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Question : 63.On November 1, 2013, Schumacher Company paid $1,200 in advance : 1254378

Accounting

 

63.On November 1, 2013, Schumacher Company paid $1,200 in advance for an insurance policy that covered the company for six months. Assuming that Schumacher recorded this purchase as an asset, the adjusting entry required on December 31, 2013 would include:   

A. a debit to Prepaid Insurance for $1,200.

B. a credit to Prepaid Insurance for $1,200.

C. a credit to Insurance Expense for $400.

D. a debit to Insurance Expense for $400.

64.The closing entry for the Dividends account would involve which of the following?   

A. A debit to Retained Earnings

B. A debit to Dividends

C. A credit to Common Stock

D. A credit to Cash

65.Which one of the following would not be included in a closing entry at the end of the accounting year?   

A. A credit to rent expense

B. A debit to service revenue

C. A debit to unearned revenue

D. A credit to salaries expense

66.The trial balance of Grundy Company at the end of the accounting period, immediately prior to recording closing entries, showed:  After closing entries, the Retained Earnings account will have a balance of   

A. $3,600

B. $4,600

C. $18,600

D. $17,600

67.Which of the following statements is true?   

A. Adjusting entries are recorded after the closing entries have been recorded.

B. The balance in the retained earnings account in the trial balance will equal the retained earnings balance on the balance sheet after closing entries have been posted to the general ledger.

C. Debits are equal to credits only after closing entries have been made.

D. Equal totals in a trial balance guarantees that no errors were made in the recording process.

68.What statement is true regarding the trial balance?   

A. A balance of debits and credits ensures that all transactions have been recorded correctly.

B. The income statement is prepared using the post-closing trial balance.

C. Incorrectly recording a cash sale as a sale on account would not cause the trial balance to be out of balance.

D. Trial balances are only prepared at the end of an accounting period.

69.At the end of 2013, Vortex Company’s adjusted trial balance showed a zero balance in retained earnings. What is the most likely explanation for this?   

A. Vortex Company reported zero net income in 2013.

B. 2013 was Vortex Company’s first year in business.

C. Vortex Company’s trial balance will be out of balance until closing entries are made.

D. An error must have been made in preparing Vortex’s trial balance.

70.The following account balances prior to closing entries were taken from the records of Keswick Company:  After closing entries at December 31, 2013, Retained Earnings will be:   

A. $2,900.

B. $7,400.

C. $19,900.

D. $24,400.

71.What effect will the following entry have on Retained Earnings?     

A. Retained Earnings will increase by $2,550.

B. Retained Earnings will decrease by $2,550.

C. Retained Earnings will remain unchanged.

D. Retained Earnings will be transferred to the income statement.

72.Magnum Corporation earned net income of $32,000 and paid cash dividends of $8,500 to its stockholders. Which of the following choices reflects the effect of closing entries on Magnum’s financial statements?     

A. Option A

B. Option B

C. Option C

D. Option D

 

 

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July 1, 2023
    

Question 1[20 points, 5 marks each]

  1. Each member of a random sample of 20 business economists was asked to predict the rate of inflation for the coming year. Assume that the predictions for the whole population of business economists follow a normal distribution with a standard deviation of 2%.

 

  1. The probability is 0.01 that the sample standard deviation is larger than what value?

 

  1. The probability is 0.025 that the sample standard deviation is smaller than what value?

 

  1. Monthly rates of return on the shares of a particular common stock are independent of one another and normally distributed with a standard deviation of 1.8. A sample of 15 months is taken.

  1. Find the probability that the sample standard deviation is less than 2.6.

 

  1. Find the probability that the sample standard deviation is more than 1.2.

 

Question 2[20 points]

  1. [10 points]To calculate a required sample size to estimate a population proportion, given a desired confidence interval and margin of error, the sample proportion is required but often unknown before the sample is collected. How is this predicament resolved?

  2. [5 points]How large a sample is needed to estimate the population proportion if ME = 0.09, = 0.05?

