300 281,780 424,600 337,750 451,620 203,519 $1,317,225 $993,468 ODGERS INC. Income Statement Data For the Year Ended December 31, 2014 $749,728 $261,438 23,951 89,745 52,650 9,129 14,475 451,388 $ 298,340 ODGERS INC. Statement of Cash Flows For the Year Ended December 31, 2014 Adjustments to reconcile net income to Problem 12-9A Condensed financial data of Odgers Inc. follow. ODGERS INC. Comparative Balance Sheets December 31 Assets 2014 2013Cash $ 155,944 $ 93,412Accounts receivable 169,454 73,340Inventory 217,125 198,501Prepaid expenses 54,812 50,180Long-term investments 266,340 210,370Plant assets 550,050 468,025Accumulated depreciation (96,500 ) (100,360 )Total $1,317,225 $993,468 Liabilities and Stockholders’ EquityAccounts payable $ 196,860 $ 129,889Accrued expenses payable 31,845 40,530Bonds payable 212,300 281,780Common stock 424,600 337,750Retained earnings 451,620 203,519Total $1,317,225 $993,468 ODGERS INC. Income Statement Data For the Year Ended December 31, 2014Sales revenue $749,728Less: Cost of goods sold $261,438 Operating expenses, excluding depreciation 23,951 Depreciation expense 89,745 Income tax expense 52,650 Interest expense 9,129 Loss on disposal of plant assets 14,475 451,388Net income $ 298,340 Additional information: 1.New plant assets costing $193,000 were purchased for cash during the year.2.Old plant assets having an original cost of $110,975 and accumulated depreciation of $93,605 were sold for $2,895 cash.3.Bonds payable matured and were paid off at face value for cash.4.A cash dividend of $50,239 was declared and paid during the year. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) ODGERS INC. Statement of Cash Flows For the Year Ended December 31, 2014 Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash Increase in Accounts Payable Loss on Disposal of Plant Assets Net Income Decrease in Accounts Receivable Increase in Prepaid Expenses Decrease in Prepaid Expenses Decrease in Accrued Expenses Payable Decrease in Inventory Increase in Inventory Sale of Common Stock Payment of Cash Dividends Increase in Accounts Receivable Redemption of Bonds Purchase of Plant Assets Depreciation Expense Decrease in Accounts Payable Increase in Accrue.

Problem 12-9AODGERS INC.Comparative Balance Sheets December 31.pdf

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Problem 2: 8 Points: Inventory JEN uses the periodic inventory method and had the following inventory events during January: Date Units Purchased Unit Cost Date Units Sold Unit Sales Price Jan. 1 150 $7.00 Jan. 2 100 $10.00 Jan. 5 225 7.20 Jan. 7 125 10.00 Jan. 10 100 7.50 Jan. 12 75 12.00 Jan. 15 150 7.80 Jan. 17 200 12.50 Jan. 20 200 7.95 Jan. 24 150 15.00 Jan. 25 150 8.00 Jan. 30 75 8.20 Note: January 1 amount was the beginning inventory and unit value. (Round all total dollar values to the nearest dollar. Round all unit values to the nearest penny.) Date Units Purchased Unit Cost Date Units Sold Unit Sales Price Jan. 1 150 $7.00 Jan. 2 100 $10.00 Jan. 5 225 7.20 Jan. 7 125 10.00 Jan. 10 100 7.50 Jan. 12 75 12.00 Jan. 15 150 7.80 Jan. 17 200 12.50 Jan. 20 200 7.95 Jan. 24 150 15.00 Jan. 25 150 8.00 Jan. 30 75 8.20 Solution Periodic inventory valuation is as below: Dt. Heads Units Cost per unit Total 1/1 Purchase 150 $7 $1,050 5/1 Purchase 225 $7.20 $1,620 10/1 Purchase 100 $7.50 $750 15/1 Purchase 150 $7.80 $1,170 20/1 Purchase 200 $7.95 $1,590 25/1 Purchase 150 $8 $1,200 30/1 Purchase 75 $8.20 $615 Total purchase (A) $7,995 2/1 Sales 100 $10 $1,000 7/1 Sales 125 $10 $1,250 12/1 Sales 75 $12 $900 17/1 Sales 200 $12.50 $2,500 24/1 Sales 150 $15 $2,250 Total sales (B) $7,900 31/1 Ending inventory (A – B) $95 Dt. Heads Units Cost per unit Total 1/1 Purchase 150 $7 $1,050 5/1 Purchase 225 $7.20 $1,620 10/1 Purchase 100 $7.50 $750 15/1 Purchase 150 $7.80 $1,170 20/1 Purchase 200 $7.95 $1,590 25/1 Purchase 150 $8 $1,200 30/1 Purchase 75 $8.20 $615 Total purchase (A) $7,995 2/1 Sales 100 $10 $1,000 7/1 Sales 125 $10 $1,250 12/1 Sales 75 $12 $900 17/1 Sales 200 $12.50 $2,500 24/1 Sales 150 $15 $2,250 Total sales (B) $7,900 31/1 Ending inventory (A – B) $95.

