Question & Answer

1.       : What opportunities and potential problems are posed by the formation of more than one coalition within an organization, each one advocating a different direction or alternative? What steps can you take as a manager to make sure that dueling coalitions result in constructive discussion rather than dissension?

What is the opportunity cost of holding money? Is it the real or the nominal rate of interest? Explain.

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.

Net income for the year for Carrie, Inc. was $750,000, but the statement of cash flows reports that net cash provided by operating activities was $860,000. What might account for the difference?

Planning} Yong recently paid his accountant $10,000 for elaborate tax planning strategies that exploit the timing strategy.  Assuming this is an election year and there could be a power shift in the White House and Congress, what is a potential risk associated with Yong’s strategies?

Jill Accardo, M.D., maintains the accounting records of Accardo Clinic on a cash basis. During 2014, Dr. Accardo collected $142,600 from her patients and paid $55,470 in expenses. At January 1, 2014, and December 31, 2014, she had accounts receivable, unearned service revenue, accrued expenses, and prepaid expenses as follows. (All long-lived assets are rented.)   Instructions Prepare a schedule that converts Dr. Accardo’s “excess of cash collected over cash disbursed” for the year 2014 to net income on an accrual basis for the year 2014.

Where, if at all, should the following items be classified on a balance sheet? (a) Goods out on approval to customers. (b) Goods in transit that were recently purchased f.o.b. destination. (c) Land held by a realty firm for sale. (d) Raw materials. (e) Goods received on consignment. (f) Manufacturing supplies.

Evaluating a reward system You are on the board of a computer software company that has three distinct divisions: home networks, small business systems and ERP systems. In a bid to encourage higher performance, it has been proposed that the company would benefit from creating a reward system with a profit-sharing component for divisional managers. At present, divisional managers are paid a fixed salary. The proposal is for the company to pool 5 per cent of the company’s profits each month and pay this amount at the end of the year based on divisional managers’ performance against targets. The targets will be set in the preliminary performance review at the beginning of the year. Targets will cover both divisional and company-wide performance. It is thought that this approach will encourage a commitment to the organisation and encourage individuals to strive for better results. There will be a vote for the current proposal at the next board meeting.   Required (a) Discuss the advantages and disadvantages of the proposal. (b) Outline an alternative reward system. (LO2 and 4)

Helen Keller Company began operations on January 1, 2013, adopting the conventional retail inventory system. None of the company’s merchandise was marked down in 2013 and, because there was no beginning inventory, its ending inventory for 2013 of $38,100 would have been the same under either the conventional retail system or the LIFO retail system. On December 31, 2014, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2014, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level. Cost Retail Inventory, Jan. 1, 2014 $ 38,100 $ 60,000 Markdowns (net) 13,000 Markups (net) 22,000 Purchases (net) 130,900 178,000 Sales (net) 167,000 Instructions Determine the cost of the 2014 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method.

On January 1, 2014, Perriman Company sold equipment for cash and leased it back. As seller-lessee, Perriman retained the right to substantially all of the remaining use of the equipment. The term of the lease is 8 years. There is a gain on the sale portion of the transaction. The lease portion of the transaction is classified appropriately as a capital lease. Instructions (a) What is the theoretical basis for requiring lessees to capitalize certain long-term leases? Do not discuss the specific criteria for classifying a lease as a capital lease. (b) (1) How should Perriman account for the sale portion of the sale-leaseback transaction at January 1, 2014? (2) How should Perriman account for the leaseback portion of the sale-leaseback transaction at January 1, 2014? (c) How should Perriman account for the gain on the sale portion of the sale-leaseback transaction during the first year of the lease? Why?

As a result of the Financial Reform Act of 2010, the Consumer Financial Protection Bureau was established and housed within the Federal Reserve. Explain the role of this bureau. (LO3)

What is meant by the designation 12 x 36 inch lathe?

Describe how purchased goodwill leads to temporary book-tax differences.

Support or refute the following statement: Investors can avoid all types of risk by purchasing a mutual fund that contains only Treasury bonds. (LO2)

1.       : How does relational coordination differ from teams and task forces? Explain your answer.

What would be the economic effects of (a) different rates of VAT, (b) different rates of personal income tax and (c) different rates of company taxation between member states if in all other respects there were no barriers to trade or factor movements?

Companies following international accounting standards are permitted to revalue fixed assets above the assets’ historical costs. Such revaluations are allowed under various countries’ standards and the standards issued by the IASB. Liberty International, a real estate company headquartered in the United Kingdom (U.K.), follows U.K. standards. In a recent year, Liberty disclosed the following information on revaluations of its tangible fixed assets. The revaluation reserve measures the amount by which tangible fixed assets are recorded above historical cost and is reported in Liberty’s stockholders’ equity. Liberty International Completed Investment Properties Completed investment properties are professionally valued on a market value basis by external valuers at the balance sheet date. Surpluses and deficits arising during the year are reflected in the revalution reserve. Liberty reported the following additional data. Amounts for Kimco Realty (which follows GAAP) in the same year are provided for comparison. Liberty Kimco (pounds sterling, in thousands) (dollars, in millions) Total revenues £ 741 $ 517 Average total assets 5,577 4,696 Net income 125 297 Instructions (a) Compute the following ratios for Liberty and Kimco. (1) Return on assets. (2) Profit margin on sales. (3) Asset turnover. How do these companies compare on these performance measures? (b) Liberty reports a revaluation surplus of £1,952. Assume that £1,550 of this amount arose from an increase in the net replacement value of investment properties during the year. Prepare the journal entry to record this increase. (c) Under U.K. (and IASB) standards, are Liberty’s assets and equity overstated? If so, why? When comparing Liberty to U.S. companies, like Kimco, what adjustments would you need to make in order to have valid comparisons of ratios such as those computed in (a) above?

Describe the type of material that is commonly used to make windshields for automobiles.

Why is it difficult to predict the size of the accelerator?

How does solidification of alloys differ from solidification of pure metals?

Tensile testing is not appropriate for hard brittle materials such as ceramics. What is the test commonly used to determine the strength properties of such materials?

A dual-in-line package has a total of 48 leads. Use Rent's rule with C = 4.5 and m = 0.5 to determine the approximate number of logic gates that could be fabricated in the IC chip for this package.

Why will the price elasticity of demand for holidays in Crete be greater than that for holidays in general? Is this difference the result of a difference in the size of the income effect or the substitution effect? Is there anything the suppliers of holidays in Crete can do to reduce this higher price elasticity?

What features or rights may alter the character of preferred stock?

1.    You are a bright, hard-working, entry-level manager who fully intends to rise through the ranks. Your performance evaluation gives you high marks for your technical skills, but low marks when it comes to people skills. Do you think people skills can be learned, or do you need to rethink your career path? If people skills can be learned, how would you go about it?