Question & Answer

Why are specific energy values so much higher in grinding than in traditional machining processes such as milling?

Identifiable assets for the seven industry segments of Foley Corporation are: Penley $500 Cheng $200 Konami 550 Takuhi 150 KSC 250 Molina 475 Red Moon 400 Based only on the identifiable assets test, which industry segments are reportable?

McNabb Company spent $190,000 developing a new process, $45,000 in legal fees to obtain a patent, and $91,000 to market the process that was patented, all in the year 2014. How should these costs be accounted for in 2014?

There are 16 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. Percentage score on the quiz is based on the total number of correct answers. 17.1 The following equipment is used for crushing and grinding of minerals in the preparation of traditional ceramics raw materials. Which of the pieces listed is used for grinding (two correct answers): (a) ball mill, (b) hammer mill, (c) jaw crusher, (d) roll crusher, and (e) roller mill? 17.2 Which one of the following compounds becomes a plastic and formable material when mixed with suitable proportions of water: (a) aluminum oxide, (b) hydrogen oxide, (c) hydrous aluminum silicate, or (d) silicon dioxide? 17.3 At which one of the following water contents does clay become a suitably plastic material for the traditional ceramics plastic forming processes: (a) 5%, (b) 10%, (c) 20%, or (d) 40%? 17.4 Which of the following processes are not plastic forming methods used in the shaping of traditional ceramics (three correct answers): (a) dry pressing, (b) extrusion, (c) jangling, (d) jiggering, (e) jolleying, (f) slip casting, and (g) spinning? 17.5 The term green piece in ceramics refers to a part that has been shaped but not yet fired: (a) true or (b) false? 17.6 In the final product made of a polycrystalline new ceramic material, strength increases with grain size: (a) true or (b) false? 17.7 Which one of the following processes for the new ceramic materials accomplishes shaping and sintering simultaneously: (a) doctor-blade process, (b) freeze drying, (c) hot pressing, (d) injection molding, or (e) isostatic pressing? 17.8 Which of the following are the purposes of finishing operations used for parts made of the new ceramics (two best answers): (a) apply a surface coating, (b) electroplate the surface, (c) improve surface finish, (d) increase dimensional accuracy, and (e) work harden the surface? 17.9 Which of the following terms describes what a cemented carbide is (one best answer): (a) ceramic, (b) cermet, (c) composite, (d) metal, (e) new ceramic, or (f) traditional ceramic? 17.10 Which of the following geometric features should be avoided if possible in the design of structural components made of new ceramics (three best answers): (a) deep holes, (b) rounded inside corners, (c) rounded outside corners, (d) sharp edges, (e) thick sections, and (f) threads?

Why is it desirable to use a worksheet when preparing a statement of cash flows? Is a worksheet required to prepare a statement of cash flows?

Included in Outkast Company’s December 31, 2014, trial balance are the following accounts: Prepaid Rent $5,200; Debt Investments (trading) $56,000; Unearned Fees $17,000; Land (held for investment) $39,000; Notes Receivable (long-term) $42,000. Prepare the long-term investments section of the balance sheet.

Do all investment projects generate significant spillovers

Data for the Vince Gill Company are presented in E23-3. Instructions Prepare the operating activities section of the statement of cash flows using the direct method.

In this model, where the country is a price taker and faces a horizontal supply curve (the small country assumption), is any of the cost of the tariff borne by the overseas suppliers?

Presented below are three models for setting GAAP. 1. The purely political approach, where national legislative action decrees GAAP. 2. The private, professional approach, where GAAP is set and enforced by private professional actions only. 3. The public/private mixed approach, where GAAP is basically set by private-sector bodies that behave as though they were public agencies and whose standards to a great extent are enforced through governmental agencies. Instructions (a) Which of these three models best describes standard-setting in the United States? Comment on your answer. (b) Why do companies, financial analysts, labor unions, industry trade associations, and others take such an active interest in standard-setting? (c) Cite an example of a group other than the FASB that attempts to establish accounting standards. Speculate as to why another group might wish to set its own standards.

Deere and Company reported inventory in its balance sheet as follows. Inventories $1,999,100,000 What additional disclosures might be necessary to present athe inventory fairly?

Ferreri Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2014. January 1, December 31, 2014 2014 Projected benefi t obligation $1,500,000 $1,527,000 Market-related and fair value of plan assets 800,000 1,130,000 Accumulated benefi t obligation 1,600,000 1,720,000 Accumulated OCI (G/L)—Net gain –0– (200,000) The service cost component of pension expense for employee services rendered in the current year amounted to $77,000 and the amortization of prior service cost was $120,000. The company’s actual funding (contributions) of the plan in 2014 amounted to $250,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,200,000 on January 1, 2014. Assume no benefits paid in 2014. Instructions (a) Determine the amounts of the components of pension expense that should be recognized by the company in 2014. (b) Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2014. (c) Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Ferreri Company for the year 2014.

