Question & Answer

Fernandez Corp. invested its excess cash in available-for-sale securities during 2014. As of December 31, 2014, the portfolio of available-for-sale securities consisted of the following common stocks. Security Quantity Cost Fair Value Lindsay Jones, Inc. 1,000 shares $ 15,000 $ 21,000 Poley Corp. 2,000 shares 40,000 42,000 Arnold Aircraft 2,000 shares 72,000 60,000 Totals $127,000 $123,000 Instructions (a) What should be reported on Fernandez’s December 31, 2014, balance sheet relative to these securities? What should be reported on Fernandez’s 2014 income statement? On December 31, 2015, Fernandez’s portfolio of available-for-sale securities consisted of the following common stocks. Security Quantity Cost Fair Value Lindsay Jones, Inc. 1,000 shares $ 15,000 $20,000 Lindsay Jones, Inc. 2,000 shares 33,000 40,000 Duff Company 1,000 shares 16,000 12,000 Arnold Aircraft 2,000 shares 72,000 22,000 Totals $136,000 $94,000 During the year 2015, Fernandez Corp. sold 2,000 shares of Poley Corp. for $38,200 and purchased 2,000 more shares of Lindsay Jones, Inc. and 1,000 shares of Duff Company. (b) What should be reported on Fernandez’s December 31, 2015, balance sheet? What should be reported on Fernandez’s 2015 income statement? On December 31, 2016, Fernandez’s portfolio of available-for-sale securities consisted of the following common stocks. Security Quantity Cost Fair Value Arnold Aircraft 2,000 shares $72,000 $82,000 Duff Company 500 shares 8,000 6,000 Totals $80,000 $88,000 During the year 2016, Fernandez Corp. sold 3,000 shares of Lindsay Jones, Inc. for $39,900 and 500 shares of Duff Company at a loss of $2,700. (c) What should be reported on the face of Fernandez’s December 31, 2016, balance sheet? What should be reported on Fernandez’s 2016 income statement? (d) What would be reported in a statement of comprehensive income at (1) December 31, 2014, and (2) December 31, 2015?

Rock Creek LLC was recently formed with the following members: Name Tax Year-End Capital/Profits % Mark Banks December 31 35% Highball Properties LLC March 31 25% Chavez Builders Inc. November 30 40% What is the required taxable year-end for Rock Creek LLC?

Net income for the year for Tanizaki, Inc. was $750,000, but the statement of cash flows reports that net cash provided by operating activities was $860,000. Tanizaki also reported capital expenditures of $75,000 and paid dividends in the amount of $30,000. Compute Tanizaki’s free cash flow.

Potlatch Corporation has issued various types of bonds such as term bonds, income bonds, and debentures. Differentiate between term bonds, mortgage bonds, debenture bonds, income bonds, callable bonds, registered bonds, bearer or coupon bonds, convertible bonds, commodity-backed bonds, and deep discount bonds.

1. If there was a growth in the total number of worker hours because people worked longer hours, what would happen to GDP per hour worked and GDP per capita? 2. If people worked longer hours how would you assess whether the country was better or worse off?

Distinguish among depreciation, depletion, and amortization.

What is a binary vision system?

Should all developing countries aim over the long term to become exporters of manufactured products?

Jamel and Jennifer have been married 30 years and have filed a joint return every year of their marriage.Their three daughters, Jade, Lindsay, and Abbi, are ages 12, 17, and 22 respectively and all live at home.None of the daughters provide more than half of her own support.Abbi is a full-time student at a local university and does not have any gross income. a.       How many personal and dependency exemptions are Jamel and Jennifer allowed to claim?

Jackson and Ashley Turner (both 45 years old) are married and want to contribute to a Roth IRA for Ashley. For the current year, their AGI is $235,000. Jackson and Ashley each earned half of the income. a. How much can Ashley contribute to her Roth IRA if they file a joint return? b. How much can Ashley contribute if she files a separate return? c. Assume that Ashley earned all of the couple’s income and that she contributed the maximum amount she is allowed to contribute to a Roth IRA. What amount can be contributed to Jackson’s Roth IRA?

Make a list of six possible aims a manager of a high street department store might have. Identify some conflicts that might arise between these aims?

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.

Cost allocation has no impact on the transfer price set.  Discuss.

Distinguish between product costs and period costs as they relate to inventory

How is it determined whether deferred tax amounts are considered to be “related” to specific asset or liability amounts?

Tedesco Company changed depreciation methods in 2014 from double-declining-balance to straight-line. Depreciation prior to 2014 under double-declining-balance was $90,000, whereas straight-line depreciation prior to 2014 would have been $50,000. Tedesco’s depreciable assets had a cost of $250,000 with a $40,000 salvage value, and an 8-year remaining useful life at the beginning of 2014. Prepare the 2014 journal entries, if any, related to Tedesco’s depreciable assets.

Assume that countries A and B are of similar size, that they have similar economies, and that the government debt levels of both countries are within reasonable limits. Assume that the regulations in country A require complete disclosure of financial reporting by issuers of debt in that country, whereas regulations in country B do not require much disclosure of financial reporting. Explain why the government of country A is able to issue debt at a lower cost than the government of country B. (LO3)

What may be included under the heading of “cash”?

How do organisations identify the costs of a cost object?

Should available-for-sale securities always be reported as a current asset? Explain.

Whiteside Corporation issues $500,000 of 9% bonds, due in 10 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Compute the issue price of the bonds.

List the accessory tools that can be used during open die forging according to the video on forging

What is the mechanism by which carbon strengthens steel during heat treatment?

Columbia Sportswear Company acquired a trademark that is helpful in distinguishing one of its new products. The trademark is renewable every 10 years at minimal cost. All evidence indicates that this trademarked product will generate cash flows for an indefinite period of time. How should this trademark be amortized?

What restrictions might prevent a partner from selling their partnership interest to a third party?