Question & Answer

Keystone Corporation’s financial statements for the year ended December 31, 2014, were authorized for issue on March 10, 2015. The following events took place early in 2015. (a) On January 10, 10,000 ordinary shares of $5 par value were issued at $66 per share. (b) On March 1, Keystone determined after negotiations with the taxing authorities that income taxes payable for 2014 should be $1,320,000. At December 31, 2014, income taxes payable were recorded at $1,100,000. Instructions Discuss how the preceding subsequent events should be reflected in the 2014 financial statements.

What are the two methods of component placement and soldering in surface-mount technology?

Answer the following questions. (a) On May 1, 2014, Goldberg Company sold some machinery to Newlin Company on an installment contract basis. The contract required five equal annual payments, with the first payment due on May 1, 2014. What present value concept is appropriate for this situation? (b) On June 1, 2014, Seymour Inc. purchased a new machine that it does not have to pay for until May 1, 2016. The total payment on May 1, 2016, will include both principal and interest. Assuming interest at a 12% rate, the cost of the machine would be the total payment multiplied by what time value of money concept? (c) Costner Inc. wishes to know how much money it will have available in 5 years if five equal amounts of $35,000 are invested, with the first amount invested immediately. What interest table is appropriate for this situation? (d) Megan Hoffman invests in a “jumbo” $200,000, 3-year certificate of deposit at First Wisconsin Bank. What table would be used to determine the amount accumulated at the end of 3 years?

What Motivates You?

Komiko Tanaka invests $12,000 in LymaBean, Inc. LymaBean does not pay any dividends. Komiko projects that her investment will generate a 10 percent before-tax rate of return. She plans to invest for the long term.   a) How much cash will Komiko retain, after-taxes, if she holds the investment for five years and then she sells it when the long-term capital gains rate is 15 percent? b) What is Komiko’s after-tax rate of return on her investment in part (a)? c) How much cash will Komiko retain, after-taxes, if she holds the investment for five years and then sells when the long-term capital gains rate is 25 percent? d) What is Komiko’s after-tax rate of return on her investment in part (c)? e) How much cash will Komiko retain, after taxes, if she holds the investment for 15 years and then she sells when the long-term capital gains rate is 15 percent? f) What is Komiko’s after-tax rate of return on her investment in part (e)?

On January 1, 2013, Phantom Company acquires $200,000 of Spiderman Products, Inc., 9% bonds at a price of $185,589. The interest is payable each December 31, and the bonds mature December 31, 2015. The investment will provide Phantom Company a 12% yield. The bonds are classified as held-to-maturity. Instructions (a) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the straightline method. (b) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the effective-interest method. (c) Prepare the journal entry for the interest receipt of December 31, 2014, and the discount amortization under the straight-line method. (d) Prepare the journal entry for the interest receipt of December 31, 2014, and the discount amortization under the effective-interest method.

A horizontal true centrifugal casting process is used to make brass bushings with the following dimensions: length = 10 cm, outside diameter = 15 cm, and inside diameter = 12 cm. (a) Determine the required rotational speed in order to obtain a G-factor of 70. (b) When operating at this speed, what is the centrifugal force per square meter (Pa) imposed by the molten metal on the inside wall of the mold?

Is it necessary that a trial balance be taken periodically? What purpose does it serve?

1.       : What types of analysis can managers perform to help them diagnose a company’s financial condition? How might a review of financial statements help managers diagnose other kinds of performance problems as well?

