Question & Answer

Jim was injured in an accident and his surgeon botched the medical procedure. Jim recovered $5,000 from the doctor for pain and suffering and $2,000 for emotional distress. Determine the taxability of these payments and briefly explain to Jim the apparent rationale for including or excluding these payments from gross income.

Variance analysis is only useful for organisations using a standard costing system. Discuss.

Augustana received $100,000 of qualified dividends this year.  Under what circumstances might the entire $100,000 of income not be taxed at the same rate?

Briefly describe the valuation of (a) biological assets and (b) agricultural produce.

Included in Gonzalez Company’s December 31 trial balance is a note receivable of $12,000. The note is a 4-month, 10% note dated October 1. Prepare Gonzalez’s December 31 adjusting entry to record $300 of accrued interest, and the February 1 journal entry to record receipt of $12,400 from the borrower.

Theodore, Alvin, and Simon are equal shareholders of Timeless Corp. (an S corporation). Simon wants to terminate the S election, but Theodore and Alvin disagree.  Can Simon unilaterally elect to have the S election terminated?  If not, what would Simon need to do to have the S election terminated?

Presented below is the comparative balance sheet for Gilmour Company.   Instructions  (Round to two decimal places.) (a) Prepare a comparative balance sheet of Gilmour Company showing the percent each item is of the total assets or total liabilities and stockholders’ equity. (b) Prepare a comparative balance sheet of Gilmour Company showing the dollar change and the percent change for each item. (c) Of what value is the additional information provided in part (a)? (d) Of what value is the additional information provided in part (b)?

How can target measures be used to promote either short-term or long-            term performance?

Who are the owners of credit unions? Explain the tax status of CUs and the reason for that status. Why are CUs typically smaller than commercial banks or savings institutions? (LO7)

Suppose you asked your favorite AI query tool “For purposes of §721, what constitutes property?” and the AI tool responded as follows:

Your client, Cascade Company, is planning to invest some of its excess cash in 5-year revenue bonds issued by the county and in the stock of one of its suppliers, Teton Co. Teton’s shares trade on the over-the-counter market. Cascade plans to classify these investments as available-for-sale. They would like you to conduct some research on the accounting for these investments. Instructions If your school has a subscription to the FASB Codification, go to http://aaahq.org/ascLogin.cfm to log in and prepare responses to the following. Provide Codification references for your responses. (a) Since the Teton shares do not trade on one of the large stock markets, Cascade argues that the fair value of this investment is not readily available. According to the authoritative literature, when is the fair value of a security “readily determinable”? (b) How is an impairment of a security accounted for? (c) To avoid volatility in their financial statements due to fair value adjustments, Cascade debated whether the bond investment could be classified as held-to-maturity; Cascade is pretty sure it will hold the bonds for 5 years. How close to maturity could Cascade sell an investment and still classify it as heldto- maturity? (d) What disclosures must be made for any sale or transfer from securities classified as held-to-maturity?

Consider a state pension fund that needs to generate a series of fixed payments for its retirees. Assume that the compensation of the fund’s portfolio managers is tied to the return earned on the investments each year. Write a short essay that explains how the compensation plan might lead to investment strategies that do not serve the needs of the retirees.

(i) Will the rate of actual growth have any effect on the rate of potential growth? (ii) For what possible reasons may one country experience a persistently faster rate of economic growth than another?

The upper and lower control limits for a p chart are: LCL = 0.19 and UCL = 0.24. Determine the sample size n that is used with this control chart.

What are the two methods of component placement and soldering in surface-mount technology?

The Samsons are trying to determine whether they can claim their 22-year-old adopted son, Jason, as a dependent.Jason is currently a full-time student at an out-of-state university.Jason lived in his parents’ home for three months of the year, and he was away at school for the rest of the year.He received $9,500 in scholarships this year for his outstanding academic performance and earned $4,800of income working a part-time job during the year. The Samsons paid a total of $5,000to support Jason while he was away at college.Jason used the scholarship, the earnings from the part-time job, and the money from the Samsons as his only sources of support. a. Can the Samsons claim Jason as their dependent?

Sarah is a cash-method, calendar-year taxpayer, and she is considering making the following cash payments related to her business. Calculate the after-tax cost of each payment assuming she has a 37 percent marginal tax rate.

Will this type of behaviour tend to lead to profit maximisation?

In each of the following independent cases, determine the taxpayer’s filing status and the number of dependents the taxpayer is allowed to claim.

Identify the principal components of a stamping die that performs blanking

When units are transferred from one department to another, how are normal spoilage costs recorded?

Taveras Enterprises provides the following information relative to its defined benefit pension plan. Balances or Values at December 31, 2014 Projected benefi t obligation $2,737,000 Accumulated benefi t obligation 1,980,000 Fair value of plan assets 2,278,329 Accumulated OCI (PSC) 210,000 Accumulated OCI—Net loss (1/1/14 balance, –0–) 45,680 Pension liability 458,671 Other pension plan data for 2014: Service cost 94,000 Prior service cost amortization 42,000 Actual return on plan assets 130,000 Expected return on plan assets 175,680 Interest on January 1, 2014, projected benefi t obligation 253,000 Contributions to plan 93,329 Benefi ts paid 140,000 Instructions (a) Prepare the note disclosing the components of pension expense for the year 2014. (b) Determine the amounts of other comprehensive income and comprehensive income for 2014. Net income for 2014 is $35,000. (c) Compute the amount of accumulated other comprehensive income reported at December 31, 2014.

Stan Conner and Mark Stein were discussing the presentation format of the statement of cash flows of Bombeck Co. At the bottom of Bombeck’s statement of cash flows was a separate section entitled “Noncash investing and financing activities.” Give three examples of significant non-cash transactions that would be reported in this section.

Explain how the Financial Reform Act of 2010 and the rules issued to implement it attempted to reduce the risk in the financial system resulting from the use of credit default swaps. (LO7)

Solve the previous problem except that the metal to be welded is high carbon steel, the cross-sectional area of the weld = 25.0 mm2, and the melting factor = 0.6.