Ch004

The following information is provided for adjustments prior to closing the books. Lopez and Knepp ask you to enter the adjustments into the spreadsheet, in the two columns to the right of the unadjusted trial balance. (CM2 uses a perpetual inventory system.)

8.20 equals $ 86,700. The contribution margin per unit at a retail price of Cr. 6.85 equal 1.95. The required volume will be the result of dividing the profit impact on the contribution margin per unit.

5. Compare and contrast selling Eurodollar futures and being a fixed rate payer in a swap as a risk management technique. Explain in detail.

The Dietary Supplement Health and Education Act (DSHEA) is legislation that defines and classifies nutrient supplements and certain other products as foods. Check all of the ingredients that are considered dietary supplements according to DSHEA:

4. On the basis of the response to Question 3, how should Coconut account for the execution of the May 1, 2012, agreement? Provide the deferred revenue balance and cumulative revenue recognized related to the Buffett arrangement upon execution of the May 1, 2012, agreement.

2. For the most recent year, what is the amount of inventory in the balance sheet? What does this amount represent?

It couldn’t effectively deal with the tax collection, flood control, social welfare, and public security. (Original: p. 565; With Sources: p. 883)

5.    Prepare any necessary adjusting entries to reflect the Inventory count at year end. These must be hand written.

Contribution Margin = (Unit selling price – unit variable cost) / unit selling price = ($9.00 – $2.60) / $9.00 = 0.7111 = 71.111%

1. Write out the initial transaction and cash flows for the trade based on entering

1. This is a contract from credit card receivables securitization, a kind of bonds finance collateralized by credit card receivables. Every Contract of security has a face value at maturity of $100,000 and will mature in 2.5 to 5 years. The price of the contract changes by 1/32 a point but cannot be 3 points above or below the previous day’s

Question 2: Assume that Jim is subject to a $5,000,000 position limit. What position should he take to exploit the mispricing for the March '86 MMI futures?

The proposed change will be worthwhile if generates more contribution margin then existing contribution margin. Therefore, we will calculate contribution margin under both situations and then consider non-financial factors:

This implies the equality of returns on comparable financial assets denominated in different currencies. Covered interest arbitrage is the underlying mechanism for this theory. It refers to the transfer of liquid funds from one monetary center to another in order to take advantage of higher rates of return or interest while covering the transaction with a forward currency hedge.

Therefore, the period between contract signing and delivery is equal to 40 days. So, we adjusted revenues to remove this 40 day early recognition. This resulted in a decreased, but more conservative, amount of revenue recognized per fiscal year. (See appendix)