Question & Answer

Hayes Company sold 10,000 shares of Kenyon Co. common stock for $27.50 per share, incurring $1,770 in brokerage commissions. These securities were classified as trading and originally cost $260,000. Prepare the entry to record the sale of these securities.

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

Allied Trucking moves produce from farms to markets. Its managers       decided to implement a balanced scorecard around the entity’s vision          statement: 'We aim to be the industry leader in cost-effective and timely      delivery of produce’. Provide two potential performance measures for each of the four perspectives for the balanced scorecard for Allied      Trucking.

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?

Dividends are sometimes said to have been paid “out of retained earnings.” What is the error, if any, in that statement?

Danner Inc. has a $395,000 capital loss carryover that will expire at the end of the current tax year if it is not used. Also, Danner Inc. has been a general partner in the Talisman Partnership for three years and plans to end its involvement with the partnership by receiving a liquidating distribution. Initially, all parties agreed that Danner Inc.’s liquidating distribution would include $50,000 in cash and land with a fair market value of $400,000 (tax basis of $120,000). Immediately before the distribution, Danner’s basis in its partnership interest is $150,000, which includes its $100,000 share of partnership debt.  Talisman Partnership does not hold any hot assets. a. What are the amount and character of any gain or loss to Danner Inc.? b. What is Danner Inc.’s basis in the land? c. Can you suggest a course of action that would help Danner Inc. avoid the expiration of its capital loss carryover?

A 4.50-in-thick slab that is 9 in wide and 24 in long is to be reduced in a single pass in a two-high rolling mill to a thickness of 3.87 in. The roll rotates at a speed of 5.50 rev/min and has a radius of 17.0 in. The work material has a strength coefficient = 30,000 lb/in2 and a strain hardening exponent = 0.15. Determine (a) roll force, (b) roll torque, and (c) power required to accomplish this operation.

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

At two levels of activity within the relevant range, average costs are $192 and $188, respectively. Assuming the cost function is linear, what can be said about the existence of fixed and variable costs?

Explain how the liquidity position of finance companies differs from that of depository institutions such as commercial banks. (LO5)

What is the difference between physical vapor deposition (PVD) and chemical vapor deposition (CVD)?

(a) Assuming no Fair Value Adjustment (available-forsale) account balance at the beginning of the year, prepare the adjusting entry at the end of the year if Laura Company’s available-for-sale securities have a fair value $60,000 below cost. (b) Assume the same information as part (a), except that Laura Company has a debit balance in its Fair Value Adjustment account of $10,000 at the beginning of the year. Prepare the adjusting entry at year-end.

Guillen, Inc. began work on a $7,000,000 contract in 2014 to construct an office building. Guillen uses the completed-contract method. At December 31, 2014, the balances in certain accounts were Construction in Process $1,715,000; Accounts Receivable $240,000; and Billings on Construction in Process $1,000,000. Indicate how these accounts would be reported in Guillen’s December 31, 2014, balance sheet.

Pierre Company has a 12% note payable with a carrying value of $20,000. Pierre applies the fair value option to this note. Given an increase in market interest rates, the fair value of the note is $22,600. Prepare the entry to record the fair value option for this note.

What is isothermal forging?

When should a debt security be classified as held-tomaturity?

Cemented carbides are what class of composites?

Seattle Bank just took speculative positions by borrowing Canadian dollars and converting the funds to invest in Australian dollars. Explain a possible future scenario that could adversely affect the bank’s performance. (LO2, LO3)

Using examples, discuss the conflicts between using the environment as productive resource and as a dump?

It is desired to determine the effect of package style on the number of circuits (logic gates) that can be fabricated onto an IC chip to which the package is assembled. Using Rent's rule with C = 4.5 and m = 0.5, compute the estimated number of devices (logic gates) that could be placed on the chip in the following cases: (a) a DIP with 16 I/O pins on a side - a total of 32 pins; (b) a square chip carrierwith 16 pins on a side - a total of 64 I/O pins; and (c) a pin grid array with 16 by 16 pins - a total of 256 pins

What are some of the arguments in favor of using the indirect (reconciliation) method as opposed to the direct method for reporting a statement of cash flows?

Use the same information as in E14-22 above except that American Bank reduced the principal to $1,900,000 rather than $2,400,000. On January 1, 2018, Barkley pays $1,900,000 in cash to American Bank for the principal. Instructions (a) Can Barkley Company record a gain under this term modification? If yes, compute the gain for Barkley Company. (b) Prepare the journal entries to record the gain on Barkley’s books. (c) What interest rate should Barkley use to compute its interest expense in future periods? Will your answer be the same as in E14-22 above? Why or why not? (d) Prepare the interest payment schedule of the note for Barkley Company after the debt restructuring. (e) Prepare the interest payment entries for Barkley Company on December 31, of 2015, 2016, and 2017. (f) What entry should Barkley make on January 1, 2018?

Are C corporations or flow-through entities (S corporations and entities taxed as partnerships) more flexible in terms of selecting a tax year-end? Why are the tax rules in this area different for C corporations and flow-through business entities?

In an examination of Arenes Corporation as of December 31, 2014, you have learned that the following situations exist. No entries have been made in the accounting records for these items. 1. The corporation erected its present factory building in 1999. Depreciation was calculated by the straight-line method, using an estimated life of 35 years. Early in 2014, the board of directors conducted a careful survey and estimated that the factory building had a remaining useful life of 25 years as of January 1, 2014. 2. An additional assessment of 2013 income taxes was levied and paid in 2014. 3. When calculating the accrual for officers’ salaries at December 31, 2014, it was discovered that the accrual for officers’ salaries for December 31, 2013, had been overstated. 4. On December 15, 2014, Arenes Corporation declared a cash dividend on its common stock outstanding, payable February 1, 2015, to the common stockholders of record December 31, 2014. Instructions Describe fully how each of the items above should be reported in the financial statements of Arenes Corporation for the year 2014.

AJ is a 30 percent partner in the Trane Partnership, a calendar-year-end entity. On January 1, AJ has an outside basis in his interest in Trane of $73,000, which includes his share of the $50,000 of partnership liabilities. Trane generates $42,000 of income during the year and does not make any changes to its liabilities. On December 31, Trane makes a proportionate distribution of the following assets to AJ to terminate his partnership interest: Tax BasisFMV Inventory $ 55,000 $ 65,000 Land 30,000 25,000    Totals $ 85,000 $90,000 a. What are the tax consequences (gain or loss, basis adjustments) of the distribution to Trane? b. What are the amount and character of any recognized gain or loss to AJ? c. What is AJ’s basis in the distributed assets? d. If AJ sells the inventory four years after the distribution for $70,000, what are the amount and character of his recognized gain or loss?