Question & Answer

1.      In which quarter of Exhibit 3.7 would you place Cam? What are some steps that you would recommend Cam consider to better connect with the employees who report to him?

Dierdorf Inc., a closely held corporation, has decided to go public. The controller, Ed Floyd, is concerned with presenting interim data when an inventory write-down is recorded. What problems are encountered with inventories when quarterly data are presented?

A metal has a flow curve with strength coefficient = 850 MPa and strain-hardening exponent = 0.30. A tensile specimen of the metal with gage length = 100 mm is stretched to a length = 157 mm. Determine the flow stress at the new length and the average flow stress that the metal has been subjected to during the deformation.

Alfonso began the year with a tax basis in his partnership interest of $30,000. His share of partnership liabilities at the beginning and end of the year consists of $4,000 of recourse liabilities and $6,000 of nonrecourse liabilities. During the year, he was allocated $40,000 of partnership ordinary business loss. Alfonso does not materially participate in this partnership, and he has $1,000 of passive income from other sources. a. How much of Alfonso’s loss is limited by his tax basis? b. How much of Alfonso’s loss is limited by his at-risk amount? c. How much of Alfonso’s loss is limited by the passive activity loss rules?

Discuss how the international landscape is changing, including the growing influence of China and India.

Is it a valid criticism of perfect competition to argue that it is incompatible with economies of scale?

What is the relationship between current assets and current liabilities?

1.       : Can intuition and evidence-based decision making coexist as valid approaches within an organization? How might managers combine their intuition with a rational, data-driven, evidence-based approach?

Dejan owns stock in two S corporations, Blue and Green. He actively participates in the management of Blue but maintains ownership in Green only as a passive investor.  Dejan has no other business investments.  Both Blue and Green anticipate a loss this year, and Dejan’s basis in his stock of both corporations is $0. All else equal, if Dejan plans on making a capital contribution to at least one of the corporations this year, to which firm should he contribute in order to increase his chances of deducting the loss allocated to him from the entity?  Why?

A bending operation is to be performed on 5.00 mm thick cold-rolled steel. The part drawing is given in Figure P20.9. Determine the blank size required.

1.       : As algorithmic control becomes more common in organizations, how might it affect the roles of managers and employees? Can you think of ways algorithmic tools might be used to decentralize control? Explain.

1.    : What strategic plans could the college or university at which you are taking this management course adopt to compete for students in the marketplace? Would these plans depend on the school’s goals?

In a tensile test on a metal specimen, true strain = 0.08 at a stress = 265 MPa. When true stress = 325 MPa, true strain = 0.27. Determine the strength coefficient and the strain-hardening exponent in the flow curve equation.

Research and development activities may include (a) personnel costs, (b) materials and equipment costs, and (c) indirect costs. What is the recommended accounting treatment for these three types of R&D costs?

Capriati Corporation commenced operations in early 2014. The corporation incurred $60,000 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation. Prepare journal entries to record the $60,000 expenditure and 2014 amortization, if any.

What book-tax differences in year 1 and year 2 associated with its capital gains and losses would DEF Inc. report in the following alternative scenarios?  Identify each book-tax difference as favorable or unfavorable and as permanent or temporary.   a.  In year 1, DEF recognized a loss of $15,000 on land that it had held for investment.  In year 1, it also recognized a $30,000 gain on equipment it had purchased a few years ago. The equipment sold for $50,000 and had an adjusted basis of $20,000.  DEF had deducted $40,000 of tax depreciation on the equipment. In year 2, DEF recognized a capital loss of $2,000.

For tax purposes, why is the married filing jointly tax status generally preferable to the married filing separately filing status?Why might a married taxpayer prefer not to file a joint return with the taxpayer’s spouse?

Selane Eatery operates a catering service specializing in business luncheons for large corporations. Selane requires customers to place their orders 2 weeks in advance of the scheduled events. Selane bills its customers on the tenth day of the month following the date of service and requires that payment be made within 30 days of the billing date. Conceptually, when should Selane recognize revenue related to its catering service?

1.      : Would you rate Casper’s competitive strategy as pursuing differentiation, cost leadership, focus, or a combination of these? Explain. Do you think Casper will grow successfully and turn a profit? Why?

Use the information presented for Ottawa Corporation in BE10-14, but assume the machinery is sold for $5,200 instead of $10,500. Prepare journal entries to (a) update depreciation for 2015 and (b) record the sale.

Teton Corporation issued $600,000 of 7% bonds on November 1, 2014, for $644,636. The bonds were dated November 1, 2014, and mature in 10 years, with interest payable each May 1 and November 1. Teton uses the effective-interest method with an effective rate of 6%. Prepare Teton’s December 31, 2014, adjusting entry.

Consider a discussion during FOMC meetings in which there is a weak economy and a war, with potential major damage to oil wells. Explain why this possible effect would have received much attention at the FOMC meetings. If this possibility was perceived to be highly likely at the time of the meetings, explain how it may have complicated the decision about monetary policy at that time. Given the conditions stated in this question, would you suggest that the Fed use a restrictive monetary policy or a stimulative monetary policy? Support your decision logically and acknowledge any adverse effects of your decision. (LO4)

1.    : Harley-Davidson, which once boasted that it made “big toys for big boys,” is trying to lure more women to the brand to make up for declining sales in a slow economy. How do you think this move will complement or confound the company’s differentiation strategy, which has long been based on a macho image?

Explain why demand might increase for relevant and useful information in the future. What professional skills will help you meet that need?

Teller Corporation’s post-closing trial balance at December 31, 2014, was as follows. IFRS Insights 879 TELLER CORPORATION POST-CLOSING TRIAL BALANCE DECEMBER 31, 2014 Dr. Cr. Accounts payable $ 310,000 Accounts receivable $ 480,000 Accumulated depreciation—building and equipment 185,000 Allowance for doubtful accounts 30,000 Bonds payable 700,000 Building and equipment 1,450,000 Cash 190,000 Dividends payable on preference shares—cash 4,000 Inventories 560,000 Land 400,000 Prepaid expenses 40,000 Retained earnings 201,000 Share capital—ordinary ($1 par value) 200,000 Share capital—preference ($50 par value) 500,000 Share premium—ordinary 1,000,000 Share premium—treasury 160,000 Treasury shares—ordinary at cost 170,000 Totals $3,290,000 $3,290,000 At December 31, 2014, Teller had the following number of ordinary and preference shares. Ordinary Preference Authorized 600,000 60,000 Issued 200,000 10,000 Outstanding 190,000 10,000 The dividends on preference shares are $4 cumulative. In addition, the preference shares have a preference in liquidation of $50 per share. Instructions Prepare the equity section of Teller’s statement of financial position at December 31, 2014.