Question & Answer

: Summarize the personal dilemmas and common dysfunctions that may arise when working in teams.

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

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

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

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

Holder-Webb Company began operations on January 1, 2012, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2015. The following information is available for the years 2012–2014. Net Income Computed Using Average-Cost Method FIFO Method LIFO Method 2012 $15,000 $19,000 $12,000 2013 18,000 23,000 14,000 2014 20,000 25,000 17,000 Instructions (Ignore all tax effects.) (a) Prepare the journal entry necessary to record a change from the average-cost method to the FIFO method in 2015. (b) Determine net income to be reported for 2012, 2013, and 2014, after giving effect to the change in accounting principle. (c) Assume Holder-Webb Company used the LIFO method instead of the average-cost method during the years 2012–2014. In 2015, Holder-Webb changed to the FIFO method. Prepare the journal entry necessary to record the change in principle.

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).

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?

The diameter of an extruder barrel is 65 mm and its length = 1.75 m. The screw rotates at 55 rev/min. The screw channel depth = 5.0 mm, and the flight angle = 18°. The head pressure at the die end of the barrel is 5.0 x 106 Pa. The viscosity of the polymer melt is given as 100 Pa-s. Find the volume flow rate of the plastic in the barrel.

What would be the marginal cost equation if the total cost equation were:                      C = 15 + 20Q – 5Q² + Q³ What would be the marginal cost at an output of 8?

Why are metals coated?

Yanmei Construction Company began operations January 1, 2014. During the year, Yanmei Construction entered into a contract with Lundquist Corp. to construct a manufacturing facility. At that time, Yanmei estimated that it would take 5 years to complete the facility at a total cost of $4,500,000. The total contract price for construction of the facility is $6,000,000. During the year, Yanmei incurred $1,185,800 in construction costs related to the construction project. The estimated cost to complete the contract is $4,204,200. Lundquist Corp. was billed and paid 25% of the contract price. Instructions Prepare schedules to compute the amount of gross profit to be recognized for the year ended December 31, 2014, and the amount to be shown as “costs and recognized profit in excess of billings” or “billings in excess of costs and recognized profit” at December 31, 2014, under each of the following methods. (a) Completed-contract method. (b) Percentage-of-completion method. Show supporting computations in good form.

South Carolina Corporation has one temporary difference at the end of 2014 that will reverse and cause taxable amounts of $55,000 in 2015, $60,000 in 2016, and $65,000 in 2017. South Carolina’s pretax financial income for 2014 is $300,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2014. Instructions (a) Compute taxable income and income taxes payable for 2014. (b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014. (c) Prepare the income tax expense section of the income statement for 2014, beginning with the line “Income before income taxes.”

Describe the effect of a “bargain-purchase option” on accounting for a capital lease transaction by a lessee.

When a shareholder receives a noncash distribution of property that is encumbered by a liability (the shareholder assumes the liability on the distribution), how does the shareholder determine the amount of the distribution?

The following are a series of unrelated situations. 1. Halen Company’s unadjusted trial balance at December 31, 2014, included the following accounts. Debit Credit Allowance for doubtful accounts $4,000 Net sales $1,200,000 Halen Company estimates its bad debt expense to be 1½% of net sales. Determine its bad debt expense for 2014. 2. An analysis and aging of Stuart Corp. accounts receivable at December 31, 2014, disclosed the following. Amounts estimated to be uncollectible $ 180,000 Accounts receivable 1,750,000 Allowance for doubtful accounts (per books) 125,000 What is the net realizable value of Stuart’s receivables at December 31, 2014? 3. Shore Co. provides for doubtful accounts based on 3% of credit sales. The following data are available for 2014. Credit sales during 2014 $2,400,000 Allowance for doubtful accounts 1/1/14 17,000 Collection of accounts written off in prior years (customer credit was reestablished) 8,000 Customer accounts written off as uncollectible during 2014 30,000 What is the balance in Allowance for Doubtful Accounts at December 31, 2014? 4. At the end of its first year of operations, December 31, 2014, Darden Inc. reported the following information. Accounts receivable, net of allowance for doubtful accounts $950,000 Customer accounts written off as uncollectible during 2014 24,000 Bad debt expense for 2014 84,000 What should be the balance in accounts receivable at December 31, 2014, before subtracting the allowance for doubtful accounts? 5. The following accounts were taken from Bullock Inc.’s trial balance at December 31, 2014. Instructions (a) What is the appropriate balance for Allowance for Doubtful Accounts at year-end? (b) Show how accounts receivable would be presented on the balance sheet. (c) What is the dollar effect of the year-end bad debt adjustment on the before-tax income? (CMA adapted)

The creditors of Chester Company agree to accept promissory notes for the amount of its indebtedness with a proviso that two-thirds of the annual profits must be applied to their liquidation. How should these notes be reported on the balance sheet of the issuing company? Give a reason for your answer.

Make a list of those who are most likely to gain and those who are most likely to lose from inflation.

For tax purposes, what happens to a corporation’s charitable contributions that are not deducted in the current year because of the taxable income limitation?

According to the video on sheet-metal stamping dies and processes, what are the factors that affect the formability of a metal?