 

  1. [5 points]A fast food company wants to determine the average number of times that fast food eaters visit fast food restaurants per week. They have decided that their estimate needs to be accurate to within plus or minus one-tenth of a visit, and they want to be 90% sure of this. Previous research has shown that the standard deviation is 0.7 visits. What is the required sample size?

 

Question 3 [25 points]

A company selling licenses for new e-commerce computer software advertises that firms using this software obtain, on average during the first year, a yield of 10% on their initial investments. A random sample of 10 of these franchises produced the following yields for the first year of operation:

6.1 9.2 11.5 8.6 12.1 3.9 8.4 10.1 9.4 8.9

 

  1. [4 marks] Calculate the sample mean and sample standard deviation.

 

  1. [4 marks] Assuming that the population distribution is normal, construct a 95% confidence interval for the true standard deviation of the yield on initial investment during the first year.

 

  1. [2 marks] Assuming that the population distribution is normal, formulate a suitable null and alternative hypothesis to test the company’s claim at the 5% level of significance.

 

  1. [2 marks] What is the test’s decision rule?

 

  1. [2 marks] Calculate the test statistic.

 

  1. [1 mark] Based on the test statistic calculated in (d) above, what is your conclusion about the company’s claim?

 

  1. [2 marks] Calculate the p-value for the test statistic computed in (d) above.

 

  1. [1 mark] Using the p-value found in (f) above, what is your conclusion about the company’s claim?

 

  1. [3 marks] Construct a 95% confidence interval for the average yield on initial investment during the first year for all firms using the company’s software.

 

  1. [3 marks] Does the confidence interval in (h) above support your conclusion from the hypothesis test? Explain.

 

Question 4[16 points, 8 points each]

  1. A music industry professional claims that the average amount of money that an average teenager spends per month on music is at least $50. Based upon previous research, the population standard deviation is estimated to be $12.42. The music professional surveys 20 students and finds that the mean spending is $47.77. Is there evidence that the average amount spent by students is less than $50? Using the p-value approach, test at the 10% significance level.

 

  1. The manufacturer of a new chewing gum claims that at least eight out of ten dentists surveyed prefer their type of gum and recommend it for their patients who chew gum. An independent consumer research firm decides to test their claim. The findings in a sample of 400 doctors indicate that 76% do actually prefer the manufacturer’s gum. Is this evidence sufficient to cast doubt on the manufacturer's claim? Use α = 0.05.

 

 

 

 

 

 

Question 5: EXCEL Question[20 points]

 

Step1 Draw 500 N(0,1) random numbers for each of ten variables. This will show up in EXCEL as 10 columns of 500 rows.

Step 2 View each row as a sample of length 10. For each of the 500 samples, calculate the sample mean and sample standard deviation. These computations lead to two new columns of length 500.

Step 3 Calculate a z-stat (assuming known σ = 1) and a t-stat (σ unknown) for each sample.

Step 4 Determine critical values z.025 and t9,025 (from Tables).

Step 5 Fill in the following Table.

Step 6 Interpret the results in language using the null and alternative hypotheses presented in class.

 

Percentage Tail Draws Based on N(0,1) Samples

500 samples; size n = 10

 

 

z-left tail

z-right tail

total z-tails

t-left tail

t-right tail

total t-tails

t-crit9,025

 

z-crit025

 

 

 

 

 

 

 

 

Percentage tail values

 

 

 

 

 

 
default image
July 1, 2023
    

Question 1[20 points, 5 marks each]

  1. Each member of a random sample of 20 business economists was asked to predict the rate of inflation for the coming year. Assume that the predictions for the whole population of business economists follow a normal distribution with a standard deviation of 2%.

 

  1. The probability is 0.01 that the sample standard deviation is larger than what value?

 

  1. The probability is 0.025 that the sample standard deviation is smaller than what value?

 

  1. Monthly rates of return on the shares of a particular common stock are independent of one another and normally distributed with a standard deviation of 1.8. A sample of 15 months is taken.

