Question & Answer

How do changing tax rates affect the timing strategy? What information do you need to determine the appropriate timing strategy when tax rates change?

1.       Make the previous numbers work. Tessa and the entire team have put massive amounts of time into the project, and they all expect you to be a team player. You don’t want to let them down. Besides, this project is a great opportunity for you in a highly visible position.

What is the range of feature sizes of entities associated with nanotechnology?

If the bonds in Question 8 are classified as available-forsale and they have a fair value at December 31, 2014, of $3,604,000, prepare the journal entry (if any) at December 31, 2014, to record this transaction.

Draw a similar diagram to Figure 24.7 showing how the price of an individual good imported into country A is determined.

Stephanie Delaney, CPA, is the newly hired director of corporate taxation for Acme Incorporated, which is a publicly traded corporation. Ms. Delaney’s first job with Acme was the review of the company’s accounting practices on deferred income taxes. In doing her review, she noted differences between tax and book depreciation methods that permitted Acme to realize a sizable deferred tax liability on its balance sheet. As a result, Acme paid very little in income taxes at that time. Delaney also discovered that Acme has an explicit policy of selling off plant assets before they reversed in the deferred tax liability account. This policy, coupled with the rapid expansion of its plant asset base, allowed Acme to “defer” all income taxes payable for several years, even though it always has reported positive earnings and an increasing EPS. Delaney checked with the legal department and found the policy to be legal, but she’s uncomfortable with the ethics of it. Instructions Answer the following questions. (a) Why would Acme have an explicit policy of selling plant assets before the temporary differences reversed in the deferred tax liability account? (b) What are the ethical implications of Acme’s “deferral” of income taxes? (c) Who could be harmed by Acme’s ability to “defer” income taxes payable for several years, despite positive earnings? (d) In a situation such as this, what are Ms. Delaney’s professional responsibilities as a CPA?

1.       : How do you think a system for self-management such as the five-step system described in this chapter could benefit you as a student? What parts of the system seem particularly useful to you? Explain.

Make out a case for adopting a policy of individual tradable carbon permits, allocated to all citizens within a country. Could such a policy be extended globally?

A billet that is 75 mm long with diameter = 35 mm is direct extruded to a diameter of 20 mm. The extrusion die has a die angle = 75°. For the work metal, K = 600 MPa and n = 0.25. In the Johnson extrusion strain equation, a = 0.8 and b = 1.4. Determine (a) extrusion ratio, (b) true strain (homogeneous deformation), (c) extrusion strain, and (d) ram pressure and force at L = 70, 60, 50, 40, 30, 20, and 10 mm. Use of a spreadsheet calculator is recommended for part (d).

What type of general guidelines may be specified for a trust that is managing a pension fund? (LO6)

Flintstone Corporation is owned equally by Fred and his sister Wilma, each of whom holds 1,000 shares in Flintstone. Wilma wants to reduce her ownership in the company, and it is decided that Flintstone will redeem 250 of her shares for $25,000 per share on December 31 of this year. Wilma’s tax basis in each share is $5,000.  Flintstone has current E&P of $10,000,000 and accumulated E&P at the beginning of the year is $50,000,000.

Explain why an increase in the money supply can affect other short-term interest rates in different ways. Include the potential impact of the money supply on the supply of and the demand for loanable funds when answering this question. (LO2)

What is the composition of green sand in the green-sand molding process?

1.              If you were Amara, how would you try to conduct yourself at the oil company? Would you act differently from your normal personality? Do you think your approach would be successful? Why or why not?

Shared bonus pools Becky Tan is the CFO at Frosters Systems, a diversified company with eight different business units (divisions). Becky has been asked by the CEO to develop a shared bonus pool system.   Required What key decisions will Becky have to make to set up the shared bonus system? (LO4)

Describe the exchange-rate path if there were a single shock that caused interest rates to fall. What determines the magnitude and speed of changes in the exchange rate in such a scenario?

Molto Stancha Corporation had zero earnings this fiscal year; in fact, they lost money. Must they file a tax return?

Why do banks hold a range of assets of varying degrees of liquidity and profitability?

Randy has found conflicting authorities that address a research question for one of his clients.  The majority of the authorities provide an unfavorable answer for his client.  According to Randy’s estimates, if the client takes the more favorable position on its tax return, then there is approximately a 48 percent chance that the position will be sustained upon audit or judicial proceeding.  If the client takes this position on its tax return, will Randy be subject to penalty?  Will the client potentially be subject to penalty?

How are restrictions of retained earnings reported?

Should available-for-sale securities always be reported as a current asset? Explain.

Explain the difference between the “nature-of-expense” and “function-of-expense” classifications.

Based on the analysis in Figure 21.13, what would an impulse response function look like for the rate of inflation?

How would a change in the natural rate of unemployment or the level of potential national income affect the EAPC and DAS curve?

What is sticking friction in metalworking?