ACC 5170 Tax Return Project Winter 2016

ACC 5170
Tax Return Project
Winter 2016

the following information to prepare the various schedules/forms for Luke and Ann
that are indicated on the class schedule of assignments. You will also use this
information (and the information from the various schedules that you will have
prepared) to prepare a federal form 1040 for Luke and Ann for 2015. Be
sure to include all necessary forms and schedules to complete the tax return
even if they were not prepared as individual assignments. Also, please put all
forms for your completed Form 1040 in the proper order per the IRS attachment
instructions. You may obtain the necessary forms and instructions from the IRS
which has a forms and publications tab.
The tax return submitted and the various schedules MUST BE HAND WRITTEN.

the individual form submissions and for the final form 1040, you must prepare
the cover sheet (last page of this document) that details any assumptions made
regarding issues on the individual forms or on the tax return as a whole. Place
the completed assumptions sheet on top of your forms or tax return when you
submit the finished products. (Make sure
your completed tax forms are consistent with your final stated assumptions.) The cover sheet may be typed. You may add additional rows to the cover
sheet if necessary.

if you combine any numbers to place them on the forms or the tax return please
show the detail on the assumptions sheet. Also be sure to label any items
placed on the forms or tax return so they can be identified.

instructions for your initial submission of Schedule A:
these instructions only apply to the schedule that will be submitted before the
final return is due.
purposes of the initial Schedule A, use $100,000 as the Adjusted Gross Income
amount. (For the final Schedule A you
will use your computed AGI amount, so you will need to revise the Schedule A to
reflect the computed AGI before you turn it in with your final tax return.)

questions, post to the discussion forum for this project and e-mail me that you
have posted a question to the discussion forum.

Luke Thompson, 48, Social Security Number
123-45-6789, is a self-employed architect. His gross income is $205,000. In 2015,
he paid estimated taxes of $33,800. His wife, Ann, 45, Social Security Number
123-48-9012, is an elementary school teacher. Her W-2 earnings were $46,000.
She had $6,050 withheld in federal tax.

Luke and Ann’s son, Samuel, 23, Social
Security number, 456-23-4556, a full-time college student, graduated from
college in May of 2015 but still lives at home and his parents pay his living
expenses. His W-2 earnings were $25,000; he had $4,000 withheld in federal
taxes. Samuel is saving his earnings for
graduate school which he hopes to attend in a couple of years.

Their daughter, Jennifer, 9, Social
Security Number 245-78-8978, is in elementary school and has income of $9,500
from a part time modeling job. All her earnings are deposited in an investment
account for her future.

Ann’s mother, Mary McIntyre, 77, Social
Security Number 345-67-8910, has lived with the family since November 2013,
except for four months in 2015, when she was convalescing in a nursing home
from a hip fracture. She receives $12,000 from Social Security. Mary also
receives a taxable pension, reported as $8,000 on her 1099-R.

Luke has a few business expenses. They

v $5,821 on office supplies.
v 1,350 for advertising.
v $6,700 on blueprints for jobs.
v $350 for printing.
v $1,100 on permits for jobs.
v $1,423 for home show fees.
v $10,000 for a part-time employee.
v Total Social Security taxes relating to this employee of $1,240, and
Medicare taxes of $290 (includes both the employer and employee portions). Federal income taxes (withholding) were also
paid, as well as $56 in federal unemployment taxes.
v $349 for professional journals related to architecture.
v $2,400 (a $200 monthly flat rate) for his cell phone, which is used 85%
for business.
v $543 for long distance business phone calls placed on his home
v Luke belongs to several local Chambers of Commerce. During 2015, he paid $360 in dues.
v $2,348 for various tickets to football games that he took his
clients to.
v Luke paid $15,000 in country club dues for the 2015 tax year. The entire
family uses the club for swimming, sports activities, and dining. Luke used the
club to entertain several of his clients during the year. His use of the club
was 18% of the total use of the club. He spent $3,320 for business meals at the
country club and $4,950 for golf fees when he and his clients played golf at
the club. Each time he entertained
clients, business was discussed before, during and/or after golfing or meals at
the club.
v Luke also incurred the following business expenses to attend several
architecture conferences during the tax year. All conferences were in the
United States.
o Airfare $2,650
o Hotel 1,229
o Meals 2,142
o Transportation 220
o Conference fees 1,190

He uses one room of the house as an office
(1/16 of the total square footage of the house). The house was purchased on August 5, 2012 for
$401,000, of which $75,000 was allocated to the purchase price of the lot. The home is 2,800 square feet. Ann also often uses this room to work on her
craft projects. The room is also used for out of town guests who visit. Some expenses related to this home office
Utilities (total
for the house) 2,590
Insurance (total
for the house) 1,450
Painting of the

In June of 2015 Luke purchased the
following assets for use in his business. (All other assets he uses in his
business were purchased a number of years ago and were either expensed or have
been completely depreciated before this year.)
All the recently purchased assets are used 100% for business. Because he anticipates his income increasing
substantially next year, he does not wish to expense any of the purchases nor
claim any additional first year depreciation he might be eligible for.
Used Desk $3,750
File Cabinet 2,450
Computer 5,850
Bookcases 3,725
Printer/Copier 2,025

Luke has carefully kept a log of his 12,900
miles spent driving to clients and returning to his home office each day. He
visits only one client a day. He drives a 2012 Volkswagen Passat, which they
paid off in 2013. He purchased the car for $28,700. He kept no gas, maintenance or any other
auto-expense receipts.

Luke’s employer identification number for
his business is 38-6543210.

Ann completed her Masters degree in
elementary education in 2015, having decided that the advanced degree would
improve her work skills and increase her salary and marketability. Continuing
education is also required to keep her teaching certification under state law,
so like a lot of teachers she felt it made sense to work on a Masters and not
just take various classes. In 2015, she fully paid tuition of $7,500.

Ann also subscribes to a number of teaching
journals. She feels they help her improve her skills at work and make her a
better employee. She spent $250 on these
journals and she also spent $350 on supplies for her classroom.

Ann, who also likes to make and sell crafts,
had gross receipts of $7,320 from this activity. The materials for the crafts
she sold cost her $4,315; other miscellaneous expenses (marketing and craft
show fees and postage) totaled $1,805.
This is the first year that Ann has attempted to sell any of her
crafts. Since she feels she was
successful, she plans to continue this activity into the future as a part time

In 2015, Luke and Ann took out a home
equity loan of $75,000. Of that sum, they spent $26,000 on a new Ford Fusion
which Ann drives and for which they also paid $1,560 in sales tax. They used
$24,000 to pay the nursing-home bill that Mary couldn’t pay herself. They paid
$2,550 in interest on the home equity loan.

