Harry loves both hot dogs and hamburgers. He receives about the same satisfaction from eating one hamburger as he does from eating one hot​ dog, and the two goods fill the same need in​ Harry's life. The price of hot dogs has been extremely volatile for the past several​ years, and this year is no exception. Hot dog prices tremendously this month. Assuming hot dogs and hamburgers are substitutes for​ Harry, what will happen to​ Harry's demand for​ hamburgers?

Required:
Using the line drawing​ tool, depict the effect on​ Harry's demand for hamburgers due to the in the price of hot dogs. Properly label this line. Carefully follow the instructions above and only draw the required object.

Answer: Harry's demand for​ hamburgers will increase.

Explanation:

Substitutes are goods that can be used to replace one another because they both serve thesame purpose. In this case, hot dogs and hamburgers are substitutes.

Since the price of hotdogs has risen, Harry will reduce its demand for hotdogs and shift its demand to buying more hamburger. This means Harry's demand for​ hamburgers will increase.

Blue Spruce’s Miniature Golf and Driving Range Inc. was opened on March 1 by Bob Dean. These selected events and transactions occurred during March.
Mar. 1 Stockholders invested $58,000 cash in the business in exchange for common stock of the corporation.
3 Purchased Snead’s Golf Land for $38,200 cash. The price consists of land
$24,900, building $8,460, and equipment $4,840.
5 Advertised the opening of the driving range and miniature golf course,
paying advertising expenses of $1,940 cash.
6 Paid cash $4,750 for a 1-year insurance policy.
10 Purchased golf clubs and other equipment for $5,950 from Tahoe Company,
payable in 30 days.
18 Received golf fees of $1,850 in cash from customers for golf services
performed.
19 Sold 100 coupon books for $25 each in cash. Each book contains 10
coupons that enable the holder to play one round of miniature golf or to hit
one bucket of golf balls.
25 Paid a $540 cash dividend.
30 Paid salaries of $850.
30 Paid Tahoe Company in full for equipment purchased on March 10.
31 Received $880 in cash from customers for golf services performed.
Journalize the March transactions. Friendley's records golf fees as service revenue.

Practice Makes Perfect Inc. was started on July 1 of the current year. Practice Makes Perfect provides piano lessons for students of all abilities. You are the founder, president, of manager, etc. You have not yet hired an accountant but your bank is asking for an income statement and balance sheet for the first month of operation. Then prepare a simple income statement and a balance sheet to present to the bank. Transactions:
a. You started your company with $100,000 that you raised by selling stock in Practice Makes Perfect Inc. to your family and friends.
b. Knowing that you would need additional funds, you presented your business plan to the bank and were able to get a $50,000 loan at 10 percent.
c. You purchased three pianos for $16,000 each, paying cash. You believe these pianos will last five years before you replace them. At the end of the five years, you think you can sell each piano for $1,000.
d. You spent $2,000 on supplies, which you charged on account.
e. The newspaper bills you $500 for the advertisement you ran. You plan on paying the bill next month.
f. Rent for the space you have leased is $1,000 a month, which you paid.
g. The firrst month, you bill students $2,000 for lessons.
h. You pay your two part-time piano teachers $500 each at the end of the month.
i. One of your students paid the $200 invoice you sent earlier in the month.
j. You write the check for the interest owed for the month.
k. You adjust the supplies account for $300 of sheet music that you gave to students.
l. You record one month of depreciation on the pianos.
2. Make a list of the assets and liabilities you would want to keep track of in a company you owned. What types of revenues would you have? What types of expenses would you want to track?
3. Look on the Internet for the ?nancial statements of a publicly held company. (If you own stock in a company, look for the financial statements in the last annual report you received.) OR ask your employer if you can look at a set of the company

JV, a corporation, was formed in 2013 to design and manufacture electric cars. JV is 60 percent owned by AutoCo (a car manufacturer) and 40 percent owned by ElectricCo (a developer of electric car technology). The decision-making authority of JV is equally shared between AutoCo and ElectricCo: the board of directors of JV is comprised of two members appointed by AutoCo and two members appointed by ElectricCo. JV’s board of directors (1) set the annual budgets; (2) responsible for the hiring, firing, and compensation of management; and (3) approve all material contracts. As part of the agreement, all cars produced by JV will bear AutoCo’s logo and will be sold at AutoCobranded auto dealers.