  1. Find the probability that the sample standard deviation is less than 2.6.

 

  1. Find the probability that the sample standard deviation is more than 1.2.

 

Question 2[20 points]

  1. [10 points]To calculate a required sample size to estimate a population proportion, given a desired confidence interval and margin of error, the sample proportion is required but often unknown before the sample is collected. How is this predicament resolved?

  2. [5 points]How large a sample is needed to estimate the population proportion if ME = 0.09, = 0.05?

 

  1. [5 points]A fast food company wants to determine the average number of times that fast food eaters visit fast food restaurants per week. They have decided that their estimate needs to be accurate to within plus or minus one-tenth of a visit, and they want to be 90% sure of this. Previous research has shown that the standard deviation is 0.7 visits. What is the required sample size?

 

Question 3 [25 points]

A company selling licenses for new e-commerce computer software advertises that firms using this software obtain, on average during the first year, a yield of 10% on their initial investments. A random sample of 10 of these franchises produced the following yields for the first year of operation:

6.1 9.2 11.5 8.6 12.1 3.9 8.4 10.1 9.4 8.9

 

  1. [4 marks] Calculate the sample mean and sample standard deviation.

 

  1. [4 marks] Assuming that the population distribution is normal, construct a 95% confidence interval for the true standard deviation of the yield on initial investment during the first year.

 

  1. [2 marks] Assuming that the population distribution is normal, formulate a suitable null and alternative hypothesis to test the company’s claim at the 5% level of significance.

 

  1. [2 marks] What is the test’s decision rule?

 

  1. [2 marks] Calculate the test statistic.

 

  1. [1 mark] Based on the test statistic calculated in (d) above, what is your conclusion about the company’s claim?

 

  1. [2 marks] Calculate the p-value for the test statistic computed in (d) above.

 

  1. [1 mark] Using the p-value found in (f) above, what is your conclusion about the company’s claim?

 

  1. [3 marks] Construct a 95% confidence interval for the average yield on initial investment during the first year for all firms using the company’s software.

 

  1. [3 marks] Does the confidence interval in (h) above support your conclusion from the hypothesis test? Explain.

 

Question 4[16 points, 8 points each]

  1. A music industry professional claims that the average amount of money that an average teenager spends per month on music is at least $50. Based upon previous research, the population standard deviation is estimated to be $12.42. The music professional surveys 20 students and finds that the mean spending is $47.77. Is there evidence that the average amount spent by students is less than $50? Using the p-value approach, test at the 10% significance level.

 

  1. The manufacturer of a new chewing gum claims that at least eight out of ten dentists surveyed prefer their type of gum and recommend it for their patients who chew gum. An independent consumer research firm decides to test their claim. The findings in a sample of 400 doctors indicate that 76% do actually prefer the manufacturer’s gum. Is this evidence sufficient to cast doubt on the manufacturer's claim? Use α = 0.05.

 

 

 

 

 

 

Question 5: EXCEL Question[20 points]

 

Step1 Draw 500 N(0,1) random numbers for each of ten variables. This will show up in EXCEL as 10 columns of 500 rows.

Step 2 View each row as a sample of length 10. For each of the 500 samples, calculate the sample mean and sample standard deviation. These computations lead to two new columns of length 500.

Step 3 Calculate a z-stat (assuming known σ = 1) and a t-stat (σ unknown) for each sample.

Step 4 Determine critical values z.025 and t9,025 (from Tables).

Step 5 Fill in the following Table.

Step 6 Interpret the results in language using the null and alternative hypotheses presented in class.

 

Percentage Tail Draws Based on N(0,1) Samples

500 samples; size n = 10

 

 

z-left tail

z-right tail

total z-tails

t-left tail

t-right tail

total t-tails

t-crit9,025

 

z-crit025

 

 

 

 

 

 

 

 

Percentage tail values

 

 

 

 

 

 
default image
July 1, 2023
    

Question 1[20 points, 5 marks each]

  1. Each member of a random sample of 20 business economists was asked to predict the rate of inflation for the coming year. Assume that the predictions for the whole population of business economists follow a normal distribution with a standard deviation of 2%.

