Question & Answer

Buhl Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2014, the following balances relate to this plan. Plan assets $480,000 Defi ned benefi t obligation 600,000 Pension asset/liability 120,000 As a result of the operation of the plan during 2014, the following additional data are provided by the actuary. Service cost for 2014 $90,000 Discount rate, 6% Actual return on plan assets in 2014 55,000 Unexpected loss from change in defi ned benefi t obligation, due to change in actuarial predictions 76,000 Contributions in 2014 99,000 Benefi ts paid retirees in 2014 85,000 Instructions (a) Using the data above, compute pension expense for Buhl Corp. for the year 2014 by preparing a pension worksheet. (b) Prepare the journal entry for pension expense for 2014.

Name the three exposure techniques in photolithography.

What is an end effector?

How is a business activity distinguished from an investment activity? Why is this distinction important for the purpose of calculating federal income taxes?

Last year, Cougar Corp. (CC) reported a net operating loss of $25,000. In the current year, CC expected its current-year tax liability to be $260,000, so it made four equal estimated tax payments of $65,000 each. Cougar closed its books at the end of each quarter.  The following schedule reports CC’s taxable income at the end of each quarter:         Quarter-End Cumulative taxable income First $300,000 Second $700,000 Third $1,000,000 Fourth $1,500,000   CC’s current year tax liability on $1,500,000 of taxable income is $315,000.  Does CC owe underpayment penalties on its estimated tax payments?  If so, for which quarters does it owe the penalty?

A screen with 10 mesh count has wires with a diameter of 0.0213 in. Determine (a) the maximum particle size that will pass through the wire mesh and (b) the proportion of open space in the screen.

What are the two major groups of metals? Define them.

Explain the amortization convention applicable to intangible assets.

What is the constructive receipt doctrine? What types of taxpayers does this doctrine generally affect? For what tax planning strategy is the constructive receipt doctrine a potential limitation?

What are the basic tax-filing requirements imposed on partnerships?

Explain why the medical expense and casualty loss provisions are sometimes referred to as “wherewithal” deductions and how this rationale is reflected in the limits on these deductions.

Maria has all of her stock in Mayan Corporation redeemed. Under what conditions will Maria treat the redemption as an exchange and recognize capital gain or loss?

What are some of the factors that influence a polymer's tendency to crystallize?

McCanna, Inc., has hired an investment company to manage its pension fund, which is invested in a stock portfolio and a bond portfolio. Explain how McCanna can evaluate the performance of the investment company in managing its pension fund money. (LO7)

Bourne Guitars, a corporation, reported a $157,000 net §1231 gain for year 6. a. Assuming Bourne reported $50,000 of nonrecaptured net §1231 losses during years 1–5, what amount of Bourne’s net §1231 gain for year 6, if any, is treated as ordinary income? b. Assuming Bourne’s nonrecaptured net §1231 losses from years 1–5 were $200,000, what amount of Bourne’s net §1231 gain for year 6, if any, is treated as ordinary income?

Graber Corporation runs a long-haul trucking business. Graber incurs the following expenses: replacement tires, oil changes, and a transmission overhaul. Which of these expenditures may be deducted currently and which must be capitalized? Explain.

What are the consequences of a taxpayer underpaying their tax liability throughout the year?  Explain the safe-harbor provisions that may apply in this situation.

A prototype of a part is to be fabricated using stereolithography. The part is shaped like a right triangle whose base = 36 mm, height = 48 mm, and thickness = 25 mm. In application, the part will stand on its base, which is 36 mm by 25 mm. In the stereolithography process, the layer thickness = 0.20 mm. The diameter of the laser beam (“spot size”) = 0.15 mm, and the beam is moved across the surface of the photopolymer at a velocity of 400 mm/s. Compute the minimum possible time required to build the part, if 8 sec are lost each layer to lower the height of the platform that holds the part. Neglect the time for postcuring.

What are the basic requirements to exclude the gain on the sale of a personal residence?

Identify some of the important advantages of shape-casting processes

Compute MV Corp.’s 2024 taxable income given the following information relating to its current-year activities. Also, compute MV’s Schedule M-1 assuming that MV’s federal income tax expense for book purposes is $100,000.   • Gross profit from inventory sales of $500,000 (no book-tax differences). • Dividends MV received from 25 percent-owned corporation of $100,000 (assume this is also MV’s pro rata share of the distributing corporation’s earnings). • Expenses other than DRD, charitable contribution (CC), and net operating loss (NOL) are $350,000 (no book-tax differences). • NOL carryforward from 2023 of $10,000. • Cash charitable contribution of $120,000.

Kano and his wife Hoshi have been married for 10 years and have two children under the age of 12.The couple has been living apart for the last two years and both children live with Kano.Kano has provided all the means necessary to support himself and his children.Kano and Hoshi do not file a joint return. What is Kano’s filing status?

What is the difference between diffusion and ion implantation?

Hawkeye Corporation reports current E&P of $300,000 this year and accumulated E&P at the beginning of the year of $200,000. Hawkeye distributed $400,000 to its sole shareholder, Kinsella, on December 31 of this year. Kinsella’s tax basis in his Hawkeye stock before the distribution is $75,000.

Presented below is a note disclosure for Matsui Corporation. Litigation and Environmental: The Company has been notified, or is a named or a potentially responsible party in a number of governmental (federal, state and local) and private actions associated with environmental matters, such as those relating to hazardous wastes, including certain sites which are on the United States EPA National Priorities List (“Superfund”). These actions seek clean-up costs, penalties and/or damages for personal injury or to property or natural resources. In 2014, the Company recorded a pre-tax charge of $56,229,000, included in the “Other expense (income)—net” caption of the Company’s consolidated income statements, as an additional provision for environmental matters. These expenditures are expected to take place over the next several years and are indicative of the Company’s commitment to improve and maintain the environment in which it operates. At December 31, 2014, environmental accruals amounted to $69,931,000, of which $61,535,000 are considered noncurrent and are included in the “Deferred credits and other liabilities” caption of the Company’s consolidated balance sheets. While it is impossible at this time to determine with certainty the ultimate outcome of environmental matters, it is management’s opinion, based in part on the advice of independent counsel (after taking into account accruals and insurance coverage applicable to such actions) that when the costs are finally determined they will not have a material adverse effect on the financial position of the Company. Instructions Answer the following questions. (a) What conditions must exist before a loss contingency can be recorded in the accounts? (b) Suppose that Matsui Corporation could not reasonably estimate the amount of the loss, although it could establish with a high degree of probability the minimum and maximum loss possible. How should this information be reported in the financial statements? (c) If the amount of the loss is uncertain, how would the loss contingency be reported in the financial statements?