Question & Answer

Presented below is a condensed version of the comparative balance sheets for Zubin Mehta Corporation for the last two years at December 31. 2014 2013 Cash $177,000 $ 78,000 Accounts receivable 180,000 185,000 Investments 52,000 74,000 Equipment 298,000 240,000 Accumulated depreciation—equipment (106,000) (89,000) Current liabilities 134,000 151,000 Common stock 160,000 160,000 Retained earnings 307,000 177,000 Additional information: Investments were sold at a loss (not extraordinary) of $10,000; no equipment was sold; cash dividends paid were $30,000; and net income was $160,000. Instructions (a) Prepare a statement of cash flows for 2014 for Zubin Mehta Corporation. (b) Determine Zubin Mehta Corporation’s free cash flow.

Indicate how the hardenability alloying elements in steel affect the TTT curve.

Assume the same information in IFRS16-11, except that Angela Corporation converts its convertible bonds on January 1, 2014. Instructions (a) Compute the carrying value of the bond payable on January 1, 2014. (b) Prepare the journal entry to record the conversion on January 1, 2014. (c) Assume that the bonds were repurchased on January 1, 2014, for $1,940,000 cash instead of being converted. The net present value of the liability component of the convertible bonds on January 1, 2014, is $1,900,000. Prepare the journal entry to record the repurchase on January 1, 2014.

The stockholders’ equity section of Tkachuk Corporation appears below as of December 31, 2014. 8% preferred stock, $50 par value, authorized 100,000 shares, outstanding 90,000 shares $ 4,500,000 Common stock, $1.00 par, authorized and issued 10 million shares 10,000,000 Additional paid-in capital 20,500,000 Retained earnings $134,000,000 Net income 33,000,000 167,000,000 $202,000,000 Net income for 2014 reflects a total effective tax rate of 34%. Included in the net income figure is a loss of $18,000,000 (before tax) as a result of a major casualty, which should be classified as an extraordinary item. Preferred stock dividends of $360,000 were declared and paid in 2014. Dividends of $1,000,000 were declared and paid to common stockholders in 2014. Instructions Compute earnings per share data as it should appear on the income statement of Tkachuk Corporation.

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.

Kraft Enterprises owns the following assets at December 31, 2014. Cash in bank—savings account 68,000 Checking account balance 17,000 Cash on hand 9,300 Postdated checks 750 Cash refund due from IRS 31,400 Certifi cates of deposit (180-day) 90,000 What amount should be reported as cash?

How do brazing and soldering differ from the solid-state welding processes?

Rembrandt Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years’-digits method, and (3) the double-declining-balance method. Year Straight-Line Years’-Digits Balance 1 $ 9,000 $15,000 $20,000 2 9,000 12,000 12,000 3 9,000 9,000 7,200 4 9,000 6,000 4,320 5 9,000 3,000 1,480 Total $45,000 $45,000 $45,000 Instructions Answer the following questions. (a) What is the cost of the asset being depreciated? (b) What amount, if any, was used in the depreciation calculations for the salvage value for this asset? (c) Which method will produce the highest charge to income in Year 1? (d) Which method will produce the highest charge to income in Year 4? (e) Which method will produce the highest book value for the asset at the end of Year 3? (f) If the asset is sold at the end of Year 3, which method would yield the highest gain (or lowest loss) on disposal of the asset?

During the Covid-19 pandemic, U.S. interest rates were extremely low. Explain how the low interest rates affected businesses’ and households’ behavior to borrow. (LO2)

A part made of sheet steel is to be nickel plated. The part is a rectangular flat plate that is 0.075 cm thick and whose face dimensions are 14 cm by 19 cm. The plating operation is carried out in an acid sulfate electrolyte, using a current = 20 amps for a duration = 30 min. Determine the average thickness of the plated metal resulting from this operation.

Beyoncé Corporation factors $175,000 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables. The receivables records are transferred to Kathleen Battle Financing on August 15, 2014. Kathleen Battle Financing assesses a finance charge of 2% of the amount of accounts receivable and also reserves an amount equal to 4% of accounts receivable to cover probable adjustments. Instructions (a) What conditions must be met for a transfer of receivables with recourse to be accounted for as a sale? (b) Assume the conditions from part (a) are met. Prepare the journal entry on August 15, 2014, for Beyoncé to record the sale of receivables, assuming the recourse obligation has a fair value of $2,000.

A cylindrical riser is to be designed for a sand casting mold. The length of the cylinder is to be 1.25 times its diameter. The casting is a square plate, each side = 10 in and thickness = 0.75 in. If the metal is cast iron, and the mold constant = 16.0 min/in2 in Chvorinov's rule, determine the dimensions of the riser so that it will take 30% longer for the riser to solidify.

