Question & Answer

A steel collar is press fitted onto a steel shaft. The modulus of elasticity of steel is 30 x 106 lb/in2. The collar has an internal diameter of 2.498 in and the shaft has an outside diameter = 2.500 in. The outside diameter of the collar is 4.000 in. Determine the radial (interference) pressure on the assembly, and (b) the maximum effective stress in the collar at its inside diameter

Who regulates credit unions? What are the regulators’ powers? Where do CUs obtain deposit insurance? (LO7)

provided the following disclosure in a recent annual report. New accounting pronouncement (partial) . . . the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101—“Revenue Recognition in Financial Statements” (SAB 101). This SAB deals with various revenue recognition issues, several of which are common within the retail industry. As a result of the issuance of this SAB . . . the Company is currently evaluating the effects of the SAB on its method of recognizing revenues related to layaway sales and will make any accounting method changes necessary during the first quarter of [next year]. In response to SAB 101, Wal-Mart changed its revenue recognition policy for layaway transactions, in which Wal-Mart sets aside merchandise for customers who make partial payment. Before the change, Wal-Mart recognized all revenue on the sale at the time of the layaway. After the change, Wal-Mart does not recognize revenue until customers satisfy all payment obligations and take possession of the merchandise. Instructions (a) Discuss the expected effect on income (1) in the year that Wal-Mart makes the changes in its revenue recognition policy, and (2) in the years following the change. (b) Evaluate the extent to which Wal-Mart’s previous revenue policy was consistent with the revenue recognition principle. (c) If all retailers had used a revenue recognition policy similar to Wal-Mart’s before the change, are there any concerns with respect to the qualitative characteristic of comparability? Explain.

There are 23 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. Percentage score on the quiz is based on the total number of correct answers. 22.1 Which of the following are examples of generating the workpart geometry in machining, as opposed to forming the geometry (two best answers): (a) broaching, (b) contour turning, (c) drilling, (d) profile milling, and (e) thread cutting? 22.2 In a turning operation, the change in diameter of the workpart is equal to which one of the following: (a) 1 x depth of cut, (b) 2 x depth of cut, (c) 1 x feed, or (d) 2 x feed? 22.3 A lathe can be used to perform which of the following machining operations (three correct answers): (a) boring, (b) broaching, (c) drilling, (d) milling, (e) planing, and (f) turning? 22.4 A facing operation is normally performed on which one of the following machine tools: (a) drill press, (b) lathe, (c) milling machine, (d) planer, or (e) shaper? 22.5 Knurling is performed on a lathe, but it is not a metal cutting operation: (a) true or (b) false? 22.6 Which one of the following cutting tools cannot be used on a turret lathe: (a) broach, (b) cutoff tool, (c) drill bit, (d) single-point turning tool, or (e) threading tool? 22.7 Which one of the following turning machines permits very long bar stock to be used: (a) chucking machine, (b) engine lathe, (c) screw machine, (d) speed lathe, or (e) turret lathe? 22.8 The twist drill is the most common type of drill bit: (a) true or (b) false? 22.9 A tap is a cutting tool used to create which one of the following geometries: (a) external threads, (b) flat planar surfaces, (c) holes used in beer kegs, (d) internal threads, or (e) square holes? 22.10 Reaming is used for which of the following functions (three correct answers): (a) accurately locate a hole position, (b) enlarge a drilled hole, (c) improve surface finish on a hole, (d) improve tolerance on hole diameter, and (e) provide an internal thread? 22.11 End milling is most similar to which one of the following: (a) face milling, (b) peripheral milling, (c) plain milling, or (d) slab milling? 22.12 The basic milling machine is which one of the following: (a) bed type, (b) knee-and-column, (c) profiling mill, (d) ram mill, or (e) universal milling machine? 22.13 A planing operation is best described by which one of the following: (a) a single-point tool moves linearly past a stationary workpart, (b) a tool with multiple teeth moves linearly past a stationary workpart, (c) a workpart is fed linearly past a rotating cutting tool, or (d) a workpart moves linearly past a single-point tool? 22.14 A broaching operation is best described by which one of the following: (a) a rotating tool moves past a stationary workpart, (b) a tool with multiple teeth moves linearly past a stationary workpart, (c) a workpart is fed past a rotating cutting tool, or (d) a workpart moves linearly past a stationary single-point tool? 22.15 The three basic types of sawing, according to type of blade motion involved, are (a) abrasive cutoff, (b) bandsawing, (c) circular sawing, (d) contouring, (e) friction sawing, (f) hacksawing, and (g) slotting? 22.16 Gear hobbing is a special form of which one of the following machining operations: (a) grinding, (b) milling, (c) planing, (d) shaping, or (e) turning?

