Many observational studies conclude that low-fat diets protect against cancer and cardiovascular "events" (heart attacks, stroke, and so forth). Experimental results, however, are generally negative. In 2006, the Women's Health Initiative (WHI) published its results. This was a large-scale randomized trial on women who had reached menopause. As one part of the study, 48,835 women were randomized: 19,541 were assigned to the treatment group and put on a low-fat diet. The other 29,294 women were assigned to the control group and ate as they normally would. Subjects were followed for 8 years. Among other things, the investigators found that 1,357 women on the low-fat diet experienced at least one cardiovascular event, compared to 2,088 in the control group. can the difference between the two groups be explained by chance? What do you conclude about the effect of the low-fat diet?

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.

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.

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 Omega Corporation has some excess cash that it would like to invest in marketable securities for a long-term hold. Its vice president of finance is considering three investments (Omega Corporation is in a 35 percent tax bracket and the tax rate on dividends is 20 percent). Which one should she select based on aftertax return: (a) Treasury bonds at a 10 percent yield; (b) corporate bonds at a 13 percent yield; or (c) preferred stock at an 11 percent yield?

Discuss the following problem. In contrast to histone acetylation, which always correlates with gene activation, histone methylation can lead to either transcriptional activation or repression. How do you suppose that the same modification-methylation- can mediate different biological outcomes?

The partner in charge of the Kappeler Corporation audit comes by your desk and leaves a letter he has started to the CEO and a copy of the cash flow statement for the year ended December 31, 2017. Because he must leave on an emergency, he asks you to finish the letter by explaining: (1) the disparity between net income and cash flow, (2) the importance of operating cash flow, (3) the renewable source(s) of cash flow, and (4) possible suggestions to improve the cash position.

$$\begin{array}{c} \textbf{KAPPELER CORPORATION}\\ \textbf{STATEMENT OF CASH FLOWS}\\ \textbf{FOR THE YEAR ENDED DECEMBER 31, 2017} \end{array}$$

$$\begin{array}{lrr} \text{Cash flows from operating activities}\\ \hspace{5pt}\text{Net income}&&\$\hspace{10pt}\text{100,000}\\ \hspace{5pt}\text{\text{Adjustments to reconcile net income to }}\\ \hspace{15pt}\text{net cash provided by operating activities:}\\ \hspace{25pt}\text{Depreciation expense}&\$\hspace{10pt}\text{10,000}\\ \hspace{25pt}\text{Amortization expense}&\hspace{4pt}\text{1,000}\\ \hspace{25pt}\text{Loss on sale of fixed assets}&\hspace{4pt}\text{5,000}\\ \hspace{25pt}\text{Increase in accounts receivable (net)}&\hspace{4pt}(\text{40,000})\\ \hspace{25pt}\text{Increase in inventory}&\hspace{4pt}(\text{35,000})\\ \hspace{25pt}\text{Decrease in accounts payable}&\underline{\hspace{9pt}(\text{41,000})}&\underline{\hspace{10pt}(\text{100,000})}\\ \text{\hspace{5pt}Net cash provided by operating activities}&&\$\hspace{32pt}\text{-0-}\\ \text{Cash flows from investing activities}\\ \hspace{5pt}\text{Sale of plant assets}&\hspace{4pt}\text{25,000}\\ \hspace{5pt}\text{Purchase of equipment}&\hspace{4pt}\text{(100,000)}\\ \hspace{5pt}\text{Purchase of land}&\underline{\hspace{4pt}(\text{200,000})}\\ \text{\hspace{15pt}Net cash used by investing activities:}&&\hspace{5pt}(\text{275,000})\\ \text{Cash flows from financing activities}\\ \hspace{5pt}\text{Payment of dividends}&\text{(10,000)}\\ \hspace{5pt}\text{Redemption of bonds}&\underline{\hspace{5pt}(\text{100,000})}\\ \text{\hspace{15pt}Net cash provided by financing activities}&&\underline{\hspace{10pt}\text{(110,000)}}\\ \text{Net decrease in cash}&&\$\hspace{5pt}\text{(385,000)}\\ \text{Cash balance, January 1, 2017}&&\underline{\hspace{18pt}\text{400,000}}\\ \text{Cash balance, December 31, 2017}&&\underline{\underline{\text{\$\hspace{18pt}\text{15,000}}}}\\ \end{array}$$

