Question & Answer

What is the relationship between the coefficient of friction and the friction angle in the orthogonal cutting model?

On January 1, 2014, Lennon Industries had stock outstanding as follows. 6% Cumulative preferred stock, $100 par value, issued and outstanding 10,000 shares $1,000,000 Common stock, $10 par value, issued and outstanding 200,000 shares 2,000,000 To acquire the net assets of three smaller companies, Lennon authorized the issuance of an additional 160,000 common shares. The acquisitions took place as shown below. On May 14, 2014, Lennon realized a $90,000 (before taxes) insurance gain on the expropriation of investments originally purchased in 2000. On December 31, 2014, Lennon recorded net income of $300,000 before tax and exclusive of the gain. Instructions Assuming a 50% tax rate, compute the earnings per share data that should appear on the financial statements of Lennon Industries as of December 31, 2014. Assume that the expropriation is extraordinary.

] Brown Thumb Landscaping is a calendar-year, accrual-method taxpayer. In September, Brown Thumb negotiated a $14,000 contract for services it would provide to the city in November of the current year. The contract specifies that Brown Thumb will receive $4,000 in October as a down payment for these services, and it will receive the remaining $10,000 in January of next year.

Suppose you asked your favorite AI query tool “For purposes of §721, what constitutes property?” and the AI tool responded as follows:

Melindainvests $200,000 in a City of Heflin bond that pays 6 percent interest.  Alternatively, Melindacould have invested the $200,000 in a bond recently issued by Surething Inc. that pays 8 percent interest with similar risk and othernontax characteristics to the City of Heflin bond.  Assume Melinda’s marginal tax rate is 25 percent.

What was TALF, and why did the Fed create it? (LO3)

Explain the role of credit rating agencies in facilitating the flow of funds from investors into the mortgage market (through mortgage-backed securities). (LO4)

What is the difference between a notching operation and a seminotching operation?

] Dontae’s employer has offered him the following employment package. What is Dontae’s gross income from his employment?

The balance sheet data of Brown Company at the end of 2014 and 2013 follow. 2014 2013 Cash $ 30,000 $ 35,000 Accounts receivable (net) 55,000 45,000 Inventory 65,000 45,000 Prepaid expenses 15,000 25,000 Equipment 90,000 75,000 Accumulated depreciation—equipment (18,000) (8,000) Land 70,000 40,000 $307,000 $257,000 Accounts payable $ 65,000 $ 52,000 Accrued expenses 15,000 18,000 Notes payable—bank, long-term 202 23,000 Bonds payable 30,000 202 Common stock, $10 par 189,000 159,000 Retained earnings 8,000 5,000 $307,000 $257,000 Land was acquired for $30,000 in exchange for common stock, par $30,000, during the year; all equipment purchased was for cash. Equipment costing $10,000 was sold for $3,000; book value of the equipment was$6,000. Cash dividends of $10,000 were declared and paid during the year. Instructions Compute net cash provided (used) by: (a) Operating activities. (b) Investing activities. (c) Financing activities.

An annual report of Ford Motor Corporation states, “Net income a share is computed based upon the average number of shares of capital stock of all classes outstanding. Additional shares of common stock may be issued or delivered in the future on conversion of outstanding convertible debentures, exercise of outstanding employee stock options, and for payment of defined supplemental compensation. Had such additional shares been outstanding, net income a share would have been reduced by 10¢ in the current year and 3¢ in the previous year. . . . As a result of capital stock transactions by the company during the current year (primarily the purchase of Class A Stock from Ford Foundation), net income a share was increased by 6¢.” What information is provided by this note?

