Question & Answer

Requirements are to be planned for component C5 in product P1. Required deliveries for P1 are given in Table 41.1. Ordering, manufacturing, and assembly lead times are as follows: for P1 and S2, the lead time is one week; for C5, the lead time is three weeks; and for M5, the lead time is 2 weeks. Given the product structure in Figure 41.4, determine the time-phased requirements for M5, C5, and S2 to meet the master schedule for P1. Assume no common use items. On-hand inventories are 200 units for M5 and 100 units for C5, zero for S2. Use a format similar to Table 41.2 and develop a spreadsheet calculator to solve. Ignore demand for P1 beyond period 10.

The surface of a silicon wafer is thermally oxidized, resulting in a SiO2 film that is 100 nm thick. If the starting thickness of the wafer was exactly 0.400 mm, what is the final wafer thickness after thermal oxidation?

1.    : Do you think that it’s possible for individuals to develop a global mind-set if they never live outside their native country? Explain.

Outline the accounting procedures involved in applying the finance lease method by a lessee.

Montel argues that a flat income tax rate system is vertically equitable.  Oprah argues that a progressive tax rate structure is vertically equitable.  How do their arguments differ?  Who is correct?

Prophet Company signed a long-term purchase contract to buy timber from the U.S. Forest Service at $300 per thousand board feet. Under these terms, Prophet must cut and pay $6,000,000 for this timber during the next year. Currently, the market value is $250 per thousand board feet. At this rate, the market price is $5,000,000. Jerry Herman, the controller, wants to recognize the loss in value on the year-end financial statements, but the financial vice president, Billie Hands, argues that the loss is temporary and should be ignored. Herman notes that market value has remained near $250 for many months, and he sees no sign of significant change. Instructions (a) What are the ethical issues, if any? (b) Is any particular stakeholder harmed by the financial vice president’s decision? (c) What should the controller do?

Wise Company began operations at the beginning of 2015. The following information pertains to this company. 1. Pretax financial income for 2015 is $100,000. 2. The tax rate enacted for 2015 and future years is 40%. 3. Differences between the 2015 income statement and tax return are listed below: (a) Warranty expense accrued for financial reporting purposes amounts to $7,000. Warranty deductions per the tax return amount to $2,000. (b) Gross profit on construction contracts using the percentage-of-completion method per books amounts to $92,000. Gross profit on construction contracts for tax purposes amounts to $67,000. (c) Depreciation of property, plant, and equipment for financial reporting purposes amounts to $60,000. Depreciation of these assets amounts to $80,000 for the tax return. (d) A $3,500 fine paid for violation of pollution laws was deducted in computing pretax financial income. (e) Interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,500. 4. Taxable income is expected for the next few years. (Assume (a) is short-term in nature; assume (b) and (c) are long-term in nature.) Instructions (a) Compute taxable income for 2015. (b) Compute the deferred taxes at December 31, 2015, that relate to the temporary differences described above. Clearly label them as deferred tax asset or liability. (c) Prepare the journal entry to record income tax expense, deferred taxes, and income taxes payable for 2015. (d) Draft the income tax expense section of the income statement, beginning with “Income before income taxes.”

Bedrock Inc. is owned equally by Barney and his spouse Betty, each of whom holds 1,000 shares in the company. Betty wants to reduce her ownership in the company, and it is decided that the company will redeem 500 of her shares for $25,000 per share on December 31 of this year. Betty’s tax basis in each share is $5,000. Bedrock has current E&P of $10,000,000 and accumulated E&P of $50,000,000.

Define outsourcing and the market entry strategies of exporting and partnerships.

What are some of the reasons for downtime on a machining transfer line?

Lina purchased a new car for use in her business during 2024. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2024 and 2025 (Lina doesn’t want to take bonus depreciation for 2024) in the following alternative scenarios (assuming half-year convention for all):  a. The vehicle cost $35,000, and business use is 100 percent (ignore §179 expense). b. The vehicle cost $80,000, and business use is 100 percent. c. The vehicle cost $80,000, and she used it 80 percent for business. d. The vehicle cost $80,000, and she used it 80 percent for business. She sold it on March 1 of year 2. e. The vehicle cost $80,000, and she used it 20 percent for business. f. The vehicle cost $80,000 and is an SUV that weighed 6,500 pounds. Business use was 100 percent.

