Question & Answer

Assume that countries A and B are of similar size, that they have similar economies, and that the government debt levels of both countries are within reasonable limits. Assume that the regulations in country A require complete disclosure of financial reporting by issuers of debt in that country, whereas regulations in country B do not require much disclosure of financial reporting. Explain why the government of country A is able to issue debt at a lower cost than the government of country B. (LO3)

Solve Problem 24.26 only using maximum production rate as the objective rather than minimum piece cost. Use of a spreadsheet calculator is recommended

What is continuity testing, and when is it performed in the PCB fabrication sequence?

The yield strength of a certain metal = 50,000 lb/in2 and its modulus of elasticity = 22 x 106 lb/in2. It is to be used for the outer ring of a press-fit assembly with a mating shaft made of the same metal. The nominal inside diameter of the ring is 1.000 in and its outside diameter = 2.500 in. Using a safety factor = 2.0, determine the maximum interference that should be used with this assembly.

What is the distinction between plastic sheet and film?

Sally Medavoy will invest $8,000 a year for 20 years in a fund that will earn 12% annual interest. If the first payment into the fund occurs today, what amount will be in the fund in 20 years? If the first payment occurs at year-end, what amount will be in the fund in 20 years?

Describe spinning and laddering in the IPO market. How do you think these actions influence the price of a newly issued stock? Who is adversely affected as a result of these actions? (LO3)

Why must an S corporation report separately stated items to its shareholders? How is the character of a separately stated item determined?  How does the S corporation report this information to each shareholder?

1.              What other strategies might Amara adopt to work with the oil company men as an active member of the team? What are the pros and cons of each strategy?

What are the basic requirements to exclude the gain on the sale of a personal residence?

Describe the differences between the three types of audits in terms of their scope and taxpayer type.

Jack, who files married filing separately, has AGI of $45,000 and paid the following taxes this year. Calculate how much Jack can deduct for taxes as an itemized deduction this year.

A prototype of a tube with a square cross section is to be fabricated using stereolithography. The outside dimension of the square = 100 mm and the inside dimension = 90 mm (wall thickness = 5 mm except at corners). The height of the tube (z-direction) = 80 mm. Layer thickness = 0.10 mm. The diameter of the laser beam (“spot size”) = 0.25 mm, and the beam is moved across the surface of the photopolymer at a velocity of 500 mm/s. Compute an estimate for the time required to build the part, if 10 s are lost each layer to lower the height of the platform that holds the part. Neglect the time for postcuring.

Explain why participants in the stock market monitor the VIX. What does a decline in VIX imply about a change in expected volatility by market participants? (LO4)

What are some of the reasons why plastic shaping processes are important?

Assume that a firm discharges waste into a river. As a result, the marginal social costs (MSC) are greater than the firm’s marginal (private) costs (MC). The following table shows how MC, MSC, AR and MR vary with output. 1 2 3 4 5 6 7 8 MC 23 21 23 25 27 30 35 42 MSC 35 34 38 42 46 52 60 72 TR 60 102 138 168 195 219 238 252 AR 60 51 46 42 39 36.5 34 31.5 MR 60 42 36 30 27 24 19 14 (a)  How much will the firm produce if it seeks to maximise profits? (b)  What is the socially efficient level of output (assuming no externalities on the demand side)? (c)  How much is the marginal external cost at this level of output? (d)  What size tax would be necessary for the firm to reduce its output to the socially efficient level? (e)  Why is the tax less than the marginal externality? (f)   Why might it be equitable to impose a lump-sum tax on this firm? (g)  Why will a lump-sum tax not affect the firm’s output (assuming that in the long-run the firm can still make at least normal profit)?

