Question & Answer

What effect will the following have on the mpc: (a)     the rate of income tax rises; (b)     the economy begins to recover from recession; (c)     people anticipate that the rate of inflation is about to rise; (d)     the government redistributes income from the rich to the poor? In each case sketch what would happen to the consumption function.

Identify some materials that possess a noncrystalline structure.

Compare and contrast different ways in which a taxpayer triggers a realization event by disposing of an asset.

Clarence Weatherspoon, a super salesman contemplating retirement on his fifty-fifth birthday, decides to create a fund on an 8% basis that will enable him to withdraw $20,000 per year on June 30, beginning in 2018 and continuing through 2021. To develop this fund, Clarence intends to make equal contributions on June 30 of each of the years 2014–2017. Instructions (a) How much must the balance of the fund equal on June 30, 2017, in order for Clarence Weatherspoon to satisfy his objective? (b) What are each of Clarence’s contributions to the fund?

1.    : A new business venture must develop a comprehensive business plan if it hopes to acquire start-up funding. Companies such as FedEx and Nike say they did not follow their original plans closely. Does this mean that developing the plan was a waste of time for these eventually successful companies?

Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $1,500 per month, has just purchased a new Acura. You decided to test the accuracy of the accounts receivable balance of $82,000 as shown in the ledger. The following information is available for your first year in business. (1) Collections from customers $198,000 (2) Merchandise purchased 320,000 (3) Ending merchandise inventory 90,000 (4) Goods are marked to sell at 40% above cost Instructions Compute an estimate of the ending balance of accounts receivable from customers that should appear in the ledger and any apparent shortages. Assume that all sales are made on account.

Cominsky Company purchased a machine on July 1, 2015, for $28,000. Cominsky paid $200 in title fees and county property tax of $125 on the machine. In addition, Cominsky paid $500 shipping charges for delivery, and $475 was paid to a local contractor to build and wire a platform for the machine on the plant floor. The machine has an estimated useful life of 6 years with a salvage value of $3,000. Determine the depreciation base of Cominsky’s new machine. Cominsky uses straight-line depreciation.

Swift Corp., a capital goods manufacturing business that started on January 4, 2014, and operates on a calendar-year basis, uses the installmentsales method of profit recognition in accounting for all its sales. The following data were taken from the 2014 and 2015 records. 2014 2015 Installment sales $480,000 $620,000 Gross profi t as a percent of costs 25% 28% Cash collections on sales of 2014 $130,000 $240,000 Cash collections on sales of 2015 –0– $160,000 The amounts given for cash collections exclude amounts collected for interest charges. Instructions (a) Compute the amount of realized gross profit to be recognized on the 2015 income statement, prepared using the installment-sales method. (Round percentages to three decimal places.) (b) State where the balance of Deferred Gross Profit would be reported on the financial statements for 2015. (c) Compute the amount of realized gross profit to be recognized on the income statement, prepared using the cost-recovery method.

A sheet-metal part 3.0 mm thick and 20.0 mm long is bent to an included angle = 60° and a bend radius = 7.5 mm in a V-die. The metal has a yield strength = 220 MPa and a tensile strength = 340 MPa. Compute the required force to bend the part, given that the die opening dimension = 15 mm.

1.    Assume that you are a project manager at a biotechnology company and that you work with managers from research, production, and marketing on a major product modification. You notice that every memo you receive from the marketing manager has been copied to senior management. At every company function, she spends time talking to the big shots. You are also aware that sometimes when you and the other project members are working tirelessly over the project, she is playing golf with senior managers. What is your evaluation of her behavior? As project manager, what do you do?

Internal and external reports Classify the following reports as internal or external. (a)          Operating budget           (b)          Credit reports                             (c)           Financial statements                   (d)          Capital budget                            (e)           Tax returns                                 (f)           Analysis of product mix

1.    : Netflix is transparent with executive salaries; guides team leader behavior with sayings like What is your North Star and Make decisions with context not control; and urges teams to be highly aligned, loosely coupled. What do these viewpoints mean to you, and what type of corporate culture do you think they would promote?

