Question & Answer

Katie recently won a ceramic dalmatian valued at $800 on a television game show.  She questions whether this prize is taxable since it was a “gift” she won on the show.  a.  Use an available tax research service to answer Katie’s question. b.  Write a letter to Katie communicating the results of your research

Rank the following three single taxpayers in order of the magnitude of taxable income (from lowest to highest) and explain your results. Assume none of the taxpayers contributed to charity this year.

Why might some have trouble classifying costs as fixed or variable?

1.       : Some people argue that the presence of an outside threat correlates with a high degree of team cohesiveness. Would you agree or disagree? Explain your answer.

Jennifer Capriati Corp. has a deferred tax asset account with a balance of $150,000 at the end of 2013 due to a single cumulative temporary difference of $375,000. At the end of 2014, this same temporary difference has increased to a cumulative amount of $450,000. Taxable income for 2014 is $820,000. The tax rate is 40% for all years. No valuation account related to the deferred tax asset is in existence at the end of 2013. Instructions (a) Record income tax expense, deferred income taxes, and income taxes payable for 2014, assuming that it is more likely than not that the deferred tax asset will be realized. (b) Assuming that it is more likely than not that $30,000 of the deferred tax asset will not be realized, prepare the journal entry at the end of 2014 to record the valuation account.

Explain how ERISA affects employees who change employers. (LO3)

Explain how the Covid-19 pandemic affected the credit risk premium and liquidity in the commercial paper market. (LO1)

Venture capital firms commonly attempt to cash out as soon as possible following IPOs. Describe the likely effect that would have on the stock price at the time of lockup expiration. Would the effect be different for a firm that relied more heavily on VC firms than on other investors for its funds? (LO3)

1. If a person earning £10 000 per year pays £1000 in a given tax and a person earning £20 000 per year pays £1600, is the tax progressive or regressive? 2. A proportional tax will leave the distribution of income unaffected. Why should this be so, given that a rich person will pay a larger absolute amount than a poor person?

A cylindrical riser with diameter-to-length ratio = 1.0 is to be designed for a sand casting mold. The casting geometry is illustrated in Figure P10.25, in which the units are inches. If the mold constant in Chvorinov's rule = 19.5 min/in2 , determine the dimensions of the riser so that the riser will take 0.5 min longer to freeze than the casting itself.

Tiffany and Carlos decided to liquidate their jointly owned corporation, Royal Oak Furniture (ROF).  After liquidating its remaining inventory and paying off its remaining liabilities, ROF had the following tax accounting balance sheet.     FMV         Tax BasisAppreciation (Depreciation) Cash$  200,000$     200,000 Building      50,000         10,000       40,000 Land    150,000       200,000      (50,000) Total$  400,000$     410,000$    (10,000)

An automated transfer line is to be designed. Based on previous experience, the average downtime per occurrence = 5.0 min, and the probability of a station failure that leads to a downtime occurrence p = 0.01. The total work content time = 9.8 min and is to be divided evenly amongst the workstations, so that the ideal cycle time for each station = 9.8/n. Determine (a) the optimum number of stations on the line n that will maximize production rate, and (b) the production rate and proportion uptime for your answer to part (a).

For the following investments identify whether they are: 1. Trading Securities 2. Available-for-Sale Securities 3. Held-to-Maturity Securities Each case is independent of the other. (a) A bond that will mature in 4 years was bought 1 month ago when the price dropped. As soon as the value increases, which is expected next month, it will be sold. (b) 10% of the outstanding stock of Farm-Co was purchased. The company is planning on eventually getting a total of 30% of its outstanding stock. (c) 10-year bonds were purchased this year. The bonds mature at the first of next year. (d) Bonds that will mature in 5 years are purchased. The company would like to hold them until they mature, but money has been tight recently and they may need to be sold. (e) Preferred stock was purchased for its constant dividend. The company is planning to hold the preferred stock for a long time. (f) A bond that matures in 10 years was purchased. The company is investing money set aside for an expansion project planned 10 years from now.

Define hardenability.

A leadscrew connected directly to a DC servomotor is the drive system for a positioning table. The leadscrew pitch = 4 mm. The optical encoder attached to the leadscrew emits 250 pulses/rev of the leadscrew. Determine (a) the control resolution of the system, expressed in linear travel distance of the table axis, (b) the frequency of the pulse train emitted by the optical encoder when the servomotor operates at 14 rev/s, and (c) the travel speed of the table at the operating speed of the motor.

Discuss the basic differences between annotated and topical tax services.  How are these services used in tax research?   Answer:

Justine would like to clarify her understanding of a code section recently enacted by Congress.  What tax law sources are available to assist Justine?

Laser-beam welding and electron-beam welding are often compared because they both produce very high power densities. LBW has certain advantages over EBW. What are they?

What is Circular 230?

Did tax law changes effective in 2018 increase or decrease the amount of the double tax on C corporation income?  Explain.

If importers and exporters believe that the exchange rate has ‘bottomed out’, what will they do?

Acme Corporation has 1,000 shares outstanding. Joan and Bill are married, and they each own 20 shares of Acme. Joan and Bill’s daughter, Shirley, also owns 20 shares of Acme.  Joan is an equal partner with Jeri in the J&J partnership, and this partnership owns 60 shares of Acme. Jeri is not related to Joan or Bill. How many shares of Acme is Shirley deemed to own under the stock attribution rules?

In year 2, Julio and Milania each received distributions of $25,000 from Falcons Corporation. a.  What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis).

On July 31, 2014, Amsterdam Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction was begun immediately and was completed on November 1, 2014. To help finance construction, on July 31 Amsterdam issued a $300,000, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $200,000 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Amsterdam made a final $100,000 payment to Minsk. Other than the note to Netherlands, Amsterdam’s only outstanding liability at December 31, 2014, is a $30,000, 8%, 6-year note payable, dated January 1, 2011, on which interest is payable each December 31. Instructions (a) Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2014. (Round all computations to the nearest dollar.) (b) Prepare the journal entries needed on the books of Amsterdam Company at each of the following dates. (1) July 31, 2014. (2) November 1, 2014. (3) December 31, 2014.

How are defined benefit plans different from defined contribution plans? How are they similar?