The U.S. government intervened to resolve problems in the mortgage markets during the credit crisis. Summarize the advantages and disadvantages of the government intervention during the credit crisis. Should the government intervene when mortgage market conditions are very weak? (LO5)

Penny, a full-time biochemist, loves stock car racing. To feed her passion, she bought a used dirt-track car and has started entering some local dirt-track races. The prize money is pretty small ($1,000 for the winner), but she really is not in it for the money. This, Penny reported the following income and expenses from her nights at the track:

Hanson Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2014, the following balances related to this plan. Plan assets (market-related value) $520,000 Projected benefi t obligation 700,000 Pension asset/liability 180,000 Cr. Prior service cost 81,000 Net gain or loss (debit) 91,000 As a result of the operation of the plan during 2014, the actuary provided the following additional data for 2014. Service cost $108,000 Settlement rate, 9%; expected return rate, 10% Actual return on plan assets 48,000 Amortization of prior service cost 25,000 Contributions 133,000 Benefi ts paid retirees 85,000 Average remaining service life of active employees 10 years Instructions Using the preceding data, compute pension expense for Hanson Corp. for the year 2014 by preparing a pension worksheet that shows the journal entry for pension expense. Use the market-related asset value to compute the expected return and for corridor amortization.

Why is the orthogonal cutting model useful in the analysis of metal machining?

Walkin Inc. is considering the write-down of its long-term plant because of a lack of profitability. Explain to the management of Walkin how to determine whether a write-down is permitted.

Answer the following multiple-choice questions. 1. GAAP stands for: (a) governmental auditing and accounting practices. (b) generally accepted attest principles. (c) government audit and attest policies. (d) generally accepted accounting principles. 2. Accounting standard-setters use the following process in establishing accounting standards: (a) Research, exposure draft, discussion paper, standard. (b) Discussion paper, research, exposure draft, standard. (c) Research, preliminary views, discussion paper, standard. (d) Research, discussion paper, exposure draft, standard. 3. GAAP is comprised of: (a) FASB standards, interpretations, and concepts statements. (b) FASB financial standards. (c) FASB standards, interpretations, EITF consensuses, and accounting rules issued by FASB predecessor organizations. (d) any accounting guidance included in the FASB Codification. 4. The authoritative status of the conceptual framework is as follows. (a) It is used when there is no standard or interpretation related to the reporting issues under consideration. (b) It is not as authoritative as a standard but takes precedence over any interpretation related to the reporting issue. (c) It takes precedence over all other authoritative literature. (d) It has no authoritative status. 5. The objective of financial reporting places most emphasis on: (a) reporting to capital providers. (b) reporting on stewardship. (c) providing specific guidance related to specific needs. (d) providing information to individuals who are experts in the field. 6. General-purpose financial statements are prepared primarily for: (a) internal users. (b) external users. (c) auditors. (d) government regulators. 7. Economic consequences of accounting standard-setting means: (a) standard-setters must give first priority to ensuring that companies do not suffer any adverse effect as a result of a new standard. (b) standard-setters must ensure that no new costs are incurred when a new standard is issued. (c) the objective of financial reporting should be politically motivated to ensure acceptance by the general public. (d) accounting standards can have detrimental impacts on the wealth levels of the providers of financial information. 8. The expectations gap is: (a) what financial information management provides and what users want. (b) what the public thinks accountants should do and what accountants think they can do. (c) what the governmental agencies want from standard-setting and what the standard-setters provide. (d) what the users of financial statements want from the government and what is provided.

Determine the bending force required in Problem 20.11 if the bend is to be performed in a V-die with a die opening width dimension = 1.25 in. The material has a tensile strength = 70,000 lb/in2 .

True or False. For purposes of determining head of household filing status, the taxpayer’s mother or father is considered to be a qualifying person of the taxpayer (even if the mother or father does not qualify as the taxpayer’s dependent) as long as the taxpayer pays more than half the costs of maintaining the household of the mother or father. Explain.

1.    : Why do some organizations seem to have a new CEO every two or three years, whereas others have top leaders who stay with the company for many years (e.g., Warren Buffett’s 50 years at Berkshire Hathaway)? What factors about the manager or about the company might account for this difference?