Pam, Sergei, and Mercedes are all one-third partners in the capital and profits of Oak Grove General Partnership. Partnership liabilities are allocated among the partners in accordance with their capital and profits interests. In addition to their normal share of the partnership’s annual income, Pam and Sergei receive annual guaranteed payments of $20,000 each to compensate them for additional services they provide. Oak Grove’s income statement for the current year reflects the following revenues and expenses: Sales revenue $476,700 Dividend income 6,600 §1231 losses (3,800) Cost of goods sold (245,000) Employee wages (92,000) Depreciation expense (31,000) Guaranteed payments (40,000) Miscellaneous expenses (11,500) Overall net income $ 60,000 In addition, Oak Grove owed creditors $90,000 at the beginning of the year and $150,000 at the end, and Pam, Sergei and Mercedes had a tax basis of $50,000 in their interests at the beginning of the year. Also, on December 31 of the current year, Sergei and Mercedes agreed to increase Pam’s capital and profits interest from 1∕3 to 40 percent in exchange for additional services she provided to the partnership. The current liquidation value of the additional capital interest Pam received at the end of the tax year is $40,000. a. What tax basis do the partners have in their partnership interests at the end of the year? b. If, in addition to the expenses listed above, the partnership donated $12,000 to a political campaign, what tax basis do the partners have in their partnership interests at the end of the year assuming the liquidation value of the additional capital interest Pam receives at the end of the year remains at $40,000?

Earnings per share” (EPS) is the most featured, single financial statistic about modern corporations. Daily published quotations of stock prices have recently been expanded to include for many securities a “times earnings” figure that is based on EPS. Stock analysts often focus their discussions on the EPS of the corporations they study. Instructions (a) Explain how dividends or dividend requirements on any class of preferred stock that may be outstanding affect the computation of EPS. (b) One of the technical procedures applicable in EPS computations is the “treasury-stock method.” Briefly describe the circumstances under which it might be appropriate to apply the treasury-stock method. (c) Convertible debentures are considered potentially dilutive common shares. Explain how convertible debentures are handled for purposes of EPS computations.

What are some of the design guidelines for weldments that are fabricated by arc welding?

Aruna, a sole proprietor, wants to sell two assets that she no longer needs for her business. Both assets qualify as §1231 assets. The first is machinery and will generate a $10,000 §1231 loss on the sale. The second is land that will generate a $7,000 §1231 gain on the sale. Aruna’s ordinary marginal tax rate is 32 percent. a. Assuming she sells both assets in December of year 1 (the current year), what effect will the sales have on Aruna’s tax liability? b. Assuming that Aruna sells the land in December of year 1 and the machinery in January of year 2, what effect will the sales have on Aruna’s tax liability for each year? c. Explain why selling the assets in separate years will result in greater tax savings for Aruna.

Define the term fusion weld.

The trial balance before adjustment for Phil Collins Company shows the following balances. Dr. Cr. Accounts Receivable $82,000 Allowance for Doubtful Accounts 2,120 Sales Revenue $430,000 Instructions Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.) 1. To obtain additional cash, Collins factors without recourse $25,000 of accounts receivable with Stills Finance. The finance charge is 10% of the amount factored. 2. To obtain a 1-year loan of $55,000, Collins assigns $65,000 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial. 3. The company wants to maintain the Allowance for Doubtful Accounts at 5% of gross accounts receivable. 4. The company wishes to increase the allowance account by 1½% of net sales.

Why does the law generally require partnerships to adopt a tax year consistent with the year used by the partners?

What are some of the important design functions of IC packaging?

Miley decided to terminate the S corporation election of her solely owned corporation on October 17, 2023 (effective immediately), in preparation for taking it public.  Miley had previously elected S corporation status on January 1, 2022.  At the time of the election, the corporation had an accumulated adjustments account balance of $150,000 and $450,000 of accumulated E&P from prior C corporation years, and Miley had a basis in her S corporation stock of $135,000.  During 2024, Miley’s corporation reported $0 taxable income or loss.  Also, during 2024 the corporation made distributions to Miley of $80,000 and $60,000.  How are these distributions taxed to Miley assuming the following?

How is the market price of land related to its productivity?

What are some of the disadvantages and limitations of brazing?

Compare and contrast the limits on the deduction of interest on home acquisition indebtedness versus home equity loans.  Are these limits consistent with horizontal equity?  Explain.

Solve Problem 20.26 except that the height = 60 mm

Visit your state’s official website and review the information there related to forming and operating business entities in your state. Write a short report explaining the steps for organizing a business in your state and summarizing any tax-related information you found.