Question & Answer

] Cassie works in an office and has access to several professional color printers. Her employer allows Cassie and her fellow employees to use the printers to print color postcards for the holidays. This year Cassie printed out two dozen postcards worth almost $76. Must Cassie include this amount in her gross income this year? Explain your answer.

Why is understanding the time value of money important for tax planning?

What are some of the major challenges facing the accountingprofession?

(Threshold Concept 13) When comparing two countries’ GDP growth rates, does it matter if we use nominal figures, provided we use them for both countries?

By looking at the nominal and real exchange rate changes in Table 25.1 can we identify periods during which the UK’s terms of trade rose?

Given the analysis of bilateral monopoly, if the passing of minimum-wage legislation forces employers to pay higher wage rates to low-paid employees, will this necessarily cause a reduction in employment?

Explain how cost data is sourced in a costing framework.

Explain how the Fed’s monetary policy could depend on the fiscal policy that is implemented. (LO4)

Ortiz purchased a piece of equipment that cost $202,000 on January 1, 2014. The equipment has the following components. Component Cost Residual Value Estimated Useful Life A $70,000 $7,000 10 years B 50,000 5,000 5 years C 82,000 4,000 12 years Compute the depreciation expense for this equipment at December 31, 2014.

Rolanda Marshall Company, organized in 2013, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2014. 1/2/14 Purchased patent (8-year life) $ 350,000 4/1/14 Purchase goodwill (indefi nite life) 360,000 7/1/14 Purchased franchise with 10-year life; expiration date 7/1/24 450,000 8/1/14 Payment of copyright (5-year life) 156,000 9/1/14 Research and development costs 215,000 $1,531,000 Instructions Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2014, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.)

Jones Co. is in a technology-intensive industry. Recently, one of its competitors introduced a new product with technology that might render obsolete some of Jones’s inventory. The accounting staff wants to follow the appropriate authoritative literature in determining the accounting for this significant market event. Instructions If your school has a subscription to the FASB Codification, go to http://aaahg.org/asclogin.cfm to log in and prepare responses to the following. Provide Codification references for your responses. (a) Identify the primary authoritative guidance for the accounting for inventories. What is the predecessor literature? (b) List three types of goods that are classified as inventory. What characteristic will automatically exclude an item from being classified as inventory? (c) Define “market” as used in the phrase “lower-of-cost-or-market.” (d) Explain when it is acceptable to state inventory above cost and which industries allow this practice.

Why should the economic, environmental and cultural dimensions be managed in unison?

From the late 1960s through to 2000 the share of capital spending in total public-sector spending in the UK fell. What could have driven this change and does the composition of public spending matter?

1. What is the significance of the slope of the line ac in the top part of Figure 6.1? 2. Given that there is a fixed supply of land in the world, what implications can you draw from Figure 6.1 about the effects of an increase in world population for food output per head?

In light of the full disclosure principle, investors and creditors need to know the balances for assets, liabilities, and equity, as well as the accounting policies adopted by management to measure the items reported in the statement of financial position. Instructions Access the IFRS authoritative literature at the IASB website (http://eifrs.iasb.org/ ). (If necessary, click on the IFRS tab and then register for eIFRS free access.) When you have accessed the documents, you can use the search tool in your Internet browser to respond to the following questions. (Provide paragraph citations.) (a) Identify the literature that addresses the disclosure of accounting policies. (b) How are accounting policies defined in the literature? (c) What are the guidelines concerning consistency in applying accounting policies? (d) What are some examples of common disclosures that are required under this statement?

What is meant by the term design for life cycle?

How do shaping and planing differ?

When units are transferred from one department to another, how are normal spoilage costs recorded?

Can a shareholder’s basis in S corporation stock ever be adjusted to a negative number? Why or why not?

What are the two basic types of forging equipment?

Distinguish between common and preferred stock.

Jack operates a large home repair business as a sole proprietorship. Besides providing services, Jack also sells home repair supplies to homeowners. However, these sales constitute a relatively small portion of Jack’s income. Describe the conditions under which Jack would need to account for sales and purchases of plumbing supplies using the accrual method. (Hint: Read §471(c) and Reg. §1.471-1.)

Fred Moss, owner of Moss Interiors, is negotiating for the purchase of Zweifel Galleries. The balance sheet of Zweifel is given in an abbreviated form below.   Moss and Zweifel agree that: 1. Land is undervalued by $30,000. 2. Equipment is overvalued by $5,000. Zweifel agrees to sell the gallery to Moss for $350,000. Instructions Prepare the entry to record the purchase of Zweifel Galleries on Moss’s books.

Jack and Jill are owners of UpAHill, an S corporation. They own 25 and 75 percent, respectively.  a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the information above?  Assume that UpAHill Corporation has $100,000 of qualified property (unadjusted basis) in both years.

Which type of entities would be suited to the use of a standard cost  system?