Question & Answer

The U.S. Securities and Exchange Commission (SEC) was created in 1934 and consists of five commissioners and a large professional staff. The SEC professional staff is organized into five divisions and several principal offices. The primary objective of the SEC is to support fair securities markets. The SEC also strives to foster enlightened stockholder participation in corporate decisions of publicly traded companies. The SEC has a significant presence in financial markets, the development of accounting practices, and corporation-shareholder relations, and has the power to exert influence on entities whose actions lie within the scope of its authority. Instructions (a) Explain from where the Securities and Exchange Commission receives its authority. (b) Describe the official role of the Securities and Exchange Commission in the development of financial accounting theory and practices. (c) Discuss the interrelationship between the Securities and Exchange Commission and the Financial Accounting Standards Board with respect to the development and establishment of financial accounting theory and practices.

What are the possible arguments in favour of fixing prices (a) below and (b) above the equilibrium? Are there any means of achieving the same social goals without fixing prices?

What should be the pattern of amortization for a limitedlife intangible?

What are the two depreciation conventions that apply to tangible personal property under MACRS? Explain why Congress provides two methods.

Using the lead-tin phase diagram in Figure 6.3, determine the liquid and solid phase compositions for a nominal composition of 40% Sn and 60% Pb at 204°C (400°F).

Birch Corp., a calendar-year corporation, was formed three years ago by its sole shareholder, James, who has operated it as an S corporation since its inception.  Last year, James made a direct loan to Birch Corp. in the amount of $5,000.  Birch Corp. has paid the interest on the loan but has not yet paid any principal.  (Assume the loan qualifies as debt for tax purposes.)  For the year, Birch experienced a $25,000 business loss.  What amount of the loss clears the tax-basis limitation, and what is James’s basis in his Birch Corp. stock and Birch Corp. debt in each of the following alternative scenarios?

Brooklyn has been contributing to a traditional IRA for seven years (all deductible contributions) and has a total of $30,000 in the account. In the current year, she is 39 years old and has decided that she wants to get a new car. She withdraws $20,000 from the IRA to help pay for the car. She is currently in the 24 percent marginal tax bracket. What amount of the withdrawal, after tax considerations, will Brooklyn have available to purchase the car?

What is reaction injection molding?

What are some of the key environmental forces that have the way projects are managed? What has been the effect of these forces on the management of project?

What evidence is necessary to demonstrate the ability to defer settlement of short-term debt?

In what way may the use of percentage depletion violate sound accounting theory?

Theory If the segmented markets theory causes an upward-sloping yield curve, what does this imply? If markets are not completely segmented, should we dismiss the segmented markets theory as even a partial explanation for the term structure of interest rates? Explain. (LO3)

What implicit and explicit costs would a firm avoid if it decided not to expand production?

Viscosity is an important property of a polymer melt in plastics shaping processes. Upon what parameters does viscosity depend?

What are the product categories usually listed in the master production schedule?

Solve Problem 21.27 but with the following changes: cutting speed = 1.3 m/s, feed = 0.75 mm/rev, and depth = 4.0 mm. Note that although the power used in this operation is only about 10% greater than in the previous problem, the metal removal rate is about 40% greater.

Elroy, who is single, has taken over the care of his mother Irene in her old age. Elroy pays the bills relating to Irene’s home.He also buys all her groceries and provides the rest of her support.Irene has no gross income.What is Elroy’s filing status?

What are the major advantages of notes to the financial statements? What types of items are usually reported in notes?

Lowell Corporation has used the accrual basis of accounting for several years. A review of the records, however, indicates that some expenses and revenues have been handled on a cash basis because of errors made by an inexperienced bookkeeper. Income statements prepared by the bookkeeper reported $29,000 net income for 2013 and $37,000 net income for 2014. Further examination of the records reveals that the following items were handled improperly. 1. Rent was received from a tenant in December 2013. The amount, $1,000, was recorded as revenue at that time even though the rental pertained to 2014. 2. Salaries and wages payable on December 31 have been consistently omitted from the records of that date and have been entered as expenses when paid in the following year. The amounts of the accruals recorded in this manner were: December 31, 2012 $1,100 December 31, 2013 1,200 December 31, 2014 940 3. Invoices for supplies purchased have been charged to expense accounts when received. Inventories of supplies on hand at the end of each year have been ignored, and no entry has been made for them. December 31, 2012 $1,300 December 31, 2013 940 December 31, 2014 1,420 Instructions Prepare a schedule that will show the corrected net income for the years 2013 and 2014. All items listed should be labeled clearly. (Ignore income tax considerations.)

Solve the previous problem only the servomotor is connected to the leadscrew through a gear box whose reduction ratio = 12:1 (12 revolutions of the motor for each revolution of the leadscrew).

Distinguish between minimum rental payments and minimum lease payments, and indicate what is included in minimum lease payments.

The following statement appeared in a financial magazine: “RRA—or Rah-Rah, as it’s sometimes dubbed—has kicked up quite a storm. Oil companies, for example, are convinced that the approach is misleading. Major accounting firms agree.” What is RRA? Why might oil companies believe that this approach is misleading?

The amount of income taxes due to the government for a period of time is rarely the amount reported on the income statement for that period as income tax expense. Instructions (a) Explain the objectives of accounting for income taxes in general-purpose financial statements. (b) Explain the basic principles that are applied in accounting for income taxes at the date of the financial statements to meet the objectives discussed in (a). (c) List the steps in the annual computation of deferred tax liabilities and assets.

What are some of the benefits usually cited for NC compared to using manual alternative methods?

Why are metals coated?