Ansel purchased raw land three years ago for $200,000 to hold as an investment. After watching the value of the land drop to $150,000, he decided to contribute it to Mountainside Developers LLC in exchange for a 5 percent capital and profits interest. Mountainside plans to develop the property and will treat it as inventory, like all of the other real estate it holds. a. If Mountainside sells the property for $150,000 after holding it for one year, how much gain or loss does it recognize, and what is the character of its gain or loss? [Hint: See §724.] b. If Mountainside sells the property for $125,000 after holding it for two years, how much gain or loss does it recognize, and what is the character of the gain or loss? c. If Mountainside sells the property for $150,000 after holding it six years, how much gain or loss is recognized, and what is the character of the gain or loss?

What differences are there between the trial balance before closing and the trial balance after closing with respect to the following accounts? (a) Accounts Payable. (b) Expense accounts. (c) Revenue accounts. (d) Retained Earnings account. (e) Cash.

This year Luke has calculated his gross tax liability at $1,800.  Luke is entitled to a $2,400 nonrefundable personal tax credit, a $1,500 business tax credit, and a $600 refundable personal tax credit.  In addition, Luke has had $2,300 of income taxes withheld from his salary.  What is Luke’s net tax due or refund?

An extruder has a barrel diameter = 5.0 in and length = 12 ft. The extruder screw rotates at 50 rev/min; it has channel depth = 0.30 in and flight angle = 17.7°. The plastic melt has a shear viscosity = 100 x 10-4 lb-sec/in2 . Find: (a) the extruder characteristic, (b) the values of Q and p at the operating point, given that the die characteristic is Qx = 0.00150 p.

What is a terpolymer?

1.       : Analyze three decisions you made over the past six months. Which of these were programmed and which were nonprogrammed? Which model—the classical, administrative, or political—best describes the approach you took to making each decision?

The following are selected ledger accounts of Spock Corporation at December 31, 2014. Cash $ 185,000 Salaries and wages expense (sales) $284,000 Inventory 535,000 Salaries and wages expense (offi ce) 346,000 Sales revenue 4,275,000 Purchase returns 15,000 Unearned sales revenue 117,000 Sales returns and allowances 79,000 Purchases 2,786,000 Freight-in 72,000 Sales discounts 34,000 Accounts receivable 142,500 Purchase discounts 27,000 Sales commissions 83,000 Selling expenses 69,000 Telephone and Internet expense (sales) 17,000 Accounting and legal services 33,000 Utilities expense (offi ce) 32,000 Insurance expense (offi ce) 24,000 Miscellaneous offi ce expenses 8,000 Advertising expense 54,000 Rent revenue 240,000 Delivery expense 93,000 Extraordinary loss (before tax) 70,000 Depreciation expense (offi ce equipment) 48,000 Interest expense 176,000 Depreciation expense (sales equipment) 36,000 Common stock ($10 par) 900,000 Spock’s effective tax rate on all items is 34%. A physical inventory indicates that the ending inventory is $686,000. Instructions Prepare a condensed 2014 income statement for Spock Corporation.7

Why might a business claim a reduced §179 expense amount in the current year rather than claiming the maximum amount available?

Jekyll and Hyde formed a corporation (Halloween Inc.) on October 31 to develop a drug to address spilt personalities. Jekyll will contribute a patented formula valued at $200,000 in return for 50 percent of the stock in the corporation. Hyde will contribute an experimental formula worth $120,000 and medical services in exchange for the remaining stock.  Jekyll’s tax basis in the patented formula is $125,000, whereas Hyde has a basis of $15,000 in his experimental formula.

During the coronavirus pandemic, between 2020 and 2022, the Fed implemented two different monetary policies. Explain the circumstances that led the Fed to change the monetary policy. (LO2; LO3)

A press release announcing the appointment of the trustees of the new Financial Accounting Foundation stated that the Financial Accounting Standards Board (to be appointed by the trustees) “. . . will become the established authority for setting accounting principles under which corporations report to the shareholders and others” (AICPA news release July 20, 1972). Instructions (a) Identify the sponsoring organization of the FASB and the process by which the FASB arrives at a decision and issues an accounting standard. (b) Indicate the major types of pronouncements issued by the FASB and the purposes of each of these pronouncements.

Assume that the yield curves in the United States, France, and Japan are flat. If the U.S. yield curve suddenly becomes positively sloped, do you think the yield curves in France and Japan would be affected? If so, how? (LO3)

1.              : How would you characterize Baker’s leadership style? What approach do you think is correct for this situation? Why?