Question & Answer

Linus Paper Company decided to close two small pulp mills in Conway, New Hampshire, and Corvallis, Oregon. Would these closings be reported in a separate section entitled “Discontinued operations after income from continuing operations”? Discuss.

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?

What is the name of the process most commonly used to grow single crystal ingots of silicon for semiconductor processing?

As economic conditions change, how do banks adjust their asset portfolio? (LO4)

Describe the short selling process. Explain the short interest ratio. (LO1)

A drilling operation is to be performed with a 12.7 mm diameter twist drill in a steel workpart. The hole is a blind hole at a depth of 60 mm and the point angle is 118°. The cutting speed is 25 m/min and the feed is 0.30 mm/rev. Determine (a) the cutting time to complete the drilling operation, and (b) metal removal rate during the operation, after the drill bit reaches full diameter.

A corporation distributes appreciated property to a shareholder. What impact does the distribution have on the corporation’s earnings and profits?

: Explain the fundamental characteristics of organizing, including division of labor, chain of command, span of management, and centralization versus decentralization.

What are the disadvantages and drawbacks of soldering?

How is present value related to the concept of a liability?

If anti-monopoly legislation is effective enough, is there ever any need to prevent mergers from going ahead?

Presented below are two independent situations. Situation A: Annie Lennox Co. reports revenues of $200,000 and operating expenses of $110,000 in its first year of operations, 2014. Accounts receivable and accounts payable at year-end were $71,000 and $29,000, respectively. Assume that the accounts payable related to operating expenses. (Ignore income taxes.) Instructions Using the direct method, compute net cash provided by operating activities. Situation B: The income statement for Blues Traveler Company shows cost of goods sold $310,000 and operating expenses (exclusive of depreciation) $230,000. The comparative balance sheet for the year shows that inventory increased $26,000, prepaid expenses decreased $8,000, accounts payable (related to merchandise) decreased $17,000, and accrued expenses payable increased $11,000. Instructions Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.

Why are agricultural prices subject to greater fluctuations than those of manufactured products?

Developing a reward system and reward targets You are a remuneration consultant. The board of a large multi-national bank has asked you to draft a proposal for a new reward system for senior executives. Currently all senior executives are paid a fixed salary. Your investigations at the entity reveal its mission is to be ‘the number one provider of quality banking services in the southern hemisphere’. You note that the entity has planned for 10 per cent profit growth over the next five years with a corresponding growth in share price. The entity has identified customer satisfaction, product quality and product innovation as the key indicators of success.   The directors are concerned as company profits have been declining. They consider a revised remuneration scheme may motivate senior executives to grow profits and the share price.   Required Prepare a report to the board outlining a new remuneration plan for the executives of the entity.             (LO2, 3 and 4)

Why might the Fed want to focus its efforts on reducing long-term interest rates rather than short-term interest rates during a weak economy? Explain how it might use a monetary policy focused on influencing long-term interest rates. Why might such a policy also affect short-term interest rates in the same direction? (LO2)

Explain the difference between a direct cost and indirect cost.

‘Executives should only be compensated based upon the achievement of           targets.  They should not receive a fixed salary component’. Discuss.             (LO4 and 5)

Use of prior year costs; quality of information Software Solutions is a family-owned business that has been in operation for more than 15 years. The board of directors is comprised of mainly family members, plus a few professionals such as an accountant and lawyer. Regina is a staff accountant who has been working on the budget for the last several weeks. The chief financial officer (CFO) needs to present the budget at the next board meeting and wants a preliminary copy in two days. Regina is certain that she will not be able to finish the budget within two days. Several department heads have not turned in their preliminary figures, and two departments have budgeted large increases in fixed costs for replacing computer equipment. Regina knows she should have alerted the CFO about these budgeted increases, but she has not had time.   One of her co-workers knows that Regina is behind and suggests that she use last year’s budgets for those departments that have not provided information and also for the departments that increased their budgets by large amounts. The co-worker says that the budget can be straightened out later because the board does not pay attention to the details.   Required (a)          Is this an ethical dilemma for Regina? Why? (b)          Why might it be important for the board of directors to have as much updated information as possible about the budget? (c)           What should Regina do, given that not enough time is available to gather high-quality information? Explain your thinking.

Two new software projects are proposed to a young, start-up company. The Alpha project will cost $150,000 to develop and is expected to have annual net cash flow of $40,000. The Beta project will cost $200,000 to develop and is expected to have annual net cash flow of $50,000. The company is very concerned about their cash flow. Using the payback period, which project is better from a cash flow standpoint? Why?

Some countries do not have well-established markets for debt securities or equity securities. Why do you think this can limit the development of the country, business expansion, and growth in national income in these countries? (LO3)

1.      : Do you think Vinson’s desire for changes in culture are related to changes in the external environment? Explain.

The December 31, 2014, balance sheet of Kepler Corp. is as follows. 10% callable, convertible bonds payable (semiannual interest dates April 30 and October 31; convertible into 6 shares of $25 par value common stock per $1,000 of bond principal; maturity date April 30, 2020) $500,000 Discount on bonds payable 10,240 $489,760 On March 5, 2015, Kepler Corp. called all of the bonds as of April 30 for the principal plus interest through April 30. By April 30, all bondholders had exercised their conversion to common stock as of the interest payment date. Consequently, on April 30, Kepler Corp. paid the semiannual interest and issued shares of common stock for the bonds. The discount is amortized on a straight-line basis. Kepler uses the book value method. Instructions Prepare the entry(ies) to record the interest expense and conversion on April 30, 2015. Reversing entries were made on January 1, 2015. (Round to the nearest dollar.)

Which tax entity types are generally allowed to use the cash method of accounting?

George and Wanda received $30,200 of Social Security benefits this year ($12,000 for George; $18,200 for Wanda). They also received $5,000 of interest from jointly owned City of Ranburne Bonds and dividend income. What amount of the Social Security benefits must George and Wanda include in their gross income under the following independent situations?

Explain the moral hazard problem as it relates to deposit insurance. (LO2)