Question & Answer

You have the choice of investing in toprated commercial paper or commercial paper that has a lower risk rating. How do you think the risk and return performances of the two investments differ? (LO1)

Mustafa’s tax basis in his partnership interest at the beginning of the year was $10,000. If his share of the partnership liabilities increased by $10,000 during the year and his share of partnership income for the year is $3,000, what is his tax basis in his partnership interest at the end of the year?

Variance analysis is only useful for organisations using a standard costing system. Discuss.

What are some of the important welding defects?

What is the likely limitation of “general-purpose financialstatements”?

1.      : Do you think Vinson’s desire for changes in culture are related to changes in the external environment? Explain.

Elliott Corp. failed to record accrued salaries for 2013, $2,000; 2014, $2,100; and 2015, $3,900. What is the amount of the overstatement or understatement of Retained Earnings at December 31, 2016?

What is a coordinate measuring machine?

Draw a utility/value function that illustrates the concepts of reference dependent preferences, loss aversion and diminishing marginal sensitivity to gains/losses.

Direct costs and overhead Job 87M had direct material costs of $400 and a total cost of $2100. Overhead is allocated at the rate of 75 per cent of prime cost (direct material and direct labour).   Required (a)     How much direct labour was used? (b)     How much overhead was allocated?

Tomiko is a 50 percent owner (partner) in the Tanaka partnership. During the year, the partnership reported $1,000 of interest income and $2,000 of dividends. How much of this income must Tomiko include in their gross income?

1. How much would be the total tax revenue for the government? 2. Will the individual producers gain from the export tax?

Explain how the financial sector could amplify the effects of shocks to the economy, such as those from the COVID-19 pandemic.

1.    : Goals that are overly ambitious can discourage employees and decrease motivation, yet the idea of stretch goals is proposed as a way to get people fired up and motivated. As a manager, how might you decide where to draw the line between a “good” stretch goal and a “bad” one that is unrealistic?

The Z-score bankruptcy prediction model uses balance sheet and income information to arrive at a Z Score, which can be used to predict financial distress: Z 5 Working capital Total assets 3 1.2 1 Retained earnings Total assets 3 1.4 1 EBIT Total assets 3 3.3 1 Sales Total assets 3 .99 1 MV equity Total liabilities 3 0.6 EBIT is earnings before interest and taxes. MV equity is the market value of common equity, which can be determined by multiplying stock price by shares outstanding. Following extensive testing, it has been shown that companies with Z-scores above 3.0 are unlikely to fail; those with Z-scores below 1.81 are very likely to fail. While the original model was developed for publicly held manufacturing companies, the model has been modified to apply to companies in various industries, emerging companies, and companies not traded in public markets. Instructions (a) Use information in the financial statements of a company like Walgreens or Deere & Co. to compute the Z-score for the past 2 years. (b) Interpret your result. Where does the company fall in the financial distress range? (c) The Z-score uses EBIT as one of its elements. Why do you think this income measure is used?

Describe the main source of funds for credit unions. Why might the average cost of funds to CUs be relatively stable even when market interest rates are volatile? (LO7)

What two assumptions are central to the IASB conceptual framework?

Several judicial doctrines limit basic tax planning strategies. What are they? Which planning strategies do they limit?

A sufficient amount of pure copper is to be heated for casting a large plate in an open mold. The plate has dimensions: length = 20 in, width = 10 in, and thickness = 3 in. Compute the amount of heat that must be added to the metal to heat it to a temperature of 2150°F for pouring. Assume that the amount of metal heated will be 10% more than what is needed to fill the mold cavity. Properties of the metal are: density = 0.324 lbm/in3 , melting point = 1981°F, specific heat of the metal = 0.093 Btu/lbm-F in the solid state and 0.090 Btu/lbm-F in the liquid state, and heat of fusion = 80 Btu/lbm.

1.       : How might organizations strike a balance between respecting and meeting the needs of a diverse workforce and shaping a well-focused high-performance corporate culture based on shared values?

Assume that bond market participants suddenly expect the Fed to substantially increase the money supply. (LO2) a. Assuming no threat of inflation, how would this expectation affect bond prices? b. Assuming that inflation may result, how would bond prices be affected? c. Given your answers to (a) and (b), explain why expectations of the Fed’s increase in the money supply may sometimes cause bond market participants to disagree about how bond prices will be affected.

Identify and briefly describe the three basic components of a numerical control system.

1.       Make the previous numbers work. Tessa and the entire team have put massive amounts of time into the project, and they all expect you to be a team player. You don’t want to let them down. Besides, this project is a great opportunity for you in a highly visible position.

A Six Sigma program uses three measures of defects per million (DPM) to assess the performance of a given process. Name the three measures of DPM.

Bill Novak is working on an audit of an IFRS client. In his review of the client’s interim reports, he notes that the reports are prepared on a discrete basis. That is, each interim report is viewed as a distinct period. Is this acceptable under IFRS? If so, explain how that treatment could affect comparisons to a GAAP company.