Question & Answer

Explain the differences between financial and non-financial performance measures and give two examples of each.             (LO1)

Saprano Company, on January 2, 2014, entered into a contract with a manufacturing company to purchase room-size air conditioners and to sell the units on an installment plan with collections over approximately 30 months with no carrying charge. For income tax purposes, Saprano Company elected to report income from its sales of air conditioners according to the installment-sales method. Purchases and sales of new units were as follows. Units Purchased Units Sold Year Quantity Price Each Quantity Price Each 2014 1,400 $130 1,100 $200 2015 1,200 112 1,500 170 2016 900 136 800 205 Collections on installment sales were as follows. Collections Received 2014 2015 2016 2014 sales $42,000 $88,000 $ 80,000 2015 sales 51,000 110,000 2016 sales 34,600 In 2016, 50 units from the 2015 sales were repossessed and sold for $120 each on the installment plan. At the time of repossession, $2,000 had been collected from the original purchasers, and the units had a fair value of $3,000. General and administrative expenses for 2016 were $60,000. No charge has been made against current income for the applicable insurance expense from a 3-year policy expiring June 30, 2017, costing $7,200, and for an advance payment of $12,000 on a new contract to purchase air conditioners beginning January 2, 2017. Instructions Assuming that the weighted-average method is used for determining the inventory cost, including repossessed merchandise, prepare schedules computing for 2014, 2015, and 2016: (a) (1) The cost of goods sold on installments. (2) The average unit cost of goods sold on installments for each year. (b) The gross profit percentages for 2014, 2015, and 2016. (c) The gain or loss on repossessions in 2016. (d) The net income from installment sales for 2016. (Ignore income taxes.)

A 2.0-in-thick slab is 10.0 in wide and 12.0 ft long. Thickness is to be reduced in three steps in a hot rolling operation. Each step will reduce the slab to 75% of its previous thickness. It is expected that for this metal and reduction, the slab will widen by 3% in each step. If the entry speed of the slab in the first step is 40 ft/min, and roll speed is the same for the three steps, determine: (a) length and (b) exit velocity of the slab after the final reduction

How do general and limited partners treat their share of ordinary business income for self-employment tax purposes?

(Looking at the Maths) Given the following supply schedule: P 2 4 6 8 10 0 10 20 30 40 (a)  Draw the supply curve. (b)  Using the arc method calculate price elasticity of supply (i) between P = 2 and P = 4;                      (ii) between P = 8 and P = 10 (c)  Using the point method calculate price elasticity of supply at P = 6. (d)  Does the elasticity of the supply curve increase or decrease as P and Q increase? Why? (e)  What would be the answer to (d) if the supply curve had been a straight line but intersecting the horizontal axis to the right of the origin?

Laura Li, a U.S. resident, works for three months this summer in China.  What type of tax authority may be especially useful in determining the tax consequences of her foreign income?

(Looking at the Maths) Assuming that the pre-tax equations were:       QD = 120 – 10P and QS = 10 + 5P What is (a) the consumer share of the tax and (b) the producer share?

If speculators on average gain from their speculation, who loses?

Explain the meaning of surplus units and deficit units. Provide an example of each. Which types of financial institutions do you deal with? Explain whether you are acting as a surplus unit or a deficit unit in your relationship with each financial institution. (LO1)

Assessing a remuneration plan Hailey’s Hair Products has two criteria upon which its reward system is based: (1) rewarding executives for performance and (2) adding to shareholder value. At present, the remuneration package for executives consists of a base salary, annual bonus and stock options. The base salary is considered critical to attract the ‘best’ people to positions with the bonus and stock options encouraging performance that leads to increases in the share price.   Base salaries are set at competitive levels to attract and retain the ‘best’ people. The bonus is payable if executives meet the annual performance targets set by the board at the beginning of the year. The stock options are not able to be exercised until five years after being granted. A recent initiative has meant that executives are able to substitute the bonus payment for stock options (but still with the five year restriction). The board’s remuneration committee is made up entirely of independent directors and makes use of outside advisors to ensure that recommendations are fair to all shareholders.   Required Evaluate the remuneration plan for executives. (LO2, 3 and 4)

What would be the economic effects of (a) different rates of VAT, (b) different rates of personal income tax and (c) different rates of company taxation between member states if in all other respects there were no barriers to trade or factor movements?

Included in the December 31 trial balance of Rivera Company are the following assets. Cash $ 190,000 Work in process $200,000 Equipment (net) 1,100,000 Accounts receivable (net) 400,000 Prepaid insurance 41,000 Patents 110,000 Raw materials 335,000 Finished goods 170,000 Prepare the current assets section of the December 31 balance sheet.

1. Give some other examples of public goods. Does the provider of these goods (the government or local authority) charge for their use? If so, is the method of charging based on the amount of the good that people use? Is it a good method of charging? Could you suggest a better method? 2. Name some goods or services provided by the government or local authorities that are not public goods. 3. Are there ways in which we could overcome the free-rider problem? Start by thinking about the provision of a public good amongst a group of friends or neighbours.

What is the purpose of the bead coil in a pneumatic tire?

1.    : Do you believe that it is ethical for organizational managers to try to get access to and scrutinize the Facebook pages of employees or job applicants? Discuss.

Midori Company had ending inventory at end-of-year prices of $100,000 at December 31, 2013; $119,900 at December 31, 2014; and $134,560 at December 31, 2015. The year-end price indexes were 100 at 12/31/13, 110 at 12/31/14, and 116 at 12/31/15. Compute the ending inventory for Midori Company for 2013 through 2015 using the dollar-value LIFO method.

Why might the relationship between the demand for money and the rate of interest be an unstable one?

A NC drill press is to perform a series of through-hole drilling operations on a 1.75 in thick aluminum plate that is a component in a heat exchanger. Each hole is 3/4 in diameter. There are 100 holes in all, arranged in a 10 by 10 matrix pattern, and the distance between adjacent hole centers (along the square) = 1.5 in. The cutting speed = 300 ft/min, the penetration feed (z-direction) = 0.015 in/rev, and the traverse rate between holes (x-y plane) = 15.0 in/min. Assume that x-y moves are made at a distance of 0.50 in above the work surface, and that this distance must be included inthe penetration feed rate for each hole. Also, the rate at which the drill is retracted from each hole is twice the penetration feed rate. The drill has a point angle = 100°. Determine the time required from the beginning of the first hole to the completion of the last hole, assuming the most efficient drilling sequence will be used to accomplish the job

Arna, Inc. uses the dollar-value LIFO method of computing its inventory. Data for the past 3 years follow. Year Ended December 31 Inventory at Current-Year Cost Price Index 2013 $19,750 100 2014 22,140 108 2015 25,935 114 Instructions Compute the value of the 2014 and 2015 inventories using the dollar-value LIFO method.

In what way is the Securities and Exchange Commissionconcerned about and supportive of accounting principles and standards?

: Describe the leadership trends emerging in today’s organizations, including Level 5 leadership, servant leadership, authentic leadership, and interactive leadership.

Under what conditions should a short-term obligation be excluded from current liabilities?

A peripheral milling operation is performed on the top surface of a rectangular workpart which is 400 mm long by 60 mm wide. The milling cutter, which is 80 mm in diameter and has five teeth, overhangs the width of the part on both sides. Cutting speed = 70 m/min, chip load = 0.25 mm/tooth, and depth of cut = 5.0 mm. Determine (a) the actual machining time to make one pass across the surface and (b) the maximum material removal rate during the cut

Some believe that accounting depreciation measures the decline in the value of fixed assets. Do you agree? Explain.

Is it easier to describe what a capital asset is or what it is not? Explain.