Question & Answer

Explain the rationale for the ceiling and floor in the lowerof- cost-or-market method of valuing inventories.

Explain the difference between a market order and a limit order. (LO1)

Rory and Nicholi, single taxpayers, each annually receives Social Security benefits of $15,000. Rory’s taxable income from sources other than Social Security exceeds $200,000. In contrast, the Social Security benefits are Nicholi’s only source of income. What percentage of the Social Security benefits must Rory include in his gross income? What percentage of Social Security benefits is Nicholi required to include in his gross income?

Compare and contrast financial accounting rules with the tax rules under UNICAP (§263A). Explain whether the UNICAP rules tend to accelerate or defer income relative to the financial accounting rules.

Actions to mitigate risk Ben, an employee of Joseph’s, appears to be extremely enthusiastic about his back-office accounting role. He has been with Joseph’s company for about four years and has performed well in his position. Ben is very keen to progress in the company and Joseph has recently decided to offer him a posting at a small international operation in Asia. While the role is to remain in the back office, the position will not require efforts on a full-time basis. Instead, Joseph decides to provide Ben with an opportunity to manage the currently vacant front-office trading role. While the operation is small and Ben has limited trading skills, Joseph is sure Ben will be able to manage both roles and hopefully learn about, and at the same time develop, the trading arm of this international operation. Joseph decides to award Ben an uncapped bonus on profits earned for the group on top of his negotiated annual base salary.   Required Prepare a report advising Joseph on the risk management ramifications of his decisions. What actions should Joseph take to mitigate any perceived risk? (LO6)

What is a factory that performs casting operations usually called?

Adam and Alyssa are equal partners in the PartiPilo Partnership. The partners formed the partnership three years ago by contributing cash. Prior to any distributions, the partners have the following bases in their partnership interests: Partner Outside Basis Adam $ 12,000 Alyssa 12,000 On December 31 of the current year, the partnership makes a pro rata operating distribution of: Partner Distribution Adam Cash     $ 16,000 Alyssa Cash          8,000 Property    8,000 (FMV)  ($6,000 basis to partnership) a. What are the amount and character of Adam’s recognized gain or loss? b. What is Adam’s remaining basis in his partnership interest? c. What are the amount and character of Alyssa’s recognized gain or loss? d. What is Alyssa’s basis in the distributed assets? e. What is Alyssa’s remaining basis in her partnership interest?

What is rapid prototyping? Provide a definition of the term.

Pretax financial income for Lake Inc. is $300,000, and its taxable income is $100,000 for 2015. Its only temporary difference at the end of the period relates to a $70,000 difference due to excess depreciation for tax purposes. If the tax rate is 40% for all periods, compute the amount of income tax expense to report in 2015. No deferred income taxes existed at the beginning of the year.

What are some steps taken by both the FASB and IASB to move to fair value measurement for financial instruments? In what ways have some of the approaches differed?

What are some of the significant sources of contaminants in IC processing?

How should changes in the estimated unguaranteed residual value be handled by the lessor?

What are the general physical properties of ceramic materials?

1.       : Why do you think Mary Parker Follett’s ideas tended to be popular with businesspeople of her day but were ignored by management scholars? Why are her ideas appreciated more today?

Answer the following questions relatedto Dubois Inc. (a) Dubois Inc. has $600,000 to invest. The company is trying to decide between two alternative uses of the funds. One alternative provides $80,000 at the end of each year for 12 years, and the other is to receive a single lump-sum payment of $1,900,000 at the end of the 12 years. Which alternative should Dubois select? Assume the interest rate is constant over the entire investment. (b) Dubois Inc. has completed the purchase of new Dell computers. The fair value of the equipment is $824,150. The purchase agreement specifies an immediate down payment of $200,000 and semiannual payments of $76,952 beginning at the end of 6 months for 5 years. What is the interest rate, to the nearest percent, used in discounting this purchase transaction? (c) Dubois Inc. loans money to John Kruk Corporation in the amount of $800,000. Dubois accepts an 8% note due in 7 years with interest payable semiannually. After 2 years (and receipt of interest for 2 years), Dubois needs money and therefore sells the note to Chicago National Bank, which demands interest on the note of 10% compounded semiannually. What is the amount Dubois will receive on the sale of the note? (d) Dubois Inc. wishes to accumulate $1,300,000 by December 31, 2024, to retire bonds outstanding. The company deposits $200,000 on December 31, 2014, which will earn interest at 10% compounded quarterly, to help in the retirement of this debt. In addition, the company wants to know how much should be deposited at the end of each quarter for 10 years to ensure that $1,300,000 is available at the end of 2024. (The quarterly deposits will also earn at a rate of 10%, compounded quarterly.) (Round to even dollars.)

What is sheet molding compound (SMC)?

In a given economy, the supply of money is £10 billion; the velocity of circulation of money (spent on final goods and services) is 3; and the price index is 2.00.          (a)  What is the level of real national income?          (b)  How much have prices risen (in percentage terms) since the base year?          (c)  Assume that money supply increases by 10 per cent and that the velocity of circulation remains constant. What will be the rate of inflation if (i) there is no increase in real national income; (ii) real national income increases by 10 per cent; (iii) real national income increases by 5 per cent?

A static memory device will have a two-dimensional array with 64 by 64 cells. Determine the number of input/output pins required using Rent's rule with C = 6.0 and m = 0.12.

Alcide Mining Company purchased land on February 1, 2014, at a cost of $1,190,000. It estimated that a total of 60,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $90,000. It believes it will be able to sell the property afterwards for $100,000. It incurred developmental costs of $200,000 before it was able to do any mining. In 2014, resources removed totaled 30,000 tons. The company sold 22,000 tons. Instructions Compute the following information for 2014. (a) Per unit material cost. (b) Total material cost of December 31, 2014, inventory. (c) Total material cost in cost of goods sold at December 31, 2014.

What is the deciding factor in determining whether a capital gain is a short-term or long-term capital gain?

The financial statements of P&G are presented in Appendix 5B. The company’s complete annual report, including the notes to the financial statements, can be accessed at the book’s companion website, www. wiley.com/college/kieso. Instructions Refer to these financial statements and the accompanying notes to answer the following questions. (a) What was P&G’s 2011 short-term debt and related weighted-average interest rate on this debt? (b) What was P&G’s 2011 working capital, acid-test ratio, and current ratio? Comment on P&G’s liquidity. (c) What types of commitments and contingencies has P&G’s reported in its financial statements? What is management’s reaction to these contingencies?

Montel argues that a flat income tax rate system is vertically equitable.  Oprah argues that a progressive tax rate structure is vertically equitable.  How do their arguments differ?  Who is correct?

Under what conditions should a short-term obligation be excluded from current liabilities?

Theory If the segmented markets theory causes an upward-sloping yield curve, what does this imply? If markets are not completely segmented, should we dismiss the segmented markets theory as even a partial explanation for the term structure of interest rates? Explain. (LO3)

If the government is running a budget deficit, does this mean that national income will increase?