In its first year of operations, Ramirez Company recognized $28,000 in service revenue,$6,000 of which was on account and still outstanding at year-end. The remaining $22,000 was received in cash from customers.

The company incurred operating expenses of$15,800. Of these expenses, $12,000 were paid in cash;$3,800 was still owed on account at year-end. In addition, Ramirez prepaid $2,400 for insurance coverage that would not be used until the second year of operations.

Instructions

(a) Calculate the first year’s net earnings under the cash basis of accounting, and calculate the first year’s net earnings under the accrual basis of accounting.

Choose a corporate bond listed on the New York Stock Exchange. Use Moody's Industrial Manuals (available at many public libraries) or Moody's online at www.moodys.com to answer the following questions about this bond.

a. What is Moody's rating for the bond?

b. What is the purpose of the bond?

c. Does the bond have a call provision?

d. What collateral, if any, has been pledged as security for the bond?

Based on the information studied, would the bond be a good investment for you? Why or why not?

J.G., a $49$-year-old man, was seen in the emergency department (ED) $2$ days ago, diagnosed with alcohol intoxication, and released after $8$ hours to his brother's care. He was brought back to the ED $12$ hours ago with an active gastrointestinal (GI) bleed and is being admitted to the intensive care unit (ICU); his diagnosis is upper GI bleed and alcohol intoxication.

You are assigned to admit and care for J.G. for the remainder of your shift. According to the ED notes, his admission vital signs were BP $84/56$ mm Hg, P $110$ bpm, R $26$, and he was vomiting bright red blood. He was given IV fluids and transfused $6$ units of packed red blood cells (PRBCs) in the ED. On initial assessment, you note that J.G.'s VS are blood pressure BP $154/90$ mm Hg, P $110$ bpm; he has a slight tremor in his hands, and he appears anxious. He complains of a headache and appears flushed. You note that he has not had any emesis and has not had any frank red blood in his stool or melena (black tarry stools) over the past $5$ hours. In response to your questions, J.G. denies that he has an alcohol problem but later admits to drinking approximately a fifth of vodka daily for the past $2$ months. He reports that he was drinking vodka just before his admission to the ED. He admits to having had seizures while withdrawing from alcohol in the past.

You note that J.G.'s physician has not diagnosed J.G. as having alcohol dependence, and his orders do not include treatment for alcohol withdrawal.

As an RN, what action is necessary before you continue to care for J.G.?

$$\begin{matrix} \text{Estimated uncollectible accounts based} & \text{}\\ \text{on aging accounts receivable} & \text{\$ 3,697.32}\\ \text{Accrued interest income} & \text{137.50}\\ \text{Merchandise inventory} & \text{45,058.15}\\ \text{Supplies inventory} & \text{126.00}\\ \text{Jalue of prepaid insurance} & \text{1,535.80}\\ \text{Annual depreciation expense- equipment} & \text{2,250.00}\\ \text{Accrued interest expense} & \text{277.58}\\ \text{Prepaid rent income earned} & \text{1,000.00}\\ \end{matrix}$$

Record all T account balances, except for Federal Income Tax Expense, on an adjusted trial balance.

Biological tissues are typically made up of 98% water. Given that the density of water is $1.0 \times 10^{3} \mathrm{kg} / \mathrm{m}^{3}$, estimate the mass of (a) the heart of an adult human; (b) a cell with a diameter of $0.5 \mu \mathrm{m}$; (c) a honeybee.

A South African paper company, SAPC Limited (SAPC), reports noncurrent Interest-Bearing Borrowings of $1,634 million at September 30, Year 6. SAPC applies IFRS and reports its results in millions of U.S. dollars. At September 30, Year 7, this balance had increased to$1,828 million. Assume that on March 30, Year 7, SAPC borrowed $1,200 million from a local bank. The loan bears interest at an annual rate of 7.5% and is due on March 31, Year 9. Assume also that SAPC makes its interest payments once per year on the last day of March. SAPC’s fiscal year begins October 1 and ends on September 30. The firm closes its books on September 30 of each year. a. What journal entry did SAPC record for the repayment of debt during the fiscal year ending September 30, Year 7?

