Question & Answer

Which of the above are examples of economies of scale?

A 3/8-24 UNF nut and bolt (3/8 in nominal diameter, 24 threads/in) are inserted through a hole in two stacked steel plates. They are tightened so the plates are clamped together with a force of 1000 lb. The torque coefficient is 0.20. (a) What is the torque required to tighten them? (b) What is the resulting stress in the bolt?

On January 1, 2014, Pennington Corporation purchased 30% of the common shares of Edwards Company for $180,000. During the year, Edwards earned net income of $80,000 and paid dividends of $20,000. Instructions Prepare the entries for Pennington to record the purchase and any additional entries related to this investment in Edwards Company in 2014.

According to the video on sheet-metal bending, what are the principal terms used to describe bending on a press brake?

What are the advantages of using restricted stock to compensate employees?

Condensed financial data of Pat Metheny Company for 2014 and 2013 are presented below. PAT METHENY COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2014 AND 2013 2014 2013 Cash $1,800 $1,150 Receivables 1,750 1,300 Inventory 1,600 1,900 Plant assets 1,900 1,700 Accumulated depreciation (1,200) (1,170) Long-term investments (held-to-maturity) 1,300 1,420 $7,150 $6,300 Accounts payable $1,200 $ 900 Accrued liabilities 200 250 Bonds payable 1,400 1,550 Capital stock 1,900 1,700 Retained earnings 2,450 1,900 $7,150 $6,300 PAT METHENY COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Sales revenue $6,900 Cost of goods sold 4,700 Gross margin 2,200 Selling and administrative expense 930 Income from operations 1,270 Other revenues and gains Gain on sale of investments 80 Income before tax 1,350 Income tax expense 540 Net income 810 Cash dividends 260 Income retained in business $ 550 Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2014. Instructions Prepare a statement of cash flows using the indirect method.

Moran owns a building he bought during year 0 for $150,000. He sold the building in year 6. During the time he held the building, he depreciated it by $32,000. What are the amount and character of the gain or loss Moran will recognize on the sale in each of the following alternative situations?    a. Moran received $145,000.  b. Moran received $170,000. c. Moran received $110,000.

Springsteen Inc. reported in a recent annual report “Restricted cash for debt redemption.” What section of the balance sheet would report this item?

Explain the dilemma of stock analysts who work for securities firms and assign ratings to large corporations. Why might they prefer not to assign low ratings to weak but large corporations? (LO6)

Luke sold a building and the land on which the building sits to his wholly owned corporation, Studemont Corp., at fair market value. The fair market value of the building was determined to be $325,000; Luke built the building several years ago at a cost of $200,000. Luke had claimed $45,000 of depreciation on the building. The fair market value of the land was determined to be $210,000 at the time of the sale; Luke purchased the land many years ago for $130,000.      a. What are the amount and character of Luke’s recognized gain or loss on the building?  b. What are the amount and character of Luke’s recognized gain or loss on the land?

Montana Matt’s Golf Inc. was formed on July 1, 2013, when Matt Magilke purchased the Old Master Golf Company. Old Master provides video golf instruction at kiosks in shopping malls. Magilke plans to integrate the instructional business into his golf equipment and accessory stores. Magilke paid $770,000 cash for Old Master. At the time, Old Master’s balance sheet reported assets of $650,000 and liabilities of $200,000 (thus owners’ equity was $450,000). The fair value of Old Master’s assets is estimated to be $800,000. Included in the assets is the Old Master trade name with a fair value of $10,000 and a copyright on some instructional books with a fair value of $24,000. The trade name has a remaining life of 5 years and can be renewed at nominal cost indefinitely. The copyright has a remaining life of 40 years. Instructions (a) Prepare the intangible assets section of Montana Matt’s Golf Inc. at December 31, 2013. How much amortization expense is included in Montana Matt’s income for the year ended December 31, 2013? Show all supporting computations. (b) Prepare the journal entry to record amortization expense for 2014. Prepare the intangible assets section of Montana Matt’s Golf Inc. at December 31, 2014. (No impairments are required to be recorded in 2014.) (c) At the end of 2015, Magilke is evaluating the results of the instructional business. Due to fierce competition from online and television (e.g., the Golf Channel), the Old Master reporting unit has been losing money. Its book value is now $500,000. The fair value of the Old Master reporting unit is $420,000. The implied value of goodwill is $90,000. Magilke has collected the following information related to the company’s intangible assets.

There are various types of patterns used in sand casting. What is the difference between a split pattern and a match-plate pattern?

Jennings Inc. reported the following pretax income (loss) and related tax rates during the years 2010 2016. Pretax Income (loss) Tax Rate 2010 $ 40,000 30% 2011 25,000 30% 2012 50,000 30% 2013 80,000 40% 2014 (180,000) 45% 2015 70,000 40% 2016 100,000 35% Pretax financial income (loss) and taxable income (loss) were the same for all years since Jennings began business. The tax rates from 2013–2016 were enacted in 2013. Instructions (a) Prepare the journal entries for the years 2014–2016 to record income taxes payable (refundable), income tax expense (benefit), and the tax effects of the loss carryback and carryforward. Assume that Jennings elects the carryback provision where possible and expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year. (b) Indicate the effect the 2014 entry(ies) has on the December 31, 2014, balance sheet. (c) Prepare the portion of the income statement, starting with “Operating loss before income taxes,” for 2014. (d) Prepare the portion of the income statement, starting with “Income before income taxes,” for 2015.

Bobek Inc. has recently reported steadily increasing income. The company reported income of $20,000 in 2011, $25,000 in 2012, and $30,000 in 2013. A number of market analysts have recommended that investors buy the stock because they expect the steady growth in income to continue. Bobek is approaching the end of its fiscal year in 2014, and it again appears to be a good year. However, it has not yet recorded warranty expense. Based on prior experience, this year’s warranty expense should be around $5,000, but some managers have approached the controller to suggest a larger, more conservative warranty expense should be recorded this year. Income before warranty expense is $43,000. Specifically, by recording a $7,000 warranty accrual this year, Bobek could report an increase in income for this year and still be in a position to cover its warranty costs in future years. Instructions (a) What is earnings management? (b) Assume income before warranty expense is $43,000 for both 2014 and 2015 and that total warranty expense over the 2-year period is $10,000. What is the effect of the proposed accounting in 2014? In 2015? (c) What is the appropriate accounting in this situation?

: Describe the practices of effective virtual teams and how these practices are implemented.

Restin Co. uses the gross method to record sales made on credit. On June 1, 2014, it made sales of $50,000 with terms 3/15, n/45. On June 12, 2014, Restin received full payment for the June 1 sale. Prepare the required journal entries for Restin Co.

Bendetta, a high-tax-rate taxpayer, owns several rental properties and would like to shift some income to her daughter, Jenine. Bendetta instructs her tenants to send their rent checks to Jenine so Jenine can report the rental income. Will this shift the income from Bendetta to Jenine? Why or why not?

What are the desirable properties of a metal that would provide good weldability for resistance welding?

Why do you think it is difficult for investors to assess the financial condition of a financial institution that has purchased a large amount of mortgage-backed securities? (LO5)

Explain how bank regulation can be more effective when there is consolidation of banks and securities firms. (LO2)

What are some aspects of business that require knowledge of taxation?  What are some aspects of personal finance that require knowledge of taxation?

Why is photolithography based on visible light not used in nanotechnology?

What are the three general factors that determine the properties of a composite material?

Identify some of the non-machine tool applications of numerical control.

What is a clean room and explain the classification system by which clean rooms are rated?