Question & Answer

Explain the categories of task-oriented behavior and people-oriented behavior and how they are related to leader effectiveness in different situations and settings.

Using the information in E20-19, prepare a worksheet inserting January 1, 2014, balances, and showing December 31, 2014, balances. Prepare the journal entry recording postretirement benefit expense.

Read the following letter and help Shady Slim with his tax situation.  Assume that gross income is $172,900 (which consists only of salary) and filing status of single for purposes of this problem.

A cemented carbide tool is used to turn a part with a length of 14.0 in and diameter = 4.0 in. The parameters in the Taylor equation are: n = 0.25 and C = 1000 (ft/min). The rate for the operator and machine tool = $45.00/hr, and the tooling cost per cutting edge = $2.50. It takes 2.5 min to load and unload the workpart and 1.50 min to change tools. The feed = 0.015 in/rev. Determine (a) cutting speed for maximum production rate, (b) tool life in min of cutting, and (c) cycle time and cost per unit of product.

What effect will the following have on the mpc: (a)     the rate of income tax rises; (b)     the economy begins to recover from recession; (c)     people anticipate that the rate of inflation is about to rise; (d)     the government redistributes income from the rich to the poor? In each case sketch what would happen to the consumption function.

In its 2012 annual report, Gap Inc. reported inventory of $1,615 million on January 25, 2012, and $1,620 million on January 29, 2011, cost of sales of $9,275 million for fiscal year 2012, and net sales of $14,549 million. Compute Gap’s inventory turnover and the average days to sell inventory for the fiscal year 2012.

State some of the more serious problems encountered in seeking to achieve the ideal measurement of periodic net income. Explain what accountants do as a practical alternative.

How do banks use duration analysis? (LO3)

Is a qualifying relative always a qualifying person for purposes of determining head of household filing status?

When a taxpayer receives a nonqualified distribution from a Roth IRA, is the entire amount of the distribution treated as taxable income? Explain.

On January 1, 2014, Beyonce Co. purchased 25,000 shares (a 10% interest) in Elton John Corp. for $1,400,000. At the time, the book value and the fair value of John’s net assets were $13,000,000. On July 1, 2015, Beyonce paid $3,040,000 for 50,000 additional shares of John common stock, which represented a 20% investment in John. The fair value of John’s identifiable assets net of liabilities was equal to their carrying amount of $14,200,000. As a result of this transaction, Beyonce owns 30% of John and can exercise significant influence over John’s operating and financial policies. John reported the following net income and declared and paid the following dividends. Net Income Dividend per Share Year ended 12/31/14 $700,000 None Six months ended 6/30/15 500,000 None Six months ended 12/31/15 815,000 $1.55 Instructions (Any excess fair value is attributed to goodwill.) Determine the ending balance that Beyonce Co. should report as its investment in John Corp. at the end of 2015.

Explain how return on investment (ROI) is calculated and how it can be         decomposed into two financial measures.

Clark Pierce conducts a wholesale merchandising business that sells approximately 5,000 items per month with a total monthly average sales value of $250,000. Its annual bad debt rate has been approximately 1½% of sales. In recent discussions with his bookkeeper, Mr. Pierce has become confused by all the alternatives apparently available in handling the Allowance for Doubtful Accounts balance. The following information has been presented to Pierce. 1. An allowance can be set up (a) on the basis of a percentage of sales or (b) on the basis of a valuation of all past due or otherwise questionable accounts receivable. Those considered uncollectible can be charged to such allowance at the close of the accounting period, or specific items can be charged off directly against (1) Gross Sales or to (2) Bad Debt Expense in the year in which they are determined to be uncollectible. 2. Collection agency and legal fees, and so on, incurred in connection with the attempted recovery of bad debts can be charged to (a) Bad Debt Expense, (b) Allowance for Doubtful Accounts, (c) Legal Expense, or (d) Administrative Expense. 3. Debts previously written off in whole or in part but currently recovered can be credited to (a) Other Revenue, (b) Bad Debt Expense, or (c) Allowance for Doubtful Accounts. Instructions Which of the foregoing methods would you recommend to Mr. Pierce in regard to (1) allowances and charge-offs, (2) collection expenses, and (3) recoveries? State briefly and clearly the reasons supporting your recommendations.

The following items relate to operations in a recent year. 1. Serious pressure was placed on profitability by sharply increasing raw material prices. Some raw materials increased in price 50% during the past year. Cost containment programs were instituted and product prices were increased whenever possible, which resulted in profit margins actually improving over the course of the year. 2. The company entered into a revolving credit agreement, under which UTC may borrow the lesser of $15,000,000 or 80% of eligible accounts receivable. At the end of the year, approximately $4,000,000 was outstanding under this agreement. The company plans to use this line of credit in the upcoming year to finance operations and expansion. Instructions (a) Should investors be informed of raw materials price increases, such as described in item 1? Does the fact that the company successfully met the challenge of higher prices affect the answer? Explain. (b) How should the information in item 2 be presented in the financial statements of UTC?

Consider the data in Problem 21.10 except that rake angle is a variable, and its effect on the forces in parts (b), (c), and (d) is to be evaluated. (a) Using a spreadsheet calculator, compute the values of shear force, cutting force, thrust force, and friction force as a function of rake angle over a range of rake angles between the high value of 20° in Problem 21.10 and a low value of -10°. Use intervals of 5° between these limits. The chip thickness ratio decreases as rake angle is reduced and can be approximated by the following relationship: r = 0.38 + 0.006 , where r = chip thickness and = rake angle. (b) What observations can be made from the computed results?

The controller for Lafayette Inc. recently commented, “If I have to disclose our segments individually, the only people who will gain are our competitors and the only people that will lose are our present stockholders.” Evaluate this comment.

Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $315,000. The estimated fair values of the assets are land $60,000, building $220,000, and equipment $80,000. At what amounts should each of the three assets be recorded?

A 12-in wafer is processed over a circular area of diameter = 11.75 in. The density of point defects in the surface area is 0.018 defects/in2. The chips to be fabricated are square with an area of 0.16 in2 each. Determine an estimate of the number of good chips using the Bose-Einstein yield computation.

Explain why taxpayers are allowed to exclude gifts and inheritances from gross income even though these payments are realized and clearly provide taxpayers with the wherewithal to pay.

Briefly describe some of the similarities and differences between GAAP and IFRS with respect to the accounting for investments.

What major types of items are reported in the retained earnings statement?

Why did Lehman Brothers experience financial problems during the credit crisis? (LO5)

What does it mean to “flip” shares? Why would investors want to flip shares? (LO3)

On October 1, 2014, Chung, Inc. assigns $1,000,000 of its accounts receivable to Seneca National Bank as collateral for a $750,000 note. The bank assesses a finance charge of 2% of the receivables assigned and interest on the note of 9%. Prepare the October 1 journal entries for both Chung and Seneca.

1.    : If you were to interview someone for a position as an international business executive, what are three questions you think it would be important to ask? Explain your reasoning.