Balanced scorecard measures for four perspectives Part of the process for developing a balanced scorecard is to identify one or more measures for each perspective.   Required Categorise each of the following potential balanced scorecard measures according to the following perspectives:   F     Financial C    Customer I      Internal business process L     Learning and growth (a)       Percentage of customer orders delivered on time (b)       Ratio of research and development cost to number of new products developed (c)        Economic value added (EVA) (d)       Number of hours of employee training (e)        Direct labour price variance (f)        Market share (g)       Percentage of customer orders delivered without error (h)       Days in accounts receivables (i)        Throughput time (j)        Direct materials efficiency variance (k)       Asset turnover (l)        Employee retention rate (m)      Percentage of bad debts collected (n)       Customer satisfaction ratings (o)       Number of degrees and certificates held per employee or department (p)       Percentage of purchase orders that are error free

Presented below is information related to the purchases of common stock by Lilly Company during 2014. Cost Fair Value (at purchase date) (at December 31) Investment in Arroyo Company stock $100,000 $ 80,000 Investment in Lee Corporation stock 250,000 300,000 Investment in Woods Inc. stock 180,000 190,000 Total $530,000 $570,000 Instructions (Assume a zero balance for any Fair Value Adjustment account.) (a) What entry would Lilly make at December 31, 2014, to record the investment in Arroyo Company stock if it chooses to report this security using the fair value option? (b) What entry would Lilly make at December 31, 2014, to record the investment in Lee Corporation, assuming that Lilly wants to classify this security as available-for-sale? This security is the only available-for-sale security that Lilly presently owns. (c) What entry would Lilly make at December 31, 2014, to record the investment in Woods Inc., assuming that Lilly wants to classify this investment as a trading security?

There are 21 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. Percentage score on the quiz is based on the total number of correct answers. 20.1 Most sheet metalworking operations are performed as which one of the following: (a) cold working, (b) hot working, or (c) warm working? 20.2 In a sheet-metal-cutting operation used to produce a flat part with a hole in the center, the part itself is called a blank, and the scrap piece that was cut out to make the hole is called a slug: (a) true or (b) false? 20.3 As sheet-metal stock hardness increases in a blanking operation, the clearance between punch and die should be (a) decreased, (b) increased, or (c) remain the same? 20.4 A circular sheet-metal slug produced in a hole punching operation will have the same diameter as (a) the die opening or (b) the punch? 20.5 The cutting force in a sheet-metal blanking operation depends on which mechanical property of the metal (one correct answer): (a) compressive strength, (b) modulus of elasticity, (c) shear strength, (d) strain rate, (e) tensile strength, or (f) yield strength? 20.6 Which of the following descriptions applies to a V-bending operation as compared to an edgebending operation (two best answers): (a) costly tooling, (b) inexpensive tooling, (c) limited to 90° bends or less, (d) used for high production, (e) used for low production, and (f) uses a pressure pad to hold down the sheet metal? 20.7 Sheet-metal bending involves which of the following stresses and strains (two correct answers): (a) compressive, (b) shear, and (c) tensile? 20.8 Which one of the following is the best definition of bend allowance: (a) amount by which the die is larger than the punch, (b) amount of elastic recovery experienced by the metal after bending, (c) safety factor used in calculating bending force, or (d) length before bending of the straight sheetmetal section to be bent? 20.9 Springback in a sheet-metal-bending operation is the result of which one of the following: (a) elastic modulus of the metal, (b) elastic recovery of the metal, (c) overbending, (d) overstraining, or (e) yield strength of the metal? 20.10 Which of the following are variations of sheet-metal-bending operations (two best answers): (a) coining, (b) flanging, (c) hemming, (d) ironing, (e) notching, (f) shear spinning, (g) trimming, and (h) tube bending? 20.10 Which of the following are variations of sheet-metal-bending operations (two best answers): (a) coining, (b) flanging, (c) hemming, (d) ironing, (e) notching, (f) shear spinning, (g) trimming, and (h) tube bending? 20.12 The holding force in drawing is most likely to be (a) greater than, (b) equal to, or (c) less than the maximum drawing force? 20.13 Which one of the following stamping dies is the most complicated: (a) blanking die, (b) combination die, (c) compound die, (d) edge-bending die, (e) progressive die, or (f) V-bending die? 20.14 Which one of the following press types is usually associated with the highest production rates in sheet-metal-stamping operations: (a) adjustable bed, (b) open back inclinable, (c) press brake, (d) solid gap, or (e) straight-sided? 20.15 Which of the following processes are classified as high-energy-rate forming processes (two best answers): (a) electrochemical machining, (b) electromagnetic forming, (c) electron beam cutting, (d) explosive forming, (e) Guerin process, (f) hydroforming, (g) redrawing, and (h) shear spinning

What is meant by solvency? What information in the balance sheet can be used to assess a company’s solvency?

