Question & Answer

An entity uses variable costing for internal reports. It must convert the variable costing results to absorption costing results for external reports. How can this conversion be accomplished?

Why is the liabilities section of the balance sheet of primary significance to bankers?

As a newly enrolled accounting major, you are anxious to better understand accounting institutions and sources of accounting literature. As a first step, you decide to explore the IASB’s Framework for the Preparation and Presentation of Financial Statements. Instructions Access the IASB Framework at the IASB website (http://eifrs.iasb.org/ ). (Click on the IFRS tab and then register for free eIFRS access if necessary.) When you have accessed the documents, you can use the search tool in your Internet browser to respond to the following items. (Provide paragraph citations.) (a) What is the objective of financial reporting? (b) What other means are there of communicating information, besides financial statements? (c) Indicate some of the users and the information they are most directly concerned with in economic decision-making.

Ten samples of size n = 8 have been collected from a process in statistical control, and the dimension of interest has been measured for each part. The calculated values of x for each sample are (mm) 9.22, 9.15, 9.20, 9.28, 9.19, 9.12, 9.20, 9.24, 9.17, and 9.23. The values of R are (mm) 0.24, 0.17, 0.30, 0.26, 0.26, 0.19, 0.21, 0.32, 0.21, and 0.23, respectively. (a) Determine the values of the center, LCL, and UCL for the x and R charts. (b) Construct the control charts and plot the sample data on the charts.

1.       : Managers at Gap Inc., a once- popular retail chain, are reported to have made a series of decisions that hurt the company: They expanded so rapidly that the chain lost touch with customers; they tried to copy the successful approach of rivals rather than charting their own course; they cut quality to reduce costs; they shifted from one fashion approach to another as each failed to appeal to customers, and so on. What techniques would you recommend that Gap managers use to improve the quality of their decisions?

Based on the video about vernier calipers, are the markings on the vernier plate (moveable scale) the same spacing, slightly closer, or slightly further apart compared to the stationary bar?

Dean supports Leicester City football club and has paid £80 for a ticket to watch them play in a cup final. The maximum amount he is willing to pay for the ticket is £200. Another Leicester City supporter offers him £400 for the ticket. Even though there are no restrictions on the resale of the tickets, Dean decides not to sell. Is his decision consistent with the predictions of rational decision making in standard economic theory? Explain your answer.

Static and flexible budgets Plush pet toys are produced in a largely automated factory in standard lots of 100 toys each. A standard cost system is used to control costs and to assign cost to inventory.       Variable overhead, estimated at $5 per lot, consists of miscellaneous items such as thread, a variety of plastic squeakers, and paints that are applied to create features such as eyes and whiskers. Fixed overhead, estimated at $24 000 per month, consists largely of depreciation on the automated machinery and rent for the building. Variable overhead is allocated based on lots produced. The standard fixed overhead allocation rate is based on the estimated output of 1000 lots per month.             Required (a)        Prepare a production budget for the coming year based on planned production  12 000 lots. (b)       Compare the budget prepared in (a) with a flexible budget based on actual activity of 15 000 lots.

Jonah has the choice of paying Rita $10,000 today or $40,000 in ten years.  Assume Jonah can earn a 12 percent after-tax rate of return.  Which should he choose?

Presented below is information related to Zonker Company. 1. On July 6, Zonker Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is: Land $ 400,000 Buildings 1,200,000 Equipment 800,000 Total $2,400,000 Zonker Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a market price of $168 per share on the date of the purchase of the property. 2. Zonker Company expended the following amounts in cash between July 6 and December 15, the date when it first occupied the building. Repairs to building $105,000 Construction of bases for equipment to be installed later 135,000 Driveways and parking lots 122,000 Remodeling of offi ce space in building, including new partitions and walls 161,000 Special assessment by city on land 18,000 3. On December 20, the company paid cash for equipment, $260,000, subject to a 2% cash discount, and freight on equipment of $10,500. Instructions Prepare entries on the books of Zonker Company for these transactions.

