Question & Answer

Which casting process is the most important commercially?

Illustrate on an indifference diagram the effects of the following: (a)    A rise in the price of good X (assuming no change in the price of Y). (b)    A fall in the price of good Y (assuming no change in the price of X).

Manilow Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Manilow’s Accounts Receivable account was $555,000 and Allowance for Doubtful Accounts had a credit balance of $40,000. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below. Probability of Days Account Outstanding Amount Collection Less than 16 days $300,000 .98 Between 16 and 30 days 100,000 .90 Between 31 and 45 days 80,000 .85 Between 46 and 60 days 40,000 .80 Between 61 and 75 days 20,000 .55 Over 75 days 15,000 .00 Instructions (a) What is the appropriate balance for Allowance for Doubtful Accounts at year-end? (b) Show how accounts receivable would be presented on the balance sheet. (c) What is the dollar effect of the year-end bad debt adjustment on the before-tax income?

Mogilny Company paid $135,000 for a machine. The Accumulated Depreciation—Equipment account has a balance of $46,500 at the present time. The company could sell the machine today for $150,000. The company president believes that the company has a “right to this gain.” What does the president mean by this statement? Do you agree?

What is meant by the term aspect ratio in microsystem technology?

Last year Acme paid Ralph $15,000 to install a new air-conditioning unit at its headquarters building. The air conditioner did not function properly, and this year Acme requested that Ralph return the payment. Because Ralph could not repair one critical part in the unit, he refunded the cost of the repair, $5,000, to Acme.

Assume that if the U.S. dollar strengthens, it can place downward pressure on U.S. inflation. Based on this information, how might expectations of a strong dollar affect the demand for loanable funds in the United States and U.S. interest rates? Is there any reason to think that expectations of a strong dollar could also affect the supply of loanable funds? Explain. (LO1, LO2)

What is meant by the term mass finishing?

On January 1, 2013, Phantom Company acquires $200,000 of Spiderman Products, Inc., 9% bonds at a price of $185,589. The interest is payable each December 31, and the bonds mature December 31, 2015. The investment will provide Phantom Company a 12% yield. The bonds are classified as held-to-maturity. Instructions (a) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the straightline method. (b) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the effective-interest method. (c) Prepare the journal entry for the interest receipt of December 31, 2014, and the discount amortization under the straight-line method. (d) Prepare the journal entry for the interest receipt of December 31, 2014, and the discount amortization under the effective-interest method.

Indicate three reasons why a company might sell its receivables to another company.

A square hole is to be cut using ECM through a plate of pure copper (valence = 1) that is 20 mm thick. The hole is 25 mm on each side, but the electrode used to cut the hole is slightly less that 25 mm on its sides to allow for overcut, and its shape includes a hole in its center to permit the flow of electrolyte and to reduce the area of the cut. This tool design results in a frontal area of 200 mm2. The applied current = 1000 amps. Using an efficiency of 95%, determine how long it will take to cut the hole.

Tool life turning tests have been conducted on B1112 steel with high-speed steel tooling, and the resulting parameters of the Taylor equation are: n = 0.13 and C = 225. B1112 is the base metal and has a machinability rating = 1.00 (100%). During the tests, feed = 0.010 in/rev, and depth of cut = 0.100 in. Based on this information, and machinability data given in Table 24.1, determine the cutting speed you would recommend for the following work materials, if the tool life desired in operation is 30 min (the same feed and depth of cut are to be used): (a) C1008 low carbon steel with 150 Brinell hardness, (b) 4130 alloy steel with 190 Brinell hardness, and (c) B1113 steel with 170 Brinell hardness.

Use the information for Boyne Inc. from BE9-8. Compute ending inventory at cost using the LIFO retail method.

Assume a taxpayer makes a nondeductible contribution to a traditional IRA. How does the taxpayer determine the taxability of distributions from the IRA on reaching retirement?

1.      Order the following primary value chain activities in the correct sequence. a.       Marketing and sales activities b.      Service activities c.       Operations d.      Outbound logistics   e.       Inbound logistics

How would you go about deciding whether person A or person B gets more personal benefit from each of the following: (a) an electric fire; (b) a clothing allowance of £x; (c) free higher education; (c) child benefit? Do your answers help you in deciding how best to allocate benefits?

