Question & Answer

What is a part family?

Leonard Bernstein Company began operations late in 2013 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2013 and no markdowns during 2013, the ending inventory for 2013 was $14,000 under both the conventional retail method and the LIFO retail method. At the end of 2014, management wants to compare the results of applying the conventional and LIFO retail methods. There was no change in the price level during 2014. The following data are available for computations. 8 Cost Retail Inventory, January 1, 2014 $14,000 $20,000 Sales revenue 80,000 Net markups 9,000 Net markdowns 1,600 Purchases 58,800 81,000 Freight-in 7,500 Estimated theft 2,000

Data for Krauss Company are presented in E23-5. Instructions Prepare the operating activities section of the statement of cash flows using the indirect method.

Explain how convertible securities are determined to be potentially dilutive common shares and how those convertible securities that are not considered to be potentially dilutive common shares enter into the determination of earnings per share data.

] Jimmer has contributed $15,000 to his Roth IRA, and the balance in the account is $18,000. In the current year, Jimmer withdrew $17,000 from the Roth IRA to pay for a new car. If Jimmer’s marginal ordinary income tax rate is 24 percent, what amount of tax and penalty, if any, is Jimmer required to pay on the withdrawal in each of the following alternative situations? a. Jimmer opened the Roth account 44 months before he withdrew the $17,000, and Jimmer is 62 years of age. b. Jimmer opened the Roth account 44 months before he withdrew the $17,000, and Jimmer is age 53. c. Jimmer opened the Roth account 76 months before he withdrew the $17,000, and Jimmer is age 62. d. Jimmer opened the Roth account 76 months before he withdrew the $17,000, and Jimmer is age 53.

On January 1, 2014, Aumont Company sold 12% bonds having a maturity value of $500,000 for $537,907.37, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2014, and mature January 1, 2019, with interest payable December 31 of each year. Aumont Company allocates interest and unamortized discount or premium on the effective-interest basis. Instructions (Round answers to the nearest cent.) (a) Prepare the journal entry at the date of the bond issuance. (b) Prepare a schedule of interest expense and bond amortization for 2014–2016. (c) Prepare the journal entry to record the interest payment and the amortization for 2014. (d) Prepare the journal entry to record the interest payment and the amortization for 2016.

At December 31, 2014, Appaloosa Corporation had a deferred tax liability of $25,000. At December 31, 2015, the deferred tax liability is $42,000. The corporation’s 2015 current tax expense is $48,000. What amount should Appaloosa report as total 2015 income tax expense?

Consider the following letter and answer Shady’s question.

On December 31, 2014, Hattie McDaniel Company had $1,200,000 of short-term debt in the form of notes payable due February 2, 2015. On January 21, 2015, the company issued 25,000 shares of its common stock for $38 per share, receiving $950,000 proceeds after brokerage fees and other costs of issuance. On February 2, 2015, the proceeds from the stock sale, supplemented by an additional $250,000 cash, are used to liquidate the $1,200,000 debt. The December 31, 2014, balance sheet is issued on February 23, 2015. Instructions Show how the $1,200,000 of short-term debt should be presented on the December 31, 2014, balance sheet, including note disclosure.

What is a chill in casting?

Hollenbeck Foods Inc. sponsors a postretirement medical and dental benefit plan for its employees. The following balances relate to this plan on January 1, 2014. Plan assets $200,000 Expected postretirement benefi t obligation 820,000 Accumulated postretirement benefi t obligation 200,000 No prior service costs exist. As a result of the plan’s operation during 2014, the following additional data are provided by the actuary. Service cost is $70,000 Discount rate is 10% Contributions to plan are $65,000 Expected return on plan assets is $10,000 Actual return on plan assets is $15,000 Benefi ts paid to employees are $44,000 Average remaining service to full eligibility: 20 years Instructions (a) Using the preceding data, compute the net periodic postretirement benefit cost for 2014 by preparing a worksheet that shows the journal entry for postretirement expense and the year-end balances in the related postretirement benefit memo accounts. (Assume that contributions and benefits are paid at the end of the year.) (b) Prepare any journal entries related to the postretirement plan for 2014 and indicate the postretirement amounts reported in the financial statements for 2014.

What is the fair value option?

