Suppose that a developer is choosing tenants for a shopping center. There are four possible tenants: a DEPARTMENT STORE, a TOY STORE, a SHOE STORE, and a HARDWARE STORE. If each store were to be located in isolation outside a shopping center it would earn a certain level of gross profit per period (this is the level of profit before subtracting out space rent). In addition, each store requires a certain number of square feet of floor space, which is the same regardless of whether or not it locates in a shopping center. The relevant values for each store type are as follows:
Store Type: Gross Profit in Isolation Required Square Footage
Department $100,000 9,000
Toy $11,200 1,000
Shoe $7,800 800
Hardware $7,000 1,100
When the stores are located together, each store earns a greater gross profit from the extra customer traffic generated by the nearby locations of other stores. The increase in gross profit for each store resulting from the presence of other store types is as follows
Affected Store Type:
Department Toy Shoe Hardware
Department -- $6000 $8000 $1000
Toy $2000 -- $600 $300
Shoe $2000 $500 -- $200
Hardware $1000 $400 $200 --
Suppose that the shopping center developer charges a rent equal to each store’s gross profit, leaving the store with a net profit of exactly zero. Total rent from the shopping center is then equal to the total gross profit of all its stores. The developer’s profit is thus equal to total gross profit of all stores in the center minus the cost of providing space to the stores (that is, total rent minus the cost of providing space). Finally, suppose that due to high-quality construction and the need to provide common space around the stores, the construction cost for shopping center space is high. In particular, suppose that the cost per period per square foot of store floor space is $10.
A) Give an intuitive explanation for the pattern of incremental profits from the presence of other stores in the second table above
B) Suppose the developer were to construct a single-store shopping center (a contradiction in terms, perhaps). There are four types of such centers (a Department Store alone, a Toy Store alone, etc.). Using the information above, compute the developer’s profit from each of these four types of centers
C) Next compute the developer’s profit from the various types of two-store shopping centers (i.e., Department Store plus Shoe Store, Department Store plus Toy Store, etc.; how many possibilities are there?)
D) Finally, compute profits from the various types of three-store centers and from the single type of four-store center
E) Comparing your answers from (b), (c), and (d), identify the optimal shopping center (the one yielding the highest profit to the developer). Explain intuitively why this particular collection of stores is optimal.

Answer:

Answer is explained in the explanation section below.

Explanation:

Solution:

a) Explanation:

Closeness of different shops at one place would result in the increased Profit because of the following reasons:

1. People usually wish to save extra bucks whenever possible, so in this case, they will be saving their travel cost because, they don't need to go somewhere else for other products. As they will be getting every product they need in a single complex.  

2. Secondly, because of the greater visibility of different products people would buy things they don't even need for the time being,  resulting in the increase in profits.

b) Single Store Shopping Centre:

For Department:

Rent of the store = $ 100,000

Cost ($ 10 per sq. foot) = 9000 x 10 = $ 90,000

Profit = $ 100,000 - $ 90,000  = $ 10,000

For Toy Store:

Rent of the store = $ 11,200

Cost ($ 10 per sq. foot) = 1,000 x 10 = $ 10,000

Profit = $ 11,200  - $ 10,000 = $1,200

For Shoe Store:

Rent of the store = $ 7,800

Cost ($ 10 per sq. foot) =  800 x 10 = $8000

Profit = $ 7,800 - $8000 = -$200

For Hardware Store:

Rent of the store = $7,000

Cost ($ 10 per sq. foot) = 1,100 x 10 = $11,000

Profit =  $7,000 - $11,000 =  -$4000

c) Two-Store Shopping centers:

Department + Toy :

Toy affected Score = $6000

So,

Profit of Affected Department = $10000 + $6000 = $16000

Profit of Affected Toy Store = $2000 + $1200 = $3200

Total Profit = Profit of Affected Toy Store + Profit of Affected Department

Total Profit =  $16000 + $3200 = $19200

Similarly,

For Department + Shoes:

Shoes Affected Score = $8000

So,

Profit of Affected Department = $10000 + $8000 = $18000

Profit of Affected Shoe Store =  -$200 + $2000 = $1800

Total Profit  =  $18000 + $1800 = $19800

Similarly,

For Department + Hardware:

Hardware affected Score =  $1000

So,

Profit of Affected Department = $10000 + $1000 = $11000

Profit of Affected Hardware Store =   -$4000 + $1000 = -$3000

Total Profit  = $11000 -$3000 = $8000

Similarly,

For Toy + Shoes:

Shoes affected Score =  $600

Profit of Affected Toy  = $1,200 + $600 = $1800

Profit of Affected Shoe Store =  -$200 + $500 = $300

Total Profit  = $1800 + $300 = $2100

Similarly,

For Toy + Hardware:

Hardware affected Score =  $300

So,

Profit of Affected Toy  = $1,200 + $300 = $1500

Profit of Affected Hardware Store = -4,000 + 400 = -3600

Total Profit  =  $1500 -3600 = -2,100

Similarly,

Shoes + Hardware:

Hardware affected Score = $200

Profit of Affected Shoes  = -200 + 200 = 0

Profit of Affected Hardware Store = -4,000 + 200 = -3800

Total Profit  = 0 - 3800 = -3800

Similarly,

d) Three-store Shopping centers:

For Department + Toy + Shoes:

Department Profit = 10,000 + 6,000 + 8,000 = $24000

Toy Profit  = 1,200 + 2,000 + 600 = $3800

Shoes Profit = -200 + 2,000 + 500 = $2300

Total Profit = $24000 + $3800 + $2300 = 30,100

For Department + Toy + Hardware:

Department Profit = 10,000 + 6,000 + 1,000 = $17000

Toy Profit = 1,200 + 2,000 + 300 = $3500

Hardware Profit = -4,000 + 1,000 + 400 = -$2600

Total Profit = $17000 +  $3500 - $2600  = 17,900

Department + Shoes + Hardware:

Department Profit =  10,000 + 8,000 + 1,000

Shoes Profit = -200 + 2,000 + 200

Hardware Profit = -4,000 + 1,000 + 200

Total Profit = 18,200

Toy + Shoes + Hardware:

Toy Profit = 1,200 + 600 + 300

Shoes Profit =  -200 + 500 + 200

Hardware Profit = -4,000 + 400 + 200

Total Profit = -800

Four store Shopping Centre:

Department + Toy + Shoes + Hardware:

Department Profit =  10,000 + 6,000 + 8,000 + 1,000

Toy Profit = 1,200 + 2,000 + 600 + 300

Shoes Profit = -200 + 2,000 + 500 + 200

Hardware Profit = -4,000 + 1,000 + 400 + 200

Total Profit = 29,200

E)

Now, if you see and compare between the profits of above calculated different category stores, then maximum profit is gained by 3 store shopping center. So, the optimal store is 3 store shopping center.

The trial balance before adjustment of Taylor Swift Inc. shows the following balances.
Dr. Cr.
Accounts Receivable $90,000
Allowance for Doubtful Accounts 1,750
Sales Revenue (all on credit) $680,000
Instructions Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of (a) 4% of gross accounts receivable and (b) 5% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,700 credit balance. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.
No. Account Titles and Explanation Debit Credit

Cozy Nights Industries manufactures down-filled comforters and uses activity-based costing. The following information is provided for September.

Activity Estimated indirect activity costs Allocation base Estimated quantity allocation base
Materials handling $12,600 Number of parts 4,200 parts
Assembly 55,440 Number of parts 4,200 parts
Packaging 10,920 Number of parts 1,050 comforters

Each comforter consists of 4 parts and the direct materials cost per comforter is $14.00.Based on the information given for Cozy Nights Industries, what is the total manufacturing cost per comforter?

a. $78.80.
b. $64.80.
c. $3.00.
d. $89.20.
d. $30.20.

Which action invalidates the contract Kyle signed?
a.
Kyle missed his monthly payment.
b.
Kyle split the missing payment into three equal parts.
c.
Kyle did not notify his bank with his intention to split up the missing payment.
d.
Kyle did not add one-third of the missing payment to the next three monthly payments.

ITS C Promise

Many names have been recognized as notable business leaders. Steve Jobs, Bill Gates, Elon Musk, Mark Zuckerberg, Jack Welch, and Colleen Barrett are all leaders identified for their unique approach to leading people. Choose one of the following business leaders for this assignment: Jeff Bezos, Elon Musk, Steve Jobs, Bill Gates, Jack Welch, Indira Nooyi, Anne Mulcahy, Howard Schultz, Colleen Barrett, Larry Page, Mark Zuckerberg, Warren Buffett, Richard Branson, Susan Wojcicki, Marissa Mayer, or Mary Barra. Select one leader and discuss (in 1,250-1,500 words) what you have learned about the selected individual as a leader and the leadership style that leader embodies. Address the following in your discussion: Identify a leader and justify why you selected that particular leader. With what organizations is the leader affiliated

Swifty Corporation issued 100000 shares of $10 par common stock for $1250000. A year later Swifty acquired 15900 shares of its own common stock at $15 per share. Three months later Swifty sold 8500 of these shares at $19 per share. If the cost method is used to record treasury stock transactions, to record the sale of the 8500 treasury shares, Swifty should credit

Selected transactions for the Joel Berges Company are presented in journal form below.

Date Account Titles and Explanation Ref. Debit Credit
5-May Accounts Receivable 4,100
      Service Revenue 4,100
        (Billed for services performed)
12 Cash 2,400
     Accounts Receivable 2,400
       (Received cash in payment of account)
15 Cash 3,000
     Service Revenue 3,000
        (Received cash for services performed)

Required:
Post the transactions to T-accounts and determine each account's ending balance.