AutoCo is an established car manufacturer that has been producing cars in the United States for the past century. To meet governmental mandates of lowering emissions and increasing the fuel economy of its fleet, AutoCo has been evaluating various ways to enter the electric vehicle market. AutoCo does not currently have viable technology for the production of electric cars. ElectricCo was established by professors that developed cutting-edge battery technology for electric cars. Although ElectricCo has not produced electric cars in a mass market, the battery technology is tested and highly valued. AutoCo and ElectricCo jointly formed JV to produce electric cars for the mass market. JV benefits from ElectricCo’s proprietary technology and AutoCo’s manufacturing expertise and access to credit markets and distribution channels.

JV is financed with 30 percent equity and 70 percent debt. When JV was formed, ElectricCo did not have access to sufficient cash at inception to fund its equity interest. To purchase its equity interest, ElectricCo received a loan from AutoCo. The debt financing was obtained in the form of a credit facility from a third-party bank. For the bank to provide debt to JV, it required that AutoCo guarantee the loan.

Required:

a. Is JV a variable interest entity (VIE)?
b. Which entity, if any, should consolidate JV?

Following are the transactions of Sustain Company.
June 1 T. James, owner, invested $14,500 cash in Sustain Co. in exchange for its common stock.
2 The company purchased $7,500 of furniture made from reclaimed wood on credit.
3 The company paid $1,300 cash for a 12-month insurance policy on the reclaimed furniture
4 The company billed a customer $6,500 in fees earned from preparing a SASB-compliant sustainability report.
12 The company paid $7,500 cash toward the payable from the June 2 furniture purchase. 20 The company collected $6,500 cash for fees billed on June 4.
21 The company received $13,500 cash from a sustainable investor group in exchange for common stock.
30 The company received $8,500 cash from a client for sustainability services for the next 3 months.
Prepare general journal entries for the above transactions View transaction list Journal entry worksheet 123 4 5 678 T.
James, owner, invested $14,500 cash in Sustain Co. in exchange for its common stock. Note: Enter debits before credits. Date General Journal Debit Credit June 01

Use the information in the adjusted trial balance presented below to calculate current assets for Taron Company, Inc.:
Account Title Debit Credit
Cash 23,000
Accounts receivable 16,000
Prepaid insurance 6,600
Equipment 100,000
Accumulated Depreciation-Equipment 50,000
Land 95,000
Accounts Payable 17,000
Interest Payable 2,400
Unearned revenue 5,000
Long-term notes payable 30,000
Common stock 1,000
Retained earnings 135,200
Totals 240,600 240,600
a) $24,400
b) $45,600
c) $41,200
d) $95,600
e) $21,200"

If the price of eggs differs by from one month to the next, by how much would you expect the price of milk to differ? Round the answer to two decimal places.

Discussion (LO. 1, 2) Marmot Corporation pays a dividend of $100,000 in the current year. Otter Corporation, a calendar year C corporation, owns 15% of Marmot's stock. Gerald, an individual taxpayer in the 24% marginal bracket, also owns 15% of Marmot's stock. Compare and contrast the treatment of the dividend by Otter Corporation and Gerald. Click here to view the dividend received deduction to use for this question. a. Otter Corporation will be allowed a equal to % of the dividends it received. It will pay tax of % on of the dividends. b. Gerald must include in income . He will pay tax at the % rate.

Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 26,000 direct labor-hours would be required for the period’s estimated level of production. The company also estimated $525,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Harris’s actual manufacturing overhead cost for the year was $658,321 and its actual total direct labor was 26,500 hours.

Required:
Compute the company's predetermined overhead rate for the year.

The following book and fair values were available for Westmont Company as of March 1.
Book Value Fair Value
Inventory $ 644,750 $ 609,000
Land 779,250 1,086,750
Buildings 1,770,000 2,138,250
Customer relationships 0 842,250
Accounts payable (102,000 ) (102,000 )
Common stock ( 2,000,000 )
Additional paid-in capital (500,000 )
Retained earnings 1/1 (424,500 )
Revenues (457,000 )
Expenses 289,500
Arturo Company pays $4,130,000 cash and issues 28,200 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont’s common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $32,400 and Arturo pays $49,800 for legal fees to complete the transaction.
Prepare Arturo’s journal entry to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Your boss would like your help on a marketing research project she is conducting on the relationship between the price of soda and the quantity of soda demanded. She hands you the following document: Price of Soda Quantity of Soda Demanded (Dollars per can) (Billions of cans) 0.50 2,000 0.75 1,500 1.00 1,000 1.25 750 Your task is to take this________ and construct a graphical representation of the data. In doing so, you determine that as the price of soda rises, the quantity of soda demanded decreases. This confirms the________

