Question & Answer

What will determine the size of the shift in the BP curve in each case?

Use the information provided in IFRS12-8. Assume that the recoverable amount of the division is estimated to be $750,000. Prepare Waters’ journal entry, if necessary, to record impairment of the goodwill.

Explain the term sales mix in your own words. How does sales mix affect the contribution margin?

Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $12,000 to a Roth IRA ($4,000 a year). The current value of the Roth IRA is $16,300. In the current year, Sherry withdraws $14,000 of the account balance to purchase a car. Assuming Sherry’s marginal tax rate is 24 percent, how much of the $14,000 withdrawal will she retain after taxes to fund her car purchase?

There are 16 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, andeach additional answer beyond the correct number of answers reduces the score by 1 point. Percentage score on the quiz is based on the total number of correct answers. 25.1 Which one of the following conventional machining processes is closest to grinding: (a) drilling, (b) milling, (c) shaping, or (d) turning? 25.2 Of the following abrasive materials, which one has the highest hardness: (a) aluminum oxide, (b) cubic boron nitride, or (c) silicon carbide? 25.3 Smaller grain size in a grinding wheel tends to (a) degrade surface finish, (b) have no effect on surface finish, or (c) improve surface finish? 25.4 Which of the following would tend to give higher material removal rates: (a) larger grain size, or (b) smaller grain size? 25.5 Which of the following will improve surface finish in grinding (three best answers): (a) denser wheel structure, (b) higher wheel speed, (c) higher workspeeds, (d) larger infeed, (e) lower infeed, (f) lower wheel speed, (g) lower workspeed, and (h) more open wheel structure? 25.6 Which one of the following abrasive materials is most appropriate for grinding steel and cast iron: (a) aluminum oxide, (b) cubic boron nitride, (c) diamond, or (d) silicon carbide? 25.7 Which one of the following abrasive materials is most appropriate for grinding hardened tool steel: (a) aluminum oxide, (b) cubic boron nitride, (c) diamond, or (d) silicon carbide? 25.8 Which one of the following abrasive materials is most appropriate for grinding nonferrous metals: (a) aluminum oxide, (b) cubic boron nitride, (c) diamond, or (d) silicon carbide? 25.9 Which of the following will help to reduce the incidence of heat damage to the work surface in grinding (four correct answers): (a) frequent dressing or truing of the wheel, (b) higher infeeds, (c) higher wheel speeds, (d) higher workspeeds, (e) lower infeeds, (f) lower wheel speeds, and (g) lower workspeeds? 25.10 Which one of the following abrasive processes achieves the best surface finish: (a) centerless grinding, (b) honing, (c) lapping, or (d) superfinishing? 25.11 The term deep grinding refers to which one of the following: (a) alternative name for any creep feed grinding operation, (b) external cylindrical creep feed grinding, (c) grinding operation performed at the bottom of a hole, (d) surface grinding that uses a large crossfeed, or (e) surface grinding that uses a large infeed?

What is the purpose of a statement of cash flows? How does it differ from a balance sheet and an income statement?

A 2.0-in-thick slab is 10.0 in wide and 12.0 ft long. Thickness is to be reduced in three steps in a hot rolling operation. Each step will reduce the slab to 75% of its previous thickness. It is expected that for this metal and reduction, the slab will widen by 3% in each step. If the entry speed of the slab in the first step is 40 ft/min, and roll speed is the same for the three steps, determine: (a) length and (b) exit velocity of the slab after the final reduction

Garcia Corporation purchased a truck by issuing an $80,000, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck.

The financial statements of P&G are presented in Appendix 5B. The company's complete annual report, including the notes to the financial statements, can be accessed at the book’s companion website, www.wiley.com/college/kieso. Instructions (a) Examining each item in P&G’s balance sheet, identify those items that require present value, discounting, or interest computations in establishing the amount reported. (The accompanying notes are an additional source for this information.) (b) (1) What interest rates are disclosed by P&G as being used to compute interest and present values? (2) Why are there so many different interest rates applied to P&G’s financial statement elements (assets, liabilities, revenues, and expenses)?

Classify the types of financial institutions mentioned in this chapter as either depository or nondepository. Explain the general difference between depository and nondepository institutions as sources of funds. It is often said that all types of financial institutions have begun to offer services that were previously offered only by certain types. Consequently, the operations of many financial institutions are becoming more similar. Nevertheless, performance levels still differ significantly among types of financial institutions. Why? (LO3)

The Fed intervened heavily during the 2008 credit crisis. Write a short essay explaining whether you believe the Fed’s intervention improved conditions in financial markets or made conditions worse.

Cartman Corporation owns 90 shares of SP Corporation. The remaining 10 shares are owned by Kenny (an individual). After several years of operations, Cartman decided to liquidate SP Corporation by distributing the assets to Cartman and Kenny. The tax basis of Cartman’s shares is $10,000, and the tax basis of Kenny’s shares is $7,000.  SP reported the following balance sheet at the date of liquidation:

Fatima pays $120,000 cash for Brittany’s one-third interest in the Westlake Partnership. Just prior to the sale, Brittany’s basis in Westlake is $96,000. Westlake reports the following balance sheet: Assets: Tax Basis FMV Cash $ 96,000 $ 96,000 Land 192,000 264,000    Totals $ 288,000 $ 360,000 Liabilities and capital: Capital- Amy 96,000 - Brittany 96,000 - Ben 96,000   Totals $ 288,000 a. What are the amount and character of Brittany’s recognized gain or loss on the sale? b. What is Fatima’s basis in her partnership interest? What is Fatima’s inside basis? c. If Westlake were to sell the land for $264,000 shortly after the sale of Brittany’s partnership interest, how much gain or loss would the partnership recognize? d. How much gain or loss would Fatima recognize if the land were sold for 264,000? e. Suppose Westlake has a §754 election in place. What is Fatima’s special basis adjustment? How much gain or loss would Fatima recognize on a subsequent sale of the land in this situation?

