Question & Answer

Jobim Inc. had the following condensed balance sheet at the end of operations for 2013. JOBIM INC. BALANCE SHEET DECEMBER 31, 2013 Cash $ 8,500 Current liabilities $ 15,000 Current assets other than cash 29,000 Long-term notes payable 25,500 Investments 20,000 Bonds payable 25,000 Plant assets (net) 67,500 Capital stock 75,000 Land 40,000 Retained earnings 24,500 $165,000 $165,000 During 2014, the following occurred. 1. A tract of land was purchased for $9,000. 2. Bonds payable in the amount of $15,000 were redeemed at par. 3. An additional $10,000 in capital stock was issued at par. 4. Dividends totaling $9,375 were paid to stockholders. 5. Net income was $35,250 after allowing depreciation of $13,500. 6. Land was purchased through the issuance of $22,500 in bonds. 7. Jobim Inc. sold part of its investment portfolio for $12,875. This transaction resulted in a gain of $2,000 for the company. The company classifies the investments as available-for-sale. 8. Both current assets (other than cash) and current liabilities remained at the same amount. Instructions (a) Prepare a statement of cash flows for 2014 using the indirect method. (b) Prepare the condensed balance sheet for Jobim Inc. as it would appear at December 31, 2014.

If the average percentage (as opposed to the average level) of potential output that was unutilised remained constant, would the trend line have the same slope as the potential output line?

: Explain the organizational dimensions that managers use to execute strategy.

It is often argued that international convergence of economic indicators is a desirable objective. Does this mean that countries should all seek to achieve the same rate of economic growth, monetary growth, interest rates and budget deficits as a percentage of their GDP, etc?

Describe how the new purpose of a corporation as defined by the Business Roundtable differs from the previously defined corporate purpose.

If the part illustrated in Figure P20.32 were made by shear spinning, determine (a) the wall thickness along the cone-shaped portion, and (b) the spinning reduction r.

Compare and contrast the aggregate and entity approaches for a sale of a partnership interest.

Explain why the medical expense provisions are sometimes referred to as “wherewithal” deductions and how this rationale is reflected in the limits on these deductions.

Using one or more diagrams like Figures 19.2, 19.7, 19.8, 19.9 and 19.10, illustrate the following: (a)  The effect of a contraction in the money supply on national income. Refer to both the interest-rate and the exchange-rate transmission mechanisms and show how the shapes of the curves affect the outcome. (b)  The effect of a fall in investment on national income. Again show how the shapes of the curves affect the outcome. Specify your assumptions about the effects on the supply of money.

Joni Hyde Inc. has the following amounts reported in its general ledger at the end of the current year. Organization costs $24,000 Trademarks 15,000 Discount on bonds payable 35,000 Deposits with advertising agency for ads to promote goodwill of company 10,000 Excess of cost over fair value of net identifi able assets of acquired subsidiary 75,000 Cost of equipment acquired for research and development projects; the equipment has an alternative future use 90,000 Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years 80,000 Instructions (a) On the basis of the information above, compute the total amount to be reported by Hyde for intangible assets on its balance sheet at year-end. (b) If an item is not to be included in intangible assets, explain its proper treatment for reporting purposes.

What are the three basic steps in the manufacture of a pneumatic tire?

In 2024, Janet and Ray are married filing jointly. They have five dependent children under 18 years of age. Janet and Ray’s taxable income (all ordinary) is $2,400,000 and they itemize their deductions as follows: state income taxes of $10,000 and mortgage interest expense of $25,000 (acquisition debt of $300,000).  What is Janet and Ray’s AMT? Complete Form 6251 for Janet and Ray.

Horizon Outfitters Company includes in its trial balance for December 31 an item for Accounts Receivable $789,000. This balance consists of the following items: Due from regular customers $523,000 Refund receivable on prior year’s income taxes (an established claim) 15,500 Travel advance to employees 22,000 Loan to wholly owned subsidiary 45,500 Advances to creditors for goods ordered 61,000 Accounts receivable assigned as security for loans payable 75,000 Notes receivable past due plus interest on these notes 47,000 Total $789,000 Illustrate how these items should be shown in the balance sheet as of December 31.