Why didn’t the FASB cover both types of postretirement benefits—pensions and healthcare—in the earlier pension accounting rules?

Helen’s basis in Haywood Partnership is $270,000. Haywood distributes all the land to Helen in complete liquidation of her partnership interest. The partnership reports the following balance sheet just before the distribution: Assets: Tax Basis FMV Cash $ 220,000 $ 220,000 Stock (investment) 480,000 220,000 Land 110,000 220,000    Totals $ 810,000 $ 660,000 Liabilities and capital: Capital- Charles $ 270,000 - Esther 270,000 - Helen 270,000   Totals $ 810,000 a. What are the amount and character of Helen’s recognized gain or loss? What is the effect on the partnership assets? b. If Haywood has a §754 election in place, what is the amount of the special basis adjustment?

Job costing journal entries Vern’s Van Service customises light trucks according to customers’ orders. This month the entity worked on five jobs, numbered 207 to 211. Materials requisitions for the month were as follows:       An analysis of the payroll records revealed the following distribution for labour costs:       Other overhead costs (consisting of rent, depreciation, taxes, insurance, utilities, etc.) amounted to $3600. At the beginning of the period, management anticipated that overhead cost would be $6400 and total direct labour would amount to $5000. Overhead is allocated on the basis of direct labour dollars.   Jobs 207 to 210 were finished during the month; Job 211 is still in process. Jobs 207 to 209 were picked up and paid for by customers. Job 210 is still on the lot waiting to be picked up.   Required (a)     Prepare the journal entries to reflect the incurrence of materials, labour, and overhead costs; the allocation of overhead; and the transfer of units to finished goods and cost of sales. (b)     Close overapplied or underapplied overhead to cost of sales.

DLW Corporation acquired and placed in service the following assets during the year:

Explain why Fannie Mae and Freddie Mac experienced mortgage problems during the credit crisis. (LO5)

: Explain how different types of followership are related to effective leadership.

Presented below is information related to equipment owned by Suarez Company at December 31, 2014. Cost $9,000,000 Accumulated depreciation to date 1,000,000 Expected future net cash fl ows 7,000,000 Fair value 4,800,000 Assume that Suarez will continue to use this asset in the future. As of December 31, 2014, the equipment has a remaining useful life of 4 years. Instructions (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2014. (b) Prepare the journal entry to record depreciation expense for 2015. (c) The fair value of the equipment at December 31, 2015, is $5,100,000. Prepare the journal entry (if any) necessary to record this increase in fair value.

] Rivendell Corporation uses the accrual method of accounting and has the following assets as of the end of 2023. Rivendell converted to an S corporation on January 1, 2024.   Asset Adjusted basis FMV Cash $40,000 $40,000 Accounts receivable 30,000 30,000 Inventory 130,000 60,000 Land 100,000 125,000   Totals $300,000 $255,000   a. What is Rivendell’s net unrealized built-in gain at the time it converted to an S corporation?

Wie Company has been operating for just 2 years, producing specialty golf equipment for women golfers. To date, the company has been able to finance its successful operations with investments from its principal owner, Michelle Wie, and cash flows from operations. However, current expansion plans will require some borrowing to expand the company’s production line. As part of the expansion plan, Wie will acquire some used equipment by signing a zero-interestbearing note. The note has a maturity value of $50,000 and matures in 5 years. A reliable fair value measure for the equipment is not available, given the age and specialty nature of the equipment. As a result, Wie’s accounting staff is unable to determine an established exchange price for recording the equipment (nor the interest rate to be used to record interest expense on the long-term note). They have asked you to conduct some accounting research on this topic. Instructions If your school has a subscription to the FASB Codification, go to http://aaahq.org/ascLogin.cfm to log in and prepare responses to the following. Provide Codification references for your responses. (a) Identify the authoritative literature that provides guidance on the zero-interest-bearing note. Use some of the examples to explain how the standard applies in this setting. (b) How is present value determined when an established exchange price is not determinable and a note has no ready market? What is the resulting interest rate often called? (c) Where should a discount or premium appear in the financial statements? What about issue costs?