Question & Answer

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

Jayanna, an advertising consultant, is contemplating instructing some of her clients to pay her in cash so that she does not have to report the income on her tax return. Use an available tax service to identify the three basic elements of tax evasion and penalties associated with tax evasion. Write a memo to Jayanna explaining tax evasion and the risks associated with her actions.

Differentiate between “accounting for the employer” and “accounting for the pension fund.”

How do you think the shape of the yield curve for commercial paper and other money market instruments compares to the yield curve for Treasury securities? Explain your logic. (LO1)

Go through each of the above reasons for shifts in the demand for and supply of sterling and consider what would cause an appreciation of the pound.

If this analysis is correct, namely that a reduction in wages will reduce the aggregate demand for goods, what assumption must we make about the relative proportions of wages and profits that are spent (given that a reduction in real wage rates will lead to a corresponding increase in rates of profit)?

Is the incentive structure in the single-move prisoners’ dilemma game in the interests of society?

How does austenite differ from ferrite?

What kinds of products are produced by blow molding?

Does a taxpayer apply the §1231 look-back rule in a year when the taxpayer recognizes a net §1231 loss?  Explain.

On January 2, 2014, $100,000 of 11%, 10-year bonds were issued for $97,000. The $3,000 discount was charged to Interest Expense. The bookkeeper, Mark Landis, records interest only on the interest payment dates of January 1 and July 1. What is the effect on reported net income for 2014 of this error, assuming straight-line amortization of the discount? What entry is necessary to correct for this error, assuming that the books are not closed for 2014?

For each of the four part drawings in Figure P16.14, indicate which PM class the parts belong to, whether the part must be pressed from one or two directions, and how many levels of press control will be required? Dimensions are mm.

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

The reported net incomes for the first 2 years of Sandra Gustafson Products, Inc., were as follows: 2014, $147,000; 2015, $185,000. Early in 2016, the following errors were discovered. 1. Depreciation of equipment for 2014 was overstated $17,000. 2. Depreciation of equipment for 2015 was understated $38,500. 3. December 31, 2014, inventory was understated $50,000. 4. December 31, 2015, inventory was overstated $16,200. Instructions Prepare the correcting entry necessary when these errors are discovered. Assume that the books are closed. (Ignore income tax considerations.)

Helen holds 1,000 shares of Fizbo Inc. stock that she purchased 11 months ago. The stock has done very well and has appreciated $20/share since Helen bought the stock. When sold, the stock will be taxed at capital gains rates (long-term rate is 15% and short-term rate is the taxpayer’s marginal tax rate). If Helen’s marginal tax rate is 35 percent, how much would she save by holding the stock an additional month before selling? What might prevent Helen from waiting to sell? Ignore the time value of money.

List the most common allocation bases used in job costing and explain under what circumstances each base would be most appropriate.

Determine the bending force required in Problem 20.9 if the bend is to be performed in a V-die with a die opening dimension of 40 mm. The material has a tensile strength of 600 MPa and a shear strength of 430 MPa

Compare and contrast the three types of primary tax law sources and give examples of each.

How does the tax treatment of a partial liquidation differ from a stock redemption?

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) Which company had the greater percentage increase in total assets from 2010 to 2011? (b) Using the Selected Financial Data section of these two companies, determine their 5-year average growth rates related to net sales and income from continuing operations. (c) Which company had more depreciation and amortization expense for 2011? Provide a rationale as to why there is a difference in these amounts between the two companies.

Explain the least aggregate deferral test for determining a partnership’s year-end and discuss when it applies

Executive remuneration: two-strikes policy Investigate which companies have experienced either one-strike or two-strikes on their remuneration reports in the last year or two. Summarise your results and collect the specifics of one example. (LO4 and 5)

You assemble the following information for Seneca Department Store, which computes its inventory under the dollar-value LIFO method. Cost Retail Inventory on January 1, 2014 $216,000 $300,000 Purchases 364,800 480,000 Increase in price level for year 9% Instructions Compute the cost of the inventory on December 31, 2014, assuming that the inventory at retail is (a) $294,300 and (b) $365,150.

Describe highly leveraged transactions (HLTs) and explain why regulators closely monitor a bank’s exposure to HLTs. (LO2)

What is the difference between bulk micromachining and surface micromachining?