Question & Answer

A high-speed steel tool is used to turn a steel workpart that is 300 mm long and 80 mm in diameter. The parameters in the Taylor equation are: n = 0.13 and C = 75 (m/min) for a feed of 0.4 mm/rev. The operator and machine tool rate = $30.00/hr, and the tooling cost per cutting edge = $4.00. It takes 2.0 min to load and unload the workpart and 3.50 min to change tools. Determine (a) cutting speed for maximum production rate, (b) tool life in min of cutting, and (c) cycle time and cost per unit of product.

A face milling operation is to be performed on a cast iron part to finish the surface to 36 µ-in. The cutter uses four inserts and its diameter is 3.0 in. The cutter rotates at 475 rev/min. To obtain the best possible finish, a type of carbide insert with 4/64 in nose radius is to be used. Determine the required feed rate (in/min) that will achieve the 36 µ-in finish.

Explain how the future value of an ordinary annuity interest table is converted to the future value of an annuity due interest table.

Should a remuneration plan include a cash bonus or share options?      Under which circumstances would either be appropriate?             (LO3 and 4)

After the presentation of your report on the examination of the financial statements to the board of directors of Piper Publishing Company, one of the new directors expresses surprise that the income statement assumes that an equal proportion of the revenue is recognized with the publication of every issue of the company’s magazine. She feels that the “crucial event” in the process of earning revenue in the magazine business is the cash sale of the subscription. She says that she does not understand why most of the revenue cannot be “recognized” in the period of the cash sale. Instructions Discuss the propriety of timing the recognition of revenue in Piper Publishing Company’s accounts with: (a) The cash sale of the magazine subscription. (b) The publication of the magazine every month. (c) Both events, by recognizing a portion of the revenue with the cash sale of the magazine subscription and a portion of the revenue with the publication of the magazine every month.

Presented below are three revenue recognition situations. (a) Grupo sells goods to MTN for $1,000,000, payment due at delivery. (b) Grupo sells goods on account to Grifols for $800,000, payment due in 30 days. (c) Grupo sells goods to Magnus for $500,000, payment due in two installments: the first installment payable in 6 months and the second payment due 3 months later. Instructions Indicate how each of these transactions is reported.

Presented below are various account balances of K.D. Lang Inc. (a) Unamortized premium on bonds payable, of which $3,000 will be amortized during the next year. (b) Bank loans payable of a winery, due March 10, 2018. (The product requires aging for 5 years before sale.) (c) Serial bonds payable, $1,000,000, of which $200,000 are due each July 31. (d) Amounts withheld from employees’ wages for income taxes. (e) Notes payable due January 15, 2017. (f) Credit balances in customers’ accounts arising from returns and allowances after collection in full of account. (g) Bonds payable of $2,000,000 maturing June 30, 2016. (h) Overdraft of $1,000 in a bank account. (No other balances are carried at this bank.) (i) Deposits made by customers who have ordered goods. Instructions Indicate whether each of the items above should be classified on December 31, 2014, as a current liability, a long-term liability, or under some other classification. Consider each one independently from all others; that is, do not assume that all of them relate to one particular business. If the classification of some of the items is doubtful, explain why in each case.

Locate the IRS Web site at www.irs.gov/ .  For every $100 the IRS collected, how much was spent on the IRS collection efforts?  What tax system criterion does this information help you to evaluate with respect to the current U.S. tax system?

Molto Stancha Corporation had zero earnings this fiscal year; in fact, they lost money. Must they file a tax return?