Presented below is information related to Cramer, Inc. Instructions Comment on the appropriateness of the accounting procedures followed by Cramer, Inc. (a) Depreciation expense on the building for the year was $60,000. Because the building was increasing in value during the year, the controller decided to charge the depreciation expense to retained earnings instead of to net income. The following entry is recorded. Retained Earnings 60,000 Accumulated Depreciation—Buildings 60,000 (b) Materials were purchased on January 1, 2014, for $120,000 and this amount was entered in the Materials account. On December 31, 2014, the materials would have cost $141,000, so the following entry is made. Inventory 21,000 Gain on Inventories 21,000 (c) During the year, the company purchased equipment through the issuance of common stock. The stock had a par value of $135,000 and a fair value of $450,000. The fair value of the equipment was not easily determinable. The company recorded this transaction as follows. Equipment 135,000 Common Stock 135,000 (d) During the year, the company sold certain equipment for $285,000, recognizing a gain of $69,000. Because the controller believed that new equipment would be needed in the near future, she decided to defer the gain and amortize it over the life of any new equipment purchased. (e) An order for $61,500 has been received from a customer for products on hand. This order was shipped on January 9, 2015. The company made the following entry in 2014. Accounts Receivable 61,500 Sales Revenue 61,500

Explain why stocks traded on the New York Stock Exchange generally exhibit less risk than stocks that are traded on other exchanges. (LO5)

Ten interrelated elements that are most directly related to measuring the performance and financial status of an enterprise are provided below. Assets Distributions to owners Expenses Liabilities Comprehensive income Gains Equity Revenues Losses Investments by owners Instructions Identify the element or elements associated with the 12 items below. (a) Arises from peripheral or incidental transactions. (b) Obligation to transfer resources arising from a past transaction. (c) Increases ownership interest. (d) Declares and pays cash dividends to owners. (e) Increases in net assets in a period from nonowner sources. (f) Items characterized by service potential or future economic benefit. (g) Equals increase in assets less liabilities during the year, after adding distributions to owners and subtracting investments by owners. (h) Arises from income statement activities that constitute the entity’s ongoing major or central operations. (i) Residual interest in the assets of the enterprise after deducting its liabilities. (j) Increases assets during a period through sale of product. (k) Decreases assets during the period by purchasing the company’s own stock. (l) Includes all changes in equity during the period, except those resulting from investments by owners and distributions to owners.

Snider Corporation, a publicly traded company, is preparing the interim financial data which it will issue to its stockholders and the Securities and Exchange Commission (SEC) at the end of the first quarter of the 2014–2015 fiscal year. Snider’s financial accounting department has compiled the following summarized revenue and expense data for the first quarter of the year. Sales revenue $60,000,000 Cost of goods sold 36,000,000 Variable selling expenses 1,000,000 Fixed selling expenses 3,000,000 Included in the fixed selling expenses was the single lump-sum payment of $2,000,000 for television advertisements for the entire year. Instructions (a) Snider Corporation must issue its quarterly financial statements in accordance with generally accepted accounting principles regarding interim financial reporting. (1) Explain whether Snider should report its operating results for the quarter as if the quarter were a separate reporting period in and of itself, or as if the quarter were an integral part of the annual reporting period. (2) State how the sales revenue, cost of goods sold, and fixed selling expenses would be reflected in Snider Corporation’s quarterly report prepared for the first quarter of the 2014–2015 fiscal year. Briefly justify your presentation. (b) What financial information, as a minimum, must Snider Corporation disclose to its stockholders in its quarterly reports?

For a certain metal, the strength coefficient = 700 MPa and strain-hardening exponent = 0.27. Determine the average flow stress that the metal experiences if it is subjected to a stress that is equal to its strength coefficient K.

Presented below is information related to Ricky Henderson Company. Cost Retail Beginning inventory $ 200,000 $ 280,000 Purchases 1,375,000 2,140,000 Markups 95,000 Markup cancellations 15,000 Markdowns 35,000 Markdown cancellations 5,000 Sales revenue 2,200,000 Instructions Compute the inventory by the conventional retail inventory method.

Consider a life insurance company that needs to ensure that it can make a steady stream of payments over time to beneficiaries of its policyholders. Assume that the compensation for the insurance company’s portfolio managers is tied to the return earned on the investments each year. Write a short essay that explains how the compensation plan might lead to investment strategies that do not serve the needs of the policyholders.

Would a corporation with a small amount of current-year taxable income (before the net operating loss deduction) and a large net operating loss carryover have a tax liability for the current year?  Explain.

Why do costs tend to increase when better surface finish is required on a machined part?

Give some examples of supply-side policies that would help to reduce the natural rate of unemployment.

1.      : Do you think a more participative and open culture can be imposed on managers with value statements and training sessions? Why or why not?

What is the difference between machine welding and automatic welding?

Four years after issue, debentures with a face value of $1,000,000 and book value of $960,000 are tendered for conversion into 80,000 shares of common stock immediately after an interest payment date. At that time, the market price of the debentures is 104, and the common stock is selling at $14 per share (par value $10). The company records the conversion as follows. Bonds Payable 1,000,000 Discount on Bonds Payable 40,000 Common Stock 800,000 Paid-in Capital in Excess of Par— Common Stock 160,000 Discuss the propriety of this accounting treatment.

Adoption of fintech has occasionally resulted in cheaper financial service costs and more accessible financial goods and services. On the other hand, others could counter that adopting fintech comes with a cost because it necessitates owning cutting-edge technology that not everyone can afford. Do you think the financial system will be more inclusive as a result of fintech adoption, or will some marginalized groups still not be able to access those services? (LO1, LO4)