Other information:

Luke and Ann
earned taxable interest of $2,002 from First National Bank.
Ann had $830 in
interest from an interest bearing checking account at Chase Bank.
Luke had $150 in
interest from an interest bearing checking account at Second National Bank.
Luke received $6,740
in interest from U.S. Treasury Bonds.
Ann received
$4,780 in interest from State of Kentucky bonds.
Ann received
$2,402 in ordinary (and qualifying) dividends from General Electric stock she
held individually
Samuel received
$112 in interest from an interest bearing checking account at PDQ Bank.
received $1,360 in ordinary (and qualifying dividends) from her investment
account at TD Ameritrade. These dividends were reinvested in the account.
Luke received
$2,440 in ordinary (and non-qualifying) dividends from Intel stock he held
They paid $9,500
in real estate taxes and $15,100 in interest on their original mortgage. (Mortgage
amount is less than $1,000,000)
They made monetary
charitable contributions of $12,530 and have receipts. Luke also contributed
design services that were auctioned off by the Alachua Animal Shelter (a
qualified charitable organization) on August 15, 2015. He normally charges $500 for such services
and the winning bid at the auction was $300.
The Thompsons also donated old clothes to the Salvation Army,
Gainesville, Florida. The clothes’
thrift shop value was $350 and the Thompsons purchased them at various times
for $1,000.
Luke and Ann and
their children had $3,200 of medical expenses and $5,400 of dental expenses
that were not covered by insurance (The family’s insurance is provided by Ann’s
employer as a part of her fringe benefit package. The value of the insurance premiums for 2015
is $14,500. The Thompsons also spent $275 on over the counter drugs during the
year. Ann spent $650 on eyeglasses and
exams that weren’t covered by insurance.
The Thompson family
lives in Gainesville, Florida at 3908 143rd Street. They pay no state or local income taxes.
The Thompson’s
had a garage sale this year and made $5,750.
They sold old clothes, old children’s toys, used furniture, and other used
household goods.
Luke received a
$25,000 gift from his parents during the year.

During 2015, Luke had the following stock









Barnes & Noble
















ACC 5170
Tax Return Project 1
Winter 2016






filing jointly

at year end

Number of dependents claimed

Use the following information to complete Paige Turner’s 2013 federal in-come tax return

