Question & Answer

Compare the relative effectiveness of fiscal and monetary policy under (a) fixed; (b) free-floating exchange rates.

Which of the above assumptions do you think would be correct in each of the following cases?                (a)  Supermarket checkout operators.                (b)  Agricultural workers.                (c)  Crane operators.                (d)  Economics teachers.                (e)  Call-centre workers.                (f)   Professional footballers.                (g)  Bar workers.

The Financial Accounting Standards Board (FASB) has developed a conceptual framework for financial accounting and reporting. The FASB has issued eight Statements of Financial Accounting Concepts. These statements are intended to set forth the objective and fundamentals that will be the basis for developing financial accounting and reporting standards. The objective identifies the goals and purposes of financial reporting. The fundamentals are the underlying concepts of financial accounting that guide the selection of transactions, events, and circumstances to be accounted for; their recognition and measurement; and the means of summarizing and communicating them to interested parties. The purpose of the statement on qualitative characteristics is to examine the characteristics that make accounting information useful. These characteristics or qualities of information are the ingredients that make information useful and the qualities to be sought when accounting choices are made. Instructions (a) Identify and discuss the benefits that can be expected to be derived from the FASB’s conceptual framework study. (b) What is the most important quality for accounting information as identified in the conceptual framework? Explain why it is the most important. (c) Statement of Financial Accounting Concepts No. 8 describes a number of key characteristics or qualities for accounting information. Briefly discuss the importance of any three of these qualities for financial reporting purposes.

Soundgarden Company sold 200 color laser copiers in 2014 for $4,000 apiece, together with a one-year warranty. Maintenance on each copier during the warranty period averages $330. Instructions (a) Prepare entries to record the sale of the copiers and the related warranty costs, assuming that the accrual method is used. Actual warranty costs incurred in 2014 were $17,000. (b) On the basis of the data above, prepare the appropriate entries, assuming that the cash-basis method is used.

The yield of good chips in multiprobe for a certain batch of wafers is 83%. The wafers have a diameter of 150 mm with a processable area that is 140 mm in diameter. If the defects are all assumed to be point defects, determine the density of point defects using the Bose-Einstein method of estimating yield.

Why are fillers added to a polymer?

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

Over what period of time should compensation cost be allocated?

Explain how the downgrading of bonds for a particular corporation affects the prices of those bonds, the return to investors who currently hold these bonds, and the potential return to other investors who may invest in the bonds in the near future. (LO2)

Missy is one of 100 unrelated shareholders of Dalmatian, an S corporation. She is considering selling her shares. Under the following alternative scenarios, would the S election be terminated? Why or why not?

To what extent do the costs used to value inventories for external financial reporting support internal management decisions on issues such as whether to accept a special, one-off order or whether to outsource part or all of the production process?

What are the advantages of a mixed model line over a batch model line for producing different product styles?

What are some of the applications of PVD?

The voltage in an EBW operation is 45 kV. The beam current is 60 milliamp. The electron beam is focused on a circular area that is 0.25 mm in diameter. The heat transfer factor is 0.87. Calculate the average power density in the area in watt/mm2

Explain how income could fall even though the unit sales level rises.

Indicate how unrealized holding gains and losses should be reported for investments securities classified as trading, available-for-sale, and held-to-maturity.

Your friend just told you about a penny stock that they purchased, which increased in price from $0.10 to $0.50 per share. You start investigating penny stocks, and after conducting a large amount of research, you find a stock with a quoted price of $0.05. Upon further investigation, you notice that the ask price for the stock is $0.08 and that the bid price is $0.01. Discuss the possible reasons for this wide bid–ask spread. (LO2)

Tim Mattke Company began operations in 2012 and for simplicity reasons, adopted weighted-average pricing for inventory. In 2014, in accordance with other companies in its industry, Mattke changed its inventory pricing to FIFO. The pretax income data is reported below. Weighted- Year Average FIFO 2012 $370,000 $395,000 2013 390,000 430,000 2014 410,000 450,000 Instructions (a) What is Mattke’s net income in 2014? Assume a 35% tax rate in all years. (b) Compute the cumulative effect of the change in accounting principle from weighted-average to FIFO inventory pricing. (c) Show comparative income statements for Tim Mattke Company, beginning with income before income tax, as presented on the 2014 income statement.

The strength coefficient = 35,000 lb/in2 and strain-hardening exponent = 0.40 for a metal used in a forming operation in which the workpart is reduced in cross-sectional area by stretching. If the average flow stress on the part is 20,000 lb/in2 , determine the amount of reduction in cross-sectional area experienced by the part.

Determine the shrink rule to be used by mold makers for die casting of zinc. Using the shrinkage value in Table 10.1, express your answer in terms of decimal mm of elongation per 300 mm of length compared to a standard 300-mm scale.

1. Name some industries where external economies of scale are gained. What are the specific external economies in each case? 2. Would you expect external economies to be associated with the concentration of an industry in a particular region?

Assume a horizontal yield curve exists. How do you think the yield curve would be affected if foreign investors in short-term securities and long-term securities suddenly anticipate that the value of the dollar will strengthen? (You may find it helpful to refer to the discussion of the yield curve in Chapter 3.) (LO2, LO3)

How does a corporation determine the percentage for its dividends-received deduction?  Explain.

The assets of Fonzarelli Corporation are presented below (000s omitted).   Instructions Indicate the deficiencies, if any, in the foregoing presentation of Fonzarelli Corporation’s assets.

Assessing reward systems You are a remuneration consultant employed by a listed company to assess the CEO’s reward plan. The board is concerned that the CEO is overpaid in absolute terms and also when compared to other CEOs of major corporations.   Required How might you determine whether or not the reward plan is appropriate? (LO2, 3 and 5)