Period: __Number: ___

Date: ______Name: ______

TASK 1 – Account Ledger

Task 1 Student Directions: Create a table to sort and organize the expenses and income of "Bling Records". There are two types of transactions that may take place, (1) deposits (money the company receives), and (2) debits/payments (money which the company spends and withdrawal from the account). If the total amount of credits is more than debits, the account balance is positive. If the total amount of debits are more than credits, the account balance is in debt and shows a negative cash value.
Use the table record each transaction:
• Transactions (Determine if the transaction is a withdrawal or deposit)
• On August 15, the beginning balance was $50,000.00
• On August 16, paid for rental of studio time $2,000.35
• On August 16, paid for manufactured CD $162,050.03
• On August 16, received proceeds from concert ticket sales $25,000
• On August 17, received $22,000 in endorsements
• On August 17, paid for artist clothing allowance $3,350.00
• On August 18, paid for publishing $6,000
• On August 19, received proceed from download $5,098.99
In addition
1. Use the table to determine the beginning and ending balance, and state if the company made a profit or remained in debt.
2. What is the total running balance?
3. In what ways is it useful to develop an algorithm for adding and subtracting rational numbers?
4. How would you interpret the total running balance?

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TASK 2 – New Edge Records and New Bling Records
Task 2 Student Directions:
A new band is trying to decide if they are going to sign with your company or "New Edge Records." A band of 4 that writes their own material, and they must determine which company's offer is the best deal.
A)New Edge Records will sell each CD for $16. Your deal is to receive a royalty rate of 11% per band member. The retailer receives 30%, the distributor receives 22% and the producer receives 4%. If you sell 500,000 records, how much will each individual receive?
B)Bling Records will sell each CD for $15. Our deal is to receive a royalty rate of 1/8 of sales per band member. The retailer receives ¼, the distributor receives 1/5, and the producer receives 1/20 of the sales. If you sell 500,000 CDs, how much will each individual receive?
C) Some band members are having a difficult time deciding which company to choose, and a representative approached one member from New Edge Records. The smooth-talking representative suggests to him that the band should sign with their company because they sell each CD for more money than Bling Records; therefore, you will make more money. Do you agree or disagree with this advice? Explain why you agree or disagree using your calculations from each company to justify your
position.

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Answer A:
500,000($16) = $8,000,000 This represents the amount of money collected from CD sales.
$8,000,000(.11) = $880,000 This represents the amount each band member will receive in royalties.
$8,000,000(.3) = $2,400,000 This represents the amount the retailer will receive.
$8,000,000(.22) = $1,760,000 This represents the amount the distributor will receive.
$8,000,000(.04) = $320,000 This represents the amount the producer will receive.
Answer B:
500,000($15) = $7,500,000: This represent the amount of money collected from CD sales.
$7,500,000(1/8) = $937,500: This represent the amount each band member will receive in royalties.
$7,500,000(¼) = $1,875,000: This represents the amount the retailer will receive.
$7,500,000(1/5) = $1,500,000: This represent the amount the distributor will receive.
$7,500,000(1/20) = $375,000: This represent the amount the producer will receive.
Answer C:
As a result of disagreeing with this advice, the band should decide to sign with “Bling Records”, because they will receive will $937,500 in royalties compared to New Edge Records. If the band chose New Edge Records they will receive a royalty amount of $880,000, which is less than Bling Records, and would not be the best decision. In addition, the band would receive $57,500 lessby signing with New Edge Records.
TASK 3 – Digital Downloads and Releases and Ringtones
Task 3Student Directions:Your company's research and development department discovered two possible solutions to eliminate the debt over time, and generate revenue. The possible solutions are either selling digital releases of sounds through iTunes, or selling your songs as ringtones through major cell phone providers. Determine the best solution if given a 36-month timeframe to get out of debt and make a profit. Then, justify your decision using your data and calculations.
***Digital Downloads and Releases
The cost for a digital release is $0.09 that must be paid to the songwriter and iTunes. "Bling Records" decided to sell each artist's song for $1.99.
a. What is the potential profit per digital release?
b. If your average sales per month is 2525 songs, how long will it take to eliminate the debt of $71,301.39?
c. How much is your potential profit per month?
d. At the end of the 36 months, how much is your potential revenue?
e. Chart the trend for the possible revenue of selling digital releases over a 36-month timeframe.
***Ringtones
The cost for producing a ringtone is $0.24 that must be paid to the songwriter and the cell phone provider. "Bling Records" decided to sell each ringtone $0.99.
a. What is the potential profit per sale of ringtone?
b. If you sell 3,750 ringtones per month on average, how long with it take to eliminate the debt of $71,301.39?
c. How much is your potential profit per month?
d. At the end of the 36 months, how much is your potential revenue?
e. Chart the trend for the possible revenue of selling ringtones over a 36-month timeframe.
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Answer Key
Solution 1: Digital Downloads and Releases
The cost for a digital release is $0.09 that must be paid to the songwriter and iTunes. "Bling Records" decided to sell each artist's song for $1.99.
a. What is the potential profit per digital release? Answer: $1.90
b. If your average sales per month is 2525 songs, how long will it take to eliminate the debt of $71,301.39? Answer: 15 months.
c. How much is your potential profit per month? Answer: $4797.50 a month
d. At the end of the 36 months, how much is your potential revenue? Answer: $100,747.50
e. Chart the trend for the possible revenue of selling digital releases over a 36-month timeframe.
Solution 2: Ringtones
The cost for producing a ringtone is $0.24 that must be paid to the songwriter and the cell phone provider. "Bling Records" decided to sell each ringtone $0.99.
a. What is the potential profit per sale of ringtone? Answer: $0.75
b. If you sell 3,750 ringtones per month on average, how long with it take to eliminate the debt of $71,301.39? Answer: 25 months.
c. How much is your potential profit per month? Answer: $2812.50 a month
d. At the end of the 36 months, how much is your potential revenue? Answer: $30,937.50
e. Chart the trend for the possible revenue of selling ringtones over a 36-month timeframe.
Which solution would you choose to help eliminate the company's debt and generate a profit? Justify your decision. Students should state they would choose solution one, digital downloads and releases, because they earned more money overall. In addition, students should state that the digital downloads and releases required the least amount of time.
Which solution would you choose to help eliminate the company's debt and generate a profit? Justify your decision. Students should state they would choose solution one, digital downloads and releases, because they earned more money overall. In addition, students should state that the digital downloads and releases required the least amount of time.