Question & Answer

David and Lilly Fernandez have determined their tax liability on their joint tax return to be $3,100. They have made prepayments of $1,900 and also have a child tax credit of $2,000. What is the amount of their tax refund or taxes due?

3. Why will marginal social benefit not equal marginal social costs in the labour market if there exists (a) union monopoly power and/or (b) firms with monopsony power?

If a business places several different assets in service during the year, must it use the same depreciation method for all assets? If not, what restrictions apply to the business’s choices of depreciation methods?

1.       An organizational consultant said, “Some aspect of functional structure appears in every organization.” Do you agree? Explain.

What is the qualified business income deduction, and how does it affect the tax rate on flow-through business entity income?

Discuss how a change in accounting policy is handled when it is impracticable to determine previous amounts.

AMP Corporation (calendar-year-end) has 2024 taxable income of $1,900,000 for purposes of computing the §179 expense. During 2024, AMP acquired the following assets:

Solve Problem 24.19 except that in part (a), determine the cutting speeds for maximum production rate

Why were bank regulators concerned about credit default swaps during the credit crisis? (LO2)

Katie recently won a ceramic dalmatian valued at $800 on a television game show.  She questions whether this prize is taxable because it was a “gift” she won on the show.     a.  Use an available tax research service to answer Katie’s question.   b.  Write a letter to Katie communicating the results of your research.

Of what merit is the contention that the allowance method lacks the objectivity of the direct write-off method? Discuss in terms of accounting’s measurement function.

In its December 31, 2014, balance sheet Oakley Corporation reported as an asset, “Net notes and accounts receivable, $7,100,000.” What other disclosures are necessary?

An electric discharge machining operation is being performed on two work materials: tungsten and zinc. Determine the amount of metal removed in the operation after one hour at a discharge amperage = 20 amps for each of these metals. Use U.S. Customary units and express the answer in in3/hr. From Table 4.1, the melting temperatures of tungsten and zinc are 6170°F and 420°F, respectively.

On June 1, year 1, Jasper Corporation’s S election was involuntarily terminated.  What is the earliest Jasper may be taxed as an S corporation again?  Are there any exceptions to the general rule?  Explain.

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

{Research} For the following independent cases, determine whether economic income is present and, if so, whether it must be included in gross income.  Identify a tax authority that supports your analysis. Hermione discovered a gold nugget (valued at $10,000) on her land.  b.       Jay embezzled $20,000 from his employer and has not yet been apprehended. c.       Keisha found $1,000 inside an old dresser.  She purchased the dresser at a discount furniture store at the end of last year and found the money after the beginning of the new year.  No one has claimed the money.

Farve Inc. recently elected S corporation status.  At the time of the election, the company had $10,000 of accumulated earnings and profits and a net unrealized gain of $1,000,000 associated with land it had invested in (although some parcels had an unrealized loss).  In the next couple of years, most of the income the company expects to generate will be in the form of interest and dividends (approximately $200,000 per year).  However, in the future, the company will want to liquidate some of its current holdings in land and possibly reinvest in other parcels.  What strategies can you recommend for Farve Inc. to help reduce its potential tax liability as an S corporation?

Consider situations where you might consider swapping items with someone. Why are such situations relatively rare? Can you think of circumstances in which this might be more common?

Indicate whether the following items are capitalized or expensed in the current year. (a) Purchase cost of a patent from a competitor. (b) Research costs. (c) Development costs (after achieving economic viability). (d) Organizational costs. (e) Costs incurred internally to create goodwill.

Why would a company restrict when a senior executive can exercise their         share options?             (LO2, 3 and 5)

An investment newsletter suggests that because the prevailing stock market conditions are subject to much uncertainty, investors should purchase call options on the CBOE volatility index (VIX). Write a short essay on the logic behind how the valuation of VIX is influenced by market uncertainty. Also support or refute the advice provided by the newsletter and offer a strategy for investing in call options on the VIX based on expectations of changes in market uncertainty.

During a tensile test, a metal has a true strain = 0.10 at a true stress = 37,000 lb/in2 . Later, at a true stress = 55,000 lb/in2 , true strain = 0.25. Determine the strength coefficient and strain-hardening exponent in the flow curve equation.

What are the two basic timing strategies? What is the intent of each?

An automated transfer line has 20 stations and operates with an ideal cycle time of 1.50 min. Probability of a station failure = 0.008 and average downtime when a breakdown occurs is 10.0 minutes. Determine (a) the average production rate and (b) the line efficiency.

In periods when home prices declined substantially, some homeowners blamed the Fed. In other periods when home prices increased, homeowners gave credit to the Fed. How can the Fed have such a large impact on home prices? How could news of a substantial increase in the general inflation level affect the Fed’s monetary policy and thereby affect home prices? (LO2; LO3)