An investor found the following in an annual report: "The financial statements, in our opinion, present fairly the financial position, operating results, and cash flows, in conformity with accounting principles generally accepted in the United States." In which section of the annual report did the investor find this?

L. Lyons started a business, called Lyons Share, by investing $4,000 for stock. Illustrate how to record the transaction in Lyons Share's T-accounts by completing the following sentence. The Cash account would be blank input field 1_(debited/credited) on the blank input field 2(left/right) side of the T-account and the Common Stock account would be blank input field 3(debited/credited) on the blank input field 4 (left/right) side of the T-account. (Enter one word per blank.)

As an entrepreneur that prefers to work independently what is the best source of financing? Explainer answer

The amount of joint costs allocated to product DBB-1 using the sales value at split-off method is (calculate all ratios and percentages to 2 decimal places, for example 33.33%, and round all dollar amounts to the nearest whole dollar): $2,213,640. $939,240. $216,870. $757,800. $447,120.

Determine the taxable amount of social security benefits for the following situations. If an amount is zero, enter "$0".
a. Erwin and Eleanor are married and file a joint tax return. They have adjusted gross income of $36,000, no tax-exempt interest, and $12,400 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
b. Assume Erwin and Eleanor have adjusted gross income of $12,000, no tax-exempt interest, and $16,000 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.
c. Assume Erwin and Eleanor have adjusted gross income of $85,000, no tax-exempt interest, and $15,000 of Social Security benefits. As a result, $ of the Social Security benefits are taxable.

Aimee is a salaried nonexempt employee who earns an annual salary of $56,000 for a 43-hour workweek, paid biweekly. The employer pays overtime for any hours worked in excess of 43 per week. During a pay period, she worked 95 hours. She has requested that she take compensatory time in lieu of paid overtime. How much compensatory time should she receive, assuming that her firm approves the compensatory time

Wildhorse Taxi Service uses the units-of-activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 144,000 miles. Taxi 10 cost $29,000 and is expected to have a salvage value of $200. Taxi 10 was driven 31,000 miles in 2021 and 33,500 miles in 2022.
Determine the depreciation cost. (Round answer to 2 decimal places, e.g. 1.25.) per unit
Depreciable costs
eTextbook and Media
Compute the depreciation for each year. 2021 2022
Depreciation expense $

The following inventory valuation errors have been discovered for Knox Corporation:
The 2015 year-end inventory was overstated by $23,000.
The 2016 year-end inventory was understated by $61,000.
The 2017 year-end inventory was understated by $17,000.
The reported income before taxes for Knox was:
Year: Income before Taxes:
2015 $138,000
2016 $254,000
2017 $168,000
Required:
Compute what income before taxes for 2015, 2016, and 2017 should have been after correcting for the errors.

Suppose that three firms make up the entire tire manufacturing industry. One has a 40% market share, and the other two have a 30% market share each. The Herfindahl index of this industry is . Tread Tough, one of the firms with a 30% market share in the tire manufacturing industry, leaves the market. This would cause the Herfindahl index for the industry to .

The next three questions use the below information. Company A started business on January 1, 20X1, and bought the following piece of equipment. Cost of asset $150,000 Useful life 3 Tax rate 21% 20X1 estimated tax payment 1,800 Depreciation for book and tax purposes is as follows: Book Tax 20X1 40,000 100,000 20X2 40,000 20,000 20X3 40,000 0 20X1 income statement information: Sales 638,000 Expenses (does not include depreciation expense and tax expense) 510,000 What is net income for 20X1?

XYZ Corporation had 158 million shares outstanding on January 1, 2012. On February 2,2012, it issued an additional 30 million shares to the market at the market priceof $55 per share. What was the effect of this share issue on the price per share

A company uses a perpetual inventory system. The company began its fiscal year with inventory of $998,000. Purchases of merchandise on account during the year totaled $3,124,089. Merchandise costing $3,456,980 was sold on account for $6,909,879. Prepare the journal entries to record these transactions.

The following selected information was extracted from the 20x1 accounting records of Lone Oak Products:

Raw material purchases $175,000
Direct labor 254,000
Indirect labor 109,000
Selling and administrative salaries 133,000
Building depreciation* 80,000
Other selling and administrative expenses 195,000
Other factory costs 344,000
Sales revenue ($130 per unit) 1,495,000

Seventy-five percent of the company's building was devoted to production activities; the remaining 25 percent was used for selling and administrative functions.
Inventory data:

January 1 December 31
Raw material $15,800 $18,200
Work in process 35,700 62,100
Finished goods 111,100 97,900

The January 1 and December 31 finished-goods inventory consisted of 1,350 units and 1,190 units, respectively.

