Question & Answer

Define braze welding.

Explain whether the receipt of boot by a shareholder in a §351 transaction causes the transaction to be fully taxable.

] Describe the two methods that taxpayers use to prepay their taxes.

Describe the shielded metal arc-welding (SMAW) process.

Inuk is the sole shareholder of Tex Corporation.  Inuk first formed Tex as a C corporation.  However, in an attempt to avoid having Tex’s income double-taxed, Inuk elected S corporation status for Tex several years ago.  On December 31, 2024, Tex reports $5,000 of earnings and profits from its years as a C corporation and $50,000 in its accumulated adjustments account from its activities as an S corporation (including its 2024 activities).  Inuk discovered that for the first time Tex was going to have to pay the excess net passive income tax.  Inuk wanted to avoid having to pay the tax, but he determined the only way to avoid the tax was to eliminate Tex’s E&P by the end of 2024.  He determined that, because of the distribution ordering rules (AAA first), he would need to have Tex immediately (in 2024) distribute $55,000 to him.  This would clear out Tex’s accumulated adjustments account first and then eliminate Tex’s C corporation earnings and profits in time to avoid the excess net passive income tax.  Inuk was not sure Tex could come up with $55,000 of cash or property in time to accomplish his objective.  Does Inuk have any other options to eliminate Tex’s earnings and profits without first distributing the balance in Tex’s accumulated adjustments account?

1. What effect will trade have on the price of capital in developing and developed countries? 2. It is sometimes claimed that trade with developing countries is unjust because it leads to the importation of goods produced at pitifully low wages. How can the Heckscher–Ohlin theory be used to refute this claim? Is there any validity in the claim? (see Box 24.3)

A lathe performs a turning operation on a workpiece of 6.0 in diameter. The shear strength of the work is 40,000 lb/in2 and the tensile strength is 60,000 lb/in2 . The rake angle of the tool is 6°. The cutting speed = 700 ft/min, feed = 0.015 in/rev, and depth = 0.090 in. The chip thickness after the cut is 0.025 in. Determine (a) the horsepower required in the operation, (b) unit horsepower for this material under these conditions, and (c) unit horsepower as it would be listed in Table 21.2 for a to of 0.010 in. Use the orthogonal cutting model as an approximation of the turning process.

Presented below is a condensed version of the comparative balance sheets for Zubin Mehta Corporation for the last two years at December 31. 2014 2013 Cash $177,000 $ 78,000 Accounts receivable 180,000 185,000 Investments 52,000 74,000 Equipment 298,000 240,000 Accumulated depreciation—equipment (106,000) (89,000) Current liabilities 134,000 151,000 Common stock 160,000 160,000 Retained earnings 307,000 177,000 Additional information: Investments were sold at a loss (not extraordinary) of $10,000; no equipment was sold; cash dividends paid were $30,000; and net income was $160,000. Instructions (a) Prepare a statement of cash flows for 2014 for Zubin Mehta Corporation. (b) Determine Zubin Mehta Corporation’s free cash flow.

Define a change in estimate and provide an illustration. When is a change in accounting estimate effected by a change in accounting principle?

Explain how equilibrium would be restored in the circular flow of income if there were a fall in investment.

How is antidilution determined when multiple securities are involved?

A test specimen in a tensile test has a gage length of 2.0 in and an area = 0.5 in2 . During the test the specimen yields under a load of 32,000 lb. The corresponding gage length = 2.0083 in. This is the 0.2 percent yield point. The maximum load of 60,000 lb is reached at a gage length = 2.60 in. Determine (a) yield strength, (b) modulus of elasticity, and (c) tensile strength. (d) If fracture occurs at a gage length of 2.92 in, determine the percent elongation. (e) If the specimen necked to an area = 0.25 in2 , determine the percent reduction in area.

What is the difference between point-to-point and continuous path in a motion control system?

Coy and Matt are equal partners in the Matcoy Partnership. Each partner has a basis in his partnership interest of $28,000 at the end of the current year, prior to any distribution. On December 31, each receives an operating distribution. Coy receives $10,000 cash. Matt receives $3,000 cash and a parcel of land with a $7,000 fair market value and a $4,000 basis to the partnership. Matcoy has no debt or hot assets. a. What is Coy’s recognized gain or loss? What is the character of any gain or loss? b. What is Coy’s ending basis in his partnership interest? c. What is Matt’s recognized gain or loss? What is the character of any gain or loss? d. What is Matt’s basis in the distributed property? e. What is Matt’s ending basis in his partnership interest?

