Question & Answer

Internal and external reports Classify the following reports as internal or external. (a)          Operating budget           (b)          Credit reports                             (c)           Financial statements                   (d)          Capital budget                            (e)           Tax returns                                 (f)           Analysis of product mix

Peggy is a rodeo clown, and this year she expended $1,000 on special “funny” clothes and outfits. Peggy would like to deduct the cost of these clothes as work-related because she refuses to wear the clothes unless she is working. Under what circumstances can Peggy deduct the cost of her clown clothes?

Jackie has a corporate client that has recently received a 30 day notice from the IRS with a $100,000 tax assessment.  Her client is considering requesting an appeals conference to contest the assessment.  What factors should Jackie advise her client to consider before requesting an appeals conference?

What are the functions of a grinding fluid?

1.      : Is a 1-5 grading system by principals and master teachers a valuable part of a feedback control system for teachers? Why?

What is an embossing operation?

Conceptually, when taxpayers receive annuity payments, how do they determine the amount of the payment they must include in gross income?

What is a partnership’s ordinary business income (loss), and how is it calculated?

What is stare decisis, and how does it relate to the Golsen rule?

“The federal income tax scores very high on the economy criterion because the current IRS budget is relatively low compared to the costs of a typical collection agency.”  Explain why this statement may be considered wrong.

1. If monopoly power existed in an industry, would production be above or below the socially efficient level (assuming no externalities)? Which would be greater, MSB or P? 2. Assuming perfect competition and no externalities, social efficiency will also be achieved in factor markets. Demonstrate that this will be where:                     MSBf = MRPf = Pf = MDUf = MSCf (where MRP is the marginal product of a factor, MDU is the marginal disutility of supplying it and f is any factor – see section 10.1).

Under what circumstances would business income from an accounting practice qualify for the deduction for qualified business income?

Why would a company wish to reduce its bond indebtedness before its bonds reach maturity? Indicate how this can be done and the correct accounting treatment for such a transaction.

List two purposes of dressing a grinding wheel.

For what reasons might a corporation purchase its own stock?

Why does the exchange-rate transmission mechanism strengthen the interest-rate transmission mechanism?

Name and briefly describe the four types of chips that occur in metal cutting

Under which of the following circumstances is there likely to be a net gain from trade diversion (refer to Figure 24.14): (a) a small difference between the EU price and the Russian pre-tariff price, and a large difference between the EU price and the Russian price with the tariff, or vice versa; (b) Elastic or inelastic Polish demand and supply curves; (c) The Polish demand and supply curves close together or far apart?

Provide examples of assets that do not qualify for interest capitalization.

On December 21, 2013, Bucky Katt Company provided you with the following information regarding its trading securities. December 31, 2013 Investments (Trading) Cost Fair Value Unrealized Gain (Loss) Clemson Corp. stock $20,000 $19,000 $(1,000) Colorado Co. stock 10,000 9,000 (1,000) Buffaloes Co. stock 20,000 20,600 600 Total of portfolio $50,000 $48,600 (1,400) Previous fair value adjustment balance –0– Fair value adjustment—Cr. $(1,400) During 2014, Colorado Company stock was sold for $9,400. The fair value of the stock on December 31, 2014, was Clemson Corp. stock—$19,100; Buffaloes Co. stock—$20,500. Instructions (a) Prepare the adjusting journal entry needed on December 31, 2013. (b) Prepare the journal entry to record the sale of the Colorado Company stock during 2014. (c) Prepare the adjusting journal entry needed on December 31, 2014.

How does the expense warranty approach differ from the sales warranty approach?

What dangers are there in maturity transformation for (a) financial institutions; (b) society generally?

What purpose do property and casualty insurance companies serve? Explain how the characteristics of PC insurance and life insurance differ. (LO4)

In periods when home prices declined substantially, some homeowners blamed the Fed. In other periods when home prices increased, homeowners gave credit to the Fed. How can the Fed have such a large impact on home prices? How could news of a substantial increase in the general inflation level affect the Fed’s monetary policy and thereby affect home prices? (LO2; LO3)

There are several modern-day variations of forge welding, the original welding process. Name them.