Question & Answer

What are the basic types of contaminants that must be cleaned from metallic surfaces in manufacturing?

Describe the three different tax rates discussed in the chapter and how taxpayers might use them.

Does the consumer in the importing country gain or lose from dumping?

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.

How does the yield on a repurchase agreement differ from a loan in the federal funds market? Why? (LO2)

The president recently vetoed a tax act passed by the House and Senate.  Is the tax act dead?  If not, what will it take for the act to be passed?

1.    How might the social value of low versus high power distance influence how you would lead and motivate employees? What about the value of low versus high performance orientation?

Clancey Inc. issues $2,000,000 of 7% bonds due in 10 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 8%. What amount will Clancey receive when it issues the bonds?

Santo Corporation has eight expense accounts in its general ledger which could be classified as selling expenses. Should Santo report these eight expenses separately in its income statement or simply report one total amount for selling expenses?

Mehta Company traded a used welding machine (cost $9,000, accumulated depreciation $3,000)for office equipment with an estimated fair value of $5,000. Mehta also paid $3,000 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.)

: Summarize the personal dilemmas and common dysfunctions that may arise when working in teams.

Rolanda Marshall Company, organized in 2013, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2014. 1/2/14 Purchased patent (8-year life) $ 350,000 4/1/14 Purchase goodwill (indefi nite life) 360,000 7/1/14 Purchased franchise with 10-year life; expiration date 7/1/24 450,000 8/1/14 Payment of copyright (5-year life) 156,000 9/1/14 Research and development costs 215,000 $1,531,000 Instructions Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2014, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.)

Two or more items are omitted in each of the following tabulations of income statement data. Fill in the amounts that are missing. 2013 2014 2015 Sales revenue $290,000 $ ? $410,000 Sales returns and allowances 11,000 13,000 ? Net sales ? 347,000 ? Beginning inventory 20,000 32,000 ? Ending inventory ? ? ? Purchases ? 260,000 298,000 Purchase returns and allowances 5,000 8,000 10,000 Freight-in 8,000 9,000 12,000 Cost of goods sold 233,000 ? 293,000 Gross profi t on sales 46,000 91,000 97,000

In a turning operation on an aluminum alloy workpiece, the feed = 0.020 in/rev, and depth of cut = 0.250 in. The motor horsepower of the lathe is 20 hp and it has a mechanical efficiency = 92%. The unit horsepower value = 0.25 hp/(in3 /min) for this aluminum grade. What is the maximum cutting speed that can be used on this job?

1.      : With respect to competitive strategy, identify and evaluate Casper’s target customers, its core competence, and how it builds synergy and delivers value.

Limited Brands recently repurchased 68,965,000 of its shares, paying $29 per share. The total number of shares outstanding before the redemption was 473,223,066. The total number of shares outstanding after the redemption was 404,258,066. Assume your client owned 20,000 shares of stock in Limited Brands. What is the minimum number of shares your client must tender to receive exchange treatment under the “substantially disproportionate with respect to the shareholder” change-in-ownership rules?

1.    What do you think the ideal ranking would be of the three skills for an effective manager?

Presented below are three unrelated situations involving equity securities. Situation 1: An equity security, whose fair value is currently less than cost, is classified as available-for-sale but is to be reclassified as trading. Situation 2: A noncurrent portfolio with an aggregate fair value in excess of cost includes one particular security whose fair value has declined to less than one-half of the original cost. The decline in value is considered to be other than temporary. Situation 3: The portfolio of trading securities has a cost in excess of fair value of $13,500. The availablefor- sale portfolio has a fair value in excess of cost of $28,600. Instructions What is the effect upon carrying value and earnings for each of the situations above?

In year 2, Julio and Milania each received distributions of $25,000 from Falcons Corporation. a.  What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis).

How does accounting help the capital allocation process?

Hollenbeck Foods Inc. sponsors a postretirement medical and dental benefit plan for its employees. The following balances relate to this plan on January 1, 2014. Plan assets $200,000 Expected postretirement benefi t obligation 820,000 Accumulated postretirement benefi t obligation 200,000 No prior service costs exist. As a result of the plan’s operation during 2014, the following additional data are provided by the actuary. Service cost is $70,000 Discount rate is 10% Contributions to plan are $65,000 Expected return on plan assets is $10,000 Actual return on plan assets is $15,000 Benefi ts paid to employees are $44,000 Average remaining service to full eligibility: 20 years Instructions (a) Using the preceding data, compute the net periodic postretirement benefit cost for 2014 by preparing a worksheet that shows the journal entry for postretirement expense and the year-end balances in the related postretirement benefit memo accounts. (Assume that contributions and benefits are paid at the end of the year.) (b) Prepare any journal entries related to the postretirement plan for 2014 and indicate the postretirement amounts reported in the financial statements for 2014.

Mustafa, Mickayla, and Taylor are starting a new business (MMT). To get the business started, Mustafa is contributing $200,000 for a 40 percent ownership interest, Mickayla is contributing a building with a value of $200,000 and a tax basis of $150,000 for a 40 percent ownership interest, and Taylor is contributing legal services for a 20 percent ownership interest. What amount of gain or income is each owner required to recognize under each of the following alterative situations? [Hint: Look at §§351 and 721.] a. MMT is formed as a C corporation. b. MMT is formed as an S corporation. c. MMT is formed as an LLC (taxed as a partnership).

What is an “implicit tax,” and how does it affect a taxpayer’s decision to purchase municipal bonds?

Based on the definition of gross income in §61, related regulations, and judicial rulings, what are the three criteria for recognizing taxable income?

If the average percentage (as opposed to the average level) of potential output that was unutilised remained constant, would the trend line have the same slope as the potential output line?