A South African paper company, SAPC Limited (SAPC), reports noncurrent Interest-Bearing Borrowings of $1,634 million at September 30, Year 6. SAPC applies IFRS and reports its results in millions of U.S. dollars. At September 30, Year 7, this balance had increased to$1,828 million. Assume that on March 30, Year 7, SAPC borrowed $1,200 million from a local bank. The loan bears interest at an annual rate of 7.5% and is due on March 31, Year 9. Assume also that SAPC makes its interest payments once per year on the last day of March. SAPC’s fiscal year begins October 1 and ends on September 30. The firm closes its books on September 30 of each year. b. Present the journal entries that SAPC Limited made in fiscal years ending September 30, Year 7, Year 8, and Year 9, related to the bank loan obtained on March 30, Year 7.

$$\begin{array}{c c} \small\text{A MONEY MANAGER FOR} \underline{\textbf{ Nancy and Joe Thomas}} & \small\text{DATE} \underline{\textbf{ 7/20/--}}\\[10pt] \text{Monthly Living Expenses} & \text{Monthly Fixed Expenses} \hspace{50pt}\\ \end{array}$$

$$\begin{array}{l r |l r} \hline \text{Food/Grocery Bill} & \$210.00 & \text{Rent/Mortgage Payment} & \$715.20\\ \text{Household Expenses} & & \text{Car Payment} & \underline{\$~~~~~~~~~~~}\\ ~~~\text{Electricity} & \$~~55.65 & \text{Other Installments}\\ ~~~\text{Heating Fuel} & \$~~63.75 & ~~~\text{Appliances} & \$~~57.75\\ ~~~\text{Telephone} & \$~~21.47 & ~~~\text{Furniture} & \$110.80\\ ~~~\text{Water} & \$~~31.80 & \text{Regular Savings} & \$~~75.00\\ ~~~\text{Garbage/Sewer Fee} & \$~~17.21 & \text{Emergency Fund} & \$~~50.00\\ ~~~\text{Other} \underline{\text{ Security}} & \$~~25.00 & \text{TOTAL} & \underline{\$~~~~~~~~~~~}\\ ~~~ \underline{\text{~~~~~~~~~~~~~~~~~~~~~~~~~~~~~}}& \underline{\$~~~~~~~~~~~} & \\[10pt] \text{Transportation} & & \textbf{ANNUAL EXPENSES} \\ ~~~\text{Gasoline/Oil} & \$~~60.00 & \text{Life Insurance} & \$480.00\\ ~~~\text{Parking} & \$~~35.00 & \text{Home Insurance} & \$180.00\\ ~~~\text{Tolls} & \$~~12.00 & \text{Car Insurance} & \$475.00\\ ~~~\text{Commuting} & \$~~20.00 & \text{Real Estate Taxes} & \$1200.00\\ ~~~\text{Other} \underline{\text{ Misc.}} & \$~~35.00 & \text{Car Registration} & \$~~26.50\\ & & \text{Pledges/Contributions} & \$360.00\\ \text{Personal Spending}& & ~~~\text{Other}\underline{\text{~~~~~~~~~~~~~~~~~}} & \underline{\$~~~~~~~~~~~}\\ ~~~ \text{Clothing} & \$100.00& \text{TOTAL} & \underline{\$~~~~~~~~~~~}\\ ~~~ \text{Credit Payments} & \$~~25.00 & \text{MONTHLY SHARE} & \\ ~~~ \text{Newspapers. Gifts, Etc.} & \$~~16.75 & \text{(Divided by 12)} & \underline{\$~~~~~~~~~~~}\\ ~~~ \text{Pocket Money} & \$~~32.00 \\[10pt] \text{Entertainment} & & \textbf{MONTHLY BALANCE SHEET}\\ ~~~ \text{Movies/Theater} & \$~~20.00 & \text{Net Income} & \\ ~~~ \text{Sporting Events} & \$~~20.00 & \text{(Total Budget)} & \$1800.00\\ ~~~ \text{Recreation} & \$~~15.00 & ~~~\text{Living Expenses} & \underline{\$~~~~~~~~~~~~~}\\ ~~~ \text{Dining Out} & \$~~32.00 & ~~~\text{Fixed Expenses} & \underline{\$~~~~~~~~~~~~~}\\ \text{TOTAL} & \underline{\$~~~~~~~~~~~} & ~~~\text{Annual Expenses} & \underline{\$~~~~~~~~~~~~~}\\ & & \text{TOTAL MONTHLY} \\ & & ~~~\text{EXPENSES} & \underline{\$~~~~~~~~~~~~~}\\ & & ~~~\text{BALANCE} & \underline{\$~~~~~~~~~~~~~}\\ \end{array}$$

What must be set aside each month for annual expenses?

