Question & Answer

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/ Marks-and-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 specific items does M&S discuss in its Note 1—Summary of Significant Accounting Policies? (List the headings only.) (b) For what segments did M&S report segmented information? Which segment is the largest? Who is M&S’s largest customer? (c) What interim information was reported by M&S?

Instructions Go to the book’s companion website and use information found there to answer the following questions related to The Coca-Cola Company and PepsiCo, Inc. (a) (1) What specific items does Coca-Cola discuss in its Note 1—Accounting Policies? (Prepare a list of the headings only.) (2) What specific items does PepsiCo discuss in its Note 2—Our Summary of Significant Accounting Policies? (Prepare a list of the headings only.) (b) For what lines of business or segments do Coca-Cola and PepsiCo present segmented information? (c) Note and comment on the similarities and differences between the auditors’ reports submitted by the independent auditors of Coca-Cola and PepsiCo for the year 2011.

Identify a major technical problem in tube bending?

An intangible asset with an estimated useful life of 30 years was acquired on January 1, 2004, for $540,000. On January 1, 2014, a review was made of intangible assets and their expected service lives, and it was determined that this asset had an estimated useful life of 30 more years from the date of the review. What is the amount of amortization for this intangible in 2014?

Table 6.4 illustrates five different short-run production functions: i.e. where the number of machines remains constant at one, two, three, four or five. In each case explain if there are diminishing or increasing marginal returns

On January 1, 2014, Blair Corporation purchased for $500,000 a tract of land (site number 101) with a building. Blair paid a real estate broker’s commission of $36,000, legal fees of $6,000, and title guarantee insurance of $18,000. The closing statement indicated that the land value was $500,000 and the building value was $100,000. Shortly after acquisition, the building was razed at a cost of $54,000. Blair entered into a $3,000,000 fixed-price contract with Slatkin Builders, Inc. on March 1, 2014, for the construction of an office building on land site number 101. The building was completed and occupied on September 30, 2015. Additional construction costs were incurred as follows. Plans, specifi cations, and blueprints $21,000 Architects’ fees for design and supervision 82,000 The building is estimated to have a 40-year life from date of completion and will be depreciated using the 150% declining-balance method. To finance construction costs, Blair borrowed $3,000,000 on March 1, 2014. The loan is payable in 10 annual installments of $300,000 starting on March 1, 2015, plus interest at the rate of 10%. Blair’s weighted-average amounts of accumulated building construction expenditures were as follows. For the period March 1 to December 31, 2014 $1,300,000 For the period January 1 to September 30, 2015 1,900,000 Instructions (a) Prepare a schedule that discloses the individual costs making up the balance in the land account in respect of land site number 101 as of September 30, 2015. (b) Prepare a schedule that discloses the individual costs that should be capitalized in the office building account as of September 30, 2015 Show supporting computations in good form.

Kelly Company had cash receipts from customers in 2014 of $142,000. Cash payments for operating expenses were $97,000. Kelly has determined that at January 1, accounts receivable was $13,000, and prepaid expenses were $17,500. At December 31, accounts receivable was $18,600, and prepaid expenses were $23,200. Compute (a) service revenue and (b) operating expenses.

Briefly describe some of the similarities and differences between GAAP and IFRS with respect to reporting accounting changes.

See if you can identify two companies that are vertically integrated and what advantages they have from such integration.

Olga is married and files a joint tax return with her husband.  What amount of AMT exemption may she deduct under each of the following alternative circumstances?  a.  Her AMTI is $390,000.

Riegel Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2014, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below. Item D Item E Item F Item G Item H Item I Estimated selling price $120 $110 $95 $90 $110 $90 Cost 75 80 80 80 50 36 Cost to complete 30 30 25 35 30 30 Selling costs 10 18 10 20 10 20 Using the LCNRV rule, determine the proper unit value for statement of financial position reporting purposes at December 31, 2014, for each of the inventory items above.

The pretax financial income (or loss) figures for Jenny Spangler Company are as follows. 2009 $160,000 2010 250,000 2011 80,000 2012 (160,000) 2013 (380,000) 2014 120,000 2015 100,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 45% tax rate for 2009 and 2010 and a 40% tax rate for the remaining years. Instructions Prepare the journal entries for the years 2011 to 2015 to record income tax expense and the effects of the net operating loss carrybacks and carryforwards assuming Jenny Spangler Company uses the carryback provision. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.)

1.              Let it slide. Missing the New York appointment is Owen’s first big mistake. He says he is getting things under control, and you believe that he should be given a chance to get himself back on track.

What evidence is necessary to demonstrate the ability to consummate the refinancing of short-term debt?

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 5 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 5 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, aftertaxes, 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)?

What is the nature of a sale on consignment?

What is Goodhart’s Law? How is it relevant to (a) monetary policy; (b) using assignment grades to assess a student’s ability; (c) paying workers according to the amount of output they produce; (d) awarding local authority contracts to cleaning or refuse disposal companies on the basis of tendered prices?

What happens to an elastomer when it is below its glass transition temperature?

If a bank expects interest rates to decrease over time, how might it alter the rate sensitivity of its assets and liabilities? (LO3)

Phil owns a ranch business and uses four-wheelers to do much of his work. Occasionally, though, he and his boys will go for a ride together as a family activity. During year 1, Phil put 765 miles on the four-wheeler that he bought on January 15 for $6,500. Of the miles driven, only 175 miles were for personal use. Assume four-wheelers qualify to be depreciated according to the five-year MACRS schedule and the four-wheeler was the only asset Phil purchased this year.  a. Calculate the allowable depreciation for year 1 (ignore the §179 expense and bonus depreciation). b. Calculate the allowable depreciation for year 2 if total miles were 930 and personal-use miles were 400 (ignore the §179 expense and bonus depreciation).

: Describe technical, human, and conceptual skills and their relevance for managers.

1.       : Assume that you are a frontline manager at a call center. Try to come up with a specific motivational idea that fits into each of the four quadrants in Exhibit 16.2: Positive Extrinsic; Positive Intrinsic; Negative Extrinsic; Negative Intrinsic.

What must a shareholder do to waive the family attribution rules in a complete redemption of stock?

On January 1, 2014, Beyonce Co. purchased 25,000 shares (a 10% interest) in Elton John Corp. for $1,400,000. At the time, the book value and the fair value of John’s net assets were $13,000,000. On July 1, 2015, Beyonce paid $3,040,000 for 50,000 additional shares of John common stock, which represented a 20% investment in John. The fair value of John’s identifiable assets net of liabilities was equal to their carrying amount of $14,200,000. As a result of this transaction, Beyonce owns 30% of John and can exercise significant influence over John’s operating and financial policies. John reported the following net income and declared and paid the following dividends. Net Income Dividend per Share Year ended 12/31/14 $700,000 None Six months ended 6/30/15 500,000 None Six months ended 12/31/15 815,000 $1.55 Instructions (Any excess fair value is attributed to goodwill.) Determine the ending balance that Beyonce Co. should report as its investment in John Corp. at the end of 2015.

The 2014 income statement of Wasmeier Corporation showed net income of $480,000 and an extraordinary loss of $120,000. Wasmeier had 100,000 shares of common stock outstanding all year. Prepare Wasmeier’s income statement presentation of earnings per share.