Question & Answer

There are 27 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, andeach additional answer beyond the correct number of answers reduces the score by 1 point. Percentage score on the quiz is based on the total number of correct answers. 11.1 Which one of the following casting processes is the most widely used: (a) centrifugal casting, (b) die casting, (c) investment casting, (d) sand casting, or (e) shell casting? 11.2 In sand casting, the volumetric size of the pattern is (a) bigger than, (b) same size as, or (c) smaller than the cast part? 11.3 Silica sand has which one of the following compositions: (a) Al2O3, (b) SiO, (c) SiO2, or (d) SiSO4? 11.4 For which one of the following reasons is a green mold named: (a) green is the color of the mold, (b) moisture is contained in the mold, (c) mold is cured, or (d) mold is dry? 11.5 Given that Wm = weight of the molten metal displaced by a core and Wc = weight of the core, the buoyancy force is which one of the following: (a) downward force = Wm + Wc, (b) downward force = Wm - Wc, (c) upward force = Wm + Wc, or (d) upward force = Wm - Wc? 11.6 Which of the following casting processes are expendable mold operations (four correct answers): (a) centrifugal casting, (b) die casting, (c) investment casting, (d) low pressure casting, (e) sand casting, (f) shell molding, (g) slush casting, and (h) vacuum molding? 11.7 Shell molding is best described by which one of the following: (a) casting operation in which the molten metal has been poured out after a thin shell has been solidified in the mold, (b) casting process in which the mold is a thin shell of sand bonded by a thermosetting resin, (c) sand-casting operation in which the pattern is a shell rather than a solid form, or (d) casting operation used to make artificial sea shells? 11.8 Investment casting is also known by which one of the following names: (a) fast-payback molding, (b) full-mold process, (c) lost-foam process, (d) lost-pattern process, or (e) lost-wax process? 11.9 In plaster mold casting, the mold is made of which one of the following materials: (a) Al2O3, (b) CaSO4-H2O, (c) SiC, or (d) SiO2? 11.10 Which of the following qualifies as a precision-casting process (two correct answers): (a) ingot casting, (b) investment casting, (c) plaster-mold casting, (d) sand casting, and (e) shell molding? 11.11 Which of the following casting processes are permanent mold operations (three correct answers): (a) centrifugal casting, (b) die casting, (c) expanded polystyrene process, (d) sand casting, (e) shell molding, (f) slush casting, and (g) vacuum molding 11.12 Which of the following metals would typically be used in die casting (three best answers): (a) aluminum, (b) cast iron, (c) steel, (d) tin, (e) tungsten, and (f) zinc? 11.13 Which of the following are advantages of die casting over sand casting (four best answers): (a) better surface finish, (b) closer tolerances, (c) higher melting temperature metals, (d) higher production rates, (e) larger parts can be cast, and (f) mold can be reused? 11.14 Cupolas are furnaces used to melt which of the following metals (one best answer): (a) aluminum, (b) cast iron, (c) steel, or (d) zinc? 11.15 A misrun is which one of the following defects in casting: (a) globules of metal becoming entrapped in the casting, (b) metal is not properly poured into the downsprue, (c) metal solidifies before filling the cavity, (d) microporosity, and (e) \"pipe\" formation? 11.16 Which one of the following casting metals is most important commercially: (a) aluminum and its alloys, (b) bronze, (c) cast iron, (d) cast steel, or (e) zinc alloys?

What is a partnership interest, and what specific economic rights or entitlements are included with it?

Hanson Company (see BE10-2) borrowed $1,000,000 on March 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,000,000 note payable and an 11%, 4-year, $3,500,000 note payable. Compute the weighted-average interest rate used for interest capitalization purposes.

Tiger Corporation reported taxable income of $500,000 from operations this year.  During the year, the company made a distribution of land to its sole shareholder, Mike Fairway. The land’s fair market value was $75,000 and its tax and E&P basis to Tiger was $125,000. Mike assumed a mortgage attached to the land of $15,000. Tiger had accumulated E&P of $750,000 at the beginning of the year.

