Question & Answer

Define group technology.

Janet is a cash-method, calendar-year taxpayer. She received a check for services provided in the mail during the last week of December. However, rather than cash the check, Janet decided to wait until the following January because she believes that her delay will cause the income to be realized and recognized next year. What would you tell her? Would it matter if she didn’t open the envelope? Would it matter if she refused to check her mail during the last week of December? Explain.

Kreter Co. provides the following information about its postretirement benefit plan for the year 2014. Service cost $ 45,000 Contribution to the plan 10,000 Actual and expected return on plan assets 11,000 Benefi ts paid 20,000 Plan assets at January 1, 2014 110,000 Accumulated postretirement benefi t obligation at January 1, 2014 330,000 Discount rate 8% Instructions Compute the postretirement benefit expense for 2014.

Dos Passos Company sells televisions at an average price of $900 and also offers to each customer a separate 3-year warranty contract for $90 that requires the company to perform periodic services and to replace defective parts. During 2014, the company sold 300 televisions and 270 warranty contracts for cash. It estimates the 3-year warranty costs as $20 for parts and $40 for labor, and accounts for warranties separately. Assume sales occurred on December 31, 2014, and straight-line recognition of warranty revenues occurs. Instructions (a) Record any necessary journal entries in 2014. (b) What liability relative to these transactions would appear on the December 31, 2014, balance sheet and how would it be classified? In 2015, Dos Passos Company incurred actual costs relative to 2014 television warranty sales of $2,000 for parts and $4,000 for labor. (c) Record any necessary journal entries in 2015 relative to 2014 television warranties. (d) What amounts relative to the 2014 television warranties would appear on the December 31, 2015, balance sheet and how would they be classified?

What are the two principal aspects of product quality?

Explain the difference between shares and share options.             (LO2)

Wynn Company offers a set of building blocks to customers who send in 3 UPC codes from Wynn cereal, along with 50¢. The block sets cost Wynn $1.10 each to purchase and 60¢ each to mail to customers. During 2014, Wynn sold 1,200,000 boxes of cereal. The company expects 30% of the UPC codes to be sent in. During 2014, 120,000 UPC codes were redeemed. Prepare Wynn’s December 31, 2014, adjusting entry.

For each of the following independent situations, indicate the amount the taxpayer must include in gross income and explain your answer:

You are compiling the consolidated financial statements for Winsor Corporation International. The corporation’s accountant, Anthony Reese, has provided you with the segment  shown on the next page. Major Segments of Business WCI conducts funeral service and cemetery operations in the United States and Canada. Substantially all revenues of WCI’s major segments of business are from unaffi liated customers. Segment information for fi scal 2015, 2014, and 2013 follows. (thousands) Funeral Floral Cemetery Real Estate Dried Whey Limousine Consolidated Revenues 2015 $302,000 $10,000 $ 73,000 $ 2,000 $7,000 $12,000 $406,000 2014 245,000 6,000 61,000 4,000 4,000 4,000 324,000 2013 208,000 3,000 42,000 3,000 1,000 3,000 260,000 Operating Income 2015 74,000 1,500 18,000 (36,000) 500 2,000 60,000 2014 64,000 200 12,000 (28,000) 200 400 48,800 2013 54,000 150 6,000 (21,000) 100 350 39,600 Capital Expenditures 2015 26,000 1,000 9,000 400 300 1,000 37,700 2014 28,000 2,000 60,000 1,500 100 700 92,300 2013 14,000 25 8,000 600 25 50 22,700 Depreciation and Amortization 2015 13,000 100 2,400 1,400 100 200 17,200 2014 10,000 50 1,400 700 50 100 12,300 2013 8,000 25 1,000 600 25 50 9,700 Identifi able Assets 2015 334,000 1,500 162,000 114,000 500 8,000 620,000 2014 322,000 1,000 144,000 52,000 1,000 6,000 526,000 2013 223,000 500 78,000 34,000 500 3,500 339,500 Instructions Determine which of the above segments must be reported separately and which can be combined under the category “Other.” Then, write a one-page memo to the company’s accountant, Anthony Reese, explaining the following. (a) What segments must be reported separately and what segments can be combined. (b) What criteria you used to determine reportable segments. (c) What major items for each must be disclosed.

Nerwin, Inc. is a furniture manufacturing company with 50 employees. Recently, after a long negotiation with the local labor union, the company decided to initiate a pension plan as a part of its compensation plan. The plan will start on January 1, 2014. Each employee covered by the plan is entitled to a pension payment each year after retirement. As required by accounting  tandards, the controller of the company needs to report the pension obligation (liability). On the basis of a discussion with the supervisor of the Personnel Department and an actuary from an insurance company, the controller develops the following information related to the pension plan. Average length of time to retirement 15 years Expected life duration after retirement 10 years Total pension payment expected each year after retirement for all employees. Payment made at the end of the year. $700,000 per year The interest rate to be used is 8%. Instructions On the basis of the information above, determine the present value of the pension obligation (liability).