Required:• Use the following information to complete Paige Turner’s 2013 federal in-come tax return. If information is missing, use reasonable assumptions to fill in the gaps.Facts:1. Paige Turner is single and has two children from her previous marriage. Alilives with Paige, and Paige provides more than half of her support. Leif lives with his father, Will (Lief lived with Will for all of 2013). Will provides more than half of Leif’s support. Paige pays “alimony” of $400 per Will. The payments are to continue until Leif reaches age 18, when they will be reducedto $150. Paige provides you with the following additional information:• She uses the cash method of accounting and a calendar year for reporting.• She wishes to contribute to the presidential election campaign.• Paige lives at 523 Essex Street, Bangor, ME 04401.• Paige’s birthday is May 31, 1975.• Ali’s birthday is October 5, 2004.• Leif’s birthday is December 1, 2002.• Paige’s Social Security number is 007-16-4727.• Ali’s Social Security number is 005-61-7232.• Leif’s SociÃ¥l Security number is 004-23-3419.• Will’s Social Security number is 006-45-6333.• She does not have any foreign bank accounts or trusts.2. Paige is employed as a nuclear engineer with Atom Systems Consultants, Inc.(ASCI). ASCI’s federal employer identification number is 79-1234466. Paige’s pay stubs indicate that she had $7,230 withheld in federal taxes, $4,987 in state taxes, $4,495 in Social Security taxes, and $1,051 in Medicare taxes. ASCI has an extensive fringe benefits program for its employees.3. Paige earned salary of $70,000 (before subtracting her 401(k) and flexible spending plan contributions). She contributed $7,000 to her 401(k) account, and she contributed $3,600 to her flexible spending account.4. ASCI paid $397 of whole life insurance premiums to cover Paige’s personal whole life insurance policy. ASCI also paid health club dues of $900 to a nearby health club on Paige’s behalf.5. Taking advantage of ASCI’s educational assistance program, during the fall Paige enrolled in two graduate engineering classes at a local college. ASCI paid her tuition, fees, and other course-related costs of $2,300.6. Paige received free parking in the company’s security garage that would normally cost $200 per month.7. Paige manages the safety program for ASCL In recognition of her superior handling of three potential crises during the year, Paige was awarded the Employee Safety Award on December 15. The cash award was $500.8. On January 15, 2013, Paige’s father died. From her father’s estate, she received stock valued at $30,000 (his basis was $12,000) and her father’s house valued at $90,000 (his basis in the house was $55,000).9. Paige owns several other investments and in February 2014 received a statement from her brokerage firm reporting the interest and dividends earned on the investments for 2013. (See Exhibit A.)10. In addition to the investments discussed above Paige owns 1,000 shares of Grubstake Mining & Development common stock. Grubstake is organized as an S corporation and has 100,000 shares outstanding (S corp. ID number 45-4567890). Grubstake reported taxable income of $200,000 and paid a distribution of $1.00 per share during the current year. Paige tells you that Grubstake typically does not send out its K-l reports until late April. How-ever, its preliminary report has been consistent with the K-l for many years. (See Exhibit A.) Paige does not materially participate in Grubstake’s activities.Il. Paige slipped on a wet spot in front of a computer store last July. She broke her ankle and was unable to work for two weeks. She incurred $1,300 in medical costs, all of which were paid by the owner of the store. The store also gave her $1,000 for pain and suffering resulting from the injury. ASCI continued to pay her salary during the two weeks she missed because of the accident. ASCI’s plan also paid her $1 ,200 in disability pay for the time she was unable to work. Under this plan ASCI pays the premiums for the disability insurance as a tax-able fringe benefit.EXHIBIT A Forms 1099 and 1098This is important tax information and is being furnished to the Internal Revenue Service.Entity General DynamicsEntity1099-DiV DividendS & DistributionsDescriptionGross qualified dividends1099-rnt IhterestAmount$300AmountS300700 200Amount$7,100435DescriptionGross interestGross interestGross interestNew Jersey Economic Development bondsIBM bondsState of Nebraska bondsEntitySunbelt Credit UnionNortheast Bank-10982Mortgaéé Interest StatementDescriptionMortgage interestHome-equity loan interestGrubstake Mining & Development: preliminary report (preliminary K-1) to Paige for the 2013 tax yearDistribution toOrdinary income (1 % of $200,000)$1,000$2,00012. Paige received a Form 1099-B from her broker for the sale of the following se-curities during 2013. The adjusted basis amounts were reported to the IRS.SecurityNebraska state bondsCassll Corp (500 shares)sale Date03/14/13 10/20/13PurchaseDate10/22/0702/19/12Sales CommissionHerPrice Paid on SaleBasis$2,300$8,500$160$425Sl ,890$9,76013. In addition to the taxes withheld from her salary, she also made timely esti-mated federal tax payments of $175 per quarter and timely estimated state in-come tax payments of S 150 for the first three quarters. The $150 fourth-quarter state payment was made on December 28, 2013. Paige would like to receive a refund for any overpayment.14. Because of her busy work schedule, Paige was unable to provide her accoun-tant with the tax documents necessary for filing her 2012 state and federal income tax returns by the due date (April 15, 2013). In filing her extension on April 15, 2013, she made a federal tax payment of $750. Her return was eventually filed on June 25, 2013. In August 2013, she received a federal refund of $180 and a state tax refund of $60. Her itemized deductions for2012 were $12,430.15. Paige found a renter for her father’s house on August I. The monthly rent is$400, and the lease agreement is for one year. The lease requires the tenant to pay the first and last months’ rent and a $400 security deposit. The security deposit is to be returned at the end of the lease if the property is in good condition. On August l, Paige received $1,200 from the tenant per the terms of the lease agreement. In November, the plumbing froze and several pipesburst, The tenant had the repairs made and paid the $300 bill. In December, he reduced his rental payment to $100 to compensate for the plumbing repairs. Paige provides you with the following additional information for the rental in 2013.Property taxes Other maintenance expensesInsurance expense Management feeDepreciation (to be computed)$770285495350The rental property is located at 35 Harvest Street, Orono, ME 04473. Local practice is to allocate 12 percent of the fair markét value of the property to theland. (See #8.) Paige makes all decisions with respect to the property.16. Paige paid $2,050 in real estate taxes on her principal residence. The real estate tax is used to pay for town schools and other municipal services.17. Paige drives a 2012 Acura TL. Her car registration fee (based on the car year) is $50 and covers the period 1/1/13 through 12/31/13. In addition, she paid $280 in property tax to the state based on the book value of the car.18. In addition to the medical costs presented in #11, Paige incurred the following unreimbursed medical costs:Dentist DoctorPrescription drugsOver-the-counter drugs OptometristEmergency room chargesLASIK eye surgery Chiropractor$ 310 390215140 1252,00026519. On March l, Paige took advantage of low interest rates and refinanced her $75,000 home mortgage with her original lender. The new home loan is for 15 years. She paid $215 in closing costs and Sl ,500 in discount points (prepaid interest) to obtain the loan. The house is worth $155,000, and Paige’s basis inthe house is $90,000. As part of the refinancing arrangement, she also obtained a $10,000 home-equity loan. She used the proceeds from the home-equity loanto reduce the balance due on her credit cards. Paige received several Form 1098 statements from her bank for interest paid by her in 2013. Details appear below.(See also Exhibit A on page C-l IPrimary home mortgageHome-equity loanCredit cardsCar loan$7,100435 49839020. On May 14, 2013, Paige contributed clothing to the Salvation Army. The origi-nal cost of the clothing was $740. She has substantiation valuing the donation at $360. The Salvation Army is located at 350 Stone Ridge Road, Bangor, ME 04401. In addition, she made the following cash contributions and received a statement from each of the following organizations acknowledging her contribution:Larkin College United WayFirst Methodist ChurchAmos House (homeless shelter) Local Chamber of Commerce$850125 79020010021. On April I, 20’13, Paige’s house was robbed. She apparently interrupted the burglar because all that’s missing is an antique brooch she inheritedfrom her grandmother (June 12, 2005) and $300 in cash. Unfortunately, she didn’t have a separate rider on her insurance policy covering the jewelry. Therefore, the insurance company reimbursed her only $500 for the brooch. Her basis in the brooch was $6,000, and its fair market value was $7,500. Her insurance policy also limits to SIOO the amount of cash that can be claimed in a theft.22. Paige sells real estate in the evening and on weekends (considered an active trade or business). She runs her business from a rental office she shares with several other realtors (692 River Road Bangor, ME 04401). The name ofher business is Turner Real Estate and the federal identification number is 05-8799561. Her business code is 531210. Paige has been operating in a business-like way since 2003 and has always shown a profit. She had the followingincome and expenses from her business:Commissions earnedExpenses:AdvertisingTelephoneRear estate licenseRentUtilities$21,2502,200951306,000600She has used her Acura TL in her business since July I, 2013. During 2013, she properly documented 6,000 business miles (1,000 miles each month). The totalmileage on het car (i.e, business- and personal-use miles) during the year was15,000 miles (including 200 miles commuting to and from the real estate office).In 2013, Paige elects to use the standard mileage method to calculate her car expenses. She spent $45 on tolls and $135 on parking related to the real estate business23. Paige’s company has an accountable expense reimbursement plan for employees from which Paige receives $12,000 for the following expenses:AirfareHotelMealsCar rentalsEntertainment Incidentals$4,7003,4002,00060090040024. During 2013, Paige also paid $295 for business publications other than those paid for by her employer and $325 for a local CPA to prepare her 2012 tax return.Required Form 1040, Schedule A, Schedule D, Schedule E, Schedule SE, Form 4562 and Form 8949

FNBK 430 Assignment 2016

In the late 2000s, the global economy experienced the worst financial crisis since the Great Depression. As a result, the United States government took a number of different steps and implemented various programs to alleviate the pressure on financial markets to stabilize the economy. In this assignment, write a paper that addresses each of the following items:Describe the impact of the financial crisis on multiple market metrics/measures (DJIA, LIBOR, Fed Funds rate, etc.).Discuss the overall efforts by the United States government to intervene in the markets to promote stability.Select two specific federal government rescue efforts and describe them in detail.With the benefit of hindsight, how effective were these two rescue efforts? Did they succeed as envisioned?Your paper must adhere to the following standards:Be 2-3 pages in length in addition to the title and references pages.Cite at least 2 sources. APA format. No plagiarised answers please and if you cant write please dont take it.

