Question & Answer

Explain the rationale for the ceiling and floor in the lowerof- cost-or-market method of valuing inventories.

Assume that Wal-Mart Stores, Inc. has decided to surface and maintain for 10 years a vacant lot next to one of its stores to serve as a parking lot for customers. Management is considering the following bids involving two different qualities of surfacing for a parking area of 12,000 square yards. Bid A: A surface that costs $5.75 per square yard to install. This surface will have to be replaced at the end of 5 years. The annual maintenance cost on this surface is estimated at 25 cents per square yard for each year except the last year of its service. The replacement surface will be similar to the initial surface. Bid B: A surface that costs $10.50 per square yard to install. This surface has a probable useful life of 10 years and will require annual maintenance in each year except the last year, at an estimated cost of 9 cents per square yard. Instructions Prepare computations showing which bid should be accepted by Wal-Mart. You may assume that the cost of capital is 9%, that the annual maintenance expenditures are incurred at the end of each year, and that prices are not expected to change during the next 10 years.

Define the difference between elastic and plastic deformation in terms of the effect on the crystal lattice structure

1.      : Ignore the test. Cheryl has proved herself via work experience and deserves the job.

Assume that in an annual audit of Harlowe Inc. at December 31, 2014, you find the following transactions near the closing date. 1. A special machine, fabricated to order for a customer, was finished and specifically segregated in the back part of the shipping room on December 31, 2014. The customer was billed on that date and the machine excluded from inventory although it was shipped on January 4, 2015. 2. Merchandise costing $2,800 was received on January 3, 2015, and the related purchase invoice recorded January 5. The invoice showed the shipment was made on December 29, 2014, f.o.b. destination. 3. A packing case containing a product costing $3,400 was standing in the shipping room when the physical inventory was taken. It was not included in the inventory because it was marked “Hold for shipping instructions.” Your investigation revealed that the customer’s order was dated December 18, 2014, but that the case was shipped and the customer billed on January 10, 2015. The product was a stock item of your client. 4. Merchandise received on January 6, 2015, costing $680 was entered in the purchase journal on January 7, 2015. The invoice showed shipment was made f.o.b. supplier’s warehouse on December 31, 2014. Because it was not on hand at December 31, it was not included in inventory. 5. Merchandise costing $720 was received on December 28, 2014, and the invoice was not recorded. You located it in the hands of the purchasing agent; it was marked “on consignment.” Instructions Assuming that each of the amounts is material, state whether the merchandise should be included in theclient’s inventory, and give your reason for your decision on each item.

Ace Company had 200,000 shares of common stock outstanding on December 31, 2015. During the year 2016, the company issued 8,000 shares on May 1 and retired 14,000 shares on October 31. For the year 2016, Ace Company reported net income of $249,690 after a casualty loss of $40,600 (net of tax). Instructions What earnings per share data should be reported at the bottom of its income statement, assuming that the casualty loss is extraordinary?

A wire EDM operation is to be performed on a slab of ¾-in-thick aluminum using a brass wire electrode whose diameter = 0.005 in. It is anticipated that the overcut will be 0.001 in, so that the kerf width will be 0.007 in. Using a discharge current = 7 amps, what is the expected allowable feed rate that can be used in the operation? The melting temperature of aluminum is 1220°F.

Why is the ‘withdrawals multiplier’ strictly speaking a negative figure?

What challenges do LLCs face when deciding whether to treat their members’ shares of ordinary business income as self-employment income?

If a person meets the qualifying relative tests for a taxpayer, is that person automatically considered to be a dependent of the taxpayer? Explain.

Explain the relative risk of the various types of securities in which a money market fund may invest. (LO3)

Data for Amsterdam Company are presented in BE8-5. Compute the April 30 inventory and the April cost of goods sold using the LIFO method.

Given the Keynesian explanation for the persistence of high levels of unemployment after the early 1980s and early 1990s recessions, what policies would you advocate to reduce unemployment in the years following a recession?

Explain how the Sarbanes-Oxley Act improved the transparency of banks. Why might the act have a negative impact on some banks? (LO2)

reported the following information regarding 2013–2014 inventory.     Instructions (a) Why might Robots, Inc., use two different methods for valuing inventory? (b) Comment on why Robots, Inc., might disclose how its LIFO inventories would be valued under FIFO. (c) Why does the LIFO liquidation reduce operating costs? (d) Comment on whether Robots, Inc. would report more or less income if it had been on a FIFO basis for all its inventory.

1. What effect did these developments have on (a) the Phillips curve; (b) the aggregate supply curve? 2. What policy implications follow from these arguments?

What is the rule of mixtures?

Clyde is a cash method taxpayer who reports on a calendar-year basis.  This year Paylate Corporation has decided to pay Clyde a year-end bonus of $1,000.  Determine the amount Clyde should include in his gross income this year under the following circumstances: a.       Paylate Corporation wrote the check and put it in his office mail slot on December 30 of this year, but Clyde did not bother to stop by the office to pick it up until after year-end. b.       Paylate Corporation mistakenly wrote the check for $100.  Clyde received the remaining $900 after year-end. c.       Paylate Corporation mailed the check to Clyde before the end of the year, (and it was delivered before year-end). Although Clyde expected the bonus payment, he decided not to collect his mail until after year-end. d.       Clyde picked up the check in December, but the check could not be cashed immediately because it was postdated January 10.

What are some of the limitations of adhesive bonding?

Consider a period in which stock prices are very high, such that investors begin to think that stocks are overvalued and their valuations are very uncertain. If investors decide to move their money into much safer investments, how do you think this would affect general interest rate levels? In your answer, use the loanable funds framework to explain how the supply or demand for loanable funds would be affected by the investor actions, and how this would affect general interest rate. (LO1)

If we were trying to get a ‘true’ measure of national production, which of the following activities would you include: (a) washing-up; (b) planting flowers in the garden; (c) playing an educational game with children in the family; (d) playing any game with children in the family; (e) cooking your own supper; (f) cooking the supper for the whole family; (g) reading a novel for pleasure; (h) reading a textbook as part of studying; (i) studying holiday brochures?       Is there a measurement problem if you get pleasure from the do-it-yourself activity itself as well as from its outcome?

1.      : Do the clinical trials in Albania. You’ll be able to bring the drug to market faster and cheaper, which will be good for BB Biotech’s employees and investors and good for the millions of people who suffer from anxiety attacks.

Based on equations in the text, derive an equation to compute the average volume per chip formed in the grinding process

Chandra was the sole shareholder of Pet Emporium, which was originally formed as an S corporation.  When Pet Emporium terminated its S election on August 31, 2023, Chandra had a stock basis and an at-risk amount of $0.  Chandra also had a suspended loss from Pet Emporium of $9,000. What amount of the suspended loss is Chandra allowed to deduct, and what is her basis in her Pet Emporium stock at the end of the post-termination transition period under the following alternative scenarios (assume Pet Emporium files for an extension to file its tax returns)?   a. Chandra makes capital contributions of $7,000 on August 30, 2024, and $4,000 on September 14, 2024.

Briefly describe some of the similarities and differences between GAAP and IFRS with respect to income tax accounting.