Choose the correct option.

The ________ is where the quantity demanded and quantity supplied are equal at a certain price.

A) surplus

B) supply schedule

C) equilibrium

The nature of demand indicates that as the price of good increases:

A) suppliers wish to sell less.

B) more of it is desired.

C) more of it is produced.

D) buyers desire to purchase less of it.

The ___________ is the only price where quantity demanded is equal to quantity supplied.

The probability of making a type I error is denoted by :

A) $\beta$

B) $1- \alpha$

C) $\alpha$

D) $1- \beta$

Kinkaid Co. is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders’ equity during its first year of operations.

1. Explain the transaction(s) underlying each journal entry (a) through (d). 2. How many shares of common stock are outstanding at year-end? 3. What is the amount of minimum legal capital (based on par value) at year-end? 4. What is the total paid-in capital at year-end? 5. What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $695,000?

Which of the following statements about a competitive firm is correct?

A-To maximize profits a competitive firm should produce at that output at which total revenue is greatest

B- In long-run equilibrium a competitive firm will produce at the point of minimum average costs

C- A competitive firm will produce in the short run so long as total receipts are sufficient to cover total fixed costs

D-A competitive firm will close down in the short run whenever price is less than the minimum attainable average total cost

If A and B are independent events with P(A) = .5 and P(B) = .2, find the following:

$$P ( \overline { A } \cup \overline { B } )$$

On January 1, Mitzu Co. pays a lump-sum amount of $2,600,000 for land, Building 1 , Building 2, and Land Improvements 1. Building 1 has no value and wi!l be demolished. Building 2 will be an office and is appraised at$644,000, with a useful life of 20 years and a $60,000 salvage value. Land improvements 1 is valued at$420,000 and is expected to last another 12 years with no salvage value. The land is valued at $1,736,000. The company also incurs the following additional costs.

Cost to demolish Building 1$ 328,400          Cost of additional land grading                      $175,400    
Cost to construct Building 3, having a useful life                     Cost of new Land Improvements 2, having a 20-year 
    of 25 years and a$392.000 salvage value           2,202,000            useful life and no salvage value                    164,000 

Required

1. Prepare a table with the following column headings: Land, Building 2, Building 3, Land Improvements 1, and Land Improvements 2. Allocate the costs incurred by Mitzu to the appropriate columns and total each column.

2. Prepare a single journal entry to record all the incurred costs assurning they are paid in cash on January 1.

3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were in use.

For each of these five separate cases, identify the principle(s) of internal control that is violated. Recommend what the business should do to ensure adherence to principles of internal control. 1. Chi Han records all incoming customer cash receipts for her employer and posts the customer payments to their respective accounts. 2. At Tico Company, Julia and Trevor alternate lunch hours. Julia is the petty cash custodian, but if someone needs petty cash when she is at lunch, Trevor fills in as custodian. 3. Nori Nozumi posts all patient charges and payments at the Hopeville Medical Clinic. Each night Nori backs up the computerized accounting system to a drive and stores it in a locked file at her desk. 4. Ben Shales prides himself on hiring quality workers who require little supervision. As office manager, Ben gives his employees full discretion over their tasks and for years has seen no reason to perform independent reviews of their work. 5. Carla Farah’s manager has told her to reduce costs. Carla decides to raise the deductible on the plant’s property insurance from $5,000 to$10,000. This cuts the property insurance premium in half. In a related move, she decides that bonding the plant’s employees is a waste of money because the company has not experienced any losses due to employee theft. Carla saves the entire amount of the bonding insurance premium by dropping the bonding insurance.

Santana Rey of Business Solutions is evaluating her inventory to determine whether it must be adjusted based on lower of cost or market rules. Business Solutions has three different types of software in its inventory, and the following information is available for each.

$$\begin{matrix} \text{Inventory Items} & \text{Units} & \text{Cost per Unit} & \text{Market per Unit}\\ \text{Office productivity} \ldots\ldots\ldots & \text{3} & \text{\$75} & \text{\$74}\\ \text{Desktop publishing} \ldots\ldots\ldots & \text{2} & \text{103} & \text{100}\\ \text{Accounting}\ldots\ldots\ldots & \text{3} & \text{90} & \text{96}\\ \end{matrix}$$

1. Compute the lower of cost or market for ending inventory assuming Rey applies the lower of cost or market rule to inventory as a whole. Must Rey adjust the reported inventory value? Explain. 2. Assume that Rey had instead applied the lower of cost or market rule to each product in inventory. Under this assumption, must Rey adjust the reported inventory value? Explain. Selected accounts and balances for the three months ended March 31, 2018, for Business Solutions follow.

$$\begin{matrix} \text{January 1 beginning inventory}\ldots\ldots\ldots & \text{\$ 0}\\ \text{Cost of goods sold} \ldots\ldots\ldots & \text{14,052}\\ \text{March 31 ending inventory} \ldots\ldots\ldots & \text{704}\\ \end{matrix}$$

1. Compute inventory turnover and days’ sales in inventory for the three months ended March 31, 2018. 2. Assess the company’s performance if competitors average 15 times for inventory turnover and 25 days for days’ sales in inventory.

Valley Company’s adjusted trial balance on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: Sales Salaries Expense, Rent Expense—Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative.

Beginning merchandise inventory was $25,400. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.

Required

1. Compute the company’s net sales for the year.

2. Compute the company’s total cost of merchandise purchased for the year.

3. Prepare a multiple-step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses.

4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.

Common categories of a classified balance sheet include Current Assets, Long-Term Investments, Plant Assets, Intangible Assets, Current Liabilities, Long-Term Liabilities, and Equity. For each or the following items, identify the balance sheet category where the item typically would best appear. lf an item does not appear on the balance sheet, indicate that instead.

1. Commissions revenue
2. Interest receivable
3. Long-term investment in stock
4. Prepaid insurance (4 months of rent)
5. Machinery
6. Notes payable (due in 15 years)
7. Copyrights
8. Current portion of long-term note payable
9. Accumulated depreciation-Trucks
10. Office equipment
11. Rent receivable
12. Salaries payable
13. Income taxes payable (due in 11 weeks)
14. Common stock
15. Office supplies
16. Interest payable
17. Rent revenue
18. Notes receivable (due in 120 days)
19. Land (used in operations)
20. Depreciation expense-Trucks

Which of the following statements are correct? Choose all that apply.

a.

$$\lim _{x \rightarrow 1^{+}} \frac{1}{1-x}$$

does not exist.

b.

$$\lim _{x \rightarrow 1^{+}} \frac{1}{1-x}=\infty.$$

c.

$$\lim _{x \rightarrow 1^{+}} \frac{1}{1-x}=-\infty.$$