Question & Answer

If countries are so keen to reduce the barriers to trade, why do many countries frequently attempt to erect barriers?

Explain the difference between horizontal and vertical die-casting machines. Which is more popular?

Wood Corporation was a C corporation in 2023 but elected to be taxed as an S corporation in 2024.  At the end of 2023, its earnings and profits were $15,500.  The following table reports Wood Corp.’s (taxable) income for 2024 (its first year as an S corporation).   Wood Corporation Income Statement December 31, 2024 Sales revenue $150,000 Cost of goods sold (35,000) Salary to owners (60,000) Employee wages (50,000) Depreciation expense (4,000) Miscellaneous expenses (4,000) Interest income 8,000 Qualified dividend income 2,000 Overall net income $7,000   What is Wood Corporation’s excess net passive income tax for 2024?

What are the five principal parameters of a grinding wheel?

Name the three basic categories of composite materials

Jessica’s friend Zachary once stated that he couldn’t understand why someone would take a tax course.  Why is this a rather naïve view?

What are some aspects of business that require knowledge of taxation?  What are some aspects of personal finance that require knowledge of taxation?

On January 1, 2014, Botosan Company issued a $1,200,000, 5-year, zerointerest- bearing note to National Organization Bank. The note was issued to yield 8% annual interest. Unfortunately, during 2015 Botosan fell into financial trouble due to increased competition. After reviewing all available evidence on December 31, 2015, National Organization Bank decided that the loan was impaired. Botosan will probably pay back only $800,000 of the principal at maturity. Instructions (a) Prepare journal entries for both Botosan Company and National Organization Bank to record the issuance of the note on January 1, 2014. (Round to the nearest $10.) (b) Assuming that both Botosan Company and National Organization Bank use the effective-interest method to amortize the discount, prepare the amortization schedule for the note. (c) Under what circumstances can National Organization Bank consider Botosan’s note to be impaired? (d) Compute the loss National Organization Bank will suffer from Botosan’s financial distress on December 31, 2015. What journal entries should be made to record this loss?

Describe some ways in which taxes affect the political process in the United States.

Courtney recently received a speeding ticket on her way to the university.  Her fine was $200.  Is this considered a tax?  Why or why not?

To help pay for the city’s new stadium, the city of Birmingham recently enacted a 1 percent surcharge on hotel rooms. Is this a tax?  Why or why not?

P.1 What would cause (a) a steep DAD curve; (b) a gently sloping DAD curve? P.2 Compare the short-run and long-run effects of (i) a temporary adverse supply shock and (ii) a permanent supply reduction under each of (a) and (b).

If the general objective of our tax system is to raise revenue, why does the income tax allow deductions for charitable contributions and retirement plan contributions?

One common argument for imposing so-called sin taxes is the social goal of reducing demand for such products.  Using cigarettes as an example, is there a segment of the population that might be sensitive to price and for whom high taxes might discourage purchases?

Dontae stated that he didn’t want to earn any more money because it would “put him in a higher tax bracket.”  What is wrong with Dontae’s reasoning?

Describe the three different tax rates discussed in the chapter and how taxpayers might use them.

Which is a more appropriate tax rate to use to compare taxpayers’ tax burdens – the average or the effective tax rate?  Why?

Which is the largest tax collected by the U.S. government?  What types of taxpayers are subject to this tax?

What is the tax base for the Social Security and Medicare taxes for an employee or employer?  What is the tax base for Social Security and Medicare taxes for a self-employed individual?  Is the self-employment tax in addition to or in lieu of federal income tax?

What is the distinguishing feature of an excise tax?

What is the distinguishing feature of an excise tax?

What are some of the taxes that currently are unique to state and local governments?  What are some of the taxes that the federal, state, and local governments each utilize?

What are some of the taxes that currently are unique to state and local governments?  What are some of the taxes that the federal, state, and local governments each utilize?

What is the difference between a sales tax and a use tax?

What is an ad valorem tax?  Name an example of this type of tax.