Question & Answer

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.

Define manufacturing capability.

On December 31 of the current year, a taxpayer prepays an advertising company to provide advertising services for the next 10 months. Using the 12-month rule and the economic performance rules, contrast when the taxpayer would be able to deduct the expenditure if the taxpayer uses the cash method of accounting versus if the taxpayer uses the accrual method of accounting.

If we would all like more money, why does the government not print a lot more? Could it not thereby solve the problem of scarcity ‘at a stroke’?

What is the difference between diffusion and ion implantation?

What would the isoquant map look like if there were (a) continuously increasing returns to scale; (b) continuously decreasing returns to scale?

On a particular production line in a wafer fabrication facility, the crystal yield is 60%, the crystal-toslice yield is 60%, wafer yield is 90%, multiprobe is 70%, and final test yield is 80%. (a) What isthe overall yield for the production line? (b) If wafer yield and multiprobe yield are combined into the same reporting category, what overall yield for the two operations would be expected?

] Dontae’s employer has offered him the following employment package. What is Dontae’s gross income from his employment?

The grinding wheel in a centerless grinding operation has a diameter = 200 mm, and the regulating wheel diameter = 125 mm. The grinding wheel rotates at 3000 rev/min and the regulating wheel rotates at 200 rev/min. The inclination angle of the regulating wheel = 2.5°. Determine the throughfeed rate of cylindrical workparts that are 25.0 mm in diameter and 175 mm long.

Cole Inc. owns shares of Marlin Corporation stock classified as an available-for-sale investment. At December 31, 2014, the available-for-sale securities were carried in Cole’s accounting records at their cost of $875,000, which equals their fair value. On September 21, 2015, when the fair value of the securities was $1,200,000, Cole declared a property dividend whereby the Marlin securities are to be distributed on October 23, 2015 to stockholders of record on October 8, 2015. Prepare all journal entries necessary on those three dates.

In 2024, Jasmine and Thomas, a married couple, had taxable income of $150,000.  If they were to file separate tax returns, Jasmine would have reported taxable income of $140,000 and Thomas would have reported taxable income of $10,000.  What is the couple’s marriage penalty or benefit?

1.       : Why do you think Mary Parker Follett’s ideas tended to be popular with businesspeople of her day but were ignored by management scholars? Why are her ideas appreciated more today?

Kyle, a single taxpayer, worked as a freelance software engineer for the first three months of 2024.  During that time, he earned $44,000 of self-employment income.  On April 1, 2024, Kyle took a job as a full-time software engineer with one of his former clients, Hoogle Inc.  From April through the end of the year, Kyle earned $178,000 in salary.  What amount of FICA taxes (self-employment and employment related) does Kyle owe for the year?

Walker Company is a manufacturer and lessor of computer equipment. What should be the nature of its lease arrangements with lessees if the company wishes to account for its lease transactions as sales-type leases?

1.              : Let Owens know that you care about what he’s going through, but insist that he take a short paid leave and get counseling to deal with his emotional difficulties and evaluate the seriousness of his problems with alcohol. If the alcohol abuse continues, require him to attend a treatment program or find another job.

At the beginning of the year, Poplock began a calendar-year, dog-boarding business called Griff’s Palace. Poplock bought and placed in service the following assets during the year:

Electron-beam welding has a significant disadvantage in high-production applications. What is that disadvantage?

Why might it present problems for a firm if managers are overconfident? Can you think of any reason why CEOs might be more inclined to optimism than the population average?

1.       : Suppose that you are the leader of a team that has just been created to develop a new registration process at your college or university. How can you use an understanding of the stages of team development to improve your team’s effectiveness?

How are current liabilities related by definition to current assets? How are current liabilities related to a company’s operating cycle?

How are qualified distributions from Roth IRAs taxed? How are nonqualified distributions taxed?

Define and sketch a groove weld.

Glass is classified as a ceramic material; yet glass is different from the traditional and new ceramics. What is the difference?

Name some products that are produced by extrusion.