Gillock, Inc. uses MACRS for its income tax return and the straight-line method for its financial statements. On January 1, Year 1, the company purchased a long-term asset that cost $130,000 and has a $10,000 salvage value and an expected 8-year useful life. MACRS specifies a 5-year life for that asset and a depreciation rate of 20% for the first year of its life. Which of the following would the company show on its financial records? Depreciation expense of $26,000 on the income statement and $15,000 on the tax return Less depreciation expense on the tax return than on the income statement The same amount of depreciation expense for financial reporting as for income tax preparation A deferred tax liability will be reported on the balance sheet Which of the following would be classified as a long-term operational asset?
a) Trademark
b) Accounts receivable
c) Inventory
d) Notes receivable

Haynes, Inc. obtained 100 percent of Turner Company's common stock on January 1, 2017, by issuing 10,000 shares of $10 par value common stock. Haynes's shares had a $15 per share fair value. On that date, Turner reported a book value of $100,000 (consisting of Common Stock $10,000, Additional Paid-In Capital $50,000, and Retained Earnings $40,000). However, its equipment (with a 5-year remaining life) was undervalued by $5,000 in the company's accounting records. Also, Turner had developed a customer list with an assessed value of $30,000, although no value had been recorded on Turner's books. The customer list had an estimated remaining useful life of 10 years.

The following figures come from the individual accounting records of these two companies as of December 31, 2017:

Haynes Turner
Revenues $(600,000) $(230,000)
Expenses 440,000 120,000
Investment income Not given 0
Dividends declared 80,000 50,000

The following balances come from the individual accounting records of these two companies as of December 31, 2018:

Haynes Turner
Revenues $(700,000) $(280,000)
Expenses 460,000 150,000
Investment income Not given 0
Dividends declared 90,000 40,000
Equipment 500,000 300,000

Required:
a. What is the consolidated equipment balance as of December 31, 2018?
b. Would this answer be affected by the investment method applied by the parent?

Selma operates a contractor's supply store. She maintains her books using the cash method. At the end of 2020, her accountant computes her accrual basis income that is used on her tax return. For 2020, Selma had cash receipts of $1,400,000, which included $200,000 collected on accounts receivable from 2019 sales. It also included the proceeds of a $100,000 bank loan. At the end of 2020, she had $250,000 in accounts receivable from customers, all from 2020 sales.

Required:
a. Compute Selma's accrual basis gross receipts for 2020
b. Selma paid cash for all of the purchases. The total amount paid for merchandise in 2014 was $1.3 million. At the end of 2019, she had merchandise on hand with a cost of $150,000. At the end of 2020, the cost of merchandise on hand was $300,000. Compute Selma's gross income from merchandise sales for 2020.

In 1880 five aboriginal trackers were each promised the equivalent of 50 Australian dollars for helping to capture the notorious outlaw Ned Kelley. In 1998 the granddaughters of two of the trackers claimed that this reward had not been paid. The prime minister stated that if this was true, the government would be happy to pay the $50. However, the granddaughters also claimed that they were entitled to compound interest.
A. How much was each entitled to if the interest rate was 3%?B. How much was each entitled to if the interest rate was 6%?

On June 1 of year 1, Riverside Corp. (RC), a calendar-year taxpayer, acquired the assets of another business in a taxable acquisition. When the purchase price was allocated to the assets purchased, RC determined it had purchased $1,629,000 of goodwill for both book and tax purposes. At the end of year 1, RC determined that the goodwill had not been impaired during the year. In year 2, however, RC concluded that $485,000 of the goodwill had been impaired and wrote down the goodwill by $485,000 for book purposes.

Required:
a. What book-tax difference associated with its goodwill should RC report in year 1? Is it favorable or unfavorable? Is it permanent or temporary?
b. What book-tax difference associated with its goodwill should RC report in year 2? Is it favorable or unfavorable? Is it permanent or temporary?

Characterize the totality of a territory

​

Two or more items are omitted in each of the following tabulations of income statement data. Fill in the amounts that are missing.
2019 2020 2021
Sales revenue $290,000 $360000 $410,000
Sales returns and allowances (11,000) (13,000) (20000)
Net sales 279000 347,000 390000
Beginning inventory 20,000 32,000 37000
Ending inventory 32000 37000 44000
Purchases 242000 260,000 298,000
Purchase returns and
allowances (5,000) (8,000) (10,000)
Freight-in 8,000 9,000 12,000
Cost of goods sold (233,000) 256000 (293,000)
Gross profit on sales 46,000 91,000 97,000

Lucia and barley are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of barley and alfalfa each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing barley or alfalfa or to produce barley on some of their land and alfalfa on the rest.