ECON 303 Growth Theory Assignment 2016

Consider the
following growth model and answer the questions below.
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(2) .0/msohtmlclip1/01/clip_image004.png”>, .0/msohtmlclip1/01/clip_image006.png”>
(3) .0/msohtmlclip1/01/clip_image008.png”> .0/msohtmlclip1/01/clip_image010.png”>
(4) .0/msohtmlclip1/01/clip_image012.png”>, .0/msohtmlclip1/01/clip_image014.png”>
(5) .0/msohtmlclip1/01/clip_image016.png”> .0/msohtmlclip1/01/clip_image018.png”>
(6) .0/msohtmlclip1/01/clip_image020.png”> .0/msohtmlclip1/01/clip_image022.png”>

(6): .0/msohtmlclip1/01/clip_image024.png”>,.0/msohtmlclip1/01/clip_image026.png”>,.0/msohtmlclip1/01/clip_image028.png”>,.0/msohtmlclip1/01/clip_image030.png”>,.0/msohtmlclip1/01/clip_image032.png”>,.0/msohtmlclip1/01/clip_image034.png”>
(3): .0/msohtmlclip1/01/clip_image036.png”>,.0/msohtmlclip1/01/clip_image038.png”>,.0/msohtmlclip1/01/clip_image040.png”>
Initial Conditions
(3): .0/msohtmlclip1/01/clip_image042.png”>,.0/msohtmlclip1/01/clip_image044.png”>
Exogenous (5):.0/msohtmlclip1/01/clip_image046.png”>,.0/msohtmlclip1/01/clip_image048.png”>,.0/msohtmlclip1/01/clip_image050.png”>,.0/msohtmlclip1/01/clip_image052.png”>,.0/msohtmlclip1/01/clip_image054.png”>

If the
variable.0/msohtmlclip1/01/clip_image040.png”> denotes the
level of technology (or know-how), what does the variable.0/msohtmlclip1/01/clip_image048.png”> denote?

the production function (3) exhibits constant returns to scale.

this model to an intensive form model, and present the classification of
variables for your intensive form model.
Hint: Define.0/msohtmlclip1/01/clip_image058.png”> and.0/msohtmlclip1/01/clip_image060.png”>.

the (non-zero) steady state “per capita” capital stock level.0/msohtmlclip1/01/clip_image058.png”> for your
intensive form model.

Use a
diagram to illustrate the comparative static multipliers.0/msohtmlclip1/01/clip_image062.png”> and.0/msohtmlclip1/01/clip_image064.png”>.

only words, explain why an increase in the savings rate provides a one-time improvement
in the living standard.

the knowledge that, in a steady state, the quantity.0/msohtmlclip1/01/clip_image060.png”> remains
constant to show that the growth rate in the living standard.0/msohtmlclip1/01/clip_image066.png”> in a steady
state is equal to the rate.0/msohtmlclip1/01/clip_image048.png”>of improvement in technology.

only words, explain why the improvement in the average living standard in the
U.S. has occurred more so because of technological change than other

Intermediate Microeconomics Homework Set 10

Intermediate MicroeconomicsHomework Set 10.Deadline: Friday, May 6th, 1:00pm.Submission options:• in person during lectures or TA sessions;• in Siddharth Hari’s mail box at 19 West 4th, 6th Floor;• (less recommended) e-mail Siddharth Hari at– in that case, be sure to use the subject line: “Submission Homework 10”.Exercise 1Consider a game of rock-scissor-paper. There are two players, player 1 and player 2,and the winner receives $1 from the loser (if they draw, nothing happens). They playthis game simultaneously.1. What kind of game is this? Express this game in normal form.2. What are the set of possible actions and strategies?3. Find all Nash equilibria of this game.Exercise 2Consider a game represented by the following payoff matrix. Find all pure strategyNash equilibria.L C RU ?10, 0 ?10, ?1 ?10, ?1M ?8, ?8 0, ?10 2, ?1D 4, 5 7, ?10 1, 1Exercise 3Consider a game represented by the following payoff matrix. There are two firmscompeting in a duopoly market. Each should decide how much to produce simultaneouslyand their profits are given in the matrix. Find all pure strategy Nash equilibria.25 35 50 10025 125, 125 100, 140 63, 125 ?63, ?25035 140, 100 105, 105 53, 75 ?123, ?35050 125, 63 75, 53 0, 0 ?250, ?500100 ?250, ?63 ?350, ?130 ?500, ?250 ?900, ?9001Exercise 4Consider two players simultaneously deciding whether to contribute to a public good— the good is said to be public because, if it is made available, a player who free-ridesby paying nothing gets just as much pleasure from its enjoyment as a player who paidfor it. If at least one player contributes to the construction of the public good, bothplayers will enjoy a payoff of four from the public good. To ensure the public goodis constructed, player 1 must pay c1 or player 2 must pay c2. Assume that c1 < 4and c2 < 4. If neither contribute, the good is not constructed and neither playergets enjoyment from the project. If one or both players contribute, then the good isconstructed and each player enjoys a payoff of four minus the contribution cost if thatplayer has contributed.1. Describe this game in normal form.2. Find any pure-strategy Nash equilibria to the game.3. Find the mixed strategy Nash equilibria — the probabilities you find will befunctions of the cost parameters.4. If c1 = c2 = 1, write out the mixed strategy Nash equilibria and find the probabilitythat the public good is provided.5. If c1 = c2 = 3, write out the mixed strategy Nash equilibria and find the probabilitythat the public good is provided.2

