Question & Answer

What are the major limitations of the balance sheet as a source of information?

What are the different processes that can be used to apply decorations to plastic parts according to the plastics finishing video?

Describe each of the two types of sheet-metal-bending operations: V-bending and edge bending

1.      : How do you think Clarke should have communicated his concerns about the information link? Why?

Briefly describe some of the similarities and differences between GAAP and IFRS with respect to the accounting for leases.

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

Navajo Corporation traded a used truck (cost $20,000, accumulated depreciation $18,000) for a small computer worth $3,300. Navajo also paid $500 in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.)

Explain how the conversion of a securities firm to a bank holding company (BHC) structure might reduce its risk. (LO2)

Define crimping in the context of electrical connections.

Compare and contrast the tests for accruing income and those for accruing deductions for tax purposes.

The following are selected transactions that may affect stockholders’ equity. 1. Recorded accrued interest earned on a note receivable. 2. Declared a cash dividend. 3. Declared and distributed a stock split. 4. Approved a retained earnings restriction. 5. Recorded the expiration of insurance coverage that was previously recorded as prepaid insurance. 6. Paid the cash dividend declared in item 2 above. 7. Recorded accrued interest expense on a note payable. 8. Declared a stock dividend. 9. Distributed the stock dividend declared in item 8. Instructions In the following table, indicate the effect each of the nine transactions has on the financial statement elements listed. Use the following code: I 5 Increase, D 5 Decrease, NE 5 No effect.

The following letter was sent to the SEC and the FASB by leaders of the business community. Dear Sirs: The FASB has been struggling with accounting for derivatives and hedging for many years. The FASB has now developed, over the last few weeks, a new approach that it proposes to adopt as a final standard. We understand that the Board intends to adopt this new approach as a final standard without exposing it for public comment and debate, despite the evident complexity of the new approach, the speed with which it has been developed and the significant changes to the exposure draft since it was released more than one year ago. Instead, the Board plans to allow only a brief review by selected parties, limited to issues of operationality and clarity, and would exclude questions as to the merits of the proposed approach. As the FASB itself has said throughout this process, its mission does not permit it to consider matters that go beyond accounting and reporting considerations. Accordingly, the FASB may not have adequately considered the wide range of concerns that have been expressed about the derivatives and hedging proposal, including concerns related to the potential impact on the capital markets, the weakening of companies’ ability to manage risk, and the adverse control implications of implementing costly and complex new rules imposed at the same time as other major initiatives, including the Year 2000 issues and a single European currency. We believe that these crucial issues must be considered, if not by the FASB, then by the Securities and Exchange Commission, other regulatory agencies, or Congress. We believe it is essential that the FASB solicit all comments in order to identify and address all material issues that may exist before issuing a final standard. We understand the desire to bring this process to a prompt conclusion, but the underlying issues are so important to this nation’s businesses, the customers they serve and the economy as a whole that expediency cannot be the dominant consideration. As a result, we urge the FASB to expose its new proposal for public comment, following the established due process procedures that are essential to acceptance of its standards, and providing sufficient time to affected parties to understand and assess the new approach. We also urge the SEC to study the comments received in order to assess the impact that these proposed rules may have on the capital markets, on companies’ risk management practices, and on management and financial controls. These vital public policy matters deserve consideration as part of the Commission’s oversight responsibilities. We believe that these steps are essential if the FASB is to produce the best possible accounting standard while minimizing adverse economic effects and maintaining the competitiveness of U.S. businesses in nthe international marketplace. Very truly yours, (This letter was signed by the chairs of 22 of the largest U.S. companies.) Instructions Answer the following questions. (a) Explain the “due process” procedures followed by the FASB in developing a financial reporting standard. (b) What is meant by the term “economic consequences” in accounting standard-setting? (c) What economic consequences arguments are used in this letter? (d) What do you believe is the main point of the letter? (e) Why do you believe a copy of this letter was sent by the business community to influential members of the U.S. Congress?

Discuss and illustrate how a correction of an error in previously issued financial statements should be handled.

Why are the molds generally more costly in mechanical thermoforming than in pressure or vacuum thermoforming?

Latoya filed her tax return on February 10th this year.  When will the statute of limitations expire for this tax return?

If the central bank targets real national income rather than inflation, what will be the shape of the MP curve?

Why are specific energy values so much higher in grinding than in traditional machining processes such as milling?

How many times is income from a C corporation taxed if a retirement fund is the owner of the corporation’s stock? Explain.

Discuss the different methods that an organisation can use to determine standard costs.

Supply Explain how the ample reserves framework that the Fed currently uses has a different impact on the money supply than the open market operations that the Fed used prior to the credit crisis. (LO2)

Copolymers can possess four different arrangements of their constituent mers. Name and briefly describe the four arrangements.

1. How much would be the total tax revenue for the government? 2. Will the individual producers gain from the export tax?

A company produces a certain part whose most important dimension is 37.50 ±0.025 in. If the tolerance is exceeded, the customer will return the part to the manufacturer at a cost of $200 in rework and replacement expenses. (a) Determine the constant k in the Taguchi loss function, Eq. (42.13). (b) The company can add a finish grinding operation that will allow the tolerance to be reduced to ±0.010 in. Using the loss function from part (a) what is the value of the loss associated with this new tolerance?

Besides high carbon content, what other alloying element is characteristic of the cast irons?

What were some of the more obvious reasons for the savings institution crisis of the late 1980s? (LO6)