Question & Answer

Presented below are three independent situations. Situation 1: A company offers a one-year warranty for the product that it manufactures. A history of warranty claims has been compiled, and the probable amounts of claims related to sales for a given period can be determined. Situation 2: Subsequent to the date of a set of financial statements but prior to the issuance of the financial statements, a company enters into a contract that will probably result in a significant loss to the company. The amount of the loss can be reasonably estimated. Situation 3: A company has adopted a policy of recording self-insurance for any possible losses resulting from injury to others by the company’s vehicles. The premium for an insurance policy for the same risk from an independent insurance company would have an annual cost of $4,000. During the period covered by the financial statements, there were no accidents involving the company’s vehicles that resulted in injury to others. Instructions Discuss the accrual or type of disclosure necessary (if any) and the reason(s) why such disclosure is appropriate for each of the three independent sets of facts above.

A hot working operation is carried out at various speeds. The strength constant = 30,000 lb/in2 and the strain-rate sensitivity exponent = 0.15. Determine the flow stress if the strain rate is (a) 0.01/sec (b) 1.0/sec, (c) 100/sec

: Describe the types of teams and the five contributions that teams make in organizations

Explain the causes and types of conflict within and among teams, and describe ways to reduce conflict.

: Identify ways in which team size, diversity of membership, and team roles affect team performance.

Through November, Cameron has received gross income of $120,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $7,000 of revenue at a cost to Cameron of $3,000, which is deductible for AGI. In contrast, engagement 2 will generate $5,000 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.

How does anodizing differ from other conversion coatings?

Describe the kinds of regulations that are imposed on finance companies. (LO1)

What types of taxes qualify to be deducted as itemized deductions? Would a vehicle registration fee qualify as a deductible tax?

Assume Rita’s consulting business generated $15,000 in gross income.

In general, what causes a stock distribution to be taxable to the recipient?

Define a “compensating balance.” How should a compensating balance be reported?

Two positions have normally been taken with respect to the recording of fixed manufacturing overhead as an element of the cost of plant assets constructed by a company for its own use: (a) It should be excluded completely. (b) It should be included at the same rate as is charged to normal operations. What are the circumstances or rationale that support or deny the application of these methods?

Which is likely to show the greater variation from one person to another at any given level of income: the short-run mpc or the long-run mpc?

Sesame Company purchased a computer system for $74,000 on January 1, 2013. It was depreciated based on a 7-year life and an $18,000 salvage value. On January 1, 2015, Sesame revised these estimates to a total useful life of 4 years and a salvage value of $10,000. Prepare Sesame’s entry to record 2015 depreciation expense.

How can gross interest income rise while the net interest margin remains somewhat stable for a particular bank? (LO2)

Describe the circumstances under which distributions from defined contribution plan are penalized. What are the penalties?

How might a company obtain a price index in order to apply dollar-value LIFO?

Assume the same data as in P21-13 and that Chambers Medical Center has an incremental borrowing rate of 10%. Instructions (a) Discuss the nature of this lease in relation to the lessee, and compute the amount of the initial lease liability. (b) Prepare a 10-year lease amortization schedule. (c) Prepare all of the lessee’s journal entries for the first year.

A direct extrusion operation produces the cross section shown in Figure P19.32(c) from an aluminum billet whose diameter = 150 mm and length = 500 mm. The flow curve parameters for the aluminum are K = 240 MPa and n = 0.16. In the Johnson strain equation, a = 0.8 and b = 1.2. Determine (a) the extrusion ratio, (b) the shape factor, (c) the force required to drive the ram forward during extrusion at the point in the process when the billet length remaining in the container = 400 mm, and (d) the length of the extruded section at the end of the operation if the volume of the butt left in the container is 600,000 mm3

What are some of the more common reasons why a bank may experience a low ROA? (LO3)

What criteria do regulators use when examining a savings institution? (LO1)

Explain the problems that arise in valuing mortgage-backed securities. (LO4)

Explain how U.S. speculators could use foreign exchange derivatives to speculate on the expected appreciation of the Japanese yen. (LO4)

What are the alternative forms of ownership of a savings institution? (LO1)