AGEC 429 Problem Set #2

Name: UIN:Problem Set #2 (50 Points)AGEC 429Due Date: Tuesday, March 10, 2015In this assignment, you are asked to analyze and calculate the impact of various agricultural policy instruments on U.S.rice markets. In answering the questions, assume that you are a policy analyst working for the Secretary of Agriculture.The information you need to answer the questions is given in the table below. Note that quantities are given in 1,000hundredweight (cwt) and prices are given in $/cwt. (FYI: a hundredweight is 100 lbs but you don’t need to know thatto work this problem set.) You may not need all the information given in the table for every question. You must showyour work on one or more separate sheets and staple them to the problem set. NOTE: — = Not applicable.1. The Secretary of Agriculture is considering recommending a surplus purchase program with a support price of$14.00/cwt to the President but before he does he wants you to determine how much rice the government will haveto purchase to support price at that level and what the cost to the government will be. Fill in the blanks below withyour answers to the Secretary. Surplus to purchase = Cost to the government =2. Congressman Drinksalot is proposing a marketing loan program with the loan rate set at $14.00/cwt instead of agovernment surplus purchase program to support price at $14.00/cwt because he claims it will cost the governmentless than a surplus purchase program. The Secretary wants to know whether the Congressman is right and asks youto calculate the cost of the marketing loan program to the government. Fill in the blanks below with your answersto the Secretary. Cost of marketing loan program to the government = Who’s right – the Secretary or the Congressman?Rice Quantities and PricespriceelasticitiesEquilibriumBeforeProgramsSupply (million cwt) 0.28 189.886Demand (million cwt) -0.73 189.886Farm Price ($/cwt) — 10.00Consumer price ($/cwt) — 10.00Target Price ($/cwt) — NoneSupport Price ($/cwt) — NoneGovernment Cost (mil $) — None 3. Senator Cityslicker doesn’t like the Secretary’s government surplus purchase program proposal or CongressmanDrinksalot’s marketing loan program because she says both result in too much rice production and cost too much.She proposes a mandatory acreage reduction program to push the price of rice up to $14.00/cwt. The Secretaryasks you to calculate the total reduction in rice supply that would be required to push price to $14.00/cwt underSenator Cityslicker’s plan assuming a 4.5% slippage. He also asks you to analyze whether producers andconsumers will be better off, worse off, or the same with such a supply reduction program compared to agovernment surplus purchase program or a marketing loan program. Supply reduction required = In the table below, indicate whether producers and consumers will be better off, worse off, or the same with anacreage reduction program (ARP) compared to a government surplus purchase (GSP) program and a marketingloan program (MLP) by comparing producer surplus and consumer surplus in each case. Write “better”, “worse”,or “same” in each cell as appropriate. (Use “consumer and producer surplus” concepts to help you answer).Producers ConsumersGSP instead of an ARPMLP instead of an ARP4. The U.S. Rice Producers Association proposes a government funded advertising campaign to promote domesticrice consumption. They propose that the slogan for the rice promotion program should be “Try the sticky littlewhite stuff that most of the rest of the world eats because you’ll like it and besides it will help rice farmers.” (Timeto hire an advertising agency to come up with a better slogan!) Anyway, the Secretary wants to know how muchmore rice people will have to eat to get the price of rice up to $14.00/cwt. Fill in the blank below with your answerto the Secretary. Increased consumption required =5. Congresswoman Knowitall doesn’t like the policy recommendations of the Secretary, Congressman Drinksalot,Senator City Slicker, or the U.S. Rice Producers Association. She proposes a price loss coverage (PLC) paymentprogram with a reference price of $14.00/cwt and a NR loan rate set at a much lower $7.00/cwt safety net levelbecause she says this program will lower the price to consumers like Congressman Drinksalot’s proposed marketingloan program but will be cheaper than either the Secretary’s or Congressman Drinksalot’s programs. The Secretaryasks you to determine if she is right. What would Congresswoman Knowitall’s proposed program cost? Is Congress woman Knowit all right?- Does her program lower the price to consumers like the MLP?- Is her program cheaper than the Secretary’s and the Congressman’s programs?6. A bill for a government surplus purchase rice program as proposed by the Secretary of Agriculture makes its waythrough the Senate while a bill representing Congressman Drinksalot’s marketing loan rice program is passed bythe House of Representatives. The two bills are sent to a Conference Committee to craft a final policy. TheConference Committee announces that in addition to the programs proposed in the two bills, it is also considering aproposal by Senator Hayseed, a member of the Conference Committee, to combine the proposed marketing loanrice program with Congresswoman Knowitall’s price loss coverage (PLC) program with the reference price set at$14.00/cwt and the NR loan rate set at $9.00/cwt because the Senator says it would be cheaper than either thegovernment surplus purchase program or the marketing loan program by itself. The Secretary asks you if SenatorHayseed is correct. What would you answer and why? 7. If the Conference Committee selects the least costly program for the American taxpayer (of those they areconsidering), which one will they choose? __________________________________________________________________________________________8. If the loan rate in Senator Hayseed’s combined program was set at $7.00/cwt instead of $9.00/cwt, what effectwould that have on the Conference Committee’s decision about which program to select?

Raymond Company’s trial balance at December 31, 2014

Raymond Company’s trial balance at December 31, 2014, is presented below. All 2014 transactions have been recorded except for the items described shown below.DebitCreditCash$28,000Accounts receivable36,000Notes receivable10,000Interest receivable0Inventory36,200Prepaid insurance4,400Land20,000Buildings160,000Equipment60,000Patents8,000Allowances for doubtful accounts300Accumulated depreciation-Buildings49,000Accumulated depreciation-Equipment24,000Accounts payable28,300Income taxes payable0Salaries and wages payable0Unearned rent revenue6,000Notes payable(due in 2015)11,000Interest payable0Notes payable (due after 2015)35,000Common stock50,000Retained earnings63,000Dividends12,000Sales revenue910,000Interest revenue0Rent revenue0Gain on disposal of plant assets0Bad debt expense0Cost of goods sold630,000…….and so on……..1. On May 1, 2014, Raymond purchased equipment for $13,000 plus sales taxes of $780 (all paid in cash).2. On July 1, 2014, Raymond sold for $3,500 equipment which originally cost $5,000.Accumulated depreciation on this equipment at January 1, 2014, was $1,800; 2014 depreciation prior to the sale of the equipment was $450.3. On December 31, 2014, Raymond sold for $9,400 on account inventory that cost $6,600.4. Raymond estimates that uncollectible accounts receivable at year-end is $4,000.5. The note receivable is a one-year, 8% note dated April 1, 2014. No interest has been recorded.6. The balance in prepaid insurance represents payment of a $4,400 6-month premium on October 1, 2014.7. The building is being depreciated using the straight-line method over 40 years. The salvage value is $20,000.8. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost.9. The equipment purchased on May 1, 2014, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,000.10. The patent was acquired on January 1, 2014, and has a useful life of 10 years from that date.11. Unpaid salaries and wages at December 31, 2014, total $2,200.12. The unearned rent revenue of $6,000 was received on December 1, 2014, for 4 months rent.13. Both the short-term and long-term notes payable are dated January 1, 2014, and carry a 9% interest rate. All interest is payable in the next 12 months.14. Income tax expense was $17,000. It was unpaid at December 31.Instructions(a) Prepare journal entries for the transactions listed above.(b) Prepare an updated December 31, 2014, trial balance.(c) Prepare a 2014 income statement and a 2014 retained earnings statement.(d) Prepare a December 31, 2014, classified balance sheet.

