KOR 3000 Quiz: KOR3000_Q1
Get access
Related Documents
Related Questions
Palisade Creek Co. is a merchandising business that uses theperpetual inventory system. The account balances for Palisade CreekCo. as of May 1, 2016 (unless otherwise indicated), are asfollows:
110 | Cash | $ 83,600 |
112 | Accounts Receivable | 233,900 |
115 | Merchandise Inventory | 624,400 |
116 | Estimated Returns Inventory | 28,000 |
117 | Prepaid Insurance | 16,800 |
118 | Store Supplies | 11,400 |
123 | Store Equipment | 569,500 |
124 | Accumulated Depreciation-Store Equipment | 56,700 |
210 | Accounts Payable | 96,600 |
211 | Salaries Payable | â |
212 | Customers Refunds Payable | 50,000 |
310 | Lynn Tolley, Capital, June 1, 2015 | 685,300 |
311 | Lynn Tolley, Drawing | 135,000 |
312 | Income Summary | â |
410 | Sales | 5,069,000 |
510 | Cost of Merchandise Sold | 2,823,000 |
520 | Sales Salaries Expense | 664,800 |
521 | Advertising Expense | 281,000 |
522 | Depreciation Expense | â |
523 | Store Supplies Expense | â |
529 | Miscellaneous Selling Expense | 12,600 |
530 | Office Salaries Expense | 382,100 |
531 | Rent Expense | 83,700 |
532 | Insurance Expense | â |
539 | Miscellaneous Administrative Expense | 7,800 |
During May, the last month of the fiscal year, the followingtransactions were completed:
Record the following transactions on page 20 of the journal.Refer to the Chart of Accounts for exact wording of accounttitles.
May | 1 | Paid rent for May, $5,000. |
3 | Purchased merchandise on account from Martin Co., terms 2/10,n/30, FOB shipping point, $36,000. | |
4 | Paid freight on purchase of May 3, $600. | |
6 | Sold merchandise on account to Korman Co., terms 2/10, n/30,FOB shipping point, $68,500. The cost of the merchandise sold was$41,000. | |
7 | Received $22,300 cash from Halstad Co. on account. | |
10 | Sold merchandise for cash, $54,000. The cost of the merchandisesold was $32,000. | |
13 | Paid for merchandise purchased on May 3. | |
15 | Paid advertising expense for last half of May, $11,000. | |
16 | Received cash from sale of May 6. | |
19 | Purchased merchandise for cash, $18,700. | |
19 | Paid $33,450 to Buttons Co. on account. | |
20 | Paid Korman Co. a cash refund of $13,230 for returnedmerchandise from sale of May 6. The invoice amount of the returnedmerchandise was $13,500 and the cost of the returned merchandisewas $8,000. |
Record the following transactions on page 21 of the journal.Refer to the Chart of Accounts for exact wording of accounttitles.
May | 20 | Sold merchandise on account to Crescent Co., terms 1/10, n/30,FOB shipping point, $110,000. The cost of the merchandise sold was$70,000. |
21 | For the convenience of Crescent Co., paid freight on sale ofMay 20, $2,300. | |
21 | Received $42,900 cash from Gee Co. on account. | |
21 | Purchased merchandise on account from Osterman Co., terms 1/10,n/30, FOB destination, $88,000. | |
24 | Returned of damaged merchandise purchased on May 21, receivinga credit memo from the seller for $5,000. | |
26 | Refunded cash on sales made for cash, $7,500. The cost of themerchandise returned was $4,800. | |
28 | Paid sales salaries of $56,000 and office salaries of$29,000. | |
29 | Purchased store supplies for cash, $2,400. | |
30 | Sold merchandise on account to Turner Co., terms 2/10, n/30,FOB shipping point, $78,750. The cost of the merchandise sold was$47,000. | |
30 | Received cash from sale of May 20 plus freight paid on May21. | |
31 | Paid for purchase of May 21, less return of May 24. |
Required: | |||||||||||||||||||
1. | Download the spreadsheet in the Ledger panel and save the Excelfile to your computer. Use the spreadsheet to post the Maytransactions from the journal to a ledger of four-column accounts.Be sure to save your work in Excel as it will be used to completethe following steps in Part 1 of this problem as well as steps inPart 2 of this problem. Your input into the spreadsheet will not beincluded in your grade in CengageNOW on this problem.
| ||||||||||||||||||
2. | Post the journal to the general ledger, extending the month-endbalances to the appropriate balance columns after all posting iscompleted. In this problem, you are not required to update or postto the accounts receivable and accounts payable subsidiary ledgers.Add the appropriate posting reference to the journal. | ||||||||||||||||||
3. | Prepare an unadjusted trial balance. Accounts with zerobalances can be left blank. | ||||||||||||||||||
4. | At the end of May, the following adjustment data wereassembled. Analyze and use these data to complete (5) and (6).
| ||||||||||||||||||
5. | (Optional) On your own paper or spreadsheet, enter theunadjusted trial balance on a 10-column end-of-period spreadsheet(work sheet), and complete the spreadsheet. Find a blankend-of-period work sheet in the Excel spreadsheet you previouslydownloaded. | ||||||||||||||||||
6. |
| ||||||||||||||||||
7. | Prepare an adjusted trial balance. Accounts with zero balancescan be left blank.