Problem 2 8 Points InventoryJEN uses the periodic inventory meth.pdf

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Problem 11-2A the following are selected transactions of Blanco Company. Blanco prepares financial statements quarterly. A. Prepare Journal entries for the listed transactions and events. B. Post the accounts Notes Payable, Interest payable, and Interest Expense. C. Show the balance sheet presentation of notes and interest payable at December 31. D. What is the total interest expense for the year????Jan. 2Purchased merchandise on account from Nunez Company, $28,800, terms 3/10, n/30. (Blanco uses the perpetual inventory system.)Feb. 1Issued a 9%, 2-month, $28,800 note to Nunez in payment of account.March. 31Accrued interest for 2 months on Nunez note.Apr. 1Paid face value and interest on Nunez note.July 1Purchased equipment from Marson Equipment apying $12,690 in cash and signing a 10%, 3 month, $50,400 note.Sept. 30Accrued interest for 3 months on Marson note.Oct 1Paid face value and interest on Marson note.Dec. 1Borrowed $28,800 from the Paola Bank by issuing a 3- month, 8% note with a face value of $28,800.Dec. 31Recognized interest expense for 1 month on Paola Bank note. Solution (‘A)- Journal Entries Sr No Date Account Details and Explanation Debit Credit (1) Jan,2 Merchandise Inventory 28,800 Accounts Payable 28,800 To record the merchandise purchase (2) Feb,1 Accounts Payable 28,800 Notes Payable 28,800 To record the issuance of 9% , 2 month notes payable against liability for purchase of merchandise (3) Mar 31, Interest Expense ( 28800 x 0.09 x 2/12) 432 Interest Payable 432 To record the interest due on notes payable (4) Apr,1 Notes Payable 28,800 Interest Payable 432 Cash 29,232 (5) July,1 Equipment 63,090 Cash 12,690 Notes Payable 50,400 To record the purchase of equipment against cash and issuance of 10 %, 3 months notes of $50,400 (6) Sep,30 Interest Expense 1,260 Interest Payable 1,260 To record the interest due on notes payable (7) Oct,1 Notes Payable 50,400 Interest Payable 1,260 Cash 51,66 To record the payment of Face value of notes payable and interest thereon. (8) Dec,1 Cash 28,800 Notes Payable 28,800 To record the borrowing from Paola Bank against issuance of 8%, 3 months notes payable (9) Dec 31, Interest Expense 192 Interest Payable 192 To record the accrued interest at the quarter end. (‘B) Posting of Accounts Notes Payable, Interest Expense and Interest Payable Notes Payable (4) 28,800 (7) 50,400 28,800 (2) 50,400 (5) 28,800 (8) 28,800 Interest Expense (3) 432 (6) 1260 (9) 192 Interest Payable (4) 432 (7) 1260 432 (3) 1260 (6) 192 (9) 192 (‘C ) Balance Sheet Extracts Assets Amount ($) Liabilities Amount ($) Current Liabilities Notes Payable 28,800 Interest Payable 192 28,992 (‘D) Interest Expense for The year Interest Expense = $ 1,884 (‘A)- Journal Entries Sr No Date Account Details and Explanation Debit Credit (1) Jan,2 Merchandise Inventory 28,800 Accounts Payable 28,800 To record the merchandise purchase (2) Feb,1 Accounts Payable 28,800 Notes Payable 28,800 To record the issuance of 9% , 2 month notes payable ag.

