Ultimate Business Study Guide - Questions & Answers

You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: penguin patties, raskels, and kipples. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of penguin patties decreases by 5%, the quantity of raskels sold decreases by 4% and the quantity of kipples sold increases by 6%. Your job is to use the cross-price elasticity between penguin patties and the other goods to determine which goods your marketing firm should advertise together.Complete the first column of the following table by computing the cross-price elasticity between penguin patties and raskels, and then between penguin patties and kipples. In the second column, determine if penguin patties are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with penguin patties. Relative to Penguin PattiesCross-Price Elasticity of Demand Complement or Substitute Recommend Marketing with Penguin Patties (Yes or No)Raskels Kipples
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If workers are more educated, then short-run aggregate supply ___________.O will increase and output and price level will increase as well. O decrease and output and price level will decrease as well. O increase and output will increase but price level will decrease. O increase and output will decrease but price level will increase. O decrease and output will decrease but price level will increase.
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1)The Pet Company has recently discovered a type of rock which, when crushed, is extremely absorbent. It is expected that the firm will experience (beginning now) an unusually high growth rate (20%) during the period (3 years) when it has exclusive rights to the property where this rock can be found. However, beginning with the fourth year the firm's competition will have access to the material, and from that time on the firm will assume a normal growth rate of 8% annually. During the rapid growth period, the firm's dividend payout ratio will be relatively low (20%), to conserve funds for reinvestment. However, the decrease in growth will be accompanied by an increase in dividend payout to 50%. Last year's earnings were $2.00 per share (E0) and the firm's cost of equity is 10%. What should be the current price of the common stock?
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Call Systems Company, a telephone service and supply company, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of uncollectible accounts, the company is considering changing to the allowance method. Information is requested as to the effect that an annual provision of 1% of sales would have had on the amount of bad debt expense reported for each of the past four years. It is also considered desirable to know what the balance of Allowance for Doubtful Accounts would have been at the end of each year. The following data have been obtained from the accounts:Year Sales Uncollectible Accounts Written Off receivable written 1st $ 900,000 $4,500 $4,500 2nd 1,250,000 9,600 3,000 $6,600 3rd 1,500,000 12,800 1,000 3,700 $8,100 4th 2,200,000 16,550 1,500 4,300 $10,750Required:1. Assemble the desired data to prepare a schedule of bad debt expense. Enter all amounts as positive numbers.
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A department using the FIFO method for process costing begins the month with 10,000 units which were 70% complete at the end of the previous month. They started and completed 50,000 units and their ending work in process inventory consisted of 5,000 units which were 10% complete. The costs incurred were $200,000. Required:A) The cost per equivalent unit of production, using the FIFO method is $ ____________ . Round your answer to two decimal places.
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Jake wants to purchase a new computer and go to the Caribbean for spring break. The computer is priced at $1,299, and the vacation is priced at $800. He has only $1,574 in his checking account, so he cannot afford to purchase both. After much thought, Jake buys the computer and writes a check for $1,299. Identify what role money plays in each of the following parts of the story. Hint: Select each role only once. Role of Money Medium of Exchange Unit of Account Store of Value Jake can easily determine that the price of the computer is more than the price of the vacation. Jake has $1,574 in his checking account. Jake writes a check for $1,299.