What is self-assembly in nanofabrication?

1.       : How might organizations strike a balance between respecting and meeting the needs of a diverse workforce and shaping a well-focused high-performance corporate culture based on shared values?

1.       : A survey of teachers found that two of the most important rewards were the belief that their work was important and a feeling of accomplishment. According to Maslow’s hierarchy of needs theory, what needs do these rewards meet?

Last year, Cougar Corp. (CC) reported a net operating loss of $25,000. In the current year, CC expected its current-year tax liability to be $260,000, so it made four equal estimated tax payments of $65,000 each. Cougar closed its books at the end of each quarter.  The following schedule reports CC’s taxable income at the end of each quarter:         Quarter-End Cumulative taxable income First $300,000 Second $700,000 Third $1,000,000 Fourth $1,500,000   CC’s current year tax liability on $1,500,000 of taxable income is $315,000.  Does CC owe underpayment penalties on its estimated tax payments?  If so, for which quarters does it owe the penalty?

Businesses valued at less than $50 million or so rarely go public. Explain the limitations to such businesses if they did go public. (LO3)

What was the purpose of the Securities Act of 1933? What was the purpose of the Securities Exchange Act of 1934? Do these laws prevent investors from making poor investment decisions? Explain. (LO2)

What are the general rules for measuring and recognizing gain or loss by a debt extinguishment with modification?

Explain the primary use of funds by commercial banks versus savings institutions. (LO3)

Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loaned him $20,000 at the beginning of the year at a simple interest rate of 1 percent. Wally would have paid interest of $2,400 this year if the interest rate on the loan had been set at the prevailing federal interest rate.

A 20-in-long sheet-metal workpiece is stretched in a stretch forming operation to the dimensions shown in Figure P20.31. The thickness of the beginning stock is 3/16 in and the width is 8.5 in. The metal has a flow curve defined by a strength coefficient of 75,000 lb/in2 and a strain hardening exponent of 0.20. The yield strength of the material is 30,000 lb/in2 . (a) Find the stretching force F required near the beginning of the operation when yielding first occurs. Determine (b) true strain experienced by the metal, (c) stretching force F, and (d) die force Fdie at the very end when the part is formed as indicated in Figure P20.31(b).

Identify the two basic methods of making electrical connections.

Instructions Complete the following statements by filling in the blanks. (a) In a period in which a taxable temporary difference reverses, the reversal will cause taxable income to be _______ (less than, greater than) pretax financial income. (b) If a $76,000 balance in Deferred Tax Asset was computed by use of a 40% rate, the underlying cumulative temporary difference amounts to $_______. (c) Deferred taxes ________ (are, are not) recorded to account for permanent differences. (d) If a taxable temporary difference originates in 2014, it will cause taxable income for 2014 to be ________ (less than, greater than) pretax financial income for 2014. (e) If total tax expense is $50,000 and deferred tax expense is $65,000, then the current portion of the expense computation is referred to as current tax _______ (expense, benefit) of $_______. (f) If a corporation’s tax return shows taxable income of $100,000 for Year 2 and a tax rate of 40%, how much will appear on the December 31, Year 2, balance sheet for “Income taxes payable” if the company has made estimated tax payments of $36,500 for Year 2? $________. (g) An increase in the Deferred Tax Liability account on the balance sheet is recorded by a _______ (debit, credit) to the Income Tax Expense account. (h) An income statement that reports current tax expense of $82,000 and deferred tax benefit of $23,000 will report total income tax expense of $________. (i) A valuation account is needed whenever it is judged to be _______ that a portion of a deferred tax asset _______ (will be, will not be) realized. (j) If the tax return shows total taxes due for the period of $75,000 but the income statement shows total income tax expense of $55,000, the difference of $20,000 is referred to as deferred tax _______ (expense, benefit).

In 2014, Wild Corporation reported a net loss of $70,000. Wild’s only net income adjustments were depreciation expense $81,000, and increase in accounts receivable $8,100. Compute Wild’s net cash provided (used) by operating activities.