Question & Answer

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

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.

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?

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

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

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

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

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

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?

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?

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.

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

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

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

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.

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.”

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?

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?

What are some of the reasons for downtime on a machining transfer line?

A 12-inch diameter silicon wafer has a processable area that is circular with a diameter = 11.4 in. The IC chips that will be fabricated on the wafer surface are square with 0.75 in on a side, including an allowance for subsequent chip separation. However, the processable area on each chip is only 0.60 in by 0.60 in. The density of circuits within each chip’s processable area is 100,000 circuits per square inch. (a) How many IC chips can be placed onto the wafer? (b) Using Rent’s Rule with C = 3.8 and m = 0.43, how many input/output terminals (pins) will be needed for each chip package?

Bedrock Inc. is owned equally by Barney and his spouse Betty, each of whom holds 1,000 shares in the company. Betty wants to reduce her ownership in the company, and it is decided that the company will redeem 500 of her shares for $25,000 per share on December 31 of this year. Betty’s tax basis in each share is $5,000. Bedrock has current E&P of $10,000,000 and accumulated E&P of $50,000,000.

What is the nature of interest? Distinguish between “simple interest” and “compound interest.”

Indicate whether the following items are capitalized or expensed in the current year. (a) Purchase cost of a patent from a competitor. (b) Research costs. (c) Development costs (after achieving economic viability). (d) Organizational costs. (e) Costs incurred internally to create goodwill.