Question & Answer

What tests are applied to determine if losses should be characterized as passive?

To what extent can the problems with privatisation be seen as arguments in favour of nationalisation?

Irene is saving for a new car she hopes to purchase either four or six years from now. Irene invests $10,000 in a growth stock that does not pay dividends and expects a 6 percent annual before-tax return (the investment is tax deferred). When she cashes in the investment after either four or six years, she expects the applicable marginal tax rate on long-term capital gains to be 25 percent.    a) What will be the value of this investment four years from now? Six years from now? b) When Irene sells the investment, how much cash will she have after taxes to purchase the new car (four and six years from now)?

1. The income–consumption curve in Figure 4.12 is drawn as positively sloped at low levels of income. Why? 2. Show the effect of a rise in income on the demand for X and Y where this time Y is the inferior good and X is the normal good. Is the income–consumption curve positively or negatively sloped?

: Define the components of strategic management and the three levels of strategy.

1. What would be the ‘first-best’ solution to the problem of an infant industry not being able to compete with imports? 2. Protection to allow the exploitation of monopoly/monopsony power can be seen as a ‘first-best’ policy for the country concerned. Similarly, the use of tariffs to counteract externalities directly involved in the trade process (e.g. the environmental costs of an oil tanker disaster) could be seen to be a first-best policy. Explain why.

What effect do stock dividends or stock splits have on the computation of the weighted-average number of shares outstanding?

What is a scanning probe instrument, and why is it so important in nanoscience and nanotechnology?

Presented below is a list of possible transactions. 1. Purchased inventory for $80,000 on account (assume perpetual system is used). 2. Issued an $80,000 note payable in payment on account (see item 1 above). 3. Recorded accrued interest on the note from item 2 above. 4. Borrowed $100,000 from the bank by signing a 6-month, $112,000, zero-interest-bearing note. 5. Recognized 4 months’ interest expense on the note from item 4 above. 6. Recorded cash sales of $75,260, which includes 6% sales tax. 7. Recorded wage expense of $35,000. The cash paid was $25,000; the difference was due to various amounts withheld. 8. Recorded employer’s payroll taxes. 9. Accrued accumulated vacation pay. 10. Recorded an asset retirement obligation. 11. Recorded bonuses due to employees. 12. Recorded a contingent loss on a lawsuit that the company will probably lose. 13. Accrued warranty expense (assume expense warranty approach). 14. Paid warranty costs that were accrued in item 13 above. 15. Recorded sales of product and related warranties (assume sales warranty approach). 16. Paid warranty costs under contracts from item 15 above. 17. Recognized warranty revenue (see item 15 above). 18. Recorded estimated liability for premium claims outstanding. Instructions Set up a table using the format shown below and analyze the effect of the 18 transactions on the financial statement categories indicated

Using the facts in problem 37, if Campbell earns an additional $15,000 of taxable income, what is her marginal tax rate on this income?  What is her marginal rate if, instead, she had $15,000 of additional deductions?

Tones Industries has the following patents on its December 31, 2013, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $30,600 3/1/10 17 years Patent B $15,000 7/1/11 10 years Patent C $14,400 9/1/12 4 years The following events occurred during the year ended December 31, 2014. 1. Research and development costs of $245,700 were incurred during the year. 2. Patent D was purchased on July 1 for $36,480. This patent has a useful life of 9½ years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B’s value may have occurred at December 31, 2014. The controller for Tones estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2015 $2,000 2016 2,000 2017 2,000 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) Instructions (a) Compute the total carrying amount of Tones’ patents on its December 31, 2013, balance sheet. (b) Compute the total carrying amount of Tones’ patents on its December 31, 2014, balance sheet.

A gas metal arc-welding test is performed to determine the value of melting factor f2 for a certain metal and operation. The welding voltage = 25 volts, current = 125 amps, and heat transfer factor is assumed to be = 0.90, a typical value for GMAW. The rate at which the filler metal is added to the weld is 0.50 in3 per minute, and measurements indicate that the final weld bead consists of 57% filler metal and 43% base metal. The unit melting energy for the metal is known to be 75 Btu/in3. (a) Find the melting factor. (b) What is the travel speed if the cross-sectional area of the weld bead = 0.05 in2?