Second Mid-Term (Alternative) Test Part One (Chapter 6) Problem #3

Problem #1A firm has the following short-run production function:Q = 50L + 6L^2 – 0.5L^3Where Q = Quantity of output per weekL = Labor (number of workers)^ exponential power L^2 implies L squareNote: More important than the algebra is the clear explanation of the implications behind the numbers for all three problems.1. Assume that each worker is paid $10 per hour and works a 40-hour week. How many workers should the firm hire if the price of the output is $10?2. During economic down turn, firms reduce price in order to stay competitive. For this reason, the price of the output falls to $7.50. What do you think be the short run impact of this price reduction on the number of workers hired and why?3. What would firms do in the long run as far as production and hiring are concerned and why if economics situation does not improve and price reduction does not help their bottom line? Consider what business usually does if economic woe persists.4. Henry Ford, the founder of Ford Motor Company, offered in 1914 $5 workday wage, which was about twice the going wage. What is the rationale behind Ford’s high-wage policy to the marginal productivity theory of employment discussed in the text book? What is the major difference in their respective goals? Be specific as to what each approach tries to achieve. Ford called “the $5-a-day wage” one of the finest cost-cutting moves.In any hiring decision, there are typically three different problems; “adverse selection” due to “asymmetry of information” prior to hiring and of “moral hazard” after hiring in your answer. Please integrate these three terms, asymmetry of information, adverse selection, and moral hazard into your answer and explain clearly how Ford’s high wage policy specifically solved these three problems associated with hiring?Problem #2The owner of a small car-rental service is trying to decide on the appropriate numbers of vehicles and mechanics to use in the business for the current level of operations. He recognizes that his choice represents a trade-off between the two resources. His past experience indicates that this trade-off is as follows:Vehicles Mechanics100 2.5 (include one part-timer)70 550 1040 1535 2532 351. Assume that annual (leasing) cost per vehicle is $6,000 and the annual salary per mechanic is $25,000. What combination of vehicles and mechanics should he employ?2. Illustrate the problem with the use of an iso-quant/iso-cost diagram with number of vehicle leased on horizontal axis and number of mechanics hired on vertical axes. Draw two iso-cost curves: one using annual the leasing cost per vehicle ($6,000) and the annual salary per mechanics ($25,000) given in the problem. In this case leasing vehicle cost is relatively inexpensive to the annual salary per mechanics, Now, another iso-cost curve, hypothetical (no data given) this time, in which annual mechanics cost is relatively inexpensive to vehicle leasing cost. Indicate graphically the (two) optimal combinations of mechanics hired and vehicles with one iso-quant curve representing a given (target) level of vehicle leasing business with two iso-cost curves; one based on given values of the annual cost of hiring mechanics and leasing vehicles in the problem and another iso-cost curve, hypothetical one, in which mechanics cost is relatively inexpensive, i.e., two reverse cases of iso-cost curves, and discuss implication behind two different optimal combinations of resources. To be consistent vehicles leased on horizontal and mechanics on vertical axes.Problem #3An American company that sells consumer electronics products has manufacturing facilities in Mexico, Taiwan, and Canada. The average hourly wage, output, and annual overhead cost for each site are as follows:Mexico Taiwan CanadaHourly wage rate $1.50 $3.00 $6.00Output per person 10 18 20Fixed overhead cost $150,000 $90,000 $110,0001. Given these figures, is the firm currently allocating its production resources optimally? If not, why do you think so? Consider output per person as a proxy for marginal product.2. Suppose the firm wants to consolidate all of its manufacturing into one facility. Where should it locate? Is there any difference in treating cost information between (1) and (2)?3. In deciding to consolidate its manufacturing into one facility, what are other factors the firm needs to consider? Please list and explain your reasons.4. Nike outsources its manufacturing operation whereas New Balance does not.In terms of marginal productivity (output per person) and hourly wage rate, explain why New Balance did not outsource its production whereas Nike did briefly.