What is the proper accounting for volume discounts on sales of products?

A bending operation is to be performed on 4.0 mm thick cold-rolled steel sheet that is 25 mm wide and 100 mm long. The sheet is bent along the 25 mm direction, so that the bend is 25 mm long. The resulting sheet metal part has an acute angle of 30° and a bend radius of 6 mm. Determine (a) the bend allowance and (b) the length of the neutral axis of the part after the bend. (Hint: the length of the neutral axis before the bend = 100.0 mm).

Terry was ill for three months and missed work during this period. During the illness, Terry received $4,500 in sick pay from a disability insurance policy. What amounts are included in Terry’s gross income under the following independent circumstances?

An NC lathe cuts two passes across a cylindrical workpiece under automatic cycle. The operator loads and unloads the machine. The starting diameter of the work is 3.00 in and its length = 10 in. The work cycle consists of the following steps (with element times given in parentheses where applicable): 1 - Operator loads part into machine, starts cycle (1.00 min); 2 - NC lathe positions tool for first pass (0.10 min); 3 - NC lathe turns first pass (time depends on cutting speed); 4 - NC lathe repositions tool for second pass (0.4 min); 5 - NC lathe turns second pass (time depends on cutting speed); and 6 - Operator unloads part and places in tote pan (1.00 min). In addition, the cutting tool must be periodically changed. This tool change time takes 1.00 min. The feed rate = 0.007 in/rev and the depth of cut for each pass = 0.100 in. The cost of the operator and machine = $39/hr and the tool cost = $2.00/cutting edge. The applicable Taylor tool life equation has parameters: n = 0.26 and C = 900 (ft/min). Determine (a) the cutting speed for minimum cost per piece, (b) the average time required to complete one production cycle, (c) cost of the production cycle. (d) If the setup time for this job is 3.0 hours and the batch size = 300 parts, how long will it take to complete the batch?

Identify which basic assumption of accounting is best described in each item below. (a) The economic activities of FedEx Corporation are divided into 12-month periods for the purpose of issuing annual reports. (b) Solectron Corporation, Inc. does not adjust amounts in its financial statements for the effects of inflation. (c) Walgreen Co. reports current and noncurrent classifications in its balance sheet. (d) The economic activities of General Electric and its subsidiaries are merged for accounting and reporting purposes.

Carlos has located a regulation that appears to answer his tax research question.  He is concerned because the regulation is a temporary regulation.  Evaluate the authoritative weight of this type of regulation.  Should he feel more or less confident in his answer if the regulation is a proposed regulation?

Answer each of the questions in the following unrelated situations. (a) The current ratio of a company is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $500,000, what is the amount of current liabilities? (b) A company had an average inventory last year of $200,000 and its inventory turnover was 5. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year? (c) A company has current assets of $90,000 (of which $40,000 is inventory and prepaid items) and current liabilities of $40,000. What is the current ratio? What is the acid-test ratio? If the company borrows $15,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be? (d) A company has current assets of $600,000 and current liabilities of $240,000. The board of directors declares a cash dividend of $180,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend?

Dave Matthew Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $100,000. Instructions (a) Prepare the journal entry for the issuance when the market price of the common shares is $165 each and market price of the preferred is $230 each. (Round to nearest dollar.) (b) Prepare the journal entry for the issuance when only the market price of the common stock is known and it is $170 per share.

A 5-mm-diameter bolt is to be tightened to produce a preload = 250 N. If the torque coefficient = 0.23, determine the torque that should be applied.

This comment appeared in the annual report of MacCloud Inc.: “The Company could pay cash or property dividends on the Class A common stock without paying cash or property dividends on the Class B common stock. But if the Company pays any cash or property dividends on the Class B common stock, it would be required to pay at least the same dividend on the Class A common stock.” How is a property dividend accounted for in the financial records?

Are all such agreements necessarily against the interests of consumers?

three factors that determine whether a taxpayer is required to file a tax return.

Ten samples of equal size are taken to prepare a p chart. The total number of parts in these ten samples was 900 and the total number of defects counted was 117. Determine the center, LCL and UCL for the p chart.

Explain how the credit risk of finance companies differs from that of other lending financial institutions. (LO5)

Using the facts in problem 52, what is the minimum tax that Pedro should pay to make the tax structure vertically equitable based on the tax rate paid?  This would result in what type of tax rate structure