Question & Answer

In 2014, Steinrotter Construction Corp. began construction work under a 3-year contract. The contract price was $1,000,000. Steinrotter uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to total estimated costs for completing the contract. The financial statement presentations relating to this contract at December 31, 2014, are shown below. Balance Sheet Accounts receivable $18,000 Construction in process $65,000 Less: Billings 61,500 Costs and recognized profi t in excess of billings 3,500 Income Statement Income (before tax) on the contract recognized in 2014 $19,500 Instructions (a) How much cash was collected in 2014 on this contract? (b) What was the initial estimated total income before tax on this contract?

In examining financial statements, financial analysts often write off goodwill immediately. Comment on this procedure.

Denton Company plans to engage in an IPO and will issue 4 million shares of stock. It is hoping to sell the shares for an offer price of $14. It hires a securities firm, which suggests that the offer price for the stock be $12 per share to ensure that all the shares can be easily sold. Explain the dilemma here for Denton Company. What is the advantage of following the securities firm’s advice? What is the disadvantage? Is the securities firm’s incentive to place the shares aligned with that of Denton Company? (LO3)

Electrodes in arc welding are divided into two categories. Name and define the two types.

What is the meaning of “corridor amortization”?

If a disastrous harvest of rice were confined to a particular country, would (a) the world price and (b) its own domestic price of rice fluctuate significantly? What would happen to the country’s export earnings and the earnings of individual farmers?

How do the properties of polymers compare with those of metals?

Could US action to protect its steel industry from foreign competition be justified in terms of the interests of the USA as a whole (as opposed to the steel industry in particular)?

In general terms, identify the similarities and differences between the corporate taxable income formula and the individual taxable income formula.

Gerald Englehart Industries changed from the doubledeclining- balance to the straight-line method in 2015 on all its plant assets. There was no change in the assets’ salvage values or useful lives. Plant assets, acquired on January 2, 2012, had an original cost of $1,600,000, with a $100,000 salvage value and an 8-year estimated useful life. Income before depreciation expense was $270,000 in 2014 and $300,000 in 2015. Instructions (a) Prepare the journal entry(ies) to record depreciation expense in 2015. (b) Starting with income before depreciation expense, prepare the remaining portion of the income nstatement for 2014 and 2015.

Define process capability.

Could production and consumption take place without money? If you think they could, give examples.

What would happen to the TR curve if the market price rose to £10? Try drawing it.

Define machinability.

With what kinds of products is tube rolling associated?

Presented below is a list of possible transactions. 1. Purchased inventory for $80,000 on account (assume perpetual system is used). 2. Issued an $80,000 note payable in payment on account (see item 1 above). 3. Recorded accrued interest on the note from item 2 above. 4. Borrowed $100,000 from the bank by signing a 6-month, $112,000, zero-interest-bearing note. 5. Recognized 4 months’ interest expense on the note from item 4 above. 6. Recorded cash sales of $75,260, which includes 6% sales tax. 7. Recorded wage expense of $35,000. The cash paid was $25,000; the difference was due to various amounts withheld. 8. Recorded employer’s payroll taxes. 9. Accrued accumulated vacation pay. 10. Recorded an asset retirement obligation. 11. Recorded bonuses due to employees. 12. Recorded a contingent loss on a lawsuit that the company will probably lose. 13. Accrued warranty expense (assume expense warranty approach). 14. Paid warranty costs that were accrued in item 13 above. 15. Recorded sales of product and related warranties (assume sales warranty approach). 16. Paid warranty costs under contracts from item 15 above. 17. Recognized warranty revenue (see item 15 above). 18. Recorded estimated liability for premium claims outstanding. Instructions Set up a table using the format shown below and analyze the effect of the 18 transactions on the financial statement categories indicated

Scorcese Inc. is involved in a lawsuit at December 31, 2014. (a) Prepare the December 31 entry assuming it is probable that Scorcese will be liable for $900,000 as a result of this suit. (b) Prepare the December 31 entry, if any, assuming it is not probable that Scorcese will be liable for any payment as a result of this suit.

Why is the earned income credit referred to as a negative income tax?

What are some of the resource changes that can be made to increase plant capacity in the short run?

Two parallel surfaces, separated by a space of 0.5 in that is occupied by a fluid, are moving relative to each other at a velocity of 25 in/sec. The motion is resisted by a shear stress of 0.3 lb/in2 due to the viscosity of the fluid. If the velocity gradient in the space between the surfaces is constant, determine the viscosity of the fluid.

Using the facts in Problem 47, what minimum tax would need to be assessed on Shameika to make the tax progressive with respect to effective tax rates?

Consider current conditions that could affect interest rates, including inflation (including oil prices), the economy, the budget deficit, and the Fed’s monetary policy. t Based on the prevailing conditions, do you think the values of mortgages that are sold in the secondary market will increase or decrease during this semester? Offer some logic to support your answer. Which factor do you think will have the biggest impact on the values of existing mortgages? (LO4)

What are the functions of a well-designed electronics package?

Jane Ellerby and Sam Callison are discussing the recent fraud that occurred at LowRental Leasing, Inc. The fraud involved the improper reporting of revenue to ensure that the company would have income in excess of $1 million. What is fraudulent financial reporting, and how does it differ from an embezzlement of company funds?

To what extent can the problems with privatisation be seen as arguments in favour of nationalisation?