Econ 351 (section 201), Penn State University Problem Set 3

Problem Set 31) (10 points) True or False? Explain.“Financial engineering always leads to a more efficient financial system.”2) (25 points) You wish to hire David to manage your shop. The profits from operations dependon how hard David works as follows_ProbabilitiesProfit=$100 Profit=$300Lazy 50% 50%Hardworker 20% 80%David views working hard as a “personal cost” valued at $30. You cannot see how hard Davidworks.a) What kind of asymmetric information do you suffer from in this example?b) What fixed percentage of the profit should you offer David to make sure that he workshard. Assume that David cares only about his expected payment less any “personal cost.”3) (25 points) What specific procedures do financial intermediaries use to reduce asymmetricinformation problems in lending?4) (25 points) How can a bursting of an asset-price bubble in the stock market help trigger afinancial crisis?5) (30 points total) Suppose that the currency in circulation is $600 billion, the amount ofcheckable deposits is $900 billion, and excess reserves are $15 billion.a) (10 points) Calculate the money supply, the currency deposit ratio, the excess reserve ratio,and the money multiplier.b) (5 points) Suppose the central bank conducts an unusually large open market purchase ofbonds held by banks of $1400 billion due to a sharp contraction in the economy. Assuming theratios you calculated in part “a” are the same, what do you predict will be the effect on themoney supply?c) (10 points) Suppose that the central bank conducts the same open market purchase as in partb, except that banks chose to hold all of these proceeds as excess reserves rather than loan themout, due to fear of a financial crisis. Assuming that currency and deposits remain the same, whathappens to the amount of excess reserves, the excess reserve ratio, the money supply, and themoney multiplier?d) (5 points) Following the financial crisis in 2008, the Federal Reserve began injecting thebanking system with massive amounts of liquidity, and at the same time, very little lendingoccurred. As a result, the M1 money multiplier was below 1 for most of the time from October2008 through 2011. How does this relate to your answer to part c?For PracticeYou don’t need to submit your answers to this part. However, you will get questions similarto these questions in the exam.MULTIPLE CHOICE. Choose the one alternative that best completes the statement oranswers the question.1) The First Bank of the United States 1) _______A) was fundamental in helping the Federal Government finance the War of 1812.B) was disbanded in 1811 when its charter was not renewed.C) had its charter renewal vetoed in 1832.D) None of the above.2) The public’s fear of centralized power and distrust of moneyed interests led to the demise ofthe first two experiments in central banking, otherwise known as 2) _______A) the First Central Bank of the United States and the Second Central Bank of the United States.B) the First Bank of the United States and the Central Bank of the United States.C) the First Bank of the United States and the Second Bank of the United States.D) the First Bank of North America and the Second Bank of North America.3) The Second Bank of the United States 3) _______A) had its charter renewal vetoed in 1832.B) is considered to be the primary cause of the bank panic of 1907.C) was disbanded in 1811 when its charter was not renewed.D) None of the above.4) What makes the Federal Reserve so unique compared to other central banks around the worldis its 4) _______A) decentralized structure. B) monetary policy functions.C) centralized structure. D) regulatory functions.5) Which of the followings is not a current duty of the Board of Governors of the FederalReserve System? 5) _______A) Setting the maximum interest rates payable on certain types of time deposits under RegulationQ.B) Setting margin requirements, the fraction of the purchase price of the securities that has to bepaid for with cash.C) Representing the United States in negotiations with foreign governments on economicmatters.D) Approving the discount rate “established” by the Federal Reserve banks.6) The Federal Reserve Bank of ________ plays a special role in the Federal Reserve Systembecause it houses the open market desk. 6) _______A) Boston B) San Francisco C) Chicago D) New York7) Each Fed bank president attends FOMC meetings; although only ________ Fed bankpresidents vote on policy, all ________ provide input. 7) _______A) three; ten B) three; twelve C) five; twelveD) five; ten8) Goal independence is the ability of ________ to set monetary policy ________.8) _______A) Congress; instruments B) the central bank; goalsC) the central bank; instruments D) Congress; goals9) The ability of a central bank to set monetary policy goals is 9) _______A) political independence. B) instrument independence.C) goal independence.D) policy independence.10) Members of Congress are able to influence monetary policy, albeit indirectly, through theirability to 10) ______A) instruct the General Accounting Office to audit the foreign exchange market functions of theFederal Reserve.B) propose legislation that would force the Fed to submit budget requests to Congress, as mustother government agencies.C) withhold appropriations from the Federal Open Market Committee.D) withhold appropriations from the Board of Governors.11) Critics of the current system of Fed independence contend that 11) ______A) the president has too much control over monetary policy on a day-to-day basis.B) the Board of Governors is held responsible for policy missteps.C) the current system is undemocratic.D) voters have too much say about monetary policy.12) The strongest argument for an independent Federal Reserve rests on the view that subjectingthe Fed to more political pressures would impart 12) ______A) an inflationary bias to monetary policy. B) a disinflationary bias to monetary policy.C) a deflationary bias to monetary policy. D) a countercyclical bias to monetary policy.13) The case for Federal Reserve independence does not include the idea that 13) ______A) a politically insulated Fed would be more concerned with long-run objectives and thus be adefender of a sound dollar and a stable price level.B) a Federal Reserve under the control of Congress or the president might make the so-calledpolitical business cycle more pronounced.C) political pressure would impart an inflationary bias to monetary policy.D) policy is always performed better by an elite group such as the Fed.14) When the value of loans begins to drop, the net worth of financial institutions falls causingthem to cut back on lending in a process called 14) ______A) deflation. B) releveraging. C) capitulation. D) deleveraging.15) A possible sequence for the three stages of a financial crisis in an advanced economy mightbe ________ leads to ________ leads to ________. 15) ______A) banking crises; increase in uncertainty; increase in interest ratesB) banking crises; increase in interest rates; unanticipated decline in price levelC) asset price declines; banking crises; unanticipated decline in price levelD) unanticipated decline in price level; banking crises; increase in interest rates16) A financial crisis occurs when an increase in asymmetric information from a disruption inthe financial system 16) ______A) increases economic activity.B) allows for a more efficient use of funds.C) causes severe adverse selection and moral hazard problems that make financial marketsincapable of channeling funds efficiently.D) reduces uncertainty in the economy and increases market efficiency.17) A major disruption in financial markets characterized by sharp declines in asset prices andfirm failures is called a 17) ______A) financial crisis. B) free-rider problem.C) “lemons” problem. D) fiscal imbalance.18) A serious consequence of a financial crisis is 18) ______A) financial globalization. B) financial engineering.C) an increase in asset prices. D) a contraction in economic activity.19) When the value of loans begins to drop, the net worth of financial institutions falls causingthem to cut back on lending in a process called 19) ______A) releveraging. B) deleveraging. C) deflation. D) capitulation.20) Debt deflation occurs when 20) ______A) an economic downturn causes the price level to fall and a deterioration in firms’ net worthbecause of the increased burden of indebtedness.B) corporations pay back their loans before the scheduled maturity date.C) rising interest rates worsen adverse selection and moral hazard problems.D) lenders reduce their lending due to declining stock prices (equity deflation) that lowers thevalue of collateral.21) Credit card debt is21) ______A) restricted debt. B) unsecured debt.C) unrestricted debt. D) secured debt.22) Of the following sources of external finance for American nonfinancial businesses, the leastimportant is 22) ______A) bonds and commercial paper.B) loans from banks.C) stocks.D) loans from other financial intermediaries.23) By bundling share purchases of many investors together mutual funds can take advantage ofeconomies of scale and thereby lower 23) ______A) adverse selection. B) moral hazard.C) diversification. D) transactions costs.24) Financial intermediaries develop ________ in things such as computer technology whichallows them to lower transactions costs. 24) ______A) diversification B) expertise C) regulations D) equity25) The analysis of how asymmetric information problems affect economic behavior is called________ theory. 25) ______A) agency B) uneven C) principal D) parallel26) The current structure of financial markets can be best understood as the result of attempts byfinancial market participants to 26) ______A) deal with the great number of small firms in the United States.B) cartelize the provision of financial services.C) adapt to continually changing government regulations.D) reduce transaction costs.27) A borrower who takes out a loan usually has better information about the potential returnsand risk of the investment projects he plans to undertake than does the lender. This inequality ofinformation is called 27) ______A) noncollateralized risk. B) asymmetric information.C) adverse selection. D) moral hazard.28) An example of the ________ problem would be if Brian borrowed money from Sean in orderto purchase a used car and instead took a trip to Atlantic City using those funds. 28) ______A) moral hazard B) agencyC) costly state verification D) adverse selection29) The free-rider problem occurs because 29) ______A) information can never be sold at any price.B) it is never profitable to produce information.C) people who pay for information use it freely.D) people who do not pay for information use it.30) Net worth can perform a similar role to 30) ______A) intermediation. B) collateral.C) diversification. D) economies of scale.31) That most used cars are sold by intermediaries (i.e., used car dealers) provides evidence thatthese intermediaries 31) ______A) have solved the moral hazard problem by providing valuable information to their customers.B) are able to prevent potential competitors from free-riding off the information that theyprovide.C) have failed to solve adverse selection problems in this market because “lemons” continue tobe traded.D) have been afforded special government treatment, since used car dealers do not provideinformation that is valued by consumers of used cars.32) The recent Enron and Tyco scandals are an example of 32) ______A) the “lemons problem.” B) the adverse selection problem.C) the free-rider problem. D) the principal-agent problem.33) The principal-agent problem would not occur if ________ of a firm had completeinformation about actions of the ________. 33) ______A) managers; owners B) owners; customersC) owners; managers D) managers; customers34) One reason financial systems in developing and transition countries are underdeveloped is34) ______A) the legal system may be poor making it difficult to enforce restrictive covenants.B) they have weak links to their governments.C) they make loans only to nonprofit entities.D) the accounting standards are too stringent for the banks to meet.35) Although restrictive covenants can potentially reduce moral hazard, a problem withrestrictive covenants is that 35) ______A) they are inexpensive to monitor and enforce.B) they reduce the value of the debt contract.C) borrowers may find loopholes that make the covenants ineffective.D) too many resources may be devoted to monitoring and enforcing them, as debtholdersduplicate others’ monitoring and enforcement efforts.36) Professional athletes often have contract clauses prohibiting risky activities such as skiingand motorcycle riding. These clauses are 36) ______A) illegal. B) restrictive covenants.C) risk insurance. D) limited-liability clauses.37) Individuals that lend funds to a bank by opening a checking account are called 37) ______A) depositors. B) debt holders. C) policyholders. D) partners.38) The government agency that oversees the banking system and is responsible for the conductof monetary policy in the United States is 38) ______A) the United States Treasury. B) the U.S. Gold Commission.C) the House of Representatives. D) the Federal Reserve System.39) Suppose that from a new checkable deposit, First National Bank holds two million dollars invault cash, nine million dollars in excess reserves, and faces a required reserve ratio of tenpercent. Given this information, we can say First National Bank has ________ million dollars inrequired reserves. 39) ______A) one B) two C) eight D) ten40) Suppose that from a new checkable deposit, First National Bank holds two million dollars invault cash, nine million dollars in excess reserves, and faces a required reserve ratio of tenpercent. Given this information, we can say First National Bank has ________ million dollarson deposit with the Federal Reserve. 40) ______A) one B) two C) eight D) ten41) Subtracting borrowed reserves from the monetary base obtains 41) ______A) the borrowed monetary base. B) high-powered money.C) the nonborrowed monetary base. D) reserves.42) The effect of an open market purchase on reserves differs depending on how the seller of thebonds keeps the proceeds. If the proceeds are kept in ________, the open market purchase has noeffect on reserves; if the proceeds are kept as ________, reserves increase by the amount of theopen market purchase. 42) ______A) currency; deposits B) deposits; currencyC) currency; currency D) deposits; deposits43) A simple deposit multiplier equal to four implies a required reserve ratio equal to 43)______A) 100 percent. B) 50 percent. C) 25 percent. D) 0 percent.44) Everything else held constant, a decrease in holdings of excess reserves will mean 44)______A) an increase in the money supply. B) a decrease in checkable deposits.C) an increase in discount loans. D) a decrease in the money supply.45) The amount of borrowed reserves is ________ related to the discount rate, and is ________related to the market interest rate. 45) ______A) negatively; negatively B) negatively; positivelyC) positively; positively D) positively; negatively46) In the model of the money supply process, the depositor’s role in influencing the moneysupply is represented by 46) ______A) the currency holdings.B) the currency holdings and borrowed reserve.C) the currency holdings and excess reserve.D) the market interest rate.47) In the model of the money supply process, the Federal Reserve’s role in influencing themoney supply is represented by 47) ______A) only borrowed reserves.B) the required reserve ratio, nonborrowed reserves, and borrowed reserves.C) both the required reserve ratio and the market interest rate.D) only nonborrowed reserves.48) The total amount of required reserves in the banking system is equal to the ________ therequired reserve ratio and checkable deposits. 48) ______A) ratio between B) sum ofC) product of D) difference between49) If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkabledeposits are $1000 billion, and excess reserves total $1 billion, then the money supply is________ billion. 49) ______A) $10,000 B) $4000 C) $10,400 D) $1400ESSAY.50) Assume that no banks hold excess reserves, and the public holds no currency. If a bank sellsa $100 security to the Fed, explain what happens to this bank and two additional steps in thedeposit expansion process, assuming a 10% reserve requirement. How much do deposits andloans increase for the banking system when the process is completed?