Barley Alfalfa
Bushels per acre Bushels per acre
Musashi 40 8
Rina 28 7

Lucia has an absolute advantage in the production of barley, and Lucia has an absolute advantage in the production of alfalfa. Kenji's opportunity cost of producing 1 bushel of alfalfa is ___________ bushels of barley, whereas Lucia's opportunity cost of producing 1 bushel of alfalfa is ____________ bushels of barley. Because Kenji has ahigher opportunity cost of producing alfalfa than ,Lucia has a comparative advantage in the production of alfalfa, andKenji has a comparative advantage in the production of barley.

Biochemical Corp. requires $660,000 in financing over the next three years. The firm can borrow the funds for three years at 12.80% interest per year. The CEO decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 9.50% interest in the first year, 14.25% interest in the second year, and 10.75% interest in the third year. Assume interest is paid in full at the end of each year.
A. Determine the total interest cost under each plan.
B. Which plan is less costly?

Greenstream Insurance Agency prepares monthly financial statements. Presented below is an income statement for the month of June that is correct on the basis of information considered.
GREENSTREAM INSURANCE AGENCY
Income Statement
For the Month Ended June 30
Revenues
Service Revenue $40,000
Expenses
Salaries and Wages Expense $12,000
Advertising Expense 800
Rent Expense 4,200
Depreciation Expense 2,800
Total Expenses 19,800
Net Income 20,200
Additional Data: When the income statement was prepared, the company accountant neglected to take into consideration the following information:
1. A utility bill for $1,200 was received on the last day of the month for electric and gas service for the month of June.
2. A company insurance salesman sold a life insurance policy to a client for a premium of $10,000. The agency billed the client for the policy and is entitled to a commission of 20%.
3. Supplies on hand at the beginning of the month were $2,500. The agency purchased additional supplies during the month for $1,500 in cash and $1,200 of supplies were on hand at June 30.
4. The agency purchased a new car at the beginning of the month for $24,000 cash. The car will depreciate $6,000 per year.
5. Salaries owed to employees at the end of the month total $5,300. The salaries will be paid on July 5.
Instructions:
Prepare a corrected income statement.

The semiconductor business of the California Microtech Corporation qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $8 million. The loss from operations of the segment during 2021 was $3.6 million. Pretax income from continuing operations for the year totaled $5.8 million. The income tax rate is 25%. The estimated fair value of the segment's assets, less costs to sell, on December 31 was $7 million. Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions.)

Finding Unknown Values in the Cost of Goods Manufactured Report [LO 2-3, 2-6]Mulligan Manufacturing Company uses a job order cost system with overhead applied to products at a rate of 150 percent of direct labor cost. Case 1 Case 2 Case 3Direct material used 15,000 14,100Direct labor 18,000 Manufacturing overhead applied 11,500 Total current manufacturing costs 27,500 28,500Beginning work in process inventory 9,900 8,000Ending work in process inventory 5,900 9,900 Cost of goods manufactured 44,000 26,001Beginning finished goods inventory 4,700 12,000 Ending finished goods inventory 7,600 6,200Cost of goods sold 41,000 36,000Required:Treating each case independently, selected from the manufacturing data given below, find the missing amounts. You should do them in the order listed. (Hint: For the manufacturing costs in Case 3, first solve for conversion costs and then determine how much of that is direct labor and how much is manufacturing overhead.) (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar. Enter all amounts as positive values.)

According to its annual report, P&G's billion-dollar brands include Pampers, Tide, Ariel, Always, Pantene, Bounty, Charmin, Downy, Olay, Crest, Vicks, Gillette, Duracell, and others. The following are items taken from its recent balance sheet and income statement. Note that different companies use slightly different titles for the same item. Select each item in the following list as an asset, liability, or stockholders' equity item that would appear on the balance sheet or a revenue or expense item that would appear on the income statement.
1) Accounts receivable2) Cash and cash equivalents3) Net sales4) Debt due within one year5) Taxes payable6) Retained earnings7) Cost of products sold8) Selling, general, and administrative expense9) Income taxes10) Accounts payable11) Trademarks and other intangible assets12) Property, plant, and equipment13) Long-term debt14) Inventories15) Interest expense