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Problem 11-2A Fechter Corporation had the following stockholders’ equity accounts on January 1, 2017: Common Stock ($5 par) $536,800, Paid-in Capital in Excess of Par—Common Stock $193,790, and Retained Earnings $100,450. In 2017, the company had the following treasury stock transactions. Mar. 1 Purchased 5,700 shares at $9 per share. June 1 Sold 1,040 shares at $13 per share. Sept. 1 Sold 1,980 shares at $10 per share. Dec. 1 Sold 1,310 shares at $7 per share. Fechter Corporation uses the cost method of accounting for treasury stock. In 2017, the company reported net income of $32,820 ournalize the treasury stock transactions, and prepare the closing entry at December 31, 2017, for net income. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS Paid-in Capital from Treasury Stock Date Explanation Ref. Debit Credit Balance J10 J10 J10 Treasury Stock Date Explanation Ref. Debit Credit Balance J10 J10 J10 J10 Retained Earnings Date Explanation Ref. Debit Credit Balance Balance ? J10 SHOW LIST OF ACCOUNTS Date Account Titles and Explanation Debit Credit Jan. 1Mar. 1June 1Sept. 1Dec. 1Dec. 31 Jan. 1Mar. 1June 1Sept. 1Dec. 1Dec. 31 Jan. 1Mar. 1June 1Sept. 1Dec. 1Dec. 31 Dec. 1 Jan. 1Mar. 1June 1Sept. 1Dec. 1Dec. 31 SHOW LIST OF ACCOUNTS Solution Journal Entries: Date Account Titles and Explanation Debit Credit Mar. 1 Treasury Stock (5700*$9) $ 51,300.00 Cash $ 51,300.00 (Being shares repurchased ) June. 1 Cash (1040*$13) $ 13,520.00 Paid-in Capital from Treasury Stock = 13520 - 9360 $ 4,160.00 Treasury Stock (1040*$9) $ 9,360.00 (Being treasury shares reissued) Sept. 1 Cash (1980*$10) $ 19,800.00 Paid-in Capital from Treasury Stock = 19800-17820 $ 1,980.00 Treasury Stock (1980*$9) $ 17,820.00 (Being treasury shares reissued) Dec. 1 Cash (1310*$7) $ 9,170.00 Paid-in Capital from Treasury Stock = 11790-9170 $ 2,620.00 Treasury Stock (1310*$9) $ 11,790.00 (Being treasury shares reissued) Dec. 31 Income Summary $ 32,820.00 Retained Earnings $ 32,820.00 (Being bet inc0me closed) Paid-in Capital from Treasury Stock Date Explanation Ref. Debit Credit Balance June. 1 J10 $ 4,160.00 $ 4,160.00 Sept. 1 J10 $ 1,980.00 $ 6,140.00 Dec. 1 J10 $ 2,620.00 $ 3,520.00 Treasury Stock Date Explanation Ref. Debit Credit Balance Mar. 1 J10 $ 51,300.00 $ 51,300.00 June. 1 J10 $ 9,360.00 $ 41,940.00 Sept. 1 J10 $ 17,820.00 $ 24,120.00 Dec. 1 J10 $ 11,790.00 $ 12,330.00 Retained Earnings Date Explanation Ref. Debit Credit Balance Balance $ 100,450.00 $ 100,450.00 Dec. 31 J10 $ 32,820.00 $ 133,270.00 FECHTER CORPORATION Balance Sheet (Partial) For the Year Ended December 31, 2017 Common Stock ($5 par) $ 536,800.00 Paid-in Capital in Excess of Par—Common Stock $ 193,790.00 Retained Earnings $ 133,270.0.

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Problem 8-9 A certain investment requires an initial outlay of $12 million and subsequently produces annual cash inflows of $1.4 million in perpetuity. A firm evaluating this investment uses a discount rate of 10%. What is the investment’s NPV? What is the EVA each period? What is the present value of the stream of EVAs? Solution a.The NPV = PV of future cash flows - inital investment PV of future cash flows = 1,400,000 *(1/0.10) = 14,000,000 Inital outlay = 12,000,000 Hence NPV = 14,000,000 -12,000,000 = 2,000,000 b. EVA for each period = 1,400,000 - (0.10*12,000,000) = 200,000 = 0.2 Million c. EVA of the stream = 0.2/0.10 = 2 Miilion = 2,000,000.

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Problem 5 At a constant interest rate of 15%, compounded annually, what is the present value of an income stream paying $50 next quarter and growing at 2% per quarter until the end of the third year? From that point on it grows at 1% per quarter indefinitely. Solution The income grows by 2% for first 12 quarters after which it grows perpetually at 1% per quarter. Interest rate, r = 15% p.a. = 15/4 = 3.75% quarterly The income stream looks as shown below Quarter Income(I) Remarks 1 50.00 2 51.00 2% increase 3 52.02 2% increase 4 53.06 2% increase 5 54.12 2% increase 6 55.20 2% increase 7 56.31 2% increase 8 57.43 2% increase 9 58.58 2% increase 10 59.75 2% increase 11 60.95 2% increase 12 62.17 2% increase 13 62.79 1% increase Present Value,PV = I1/(1+r) + I2/(1+r)2 + I3/(1+r)3+ ........ + I12/(1+r)12 + I13/(1+r)13 + .... constant growth So PV = I1/(1+r) + I2/(1+r)2+ I2/(1+r)2+ .........+ I12/(1+r)12+ I13/((1+r)13*(r-g)) {Infinite GP series formula used} where g = 1% or 0.01 So PV = 48.19 + 47.38 + 46.58 + 45.80 + 45.02 + 44.26+ 43.52+ 42.78+ 42.06+41.35+40.65+39.97+1414.87 So Present Value, PV = $1942.43 Quarter Income(I) Remarks 1 50.00 2 51.00 2% increase 3 52.02 2% increase 4 53.06 2% increase 5 54.12 2% increase 6 55.20 2% increase 7 56.31 2% increase 8 57.43 2% increase 9 58.58 2% increase 10 59.75 2% increase 11 60.95 2% increase 12 62.17 2% increase 13 62.79 1% increase.

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Problem 5. In a currency swap, a dealer is paying fixed rate dollar and receiving fixed rate euro. Suppose that he enters into the swap and immediately thereafter dollar becomes weaker against euro (that is, euro appreciates against dollar) while interest rates in both currencies remain unchanged. What happens to value of the dealer’s swap position? a. increase b. decrease c. no change d. not enough information to determine Solution Correct option is \"C\" -No change as they have entered in to fixed currency swap ..

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