 

  1. The probability is 0.01 that the sample standard deviation is larger than what value?

 

  1. The probability is 0.025 that the sample standard deviation is smaller than what value?

 

  1. Monthly rates of return on the shares of a particular common stock are independent of one another and normally distributed with a standard deviation of 1.8. A sample of 15 months is taken.

  1. Find the probability that the sample standard deviation is less than 2.6.

 

  1. Find the probability that the sample standard deviation is more than 1.2.

 

Question 2[20 points]

  1. [10 points]To calculate a required sample size to estimate a population proportion, given a desired confidence interval and margin of error, the sample proportion is required but often unknown before the sample is collected. How is this predicament resolved?

  2. [5 points]How large a sample is needed to estimate the population proportion if ME = 0.09, = 0.05?

 

  1. [5 points]A fast food company wants to determine the average number of times that fast food eaters visit fast food restaurants per week. They have decided that their estimate needs to be accurate to within plus or minus one-tenth of a visit, and they want to be 90% sure of this. Previous research has shown that the standard deviation is 0.7 visits. What is the required sample size?

 

Question 3 [25 points]

A company selling licenses for new e-commerce computer software advertises that firms using this software obtain, on average during the first year, a yield of 10% on their initial investments. A random sample of 10 of these franchises produced the following yields for the first year of operation:

6.1 9.2 11.5 8.6 12.1 3.9 8.4 10.1 9.4 8.9

 

  1. [4 marks] Calculate the sample mean and sample standard deviation.

 

  1. [4 marks] Assuming that the population distribution is normal, construct a 95% confidence interval for the true standard deviation of the yield on initial investment during the first year.

 

  1. [2 marks] Assuming that the population distribution is normal, formulate a suitable null and alternative hypothesis to test the company’s claim at the 5% level of significance.

 

  1. [2 marks] What is the test’s decision rule?

 

  1. [2 marks] Calculate the test statistic.

 

  1. [1 mark] Based on the test statistic calculated in (d) above, what is your conclusion about the company’s claim?

 

  1. [2 marks] Calculate the p-value for the test statistic computed in (d) above.

 

  1. [1 mark] Using the p-value found in (f) above, what is your conclusion about the company’s claim?

 

  1. [3 marks] Construct a 95% confidence interval for the average yield on initial investment during the first year for all firms using the company’s software.

 

  1. [3 marks] Does the confidence interval in (h) above support your conclusion from the hypothesis test? Explain.

 

Question 4[16 points, 8 points each]

  1. A music industry professional claims that the average amount of money that an average teenager spends per month on music is at least $50. Based upon previous research, the population standard deviation is estimated to be $12.42. The music professional surveys 20 students and finds that the mean spending is $47.77. Is there evidence that the average amount spent by students is less than $50? Using the p-value approach, test at the 10% significance level.

 

  1. The manufacturer of a new chewing gum claims that at least eight out of ten dentists surveyed prefer their type of gum and recommend it for their patients who chew gum. An independent consumer research firm decides to test their claim. The findings in a sample of 400 doctors indicate that 76% do actually prefer the manufacturer’s gum. Is this evidence sufficient to cast doubt on the manufacturer's claim? Use α = 0.05.

 

 

 

 

 

 

Question 5: EXCEL Question[20 points]

 

Step1 Draw 500 N(0,1) random numbers for each of ten variables. This will show up in EXCEL as 10 columns of 500 rows.

Step 2 View each row as a sample of length 10. For each of the 500 samples, calculate the sample mean and sample standard deviation. These computations lead to two new columns of length 500.

Step 3 Calculate a z-stat (assuming known σ = 1) and a t-stat (σ unknown) for each sample.

Step 4 Determine critical values z.025 and t9,025 (from Tables).

Step 5 Fill in the following Table.

Step 6 Interpret the results in language using the null and alternative hypotheses presented in class.

 

Percentage Tail Draws Based on N(0,1) Samples

500 samples; size n = 10

 

 

z-left tail

z-right tail

total z-tails

t-left tail

t-right tail

total t-tails

t-crit9,025

 

z-crit025

 

 

 

 

 

 

 

 

Percentage tail values

 

 

 

 

 

 
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