Question & Answer

What is a production line?

Differentiate between “financial statements” and “financialreporting.”

What are the major sources of cash (inflows) in a statement of cash flows? What are the major uses (outflows) of cash?

What is the full disclosure principle in accounting? Why has disclosure increased substantially in the last 10 years?

Dontae stated that he didn’t want to earn any more money because it would “put him in a higher tax bracket.”  What is wrong with Dontae’s reasoning?

Compare and contrast for and from AGI deductions.Why are for AGI deductions likely more valuable to taxpayers than from AGI deductions?

] Are both corporations and individuals subject to depreciation recapture when they sell depreciable real property at a gain?  Explain.

Transactions for Mehta Company for the month of May are presented below. Prepare journal entries for each of these transactions. (You may omit explanations.) May 1 B.D. Mehta invests $4,000 cash in exchange for common stock in a small welding corporation. 3 Buys equipment on account for $1,100. 13 Pays $400 to landlord for May rent. 21 Bills Noble Corp. $500 for welding work done.

Amina is a 30 percent partner in the AOM Partnership when she sells her entire interest to Hope for $72,000 cash. At the time of the sale, Amina’s basis in AOM is $44,000 (which includes her $6,000 share of AOM liabilities). AOM does not have any hot assets. What is Amina’s gain or loss on the sale of her interest?

1.      : Donate the $1,000 to Northeast High, and consider the $10,000 bonus a good return on your investment. There is nothing illegal or immoral about making the donation.

What tests are applied to determine if losses should be characterized as passive?

Explain how the standard deduction is rationalized and why the standard deduction might be viewed as a floor limit on itemized deductions.

Irene is saving for a new car she hopes to purchase either four or six years from now. Irene invests $10,000 in a growth stock that does not pay dividends and expects a 6 percent annual before-tax return (the investment is tax deferred). When she cashes in the investment after either four or six years, she expects the applicable marginal tax rate on long-term capital gains to be 25 percent.    a) What will be the value of this investment four years from now? Six years from now? b) When Irene sells the investment, how much cash will she have after taxes to purchase the new car (four and six years from now)?

What factors have to be present for income shifting to be a viable strategy?

Define a change in estimate and provide an illustration. When is a change in accounting estimate effected by a change in accounting principle?

: Define the components of strategic management and the three levels of strategy.

What effect do stock dividends or stock splits have on the computation of the weighted-average number of shares outstanding?

What is a scanning probe instrument, and why is it so important in nanoscience and nanotechnology?

1.       : Managers at Gap Inc., a once- popular retail chain, are reported to have made a series of decisions that hurt the company: They expanded so rapidly that the chain lost touch with customers; they tried to copy the successful approach of rivals rather than charting their own course; they cut quality to reduce costs; they shifted from one fashion approach to another as each failed to appeal to customers, and so on. What techniques would you recommend that Gap managers use to improve the quality of their decisions?

Presented below is a list of possible transactions. 1. Purchased inventory for $80,000 on account (assume perpetual system is used). 2. Issued an $80,000 note payable in payment on account (see item 1 above). 3. Recorded accrued interest on the note from item 2 above. 4. Borrowed $100,000 from the bank by signing a 6-month, $112,000, zero-interest-bearing note. 5. Recognized 4 months’ interest expense on the note from item 4 above. 6. Recorded cash sales of $75,260, which includes 6% sales tax. 7. Recorded wage expense of $35,000. The cash paid was $25,000; the difference was due to various amounts withheld. 8. Recorded employer’s payroll taxes. 9. Accrued accumulated vacation pay. 10. Recorded an asset retirement obligation. 11. Recorded bonuses due to employees. 12. Recorded a contingent loss on a lawsuit that the company will probably lose. 13. Accrued warranty expense (assume expense warranty approach). 14. Paid warranty costs that were accrued in item 13 above. 15. Recorded sales of product and related warranties (assume sales warranty approach). 16. Paid warranty costs under contracts from item 15 above. 17. Recognized warranty revenue (see item 15 above). 18. Recorded estimated liability for premium claims outstanding. Instructions Set up a table using the format shown below and analyze the effect of the 18 transactions on the financial statement categories indicated

A gas metal arc-welding test is performed to determine the value of melting factor f2 for a certain metal and operation. The welding voltage = 25 volts, current = 125 amps, and heat transfer factor is assumed to be = 0.90, a typical value for GMAW. The rate at which the filler metal is added to the weld is 0.50 in3 per minute, and measurements indicate that the final weld bead consists of 57% filler metal and 43% base metal. The unit melting energy for the metal is known to be 75 Btu/in3. (a) Find the melting factor. (b) What is the travel speed if the cross-sectional area of the weld bead = 0.05 in2?

1.              Give Owens a month’s notice and terminate him. He’s known as a good consultant, so he probably won’t have any trouble finding a new job, and you’ll avoid any further problems associated with his emotional difficulties and his possible alcohol problem.

Question: Lorenzo is considering starting a trucking company either in Texas or Oklahoma.  He will relocate his family, which includes his wife, children, and parents, to reside in the same state as his business.  What types of taxes may influence his decision of where to locate his business?

Carole, Karmen, and Cyrus formed ABC Corporation. Carole received 60 percent of the stock in ABC Corporation in exchange for appreciated property, Karmen received 30 percent of the stock in ABC Corporation in exchange for legal services, and Cyrus received 10 percent of the stock ABC Corporation in exchange for cash.   a. Must Carole recognize the gain she realized on her transfer of the appreciated property?   b. Suppose that, instead of receiving the entire 30 percent of the ABC Corporation stock in exchange for legal services, Karmen received 10 percent of the ABC Corporation stock in exchange for her legal services and she received 20 percent of the ABC Corporation stock in exchange for cash (i.e., she transferred both services and property to ABC Corporation). Must Carole recognize gain on her transfer of appreciated property?

If MUX/MUY were greater than PX/PY, how would consumers behave? What would bring consumption back to equilibrium where MUX/MUY = PX/PY?