Question & Answer

If a bank is very uncertain about future interest rates, how might it insulate its future performance from future interest rate movements? (LO3)

Under what circumstances would an expansionary fiscal policy have no effect at all on national income?

1. Which of the above theories overlap and in what way? 2. Why, do you think, is it difficult to find adequate empirical support for any of them?

The following information relates to Starbucks for the year ended October 2, 2011: net income 1,245.7 million; unrealized holding loss of $10.9 million related to available-for-sale securities during the year; accumulated other comprehensive income of $57.2 million on October 3, 2010. Assuming no other changes in accumulated other comprehensive income, determine (a) other comprehensive income for 2011, (b) comprehensive income for 2011, and (c) accumulated other comprehensive income at October 2, 2011.

Are taxpayers allowed to deduct net capital losses (capital losses in excess of capital gains)? Explain.

What are the relative advantages of the cash and accrual methods of accounting?

Karen Weller, D.D.S., opened a dental practice on January 1, 2014. During the first month of operations, the following transactions occurred. 1. Performed services for patients who had dental plan insurance. At January 31, $750 of such services was performed but not yet billed to the insurance companies. 2. Utility expenses incurred but not paid prior to January 31 totaled $520. 3. Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing a $60,000, 3-year note payable. The equipment depreciates $400 per month. Interest is $500 per month. 4. Purchased a one-year malpractice insurance policy on January 1 for $12,000. 5. Purchased $1,600 of dental supplies. On January 31, determined that $500 of supplies were on hand. Instructions Prepare the adjusting entries on January 31. (Omit explanations.) Account titles are Accumulated Depreciation—Equipment, Depreciation Expense, Service Revenue, Accounts Receivable, Insurance Expense, Interest Expense, Interest Payable, Prepaid Insurance, Supplies, Supplies Expense, Utilities Expense, and Accounts Payable.

What is a bank’s gap, and what does it attempt to determine? Interpret a negative gap. What are some limitations of measuring a bank’s gap? (LO3)

Camille Sikorski was divorced last year.She currently owns and provides a home for her 15-year-old daughter, Kaly, and 18-year-old son, Parker.Both children lived in Camille’s home for the entire year and Camille paid for all the costs of maintaining the home.She received a salary of $105,000 and contributed $6,000 of it to a qualified retirement account (a for AGI deduction).She also received $10,000 of alimony from her former husband.Finally, Camille paid $5,000 of expenditures that qualified as itemized deductions. a.       What is Camille’s taxable income?

How are state-sponsored 529 educational savings plans taxed if investment returns are used for educational purposes? Are the returns taxed differently if they are not ultimately used to pay for education costs?

Explain how the bond market facilitates a government’s fiscal policy. How do you think the bond market could discipline a government and discourage the government from borrowing (and spending) excessively? (LO1)

An integrated circuit used in a memory module contains 224 memory circuits. Sixteen of these integrated circuits are packaged onto a board to provide a 256 Mbyte memory module. Use Rent's rule, Eq. (34.11), with C = 6.0 and m = 0.12 to determine the approximate number of input/output pins required in each of the integrated circuits.

1.    : As a manager, how would you use symbols to build an adaptability culture that encourages teamwork and risk taking? What kinds of symbols could you use to promote the values of an involvement culture?

1.    : Why do you think so little attention is given to followership compared to leadership in organizations? Discuss how the role of an effective follower is similar to the role of a leader.

1. Assume that demand for a product is inelastic. Will consumer expenditure go on increasing as price rises? Would there be any limit? 2. Can you think of any examples of goods which have a totally inelastic demand (a) at all prices; (b) over a particular price range?

What strategies will help a business maximize its current depreciation deductions (including §179)? Why might a taxpayer choose not to maximize its current depreciation deductions?

What is a reversing mill in rolling?

All else being equal, should taxpayers prefer to exclude income or defer it?Why?

Name and sketch the five joint types.

What is the difference between peripheral milling and face milling?

Jeremy (unmarried) earned $100,000 in salary and $6,000 in interest income during the year. Jeremy’s employer withheld $10,000 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child (age 14) who lives with him. Jeremey qualifies to file as head of household and has $25,000 in itemized deductions.

Kimberly is divorced and the custodial parent of a 3-year-old girl named Bailey. Kimberly and Bailey live with Kimberly’s parents, who pay all the costs of maintaining the household (such as mortgage, property taxes, and food). Kimberly pays forBailey’s clothing, entertainment, and healthinsurance costs.These costs comprised only a small part of the total costs of maintaining the household.Kimberly does not qualify as her parents’ dependent. a. Determine the appropriate filing status for Kimberly.

Consider the prevailing conditions for inflation (including oil prices), the economy, the budget deficit, and the Fed’s monetary policy that could affect interest rates. Based on these conditions, do you think interest rates will likely increase or decrease during this semester? Offer some logic to support your answer. Which factor do you think will have the greatest impact on interest rates? (LO2)

Describe the difference between up milling and down milling?

What is the relationship of the asset turnover to the return on assets?