Question & Answer

Sarazan Company issues a 4-year, 7.5% fixed-rate interest only, nonprepayable $1,000,000 note payable on December 31, 2013. It decides to change the interest rate from a fixed rate to variable rate and enters into a swap agreement with M&S Corp. The swap agreement specifies that Sarazan will receive a fixed rate at 7.5% and pay variable with settlement dates that match the interest payments on the debt. Assume that interest rates have declined during 2014 and that Sarazan received $13,000 as an adjustment to interest expense for the settlement at December 31, 2014. The loss related to the debt (due to interest rate changes) was $48,000. The value of the swap contract increased $48,000. Instructions (a) Prepare the journal entry to record the payment of interest expense on December 31, 2014. (b) Prepare the journal entry to record the receipt of the swap settlement on December 31, 2014. (c) Prepare the journal entry to record the change in the fair value of the swap contract on December 31, 2014. (d) Prepare the journal entry to record the change in the fair value of the debt on December 31, 2014.

1.    : Which do you think would be more effective for shaping long-term ethical behavior in an organization: a written code of ethics combined with ethics training or strong ethical leadership? Which would have more impact on you? Why?

Explain how the accounting for bad debts can be used for earnings management.

1.       : Using Hackman and Oldham’s core job dimensions, compare and contrast the jobs of these two state employees: (1) Jared, who spends much of his time researching and debating energy policy to make recommendations that will eventually be presented to the state legislature, and (2) Anise, who spends her days planting and caring for the flower gardens and grounds surrounding the state capitol building.

What is wheel structure?

Describe the planar process.

Whitney received $75,000 of taxable income in 2024.  All of the income was salary from her employer.  What is her income tax liability in each of the following alternative situations?

Sycamore Candy Company offers an MP3 download (seven-single medley) as a premium for every five candy bar wrappers presented by customers together with $2.50. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.25. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2014 and 2015 are as follows. (All purchases and sales are for cash.) 2014 2015 MP3 codes purchased 250,000 330,000 Candy bars sold 2,895,400 2,743,600 Wrappers redeemed 1,200,000 1,500,000 2014 wrappers expected to be redeemed in 2015 290,000 2015 wrappers expected to be redeemed in 2016 350,000 Instructions (a) Prepare the journal entries that should be made in 2014 and 2015 to record the transactions related to the premium plan of the Sycamore Candy Company. (b) Indicate the account names, amounts, and classifications of the items related to the premium plan that would appear on the balance sheet and the income statement at the end of 2014 and 2015.

{Research} Janice Traylor is single.She has an 18-year-old son named Marty.Marty is Janice’s only child.Marty has lived with Janice his entire life.However, Marty recently joined the Marines and was sent on a special assignment to Australia.During the current year, Marty spent nine months in Australia.Marty was extremely homesick while in Australia, since he had never lived away from home.However, Marty knew this assignment was only temporary, and he couldn’t wait to come home and find his room just the way he left it.Janice has always filed as head of household, and Marty has always been considered a qualifying child (and he continues to meet all the tests with the possible exception of the residence test due to his stay in Australia).However, this year Janice is unsure whether she qualifies as head of household due to Marty’s nine-month absence during the year.Janice has come to you for advice on whether she qualifies for head of household filing status.What do you tell her?

What are the alternatives to photolithography in IC processing?

What is Rent's rule?

Sandra would like to organize LAB (a legal corporation) as either an S corporation or a C corporation for tax purposes. In either form, the entity is expected to generate an 8 percent annual before-tax return on a $500,000 investment. Sandra’s marginal income tax rate is 37 percent and her tax rate on qualified dividends and net capital gains is 20 percent. LAB’s income is not qualified business income (QBI) so Sandra is not allowed to claim the QBI deduction. Assume that LAB will distribute all of its earnings after entity-level taxes every year. Ignore the additional Medicare tax and the net investment income tax when computing your answers.   a. How much cash after taxes would Sandra receive from her investment in the first year if LAB is organized as either an S corporation or a C corporation?  b. What is the overall tax rate on LAB’s income in first year if LAB is organized as an S corporation or as a C corporation? c. At a high level, explain the differences between entity types in after-tax cash flow and overall tax rate on business income.

Which item has the same value for both the static budget and the flexible budget?

In 2024, Lisa and Fred, a married couple, have taxable income of $400,000.  If they were to file separate tax returns, Lisa would have reported taxable income of $225,000 and Fred would have reported taxable income of $175,000.  What is the couple’s marriage penalty or benefit?

Describe the economic trade-off faced by the Fed in achieving its economic goals. (LO4)

The first IBM personal computer was based on the Intel 8088 CPU, which was released in 1979. The 8088 had 29,000 transistors and 40 I/O pins. The final version of the Pentium III (1 GHz) was released in 2000. It contained 28,000,000 transistors and had 370 I/O pins. (a) Determine the Rent’s rule coefficient values m and C assuming that a transistor can be considered a circuit. (b) Use the value of m and C to predict the number of I/O pins required for the first Pentium 4 assuming that it is manufactured with 42,000,000 transistors. (c) The first Pentium 4, released in 2001, used 423 I/O pins. Comment on the accuracy of your prediction.

Assume that ACW Corporation has 2024 taxable income of $1,500,000 for purposes of computing the §179 expense. The company acquired the following assets during 2024 (assume no bonus depreciation):

What are debentures? How do they differ from subordinated debentures? (LO2)

Cole Inc. owns shares of Marlin Corporation stock classified as an available-for-sale investment. At December 31, 2014, the available-for-sale securities were carried in Cole’s accounting records at their cost of $875,000, which equals their fair value. On September 21, 2015, when the fair value of the securities was $1,200,000, Cole declared a property dividend whereby the Marlin securities are to be distributed on October 23, 2015 to stockholders of record on October 8, 2015. Prepare all journal entries necessary on those three dates.

Give some examples of commercial products which are laminar composite structures

Way Corporation disposed of the following tangible personal property assets in the current year. Assume that the delivery truck is not a luxury auto. Calculate Way Corporation’s 2024 depreciation deduction (ignore §179 expense and bonus depreciation for this problem).

Compare and contrast an employee’s FICA tax payment responsibilities with those of a self-employed taxpayer.

Identify two major disadvantages of plasma arc cutting.

Rank the following three single taxpayers in order of the magnitude of taxable income (from lowest to highest) and explain your results. Assume none of the taxpayers contributed to charity this year.

In a controlled experiment, it takes 3700 J to melt the amount of metal that is in a weld bead with a cross-sectional area of 6.0 mm2 that is 150.0 mm long. (a) Using Table 29.2, what is the most likely metal? (b) If the heat transfer factor is 0.85 and the melting factor is 0.55 for a welding process, how much heat must be generated at the welding source to accomplish the weld?