Jones Co. is in a technology-intensive industry. Recently, one of its competitors introduced a new product with technology that might render obsolete some of Jones’s inventory. The accounting staff wants to follow the appropriate authoritative literature in determining the accounting for this significant market event. Instructions If your school has a subscription to the FASB Codification, go to http://aaahg.org/asclogin.cfm to log in and prepare responses to the following. Provide Codification references for your responses. (a) Identify the primary authoritative guidance for the accounting for inventories. What is the predecessor literature? (b) List three types of goods that are classified as inventory. What characteristic will automatically exclude an item from being classified as inventory? (c) Define “market” as used in the phrase “lower-of-cost-or-market.” (d) Explain when it is acceptable to state inventory above cost and which industries allow this practice.

Explain how the conversion of a securities firm to a bank holding company (BHC) structure might reduce its risk. (LO2)

On January 1, 2014, Acker Inc. had the following balance sheet. ACKER INC. BALANCE SHEET AS OF JANUARY 1, 2014 Assets Equity Cash $ 50,000 Common stock $260,000 Equity investments (available-for-sale) 240,000 Accumulated other comprehensive income 30,000 Total $290,000 Total $290,000 The accumulated other comprehensive income related to unrealized holding gains on available-for-sale securities. The fair value of Acker Inc.’s available-for-sale securities at December 31, 2014, was $190,000; its cost was $140,000. No securities were purchased during the year. Acker Inc.’s income statement for 2014 was as follows. (Ignore income taxes.) ACKER INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Dividend revenue $ 5,000 Gain on sale of investments 30,000 Net income $35,000 Instructions (Assume all transactions during the year were for cash.) (a) Prepare the journal entry to record the sale of the available-for-sale securities in 2014. (b) Prepare a statement of comprehensive income for 2014. (c) Prepare a balance sheet as of December 31, 2014.

Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Jasmine, Michael, and Candice). The Jacksons file a joint tax return. The couple received salary income of $105,000 and qualified business income of $10,000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $200,000 and they sold it for $250,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $16,500 of itemized deductions, and they had $4,000 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice was 18 years of age at year end, the Jacksons may only claim the child tax credit for other qualifying dependents for Candice.

Differentiate between operating activities, investing activities, and financing activities.

1.       : In response to security threats in today’s world, the U.S. government has federalized airport security workers. Many argued that simply making screeners federal workers would not solve the root problem: Bored, low-paid, and poorly trained security workers have little motivation to be vigilant. How might these employees be motivated to provide the security that travel threats now demand?

The following letter was sent to the SEC and the FASB by leaders of the business community. Dear Sirs: The FASB has been struggling with accounting for derivatives and hedging for many years. The FASB has now developed, over the last few weeks, a new approach that it proposes to adopt as a final standard. We understand that the Board intends to adopt this new approach as a final standard without exposing it for public comment and debate, despite the evident complexity of the new approach, the speed with which it has been developed and the significant changes to the exposure draft since it was released more than one year ago. Instead, the Board plans to allow only a brief review by selected parties, limited to issues of operationality and clarity, and would exclude questions as to the merits of the proposed approach. As the FASB itself has said throughout this process, its mission does not permit it to consider matters that go beyond accounting and reporting considerations. Accordingly, the FASB may not have adequately considered the wide range of concerns that have been expressed about the derivatives and hedging proposal, including concerns related to the potential impact on the capital markets, the weakening of companies’ ability to manage risk, and the adverse control implications of implementing costly and complex new rules imposed at the same time as other major initiatives, including the Year 2000 issues and a single European currency. We believe that these crucial issues must be considered, if not by the FASB, then by the Securities and Exchange Commission, other regulatory agencies, or Congress. We believe it is essential that the FASB solicit all comments in order to identify and address all material issues that may exist before issuing a final standard. We understand the desire to bring this process to a prompt conclusion, but the underlying issues are so important to this nation’s businesses, the customers they serve and the economy as a whole that expediency cannot be the dominant consideration. As a result, we urge the FASB to expose its new proposal for public comment, following the established due process procedures that are essential to acceptance of its standards, and providing sufficient time to affected parties to understand and assess the new approach. We also urge the SEC to study the comments received in order to assess the impact that these proposed rules may have on the capital markets, on companies’ risk management practices, and on management and financial controls. These vital public policy matters deserve consideration as part of the Commission’s oversight responsibilities. We believe that these steps are essential if the FASB is to produce the best possible accounting standard while minimizing adverse economic effects and maintaining the competitiveness of U.S. businesses in nthe international marketplace. Very truly yours, (This letter was signed by the chairs of 22 of the largest U.S. companies.) Instructions Answer the following questions. (a) Explain the “due process” procedures followed by the FASB in developing a financial reporting standard. (b) What is meant by the term “economic consequences” in accounting standard-setting? (c) What economic consequences arguments are used in this letter? (d) What do you believe is the main point of the letter? (e) Why do you believe a copy of this letter was sent by the business community to influential members of the U.S. Congress?