On April 1, 2019, AFC Corporation was organized. The following transactions occurred during 2019:
On April 1, 2019, 10,000 shares of $1 par value common stock were issued for $20 per share.
On April 2, 2019, a one year rent for $64,000 a year was signed on a store. The corporation paid the entire $64,000 on this date.
On April 2, 2019 the company borrowed $50,000 from the bank by signing a three year, 8%
note with interest payable each April 1 (first interest payment due April 1, 2020).
The company purchased furniture and equipment for $40,000 in cash on April 2, 2019. The
furniture and equipment has an estimated life of 5 years with no residual value.
During the 2019 the company purchased $130,000 worth of merchandise for cash.
Merchandise costing $120,000 was sold for $290,000 in 2019. All sales were cash sales.
Salaries and wages of $50,000 were paid during 2019.
Other operating expenses totaled $10,000 in 2019 and were paid in cash.
Dividends of $1 per share were declared on December 15, 2019 to be paid on January 15, 2020.
List of Accounts:
Cash, Inventory, Prepaid Rent, Furniture & Equipment, Accumulated Depreciation, Interest Payable, Notes Payable, Dividends Payable, Salaries & Wages Payable, Common Stock, Additional Paid In Capital, Retained Earnings, Sales Revenue, Cost of Goods Sold, Rent Expense, Salaries & Wages Expense, Interest Expense, Depreciation Expense, Other Expenses, Dividends
1. Journalize the transactions
2. Prepare an unadjusted trial balance
3. Prepare and Post Adjusting Entries. Prepare all necessary adjusting entries at December 31, 2019. Note that salaries and wages earned by employees in December of 2019 but not yet paid at December 31, 2019 amounted to $3,000 (Remember to update ledger accounts).
4. Prepare an adjusted trial balance
5. Prepared Financial Statements for the period in good forms

The bookkeeper for Sunland Company asks you to prepare the following accrual adjusting entries at December 31. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
(a) Interest on notes payable of $370 is accrued.
(b) Services performed but unbilled totals $1,830
(c) Salaries of $900 earned by employees have not been recorded
No. Date Account Titles and Explanation Debit Credit
(a) Dec. 31
(b) Dec. 31
(c) Dec. 31

Consider the market for wheat, which is currently in equilibrium. Then, the following two things happen: 1) A change in the climate causes farmers to switch from planting wheat to corn and 2) a credible study shows that eating even a moderate amount of wheat is bad for you If the change given is the only change that happened (all other things are held constant), what will be the effect on the equilibrium?
A. Price of wheat increases, change in quantity of wheat is ambiguous.B. Price of wheat decreases, change in quantity of wheat is ambiguous.C. Quantity of wheat increases, change in price of wheat is ambiguous.D. Quantity of wheat decreases, change in price of wheat is ambiguous.E. None of the above.

According to a newly added office smoking regulation, only employees who have an enclosed office may smoke at their desks. This leads to a major conflict between various employees as virtually all employees with enclosed offices are higher level managers, and all other employees lack enclosed offices. Therefore, the lower level employees who smoke argue that they should be offered enclosed offices. Which of the following, if true, strengthens the employees' argument?
A) The company is a zealous supporter of the "Kick the Butt" campaign a corporate anti-smoking campaign.
B) The smoking regulations allow all employees who smoke an equal opportunity to do so, regardless of an employee's job level.
C) The company has a limited budget for infrastructure modifications.
D) Employees at the higher level, who do not smoke, do not have enclosed offices.
E) Higher level managers, who have enclosed offices, are willing to share their offices with lower level employees.

If every time production volume doubles, the direct labor costs decrease 20%, the learning curve is:

Use Worksheet 5.2 and Exhibit 5.9. Denise Green is currently renting an apartment for $650 per month and paying $400 annually for renters insurance. She just found a small townhouse she can buy for $175,000. She has enough cash for a $10,000 down payment and $4,200 in closing costs. Denise estimated the following costs as a percentage of the homes price: property taxes, 2.5 percent; homeowners insurance, 0.5 percent; and maintenance, 0.7 percent. She is in the 25 percent tax bracket. Using Worksheet 5.2, calculate the cost of each alternative and recommend the least costly option - rent or buy - for Denise. Assume Denises security deposit is equal to one months rent of $650. Also assume a 4% after tax rate return on her savings, a 3% annual appreciation in home price, and a 6% mortgage interest rate for 30 years.1. Cost of renting. Round the answer to the nearest dollar.
$
2. Cost of buying. Round the answer to to the nearest dollar.
$

Fit & Slim (F&S) is a health club that offers members various gym services.

Assume F&S offers a deal whereby enrolling in a new membership for $1,100 provides a year of unlimited access to facilities and also entitles the member to receive a voucher redeemable for 30% off yoga classes for one year. The yoga classes are offered to gym members as well as to the general public. A new membership normally sells for $1,140, and a one-year enrollment in yoga classes sells for an additional $600. F&S estimates that approximately 50% of the vouchers will be redeemed. F&S offers a 10% discount on all one-year enrollments in classes as part of its normal promotion strategy.

Required:
a. Indicate whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price.
b. Prepare the journal entry to recognize revenue for the sale of a new membership.