Should all developing countries aim over the long term to become exporters of manufactured products?

A pile of iron powder weighs 2 lb. The particles are spherical in shape and all have the same diameter of 0.002 in. (a) Determine the total surface area of all the particles in the pile. (b) If the packing factor = 0.6, determine the volume taken by the pile. Note: the density of iron = 0.284 lb/in3 .

The following conditions and settings are used in a certain surface grinding operation: wheel diameter = 6.0 in, infeed = 0.003 in, wheel speed = 4750 ft/min, workspeed = 50 ft/min, and crossfeed = 0.20 in. The number of active grits per square inch of wheel surface = 500. Determine (a) average length per chip, (b) metal removal rate, and (c) number of chips formed per unit time for the portion of the operation when the wheel is engaged in the work.

If a business places several different assets in service during the year, must it use the same depreciation method for all assets? If not, what restrictions apply to the business’s choices of depreciation methods?

1. If the number unemployed exceeded the total annual outflow, what could we conclude about the average duration of unemployment? 2. Make a list of the various inflows to and outflows from employment from and to (a) unemployment; (b) outside the workforce.

Daniel Barenboim sells and erects shell houses, that is, frame structures that are completely finished on the outside but are unfinished on the inside except for flooring, partition studding, and ceiling joists. Shell houses are sold chiefly to customers who are handy with tools and who have time to do the interior wiring, plumbing, wall completion and finishing, and other work necessary to make the shell houses livable dwellings. Barenboim buys shell houses from a manufacturer in unassembled packages consisting of all lumber, roofing, doors, windows, and similar materials necessary to complete a shell house. Upon commencing operations in a new area, Barenboim buys or leases land as a site for its local warehouse, field office, and display houses. Sample display houses are erected at a total cost of $30,000 to $44,000 including the cost of the unassembled packages. The chief element of cost of the display houses is the unassembled packages, inasmuch as erection is a short, low-cost operation. Old sample models are torn down or altered into new models every 3 to 7 years. Sample display houses have little salvage value because dismantling and moving costs amount to nearly as much as the cost of an unassembled package. Instructions (a) A choice must be made between (1) expensing the costs of sample display houses in the periods in which the expenditure is made and (2) spreading the costs over more than one period. Discuss the advantages of each method. (b) Would it be preferable to amortize the cost of display houses on the basis of (1) the passage of time or (2) the number of shell houses sold? Explain.

Describe the primary activities in the value chain for your college or university. In your opinion, which primary activities create the most value?

Describe the consequences for failure to file a tax return and late payment of taxes owed.

CVP Single product   (LO3) SmallScale Publishing has just commenced business and will sell only one title, “New to Business”. Market analysis has indicated that sales for the next 6 months should be 5 000 copies. The accountant has provided information that shows variable costs are $100 per title with fixed costs expected to be $200 000. The book is expected to sell for $150. Required (a) Calculate the breakeven number of books to be sold. (b)           Calculate the estimated profit for the first six months.

Threaded metric fasteners are available in several systems, two of which are coarse and fine (Table 32.1). Finer threads are not cut as deep and as a result have a larger tensile stress area for the same nominal diameter. (a) Determine the maximum preload that can be safely achieved for coarse pitch and fine pitch threads for a 12 mm bolt. (b) Determine the percent increase in preload of fine threads compared to course threads. Coarse pitch = 1.75 mm and fine pitch = 1.25 mm. Assume the proof strength for both bolts is 600 MPa.

Cuevas Co. is in the process of developing a revolutionary new product. A new division of the company was formed to develop, manufacture, and market this new product. As of year-end (December 31, 2014), the new product has not been manufactured for resale. However, a prototype unit was built and is in operation. Throughout 2014, the new division incurred certain costs. These costs include design and engineering studies, prototype manufacturing costs, administrative expenses (including salaries of administrative personnel), and market research costs. In addition, approximately $900,000 in equipment (with an estimated useful life of 10 years) was purchased for use in developing and manufacturing the new product. Approximately $315,000 of this equipment was built specifically for the design development of the new product. The remaining $585,000 of equipment was used to manufacture the pre-production prototype and will be used to manufacture the new product once it is in commercial production. Instructions (a) How are “research” and “development” defined in the authoritative literature (GAAP)? (b) Briefly indicate the practical and conceptual reasons for the conclusion reached by the FinancialAccounting Standards Board on accounting and reporting practices for research and development costs. (c) In accordance with GAAP, how should the various costs of Cuevas described above be recorded on the financial statements for the year ended December 31, 2014?