1.       Do you think it is the responsibility of managers and organizations to help employees increase resilience and manage stress? Why or why not?

Write a short essay on the future of finance company operations. Should finance companies be merged into the banking industry, or should they remain distinctly different from commercial banks?

Explain how multiple-deliverable arrangements are measured and reported.

Schmitt Company must make computations and adjusting entries for the following independent situations at December 31, 2015. 1. Its line of amplifiers carries a 3-year warranty against defects. On the basis of past experience the estimated warranty costs related to dollar sales are first year after sale—2% of sales revenue; second year after sale—3% of sales revenue; and third year after sale—5% of sales revenue. Sales and actual warranty expenditures for the first 3 years of business were: Sales Warranty Revenue Expenditures 2013 $ 800,000 $ 6,500 2014 1,100,000 17,200 2015 1,200,000 62,000 Instructions Compute the amount that Schmitt Company should report as a liability in its December 31, 2015, balance sheet. Assume that all sales are made evenly throughout each year with warranty expenses also evenly spaced relative to the rates above. 2. With some of its products, Schmitt Company includes coupons that are redeemable in merchandise. The coupons have no expiration date and, in the company’s experience, 40% of them are redeemed. The liability for unredeemed coupons at December 31, 2014, was $9,000. During 2015, coupons worth $30,000 were issued, and merchandise worth $8,000 was distributed in exchange for coupons redeemed. Instructions Compute the amount of the liability that should appear on the December 31, 2015, balance sheet.

SFAC No. 8 identifies the qualitative characteristics that make accounting information useful. Presented below are a number of questions related to these qualitative characteristics and underlying constraint. (a) What is the quality of information that enables users to confirm or correct prior expectations? (b) Identify the pervasive constraint developed in the conceptual framework. (c) The chairman of the SEC at one time noted, “If it becomes accepted or expected that accounting principles are determined or modified in order to secure purposes other than economic measurement, we assume a grave risk that confidence in the credibility of our financial information systemwill be undermined.” Which qualitative characteristic of accounting information should ensure that such a situation will not occur? (Do not use faithful representation.) (d) Muruyama Corp. switches from FIFO to average-cost to FIFO over a 2-year period. Which qualitative characteristic of accounting information is not followed? (e) Assume that the profession permits the savings and loan industry to defer losses on investments it sells because immediate recognition of the loss may have adverse economic consequences on the industry. Which qualitative characteristic of accounting information is not followed? (Do not use relevance or faithful representation.) (f) What are the two fundamental qualities that make accounting information useful for decisionmaking? (g) Watteau Inc. does not issue its first-quarter report until after the second quarter’s results are reported. Which qualitative characteristic of accounting is not followed? (Do not use relevance.) (h) Predictive value is an ingredient of which of the two fundamental qualities that make accounting information useful for decision-making purposes? (i) Duggan, Inc. is the only company in its industry to depreciate its plant assets on a straight-line basis. Which qualitative characteristic of accounting information may not be followed? (j) Roddick Company has attempted to determine the replacement cost of its inventory. Three different appraisers arrive at substantially different amounts for this value. The president, nevertheless, decides to report the middle value for external reporting purposes. Which qualitative characteristic of information is lacking in these data? (Do not use relevance or faithful representation.)

Assume now that the firm has monopoly power in hiring out equipment, and thus faces a downward-sloping demand curve. Draw in two such demand curves on a diagram like Figure 10.13(b), one crossing the MC curve in the horizontal section, and one in the vertical section. How much will the firm supply in each case and at what price? (You will need to draw in MR curves too.) Is the MC curve still the supply curve?

For what reasons may the natural rate of unemployment increase?

What type of earnings per share presentation is required in a complex capital structure?

Maria Alvarez is investing $300,000 in a fund that earns 8% interest compounded annually. What equal amounts can Maria withdraw at the end of each of the next 20 years?