Date

President Kappeler, CEO Kappeler Corporation 125 Wall Street Middleton, Kansas 67458

Dear Mr. Kappeler:

I have good news and bad news about the financial statements for the year ended December 31, 2017. The good news is that net income of $100,000 is close to what we predicted in the strategic plan last year, indicating strong performance this year. The bad news is that the cash balance is seriously low. Enclosed is the Statement of Cash Flows, which best illustrates how both of these situations occurred simultaneously . . .

Complete the letter to the CEO, including the four components requested by your boss.

Which of the following policies would be the most appropriate for improving these economic conditions? Actual GDP in a country is estimated to be 10% below potential GDP. Prices are virtually unchanged from one year ago. Unemployment is 12 % of the civilian workforce, much higher than it has been in many years.

A. reductions in the federal debt
B. decreases in interest rates by the central bank
C. increases in corporate and personal income taxes
D. increases in reserve requirements on deposits at commercial banks to protect depositors

A CEO's impact on corporate profits. Can a corporation's annual profit be anticipated from information about the company's CEO? Each year Forbes publishes data on company profit (in $millions), the CEO's annual income (in $ thousands), and the percentage of the company's stock owned by the CEO. Assume a model relating company profit (y) to CEO income$(x_1)$and stock percentage$(x_2)$. Describe what it means to say that "CEO income$x_1$and stock percentage$x_2$ interact to affect company profit y."

Hannah Gilpin is the controller of Blakemore Auto Glass, a division of Eastern Glass and Window. Blakemore replaces and installs windshields. Her division has been under pressure to improve its divisional operating income. Currently, divisions of Eastern Glass are allocated corporate overhead based on cost of goods sold. Jake Myers, the president of the division, has asked Gilpin to reclassify $50,000 of installation labor, which is included in cost of goods sold, as administrative labor, which is not. Doing so will save the division$20,000 in allocated corporate overhead. The labor costs in question involve installation labor provided by trainee employees. Myers argues, “the trainees are not as efficient as regular employees so this is unfairly inflating our cost of goods sold. This is really a cost of training (administrative labor) not part of cost of goods sold.” Gilpin does not see a reason for reclassification of the costs, other than to avoid overhead allocation costs. 1. Describe Gilpin’s ethical dilemma. 2. What should Gilpin do if Myers gives her a direct order to reclassify the costs?

Use the term in one of the sentences.

Disability insurance

a. The personnel department may use a $\underline{~~~~?~~~~}$ to compare the salaries of various jobs.
b. $\underline{~~~~?~~~~}$ may include the cost of advertising in the newspaper.
c. Paid vacations and holidays are $\underline{~~~~?~~~~}$ that most businesses give their employees.
d. When training sessions are held during work hours, the cost of $\underline{~~~~?~~~~}$ is one of the expenses.
e. If a job requires travel, the employee may be reimbursed for $\underline{~~~~?~~~~}$ which include transportation, lodging, and meals.
f. A $\underline{~~~~?~~~~}$ is a raise in an employee’s salary.
g. $\underline{~~~~?~~~~}$ pays benefits to an individual who must miss work due to an illness or injury.

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?

In a diagnostic procedure, a patient in a hospital ingests 80 mCi of gold $-198\left(t_{1 / 2}=2.7 \text { days }\right) .$ What is the activity at the end of one month, assuming none of the gold is eliminated from the body by biological functions?

Disruptive selection maintains a bimodal distribution of bill size in the West African seedcracker because

a. bills of intermediate shapes are difficult to form.

b. the birds' two major food sources differ markedly in size and hardness.

c. males use their large bills in displays.

d. migrants introduce different bill sizes into the population each year.

e. older birds need larger bills than younger birds.