In blanking of a circular sheet-metal part, is the clearance applied to the punch diameter or the die diameter?

Differentiate between investing activities, financing activities, and operating activities.

1.       : A report published by Hay Group found that some managers have personalities suited to horizontal relationships, such as project management, and achieve results with little formal authority. Other managers are more suited to operating roles with much formal authority in a vertical structure. In what type of structure—functional, matrix, team, or virtual network—do you believe your personality would best fit? Which structure would be the most challenging for you? Give your reasons.

Matheny Inc. went public 3 years ago. The board of directors will be meeting shortly after the end of the year to decide on a dividend policy. In the past, growth has been financed primarily through the retention of earnings. A stock or a cash dividend has never been declared. Presented below is a brief financial summary of Matheny Inc. operations. ($000 omitted) 2015 2014 2013 2012 2011 Sales revenue $20,000 $16,000 $14,000 $6,000 $4,000 Net income 2,400 1,400 800 700 250 Average total assets 22,000 19,000 11,500 4,200 3,000 Current assets 8,000 6,000 3,000 1,200 1,000 Working capital 3,600 3,200 1,200 500 400 Common shares: Number of shares  outstanding (000) 2,000 2,000 2,000 20 20 Average market price $9 $6 $4 — — Instructions (a) Suggest factors to be considered by the board of directors in establishing a dividend policy. (b) Compute the return on assets, profit margin on sales, earnings per share, price-earnings ratio, and current ratio for each of the 5 years for Matheny Inc. (c) Comment on the appropriateness of declaring a cash dividend at this time, using the ratios computed in part (b) as a major factor in your analysis.

A manual assembly line is being designed for a product with annual demand = 100,000 units. The line will operate 50 wks/year, 5 shifts/wk, and 7.5 hr/shift. Work units will be attached to a continuously moving conveyor. Work content time = 42.0 min. Assume line efficiency = 0.97, balancing efficiency = 0.92, and repositioning time = 6 sec. Determine (a) hourly production rate to meet demand, (b) number of workers required, and (c) the number of workstations required if the estimated manning level is 1.4.

If the central bank targets real national income rather than inflation, what will be the shape of the MP curve?

Give some examples of decisions you have taken recently that were made under conditions of uncertainty. With hindsight do you think you made the right decisions?

Name the four forming processes listed in the video clip on sheet-metal stamping dies and processes

Discuss the different methods that an organisation can use to determine standard costs.

How many times is income from a C corporation taxed if a retirement fund is the owner of the corporation’s stock? Explain.

Use the information from BE7-2, assuming Restin Co. uses the net method to account for cash discounts. Prepare the required journal entries for Restin Co.

What depreciation methods are available for tangible personal property? Explain the characteristics of a business likely to adopt each method.

Adam elects the accrual method of accounting for his business. What amount of deductions does Adam recognize this year for the following transactions?  a) Adam guarantees that he will refund the cost of any goods sold to a client if the goods fail within a year of delivery. In December of this year, Adam agreed to refund $2,400 to clients, and he expects to make payment in January of next year. b) On December 1 of this year, Adam paid $480 for a one-year contract with CleanUP Services to clean his store. The agreement calls for services to be provided on a weekly basis. c) Adam was billed $240 for annual personal property taxes on his delivery van. Because this was the first time Adam was billed for these taxes, he did not make payment until January of next year. However, he considers the amounts immaterial.

Besides high carbon content, what other alloying element is characteristic of the cast irons?