Question & Answer

Georgette has identified a 1983 court case that appears to answer her research question.  What must she do to determine if the case still represents “current” law?

On separate demand and supply diagrams for bread, sketch the effects of the following: (a) a rise in the price of wheat; (b) a rise in the price of butter and margarine; (c) a rise in the price of rice, pasta and potatoes. In each case, state your assumptions.

A firm under monopoly or oligopoly that aims to maximise sales revenue will tend to produce more than one that aims to maximise profits. Does this conclusion also apply under (a) perfect competition and (b) monopolistic competition, given that there is freedom of entry?

Cannondale Company purchased an electric wax melter on April 30, 2014, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase. List price of new melter $15,800 Cash paid 10,000 Cost of old melter (5-year life, $700 salvage value) 11,200 Accumulated depreciation—old melter (straight-line) 6,300 Secondhand fair value of old melter 5,200 Instructions Prepare the journal entry(ies) necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Cannondale’s fiscal year ends on December 31, and depreciation has been recorded through December 31, 2013.

1.    : By the time an online or mobile business starts noticeably losing customers, it is often too late to turn things around. If you were the creator of a successful game app, such as Fortnite Battle Royale or League of Legends, how might you know when it was time to pivot so as to keep thriving?

Grady received $8,200 of Social Security benefits this year. Grady also reported salary and interest income this year. What amount of the benefits must Grady include in his gross income under the following two independent situations?

Arruza Co. is considering switching from the specific-goods LIFO approach to the dollar-value LIFO approach. Because the financial personnel at Arruza know very little about dollar-value LIFO, they ask you to answer the following questions. (a) What is a LIFO pool? (b) Is it possible to use a LIFO pool concept and not use dollar-value LIFO? Explain. (c) What is a LIFO liquidation? (d) How are price indexes used in the dollar-value LIFO method? (e) What are the advantages of dollar-value LIFO over specific-goods LIFO?

Distinguish between a substitutional solid solution and an interstitial solid solution.

Solve Problem 24.26 only using maximum production rate as the objective rather than minimum piece cost. Use of a spreadsheet calculator is recommended

How would the shifts in the SRAS curve be affected if, in response to rising output levels, firms increased their investment expenditures?

The following comments were made at an Annual Conference of the Financial Executives Institute (FEI). There is an irreversible movement toward the harmonization of financial reporting throughout the world. The international capital markets require an end to: 1. The confusion caused by international companies announcing different results depending on the set of accounting standards applied. 2. Companies in some countries obtaining unfair commercial advantages from the use of particular national accounting standards. 3. The complications in negotiating commercial arrangements for international joint ventures caused by different accounting requirements. 4. The inefficiency of international companies having to understand and use a myriad of different accounting standards depending on the countries in which they operate and the countries in which they raise capital and debt. Executive talent is wasted on keeping up to date with numerous sets of accounting standards and the never-ending changes to them. 5. The inefficiency of investment managers, bankers, and financial analysts as they seek to compare financial reporting drawn up in accordance with different sets of accounting standards. Instructions (a) What is the International Accounting Standards Board? (b) What stakeholders might benefit from the use of International Accounting Standards? (c) What do you believe are some of the major obstacles to convergence?

Daniel is considering selling two stocks that have not fared well over recent years. A friend recently informed Daniel that one of his stocks has a special designation, which allows him to treat a loss up to $50,000 on this stock as an ordinary loss rather than the typical capital loss. Daniel figures that he has a loss of $60,000 on each stock. If Daniel’s marginal tax rate is 35 percent and he has $120,000 of other capital gains (taxed at 15 percent), what is the tax savings from the special tax treatment

Describe the major constraint inherent in the presentation of accounting information.

What are the advantages of snap fitting?

Markus Company purchases supplies from France once a year. Would Markus be favorably affected if it establishes a currency swap arrangement and the dollar strengthens? What if it establishes a currency swap arrangement and the dollar weakens? (LO8)

Data for Pat Metheny Company are presented in E23-11. Instructions Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)

What is the limitation on a deductible IRA contribution?

Using the facts from the previous problem, Oriole Corporation proposes to pay Larry $100,000 and give him an installment note that will pay him $30,000 per year for the next 10 years plus a market rate of interest. Will this arrangement allow Larry to treat the redemption as an exchange?

Using the facts from the previous problem, how would your answer change if instead, Duff adopted the cash method of accounting to allow him to better control the timing of his cash receipts and disbursements?

Benjamin, a new staff accountant for Local Firm CPAs, LLC, takes a CPA review course to help prepare for the CPA exam. Benjamin is not reimbursed for the cost of the course ($1,500), but his firm expects him to take and pass the exam. Use an available tax research service to determine if Benjamin may deduct the cost of the CPA exam course.  Write a memo communicating the results of your research.

Explain how the credit crisis adversely affected many other people and institutions beyond homeowners and mortgage companies. (LO5)

Distinguish between a current liability and a long-term debt.

In 2014, Hollis Corporation reported net income of $1,000,000. It declared and paid preferred stock dividends of $250,000. During 2014, Hollis had a weighted average of 190,000 common shares outstanding. Compute Hollis’s 2014 earnings per share.

Using the facts in problem 48, what minimum tax would need to be assessed on Shameika to make the tax progressive with respect to effective tax rates?

What is an alloy?