Question & Answer

Stephanie Delaney, CPA, is the newly hired director of corporate taxation for Acme Incorporated, which is a publicly traded corporation. Ms. Delaney’s first job with Acme was the review of the company’s accounting practices on deferred income taxes. In doing her review, she noted differences between tax and book depreciation methods that permitted Acme to realize a sizable deferred tax liability on its balance sheet. As a result, Acme paid very little in income taxes at that time. Delaney also discovered that Acme has an explicit policy of selling off plant assets before they reversed in the deferred tax liability account. This policy, coupled with the rapid expansion of its plant asset base, allowed Acme to “defer” all income taxes payable for several years, even though it always has reported positive earnings and an increasing EPS. Delaney checked with the legal department and found the policy to be legal, but she’s uncomfortable with the ethics of it. Instructions Answer the following questions. (a) Why would Acme have an explicit policy of selling plant assets before the temporary differences reversed in the deferred tax liability account? (b) What are the ethical implications of Acme’s “deferral” of income taxes? (c) Who could be harmed by Acme’s ability to “defer” income taxes payable for several years, despite positive earnings? (d) In a situation such as this, what are Ms. Delaney’s professional responsibilities as a CPA?

Identify some of the changes and injuries that can occur at or immediately below the surface of a metal.

Draw a similar diagram to Figure 24.7 showing how the price of an individual good imported into country A is determined.

Make out a case for adopting a policy of individual tradable carbon permits, allocated to all citizens within a country. Could such a policy be extended globally?

A billet that is 75 mm long with diameter = 35 mm is direct extruded to a diameter of 20 mm. The extrusion die has a die angle = 75°. For the work metal, K = 600 MPa and n = 0.25. In the Johnson extrusion strain equation, a = 0.8 and b = 1.4. Determine (a) extrusion ratio, (b) true strain (homogeneous deformation), (c) extrusion strain, and (d) ram pressure and force at L = 70, 60, 50, 40, 30, 20, and 10 mm. Use of a spreadsheet calculator is recommended for part (d).

What are four major sources of funds for banks? Which alternatives does a bank have if it needs temporary funds? What is the most common reason that banks issue bonds? (LO2)

Flintstone Corporation is owned equally by Fred and his sister Wilma, each of whom holds 1,000 shares in Flintstone. Wilma wants to reduce her ownership in the company, and it is decided that Flintstone will redeem 250 of her shares for $25,000 per share on December 31 of this year. Wilma’s tax basis in each share is $5,000.  Flintstone has current E&P of $10,000,000 and accumulated E&P at the beginning of the year is $50,000,000.

Explain why an increase in the money supply can affect other short-term interest rates in different ways. Include the potential impact of the money supply on the supply of and the demand for loanable funds when answering this question. (LO2)

What type of general guidelines may be specified for a trust that is managing a pension fund? (LO6)

What is the composition of green sand in the green-sand molding process?

1.              If you were Amara, how would you try to conduct yourself at the oil company? Would you act differently from your normal personality? Do you think your approach would be successful? Why or why not?

Shared bonus pools Becky Tan is the CFO at Frosters Systems, a diversified company with eight different business units (divisions). Becky has been asked by the CEO to develop a shared bonus pool system.   Required What key decisions will Becky have to make to set up the shared bonus system? (LO4)

: How do you think that the team evolved to this low level of cooperation and cohesiveness?

Molto Stancha Corporation had zero earnings this fiscal year; in fact, they lost money. Must they file a tax return?

Why do banks hold a range of assets of varying degrees of liquidity and profitability?

Explain the difference between the “nature-of-expense” and “function-of-expense” classifications.

Should available-for-sale securities always be reported as a current asset? Explain.

How are restrictions of retained earnings reported?

List three types of internal reports and explain how each is used. List three types of external reports and explain how each is used.

What is sticking friction in metalworking?

Jayanna, an advertising consultant, is contemplating instructing some of her clients to pay her in cash so that she does not have to report the income on her tax return. Use an available tax service to identify the three basic elements of tax evasion and penalties associated with tax evasion. Write a memo to Jayanna explaining tax evasion and the risks associated with her actions.

How would a change in the natural rate of unemployment or the level of potential national income affect the EAPC and DAS curve?

1.      : Don’t require Rukman “connectors” to reveal their affiliation with the corporate word-of-mouth marketing campaign. They don’t have to recommend a product they don’t believe in.

Jana Kingston Corporation enters into a lease on January 1, 2014, that does not transfer ownership or contain a bargain-purchase option. It covers 3 years of the equipment’s 8-year useful life, and the present value of the minimum lease payments is less than 90% of the fair value of the asset leased. Prepare Jana Kingston’s journal entry to record its January 1, 2014, annual lease payment of $35,000.

An electron-beam welding operation uses the following process parameters: accelerating voltage = 25 kV, beam current = 100 milliamp, and the circular area on which the beam is focused has a diameter = 0.020 in. If the heat transfer factor = 90%, determine the average power density in the area in Btu/sec in2.