Question & Answer

List the factors that affect the hold down pressure in a drawing operation according to the video on sheet-metal stamping dies and processes.

] Song earns $100,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $20,000 of tax).  If Congress increases the income tax rate such that Song’s average tax rate increases from 20 percent to 25 percent, how much more income tax will she pay assuming that the income effect is descriptive?  What effect will this tax rate change have on the tax base and tax collected?

What is the kiddie tax?  Explain.

Your client is in the planning phase for a major plant expansion, which will involve the construction of a new warehouse. The assistant controller does not believe that interest cost can be included in the cost of the warehouse, because it is a financing expense. Others on the planning team believe that some interest cost can be included in the cost of the warehouse, but no one could identify the specific authoritative guidance for this issue. Your supervisor asks you to research this issue. Instructions If your school has a subscription to the FASB Codification, go to http://aaahq.org/asclogin.cfm to log in and prepare responses to the following. Provide Codification references for your responses. (a) Is it permissible to capitalize interest into the cost of assets? Provide authoritative support for your answer. (b) What are the objectives for capitalizing interest? (c) Discuss which assets qualify for interest capitalization. (d) Is there a limit to the amount of interest that may be capitalized in a period? (e) If interest capitalization is allowed, what disclosures are required?

For each item below, indicate to which category of elements of financial statements it belongs. (a) Retained earnings (e) Depreciation (h) Dividends (b) Sales (f) Loss on sale of equipment (i) Gain on sale of investment (c) Additional paid-in capital (g) Interest payable (j) Issuance of common stock (d) Inventory

Compare and contrast the IRS method and the Tax Court method for allocating expenses between personal use and rental use for vacation homes. Include the Tax Court’s justification for departing from the IRS method in your answer.

Hanson Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1,800,000 on March 1, $1,200,000 on June 1, and $3,000,000 on December 31. Compute Hanson’s weighted-average accumulated expenditures for interest capitalization purposes.

What are the general rules for measuring and recognizing gain or loss by both the debtor and the creditor in a troubleddebt restructuring involving a modification of terms?

Describe the principal methods by which organic coatings are applied to a surface.

Hull Company’s record of transactions concerning part X for the month of April was as follows. Purchases Sales April 1 (balance on hand) 100 @ $5.00 April 5 300 4 400 @ 5.10 12 200 11 300 @ 5.30 27 800 18 200 @ 5.35 28 150 26 600 @ 5.60 30 200 @ 5.80 Instructions (a) Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. Carry unit costs to the nearest cent. (1) First-in, first-out (FIFO). (2) Last-in, first-out (LIFO). (3) Average-cost. (b) If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal, what amount would be shown as ending inventory in (1), (2), and (3) above? (Carry average unit costs to four decimal places.)

Under what circumstances does property received by a corporation in a §351 transaction not receive a carryover basis?  What is the reason for this rule?

SCC corporation (a calendar-year C corporation) has a net operating loss (NOL) carryover to 2024 in the amount of $30,000.  How much tax will SCC pay for 2024 if it reports taxable income from operations of $20,000 before considering loss carryovers under the following assumptions?   a. The NOL originated in 2017.

What else is the diagram telling us?

Define the term fusion weld.

Busytown Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. Busytown Corporation gave the machine plus $340 to Dick Tracy Business Machine Company (dealer) in exchange for a new machine. Assume the following information about the machines. Busytown Corp. Dick Tracy Co. (Old Machine) (New Machine) Machine cost $290 $270 Accumulated depreciation 140 –0– Fair value 85 425 Instructions For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.)

The weekly demand and supply schedules for t-shirts (in millions) in a free market are as follows: Price (£) 8 7 6 5 4 3 2 1 Quantity demanded 6 8 10 12 14 16 18 20 Quantity supplied 18 16 14 12 10 8 6 4            (a)  What are the equilibrium price and quantity?          (b)  Assume that changes in fashion cause the demand for t-shirts to rise by 4 million at each price. What will be the new equilibrium price and quantity? Has equilibrium quantity risen as much as the rise in demand? Explain why or why not.          (c)  Now plot the data in the table and mark the equilibrium. Also plot the new data corresponding to (b).

Explain a multiple-deliverable arrangement. What is the major accounting issue related to these arrangements?

