Question & Answer

] Manny hired his brother’s firm to provide accounting services to his business. During the current year, Manny paid his brother’s firm $82,000 for services even though other firms were willing to provide the same services for $40,000. How much of this expenditure, if any, is deductible as an ordinary and necessary business expenditure?

Assume Rita’s consulting business generated $13,000 in gross income for the current year. Further, assume Rita uses the actual expense method for computing her home office expense deduction.

Does this imply that if, say, half of the petrol stations were closed down, the consumer would benefit? (Clue: what would happen to the demand curves of the remaining stations?)

Who pays the first level of tax on a C corporation’s income? What is the tax rate applicable to the first level of tax?

: Compare and contrast programmed and nonprogrammed decisions, including how they relate to the presence of certainty, uncertainty, and ambiguity.

List at least three possible allocation bases that could be used to allocate accounting department costs to other departments. Give one advantage and one disadvantage of using each allocation base.

What are the basic tax-filing requirements imposed on partnerships?

On January 2, 2014, Parton Company issues a 5-year, $10,000,000 note at LIBOR, with interest paid annually. The variable rate is reset at the end of each year. The LIBOR rate for the first year is 5.8%. Parton Company decides it prefers fixed-rate financing and wants to lock in a rate of 6%. As a result, Parton enters into an interest rate swap to pay 6% fixed and receive LIBOR based on $10 million. The variable rate is reset to 6.6% on January 2, 2015. Instructions (a) Compute the net interest expense to be reported for this note and related swap transactions as of December 31, 2014. (b) Compute the net interest expense to be reported for this note and related swap transactions as of December 31, 2015.

1.              : Go ahead and close the deal, but come clean later. Explain that the controller had been on an extended leave of absence and because you had been on the job for only a few days, you had not had time to analyze the numbers yourself.

Describe the 12-month rule for determining whether and to what extent businesses should capitalize or immediately deduct prepaid expenses such as insurance or security contracts. Explain the apparent rationale for this rule.

What is the relationship between the mpc, the mpcd and the mpw?

Jesper Parnevik borrowed $70,000 on March 1, 2012. This amount plus accrued interest at 12% compounded semiannually is to be repaid March 1, 2022. To retire this debt, Jesper plans to contribute to a debt retirement fund five equal amounts starting on March 1, 2017, and for the next 4 years. The fund is expected to earn 10% per annum. Instructions How much must be contributed each year by Jesper Parnevik to provide a fund sufficient to retire the debt on March 1, 2022?

Compare and contrast the method of allocating income or loss to owners for partnerships and for S corporations.

: Explain globalization and why a global mind-set is so important for managers working internationally.

Look ahead to Table 3.1. It shows the income elasticity of demand for various foodstuffs. Explain the difference in the figures for milk, fish and fruit juice..

How do economies of scale in banking relate to the issue of interstate banking? (LO2)

Kumar Inc. uses a perpetual inventory system. At January 1, 2014, inventory was $214,000 at both cost and market value. At December 31, 2014, the inventory was $286,000 at cost and $265,000 at market value. Prepare the necessary December 31 entry under (a) the cost-of-goods-sold method and (b) the loss method.

6 Explain differences in social values and communication challenges across country cultures.

When you made the decision to study economics, was it a ‘rational’ decision (albeit based on the limited information you had available at the time)? What additional information would you like to have had in order to ensure that your decision was the right one?

Assume that the Fed’s primary goal is to reduce inflation. How can it implement monetary policy to achieve this goal? What is a possible adverse effect of such action by the Fed (even if it achieves this goal)? (LO3)

] Bethany incurred $20,000 in research and experimental costs for developing a specialized product during July 2024. Bethany went through a lot of trouble and spent $10,000 in legal fees to receive a patent for the product in August 2026. Bethany expects the patent to have a remaining useful life of 10 years. a. What amount of research and experimental expenses for 2024, 2025, and 2026 may Bethany deduct? b. How much patent amortization expense would Bethany deduct 2026?

A special ceramic specimen is tested in a bend test. Its width = 0.50 in and thickness = 0.25 in. The length of the specimen between supports = 2.0 in. Determine the transverse rupture strength if failure occurs at a load = 1700 lb

(Threshold Concept 11) 1. Why might consumers not always make efficient consumption decisions? (Threshold Concept 11) 2. Explain the meaning of social efficiency using the concept of Pareto optimality.

Identify today’s international trade alliances and discuss how they affect international companies.

Job costing, over- and underapplied overhead, journal entries Shane’s Shovels produces small, custom earth-moving equipment for landscaping companies. Manufacturing overhead is allocated to work in process using an estimated overhead rate. During April, transactions for Shane’s Shovels included the following:       Beginning and ending work in process were both zero.   Required (a)     What was the cost of jobs completed in April? (b)     Was manufacturing overhead underapplied or overapplied? By how much? (c)      Write out the journal entries for these transactions, including the adjustment.