Required:

a. Calculate Lone Oak's manufacturing overhead for the year.
b. Calculate Lone Oak's cost of goods manufactured.
c. Compute the company's cost of goods sold.
d. Determine net income for 20x1, assuming a 30% income tax rate.
e. Determine the number of completed units manufactured during the year.

Adidea Corp. regularly buys merchandise from vendors. It just purchased 1,000 units on credit from one of its vendors. How will the company record this transaction?

The company will record the purchase as a debit to the inventory account and a credit to the ________ account.

Hunt Advertising is collaborating on an initiative with the Odessa Arts Council, a nonprofit organization, by providing public-relations training to working professionals throughout West Texas. Twenty percent of the fee that the participants would pay is given to the nonprofit organization. The nonprofit organization in turn reaches a wider range of audience across West Texas for its training program. This scenario illustrates _______.

One current answer to the historical struggle within management to balance the things of production and the humanity of production is social business, including the use of social media. Please indicate if the social media benefits listed below aid a thing of production or the humanity of production. Social media benefit Thing of production Humanity of production Improve efficiency Facilitate collaboration

ohansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year: Direct materials $ 6,000 Direct labor $ 20,000 Rent on factory building $ 15,000 Sales salaries $ 25,000 Depreciation on factory equipment $ 8,000 Indirect labor $ 12,000 Production supervisor's salary $ 15,000 Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be:

Feb. 1 Paid $500 for rent of hangar space in February.Feb. 4 Received customer payment of $1,510 to ship several items to Philadelphia next month.Feb. 7 Flew cargo from Denver to Dallas; the customer paid in full ($1,410 cash).Feb. 10 Incurred and paid $1,500 in pilot wages for flying in February.Feb. 14 Paid $116 for an advertisement run in the local paper on February 14.Feb. 18 Flew cargo for two customers from Dallas to Albuquerque for $2,130; one customer paid $860 cash and the other asked to be billed $1,270.Feb. 25 Purchased on account $1,755 in supplies for future use on the planes.Required:Prepare accrual basis journal entries for each transaction.Calculate the company’s preliminary net income.Calculate the company’s net profit margin expressed as a percent.

For this question, consider a manufacturer of wall calendars. A cost leadership strategy would be oriented around mass producing calendars. Responsiveness would be oriented around being flexible and changing designs/themes as the market changes and always having calendars available for sale (reliable response). A differentiation strategy would be through unique and customizable product design. This would also create a production that is like that of a craftsman rather than mass production where customers will be able to design and have produced a custom product. You are hiring personnel to work on the Wall Calendar Production Line. Your decision depends on the operations strategy. Match the appropriate decision with the strategy:
Differentiation
Cost Leadership
Responsiveness (flexible response)
A. Hire artists to create unique calendars.
B. Hire workers who will be cross trained, so they can be scheduled to do various positions.
C. Hire low skilled labor, like high school grads, to run machines for printing and cutting.

b. Which of the following combinations of fishing lures and duck decoys is unobtainable to Mountain Mack in one week's worth of carving? multiple choice 1 10 fishing lures and 40 duck decoys 20 fishing lures and 10 duck decoys 40 fishing lures and 0 duck decoys 16 fishing lures and 30 duck decoys c. Which of the following combinations of fishing lures and duck decoys is an efficient combination? multiple choice 2 16 fishing lures and 30 duck decoys 10 fishing lures and 40 duck decoys 50 fishing lures and 0 duck decoys 20 fishing lures and 10 duck decoys

Ivanhoe Company issued $492,000 of 10%, 20-year bonds on January 1, 2017, at 104. Interest is payable semiannually on July 1 and January 1, Ivanhoe Company uses the straight-line method of amortization for bond premium or discount.
Prepare the journal entries to record the following.
(a) The issuance of the bonds.
(b) The payment of interest and the related amortization on July 1, 2017.
(c) The accrual of interest and the related amortization on December 31, 2017.

Which of the following principles underlies the interaction of individual choices? a Marginal analysis is used for "how much" decisions. b People usually exploit opportunities to make themselves better off. c Resources are scarce. d There are gains from trade.

MM Proposition I with corporate taxes states that:

I. capital structure can affect firm value by an amount that is equal to the present value of the interest tax shield;
II. by raising the debt-to-equity ratio, the firm can lower its taxes and thereby increase its total value;
III. firm value is maximized by using an all-equity capital structure

a. I only
b. II only
c. III only
d. I and II

In the current year, Big Burgers, Inc., expanded its fast-food operations by opening several new stores in Texas. The company incurred the following costs in the current year: market appraisal ($50,000), consulting fees ($72,000), advertising ($47,000), and traveling to train employees ($31,000). The company is willing to incur these costs because it foresees strong customer demand in Texas for the next several years. What amount should Big Burgers report as an expense in its income statement associated with these costs?