Question & Answer

Discuss how a change to the LIFO method of inventory valuation is handled when it is impracticable to determine previous LIFO inventory amounts.

Consider the following independent situations. (a) Mike Finley wishes to become a millionaire. His money market fund has a balance of $92,296 and has a guaranteed interest rate of 10%. How many years must Mike leave that balance in the fund in order to get his desired $1,000,000? (b) Assume that Sally Williams desires to accumulate $1 million in 15 years using her money market fund balance of $182,696. At what interest rate must Sally’s investment compound annually?

What are some possible disadvantages to investors who invest in stocks listed on a private stock market? (LO5)

Presented below is information related to Haselhof Inc. Balance per books at October 31, $41,847.85; receipts $173,523.91; disbursements $164,893.54. Balance per bank statement November 30, $56,274.20. The following checks were outstanding at November 30. 1224 $1,635.29 1230 2,468.30 1232 2,125.15 1233 482.17 Included with the November bank statement and not recorded by the company were a bank debit memo for $27.40 covering bank charges for the month, a debit memo for $372.13 for a customer’s check returned and marked NSF, and a credit memo for $1,400 representing bond interest collected by the bank in the name of Haselhof Inc. Cash on hand at November 30 recorded and awaiting deposit amounted to $1,915.40. Instructions (a) Prepare a bank reconciliation (to the correct balance) at November 30, for Haselhof Inc. from the information above. (b) Prepare any journal entries required to adjust the cash account at November 30.

Distinguish between FASB Accounting Standards Updatesand FASB Statements of Financial Accounting Concepts.

Moonwalker Corporation issued 2,000 shares of its $10 par value common stock for $60,000. Moonwalker also incurred $1,500 of costs associated with issuing the stock. Prepare Moonwalker’s journal entry to record the issuance of the company’s stock.

Does the kiddie tax eliminate the tax benefits gained by a family when parents transfer income-producing assets to children?  Explain.

Describe the gross receipts test and identify how this test relates to the business interest deduction.

Assuming adequate E&P, will the shareholder’s tax basis in noncash property received equal the amount the shareholder includes in gross income as a dividend (assuming adequate E&P)? Under what circumstances will the amounts be different, if any?

When the UK joined the ERM in 1990, it was hoped that this would make speculation pointless. As it turned out, speculation forced the UK to leave the ERM in 1992. Can you reconcile this with the argument that fixed rates discourage speculation?

Assume the same information as in E17-3 except that the securities are classified as available-for-sale. The fair value of the bonds at December 31 of each year-end is as follows. 2013 $320,500 2016 $310,000 2014 $309,000 2017 $300,000 2015 $308,000 Instructions (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entries to record the interest received and recognition of fair value for 2013. (c) Prepare the journal entry to record the recognition of fair value for 2014.

Compare actual and normal cost systems. Discuss the ways in which they are similar and the ways they differ.

In the absence of restrictive provisions, what are the basic rights of stockholders of a corporation?

During 2014, Liselotte Company earned income of $1,500,000 before income taxes and realized a gain of $450,000 on a government-forced condemnation sale of a division plant facility. The income is subject to income taxation at the rate of 34%. The gain on the sale of the plant is taxed at 30%. Proper accounting suggests that the unusual gain be reported as an extraordinary item. Illustrate an appropriate presentation of these items in the income statement.

Discuss the similarities and the differences between convertible debt and debt issued with stock warrants.

Discuss briefly the three approaches that have been suggested for reporting changes in accounting principles.

. In 2024, Jack is single two children, ages 10 and 12.  Jack works full time and earns an annual salary of $195,000 as a consultant. Jack files as a head of household and does not itemize his deductions.  In the fall of this year, he was recently offered a position with another firm that would pay him an additional $45,000.

Explain how some mortgage operations by some commercial banks (along with other financial institutions) played a major role in instigating the credit crisis that began in 2008. (LO3)

1.       : If talkative men are viewed as powerful and competent, why do you think talkative women are seen as less capable and pushy? Do you think this perception would be different in an organization with a large percentage of female managers at top levels?

Who are the two key international players in the development of international accounting standards? Explain their role.

If taxpayers are not allowed to claim deductions for dependency exemptions, is it necessary to determine who qualifies as a taxpayer’s dependent(s)? Briefly explain.

Describe the doctor-blade process.

Explain whether the receipt of boot by a shareholder in a §351 transaction causes the transaction to be fully taxable.

Wallace Computer Company is a small, closely held corporation. Eighty percent of the stock is held by Derek Wallace, president. Of the remainder, 10% is held by members of his family and 10% by Kathy Baker, a former officer who is now retired. The balance sheet of the company at June 30, 2014, was substantially as shown below.CONCEPTS FOR ANALYSIS Assets Liabilities and Stockholders’ Equity Cash $ 22,000 Current liabilities $ 50,000 Other 450,000 Common stock 250,000 $472,000 Retained earnings 172,000 $472,000 Additional authorized common stock of $300,000 par value had never been issued. To strengthen the cash position of the company, Wallace issued common stock with a par value of $100,000 to himself at par for cash. At the next stockholders’ meeting, Baker objected and claimed that her interests had been injured. Instructions (a) Which stockholder’s right was ignored in the issue of shares to Derek Wallace? (b) How may the damage to Baker’s interests be repaired most simply? (c) If Derek Wallace offered Baker a personal cash settlement and they agreed to employ you as an impartial arbitrator to determine the amount, what settlement would you propose? Present your calculations with sufficient explanation to satisfy both parties.

What is a flexible manufacturing system?