Question & Answer

Explain how underwriting costs and accounting and legal fees associated with the issuance of stock should be recorded.

In your audit of Jose Oliva Company, you find that a physical inventory on December 31, 2014, showed merchandise with a cost of $441,000 was on hand at that date. You also discover the following items were all excluded from the $441,000. 1. Merchandise of $61,000 which is held by Oliva on consignment. The consignor is the Max Suzuki Company. 2. Merchandise costing $38,000 which was shipped by Oliva f.o.b. destination to a customer on December 31, 2014. The customer was expected to receive the merchandise on January 6, 2015. 3. Merchandise costing $46,000 which was shipped by Oliva f.o.b. shipping point to a customer on December 29, 2014. The customer was scheduled to receive the merchandise on January 2, 2015. 4. Merchandise costing $83,000 shipped by a vendor f.o.b. destination on December 30, 2014, and received by Oliva on January 4, 2015. 5. Merchandise costing $51,000 shipped by a vendor f.o.b. shipping point on December 31, 2014, and received by Oliva on January 5, 2015. Instructions Based on the above information, calculate the amount that should appear on Oliva’s balance sheet at December 31, 2014, for inventory.

Differentiate between “financial statements” and “financialreporting.”

What is the expected value of the lottery ticket gamble if the chances of purchasing a winning ticket are 1 per cent? How much of the certain pay-off is a risk-loving person willing to sacrifice if they decide to purchase the lottery ticket? If they were indifferent between purchasing and not purchasing the ticket what is their certainty equivalent and risk premium of the gamble?

In what way may short-term demand-management policies help to stabilise the economy? What problems occur in the use of such policies?

Give three examples of oligopolistic industries. In what ways do the firms in each of these industries compete? Why do they choose to compete in the way that they do?

Compare and contrast the tax treatment for rental income received in advance with advance payments for goods and services.

Distinguish between a substitutional solid solution and an interstitial solid solution.

In addition to fillers and plasticizers, what are some other additives used with polymers?

What is a DIP?

Larry recently invested $20,000 (tax basis) in purchasing a limited partnership interest. His at-risk amount is also $20,000. In addition, Larry’s share of the limited partnership loss for the year is $2,000, his share of income from a different limited partnership was $1,000, and he had $3,000 of dividend income from the stock he owns. How much of Larry’s $2,000 loss from the limited partnership can he deduct in the current year?

Given the higher capital requirements now imposed on them, why might banks be even more interested in underwriting corporate debt issues? (LO2)

In a certain welding operation to make a fillet weld, the cross-sectional area = 0.025 in2 and the travel speed = 15 in/min. If the heat transfer factor = 0.95 and melting factor = 0.5, and the melting point = 2000°F for the metal to be welded, determine the rate of heat generation required at the heat source to accomplish this weld.

In the make or buy decision, why is it that purchasing a component from a vendor may cost more than producing the component internally, even though the quoted price from the vendor is lower than the internal price?

Tones Company purchased a warehouse in a downtown district where land values are rapidly increasing. Gerald Carter, controller, and Wilma Ankara, financial vice president, are trying to allocate the cost of the purchase between the land and the building. Noting that depreciation can be taken only on the building, Carter favors placing a very high proportion of the cost on the warehouse itself, thus reducing taxable income and income taxes. Ankara, his supervisor, argues that the allocation should recognize the increasing value of the land, regardless of the depreciation potential of the warehouse. Besides, she says, net income is negatively impacted by additional depreciation and will cause the company’s stock price to go down. Instructions Answer the following questions. (a) What stakeholder interests are in conflict? (b) What ethical issues does Carter face? (c) How should these costs be allocated?

The following are a number of values taken from compound interest tables involving the same number of periods and the same rate of interest. Indicate what each of these four values represents.

Lee is 30 years old and single.Lee paid all the costs of maintaining his household for the entire year.Determine Lee’s filing status in each of the following alternative situations: a.       Lee is Ashton’s uncle.Ashton is 15 years old and has gross income of $5,000. Ashton lived in Lee’s home from April 1 through the end of the year. b.      Lee is Ashton’s uncle.Ashton is 20 years old, not a full-time student, and has gross income of $7,000. Ashton lived in Lee’s home from April 1 through the end of the year. c.       Lee is Ashton’s uncle.Ashton is 22 years old and was a full-time student from January through April.Ashton’s gross income was $5,000.Ashton lived in Lee’s home from April 1 through the end of the year. d.      Lee is Ashton’s cousin.Ashton is 18 years old, has gross income of $3,000, and is not a full-time student. Ashton lived in Lee’s home from April 1 through the end of the year. e.       Lee and Ashton are cousins.Ashton is 18 years old, has gross income of $3,000, and is not a full-time student. Ashton lived in Lee’s home for the entire year.

A recent financial magazine indicated that the airline industry has poor financial flexibility. What is meant by financial flexibility, and why is it important?

Presented below are selected transactions on the books of Simonson Corporation. May 1, 2014 Bonds payable with a par value of $900,000, which are dated January 1, 2014, are sold at 106 plus accrued interest. They are coupon bonds, bear interest at 12% (payable annually at January 1), and mature January 1, 2024. (Use interest expense account for accrued interest.) Dec. 31 Adjusting entries are made to record the accrued interest on the bonds, and the amortization of the proper amount of premium. (Use straight-line amortization.) Jan. 1, 2015 Interest on the bonds is paid. April 1 Bonds with par value of $360,000 are called at 102 plus accrued interest, and redeemed. (Bond premium is to be amortized only at the end of each year.) Dec. 31 Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium amortized.

What are the elements in the ceramic material Sialon?

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?

Explain why diversification across different types of mutual funds is highly recommended. (LO2)

How have growth rates varied over the decades? Does the answer vary by country?

Assume the same data as in P21-10 with National Airlines Co. having an incremental borrowing rate of 10%. Instructions (a) Discuss the nature of this lease in relation to the lessee, and compute the amount of the initial lease liability. (b) Prepare a 10-year lease amortization schedule. (c) Prepare all of the lessee’s journal entries for the first year.

Define pressure gas welding.