Question & Answer

Assume that the Fed adopts an inflation-targeting strategy. Describe how the Fed’s monetary policy would be affected by an abrupt 15 percent rise in oil prices in response to an oil shortage. Do you think an inflation targeting strategy would be more or less effective in this situation than a strategy of balancing inflation concerns with unemployment concerns? Explain. (LO3)

Why might the Fed want to focus its efforts on reducing long-term interest rates rather than short-term interest rates during a weak economy? Explain how it might use a monetary policy focused on influencing long-term interest rates. Why might such a policy also affect short-term interest rates in the same direction? (LO2)

Do taxpayers always add back the standard deduction when computing alternative minimum taxable income?  Explain.

Explain how the financial sector could amplify the effects of shocks to the economy, such as those from the COVID-19 pandemic.

A screen with 325 mesh count has wires with a diameter of 0.001377 in. Determine (a) the maximum particle size that will pass through the wire mesh and (b) the proportion of open space in the screen.

Summarize the historical struggle between managing the “things of production” and the “humanity of production

For Warren Corporation, year-end plan assets were $2,000,000. At the beginning of the year, plan assets were $1,780,000. During the year, contributions to the pension fund were $120,000, and benefits paid were $200,000. Compute Warren’s actual return on plan assets.

How does a casualty loss on a business asset differ when the asset is stolen as opposed to destroyed in a fire?

A 42.0-mm-thick plate made of low carbon steel is to be reduced to 34.0 mm in one pass in a rolling operation. As the thickness is reduced, the plate widens by 4%. The yield strength of the steel plate is 174 MPa and the tensile strength is 290 MPa. The entrance speed of the plate is 15.0 m/min. The roll radius is 325 mm and the rotational speed is 49.0 rev/min. Determine (a) the minimum required coefficient of friction that would make this rolling operation possible, (b) exit velocity of the plate, and (c) forward slip.

What approaches may be employed in applying the lower-of-cost-or-market procedure? Which approach is normally used and why?

Following are selected statement of financial position accounts of Sander Bros. Corp. at December 31, 2014 and 2013, and the increases or decreases in each account from 2013 to 2014. Also presented is selected income statement information for the year ended December 31, 2014, and additional information. Increase Selected statement of fi nancial position accounts 2014 2013 (Decrease) Assets Property, plant, and equipment $277,000 $247,000 $30,000 Accumulated depreciation (178,000) (167,000) (11,000) Accounts receivable 34,000 24,000 10,000 Equity and liabilities Share capital—ordinary, $1 par $ 22,000 $ 19,000 $ 3,000 Share premium—ordinary 9,000 3,000 6,000 Retained earnings 104,000 91,000 13,000 Bonds payable 49,000 46,000 3,000 Dividends payable 8,000 5,000 3,000 Selected income statement information for the year ended December 31, 2014 Sales revenue $155,000 Depreciation 38,000 Gain on sale of equipment 14,500 Net income 31,000 Additional information: 1. During 2014, equipment costing $45,000 was sold for cash. 2. Accounts receivable relate to sales of merchandise. 3. During 2014, $25,000 of bonds payable were issued in exchange for property, plant, and equipment. There was no amortization of bond discount or premium. Instructions Determine the category (operating, investing, or financing) and the amount that should be reported in the statement of cash flows for the following items. (a) Payments for purchase of property, plant, and equipment. (b) Proceeds from the sale of equipment. (c) Cash dividends paid. (d) Redemption of bonds payable.

Where on the asset side of the balance sheet are trading securities, available-for-sale securities, and held-to-maturity securities reported? Explain.

Assume that Timberline Corporation has 2024 taxable income of $240,000 for purposes of computing the §179 expense. It acquired the following assets in 2024:

What is wheel grade?

In 2024, Deon and NeNe are married filing jointly.  Deon and NeNe’s taxable income is $1,390,000 (all ordinary), and they itemize their deductions as follows: real property taxes of $10,000, charitable contributions of $30,000, and mortgage interest expense of $40,000 ($700,000 acquisition debt for home).  What is Deon and NeNe’s AMT? Complete Form 6251 for Deon and NeNe.

How are deferred tax assets and deferred tax liabilities reported on the statement of financial position under IFRS?

What is a precedence constraint in process planning?

The following account balances were included in the trial balance of Twain Corporation at June 30, 2014. Sales revenue $1,578,500 Depreciation expense (offi ce Sales discounts 31,150 furniture and equipment) $ 7,250 Cost of goods sold 896,770 Property tax expense 7,320 Salaries and wages expense (sales) 56,260 Bad debt expense (selling) 4,850 Sales commissions 97,600 Maintenance and repairs Travel expense (salespersons) 28,930 expense (administration) 9,130 Delivery expense 21,400 Offi ce expense 6,000 Entertainment expense 14,820 Sales returns and allowances 62,300 Telephone and Internet expense (sales) 9,030 Dividends received 38,000 Depreciation expense (sales equipment) 4,980 Interest expense 18,000 Maintenance and repairs expense (sales) 6,200 Income tax expense 102,000 Miscellaneous selling expenses 4,715 Depreciation understatement Offi ce supplies used 3,450 due to error—2011 (net of tax) 17,700 Telephone and Internet expense Dividends declared on (administration) 2,820 preferred stock 9,000 Dividends declared on common stock 37,000 The Retained Earnings account had a balance of $337,000 at July 1, 2013. There are 80,000 shares of common stock outstanding. Instructions (a) Using the multiple-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2014. (b) Using the single-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2014.

What is the difference between a tax deduction and a tax credit? Is one more beneficial than the other? Explain.

Warren Co. purchased a put option on Echo common shares on January 7, 2014, for $360. The put option is for 400 shares, and the strike price is $85 (which equals the price of an Echo share on the purchase date). The option expires on July 31, 2014. The following data are available with respect to the put option. Date Market Price of Echo Shares Time Value of Put Option March 31, 2014 $80 per share $200 June 30, 2014 82 per share 90 July 6, 2014 77 per share 25 Instructions Prepare the journal entries for Warren Co. for the following dates. (a) January 7, 2014—Investment in put option on Echo shares. (b) March 31, 2014—Warren prepares financial statements. (c) June 30, 2014—Warren prepares financial statements. (d) July 6, 2014—Warren settles the put option on the Echo shares.

What are the alternatives to photolithography in IC processing?

A 3.5 in diameter through hole is to be cut in a block of pure iron (Valence = 2) by electrochemical machining. The block is 2.0 in thick. To speed the cutting process, the electrode tool will have a center hole of 3.0 in which will produce a center core that can be removed after the tool breaks through. The outside diameter of the electrode is undersized to allow for overcut. The overcut is expected to be 0.005 in on a side. If the efficiency of the ECM operation is 90%, what current will be required to complete the cutting operation in 20 minutes?

What implications would a vertical short-run aggregate supply curve have for the effects of demand management policy?

Campbell’s tax return was audited because they failed to report on their tax return interest they earned.  What IRS audit selection method identified their tax return?

What disclosures should be made by lessees and lessors related to future lease payments?