Chapter 6 terms Flashcards

accounting

present selected information from the notes to the financial statements of Juicy-Juice, a U.S. based beverage company, regarding its pension and health care retirement plans. f. Prepare an analysis that explains the change in the prior service credit for health care plans from $114 million at the end of 2012 to$101 million at the end of 2013.

\begin{array}{l} \textbf{Elements of Juicy-Juice’s U.S. Pension and Health Care Expense}\\ \textbf{(amounts in millions of US\$)}\\ \textbf{(Problem 30)}\\ \end{array}

\begin{array}{lccccccc} &\textbf{U.S. Pension Plans}&\textbf{Health Care Plans}\\ \hline &\textbf{2013}\quad\textbf{2012}\quad\textbf{2011}&\textbf{2013}\quad\textbf{2012}\quad\textbf{2011}\\ \hline \text{Service Cost}&\$ 245\quad\$ 213\quad\$ 193\quad&\$ 46\quad\$ 40\quad\$ 38\quad\\ \text{Interest Cost}&319\quad296\quad271\quad&72\quad78\quad72\quad\\ \text{Expected Return on Assets}&(391)\quad(344)\quad(325)\quad&—\quad—\quad—\quad\\ \text{Prior Service Cost}&3\quad3\quad6\quad&(13)\quad(11)\quad(8)\quad\\ \text{Actuarial Loss}&\underline{164}\quad\underline{106}\quad\underline{81}\quad&\underline{21}\quad\underline{26}\quad\underline{19}\quad\\ \text{Net Expense}&\underline{\underline{\$ 340}}\quad\underline{\underline{\$ 274}}\quad\underline{\underline{\$ 226}}\quad&\underline{\underline{\$126}}\quad\underline{\underline{\$133}}\quad\underline{\underline{\$121}}\quad\\ \end{array}

\begin{array}{lcccc} \textbf{Funded Status of Juicy-Juice’s U.S. Pension and Health Care Plans}\\ \textbf{(amounts in millions of US\$)}\\ \textbf{(Problem 30)}\\ \end{array}

\begin{array}{lcccc} &\textbf{U.S. Pension Plans}&\textbf{Health Care Plans}\\ \hline &\textbf{2013}\quad\textbf{2012}&\textbf{2013}\quad\textbf{2012}\\ \hline \text{Benefit Obligation, January 1}&\$5,771\quad\$ 4,968&\$ 1,312\quad\$ 1,319\quad\\ \text{Service Cost}&245\quad213&46\quad40\quad\\ \text{Interest Cost}&319\quad296&72\quad78\quad\\ \text{Plan Amendments}&11\quad—&—\quad(8)\quad\\ \text{Actuarial Loss (Gain)}&(163)\quad517&(34)\quad(45)\quad\\ \text{Benefits Paid}&(233)\quad(241)&(75)\quad(74)\quad\\ \text{Other}&\underline{(3)}\quad\underline{18}&\underline{49}\quad\underline{2}\quad\\ \text{Benefit Obligation, December 31}&\underline{\underline{\$5,947}}\quad\underline{\underline{\$ 5,771}}&\underline{\underline{\$ 1,370}}\quad\underline{\underline{\$ 1,312}}\quad\\ \\ \text{Fair Value of Plan Assets, January 1}&\$5,086\quad\$ 4,152&\$ —\quad\$ —\quad\\ \text{Actual Return on Assets}&513\quad477&—\quad—\quad\\ \text{Employer Contributions}&19\quad699&75\quad74\quad\\ \text{Benefits Paid}&(233)\quad&(75)\quad(74)\quad\\ \text{Other}&\underline{(7)}\quad\underline{(1)}&\underline{—}\quad\underline{—}\quad\\ \text{Fair Value of Plan Assets, December}&\underline{\underline{\$5,378}}\quad\underline{\underline{\$ 5,086}}&\underline{\underline{\$ —}}\quad\underline{\underline{\$ —}}\quad\\ \text{Net Funded Asset (Liability)}&\underline{\underline{\$ (569)}}\quad\underline{\underline{\$ (685)}}&\underline{\underline{\$ (1,370)}}\quad\underline{\underline{\$(1,312)}}\quad\\ \\ \text{Recognized in:}&\quad&\quad\quad\\ \quad\text{Noncurrent Assets}&\$ 185\quad\$ 2,068&\$ —\quad\$ —\quad\\ \quad\text{Current Liabilities}&(25)\quad—&(100)\quad—\quad\\ \quad\text{Noncurrent Liabilities}&(729)\underline{(2,753)}\quad&\underline{(1,270)}\quad\underline{(1,312)}\quad\\ \quad\quad\text{Net Asset (Liability) Recognized}&\underline{\underline{\$ (569)}}\quad\underline{\underline{\$ (685)}}&\underline{\underline{\$ (1,370)}}\quad\underline{\underline{\$ (1,312)}}\quad\\ \text{Recognized in Shareholders’ Equity:}&\quad&\quad\quad\\ \quad\text{Prior Service Cost (Credit)}&\$ 13\quad\$ 5&\$ (101)\quad\$ (114)\quad\\ \quad\text{Net Actuarial Loss}&\$1,836\quad\$ 2,285&\$ 364\quad\$ 419\quad\\ \\ \text{Actuarial Assumptions:}&\quad&\quad\quad\\ \text{Discount Rate}&5.8\%\quad5.7\%&5.8\%\quad5.7\%\quad\\ \text{Expected Return on Assets}&7.8\%\quad7.8\%&—\quad—\quad\\ \text{Rate of Compensation Increase}&4.5\%\quad4.4\%&—\quad—\quad\\ \text{Initial Health Care Cost Trend Rate}&—\quad—&9.0\%\quad10.0\%\quad\\ \text{Ultimate Health Care Cost Trend Rate}&—\quad—&5.0\%\quad5.0\%\quad\\ \text{Number of Years to Ultimate Trend Rate}&—\quad—&\text{5 years}\quad\text{5 years}\quad\\ \end{array}

