Question & Answer

Which of the following are macroeconomic issues, which are microeconomic ones and which could be either depending on the context?                (a)  Inflation.                (b)  Low wages in certain sectors.                (c)  The rate of exchange between the pound and the euro.                (d)  Why the prices of fresh fruit and vegetables fluctuate more than those of cars.                (e)  The rate of economic growth this year compared with last year.                (f)   The decline of traditional manufacturing industries.                (g)  Immigration of workers

Jake is a retired jockey who takes monthly trips to Las Vegas to gamble on horse races. So far this year, Jake has won almost $47,500 during his trips to Las Vegas while spending $27,250 on travel expenses and incurring $62,400 of gambling losses. Explain how Jake’s gambling winnings and related costs will be treated for tax purposes.

How does whole life insurance serve as a form of savings to policyholders? (LO3)

This year Randy paid $28,000 of interest (Randy borrowed $450,000 to buy his residence, and it is currently worth $500,000). Randy also paid $2,500 of interest on his car loan and $4,200 of margin interest to his stockbroker (investment interest expense). How much of this interest expense can Randy deduct as an itemized deduction under the following circumstances?

List (a) the similarities and (b) the differences in the accounting treatments of depreciation and cost depletion.

The worktable of a numerical control machine tool is driven by a closed-loop positioning system which consists of a servomotor, leadscrew, and optical encoder. The leadscrew has 4 threads/in and is coupled directly to the motor shaft (gear ratio = 1:1). The optical encoder generates 200 pulses per motor revolution. The table has been programmed to move a distance of 7.5 in at a feed rate = 20.0 in/min. (a) How many pulses are received by the control system to verify that the table has moved the programmed distance? What are (b) the pulse rate and (c) motor speed that correspond to the specified feed rate?

Janelle wants to create an S corporation called J’s Dance Shoes (JDS). Describe how the items below affect her eligibility for an S election. a. Because Janelle wants all her shareholders to have an equal say in the future of JDS, she gives them equal voting rights and decides shareholders who take a more active role in the firm will have priority in terms of distribution and liquidation rights.

Will the amortization of Discount on Bonds Payable increase or decrease Bond Interest Expense? Explain.

Describe the process of bookbuilding. Why is bookbuilding sometimes criticized as a means of setting the offer price? (LO3)

Explain the differences between the installment-sales method and the cost-recovery method.

Of all of the current rapid prototyping technologies, which one is the most widely used?

Compare and contrast the lifetime learning credit with the American opportunity tax credit.

Assume that in a household one parent currently works full time and the other stays at home to look after the family. How would you set about identifying and calculating the opportunity costs of the second parent now taking a full-time job? How would such calculations be relevant in deciding whether it is worth taking that job?

1.              : How would you suggest that Baker modify his leadership style if he wants to succeed Davidson in two years? Be specific.

Requirements are to be planned for component C5 in product P1. Required deliveries for P1 are given in Table 41.1. Ordering, manufacturing, and assembly lead times are as follows: for P1 and S2, the lead time is one week; for C5, the lead time is three weeks; and for M5, the lead time is 2 weeks. Given the product structure in Figure 41.4, determine the time-phased requirements for M5, C5, and S2 to meet the master schedule for P1. Assume no common use items. On-hand inventories are 200 units for M5 and 100 units for C5, zero for S2. Use a format similar to Table 41.2 and develop a spreadsheet calculator to solve. Ignore demand for P1 beyond period 10.

What is a sensor?

The surface of a silicon wafer is thermally oxidized, resulting in a SiO2 film that is 100 nm thick. If the starting thickness of the wafer was exactly 0.400 mm, what is the final wafer thickness after thermal oxidation?

Outline the accounting procedures involved in applying the finance lease method by a lessee.

1.    : Do you think that it’s possible for individuals to develop a global mind-set if they never live outside their native country? Explain.

The food industry provides a great deal of information about its products. Why, despite this, does the government run various campaigns about healthy eating?

Jansen Corporation shipped $20,000 of merchandise on consignment to Gooch Company. Jansen paid freight costs of $2,000. Gooch Company paid $500 for local advertising, which is reimbursable from Jansen. By year-end, 60% of the merchandise had been sold for $21,500. Gooch notified Jansen, retained a 10% commission, and remitted the cash due to Jansen. Prepare Jansen’s entry when the cash is received.

Financial and non-financial measures Managers increasingly use a mixture of financial and non-financial measures for organisational performance.         Required In the following list of performance measures, identify those that are financial (F) and those that are non-financial (N).   (a)     Customer satisfaction ratings (b)     Market share (c)     Operating margin (d)     Return on sales (e)     Annual average purchase amount per customer (f)      Defect rate (g)     Normal spoilage (h)     Labour efficiency variance (i)      Number of new products developed annually (j)      Revenues from new products introduced this year

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?

Wise Company began operations at the beginning of 2015. The following information pertains to this company. 1. Pretax financial income for 2015 is $100,000. 2. The tax rate enacted for 2015 and future years is 40%. 3. Differences between the 2015 income statement and tax return are listed below: (a) Warranty expense accrued for financial reporting purposes amounts to $7,000. Warranty deductions per the tax return amount to $2,000. (b) Gross profit on construction contracts using the percentage-of-completion method per books amounts to $92,000. Gross profit on construction contracts for tax purposes amounts to $67,000. (c) Depreciation of property, plant, and equipment for financial reporting purposes amounts to $60,000. Depreciation of these assets amounts to $80,000 for the tax return. (d) A $3,500 fine paid for violation of pollution laws was deducted in computing pretax financial income. (e) Interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,500. 4. Taxable income is expected for the next few years. (Assume (a) is short-term in nature; assume (b) and (c) are long-term in nature.) Instructions (a) Compute taxable income for 2015. (b) Compute the deferred taxes at December 31, 2015, that relate to the temporary differences described above. Clearly label them as deferred tax asset or liability. (c) Prepare the journal entry to record income tax expense, deferred taxes, and income taxes payable for 2015. (d) Draft the income tax expense section of the income statement, beginning with “Income before income taxes.”

Pacific Airlines Co. awards members of its Frequent Fliers Club one free round-trip ticket, anywhere on its flight system, for every 50,000 miles flown on its planes. How would you account for the free ticket award?