Question & Answer

Identify the lease classifications for lessors and the criteria that must be met for each classification.

Diana and Ryan Workman were married on January 1 of last year. Ryan has an eight-year-old son, Jorge, from his previous marriage. Diana works as a computer programmer at Datafile Inc. (DI) earning a base salary of $94,000. Ryan is self-employed and runs a day care center. The Workmans reported the following financial information pertaining to their activities during the current year.

Assume the same information as E14-6. Instructions Set up a schedule of interest expense and discount amortization under the effective-interest method. (Hint: The effective-interest rate must be computed.)

1.      : Mind your own business. Taandil hasn’t said anything about the new guidelines and you don’t want to overstep your authority. You’ve been unemployed and need this job.

Daniel Hardware Co. is considering alternative financing arrangements for equipment used in its warehouses. Besides purchasing the equipment outright, Daniel is also considering a lease. Accounting for the outright purchase is fairly straightforward, but because Daniel has not used equipment leases in the past, the accounting staff is less informed about the specific accounting rules for leases. The staff is aware of some general lease rules related to “risks and rewards,” but they are unsure about the meanings of these terms in lease accounting. Daniel has asked you to conduct some research on these items related to lease capitalization criteria. Instructions Access the IFRS authoritative literature at the IASB website (http://eifrs.iasb.org/). (Click on the IFRS tab and then register for free eIFRS access if necessary.) When you have accessed the documents, you can use the search tool in your Internet browser to respond to the following questions. (Provide paragraph citations.) (a) What is the objective of lease classification criteria? (b) An important element of evaluating leases is determining whether substantially all of the risks and rewards of ownership are transferred in the lease. How is “substantially all” defined in the authoritative literature? (c) Besides the non-cancelable term of the lease, name at least three other considerations in determining the “lease term.”

The financial statements of Marks and Spencer plc (M&S) are available at the book’s companion website or can be accessed at http://annualreport.marksandspencer.com/_assets/downloads/Marksand- Spencer-Annual-report-and-financial-statements-2012.pdf. Instructions Refer to M&S’s financial statements and the accompanying notes to answer the following questions. (a) What types of leases are used by M&S? (b) What amount of finance leases was reported by M&S in total and for less than one year? (c) What minimum annual rental commitments under all non-cancelable leases at 31 March 2012 did M&S disclose?

: Explain how different types of followership are related to effective leadership.

Compare and contrast the similarities and differences between like-kind exchanges and involuntary conversions for tax purposes.

What is the accounts receivable turnover, and what type of information does it provide?

Explain how cash-basis accounting for pension plans differs from accrual-basis accounting for pension plans. Why is cash-basis accounting generally considered unacceptable for pension plan accounting?

Southeast Airlines Inc. awards members of its Flightline program a second ticket at half price, valid for 2 years anywhere on its flight system, when a full-price ticket is purchased. How would you account for the full-fare and half-fare tickets?

During pouring into a sand mold, the molten metal can be poured into the downsprue at a constant flow rate during the time it takes to fill the mold. At the end of pouring the sprue is filled and there is negligible metal in the pouring cup. The downsprue is 6.0 in long. Its cross-sectional area at the top = 0.8 in2 and at the base = 0.6 in2 . The cross-sectional area of the runner leading from the sprue also = 0.6 in2 , and it is 8.0 in long before leading into the mold cavity, whose volume = 65 in3 . The volume of the riser located along the runner near the mold cavity = 25 in3 . It takes a total of 3.0 sec to fill the entire mold (including cavity, riser, runner, and sprue. This is more than the theoretical time required, indicating a loss of velocity due to friction in the sprue and runner. Find (a) the theoretical velocity and flow rate at the base of the downsprue; (b) the total volume of the mold; (c) the actual velocity and flow rate at the base of the sprue; and (d) the loss of head in the gating system due to friction.

According to this chapter, have banks been able to insulate themselves against interest rate movements? Explain. (LO3)

Assume that as traffic density increases along a given stretch of road, there comes a point when traffic begins to slow down. The following table gives the times taken for a car to travel the stretch of road (in minutes) according to the number of cars entering the road per minute. Cars entering the road 5 6 7 8 9 10 11 Journey time 10 10 11 13 16 22 30 (a)  Copy out the table and add the following rows: (i) total journey time for all cars; (ii) extra journey time as traffic increases by one more car (marginal social time cost); (iii) additional time cost imposed on other road users for each additional car entering the road (marginal external time cost). (See Table 13.3 in the text.) (b)  Assume that time is valued at 10p per minute. On a graph, plot the marginal private time cost (journey time) and the marginal social time cost. (c)  Assume that electronic road pricing is introduced. What charge should be levied when traffic density reaches (i) 6 cars per minute; (ii) 8 cars per minute; (iii) 11 cars per minute? (d)  What additional information would you need in order to work out the socially efficient traffic density on this particular stretch of road?

What is the relationship between the coefficient of friction and the friction angle in the orthogonal cutting model?

What is the difference between a perpetual inventory and a physical inventory? If a company maintains a perpetual inventory, should its physical inventory at any date be equal to the amount indicated by the perpetual inventory records? Why?

Solve Problem 34.5, only use a wafer size of 12.0 in whose processable area has a diameter = 11.75 in. What is the percent increase in (a) processable area on the wafer and (b) number of chips on the wafer compared to the 200% increase in wafer diameter?

Assume that oil-producing countries have agreed to reduce their oil production by 30 percent. How would bond prices be affected by this announcement? Explain. (LO2)

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?

1.              : Tell Carolyn Campbell that employee volunteerism is important to the company and that while her performance evaluation will not be affected by her decision, she should consider helping Hayes because it is an opportunity to help a worthy community project.

Illustrate on four separate diagrams (as in Figure 3.6) the effect of different elasticities of demand and supply on the incidence of a subsidy.

Does this mean that Keynesians would advocate using supply-side policies only at times of full employment?

Why is it a nontax advantage for corporations to be able to trade their stock on the stock market?

What are the advantages and disadvantages of welding compared to other types of assembly operations?

Name the four forming processes listed in the video clip on sheet-metal stamping dies and processes