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business math

(a) Sketch the admissible set for the problem

\max -\left(x+\frac{1}{2}\right)^2-\frac{1}{2} y^2 \quad \text { subject to } e^{-x}-y \leq 0 \text { and } y \leq \frac{2}{3}

(b) Write down the Kuhn-Tucker conditions, and find the solution of the problem.

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accounting

Using the following purchases journal, identify each of the posting references, indicated by a letter, as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary ledger account, or (3) that no posting is required.

\begin{array}{rlcrrrccr} \textbf{Date}&\textbf{Account Credited}&\textbf{Ref.}&\textbf{AP Cr.}&\textbf{Store Supplies Dr.}&\textbf{Office Supplies Dr.}&\textbf{Accounts Dr.}&\textbf{Ref.}&\textbf{Amount}\\ \text{Mar. 4}&\text{Arrow Supply Co.}&\text{(a)}&4,000&&4,000&&&\\ 6&\text{Coastal Equipment Co.}&\text{(b)}&5,325&&&\text{Warehouse Equipment}&\text{(c)}&5,325\\ 9&\text{Thorton Products}&\text{(d)}&1,875&1,600&275&\\ 14&\text{Office Warehouse}&\text{(e)}&2,200&&&\text{Office Equipment}&\text{(f)}&2,200\\ 20&\text{Office Warehouse}&\text{(g)}&6,000&&&\text{Store Equipment}&\text{(h)}&6,000\\ 25&\text{Monroe Supply Co.}&\text{(i)}&2,740&2,740&&\\\hline 30&&&22,140&4,340&4,275&&&13,525\\\hline\hline &&&\text{(j)}&\text{(k)}&\text{(l)}&&&\text{(m)} \end{array}

m.

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accounting

Coca-Cola Enterprises is the largest bottler of Coca-Cola $^{\tiny\circledR}$ in Western Europe. The company purchases Coke $^{\tiny\circledR}$ and Sprite $^{\tiny\circledR}$ concentrate from The Coca-Cola Company, dilutes and mixes the concentrate with carbonated water, and then fills the blended beverage into cans or plastic two-liter bottles. Assume that the estimated production for Coke and Sprite two-liter bottles at the Wakefield, UK, bottling plant is as follows for the month of May:

Coke $\quad 153,000$ two-liter bottles

Sprite $\quad 86,500$ two-liter bottles

In addition, assume that the concentrate costs $75 per pound for both Coke and Sprite and is used at a rate of 0.15 pound per 100 liters of carbonated water in blending Coke and 0.10 pound per 100 liters of carbonated water in blending Sprite. Assume that two liters of carbonated water are used for each two-liter bottle of finished product. Assume further that two-liter bottles cost$0.08 per bottle and carbonated water costs $0.06 per liter.

Prepare a direct materials purchases budget for May, assuming that inventories are ignored, because there are no changes between beginning and ending inventories for concentrate, bottles, and carbonated water.

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