If fringe benefits (such as long holidays, company cars, free clothing/uniforms, travel allowances and health insurance) were included, do you think the level of inequality would increase or decrease? Explain why.

provides products and services to oil and natural gas exploration, production, transmission, and processing companies. The following is taken from a recent income statement. (Dollaramounts are in millions.) Sales revenue $2,697.0 Service revenue 1,933.9 Share of earnings of unconsolidated affi liates 92.4 Total revenues 4,723.3 Cost of sales 1,722.7 Cost of services 1,799.9 Total costs of sales and services 3,522.6 Gross earnings $1,200.7 Selling, engineering, administrative and general expenses (919.8) Special charges (70.0) Other income (deductions) Interest expense (47.4) Interest earned 19.1 Other, net 4.8 Earnings before income taxes and other items below 187.4 Income taxes (79.4) Noncontrolling interest (10.3) Earnings from continuing operations 97.7 Discontinued operations (35.3) Earnings before extraordinary items 62.4 Extraordinary items (6.3) Net earnings $ 56.1 Instructions Assume that 177,636,000 shares of stock were issued and outstanding. Prepare the per share portion of the income statement. Remember to begin with “Earnings from continuing operations.”

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?

Many business organizations have been concerned with providing for the retirement of employees since the late 1800s. During recent decades, a marked increase in this concern has resulted in the establishment of private pension plans in most large companies and in many medium- and small-sized ones. The substantial growth of these plans, both in numbers of employees covered and in amounts of retirement benefits, has increased the significance of pension costs in relation to the financial position, results of operations, and cash flows of many companies. In examining the costs of pension plans, a CPA encounters certain terms. The components of pension costs that the terms represent must be dealt with appropriately if generally accepted accounting principles are to be reflected in the financial statements of entities with pension plans. Instructions (a) Define a private pension plan. How does a contributory pension plan differ from a noncontributory plan? (b) Differentiate between “accounting for the employer” and “accounting for the pension fund.” (c) Explain the terms “funded” and “pension liability” as they relate to: (1) The pension fund. (2) The employer. (d) (1) Discuss the theoretical justification for accrual recognition of pension costs. (2) Discuss the relative objectivity of the measurement process of accrual versus cash (pay-as-you-go) accounting for annual pension costs. (e) Distinguish among the following as they relate to pension plans. (1) Service cost. (2) Prior service costs. (3) Vested benefits.

Can taxes be used to relieve poverty?

Assume that there is a positive technological shock. How would this impact on the equilibrium level of employment and the economy’s potential output?  Illustrate using diagrams of both the labour and goods markets.

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.

When the COVID-19 epidemic struck unexpectedly at the end of 2019, company closures and instructions to stay at home severely disrupted the economy. Write a short essay outlining how COVID-19 has affected the growth and use of fintech. Do you think this terrible episode had a positive effect on the growth and use of fintech, or did it generate more problems than fintech could solve?

In a given economy, the supply of money is £10 billion; the velocity of circulation of money (spent on final goods and services) is 3; and the price index is 2.00.          (a)  What is the level of real national income?          (b)  How much have prices risen (in percentage terms) since the base year?          (c)  Assume that money supply increases by 10 per cent and that the velocity of circulation remains constant. What will be the rate of inflation if (i) there is no increase in real national income; (ii) real national income increases by 10 per cent; (iii) real national income increases by 5 per cent?

Explain the dilemma of stock analysts who work for securities firms and assign ratings to large corporations. Why might they prefer not to assign low ratings to weak but large corporations? (LO6)

This year Elizabeth agreed to a three-year service contract with an engineering consulting firm to improve efficiency in her factory. The contract requires Elizabeth to pay the consulting firm $1,500 for each instance that Elizabeth requests its assistance. The contract also provides that Elizabeth only pays the consultants if their advice increases efficiency as measured 12 months from the date of service. This year Elizabeth requested advice on three occasions, and she has not yet made any payments to the consultants.  a) How much should Elizabeth deduct this year under this service contract if she uses the accrual method of accounting?  b) How much should Elizabeth deduct this year under this service contract if she uses the cash method of accounting?

Hollenbeck Foods Inc. sponsors a postretirement medical and dental benefit plan for its employees. The following balances relate to this plan on January 1, 2014. Plan assets $200,000 Expected postretirement benefi t obligation 820,000 Accumulated postretirement benefi t obligation 200,000 No prior service costs exist. As a result of the plan’s operation during 2014, the following additional data are provided by the actuary. Service cost is $70,000 Discount rate is 10% Contributions to plan are $65,000 Expected return on plan assets is $10,000 Actual return on plan assets is $15,000 Benefi ts paid to employees are $44,000 Average remaining service to full eligibility: 20 years Instructions (a) Using the preceding data, compute the net periodic postretirement benefit cost for 2014 by preparing a worksheet that shows the journal entry for postretirement expense and the year-end balances in the related postretirement benefit memo accounts. (Assume that contributions and benefits are paid at the end of the year.) (b) Prepare any journal entries related to the postretirement plan for 2014 and indicate the postretirement amounts reported in the financial statements for 2014.