Question & Answer

How would a change in the natural rate of unemployment or the level of potential national income affect the EAPC and DAS curve?

If inventory physically increases during the period, income under absorption costing will be higher than income using variable costing. Explain.

Actions to mitigate risk Ben, an employee of Joseph’s, appears to be extremely enthusiastic about his back-office accounting role. He has been with Joseph’s company for about four years and has performed well in his position. Ben is very keen to progress in the company and Joseph has recently decided to offer him a posting at a small international operation in Asia. While the role is to remain in the back office, the position will not require efforts on a full-time basis. Instead, Joseph decides to provide Ben with an opportunity to manage the currently vacant front-office trading role. While the operation is small and Ben has limited trading skills, Joseph is sure Ben will be able to manage both roles and hopefully learn about, and at the same time develop, the trading arm of this international operation. Joseph decides to award Ben an uncapped bonus on profits earned for the group on top of his negotiated annual base salary.   Required Prepare a report advising Joseph on the risk management ramifications of his decisions. What actions should Joseph take to mitigate any perceived risk? (LO6)

Why do you think some banks suffered larger losses than other banks during the credit crisis? (LO1)

What is the fair value option?

Ivan incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and adjusted tax bases.       FMV    Adjusted Tax Basis Inventory$    10,000$  15,000 Building      50,000    40,000 Land      60,000    30,000 Total$  120,000$  85,000   The fair market value of the corporation’s stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ivan. The transaction met the requirements to be tax-deferred under §351.

Explain the difference between load and no-load mutual funds. (LO1)

Consider the prevailing conditions that could affect the demand for stocks, including inflation, the economy, the budget deficit, the Fed’s monetary policy, political conditions, and the general mood of investors. Based on the current conditions, recommend a specific type of stock mutual fund that you think would perform well. Offer some logic to support your recommendation. (LO2)

What is the difference between open pores and closed pores in a metallic powders?

In 2007 China overtook the USA as the world’s largest emitter of CO2. Yet USA per capita emissions are three times that of China. What issues arise from this in the formulation of a global policy to reduce CO2 emissions?

What are the two main categories of printed circuit board assemblies, as distinguished by the method of attaching components to the board?

The cash method of accounting is generally preferred by taxpayers. Describe two types of businesses that are not allowed to use the cash method.

IFRS prohibits the use of the completed-contract method in accounting for long-term contracts. If revenues and costs are difficult to estimate, how must companies account for long-term contracts?

Marjorie sold her condominium for $500,000 on September 14, 2014; she had paid $330,000 for it in 2006. Marjorie collected the selling price as follows: 2014, $80,000; 2015, $320,000; and 2016, $100,000. Marjorie appropriately uses the installment-sales method. Prepare a schedule to determine the gross profit for 2014, 2015, and 2016 from the installment sale.

Amsterdam Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available. Units Unit Cost Total Cost April 1 inventory 250 $10 $ 2,500 April 15 purchase 400 12 4,800 April 23 purchase 350 13 4,550 1,000 $11,850 Compute the April 30 inventory and the April cost of goods sold using the average-cost method.

A carbon steel bar with 7.64 in diameter has a tensile strength of 65,000 lb/in2 and a shear strength of 45,000 lb/in2 . The diameter is reduced using a turning operation at a cutting speed of 400 ft/min. The feed is 0.011 in/rev and the depth of cut is 0.120 in. The rake angle on the tool in the direction of chip flow is 13°. The cutting conditions result in a chip ratio of 0.52. Using the orthogonal model as an approximation of turning, determine (a) the shear plane angle, (b) shear force, (c) cutting force and feed force, and (d) coefficient of friction between the tool and chip.

Reynolds Custom Builders (RCB) was established in 1987 by Avery Conway and initially built high-quality customized homes under contract with specific buyers. In 2002, Conway’s two sons joined the company and expanded RCB’s activities into the high-rise apartment and industrial plant markets. Upon the retirement of RCB’s long-time financial manager, Conway’s sons recently hired Ed Borke as controller for RCB. Borke, a former college friend of Conway’s sons, has been associated with a public accounting firm for the last 6 years. Upon reviewing RCB’s accounting practices, Borke observed that RCB followed the completedcontract method of revenue recognition, a carryover from the years when individual home building was the majority of RCB’s operations. Several years ago, the predominant portion of RCB’s activities shifted to the high-rise and industrial building areas. From land acquisition to the completion of construction, most building contracts cover several years. Under the circumstances, Borke believes that RCB should follow the percentage-of-completion method of accounting. From a typical building contract, Borke developed the  BLUESTEM TRACTOR PLANT Contract price: $8,000,000 2014 2015 2016 Estimated costs $1,600,000 $2,880,000 $1,920,000 Progress billings 1,000,000 2,500,000 4,500,000 Cash collections 800,000 2,300,000 4,900,000 Instructions (a) Explain the difference between completed-contract revenue recognition and percentage-of-completion revenue recognition. (b) Using the data provided for the Bluestem Tractor Plant and assuming the percentage-of-completion method of revenue recognition is used, calculate RCB’s revenue and gross profit for 2014, 2015, and 2016, under each of the following circumstances. (1) Assume that all costs are incurred, all billings to customers are made, and all collections from customers are received within 30 days of billing, as planned. (2) Further assume that, as a result of unforeseen local ordinances and the fact that the building site was in a wetlands area, RCB experienced cost overruns of $800,000 in 2014 to bring the site into compliance with the ordinances and to overcome wetlands barriers to construction. (3) Further assume that, in addition to the cost overruns of $800,000 for this contract incurred under part (b)(2), inflationary factors over and above those anticipated in the development of the original contract cost have caused an additional cost overrun of $850,000 in 2015. It is not anticipated that any cost overruns will occur in 2016.

According to the die casting video, what materials are most common for die-casting dies?

What factors must be considered by the actuary in measuring the amount of pension benefits under a defined benefit plan?

1.    : Do you think that it’s possible for individuals to develop a global mind-set if they never live outside their native country? Explain.

How do insurance companies finance the real estate market? (LO3)

What are the disadvantages and drawbacks of soldering?

What is the time value of money? Why should accountants have an understanding of compound interest, annuities, and present value concepts?

How do insurance companies manage credit risk and liquidity risk? (LO5)

A silicon boule has been processed through grinding to provide a cylinder whose diameter = 285 mm and whose length = 900 mm. Next, it will be sliced into wafers 0.7 mm thick using a cut-off saw with a kerf = 0.5 mm. The wafers thus produced will be used to fabricate as many IC chips as possible for the personal computer market. Each IC has a market value to the company of $98. Each chip is square with 15 mm on a side. The processable area of each wafer is defined by a diameter = 270 mm. Estimate the value of all of the IC chips that could be produced, assuming an overall yield of 80% good product.