Baden Corporation entered into a lease agreement for 10 photocopy machines for its corporate headquarters. The lease agreement qualifies as an operating lease in all terms except there is a bargain-purchase option. After the 5-year lease term, the corporation can purchase each copier for $1,000, when the anticipated fair value is $2,500. Jerry Suffolk, the financial vice president, thinks the financial statements must recognize the lease agreement as a capital lease because of the bargain-purchase option. The controller, Diane Buchanan, disagrees: “Although I don’t know much about the copiers themselves, there is a way to avoid recording the lease liability.” She argues that the corporation might claim that copier technology advances rapidly and that by the end of the lease term the machines will most likely not be worth the $1,000 bargain price. Instructions Answer the following questions. (a) What ethical issue is at stake? (b) Should the controller’s argument be accepted if she does not really know much about copier technology? Would it make a difference if the controller were knowledgeable about the pace of change in copier technology? (c) What should Suffolk do?

The total work content for a product assembled on a manual production line is 48 min. The work is transported using a continuous overhead conveyor that operates at a speed of 3 ft/min. There are 24 workstations on the line, one-third of which have two workers; the remaining stations each have one worker. Repositioning time per worker is 9 sec, and uptime efficiency of the line is 95%. (a) What is the maximum possible hourly production rate if line is assumed to be perfectly balanced? (b) If the actual production rate is only 92% of the maximum possible rate determined in part (a), what is the balance efficiency on the line?

A drawing operation is performed on 3.0 mm stock. The part is a cylindrical cup with height = 50 mm and inside diameter = 70 mm. Assume the corner radius on the punch is zero. (a) Find the required starting blank size Db. (b) Is the drawing operation feasible?

During 2014, Kate Holmes Co.’s first year of operations, the company reports pretax financial income at $250,000. Holmes’s enacted tax rate is 45% for 2014 and 40% for all later years. Holmes expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2014, are summarized as follows. Future Years 2015 2016 2017 2018 2019 Total Future taxable (deductible) amounts: Installment sales $32,000 $32,000 $32,000 $ 96,000 Depreciation 6,000 6,000 6,000 $6,000 $6,000 30,000 Unearned rent (50,000) (50,000) (100,000) Instructions (a) Complete the schedule below to compute deferred taxes at December 31, 2014. (b) Compute taxable income for 2014. (c) Prepare the journal entry to record income taxes payable, deferred taxes, and income tax expense for 2014. Future Taxable December 31, 2014 (Deductible) Tax Deferred Tax Temporary Difference Amounts Rate (Asset) Liability Installment sales $ 96,000 Depreciation 30,000 Unearned rent (100,000) Totals $

Much of the work at the Cut-Anything Company involves cutting and forming of flat sheets of fiber-glass for the pleasure boat industry. Manual methods based on portable saws are currently used to perform the cutting operation, but production is slow and scrap rates are high. The foreman says the company should invest in a plasma arc cutting machine, but the plant manager thinks it would be too expensive. What do you think? Justify your answer by indicating the characteristics of the process that make PAC attractive or unattractive in this application.

Using the appropriate interest table, answer the following questions. (Each case is independent of the others). (a) What is the future value of 20 periodic payments of $4,000 each made at the beginning of eachperiod and compounded at 8%? (b) What is the present value of $2,500 to be received at the beginning of each of 30 periods, discounted at 10% compound interest? (c) What is the future value of 15 deposits of $2,000 each made at the beginning of each period and compounded at 10%? (Future value as of the end of the fifteenth period.) (d) What is the present value of six receipts of $1,000 each received at the beginning of each period, discounted at 9% compounded interest?

What is the difference between a roving and a yarn?

What is a two-high rolling mill?

How does the change in cross-sectional area of a test specimen in a compression test differ from its counterpart in a tensile test specimen?

What does the centerburst defect in extrusion have in common with the roll piercing process?

1. Why do you think that the ratios for developing countries are lower than those for developed countries? 2. Make a list of reasons why the ratios of the bottom 40 per cent to the top 20 per cent may not give an accurate account of relative levels of inequality between countries. 3. What would the ratio be if national income were absolutely equally distributed?

Apple Union (AU), a C corporation with a March 31 year-end, uses the accrual method of accounting.  If AU elects to be taxed as an S corporation, what will its year-end and method of accounting be (assuming no special elections)?

Bruno Corporation’s post-closing trial balance at December 31, 2014, is shown on the next page.   At December 31, 2014, Bruno had the following number of common and preferred shares. Common Preferred Authorized 600,000 60,000 Issued 200,000 10,000 Outstanding 190,000 10,000 The dividends on preferred stock are $4 cumulative. In addition, the preferred stock has a preference in liquidation of $50 per share. Instructions Prepare the stockholders’ equity section of Bruno’s balance sheet at December 31, 2014.