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As an auditor for Bernard and Thomas, you are responsible for determining the proper classification of income statement items in the audit of California Sports Grill. Required: Select whether each of the following items should be classified as discontinued operations, other revenues, or other expenses.Items Description a. One of the company's restaurants was destroyed in a forest fire that raged through Southern California. Uninsured losses from Other expenses the fire are estimated to be $450,000 b. Califomia Sports Grill has three operating divisions: restaurants, catering, and frozen retail foods. The company sells the frozen retail foods division of the business for a profit of $2.4 million in order to focus more on the restaurant and catering business c. An employee strike to increase wages and benefits shut down operations for several days at an estimated cost of $200,000. d. A restaurant waiter slipped on a wet floor and sued the company. The employeo won a settlement for $100,000, but Califormia Sports Grill has not yet paid the settiement.e. The company owns and operates over 40 restaurants but sold one restaurant this year at a gain of $650,000 Other revenues
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A company reports the following GAAP income statement: Income Statement (GAAP) ($ in millions) 2019ARevenue 654Operating expenses 254Operating profit 400Interest expense 14Other expenses 3Pretax profit 383Taxes 77Net income 306In addition to the GAAP income statement, the company provided a 2019 non-GAAP disclosure identifying: $12 million in stock-based compensation expense $7 million in restructuring expenses $5 million gain on sale Assuming the companys effective tax rate applies to non-GAAP items, estimate 2019 non-GAAP net income:a. $295 millionb. $317 millionc. $323 milliond. $325 million
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Daniel started at his company in the mailroom. He was dependable and had a strong work ethic, so he was eventually asked to move to the sales department. After a few years, Daniel was invited to train as a special representative oversees. This is an example of _____.
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Dave works as a traveling pharmacist. He does not work at one pharmacy but fills in all over the country whenever another pharmacist needs a day off. This is an example of a(n) _____.
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What is one reason that a person might want to be an entrepreneur?They have the security of working for a long-standing company.They can be their own boss.They dont have to worry about making decisions.They can work in a group.
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Jamison Company reports depreciation expense of $48,000 for Year 2. Also, equipment costing $164,000 was sold for a $5,800 gain in Year 2. The following selected information is available for Jamison Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.At December 31 Year 2 Year 1Equipment $ 650,000 $ 814,000 Accumulated Depreciation-Equipment 460,000 540,000 a) $41,800.b) $36,000.c) $30,200.d) $48,000.e) $84,000.
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A factory machine was purchased for $393000 on January 1, 2018. It was estimated that it would have a $74000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 30000 hours in the 5 years. The company ran the machine for 3900 actual hours in 2018. Required:1. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2018 would be ________. A) $51090. B) $41470. C) $82940. D) $74000.
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what is brand awareness?A.) how much potential consumers like a particular brand over another. B.) how willing a consumer is to purchase a specific brand.C.) how well a brand is recognized by potential customers.D.) how well a brand is doing in comparison to its competitors
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Andrea is a preschool teacher. She works with three- and four-year olds every day from 9am to 3pm. She does not work over the holidays. This is an example of a ______.traditional careerentrepreneurshipremote workernon-traditional career
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One of the most fundamental issues in business law involves the question of when a company can be held liable for the acts of an individual person, whether this involves a contractual obligation or a personal injury (meaning a tort). A) Choose one of the scenarios below and explain whether or not you think the business is liable for the acts under the principles of agency law.1. A real estate agent hires a handful of local kids to do the landscaping of homes that he is trying to sell. In addition to the general payment, he reimburses them for the cost of gasoline for lawn mowers and other equipment. While mowing a lawn, one of the kids loses control of a lawn mower and it mows down a neighbors very expensive collection of lawn gnomes.2. In a hurry to get his apartment complex painted, a homeowner hires three people he meets at the local home improvement store to do the work. Since theyre not professional painters, he provides all of the equipment and paint needed to do the work. While at the apartment complex, one of them breaks into an apartment, assaults the resident and steals a wallet.3. An entrepreneur decides to open up his own car-for-hire business, and creates an app allowing anyone to connect with people who need a ride. The passengers pay the entrepreneur, who in turn pays a percentage to the driver. Other than the app, the entrepreneur has no other involvement between the driver and the passenger. One night, a driver who is intoxicated picks up a passenger and then gets into an accident, and the passenger is severely injured.
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A number of business transactions carried out by Smalling Manufacturing Company are as follows. a. Borrowed money from a bank. b. Sold land for cash at a price equal to its cost. c. Paid a liability. d. Returned for credit some of the office equipment previously purchased on credit but not yet paid for. (Treat this the opposite of a transaction in which you purchased office equipment on credit.) e. Sold land for cash at a price in excess of cost. (Hint: The difference between cost and sales price represents a gain that will be in the companys income statement.) f. Purchased a computer on credit. g. The owner invested cash in the business. h. Purchased office equipment for cash. i. Collected an account receivable.Required:1. Indicate the effects of each of these transactions on the total amounts of the company's assets, liabilities, and owner's equity.
