Question & Answer

What are the basic factors that affect surface finish in machining?

Barry Porter and Winnie Weeks are considering making an S election on March 1, 2024, for their C corporation, Omniocular. However, first they want to consider the implications of the following information: • Winnie is a U.S. citizen and resident. • Barry is a citizen of the United Kingdom but a resident of the United States. • Barry and Winnie each own 50 percent of the voting power in Omniocular.  However, Barry’s stock provides him with a claim on 60 percent of the Omniocular assets in liquidation. • Omniocular was formed under Arizona state law, but it plans on eventually conducting some business in Mexico.   a) Is Omniocular eligible to elect S corporation status?  If so, when is the election effective?

Is there any truth in the saying that the price of a good is a reflection of its quality?

Planning} Todd and Margo are seeking a divorce and no longer live together.  Margo has offered to pay Todd $42,000 per year for five years if Margo receives sole title to the art collection.  This collection cost them $100,000, but is now worth $360,000.  All other property is to be divided equally. a.       If Margo’s payments cease in the event of Todd’s death, how are the payments treated for tax purposes?  b.       How much of the gain would be taxed to Todd if Margo sells the art at the end of five years? c.       Compute the tax cost (benefit) to Todd (Margo) if the payments qualify as alimony.  Assume that Todd (Margo) has a marginal tax rate of 15 percent (35 percent) and ignore the time value of money. d.       How much more over the five year period should Todd demand in order to agree to allow the payments to cease in the event of his death?  (How much more will make him indifferent between receiving $42,000 a year in non alimony payments and receiving higher payments that are considered to be alimony?)

On July 1, 2014, Wheeler Company purchased $4,000,000 of Duggen Company’s 8% bonds, due on July 1, 2021. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $3,500,000 to yield 10%. Determine the amount of interest revenue Wheeler should report on its income statement for the year ended December 31, 2014.

Jerry is a 30 percent partner in the JJM Partnership when he sells his entire interest to Lucia for $56,000 cash. At the time of the sale, Jerry’s basis in JJM is $32,000. JJM does not have any debt or hot assets. What is Jerry’s gain or loss on the sale of his interest?

Use the information from BE17-5 but assume the stock was purchased as a trading security. Prepare Fairbanks’ journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment.

A torsion test specimen has a radius = 25 mm, wall thickness = 3 mm, and gage length = 50 mm. In testing, a torque of 900 N-m results in an angular deflection = 0.3°. Determine (a) the shear stress, (b) shear strain, and (c) shear modulus, assuming the specimen had not yet yielded. (d) If failure of the specimen occurs at a torque = 1200 N-m and a corresponding angular deflection = 10°, what is the shear strength of the metal?

Kasten Inc. provides paid vacations to its employees. At December 31, 2014, 30 employees have each earned 2 weeks of vacation time. The employees’ average salary is $500 per week. Prepare Kasten’s December 31, 2014, adjusting entry.

What is the difference between the traditional ceramics and the new ceramics?

The Samsons are trying to determine whether they can claim their 22-year-old adopted son, Jason, as a dependent.Jason is currently a full-time student at an out-of-state university.Jason lived in his parents’ home for three months of the year, and he was away at school for the rest of the year.He received $9,500 in scholarships this year for his outstanding academic performance and earned $4,800of income working a part-time job during the year. The Samsons paid a total of $5,000to support Jason while he was away at college.Jason used the scholarship, the earnings from the part-time job, and the money from the Samsons as his only sources of support. a. Can the Samsons claim Jason as their dependent?

Identify which basic assumption of accounting is best described in each item below. (a) The economic activities of FedEx Corporation are divided into 12-month periods for the purpose of issuing annual reports. (b) Solectron Corporation, Inc. does not adjust amounts in its financial statements for the effects of inflation. (c) Walgreen Co. reports current and noncurrent classifications in its balance sheet. (d) The economic activities of General Electric and its subsidiaries are merged for accounting and reporting purposes.

What is meant by the terms narrow money and broad money? Does broad money fulfil all the functions of money?

What are the common book-tax differences relating to accounting for capital gains and losses?  Do these differences create favorable or unfavorable book-to-tax adjustments?

Describe when economic performance occurs for the following expenses: a)Workers’ compensation  b) Rebates and refunds c) Insurance, warranties, and service contracts provided to the business d) Taxes

What is the nature of an installment sale? How do installment sales differ from ordinary credit sales?

Grady received $8,200 of Social Security benefits this year.  Grady also reported salary and interest income this year.  What amount of the benefits must Grady include in his gross income under the following two independent situations? a.       Grady files single and reports salary of $12,100 and interest income of $250. b.       Grady files single and reports salary of $22,000 and interest income of $600. c.       Grady files married joint and reports salary of $75,000 and interest income of $500. d.       Grady files married joint and reports salary of $44,000 and interest income of $700. e.            Grady files married separate and reports salary of $22,000 and interest income of $600

Discuss at least two situations in which estimates could affect the usefulness of information in the balance sheet.

A gear made of aluminum (modulus of elasticity = 69,000 MPa) is press fitted onto an aluminum shaft. The gear has a diameter of 55 mm at the base of its teeth. The nominal internal diameter of the gear = 30 mm and the interference = 0.10 mm. Compute: (a) the radial pressure between the shaft and the gear, and (b) the maximum effective stress in the gear at its inside diameter.

How does a corporation’s adjustment to earnings and profits differ based on the tax treatment of a stock redemption to the shareholder (i.e., as either a dividend or exchange)?

What are the advantages and disadvantages for a developing country of pursuing a policy of ISI?

Should large securities firms be allowed to be independent and insulated from bank regulation, or should they be required to register as bank holding companies, and subject to bank regulations? Write a short essay that supports your opinion.

A batch of annealed steel has just been received from the vendor. It is supposed to have a tensile strength in the range 60,000 - 70,000 lb/in2 . A Brinell hardness test in the receiving department yields a value of HB = 118. (a) Does the steel meet the specification on tensile strength? (b) Estimate the yield strength of the material.

Question: What does it mean to say that a married couple filing a joint tax return has joint and several liability for the taxes associated with the return?

What function is served by tempering?