Question & Answer

Carla incorporated her 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$    20,000$        10,000 Building    150,000        100,000 Land    250,000        300,000 Total$  420,000$      410,000

In what situations do partners need to know the tax basis in their partnership interests?

What is so special about the superalloys? What distinguishes them from other alloys?

Leonard Bernstein Company began operations late in 2013 and adopted the conventional retail inventory method. Because there was no beginning inventory for 2013 and no markdowns during 2013, the ending inventory for 2013 was $14,000 under both the conventional retail method and the LIFO retail method. At the end of 2014, management wants to compare the results of applying the conventional and LIFO retail methods. There was no change in the price level during 2014. The following data are available for computations. 8 Cost Retail Inventory, January 1, 2014 $14,000 $20,000 Sales revenue 80,000 Net markups 9,000 Net markdowns 1,600 Purchases 58,800 81,000 Freight-in 7,500 Estimated theft 2,000

] Explain why an insolvent taxpayer is allowed to exclude income from the discharge of indebtedness if the taxpayer remains insolvent after receiving debt relief.

Discuss the EU ruling that gender may not be used to differentiate insurance premiums. Which insurance markets would be affected by outlawing age ‘discrimination’ in a similar manner? What would be the impact?

Larry Byrd, Inc., spent $68,000 in attorney fees while developing the trade name of its new product, the Mean Bean Machine. Prepare the journal entries to record the $68,000 expenditure and the first year’s amortization, using an 8-year life.

Describe how purchased goodwill leads to temporary book-tax differences.

(Threshold Concept 10) 1. If general equilibrium is achieved when all markets have responded to a change and its knock-on effects, and if such changes are constantly occurring, will general equilibrium actually be achieved? Does your answer have any implications for policy? (Threshold Concept 10) 2. If social efficiency is seen as desirable (a normative issue), should policy necessarily be geared to achieving this?

What is an orthogonal cutting operation?

A surfacing weld is to be applied to a rectangular low carbon steel plate that is 200 mm by 350 mm. The filler metal to be added is a harder (alloy) grade of steel, whose melting point is assumed to be the same. A thickness of 2.0 mm will be added to the plate, but with penetration into the base metal, the total thickness melted during welding = 6.0 mm, on average. The surface will be applied by making a series of parallel, overlapped welding beads running lengthwise on the plate. The operation will be carried out automatically with the beads laid down in one long continuous operation at a travel speed = 7.0 mm/s, using welding passes separated by 5 mm. Assume the welding bead is rectangular in cross section: 5 mm by 6 mm. Ignore the minor complications of the turnarounds at the ends of the plate. Assuming the heat transfer factor = 0.8 and the melting factor = 0.6, determine (a) the rate of heat that must be generated at the welding source, and (b) how long will it take to complete the surfacing operation.

Malak has decided to contribute some equipment she previously used in her sole proprietorship in exchange for a 10 percent profits and capital interest in Fast Choppers LLC. Malak originally paid $200,000 cash for the equipment. Since then, the tax basis in the equipment has been reduced to $100,000 because of tax depreciation, and the fair market value of the equipment is now $150,000. a. Must Malak recognize any of the potential §1245 recapture when she contributes the machinery to Fast Choppers? [Hint: See §1245(b)(3).] b. What cost recovery method will Fast Choppers use to depreciate the machinery? [Hint: See §168(i)(7).] c. If Fast Choppers were to immediately sell the equipment Malak contributed for $150,000, how much gain would Malak recognize, and what is its character? [Hint: See §§1245 and 704(c).]

What are the five principal parameters of a grinding wheel?

Jonah has the choice of paying Rita $10,000 today or $40,000 in ten years. Assume Jonah can earn a 12 percent after-tax rate of return. Which should he choose?

1. Will the shape of the long-run AS curve here depend on just how the ‘long’ run is defined? 2. If a shift in the aggregate demand curve from AD to AD1 in Figure 20.17 causes a movement from point a to point d in the long run, would a shift in aggregate demand from AD1 to AD cause a movement from point d back to point a in the long run?

Draw a diagram like Figure 19.18, only with just one L curve. Assume that the current level of national income is at Y1. Now assume that the supply of money decreases. Show the effect on (a) the rate of interest; (b) the position of the LM curve.

Draw a diagram similar to Figure 21.11 and illustrate the effect of a positive demand shock, showing how the effect differs according to whether a simple inflation rule is followed or a Taylor rule. Again assume that the weight attached to controlling inflation is the same with the simple rule and the Taylor rule.

Wayne Rogers, an administrator at a major university, recently said, “I’ve got some CDs in my IRA, which I set up to beat the IRS.” As elsewhere, in the world of accounting and finance, it often helps to be fluent in abbreviations and acronyms. Instructions Presented below is a list of common accounting acronyms. Identify the term for which each acronym stands, and provide a brief definition of each term. (a) AICPA (e) FAF (i) CPA (b) CAP (f) FASAC (j) FASB (c) ARB (g) SOP (k) SEC (d) APB (h) GAAP (l) IASB

What are the parameters that have the greatest influence in determining the ideal surface roughness Ri in a turning operation?

Arantxa Corporation made the following cash purchases of securities during 2014, which is the first year in which Arantxa invested in securities. 1. On January 15, purchased 10,000 shares of Sanchez Company’s common stock at $33.50 per share plus commission $1,980. 2. On April 1, purchased 5,000 shares of Vicario Co.’s common stock at $52.00 per share plus commission $3,370. 3. On September 10, purchased 7,000 shares of WTA Co.’s preferred stock at $26.50 per share plus commission $4,910. On May 20, 2014, Arantxa sold 4,000 shares of Sanchez Company’s common stock at a market price of $35 per share less brokerage commissions, taxes, and fees of $3,850. The year-end fair values per share were Sanchez $30, Vicario $55, and WTA $28. In addition, the chief accountant of Arantxa told you that Arantxa Corporation plans to hold these securities for the long term but may sell them in order to earn profits from appreciation in prices. Instructions (a) Prepare the journal entries to record the above three security purchases. (b) Prepare the journal entry for the security sale on May 20. (c) Compute the unrealized gains or losses and prepare the adjusting entries for Arantxa on December 31, 2014.

1.              : Take swift action to notify the venture capitalists of the truth of the situation—and start cleaning house to get rid of people who would knowingly lie to close a deal.

George and Weezy received $30,200 of Social Security benefits this year ($12,000 for George; $18,200 for Weezy).  They also received $5,000 of interest from jointly owned City of Ranburne Bonds and dividend income. What amount of the Social Security benefits must George and Weezy include in their gross income under the following independent situations? a.       George and Weezy file married joint and receive $8,000 of dividend income from stocks owned by George. b.       George and Weezy file married separate and receive $8,000 of dividend income from stocks owned by George. c.       George and Weezy file married joint and receive $30,000 of dividend income from stocks owned by George. d.     George and Weezy file married joint and receive $15,000 of dividend income from stocks owned by George

Draw a utility/value function that illustrates the concepts of reference dependent preferences, loss aversion and diminishing marginal sensitivity to gains/losses.

Offer an argument for why a political regime that favors a large government will cause interest rates to be higher. Offer at least one example of why a political regime that favors a large government will cause interest rates to be lower. (Hint: Recognize that the government intervention in the economy can influence other factors that affect interest rates.) (LO2)

1.       : Research on team interactions indicates that when people eat lunch at 12-person tables, they are more talkative and collaborative than when they eat at 4-person tables, even if they aren’t eating with their own team members. What do you think would explain this finding?