Question & Answer

The qualitative characteristics that make accounting information useful for decision-making purposes are as follows. Relevance Neutrality Verifi ability Faithful representation Completeness Understandability Predictive value Timeliness Comparability Confi rmatory value Materiality Free from error Instructions Identify the appropriate qualitative characteristic(s) to be used given the information provided below. (a) Qualitative characteristic being employed when companies in the same industry are using the same accounting principles. (b) Quality of information that confirms users’ earlier expectations. (c) Imperative for providing comparisons of a company from period to period. (d) Ignores the economic consequences of a standard or rule. (e) Requires a high degree of consensus among individuals on a given measurement. (f) Predictive value is an ingredient of this fundamental quality of information. (g) Four qualitative characteristics that are related to both relevance and faithful representation. (h) An item is not recorded because its effect on income would not change a decision. (i) Neutrality is an ingredient of this fundamental quality of accounting information. (j) Two fundamental qualities that make accounting information useful for decision-making purposes. (k) Issuance of interim reports is an example of what enhancing quality of relevance?

: Describe the types of teams and the five contributions that teams make in organizations

Name some of the abrasive operations available to achieve very good surface finishes

Describe the kinds of regulations that are imposed on finance companies. (LO1)

A U.S. insurance company purchased British 20-year Treasury bonds instead of U.S. 20-year Treasury bonds because the coupon rate was 2 percentage points higher on the British bonds. Assume that the insurance company sold the bonds after five years. Its yield over the five-year period was substantially less than the yield it would have received on the U.S. bonds over the same five-year period. Assume that the U.S. insurance company had hedged its exchange rate exposure. Given that the lower yield was not because of default risk or exchange rate risk, explain how the British bonds could have generated a lower yield than the U.S. bonds. (Assume that either type of bond could have been purchased at the par value.) (LO2, LO5)

What are the general rules for how gains or losses on retirement of plant assets should be reported in income?

A turning operation is to be performed on C1010 steel, which is a ductile grade. It is desired to achieve a surface finish of 64 µ-in, while at the same time maximizing the metal removal rate. It has been decided that the speed should be in the range 200 ft/min to 400 ft/min, and that the depth of cut will be 0.080 in. The tool nose radius = 3/64 in. Determine the speed and feed combination that meets these criteria.

Petrenko Corporation has outstanding 2,000 $1,000 bonds, each convertible into 50 shares of $10 par value ordinary shares. The bonds are converted on December 31, 2014. The bonds payable has a carrying value of $1,950,000 and conversion equity of $20,000. Record the conversion using the book value method.

At December 31, 2014, Cascade Company had a net deferred tax liability of $450,000. An explanation of the items that compose this balance is as follows. Temporary Differences in Deferred Taxes Resulting Balances 1. Excess of tax depreciation over book depreciation. $200,000 2. Accrual, for book purposes, of estimated loss contingency from pending lawsuit that is expected to be settled in 2015. The loss will be deducted on the tax return when paid. $ (50,000) 3. Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale of an investment. $300,000 In analyzing the temporary differences, you find that $30,000 of the depreciation temporary difference will reverse in 2015, and $120,000 of the temporary difference due to the installment sale will reverse in 2015. The tax rate for all years is 40%. Instructions Indicate the manner in which deferred taxes should be presented on Cascade Company’s December 31, 2014, statement of financial position.

Summarize the factors that affect women’s opportunities, including the first rung of the management ladder and the female advantage.

An 8-in diameter grinding wheel, 1.0 in wide, is used in a surface grinding job performed on a flat piece of heat-treated 4340 steel. The wheel rotates to achieve a surface speed of 5000 ft/min, with a depth of cut (infeed) = 0.002 in per pass and a crossfeed = 0.15 in. The reciprocating speed of the work is 20 ft/min, and the operation is performed dry. (a) What is the length of contact between the wheel and the work? (b) What is the volume rate of metal removed? (c) If there are 300 active grits/in2 of wheel surface, estimate the number of chips formed per unit time. (d) What is the average volume per chip? (e) If the tangential cutting force on the workpiece = 7.3 lbs, what is the specific energy calculated for this job?

If a person meets the qualifying relative tests for a taxpayer, is that person automatically considered to be a dependent of the taxpayer? Explain.

Ottawa Corporation owns machinery that cost $20,000 when purchased on July 1, 2011. Depreciation has been recorded at a rate of $2,400 per year, resulting in a balance in accumulated depreciation of $8,400 at December 31, 2014. The machinery is sold on September 1, 2015, for $10,500. Prepare journal entries to (a) update depreciation for 2015 and (b) record the sale.

Is deindustrialisation necessarily undesirable?

Mehta Company traded a used welding machine (cost $9,000, accumulated depreciation $3,000)for office equipment with an estimated fair value of $5,000. Mehta also paid $3,000 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.)

The invoice price of a machine is $50,000. Various other costs relating to the acquisition and installation of the machine including transportation, electrical wiring, special base, and so on amount to $7,500. The machine has an estimated life of 10 years, with no salvage value at the end of that period. The owner of the business suggests that the incidental costs of $7,500 be charged to expense immediately for the following reasons. 1. If the machine should be sold, these costs cannot be recovered in the sales price. 2. The inclusion of the $7,500 in the machinery account on the books will not necessarily result in a closer approximation of the market price of this asset over the years, because of the possibility of changing demand and supply levels. 3. Charging the $7,500 to expense immediately will reduce federal income taxes. Instructions Discuss each of the points raised by the owner of the business.

For what reasons might a company restrict a portion of its retained earnings?

What criteria do regulators use when examining a savings institution? (LO1)

What are the alternative forms of ownership of a savings institution? (LO1)

Fairbanks Corporation purchased 400 ordinary shares of Sherman Inc. as a trading investment for $13,200. During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman shares were selling for $34.50 per share. Prepare Fairbanks’ journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment.

Name some of the nonoptical noncontact sensor technologies available for inspection.

The Fed focuses its control on the federal funds rate, yet indirectly influences many other types of interest rates. Explain. (LO2)

Give an example of a noncontact inspection technique.

How does high economic growth affect an SI? (LO3)

What is the theoretical justification of the allowance method as contrasted with the direct write-off method of accounting for bad debts?