Question & Answer

The credit crisis that occurred in 2008–2009 could also be called an equity crisis due to systemic risk. Write a short essay to explain the impact of the credit markets on the equity markets during the crisis.

What are the two basic categories of approaches used in nanofabrication?

Alan Jackson invests $20,000 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 8 years. At the end of the 8 years, Alan withdraws the accumulated amount of money. Instructions (a) Compute the amount Alan would withdraw assuming the investment earns simple interest. (b) Compute the amount Alan would withdraw assuming the investment earns interest compounded annually. (c) Compute the amount Alan would withdraw assuming the investment earns interest compounded semiannually.

Determine the shape factor for each of the extrusion die orifice shapes in Figure P19.32.

Explain the argument that the deductions for charitable contributions and home mortgage interest represent indirect subsidies for these activities.

What are four major sources of funds for banks? Which alternatives does a bank have if it needs temporary funds? What is the most common reason that banks issue bonds? (LO2)

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?

Describe the circumstances in which a taxpayer acquires a home and rents it out and is not allowed to deduct a portion of the interest expense on the loan the taxpayer used to acquire the home.

Ehlo Company is a multiproduct firm. Presented below is information concerning one of its products, the Hawkeye. Date Transaction Quantity Price/Cost 1/1 Beginning inventory 1,000 $12 2/4 Purchase 2,000 18 2/20 Sale 2,500 30 4/2 Purchase 3,000 23 11/4 Sale 2,200 33 Instructions Compute cost of goods sold, assuming Ehlo uses: (a) Periodic system, FIFO cost flow. (d) Perpetual system, LIFO cost flow. (b) Perpetual system, FIFO cost flow. (e) Periodic system, weighted-average cost flow. (c) Periodic system, LIFO cost flow. (f) Perpetual system, moving-average cost flow.

What is the normal procedure for handling the collection of accounts receivable previously written off using the direct write-off method? The allowance method?

Jackson is 18 years old and has a dog-sitting business. Calculate the 2024 standard deduction Jackson will claim under the following independent circumstances. a. Jackson reported $2,000 of earnings from his dog sitting and $300 in interest income from his savings account. Jackson’s parents claim him as a dependent. b. Jackson reported $500 of earnings from his dog sitting and $2,000 in interest income from his savings account. Jackson’s parents claim him as a dependent. c. Jackson reported $8,000 of earnings from his dog sitting and $3,000 in interest income. Jackson’s parents do not claim him as a dependent.

Recently, a government official in Europe stated that the European Central Bank needs to weaken the euro so as to improve the European economy. Write a short essay that explains the logic behind this recommendation, and state whether you believe the strategy would be successful.

1.      Talk to the company’s legal counsel and contact the Strategic and Competitive Intelligence Professionals for guidance. Then, with their opinions and facts to back you up, go to your boss.

Indicate which of the following costs should be expensed when incurred. (a) $13,000 paid to rearrange and reinstall machinery. (b) $200,000 paid for addition to building. (c) $200 paid for tune-up and oil change on delivery truck. (d) $7,000 paid to replace a wooden floor with a concrete floor. (e) $2,000 paid for a major overhaul on a truck, which extends the useful life.

1.      : Recommend to the president that a meeting be arranged with the sales representatives entitled to a bonus and tell them that their checks were going to be delayed until Tacoma’s financial picture clarified. The sales reps would be told that the company had a legal right to delay payment and that it may not be able to pay the bonuses if its financial situation continues to deteriorate.

Cliff’s basis in his Aero Partnership interest is $11,000. Cliff receives a distribution of $22,000 cash from Aero in complete liquidation of his interest. Aero is an equal partnership with the following balance sheet: Assets: Tax Basis FMV Cash $ 22,000 $ 22,000 Investment 8,800 8,800 Land 2,200 35,200    Totals $ 33,000 $ 66,000 Liabilities and capital: Capital- Chris 11,000 - Cliff 11,000 - Cooper 11,000   Totals $ 33,000 a. What are the amount and character of Cliff’s recognized gain or loss? What is the effect on the partnership assets? b. If Aero has a §754 election in place, what is the amount of the special basis adjustment?

The following article appeared in the Wall Street Journal. washington—The Securities and Exchange Commission staff issued guidelines for companies grappling with the problem of dividing up their business into industry segments for their annual reports. An industry segment is defined by the Financial Accounting Standards Board as a part of an enterprise engaged in providing a product or service or a group of related products or services primarily to unaffiliated customers for a profit. Although conceding that the process is a “subjective task” that “to a considerable extent, depends on the judgment of management,” the SEC staff said companies should consider . . . various factors . . . to determine whether products and services should be grouped together or reported as segments. Instructions (a) What does financial reporting for segments of a business enterprise involve? (b) Identify the reasons for requiring financial data to be reported by segments. (c) Identify the possible disadvantages of requiring financial data to be reported by segments. (d) Identify the accounting difficulties inherent in segment reporting.

Hermione must include the value of the nugget in her gross income.  The value of the nugget is realized income because gold is marketable in a nugget form and easily valued.  The authorities (Reg § 1.61-14(a).; Rev. Rul. 61, 1953-1 C.B. 17) refer to the finder of a “treasure trove” and hold that there is gross income (to the extent of the ascertainable value in U.S. currency) in the tax year in which the property is reduced to the taxpayer’s undisputed possession.

If a corporation has been an S corporation since inception, describe how its operating distributions to its shareholders are taxed to the shareholders.

Jonah has the choice of paying Rita $10,000 today or $40,000 in ten years.  Assume Jonah can earn a 12 percent after-tax rate of return.  Which should he choose?

Amy Monroe wants to create a fund today that will enable her to withdraw $25,000 per year for 8 years, with the first withdrawal to take place 5 years from today. If the fund earns 8% interest, how much must Amy invest today?

Why can’t large, publicly traded corporations be treated as S corporations?

Identify some of the sources for tax professional standards.  What are the potential ramifications of failing to comply with these standards?

How would you evaluate (a) the external effects of building a reservoir in an area of outstanding natural beauty; (b) the external effects of acid rain pollution from a power station?

It is desired to compare the cycle times required to grind a particular workpiece using traditional surface grinding and using creep feed grinding. The workpiece is 200 mm long, 30 mm wide, and 75 mm thick. To make a fair comparison, the grinding wheel in both cases is 250 mm in diameter, 35 mm in width, and rotates at 1500 rev/min. It is desired to remove 25 mm of material from the surface. When traditional grinding is used, the infeed is set at 0.025 mm, and the wheel traverses twice (forward and back) across the work surface during each pass before resetting the infeed. There is no crossfeed since the wheel width is greater than the work width. Each pass is made at a workspeed of 12 m/min, but the wheel overshoots the part on both sides. With acceleration and deceleration, the wheel is engaged in the work for 50% of the time on each pass. When creep feed grinding is used, the depth is increased by 1000 and the forward feed is decreased by 1000. How long will it take to complete the grinding operation (a) with traditional grinding and (b) with creep feed grinding?