A cylindrical billet that is 100 mm long and 50 mm in diameter is reduced by indirect (backward) extrusion to a 20 mm diameter. The die angle is 90°. The Johnson equation has a = 0.8 and b = 1.4, and the flow curve for the work metal has a strength coefficient of 800 MPa and strain hardening exponent of 0.13. Determine (a) extrusion ratio, (b) true strain (homogeneous deformation), (c) extrusion strain, (d) ram pressure, and (e) ram force.

provides products and services to oil and natural gas exploration, production, transmission, and processing companies. The following is taken from a recent income statement. (Dollaramounts are in millions.) Sales revenue $2,697.0 Service revenue 1,933.9 Share of earnings of unconsolidated affi liates 92.4 Total revenues 4,723.3 Cost of sales 1,722.7 Cost of services 1,799.9 Total costs of sales and services 3,522.6 Gross earnings $1,200.7 Selling, engineering, administrative and general expenses (919.8) Special charges (70.0) Other income (deductions) Interest expense (47.4) Interest earned 19.1 Other, net 4.8 Earnings before income taxes and other items below 187.4 Income taxes (79.4) Noncontrolling interest (10.3) Earnings from continuing operations 97.7 Discontinued operations (35.3) Earnings before extraordinary items 62.4 Extraordinary items (6.3) Net earnings $ 56.1 Instructions Assume that 177,636,000 shares of stock were issued and outstanding. Prepare the per share portion of the income statement. Remember to begin with “Earnings from continuing operations.”

1.      Talk to the company’s legal counsel and contact the Strategic and Competitive Intelligence Professionals for guidance. Then, with their opinions and facts to back you up, go to your boss.

The drive unit of a positioning table for a component insertion machine is based on a stepping motor and leadscrew mechanism. The specifications are for the table speed to be 25 mm/s over a 600 mm range and for the accuracy to be 0.025 mm. The pitch of the leadscrew = 4.5 mm, and the gear ratio = 5:1 (5 turns of the motor for each turn of the leadscrew). The mechanical errors in the motor, gear box, leadscrew, and table connection are characterized by a normal distribution with standard deviation = 0.005 mm. Determine (a) the minimum number of step angles in the stepping motor, and (b) the frequency of the pulse train required to drive the table at the desired maximum speed for the stepping motor in part (a).

Simon lost $5,000 gambling this year on a trip to Las Vegas. In addition, he paid $2,000 to his broker for managing his $200,000 portfolio, and $1,500 to his accountant for preparing his tax return. In addition, Simon incurred $2,500 in transportation costs commuting back and forth from his home to his employer’s office, which were not reimbursed. Calculate the amount of these expenses that Simon is able to deduct (assuming he itemizes his deductions).

How could a bank generate higher income before tax (as a percentage of assets) when its net interest margin has decreased? (LO2)

Ann M. Martin Company makes the following errors during the current year. (Evaluate each case independently and assume ending inventory in the following year is correctly stated.) 1. Ending inventory is overstated, but purchases and related accounts payable are recorded correctly. 2. Both ending inventory and purchases and related accounts payable are understated. (Assume this purchase was recorded and paid for in the following year.) 3. Ending inventory is correct, but a purchase on account was not recorded. (Assume this purchase was recorded and paid for in the following year.) Instructions Indicate the effect of each of these errors on working capital, current ratio (assume that the current ratio is greater than 1), retained earnings, and net income for the current year and the subsequent year.

1.    : Which style of communicating do you think would be most beneficial to the long-term success of a U.S. company operating internationally—high-context or low-context communications? Why?

What are the natural tolerance limits?

If the vertical scale for Figure A1.2 ran from 0 to 5 million, how would this alter your impression of the degree to which unemployment had changed?

Allie received a $50,000 distribution from her 401(k) account this year that she established while working for Big Stories, Inc. Assuming her marginal ordinary tax rate is 24 percent, how much tax and penalty will Allie pay on the distribution under the following circumstances?

What are reversing entries, and why are they used?

A steel collar whose outside diameter = 3.000 in at room temperature is to be shrink fitted onto a steel shaft by heating it to an elevated temperature while the shaft remains at room temperature. The shaft diameter = 1.500 in. For ease of assembly when the collar is heated to an elevated temperature of 1000°F, the clearance between the shaft and the collar is to be 0.007 in. Determine (a) the initial inside diameter of the collar at room temperature so that this clearance is satisfied, (b) the radial pressure and (c) maximum effective stress on the resulting interference fit at room temperature (70°F). For steel, the elastic modulus = 30,000,000 lb/in2 and coefficient of thermal expansion = 6.7 x 10-6 in/in per °F.

Garcia Corporation purchased a truck by issuing an $80,000, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck.

What is the due date for the corporation tax return Form 1120?  Is it possible to extend the due date?  Explain.