Question & Answer

Why does the law generally require partnerships to adopt a tax year consistent with the year used by the partners?

The trial balance before adjustment for Phil Collins Company shows the following balances. Dr. Cr. Accounts Receivable $82,000 Allowance for Doubtful Accounts 2,120 Sales Revenue $430,000 Instructions Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.) 1. To obtain additional cash, Collins factors without recourse $25,000 of accounts receivable with Stills Finance. The finance charge is 10% of the amount factored. 2. To obtain a 1-year loan of $55,000, Collins assigns $65,000 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial. 3. The company wants to maintain the Allowance for Doubtful Accounts at 5% of gross accounts receivable. 4. The company wishes to increase the allowance account by 1½% of net sales.

In addition to cash contributions to charity, Dean decided to donate shares of stock and a portrait painted during the earlier part of the last century. Dean purchased the stock and the portrait many years ago as investments. Dean reported the following recipients in 2024: Charity Property Cost FMV State University Cash $ 15,000 $15,000 Red Cross Cash 14,500 14,500 State History Museum Antique painting 5,000 82,000 City Medical Center Dell stock 28,000 17,000 a. Determine the maximum amount of charitable deduction for each of these contributions ignoring the AGI ceiling on charitable contributions. b. Assume that Dean’s AGI this year is $150,000. Determine Dean’s itemized deduction for his charitable contributions this year and any carryover. c. Suppose Dean is a dealer in antique paintings, and he held the painting for sale before the contribution. What is Dean’s charitable contribution deduction for the painting in this situation? d. Suppose that Dean’s objective with the donation to the museum was to finance expansion of the historical collection. Hence, Dean was not surprised when the museum announced the sale of the portrait because of its limited historical value. What is Dean’s charitable contribution deduction for the painting in this situation (ignoring AGI limitations)?

Treasure Land Corporation incurred the following costs in 2014. Cost of laboratory research aimed at discovery of new knowledge $120,000 Cost of testing in search for product alternatives 100,000 Cost of engineering activity required to advance the design of a product to the manufacturing stage 210,000 $430,000 Prepare the necessary 2014 journal entry or entries for Treasure Land.

]  What are the three potential tax treatments of a cash distribution to a shareholder?  Are these potential tax treatments elective by the shareholder?

Use a stock valuation framework to explain why the Sarbanes-Oxley Act (SOX) could improve the valuation of a stock. Why might SOX cause a reduction in the valuation of a stock? (See the chapter appendix). (LO1)

1.      : Agree with Hazel Putnam. Despite your personal feelings, accept that Farhad Hamidi is not capable of carrying out the accountant assistant’s responsibilities. Make the break now, and give him his notice on the grounds that he cannot carry out one of the key stated job requirements. Advise him that a position that primarily involves paperwork would be a better fit for him if he doesn’t improve his speaking skills.

Solve Problem 20.26 except that the height = 60 mm

The state of Georgia recently increased its tax on a pack of cigarettes by $2.  What type of tax is this?  Why might Georgia choose this type of tax?

Mike Macinski Leasing Company leases a new machine that has a cost and fair value of $95,000 to Sharrer Corporation on a 3-year noncancelable contract. Sharrer Corporation agrees to assume all risks of normal ownership including such costs as insurance, taxes, and maintenance. The machine has a 3-year useful life and no residual value. The lease was signed on January 1, 2014. Mike Macinski Leasing Company expects to earn a 9% return on its investment. The annual rentals are payable on each December 31. Instructions (a) Discuss the nature of the lease arrangement and the accounting method that each party to the lease should apply. (b) Prepare an amortization schedule that would be suitable for both the lessor and the lessee and that covers all the years involved.

Describe the tax benefits from “bunching” itemized deductions in one year. Describe the characteristics of the taxpayers who are most likely to benefit from using bunching and explain why this is so.

In a chemical milling operation on a flat mild steel plate, it is desired to cut an ellipse-shaped pocket to a depth of 0.4 in. The semiaxes of the ellipse are a = 9.0 in and b = 6.0 in. A solution of hydrochloric and nitric acids will be used as the etchant. Determine (a) metal removal rate in in3/hr, (b) time required to etch to depth, and (c) required dimensions of the opening in the cut and peel maskant required to achieve the desired pocket size on the part.

with corporate headquarters in Pittsburgh, Pennsylvania, is one of the largest producers, transporters, distributors, and marketers of natural gas in North America. Periodically, the company experiences a decrease in the value of its gas- and oil-producing properties,and a special charge to income was recorded in order to reduce the carrying value of those assets. Assume the following information. In 2013, CNG estimated the cash inflows from its oil- and gasproducing properties to be $375,000 per year. During 2014, the write-downs described above caused the estimate to be decreased to $275,000 per year. Production costs (cash outflows) associated with all these properties were estimated to be $125,000 per year in 2013, but this amount was revised to $155,000 per year in 2014. Instructions (Assume that all cash flows occur at the end of the year.) (a) Calculate the present value of net cash flows for 2013–2015 (three years), using the 2013 estimates and a 10% discount factor. (b) Calculate the present value of net cash flows for 2014–2016 (three years), using the 2014 estimates and a 10% discount factor. (c) Compare the results using the two estimates. Is information on future cash flows from oil- and gasproducing properties useful, considering that the estimates must be revised each year? Explain.

Assume there are just two firms (X and Y) and they are considering which of two alternative prices to charge. The decisions are made simultaneously: i.e. without either firm knowing the choice of its rival. The various profits are illustrated in the following pay-off matrix: (a)  What is firm Y’s best response to each of the different prices firm X could charge? Does firm Y have a dominant strategy? (b)  What is firm X’s best response to each of the different prices firm Y could charge? Does firm X have a dominant strategy?     (c)  What is/are the Nash equilibrium/equilbria? What is the most likely outcome of this game? Explain your answer.

1.    Social entrepreneurship is a growing phenomenon. Do you believe that for-profit businesses can have a social mission equal to their profit mission? Should they do so if it means hurting profits?

Identify some of the advantages of adhesive bonding compared to alternative joining methods.

Gary inherited a Maine summer cabin on 10 acres from his grandmother. His grandparents originally purchased the property for $500 in 1951 and built the cabin at a cost of $10,000 in 1966. His grandfather died in 1981, and when his grandmother recently passed away, the property was appraised at $500,000 for the land and $700,000 for the cabin. Because Gary doesn’t currently live in New England, he decided that it would be best to put the property to use as a rental. What is Gary’s basis in the land and in the cabin?

Consider the following tax rate structure.  Is it horizontally equitable?  Why or why not?  Is it vertically equitable?  Why or why

1.              : Discipline Darius Hayes for coercing his subordinates to spend their own time on his volunteer work at the community after-school program. This action will send a signal that coercing employees is a clear violation of leadership authority.

If the CPI went up from 150 to 162 over 12 months, what would be the rate of inflation?

Identify some of the present and future products associated with nanotechnology.

Solve Problem 19.12 except that the operation is warm rolling and the strain-hardening exponent is 0.18. Assume the strength coefficient remains at 20,000 lb/in2 .

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?

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.