{Planning}Tesha works for a company that pays a year-end bonus in January of each defer the bonus income.  Assume Congress recently passed tax legislation that decreases individual tax rates as of next year.  Does this increase or decrease the benefits of the bonus deferral this year?  What if Congress passed legislation that increased tax rates next year?  Should Tesha ask the company to change its policy this year?  What additional information do you need to answer this question?year (instead of December of the preceding year) to allow employees to

: Describe the concept of total quality management (TQM) and major TQM techniques, including quality circles, benchmarking, Six Sigma principles, quality partnering, and continuous improvement.

Cardinals Corporation purchased a computer on December 31, 2013, for $105,000, paying $30,000 down and agreeing to pay the balance in five equal installments of $15,000 payable each December 31 beginning in 2014. An assumed interest rate of 10% is implicit in the purchase price. Instructions (Round to two decimal places.) (a) Prepare the journal entry(ies) at the date of purchase. (b) Prepare the journal entry(ies) at December 31, 2014, to record the payment and interest (effectiveinterest method employed). (c) Prepare the journal entry(ies) at December 31, 2015, to record the payment and interest (effectiveinterest method employed). E10-16 (Asset Acquisition) Hayes Industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2: These assets were purchased as a lump sum for $100,000 cash. The following informationwas gathered. Depreciation to Initial Cost on Date on Seller’s Book Value on Description Seller’s Books Books Seller’s Books Appraised Value Machinery $100,000 $50,000 $50,000 $90,000 Equipment 60,000 10,000 50,000 30,000 Asset 3: This machine was acquired by making a $10,000 down payment and issuing a $30,000, 2-year, zero-interest-bearing note. The note is to be paid off in two $15,000 installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for $35,900. Asset 4: This machinery was acquired by trading in used machinery. (The exchange lacks commercial substance.) Facts concerning the trade-in are as follows. Cost of machinery traded $100,000 Accumulated depreciation to date of sale 40,000 Fair value of machinery traded 80,000 Cash received 10,000 Fair value of machinery acquired 70,000 Asset 5: Equipment was acquired by issuing 100 shares of $8 par value common stock. The stock had a market price of $11 per share. Construction of Building: A building was constructed on land purchased last year at a cost of $150,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows. Date Payment 2/1 $120,000 6/1 360,000 9/1 480,000 11/1 100,000 To finance construction of the building, a $600,000, 12% construction loan was taken out on February 1. The loan was repaid on November 1. The firm had $200,000 of other outstanding debt during the year at a borrowing rate of 8%. Instructions Record the acquisition of each of these assets.

The food industry provides a great deal of information about its products. Why, despite this, does the government run various campaigns about healthy eating?

Why might a bank retain some excess earnings rather than distribute those funds as dividends? (LO1)

Why may managers choose to set prices that cover all costs including sunk costs.

Plant acquisitions for selected companies are as follows. 1. Belanna Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co.,for a lump-sum price of $700,000. At the time of purchase, Torres’s assets had the following book and appraisal values. Book Values Appraisal Values Land $200,000 $150,000 Buildings 250,000 350,000 Equipment 300,000 300,000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. Land 150,000 Buildings 250,000 Equipment 300,000 Cash 700,000 2. Harry Enterprises purchased store equipment by making a $2,000 cash down payment and signing a 1-year, $23,000, 10% note payable. The purchase was recorded as follows. Equipment 27,300 Cash 2,000 Notes Payable 23,000 Interest Payable 2,300 3. Kim Company purchased office equipment for $20,000, terms 2/10, n/30. Because the company intended to take the discount, it made no entry until it paid for the acquisition. The entry was: Equipment 20,000 Cash 19,600 Purchase Discounts 400 4. Kaisson Inc. recently received at zero cost land from the Village of Cardassia as an inducement to locate its business in the Village. The appraised value of the land is $27,000. The company made no entry to record the land because it had no cost basis. 5. Zimmerman Company built a warehouse for $600,000. It could have purchased the building for $740,000. The controller made the following entry. Buildings 740,000 Cash 600,000 Profit on Construction 140,000 Instructions Prepare the entry that should have been made at the date of each acquisition.

If factor X costs twice as much as factor Y (Px/Py = 2), what can be said about the relationship between the MPPs of the two factors if the optimum combination of factors is used?