ASU FIN 331 Assignment 2016

Extra credit deadline: Tuesday May 3rd, 4pmLate work won’t be accepted. Start early.Collaboration is encouraged. Each group need to turn in one and only one report. Each group can haveat most two members.Introduction: Human Height and Weight are mostly hereditable, but lifestyles, diet, health andenvironmental factors also play a role in determining individual’s physical characteristics. In 1993, astudy was by a Growth Survey of children from birth to 18 years of age recruited from Maternal andChild Health Centres (MCHC) and were used to develop Hong Kong’s current growth charts for weight,height, weight-for-age, weight-for-height and body mass index (BMI). The dataset contains records ofheights and weights for 200 teenagers at age 18. In 2015, new surveys show that the average height andweight for teenagers at age 18 is 66.85 inches and 136.25 pounds, respectively. Conduct a statisticalanalysis using the data provided. Is it showing any difference over the past 22 years?The report will be graded based on the quality of:1. describing a problem2. presenting the data (summaries and graphs are always helpful)3. presenting the results4. making a conclusion (if you have any)Don’t forget to validate the statistical methods you use. For example, if using a t-test, you need to checkthe conditions required.Suggested keywords: population of interest, variable of interest, population parameter, histogram,boxplot, QQplot, point estimate, confidence interval, hypothesis test.