Question & Answer

To what extent do you consider the following items to be proper costs of the fixed asset? Give reasons for your opinions. (a) Overhead of a business that builds its own equipment. (b) Cash discounts on purchases of equipment. (c) Interest paid during construction of a building. (d) Cost of a safety device installed on a machine. (e) Freight on equipment returned before installation, for replacement by other equipment of greater capacity. (f) Cost of moving machinery to a new location. (g) Cost of plywood partitions erected as part of the remodeling of the office. (h) Replastering of a section of the building. (i) Cost of a new motor for one of the trucks.

A production line with four automatic workstations (the other stations are manual) produces a certain product whose total assembly work content time = 55.0 min of direct manual labor. The production rate on the line is 45 units/hr. Because of the automated stations, uptime efficiency = 89%. The manual stations each have one worker. It is known that 10% of the cycle time is lost due to repositioning. If the balancing efficiency = 0.92 on the manual stations, find (a) cycle time, (b) number of workers and (c) workstations on the line. (d) What is the average manning level on the line, where the average includes the automatic stations?

What is an important precondition for the success of an adhesive bonding operation?

Describe the procedure(s) involved in classifying deferred tax amounts on the statement of financial position under IFRS.

Suppose you asked your favorite AI query tool the following question: “Are property taxes that refunded included in gross income for federal income tax purposes?”  The AI tool provided the following response:

Last year Acme paid Ralph $15,000 to install a new air-conditioning unit at its headquarters building. The air conditioner did not function properly, and this year Acme requested that Ralph return the payment. Because Ralph could not repair one critical part in the unit, he refunded the cost of the repair, $5,000, to Acme.

How are asymmetric shocks dealt with within a country? To what extent can this process be mirrored within the eurozone?

On a diagram like Figure A1.8 draw the graphs for the following equations:                      y = –3 + 4x                      y = 15 – 3x

Yesenia is a lawyer who uses the cash method of accounting. Last year Yesenia provided a client with legal services worth $55,000, but the client could not pay the fee. This year Yesenia requested that in lieu of paying Yesenia $55,000 for the services, the client could make a $45,000 gift to Yesenia’s daughter. Yesenia’s daughter received the check for $45,000 and deposited it in her bank account. How much of this income is taxed, if any, to Yesenia? Explain.

Why are Wo and Wa curves rather than straight lines?

When economic crises in countries are due to a weak economy, local interest rates tend to be very low. However, if the crisis is caused by an unusually high rate of inflation, the interest rate tends to be very high. Explain why. (LO2)

Rick Kleckner Corporation recorded a capital lease at $300,000 on January 1, 2014. The interest rate is 12%. Kleckner Corporation made the first lease payment of $53,920 on January 1, 2014. The lease requires eight annual payments. The equipment has a useful life of 8 years with no salvage value. Prepare Kleckner Corporation’s December 31, 2014, adjusting entries.

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.

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 12-in wafer is processed over a circular area of diameter = 11.75 in. The density of point defects in the surface area is 0.018 defects/in2. The chips to be fabricated are square with an area of 0.16 in2 each. Determine an estimate of the number of good chips using the Bose-Einstein yield computation.

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

Should governments or regulators always attempt to eliminate the supernormal profits of monopolists/ oligopolists?

When is a debt security considered impaired? Explain how to account for the impairment of an available-for-sale debt security.

On January 1, 2015, Wilke Corp. had 480,000 shares of common stock outstanding. During 2015, it had the following transactions that affected the common stock account. February 1 Issued 120,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 100,000 shares of treasury stock June 1 Issued a 3-for-1 stock split October 1 Reissued 60,000 shares of treasury stock Instructions (a) Determine the weighted-average number of shares outstanding as of December 31, 2015. (b) Assume that Wilke Corp. earned net income of $3,456,000 during 2015. In addition, it had 100,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2015. Compute earnings per share for 2015, using the weighted-average number of shares determined in part (a). (c) Assume the same facts as in part (b), except that the preferred stock was cumulative. Compute earnings per share for 2015. (d) Assume the same facts as in part (b), except that net income included an extraordinary gain of $864,000 and a loss from discontinued operations of $432,000. Both items are net of applicable income taxes. Compute earnings per share for 2015.

Explain why an employee should be concerned about whether his employer reimburses business expenses using an “accountable” plan?

Would any of these problems be lessened by the world returning to an adjustable peg system? If so, what sort of adjustable peg system would you recommend?

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?

Hincapie Co. (a specialty bike-accessory manufacturer) is expecting growth in sales of some products targeted to the low-price market. Hincapie is contemplating a preference share issue to help finance this expansion in operations. The company is leaning toward preference shares because ownership will not be diluted, but the investors will get an extra dividend if the company does well. The company management wants to be certain that its reporting of this transaction is transparent to its current shareholders and wants you to research the disclosure requirements related to its capital structure. Instructions Access the IFRS authoritative literature at the IASB website (http://eifrs.iasb.org/). (Click on the IFRS tab and then register for free eIFRS access if necessary.) When you have accessed the documents, you can use the search tool in your Internet browser to respond to the following questions. (Provide paragraph citations.) (a) Identify the authoritative literature that addresses disclosure of information about capital structure. (b) What information about share capital must companies disclose? Discuss how Hincapie should report the proposed preference share issue.

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?

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.