|
Using the data below, I need answers to the following questions:
a) Using the data in Table 1, specify a linear functional form for the demand for Combination 1 meals, and run a regression to estimate the demand for Combo 1meals.
b) Using statistical software (Excel), estimate the parameters of the empirical demand function specifiedin part a.Write your estimated industry demand equation.
c) Evaluate your regression results by examining signs of parameters, p-values, and the R2.
d) Discuss how the estimation of demand might beimproved.
e) If the owner plans to charge a price of 4.15 for a Combination 1 meal and spend $18,000 per week on advertising, how many Combination 1 meals do you predict will be sold each week?
f) If the owner spends $18,000 per week on advertising, write the equation for the inverse demand function. Then, calculate the demand price for 50,000 Combination meals.
Estimation and Analysis of Demand for Fast Food Meals
You work for PriceWatermanCoopers as a market analyst. PWC has been hired by the owner of two Burger King restaurants located in a suburban Atlanta market area to study the demand for its basic hamburger meal packageâreferred to as âCombination 1" on its menus. The two restaurants face competition in the Atlanta suburb from five other hamburger restaurants (three MacDonaldâs and two Wendyâs restaurants) and three other restaurants serving âdrive-throughâ fast food (a Taco Bell, a Kentucky Fried Chicken, and a small family-owned Chinese restaurant).
The owner of the two Burger King restaurants provides PWC with the data shown in Table 1. Q is the total number of Combination 1 meals sold at both locations during each week in 1998. P is the average price charged for a Combination 1 meal at the two locations. [Prices are identical at the two Burger King locations.] Every week the Burger King owner advertises special price offers at its two restaurants exclusively in daily newspaper advertisements. A is the dollar amount spent on newspaper ads for each week in 1998. The owner could not provide PWC with data on prices charged by other competing restaurants during 1998. For the one-year time period of the study, household income and population in the suburb did not change enough to warrant inclusion in the demand analysis.
TABLE 1: Weekly Sales Data for Combination 1 Meals (1998)
week Q P A week Q P A
1 | 51,345 | 2.78 | 4,280 | 27 | 78,953 | 2.27 | 21,225 |
2 | 50,337 | 2.35 | 3,875 | 28 | 52,875 | 3.78 | 7,580 |
3 | 86,732 | 3.22 | 12,360 | 29 | 81,263 | 3.95 | 4,175 |
4 | 118,117 | 1.85 | 19,250 | 30 | 67,260 | 3.52 | 4,365 |
5 | 48,024 | 2.65 | 6,450 | 31 | 83,323 | 3.45 | 12,250 |
6 | 97,375 | 2.95 | 8,750 | 32 | 68,322 | 3.92 | 11,850 |
7 | 75,751 | 2.86 | 9,600 | 33 | 71,925 | 4.05 | 14,360 |
8 | 78,797 | 3.35 | 9,600 | 34 | 29,372 | 4.01 | 9,540 |
9 | 59,856 | 3.45 | 9,600 | 35 | 21,710 | 3.68 | 7,250 |
10 | 23,696 | 3.25 | 6,250 | 36 | 37,833 | 3.62 | 4,280 |
11 | 61,385 | 3.21 | 4,780 | 37 | 41,154 | 3.57 | 13,800 |
12 | 63,750 | 3.02 | 6,770 | 38 | 50,925 | 3.65 | 15,300 |
13 | 60,996 | 3.16 | 6,325 | 39 | 57,657 | 3.89 | 5,250 |
14 | 84,276 | 2.95 | 9,655 | 40 | 52,036 | 3.86 | 7,650 |
15 | 54,222 | 2.65 | 10,450 | 41 | 58,677 | 3.95 | 6,650 |
16 | 58,131 | 3.24 | 9,750 | 42 | 73,902 | 3.91 | 9,850 |
17 | 55,398 | 3.55 | 11,500 | 43 | 55,327 | 3.88 | 8,350 |
18 | 69,943 | 3.75 | 8,975 | 44 | 16,262 | 4.12 | 10,250 |
19 | 79,785 | 3.85 | 8,975 | 45 | 38,348 | 3.94 | 16,450 |
20 | 38,892 | 3.76 | 6,755 | 46 | 29,810 | 4.15 | 13,200 |
21 | 43,240 | 3.65 | 5,500 | 47 | 69,613 | 4.12 | 14,600 |
22 | 52,078 | 3.58 | 4,365 | 48 | 45,822 | 4.16 | 13,250 |
23 | 11,321 | 3.78 | 9,525 | 49 | 43,207 | 4.00 | 18,450 |
24 | 73,113 | 3.75 | 18,600 | 50 | 81,998 | 3.93 | 16,500 |
25 | 79,988 | 3.22 | 14,450 | 51 | 46,756 | 3.89 | 6,500 |
26 | 98,311 | 3.42 | 15,500 | 52 | 34,592 | 3.83 | 5,650 |