Question & Answer

The balance sheet data of Brown Company at the end of 2014 and 2013 follow. 2014 2013 Cash $ 30,000 $ 35,000 Accounts receivable (net) 55,000 45,000 Inventory 65,000 45,000 Prepaid expenses 15,000 25,000 Equipment 90,000 75,000 Accumulated depreciation—equipment (18,000) (8,000) Land 70,000 40,000 $307,000 $257,000 Accounts payable $ 65,000 $ 52,000 Accrued expenses 15,000 18,000 Notes payable—bank, long-term 202 23,000 Bonds payable 30,000 202 Common stock, $10 par 189,000 159,000 Retained earnings 8,000 5,000 $307,000 $257,000 Land was acquired for $30,000 in exchange for common stock, par $30,000, during the year; all equipment purchased was for cash. Equipment costing $10,000 was sold for $3,000; book value of the equipment was$6,000. Cash dividends of $10,000 were declared and paid during the year. Instructions Compute net cash provided (used) by: (a) Operating activities. (b) Investing activities. (c) Financing activities.

1.      : Adopt Chris Robinson’s proposed changes and show more leniency to first-time offenders. It is a more cost-effective approach to the problem than the current policy, plus it stays close to your father’s original intent.

How might multiplier effects (the principle of cumulative causation) lead to prosperous regions becoming more prosperous and less prosperous regions falling even further behind?

Carmine was allocated the following items from the Piccolo LLC for last year: Ordinary business loss Nondeductible penalties Tax-exempt interest income Short-term capital gain Cash distributions Rank these items in terms of the order they should be applied to adjust Carmine’s tax basis in Piccolo for the year (some items may be of equal rank).

What is the difference between a CPA’s unqualified opinion or “clean” opinion and a qualified one?

Tim is a plumber who joined a barter club. This year Tim exchanges plumbing services for a new roof. The roof is properly valued at $2,500, but Tim would have billed only $2,200 for the plumbing services. What amount of income should Tim recognize on the exchange of his services for a roof? Would your answer change if Tim would have normally billed $3,000 for his services?

What challenges do LLCs face when deciding whether to treat their members’ shares of ordinary business income as self-employment income?

(a) Name the important refractory metals. (b) What does the term refractory mean?

1.    : What should Ali Boyer do? What would you actually do if you were in her place? Explain.

{Research}  Cash donations to charity are subject to a number of very specific substantiation requirements.  Describe these requirements and how charitable gifts can be substantiated.  Describe the substantiation requirements for property donations.

What is the proper accounting for volume discounts on sales of products?

Why is the oxyacetylene welding process favored over the other oxyfuel welding processes?

What is an intermediate phase in the context of alloys?

Define a “compensating balance.” How should a compensating balance be reported?

Three years ago, Adrian purchased 100 shares of stock in X Corp. for $10,000. On December 30 of year 4, Adrian sells the 100 shares for $6,000.

Assume that Switzerland has a very strong economy, putting upward pressure on both its inflation and interest rates. Explain how these conditions could place pressure on the value of the Swiss franc, and determine whether the franc’s value will rise or fall. (LO2)

Explain the value chain and list ways that value chain analysis benefits organisations.

Which would you rather have: five restaurants to choose from, each with very different menus and each having spare tables so that you could always guarantee getting one; or just two restaurants, charging less but with less choice and where you have to book quite a long time in advance?

Explain why diversification across different types of mutual funds is highly recommended. (LO2)

What is the basic difference between low-density and high-density polyethylene?

Morgan Freeman is investing $16,380 at the end of each year in a fund that earns 10% interest. In how many years will the fund be at $100,000?

How do the tax consequences of S corporation liquidating distributions differ from the tax consequences of S corporation operating distributions at both the corporate and shareholder levels?

The credit crisis that occurred in 2008–2009 could also be called an equity crisis due to systemic risk. Write a short essay to explain the impact of the credit markets on the equity markets during the crisis.

An adhesive must cure in order to bond. What is meant by the term curing?

For the following independent cases, determine whether economic income is present and, if so, whether it must be included in gross income (i.e., is it realized and recognized for tax purposes?).