Question & Answer

Corbett’s AMTI is $650,000.  What is his AMT exemption under the following alternative circumstances?

It has been suggested that tax policy favors deductions for AGI compared to itemized deductions.  Describe two ways in which deductions for AGI are treated more favorably than itemized deductions

Describe the record-keeping requirements for deducting business expenses, including mixed-motive expenditures.

Explain why the failure of Lehman Brothers caused prices on credit default swap contracts to increase. (LO7)

Spartan Corporation redeemed 25 percent of its shares for $2,000 on July 1 of this year, in a transaction that qualified as an exchange under §302(a).  Spartan’s accumulated E&P at the beginning of the year was $2,000. Its current E&P is $12,000.  Spartan made dividend distributions of $1,000 on June 1 and $4,000 on August 31.  Determine the balance in Spartan’s accumulated E&P at the beginning of next year.  See Rev. Rul. 74-338 and Rev. Rul. 74-339 for help in making this calculation.

Describe a situation in which a former C corporation that elected to be taxed as an S corporation may have its S election automatically terminated, but a similarly situated corporation that has always been taxed as an S corporation would not.

Indicate in general journal form how the items below would be entered in a worksheet for the preparation of the statement of cash flows. (a) Net income is $317,000. (b) Cash dividends declared and paid totaled $120,000. (c) Equipment was purchased for $114,000. (d) Equipment that originally cost $40,000 and had accumulated depreciation of $32,000 was sold for

SBT partnership distributes $5,000 cash and a parcel of land with a fair market value of $40,000 and a $25,000 basis to the partnership to Sam (30 percent partner). What factors must Sam and SBT consider in determining the tax treatment of this distribution?

1.       : Explain the basic idea underlying the contingency view. How would you go about identifying key contingencies facing an organization?

1. Trace through the effect of an adverse supply shock, such as a rise in oil prices. 2. What determines the amount that national income fluctuates when there is a temporary shift in the DAS curve?

Seven years ago, Halle (currently age 41) contributed $4,000 to a Roth IRA account. The current value of the Roth IRA is $9,000. In the current, year Halle withdraws $8,000 of the account balance to use as a down payment on her first home. Assuming Halle is in the 24 percent marginal tax bracket, how much of the $8,000 withdrawal will she retain after taxes to fund her house down payment?

Presented below is an amortization schedule related to Spangler Company’s 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2012, for $108,660. Cash Interest Bond Premium Carrying Amount Date Received Revenue Amortization of Bonds 12/31/12 $108,660 12/31/13 $7,000 $5,433 $1,567 107,093 12/31/14 7,000 5,354 1,646 105,447 12/31/15 7,000 5,272 1,728 103,719 12/31/16 7,000 5,186 1,814 101,905 12/31/17 7,000 5,095 1,905 100,000 The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 Amortized cost $107,093 $105,447 $103,719 $101,905 $100,000 Fair value $106,500 $107,500 $105,650 $103,000 $100,000 Instructions (a) Prepare the journal entry to record the purchase of these bonds on December 31, 2012, assuming the bonds are classified as held-to-maturity securities. (b) Prepare the journal entry(ies) related to the held-to-maturity bonds for 2013. (c) Prepare the journal entry(ies) related to the held-to-maturity bonds for 2015. (d) Prepare the journal entry(ies) to record the purchase of these bonds, assuming they are classified as available-for-sale. (e) Prepare the journal entry(ies) related to the available-for-sale bonds for 2013. (f) Prepare the journal entry(ies) related to the available-for-sale bonds for 2015.

In a certain centerless grinding operation, the grinding wheel diameter = 8.5 in, and the regulating wheel diameter = 5.0 in. The grinding wheel rotates at 3500 rev/min and the regulating wheel rotates at 150 rev/min. The inclination angle of the regulating wheel = 3°. Determine the throughfeed rate of cylindrical workparts that have the following dimensions: diameter = 1.25 in and length = 8.0 in

What is wave soldering?

Go through the above arguments and give a reply to the criticisms made of government intervention.

What are hot assets, and why are they important in the sale of a partnership interest?

How does the initial rate on adjustable-rate mortgages (ARMs) differ from the rate on fixed-rate mortgages? Why? Explain how caps on ARMs can affect a financial institution’s exposure to interest rate risk. (LO2)

A two-spindle drill simultaneously drills a ½ in hole and a ¾ in hole through a workpiece that is 1.0 inch thick. Both drills are twist drills with point angles of 118°. Cutting speed for the material is 230 ft/min. The rotational speed of each spindle can be set individually. The feed rate for both holes must be set to the same value because the 2 spindles lower at the same rate. The feed rate is set so the total metal removal rate does not exceed 1.50 in3 /min. Determine (a) the maximum feed rate (in/min) that can be used, (b) the individual feeds (in/rev) that result for each hole, and (c) the time required to drill the holes.

Explain the conditions under which a speculator would like to invest in a foreign currency today even when the speculator has no use for that currency in the future. (LO2, LO3)

Identify the four generic perspectives for a balanced scorecard and         explain how they are related.

Melissa, Nicole, and Miguel are equal partners in the Opto Partnership (calendar-year-end entity). Melissa decides she wants to exit the partnership and receives a proportionate distribution to liquidate her partnership interest on January 1. The partnership has no liabilities and holds the following assets as of January 1: Tax BasisFMV Cash $ 18,000 $ 18,000 Accounts receivable -0- 24,000 Stock investment 7,500 12,000 Land 30,000 36,000    Totals $ 55,500 $ 90,000 Melissa receives one-third of each of the partnership assets. She has a basis in her partnership interest of $25,000. a. What are the amount and character of any recognized gain or loss to Melissa? b. What is Melissa’s basis in the distributed assets? c. What are the tax implications (amount and character of gain or loss and basis of assets) to Melissa if her outside basis is $11,000 rather than $25,000? d. What are the amount and character of any recognized gain or loss from the distribution

1.       : What are some specific tips that you would give a new manager for building trust with subordinates? With other managers?

Define epitaxial deposition.

Would it be possible for firms to calculate their maximum-profit output if they did not use marginal cost and marginal revenue concepts?

Compare the relative merits of banning certain types of market structure with banning certain types of market behaviour.