Question & Answer

Use the information from BE17-5 but assume the stock was purchased as a trading security. Prepare Fairbanks’ journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment.

A torsion test specimen has a radius = 25 mm, wall thickness = 3 mm, and gage length = 50 mm. In testing, a torque of 900 N-m results in an angular deflection = 0.3°. Determine (a) the shear stress, (b) shear strain, and (c) shear modulus, assuming the specimen had not yet yielded. (d) If failure of the specimen occurs at a torque = 1200 N-m and a corresponding angular deflection = 10°, what is the shear strength of the metal?

Kasten Inc. provides paid vacations to its employees. At December 31, 2014, 30 employees have each earned 2 weeks of vacation time. The employees’ average salary is $500 per week. Prepare Kasten’s December 31, 2014, adjusting entry.

What is the difference between the traditional ceramics and the new ceramics?

Where, if at all, should the following items be classified on a balance sheet? (a) Goods out on approval to customers. (b) Goods in transit that were recently purchased f.o.b. destination. (c) Land held by a realty firm for sale. (d) Raw materials. (e) Goods received on consignment. (f) Manufacturing supplies.

What are the common book-tax differences relating to accounting for capital gains and losses?  Do these differences create favorable or unfavorable book-to-tax adjustments?

Describe when economic performance occurs for the following expenses: a)Workers’ compensation  b) Rebates and refunds c) Insurance, warranties, and service contracts provided to the business d) Taxes

What is the nature of an installment sale? How do installment sales differ from ordinary credit sales?

In an orthogonal cutting operation, the rake angle = -5°, chip thickness before the cut = 0.2 mm and width of cut = 4.0 mm. The chip ratio = 0.4. Determine (a) the chip thickness after the cut, (b) shear angle, (c) friction angle, (d) coefficient of friction, and (e) shear strain.

Grady received $8,200 of Social Security benefits this year.  Grady also reported salary and interest income this year.  What amount of the benefits must Grady include in his gross income under the following two independent situations? a.       Grady files single and reports salary of $12,100 and interest income of $250. b.       Grady files single and reports salary of $22,000 and interest income of $600. c.       Grady files married joint and reports salary of $75,000 and interest income of $500. d.       Grady files married joint and reports salary of $44,000 and interest income of $700. e.            Grady files married separate and reports salary of $22,000 and interest income of $600

What are the advantages and disadvantages for a developing country of pursuing a policy of ISI?

Think of three examples of monopolies (local or national) and consider how contestable their markets are.

If price regulation results in lower profits, will this always imply lower investment? How might a government incentivise innovation in a regulated industry?

Should large securities firms be allowed to be independent and insulated from bank regulation, or should they be required to register as bank holding companies, and subject to bank regulations? Write a short essay that supports your opinion.

MACRS depreciation requires the use of a recovery period, method, and convention to depreciate tangible personal property assets. Briefly explain why each is important to the calculation.

A batch of annealed steel has just been received from the vendor. It is supposed to have a tensile strength in the range 60,000 - 70,000 lb/in2 . A Brinell hardness test in the receiving department yields a value of HB = 118. (a) Does the steel meet the specification on tensile strength? (b) Estimate the yield strength of the material.

What function is served by tempering?

Latrell recently used his Delta Skymiles to purchase a free round-trip ticket to Milan, Italy (value $1,200).  The frequent flyer miles used to purchase the ticket were generated from Latrell’s business travel as a CPA.  Latrell’s employer paid for his business trips, and he was not taxed on the travel reimbursement.     a.  Use an available tax research service to determine how much income, if any, Latrell will have to recognize as a result of purchasing an airline ticket with Skymiles earned from business travel.   b.  Write a memo communicating the results of your research.

Trevor is a single individual who is a cash-method, calendar-year taxpayer. For each of the next two years (2024 and 2025), Trevor expects to report salary of $80,000, contribute $8,000 to charity, and pay $2,800 in state income taxes. a. Estimate Trevor’s taxable income for 2024 and 2025 using the 2024 amounts for the standard deduction for both years. b. Now assume that Trevor combines his anticipated charitable contributions for the next two years and makes the combined contribution in December of 2024. Estimate Trevor’s taxable income for each of the next two years using the 2024 amounts for the standard deduction. Reconcile the total taxable income to your solution to part (a). c. Trevor plans to purchase a residence next year, and he estimates that additional property taxes and residential interest will cost $2,000 and $12,000, respectively, each year. Estimate Trevor’s taxable income for each of the next two years (2024 and 2025) using the 2024 amounts for the standard deduction and also assuming Trevor makes the charitable contribution of $8,000 and state tax payments of $2,800 in each year. d. Assume the facts in part (c) but that Trevor makes the charitable contribution for 2025 in December of 2024. Estimate Trevor’s taxable income for 2024 and 2025 using the 2024 amounts for the standard deduction. Reconcile the total taxable income to your solution to part (c). e. Explain the conditions in which the bunching strategy in part (d) will generate tax savings for Trevor.

1.       : Psychologists have identified three pathways to happiness: pleasure, engagement, and meaning. Do you think it is the manager’s responsibility to help people find these elements in their work? Discuss.

Will Smith will receive $80,000 on December 31, 2019 (5 years from now), from a trust fund established by his father. Assuming the appropriate interest rate for discounting is 12% (compounded semiannually), what is the present value of this amount today?

Many London councils now have residents’ street parking permits, with charges that vary according to the carbon emissions of the registered vehicle. Explain the thinking behind this policy.

Jim purchased 100 shares of stock this year and elected to participate in a dividend reinvestment program. This program automatically uses dividends to purchase additional shares of stock. This year Jim’s shares paid $350 of dividends, and these funds were used to purchase additional shares of stock. These additional shares are worth $375 at year-end. What amount of dividends, if any, should Jim declare as income this year? Explain.

Approximately what percentage of tax returns does the IRS audit?  What are the implications of this number for the IRS’s strategy in selecting returns for audit?

Jasper and Crewella Dahvill were married in year 0. They filed joint tax returns in years 1 and 2. In year 3, their relationship was strained and Jasper insisted on filing a separate tax return. In year 4, the couple divorced. Both Jasper and Crewella filed single tax returns in year 4. In year 5, the IRS audited the couple’s joint year 2 tax return and each spouse’s separate year 3 tax returns. The IRS determined that the year 2 joint return and Crewella’s separate year 3 tax return understated Crewella’s self-employment income, causing the joint return year 2 tax liability to be understated by $4,000 and Crewella’s year 3 separate return tax liability to be understated by $6,000. The IRS also assessed penalties and interest on both of these tax returns. Try as it might, the IRS has not been able to locate Crewella, but they have been able to find Jasper.