Why are government bonds which still have 11 months to run regarded as liquid, whereas overdrafts granted for a few weeks are not?

Agustina, Bobby, and Claudia are equal owners in Lafter, an S corporation that was a C corporation several years ago. While Agustina and Bobby actively participate in running the company, Claudia has a separate day job and is a passive owner. Consider the following information for 2024:    • As of January 1, 2024, Agustina, Bobby, and Claudia each have a basis in Lafter stock of $15,000 and a debt basis of $0.  On January 1, the stock basis is also the at-risk amount for each shareholder. • Bobby and Claudia also are passive owners in Aggressive LLC, which allocated business income of $14,000 to each of them in 2024. Neither has any other source of passive income (besides Lafter, for Claudia).  • On March 31, 2024, Agustina lends $5,000 of her own money to Lafter. • Anticipating the need for basis to deduct a loss, on April 4, 2024, Bobby takes out a $10,000 loan to make a $10,000 capital contribution to Lafter. Bobby uses his automobile ($12,000 fair market value) as the sole collateral for his loan (nonrecourse).  • Lafter has an accumulated adjustments account balance of $45,000 as of January 1, 2024. • Lafter has C corporation earnings and profits of $15,000 as of January 1, 2024. • During 2024, Lafter reports a business loss of $75,000, computed as follows: Sales revenue $90,000 Cost of goods sold (85,000) Salary to Agustina (40,000) Salary to Bobby (40,000) Business (loss)($75,000) • Lafter also reported $12,000 of tax-exempt interest income.     a. What amount of Lafter’s 2024 business loss of $75,000 are Agustina, Bobby, and Claudia allowed to deduct on their individual tax returns?  What are each owner’s stock basis and debt basis (if applicable) and each owner’s at-risk amount with respect to the investment in Lafter at the end of 2024?

Angela Lansbury Company deposits all receipts and makes all payments by check. The following information is available from the cash records.   Instructions (a) Prepare a bank reconciliation going from balance per bank and balance per book to correct cash balance. (b) Prepare the general journal entry or entries to correct the Cash account.

Assume the facts in E13-5 except that Matt Broderick Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without discounting. The company used the following projected rates to accrue vacation time. Year in Which Vacation Projected Future Pay Rates Time Was Earned Used to Accrue Vacation Pay 2013 $10.75 2014 11.60 Instructions (a) Prepare journal entries to record transactions related to compensated absences during 2013 and 2014. (b) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2013, and 2014.

Presented below are a number of business transactions that occurred during the current year for Gonzales, Inc. Instructions In each of the situations, discuss the appropriateness of the journal entries in terms of generally accepted accounting principles. (a) The president of Gonzales, Inc. used his expense account to purchase a new Suburban solely for personal use. The following journal entry was made. Miscellaneous Expense 29,000 Cash 29,000 (b) Merchandise inventory that cost $620,000 is reported on the balance sheet at $690,000, the expected selling price less estimated selling costs. The following entry was made to record this increase in value. Inventory 70,000 Sales Revenue 70,000 (c) The company is being sued for $500,000 by a customer who claims damages for personal injury apparently caused by a defective product. Company attorneys feel extremely confident that the company will have no liability for damages resulting from the situation. Nevertheless, the company decides to make the following entry. Loss from Lawsuit 500,000 Liability for Lawsuit 500,000 (d) Because the general level of prices increased during the current year, Gonzales, Inc. determined that there was a $16,000 understatement of depreciation expense on its equipment and decided to record it in its accounts. The following entry was made. Depreciation Expense 16,000 Accumulated Depreciation—Equipment 16,000 (e) Gonzales, Inc. has been concerned about whether intangible assets could generate cash in case of liquidation. As a consequence, goodwill arising from a purchase transaction during the current year and recorded at $800,000 was written off as follows. Retained Earnings 800,000 Goodwill 800,000 (f) Because of a “fire sale,” equipment obviously worth $200,000 was acquired at a cost of $155,000. The following entry was made. Equipment 200,000 Cash 155,000 Sales Revenue 45,000

Explain how foreign stock exchanges have reduced transactions costs. (LO2, LO5)

Sustainability and classification Using the following table, classify each sustainability cost according to their appropriate category (level 1–5).         (LO3 and 4)

Susmita purchased a car this year and uses it for both business and personal purposes. Susmita drove the car 11,000 miles on business trips and 9,000 miles for personal transportation. Describe how Susmita will determine the amount of deductible expenses associated with the auto.