Lettie just got her driver's license. Her friends soon nicknamed her "Leadfoot" because she is always going 80 mph on the freeway even though the speed limit is 65 mph. a. At this speed, how long will it take her to travel 50 miles? b. How long would it take her if she drove the 50 miles at 65 mph? c. Speeding tickets carry fines of about $200 and usually increase the cost of insurance. If Lettie gets a ticket on this trip, then what would be her cost per minute of time saved?

The following revenue and expense account balances were taken from the ledger of Wholistic Health Services Co, after the accounts had been adjusted on February 29, 2016, the end of the fiscal year:

$$\begin{array}{lrlr}\text { Depreciation Expense } & \$ 7,500 & \text { Service Revenue } & \$ 448,400 \\ \text { Insurance Expense } & 3,000 & \text { Supplies Expense } & 2,750 \\ \text { Miscellaneous Expense } & 8,150 & \text { Utilities Expense } & 33,900 \\ \text { Rent Expense } & 54,000 & \text { Wages Expense } & 360,000\end{array}$$

Prepare an income statement.

An actuary studying the insurance preferences of automobile owners makes the following conclusions: (i) An automobile owner is twice as likely to purchase collision coverage as disability coverage. (ii) The event that an automobile owner purchases collision coverage is independent of the event that he or she purchases disability coverage. (iii) The probability that an automobile owner purchases both collision and disability coverages is 0.15. What is the probability that an automobile owner purchases neither collision nor disability coverage? Choose one of the following. (a) 0.18 (b) 0.33 (c) 0.48 (d) 0.67 (e) 0.82

Suppose consumers pay less than the true cost of medical services because a third party, such as an insurance company or the government, pays most of the bill. In the following graph, $D_{1}$ represents the demand for medical services if consumers paid the full price of medical services; $D_{2}$ represents the demand for medical services when consumers pay only a fraction of the true cost of medical services; and S represents the supply of medical services. Use the graph to answer the following questions. Briefly explain your answers.

What is the efficient quantity of medical services?

Use Table discussed earlier to find the annual premium of each of the following life insurance policies:

$$\begin{array}{} \begin{array}{}\text{Sex} \end{array}& \begin{array}{}\text{Age} \end{array}& \begin{array}{}\text{Policy type}\end{array}& \begin{array}{}\text{Rate classification} \end{array}& \begin{array}{}\text{Face Value}\end{array}& \begin{array}{}\text{Annual premium}\end{array}&\\ \text{Female}&30&\text{Whole-life}&\text{NT}&\$200,000 \end{array}$$

A policy clerk can sort and file 170 original , signed insurance policies per hour.

An office manager supervises five data-entry workstations . The cost of each workstation is as follows : wages , 1,950 hours per year @ $10.80; fringe benefits, 25 % of wages ; space, 60 square feet @$18.50 per square foot per year ; data terminal rental , $50 per month; supplies ,$2 75 per year; other costs, $1,300 per year. What is the total yearly cost of the five stations?

You are working in a busy OB/GYN office, and the last patient of the day is P.B., a $36$-year-old who is planning to get married soon. She wants to use birth control but is not sure what to choose. Her fiancé is in law school, and they do not have health insurance, so she is anxious not to get pregnant right away. She asks you to review the various methods and help her explore what is best for her.

What lifestyle information will help you assist P.B. in choosing an appropriate method for her?

Talkington Electronics issues a $400,000, 8%, 15-year mortgage note on December 31, 2016. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note provide for annual installment payments, exclusive of real estate taxes and insurance, of$59,612. Payments are due on December 31.

Instructions (a) Prepare an installment payments schedule for the first 4 years. (b) Prepare the entries for (1) the loan and (2) the first installment payment. (c) Show how the total mortgage liability should be reported on the balance sheet at December 31, 2017.

Suppose that an insurance company classifies people into one of three classes — good risks, average risks, and bad risks. Their records indicate that the probabilities that good, average, and bad risk persons will be involved in an accident over a 1-year span are, respectively, .05, .15, and .30. If 20 percent of the population are “good risks,” 50 percent are “average risks,” and 30 percent are “bad risks,” what proportion of people have accidents in a fixed year? If policy holder A had no accidents in 1987, what is the probability that he or she is a good (average) risk?

On January 14, the end of the first bi-weekly pay period of the year, Rockin Company’s payroll register displayed that its employees earned $14,000 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%,$2,600 of federal income taxes, $309 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 Rockin Company’s January 14 (employee) payroll expenses and liabilities.

Prince Distribution Inc. has an unfunded postretirement benefit plan. Medical care and life insurance benefits are provided to employees who render 10 years service and attain age 55 while in service. At the end of 2016, Jim Lukawitz is 31. He was hired by Prince at age 25 (6 years ago) and is expected to retire at age 62. The expected postretirement benefit obligation for Lukawitz at the end of 2016 is $50,000 and$54,000 at the end of 2017. Calculate the accumulated postretirement benefit obligation at the end of 2016 and 2017 and the service cost for 2016 and 2017 as pertaining to Lukawitz.

FDIC bank failures. The Federal Deposit Insurance Corporation (FDIC) normally insures deposits of up to $\$ 100,000$ in banks that are members of the Federal Reserve System against losses due to bank failure or theft. Over the last 10 years, the average number of bank failures per year among insured banks was 52 (FDIC Failed Bank List, 2016). Assume that $x$, the number of bank failures per year among insured banks, can be adequately characterized by a Poisson probability distribution with mean 52 . Find the expected value and standard deviation of $x$.

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

Journalize the income tax adjustment and post it to the T accounts.

Two people decide to open a business reconditioning toner cartridges for copy machines. They rent a building for $7000/year and estimate that building maintenance, taxes, and insurance will cost$6500/year. Each person wants to make $12/h in the first year and will work 10 h per day for 260 days of the year. Assume that it costs$28 to restore a cartridge and that the restored cartridge can be sold for $45. Write a linear function for the total cost C to operate the business and restore n cartridges during the first year, not including the hourly wage the owners wish to earn.