The strength coefficient and strain-hardening exponent of a certain test metal are 40,000 lb/in2 and 0.19, respectively. A cylindrical specimen of the metal with starting diameter = 2.5 in and length = 3.0 in is compressed to a length of 1.5 in. Determine the flow stress at this compressed length and the average flow stress that the metal has experienced during deformation

Explain how a life insurance company’s asset portfolio may be affected by inflation. (LO3)

The following note appears in the “Summary of Significant Accounting Policies” section of the Annual Report of Westinghouse Electric Corporation. Note 1 (in part): Revenue Recognition. Sales are primarily recorded as products are shipped and services are rendered. The percentage-of-completion method of accounting is used for nuclear steam supply system orders with delivery schedules generally in excess of five years and for certain construction projects where this method of accounting is consistent with industry practice. WFSI revenues are generally recognized on the accrual method. When accounts become delinquent for more than two payment periods, usually 60 days, income is recognized only as payments are received. Such delinquent accounts for which no payments are received in the current month, and other accounts on which income is not being recognized because the receipt of either principal or interest is questionable, are classified as nonearning receivables. Instructions (a) Identify the revenue recognition methods used by Westinghouse Electric as discussed in its note on significant accounting policies. (b) Under what conditions are the revenue recognition methods identified in the first paragraph of Westinghouse’s note above acceptable? (c) From the information provided in the second paragraph of Westinghouse’s note, identify the type of operation being described and defend the acceptability of the revenue recognition method.

In 1974 the UK economy shrank by 2.5 per cent before shrinking by a further 1.5 per cent in 1975. However, GDP measured in the prices of the time rose by 13 per cent in 1974 and by 24 per cent in 1975. What explains these apparently contradictory results?

Assume the bonds in IFRS14-3 were issued for $644,636 and the effective-interest rate is 6%. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. (Round to the nearest dollar.)

Sabonis Cosmetics Co. purchased machinery on December 31, 2013, paying $50,000 down and agreeing to pay the balance in four equal installments of $40,000 payable each December 31. An assumed interest of 8% is implicit in the purchase price. Instructions Prepare the journal entries that would be recorded for the purchase and for the payments and interest on the following dates. (Round answers to the nearest cent.) (a) December 31, 2013. (d) December 31, 2016. (b) December 31, 2014. (e) December 31, 2017. (c) December 31, 2015.

What are common book-tax differences relating to corporate charitable contributions?  Are these differences favorable or unfavorable?

What is the most commonly plated substrate metal?

In a turning operation on plain carbon steel whose Brinell hardness = 275 HB, the cutting speed is set at 200 m/min and depth of cut = 6.0 mm. The lathe motor is rated at 25 kW, and its mechanical efficiency = 90%. Using the appropriate specific energy value from Table 21.2, determine the maximum feed that can be set for this operation. Use of a spreadsheet calculator is recommended for the iterative calculations required in this problem.

Why are parts sometimes fixed to the conveyor in a continuous transfer system in manual assembly?

Operating profits and losses for the seven industry segments of Foley Corporation are: Penley $ 90 Cheng $ (20) Konami (40) Takuhi 34 KSC 25 Molina 150 Red Moon 50 Based only on the operating profit (loss) test, which industry segments are reportable?

Presented below is selected information related to Martin Burke Inc. at year-end. All these accounts have debit balances. Cable television franchises Film contract rights Music copyrights Customer lists Research and development costs Prepaid expenses Goodwill Covenants not to compete Cash Brand names Discount on notes payable Notes receivable Accounts receivable Investments in affi liated companies Property, plant, and equipment Organization costs Internet domain name Land Instructions Identify which items should be classified as an intangible asset. For those items not classified as an intangible asset, indicate where they would be reported in the financial statements.

Explain relevant information in a decision-making context.

On January 1, 2014, Aumont Company sold 12% bonds having a maturity value of $500,000 for $537,907.37, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2014, and mature January 1, 2019, with interest payable December 31 of each year. Aumont Company allocates interest and unamortized discount or premium on the effective-interest basis. Instructions (Round answers to the nearest cent.) (a) Prepare the journal entry at the date of the bond issuance. (b) Prepare a schedule of interest expense and bond amortization for 2014–2016. (c) Prepare the journal entry to record the interest payment and the amortization for 2014. (d) Prepare the journal entry to record the interest payment and the amortization for 2016.

Solve Problem 21.27 but with the following changes: cutting speed = 1.3 m/s, feed = 0.75 mm/rev, and depth = 4.0 mm. Note that although the power used in this operation is only about 10% greater than in the previous problem, the metal removal rate is about 40% greater.

What are the differences between bulk deformation processes and sheet metal processes?