Question & Answer

Fielder Company obtained land by issuing 2,000 shares of its $10 par value common stock. The land was recently appraised at $85,000. The common stock is actively traded at $40 per share. Prepare the journal entry to record the acquisition of the land.

Is trade diversion more likely or less likely in the following cases? (a)  European producers gain monopoly power in world trade. (b)  Modern developments in technology and communications reduce the differences in production costs associated with different locations. (c)  The development of the internal market produces substantial economies of scale in many industries.

Compare and contrast the cost and percentage depletion methods for recovering the costs of natural resources. What are the similarities and differences between the two methods?

Assuming that Y rises each year as a result of increases in productivity, can money supply rise without causing inflation? Would this destroy the validity of the quantity theory?

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?

Why do firms engage in IPOs? What is the amount of the fees that the lead underwriter and its syndicate charge a firm that is going public? Why are there many IPOs in some periods and few IPOs in other periods? (LO3)

Eva received $60,000 in compensation payments from JAZZ Corp. during 2024.  Eva incurred $5,000 in business expenses relating to her work for JAZZ Corp.  JAZZ did not reimburse Eva for any of these expenses.  Eva is single and deducts a standard deduction of $14,600.  Based on these facts, answer the following questions: a. Assume that Eva is considered to be an employee.  What amount of FICA taxes is she required to pay for the year?

Smashing Pumpkins Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2014, consists of products D, E, F, G, H, and I. Relevant per-unit data for these products appear below. Item Item Item Item Item Item D E F G H I Estimated selling price $120 $110 $95 $90 $110 $90 Cost 75 80 80 80 50 36 Replacement cost 120 72 70 30 70 30 Estimated selling expense 30 30 30 25 30 30 Normal profi t 20 20 20 20 20 20 Instructions Using the lower-of-cost-or-market rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2014, for each of the inventory items above.

1.       : Experts say that organizations are becoming increasingly decentralized, with authority, decision-making responsibility, and accountability being pushed further down into the organization. How will this trend affect what will be asked of you as a manager?

Identify some of the important applications of zinc.

What are the advantages of FMS technology, compared to conventional batch operations?

Zoop Corporation purchased for $300,000 a 30% interest in Murphy, Inc. This investment enables Zoop to exert significant influence over Murphy. During the year, Murphy earned net income of $180,000 and paid dividends of $60,000. Prepare Zoop’s journal entries related to this investment.

Briefly define the three types of mechanized workpart transfer systems used in production lines.

Assume the same information as in IFRS11-11, except that Pujols intends to dispose of the equipment in the coming year. Instructions (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2014. (b) Prepare the journal entry (if any) to record depreciation expense for 2015. (c) The asset was not sold by December 31, 2015. The fair value of the equipment on that date is $5,100,000. Prepare the journal entry (if any) necessary to record this increase. It is expected that the cost of disposal is $20,000.

Explain why mutual funds are attractive to small investors. How can mutual funds generate returns to their shareholders? (LO1)

Where in the financial statements is preferred stock normally reported?

What is the nature of a “discount” on notes payable?

What is the difference between a shrink fit and expansion fit in assembly?

What is a plasticizer?

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.

How are business credits similar to personal credits?  How are they dissimilar?

Novotna Inc.’s only temporary difference at the beginning and end of 2013 is caused by a $3 million deferred gain for tax purposes for an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal installments in 2014 and 2015. The related deferred tax liability at the beginning of the year is $1,200,000. In the third quarter of 2013, a new tax rate of 34% is enacted into law and is scheduled to become effective for 2015. Taxable income for 2013 is $5,000,000, and taxable income is expected in all future years. Instructions (a) Determine the amount reported as a deferred tax liability at the end of 2013. Indicate proper classification(s). (b) Prepare the journal entry (if any) necessary to adjust the deferred tax liability when the new tax rate is enacted into law. (c) Draft the income tax expense portion of the income statement for 2013. Begin with the line “Income before income taxes.” Assume no permanent differences exist.

The IRS recently completed an audit of Shea’s tax return and assessed $15,000 additional tax.  Shea requested an appeals conference but was unable to settle the case at the conference.  She is contemplating which trial court to choose to hear her case.  Provide a recommendation based on the following alternative facts.

Compare disposable and regrindable tooling. The same grade of cemented carbide tooling is available in two forms for turning operations in a certain machine shop: disposable inserts and brazed inserts. The parameters in the Taylor equation for this grade are: n = 0.25 and C = 300 (m/min) under the cutting conditions considered here. For the disposable inserts, price of each insert = $6.00, there are four cutting edges per insert, and the tool change time = 1.0 min (this is an average of the time to index the insert and the time to replace it when all edges have been used). For the brazed insert, the price of the tool = $30.00 and it is estimated that it can be used a total of 15 times before it must be scrapped. The tool change time for the regrindable tooling = 3.0 min. The standard time to grind or regrind the cutting edge is 5.0 min, and the grinder is paid at a rate = $20.00/hr. Machine time on the lathe costs $24.00/hr. The workpart to be used in the comparison is 375 mm long and 62.5 mm in diameter, and it takes 2.0 min to load and unload the work. The feed = 0.30 mm/rev. For the two tooling cases, compare (a) cutting speeds for minimum cost, (b) tool lives, (c) cycle time and cost per unit of production. Which tool would you recommend?

What are the taxpayer’s standards to avoid the substantial understatement of tax penalty?