As stated in the chapter, notes to the financial statements are the means of explaining the items presented in the main body of the statements. Common note disclosures relate to such items as accounting policies, segmented information, and interim reporting. The financial statements of P&G are presented in Appendix 5B. The company’s complete annual report, including the notes to the financial statements, can be accessed at the book’s companion website, www.wiley.com/college/kieso. Instructions Refer to P&G’s financial statements and the accompanying notes to answer the following questions. (a) What specific items does P&G discuss in its Note 1—Summary of Significant Accounting Policies? (List the headings only.) (b) For what segments did P&G report segmented information? Which segment is the largest? Who is P&G’s largest customer? (c) What interim information was reported by P&G?

Question: Lorenzo is considering starting a trucking company either in Texas or Oklahoma.  He will relocate his family, which includes his wife, children, and parents, to reside in the same state as his business.  What types of taxes may influence his decision of where to locate his business?

Presented below are three unrelated situations involving equity securities. Situation 1: An equity security, whose fair value is currently less than cost, is classified as available-for-sale but is to be reclassified as trading. Situation 2: A noncurrent portfolio with an aggregate fair value in excess of cost includes one particular security whose fair value has declined to less than one-half of the original cost. The decline in value is considered to be other than temporary. Situation 3: The portfolio of trading securities has a cost in excess of fair value of $13,500. The availablefor- sale portfolio has a fair value in excess of cost of $28,600. Instructions What is the effect upon carrying value and earnings for each of the situations above?

Carole, Karmen, and Cyrus formed ABC Corporation. Carole received 60 percent of the stock in ABC Corporation in exchange for appreciated property, Karmen received 30 percent of the stock in ABC Corporation in exchange for legal services, and Cyrus received 10 percent of the stock ABC Corporation in exchange for cash.   a. Must Carole recognize the gain she realized on her transfer of the appreciated property?   b. Suppose that, instead of receiving the entire 30 percent of the ABC Corporation stock in exchange for legal services, Karmen received 10 percent of the ABC Corporation stock in exchange for her legal services and she received 20 percent of the ABC Corporation stock in exchange for cash (i.e., she transferred both services and property to ABC Corporation). Must Carole recognize gain on her transfer of appreciated property?

What is the difference between an open mold and a closed mold?

If MUX/MUY were greater than PX/PY, how would consumers behave? What would bring consumption back to equilibrium where MUX/MUY = PX/PY?

Consider current conditions that could affect interest rates, including inflation (including oil prices), the economy, the budget deficit, and the Fed’s monetary policy. t Based on the prevailing conditions, do you think the values of mortgages that are sold in the secondary market will increase or decrease during this semester? Offer some logic to support your answer. Which factor do you think will have the biggest impact on the values of existing mortgages? (LO4)

Compare and contrast realization of income with recognition of income.

Will organisational efforts towards sustainability result in reduced organisational profits?

Explain the concept of bond price elasticity. Would bond price elasticity suggest a higher price sensitivity for zero-coupon bonds or high-coupon bonds that are offering the same yield to maturity? Why? What does this suggest about the market value volatility of mutual funds containing zero-coupon Treasury bonds versus high-coupon Treasury bonds? (LO1, LO3)

1.      In which quarter of Exhibit 3.7 would you place Cam? What are some steps that you would recommend Cam consider to better connect with the employees who report to him?

For tax purposes, why is the married filing jointly tax status generally preferable to the married filing separately filing status? Why might a married taxpayer prefer not to file a joint return with the taxpayer’s spouse?

A metal has a flow curve with strength coefficient = 850 MPa and strain-hardening exponent = 0.30. A tensile specimen of the metal with gage length = 100 mm is stretched to a length = 157 mm. Determine the flow stress at the new length and the average flow stress that the metal has been subjected to during the deformation.