The end-of-year assets of the Medicare Hospital Insurance Trust Fund (in billions of dollars) for the years 2006 through 2014 are shown. 2006: 305.4, 2007: 326.0, 2008: 321.3, 2009: 304,.2 2010: 271.9, 2011: 244.2, 2012: 220.4, 2013: 205.4, 2014: 197.3. (a) Use the regression capabilities of a graphing utility to find a model of the form $M=a t^{3}+b t^{2}+c t+d$ for the data. Let t=6 represent 2006. (b) Use a graphing utility to plot the data and graph the model. (c) Find the maximum value of the model and compare the result with the actual data.

The following items and amounts were taken from Motte Inc.’s 2014 income statement and balance sheet.

______ Cash                        $ 84,700
______ Retained earnings            123,192 
______ Cost of goods sold           438,458 
______ Salaries and wages expense   115,131 
______ Prepaid insurance              7,818 
______ Inventory                     64,618 
______ Accounts receivable           88,419
______ Sales revenue                584,951
______ Notes payable                  6,499
______ Accounts payable              49,384
______ Service revenue                4,806
______ Interest expense               1,882

Instructions (a) In each, case, identify on the blank line whether the item is an asset (A), liability (L), stockholder’s equity (SE), revenue (R), or expense (E) item.

You are working as the triage nurse in the emergency department at a busy tertiary care center. A woman comes in complaining of very heavy vaginal bleeding and extreme pain. S.K. is single, $47$ years of age, and has been bleeding for $24$ hours, soaking a pad an hour. She works in a law firm as a paralegal and was embarrassed yesterday when she leaked around her pad and stained a chair in the conference room. She has two sexual partners currently and has been relying on condoms for birth control. She thinks her last menstrual period was $2$ months ago, but they have been irregular and she is not sure. She has had some occasional spotting during the past $6$ months. She states she is afraid of the amount of bleeding in the past $24$ hours.

What precautions do you need to take while administering the meperidine (Demerol)?

The unadjusted trial balance for Sierra Corp. is shown in Illustration 4-4 (page 168). Instead of the adjusting entries shown in the text at October 31, assume the following adjustment data.

1. Supplies on hand at October 31 total $500.
2. Expired insurance for the month is$100.
3. Depreciation for the month is $75.
4. As of October 31, services worth$800 related to the previously recorded unearned revenue had been performed.
5. Services performed but unbilled (and no receivable has been recorded) at October 31 are $280.
6. Interest expense accrued at October 31 is$70.
7. Accrued salaries at October 31 are $1,400.

Instructions

Prepare the adjusting entries for the items above.

On January 15, the end of the first biweekly pay period of the year, North Company’s payroll register showed that its employees earned $35,000 of sales salaries. Withholdings from the employees’ salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%,$6,500 of federal income taxes, $772.50 of medical insurance deductions, and$120 of union dues. No employee earned more than $7,000 in this first period. Prepare the journal entry to record North Company’s January 15 (employee) payroll expenses and liabilities. (Round amounts to cents.)

Reidland Manufacturing has four divisions: Acme, Dune, Stark, and Brothers. Corporate headquarters is in Minnesota. Reidland corporate headquarters incurs costs of $16,800,000 per period, which is an indirect cost of the divisions. Corporate headquarters currently allocates this cost to the divisions based on the revenues of each division. The CEO has asked each division manager to suggest an allocation base for the indirect headquarters costs from among revenues, segment margin, direct costs, and number of employees. The following is relevant information about each division:$

$$\begin{matrix} & \text{Acme} & \text{Dune} & \text{Stark} & \text{Brothers}\\ \text{Revenues} & \text{\$23,400,000} & \text{\$25,400,000} & \text{\$18,600,000} & \text{\$16,500,000}\\ \text{Direct costs} & \text{15,900,000} & \text{12,300,000} & \text{12,900,000} & \text{13,800,000}\\ \text{Segment margin} & \text{\$7,500,000} & \text{\$13,200,000} & \text{\$5,700,000} & \text{\$2,700,000}\\ \text{Number of employees} & \text{6,000} & \text{12,000} & \text{4,500} & \text{1,500}\\ \end{matrix}$$

$ 1. Allocate the indirect headquarters costs of Reidland Manufacturing to each of the four divisions using revenues, direct costs, segment margin, and number of employees as the allocation bases. Calculate operating margins for each division after allocating headquarters costs. 2. Which allocation base do you think the manager of the Brothers division would prefer? Explain. 3. What factors would you consider in deciding which allocation base Reidland should use? 4. Suppose the Reidland CEO decides to use direct costs as the allocation base. Should the Brothers division be closed? Why or why not?