Evaluate balanced scorecard design             Frieda’s Fizz brews specialty soft drinks, including root beer and other flavours. Its vision is 'To proudly produce and sell extraordinarily smooth, rich, and delicious soft drinks to satisfy kids of all ages.' The entity has a reputation for high quality and unique flavour, enabling it to sell soft drinks at a premium price to gourmet grocery stores in the local area. The entity’s managers plan to expand the business to other geographic regions, but they want to ensure that they maintain high quality as the entity grows. They have decided to implement a balanced scorecard, and they have chosen the following balanced scorecard measures: Financial Perspective 1.       Breakdown of manufacturing cost per case: ingredients, direct labour, packaging materials, and overhead 2.       Operating profit per case 3.       Return on investment          Customer Perspective 4.       Number of customer complaints relating to taste, freshness, package integrity, appearance, and foreign objects 5.       Quality index (an internal measure of manufacturing quality, including microbiology and chemistry) 6.       Percentage sales growth          Internal Business Process Perspective 7.       Ratio of plant production hours to total available time 8.       Throughput (number of cases packaged) 9.       Waste and scrap as a percent of total production cost          Learning and Growth Perspective 10.     Number of work-related injuries 11.     Number of training hours per employee 12.     Number of community volunteer hours per employee   Required  (a)    Explain why uncertainties exist about the best balanced scorecard measures for Frieda’s Fizz. (Do not discuss any of the measures already listed. Instead, focus on why any set of measures might not provide ideal information and on why the managers cannot know with certainty which set of measures is best.) (b)     For the balanced scorecard perspective:                                               (i)          Describe the strengths and weaknesses of the measures chosen for that category.                                             (ii)          Reach a conclusion about the reasonableness of the set of balanced scorecard measures for that category. (c)     What are the pros and cons of implementing a balanced scorecard? (d)     How valuable do you think the balanced scorecard will be in helping the managers of Frieda’s Fizz meet its vision? Explain. (e)     The managers of Frieda’s Fizz want your evaluation of their proposed balanced scorecard. Use the information you learned from the preceding analyses to write a memo to the managers presenting your evaluation of                                               (i)          whether they should adopt a balanced scorecard                                             (ii)          the proposed balanced scorecard design.

Assume that a monopolistically competitive industry is in long-run equilibrium. On a diagram like Figure 8.1(b), show the effect of a fall in demand on a firm’s price and profit in (a) the short run and (b) the long run.

George Zidek Corporation bought a machine on June 1, 2012, for $31,000, f.o.b. the place of manufacture. Freight to the point where it was set up was $200, and $500 was expended to install it. The machine’s useful life was estimated at 10 years, with a salvage value of $2,500. On June 1, 2013, an essential part of the machine is replaced, at a cost of $1,980, with one designed to reduce the cost of operating the machine. The cost of the old part and related depreciation cannot be determined with any accuracy. On June 1, 2016, the company buys a new machine of greater capacity for $35,000, delivered, trading in the old machine which has a fair value and trade-in allowance of $20,000. To prepare the old machine for removal from the plant cost $75, and expenditures to install the new one were $1,500. It is estimated that the new machine has a useful life of 10 years, with a salvage value of $4,000 at the end of that time. (The exchange has commercial substance.) Instructions Assuming that depreciation is to be computed on the straight-line basis, compute the annual depreciation on the new equipment that should be provided for the fiscal year beginning June 1, 2016. (Round to the nearest dollar.)

An alloy steel Metric 10x1.5 screw (10 mm diameter, pitch p = 1.5 mm) is to be turned into a threaded hole and tightened to one/half of its proof strength. According to Table 32.2, the proof strength = 830 MPa. Determine the maximum torque that should be used if the torque coefficient = 0.18.

Using the facts from problem 50, what will happen to the government’s tax revenues if Song chooses to spend more time pursuing her other passions besides work in response to the tax rate change and earns only $75,000 in taxable income?  What is the term that describes this type of reaction to a tax rate increase?  What types of taxpayers are likely to respond in this manner?

