Question & Answer

Describe the growing-equity mortgage. How does it differ from a graduated-payment mortgage? (LO2)

What is the common approach used in all of the material addition technologies to prepare the control instructions for the RP system?

Liquid phase sintering is used for WC-Co compacts, even though the sintering temperatures are below the melting points of either WC or Co. How is this possible?

What role does debt basis play in determining the taxability of operating distributions to S corporation shareholders?

What would happen to price and quantity if the demand curve shifted to the left? Draw a diagram to illustrate your answer.

Explain why there are such a large number and variety of tax credits.

What type of information do investors rely on when determining the proper value of stocks? (LO2)

Why are firms likely to experience economies of scale up to a certain size and then diseconomies of scale after some point beyond that?

The adjusted trial balance of Lopez Company shows the following data pertaining to sales at the end of its fiscal year, October 31, 2014: Sales Revenue $800,000, Delivery Expense $12,000, Sales Returns and Allowances $24,000, and Sales Discounts $15,000. Instructions (a) Prepare the revenues section of the income statement. (b) Prepare separate closing entries for (1) sales and (2) the contra accounts to sales.

How should the disposal of a component of a business be disclosed in the income statement?

List the factors that affect the hold down pressure in a drawing operation according to the video on sheet-metal stamping dies and processes.

How does the current earnings and profits account differ from the accumulated earnings and profits accounts?

List the four general categories of adjustments that a corporation makes to taxable income or net loss to compute current E&P.  What is the rationale for making these adjustments?

The following are selected 2014 transactions of Sean Astin Corporation. Sept. 1 Purchased inventory from Encino Company on account for $50,000. Astin records purchases gross and uses a periodic inventory system. Oct. 1 Issued a $50,000, 12-month, 8% note to Encino in payment of account. Oct. 1 Borrowed $50,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $54,000 note. Instructions (a) Prepare journal entries for the selected transactions above. (b) Prepare adjusting entries at December 31. (c) Compute the total net liability to be reported on the December 31 balance sheet for: (1) The interest-bearing note. (2) The zero-interest-bearing note.

List the most common methods for forming the pressed parts in powder metallurgy according to the powder metallurgy video.

This year Elizabeth agreed to a three-year service contract with an engineering consulting firm to improve efficiency in her factory. The contract requires Elizabeth to pay the consulting firm $1,500 for each instance that Elizabeth requests its assistance. The contract also provides that Elizabeth only pays the consultants if their advice increases efficiency as measured 12 months from the date of service. This year Elizabeth requested advice on three occasions, and she has not yet made any payments to the consultants.  a) How much should Elizabeth deduct this year under this service contract if she uses the accrual method of accounting?  b) How much should Elizabeth deduct this year under this service contract if she uses the cash method of accounting?

Figure 15.5 shows a decline in actual output in recessions. Redraw the diagram, only this time show a mere slowing down of growth in phase 4.

List the stages of extrusion blow molding according to the video.

Steve’s tentative minimum tax (TMT) for 2024 is $245,000. What is his AMT if a. His regular tax is $230,000?

Convers Corporation (calendar-year-end) acquired the following assets during the current tax year:

Match the qualitative characteristics below with the following statements. 1. Timeliness 5. Faithful representation 2. Completeness 6. Relevance 3. Free from error 7. Neutrality 4. Understandability 8. Confirmatory value (a) Quality of information that assures users that information represents the economic phenomena that it purports to represent. (b) Information about an economic phenomenon that corrects past or present expectations based on previous evaluations. (c) The extent to which information is accurate in representing the economic substance of a transaction. (d) Includes all the information that is necessary for a faithful representation of the economic phenomena that it purports to represent. (e) Quality of information that allows users to comprehend its meaning.

Cleveland Company has a stock portfolio valued at $4,000 (available-for-sale). Its cost was $3,300. If the Fair Value Adjustment account has a debit balance of $200, prepare the journal entry at year-end.

Research and development activities may include (a) personnel costs, (b) materials and equipment costs, and (c) indirect costs. What is the recommended accounting treatment for these three types of R&D costs?

Electron-beam welding has a significant disadvantage in high-production applications. What is that disadvantage?

Presented below are selected ledger accounts of Tucker Corporation as of December 31, 2014. Cash $ 50,000 Administrative expenses 100,000 Selling expenses 80,000 Net sales 540,000 Cost of goods sold 210,000 Cash dividends declared (2014) 20,000 Cash dividends paid (2014) 15,000 Discontinued operations (loss before income taxes) 40,000 Depreciation expense, not recorded in 2013 30,000 Retained earnings, December 31, 2013 90,000 Effective tax rate 30% Instructions (a) Compute net income for 2014. (b) Prepare a partial income statement beginning with income from continuing operations before income tax, and including appropriate earnings per share information. Assume 10,000 shares of common stock were outstanding during 2014.