Aero Inc. had the following balance sheet at December 31, 2013.   During 2014, the following occurred. 1. Aero liquidated its available-for-sale investment portfolio at a loss of $5,000. 2. A tract of land was purchased for $38,000. 3. An additional $30,000 in common stock was issued at par. 4. Dividends totaling $10,000 were declared and paid to stockholders. 5. Net income for 2014 was $35,000, including $12,000 in depreciation expense. 6. Land was purchased through the issuance of $30,000 in additional bonds. 7. At December 31, 2014, Cash was $70,200, Accounts Receivable was $42,000, and Accounts Payable was $40,000. Instructions (a) Prepare a statement of cash flows for the year 2014 for Aero. (b) Prepare the unclassified balance sheet as it would appear at December 31, 2014. (c) Compute Aero’s free cash flow and current cash debt coverage for 2014. (d) Use the analysis of Aero to illustrate how information in the balance sheet and statement of cash flows helps the user of the financial statements.

Describe two specific accounting methods that are treated as initiated by the taxpayer without any need for consent of the IRS when the business qualifies under the gross receipts test.

Assume the same situation as in Question 11, except that the four equal amounts are deposited at the beginning of the period rather than at the end. In this case, what amount must be deposited at the beginning of each period  (Round to two decimals.)

The ledger of Duggan Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. An analysis of the accounts shows the following. 1. The equipment depreciates $250 per month. 2. One-third of the unearned rent was recognized as revenue during the quarter. 3. Interest of $500 is accrued on the notes payable. 4. Supplies on hand total $850. 5. Insurance expires at the rate of $300 per month. WATTEAU CO. TRIAL BALANCE JUNE 30, 2014 Debit Credit Cash $ 2,870 Accounts Receivable $ 3,231 Supplies 800 Equipment 3,800 Accounts Payable 2,666 Unearned Service Revenue 1,200 Common Stock 6,000 Retained Earnings 3,000 Service Revenue 2,380 Salaries and Wages Expense 3,400 Offi ce Expense 940 $13,371 $16,916 Debit Credit Prepaid Insurance $ 3,600 Supplies 2,800 Equipment 25,000 Accumulated Depreciation—Equipment $ 8,400 Notes Payable 20,000 Unearned Rent Revenue 9,300 Rent Revenue 60,000 Interest Expense –0– Salaries and Wages Expense 14,000 Instructions Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense. (Omit explanations.)

Re-word the explanation of marginal disutility of work in terms of the marginal utility of leisure.

What is the distinguishing feature of an excise tax?

Mitchell Corporation had income before income taxes of $195,000 in 2014. Mitchell’s current income tax expense is $48,000, and deferred income tax expense is $30,000. Prepare Mitchell’s 2014 income statement, beginning with Income before income taxes.

Consider the prevailing conditions that could affect the demand for stocks, including inflation, the economy, the budget deficit, the Fed’s monetary policy, political conditions, and the general mood of investors. Based on these conditions, would you consider purchasing stock index options at this time? Offer some logic to support your answer. Which factor do you think will have the biggest impact on stock index option prices? (LO2, LO5)

1.       : One company had 40 percent of its workers and 20 percent of its managers resign during the first year after it reorganized from a vertical hierarchy into agile teams. What might account for this dramatic turnover? How might managers ensure a smooth transition to agile teams?

Larson Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2015, the following balances related to this plan. Plan assets (market-related value) $270,000 Projected benefi t obligation 340,000 Pension asset/liability 70,000 Cr. Prior service cost 90,000 OCI—Loss 39,000 As a result of the operation of the plan during 2015, the actuary provided the following additional data for 2015. Service cost $45,000 Actual return on plan assets 27,000 Amortization of prior service cost 12,000 Contributions 65,000 Benefi ts paid retirees 41,000 Settlement rate 7% Expected return on plan assets 8% Average remaining service life of active employees 10 years Instructions (a) Compute pension expense for Larson Corp. for the year 2015 by preparing a pension worksheet that shows the journal entry for pension expense. (b) Indicate the pension amounts reported in the financial statements.

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.

What types of federal income-based taxes, other than the regular income tax, might taxpayers be required to pay?In general terms, what is the tax base for each of these other taxes on income?

Industry and organisational value chain With reference to Marino Designs in Self-study problem 2, at the start of this chapter, differentiate between an industry value chain and an organisational value chain.