There are 10 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. 12.1 Which one of the following terms refers to the glassy state of a material: (a) crystalline, (b) devitrified, (c) polycrystalline, (d) vitiated, or (e) vitreous? 12.2 Besides helping to preserve the environment, the use of recycled glass as an ingredient of the starting material in glassmaking serves what other useful purpose (one answer): (a) adds coloring variations to the glass for aesthetic value, (b) makes the glass easier to melt, (c) makes the glass stronger, or (d) reduces odors in the plant 12.3 The charge in glassworking is which one of the following: (a) the duration of the melting cycle, (b) the electric energy required to melt the glass, (c) the name given to the melting furnace, or (d) the starting materials in melting? 12.4 Typical glass melting temperatures are in which of the following ranges: (a) 400°C to 500°C, (b) 900°C to 1000°C, (c) 1500°C to 1600°C, or (d) 2000°C to 2200°C? 12.5 Casting is a glassworking process used for (a) high production, (b) low production, or (c) medium production? 12.6 Which one of the following processes or processing steps is not applicable in glassworking: (a) annealing, (b) pressing, (c) quenching, (d) sintering, and (e) spinning? 12.7 The press-and-blow process is best suited to the production of (narrow-necked) beverage bottles, while the blow-and-blow process is more appropriate for producing (wide-mouthed) jars: (a) true, or (b) false 12.8 Which one of the following processes is used to produce glass tubing: (a) Danner process, (b) pressing, (c) rolling, or (d) spinning? 12.9 If a glass part with a wall thickness of 5 mm (0.20 in) takes 10 minutes to anneal, how much time would a glass part of similar geometry but with a wall thickness of 7.5 mm (0.30 in) take to anneal (choose the one closest answer): (a) 10 minutes, (b) 15 minutes, (c) 20 minutes, or (c) 30 minutes? 12.10 A lehr is which of the following: (a) a lion's den, (b) a melting furnace, (c) a sintering furnace, (d) an annealing furnace, or (e) none of the above?

For Problem 21.12, the lathe has a mechanical efficiency = 0.83. Determine (a) the horsepower consumed by the turning operation; (b) horsepower that must be generated by the lathe; (c) unit horsepower and specific energy for the work material in this operation

In its December 31, 2014, balance sheet Oakley Corporation reported as an asset, “Net notes and accounts receivable, $7,100,000.” What other disclosures are necessary?

Distinguish between a capital interest and a profits interest, and explain how partners and partnerships treat each when exchanging them for services provided.

You are evaluating Woodlawn Racetrack for a potential loan. An examination of the notes to the financial statements indicates restricted cash at year-end amounts to $100,000. Explain how you would use this information in evaluating Woodlawn’s liquidity.

Jerry is a 30 percent partner in the JJM Partnership when he sells his entire interest to Lucia for $56,000 cash. At the time of the sale, Jerry’s basis in JJM is $32,000. JJM does not have any debt or hot assets. What is Jerry’s gain or loss on the sale of his interest?

Parnevik Company has the following securities in its investment portfolio on December 31, 2014 (all securities were purchased in 2014): (1) 3,000 shares of Anderson Co. common stock which cost $58,500, (2) 10,000 shares of Munter Ltd. common stock which cost $580,000, and (3) 6,000 shares of King Company preferred stock which cost $255,000. The Fair Value Adjustment account shows a credit of $10,100 at the end of 2014. In 2015, Parnevik completed the following securities transactions. 1. On January 15, sold 3,000 shares of Anderson’s common stock at $22 per share less fees of $2,150. 2. On April 17, purchased 1,000 shares of Castle’s common stock at $33.50 per share plus fees of $1,980. On December 31, 2015, the market prices per share of these securities were Munter $61, King $40, and Castle $29. In addition, the accounting supervisor of Parnevik told you that, even though all these securities have readily determinable fair values, Parnevik will not actively trade these securities because the top management intends to hold them for more than one year. Instructions (a) Prepare the entry for the security sale on January 15, 2015. (b) Prepare the journal entry to record the security purchase on April 17, 2015. (c) Compute the unrealized gains or losses and prepare the adjusting entry for Parnevik on December 31, 2015. (d) How should the unrealized gains or losses be reported on Parnevik’s balance sheet?

In a production turning operation, the foreman has decreed that a single pass must be completed on the cylindrical workpiece in 5.0 min. The piece is 400 mm long and 150 mm in diameter. Using a feed = 0.30 mm/rev and a depth of cut = 4.0 mm, what cutting speed must be used to meet this machining time requirement?

If production were at a point on the production possibility curve below point S, describe the process whereby market forces would return the economy to point S.

At a recent management meeting at Skyward Industries, the Transport Division manager was heard to say “this transfer pricing is a waste of time – at the end of the year all the internal transactions are eliminated on consolidation in the financial reports”.  Comment on this statement.

Can taxes be used to relieve poverty?

Explain how the current account of the balance of payments is likely to vary with the course of the business cycle.