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Astro Corporation was started with the issue of 5,100 shares of $10 par stock for cash on January 1, 2018. The stock was issued at a market price of $15 per share. During 2018, the company earned $66,100 in cash revenues and paid $44,287 for cash expenses. Also, a $3,700 cash dividend was paid to the stockholders.Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Astro Corporation's 2018 fiscal year.
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Financial instruments are assets that have a monetary value or record a monetary transaction. To coordinate the exchange of capital between borrowers and lenders, financial instruments trade in the financial markets. These financial instruments can be categorized on the basis of their issuers, maturity, risk, and other factors. Identify the financial instruments based on the following descriptions.a. Backed by the US government, these financial instruments are fixed-rate debt securities with a maturity of more than one year. They are considered default free but are subject to interest rate risk. b. Issued by corporations, these unsecured debt instruments are used to fund corporate short-term financing requirements. If issued by a financially strong company, they have less risk. c. These financial instruments are investment pools that buy such short-term debt instruments as Treasury bills (T-bills), certificates of deposit (CDs), and commercial paper. They can be easily liquidated. d. These financial instruments are contractual agreements that give one party a long-term agreement to use an asset by providing regular payments. Which of the following instruments are traded in the capital markets? Check all that apply. a. Common stocks b. Corporate bonds c. Preferred stocks d. Certificates of deposit e. Long-term bank loans
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Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pool Activity Rate Setting up batches $59.06 per batch Processing customer orders $72.66 per customer order Assembling products $3.75 per assembly hourData concerning two products appear below: Product K91B Product F65ONumber of batches 86 57Number of customer orders 36 50Number of assembly hours 490 897Required:How much overhead cost would be assigned to Product K91B using the activity-based costing system? (Round your intermediate calculations and final answers to 2 decimal places.)
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A basic concept in economics is that al resources are?
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The manufacturing overhead budget of Paparella Corporation is based on budgeted direct labor-hours. The November direct labor budget indicates that 6,000 direct labor-hours will be required in that month. The variable overhead rate is $2.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $79,200 per month, which includes depreciation of $21,000. All other fixed manufacturing overhead costs represent current cash flows.Required:A. Determine the cash disbursements for manufacturing overhead for November.B. Determine the predetermined overhead rate for November.
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Deluxe Building Services offers custodial services on both a contract basis and an hourly basis. On January 1, 2015, Deluxe collected $30,150 in advance on a six-month contract for work to be performed evenly during the next six months. Assume that Deluxe closes its books and issues financial reports on a monthly basis. a. Prepare the entry on January 1 to record the receipt of $30,150 cash for contract work (1) using the financial statements effect template and (2) in journal entry form. b. Prepare the adjusting entry to be made on January 31, 2015, for the contract work done during January (1) using the financial statements effect template and (2) in journal entry form. c. At January 31, a total of 30 hours of hourly rate custodial work was unbilled. The billing rate is $19 per hour. Prepare the adjusting entry needed on January 31, 2015, (1) using the financial statements effect template and (2) in journal entry form. (The firm uses the account Fees Receivable to reflect amounts due but not yet billed).
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When looking at a country as a market or investment, the international business must consider the country's legal system. In that assessment, the firm needs to understand the differences between private actions, which refer to theft, piracy, blackmail, and the like from individuals or groups, and public actions, which are those actions taken by politicians and government bureaucrats. Either kind of action would pose a serious threat to the firm's investment or operations. Before the firm can seek legal remedies, it must clearly understand the options open to it. In a legal sense, property refers to a resource over which an individual or a business holds a legal title. It is a resource that it owns. Countries differ in the extent to which their legal systems define and protect property rights, even those countries that are still nominally communist states. Property rights can be violated, sometimes by governments and sometimes by individuals or groups.Determine form the followings if it pertains more to private or public actions in terms Of property rights and legal protections.a. Legal mechanismsb. Theft or blackmailc. Briberyd. Organizational plan/ protection moneye. Corruptionf. Weak legal system
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