Question & Answer

On a diagram like Figure A1.8 draw the graphs for the following equations:                      y = –3 + 4x                      y = 15 – 3x

Solve Problem 20.21 except that the stock thickness t = 1/8 in.

What would be the classical economists’ criticisms of this argument?

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

How is the distinction between nominal and real relevant to misperceptions theory?

Use the information presented in BE5-8 for Adams Company to prepare the long-term liabilities section of the balance sheet.

Compare and contrast the tests for accruing income and those for accruing deductions for tax purposes.

{Planning} Billups, a physician and cash-method taxpayer, is new to the concept of tax planning and recently learned of the timing strategy.  To implement the timing strategy, Billups plans to establish a new policy that allows all his clients to wait two years to pay their co-pays.  Assume that Billups does not expect his marginal tax rates to change.  What is wrong with his strategy?

The Colson Company issued $300,000 of 10% bonds on January 1, 2014. The bonds are due January 1, 2020, with interest payable each July 1 and January 1. The bonds are issued at face value. Prepare Colson’s journal entries for (a) the January issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry.

Referring to Problem 38.1, the mechanical inaccuracies in the open-loop positioning system can be described by a normal distribution whose standard deviation = 0.005 mm. The range of the worktable axis is 500 mm, and there are 12 bits in the binary register used by the digital controller to store the programmed position. For the positioning system, determine (a) control resolution, (b) accuracy, and (c) repeatability. (d) What is the minimum number of bits that the binary register should have so that the mechanical drive system becomes the limiting component on control resolution?

To what extent do (a) income tax, (b) VAT and (c) a poll tax meet the various requirements for a good tax system?

Describe the flash crash on May 6, 2010, and explain why it caused so much concern among investors and regulators. (LO3)

Clark owns stock in BCS Corporation that he purchased in January of the current year. The stock has appreciated significantly during the year. It is now December of the current year, and Clark is deciding whether he should sell the stock. What tax and nontax factors should Clark consider before making the decision on whether to sell the stock now?

EG Corporation redeemed 200 shares of stock from one of its shareholders in exchange for $200,000. The redemption represented 20 percent of the corporation’s outstanding stock. The redemption was treated as an exchange by the shareholder. By what amount does EG reduce its E&P as a result of the redemption under the following E&P assumptions?

Go through the above arguments and give a reply to the criticisms made of government intervention.

How easy do you think it would be for a firm to split customers into different groups based on their incomes?

1.    Why do you think the three skills are all needed to be an effective manager? Give examples of times when each one is used.

Why might a foreign government’s policies be closely monitored by investors in other countries, even if the investors plan no investments in that country? Explain how monetary policy in one country can affect interest rates in other countries. (LO6)

What factors have to be present for income shifting to be a viable strategy?

List and briefly describe some of the plastic forming methods used to shape traditional ceramic products.

Hyundai is considering opening a plant in two neighboring states.  One state has a corporate tax rate of 10 percent.  If operated in this state, the plant is expected to generate $1,000,000 pretax profit.  The other state has a corporate tax rate of 2 percent.  If operated in this state, the plant is expected to generate $930,000 of pretax profit.  Which state should Hyundai choose?  Why do you think the plant in the state with a lower tax rate would produce a lower before-tax income?

What are the advantages and disadvantages of the singlestep income statement?

What are adjusting entries and why are they necessary?

What are some of the taxes that currently are unique to state and local governments?  What are some of the taxes that the federal, state, and local governments each utilize?

Presented below is information related to Waveland Inc. Cost Retail Inventory, 12/31/14 $250,000 $ 390,000 Purchases 914,500 1,460,000 Purchase returns 60,000 80,000 Purchase discounts 18,000 — Gross sales revenue (after employee discounts) — 1,410,000 Sales returns — 97,500 Markups — 120,000 Markup cancellations — 40,000 Markdowns — 45,000 Markdown cancellations — 20,000 Freight-in 42,000 — Employee discounts granted — 8,000 Loss from breakage (normal) — 4,500 Instructions Assuming that Waveland Inc. uses the conventional retail inventory method, compute the cost of its ending inventory at December 31, 2015.