Question & Answer

Presented below is information related to Candlebox Enterprises. J an. 31 Feb. 28 M ar. 31 A pr. 30 Inventory at cost $15,000 $15,100 $17,000 $13,000 Inventory at the lower-of-cost-or-market 14,500 12,600 15,600 12,300 Purchases for the month 20,000 24,000 26,500 Sales revenue for the month 29,000 35,000 40,000 Instructions (a) From the information, prepare (as far as the data permit) monthly income statements in columnar form for February, March, and April. The inventory is to be shown in the statement at cost, the gain or loss due to market fluctuations is to be shown separately, and a valuation account is to be set up for the difference between cost and the lower of cost or market. (b) Prepare the journal entry required to establish the valuation account at January 31 and entries to adjust it monthly thereafter.

What is the present value of a machine that lasts three years, earns £100 in year 1, £200 in year 2 and £200 in year 3, and then has a scrap value of £100? Assume that the rate of discount is 5 per cent. If the machine costs £500, is the investment worthwhile? Would it be worthwhile if the rate of discount were 10 per cent?

A cup-shaped part is backward extruded from an aluminum slug that is 50 mm in diameter. The final dimensions of the cup are: OD = 50 mm, ID = 40 mm, height = 100 mm, and thickness of base = 5 mm. Determine (a) extrusion ratio, (b) shape factor, and (c) height of starting slug required to achieve the final dimensions. (d) If the metal has flow curve parameters K = 400 MPa and n = 0.25, and the constants in the Johnson extrusion strain equation are: a = 0.8 and b = 1.5, determine the extrusion force.

Match the qualitative characteristics below with the following statements. 1. Timeliness 5. Faithful representation 2. Completeness 6. Relevance 3. Free from error 7. Neutrality 4. Understandability 8. Confirmatory value (a) Quality of information that assures users that information represents the economic phenomena that it purports to represent. (b) Information about an economic phenomenon that corrects past or present expectations based on previous evaluations. (c) The extent to which information is accurate in representing the economic substance of a transaction. (d) Includes all the information that is necessary for a faithful representation of the economic phenomena that it purports to represent. (e) Quality of information that allows users to comprehend its meaning.

Bobbie works as an employee for Altron Corp. for the first half of the year and for Betel Inc. for rest of the year. She is relatively well paid. What FICA tax issues is she likely to encounter?  What FICA tax issues do Altron Corp. and Betel Inc. need to consider?

Describe the all-events test for recognizing taxable income.

Besides flat rolling and shape rolling, identify some additional bulk forming processes that use rolls to effect the deformation

What is the difference between water jet cutting, abrasive water jet cutting, and abrasive jet cutting?

1. To what extent could property rights (either public or private) be successfully extended and invoked to curb the problem of industrial pollution (a) of the atmosphere; (b) of rivers; (c) by the dumping of toxic waste; (d) by the erection of ugly buildings; (e) by the creation of high levels of noise? 2. What protection do private property rights in the real world give to sufferers of noise (a) from neighbours; (b) from traffic; (c) from mobile phones on public transport?

A vertical true centrifugal casting process is used to cast brass tubing that is 15.0 in long and whose outside diameter = 8.0 in. If the speed of rotation during solidification is 1000 rev/min, determine the inside diameters at the top and bottom of the tubing if the total weight of the final casting = 75.0 lbs.

Use a stock valuation framework to explain why the Sarbanes-Oxley Act (SOX) could improve the valuation of a stock. Why might SOX cause a reduction in the valuation of a stock? (See the chapter appendix). (LO1)

] Clyde lives and operates a sole proprietorship in Dallas, Texas. This year Clyde found it necessary to travel to Fort Worth (about 25 miles away) for legitimate business reasons. Is Clyde’s trip likely to qualify as “away from home”? Why would this designation matter?

What is the “call” feature of a bond issue? How does the call feature affect the amortization of bond premium or discount?

Wilco Corporation has the following account balances at December 31, 2014. Share capital—ordinary, $5 par value $ 510,000 Treasury shares 90,000 Retained earnings 2,340,000 Share premium—ordinary 1,320,000 Instructions Prepare Wilco’s December 31, 2014, equity section.

Assume a horizontal yield curve exists. How do you think the yield curve would be affected if foreign investors in short-term securities and long-term securities suddenly anticipate that the value of the dollar will strengthen? (You may find it helpful to refer to the discussion of the yield curve in Chapter 3.) (LO2, LO3)

Zonker Inc. purchases 500 units of an item at an invoice cost of $30,000. What is the cost per unit? If the goods are shipped f.o.b. shipping point and the freight bill was $1,500, what is the cost per unit if Zonker Inc. pays the freight charges? If these items were bought on 2/10, n/30 terms and the invoice and the freight bill were paid within the 10-day period, what would be the cost per unit?

What is the meaning of “corridor amortization”?

Are different factor markets similarly interdependent? What would happen if the price of capital equipment rose?

Assume that there is a positive economic shock and the economy expands. Why may it continue to expand for some time? Why may the expansion eventually cease and be followed by a recession?

An electron-beam welding operation will join two pieces of steel plate together. The plates are 1.00 in thick. The unit melting energy is 125 Btu/in3. The diameter of the work area focus of the beam is 0.060 in, hence the width of the weld will be 0.060 in. The accelerating voltage is 30 kV and the beam current is 35 milliamp. The heat transfer factor is 0.70 and the melting factor is 0.55. If the beam moves at a speed of 50 in/min, will the beam penetrate the full thickness of the plates?

What are the computational guidelines for determining whether a convertible security is to be reported as part of diluted earnings per share?

Briefly explain the meaning of decision-usefulness in thecontext of financial reporting.

Describe the primary activities in the value chain for your college or university. In your opinion, which primary activities create the most value?

On January 1, 2014 (the date of grant), Lutz Corporation issues 2,000 shares of restricted stock to its executives. The fair value of these shares is $75,000, and their par value is $10,000. The stock is forfeited if the executives do not complete 3 years of employment with the company. Prepare the journal entry (if any) on January 1, 2014, and on December 31, 2014, assuming the service period is 3 years.

Distinguish between a current liability, such as accounts payable, and a provision.