Describe the January effect. (LO3)

Dingel Corporation has contracted with you to prepare a statement of cash flows. The controller has provided the following information. December 31 2014 2013 Cash $ 38,500 $13,000 Accounts receivable 12,250 10,000 Inventory 12,000 10,000 Investments –0– 3,000 Buildings –0– 29,750 Equipment 40,000 20,000 Copyrights 5,000 5,250 Totals $107,750 $91,000 Allowance for doubtful accounts $ 3,000 $ 4,500 Accumulated depreciation—equipment 2,000 4,500 Accumulated depreciation—buildings –0– 6,000 Accounts payable 5,000 4,000 Dividends payable –0– 5,000 Notes payable, short-term (nontrade) 3,000 4,000 Long-term notes payable 36,000 25,000 Common stock 38,000 33,000 Retained earnings 20,750 5,000 $107,750 $91,000 Additional data related to 2014 are as follows. 1. Equipment that had cost $11,000 and was 30% depreciated at time of disposal was sold for $2,500. 2. $5,000 of the long-term note payable was paid by issuing common stock. 3. Cash dividends paid were $5,000. 4. On January 1, 2014, the building was completely destroyed by a flood. Insurance proceeds on the building were $33,000 (net of $4,000 taxes). 5. Investments (available-for-sale) were sold at $1,500 above their cost. The company has made similar sales and investments in the past. 6. Cash and long-term note for $16,000 were given for the acquisition of equipment. 7. Interest of $2,000 and income taxes of $5,000 were paid in cash. Instructions (a) Use the indirect method to analyze the above information and prepare a statement of cash flows for Dingel. Flood damage is unusual and infrequent in that part of the country. (b) What would you expect to observe in the operating, investing, and financing sections of a statement of cash flows of: (1) A severely financially troubled firm? (2) A recently formed firm that is experiencing rapid growth?

Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2014 Inventory (fi nished goods) $ 52,000 Cost of Goods Sold $2,100,000 Unearned Service Revenue 90,000 Notes Receivable 40,000 Equipment 253,000 Accounts Receivable 161,000 Inventory (work in process) 34,000 Inventory (raw materials) 207,000 Cash 37,000 Supplies Expense 60,000 Equity Investments (short-term) 31,000 Allowance for Doubtful Accounts 12,000 Customer Advances 36,000 Licenses 18,000 Restricted Cash for Plant Expansion 50,000 Additional Paid-in Capital 88,000 Treasury Stock 22,000 The following additional information is available. 1. Inventories are valued at lower-of-cost-or-market using LIFO. 2. Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is $50,600. 3. The short-term investments have a fair value of $29,000. (Assume they are trading securities.) 4. The notes receivable are due April 30, 2016, with interest receivable every April 30. The notes bear interest at 6%. (Hint: Accrued interest due on December 31, 2014.) 5. The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of $50,000 are pledged as collateral on a bank loan. 6. Licenses are recorded net of accumulated amortization of $14,000. 7. Treasury stock is recorded at cost. Instructions Prepare the current assets section of Yasunari Kawabata Company’s December 31, 2014, balance sheet, with appropriate disclosures.

Define thermal diffusivity.

What is a smart contract? Explain how smart contracts are used on the blockchain. (LO3)

Why might a recovering economy (and hence a fall in government expenditure on social security benefits) make the government feel even more concerned to make discretionary cuts in government expenditure?

In a tensile test, two pairs of values of stress and strain were measured for the specimen metal after it had yielded: (1) true stress = 217 MPa and true strain = 0.35, and (2) true stress = 259 MPa and true strain = 0.68. Based on these data points, determine the strength coefficient and strain-hardening exponent

What would be the rate of economic growth if 20 per cent of national income were saved and invested and the marginal capital/output ratio was 5/2?

An 92% aluminum-8% copper alloy casting is made in a sand mold using a sand core that weighs 20 kg. Determine the buoyancy force in Newtons tending to lift the core during pouring. Sand density = 1.6

On July 1, 2014, Roberts Corporation issued $3,000,000 of 9% bonds payable in 20 years. The bonds include detachable warrants giving the bondholder the right to purchase for $30 one share of $1 par value common stock at any time during the next 10 years. The bonds were sold for $3,000,000. The value of the warrants at the time of issuance was $100,000. Prepare the journal entry to record this transaction.

1.    : By the time an online or mobile business starts noticeably losing customers, it is often too late to turn things around. If you were the creator of a successful game app, such as Fortnite Battle Royale or League of Legends, how might you know when it was time to pivot so as to keep thriving?