Question & Answer

What disclosures are required relative to long-term debt and sinking fund requirements?

Beilman Inc. reports the following pretax income (loss) for both book and tax purposes. (Assume the carryback provision is used where possible for a net operating loss.) Year Pretax Income (Loss) Tax Rate 2012 $120,000 40% 2013 90,000 40% 2014 (280,000) 45% 2015 120,000 45% The tax rates listed were all enacted by the beginning of 2012. Instructions (a) Prepare the journal entries for years 2012–2015 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carryback and loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized. (b) Prepare the income tax section of the 2014 income statement beginning with the line “Operating loss before income taxes.” (c) Prepare the income tax section of the 2015 income statement beginning with the line “Income before income taxes.”

Compare how the return of capital principle applies when (1) a taxpayer sells an asset and collects the sale proceeds all immediately and (2) a taxpayer sells an asset and collects the sale proceeds over several periods (an installment sale). If Congress wanted to maximize revenue from installment sales, how would it have applied the return of capital principle for installment sales?

A fillet weld has a cross-sectional area of 25.0 mm2 and is 300 mm long. (a) What quantity of heat (in joules) is required to accomplish the weld, if the metal to be welded is low carbon steel? (b) How much heat must be generated at the welding source, if the heat transfer factor is 0.75 and the melting factor = 0.63?

In MRP, what are common use items?

Jackel Industries presents you with the following information. Accumulated Date Salvage Life in Depreciation Depreciation to Depreciation Description Purchased Cost Value Years Method 12/31/15 for 2016 Machine A 2/12/14 $142,500 $16,000 10 (a) $33,350 (b) Machine B 8/15/13 (c) 21,000 5 SL 29,000 (d) Machine C 7/21/12 75,400 23,500 8 DDB (e) (f) Machine D 10/12/(g) 219,000 69,000 5 SYD 70,000 (h) Instructions Complete the table for the year ended December 31, 2016. The company depreciates all assets using the half-year convention.

Why did the U.S. government rescue AIG during the credit crisis in 2008? (LO5)

Using the facts in problem 44, what interest rate does Surething Inc. need to offer to make Hugh indifferent between investing in the two bonds?

Rank the following three single taxpayers in order of the magnitude of taxable income (from lowest to highest) and explain your results. Ahmed           Baker                    Chin Gross Income                 $ 80,000               $ 80,000               $ 80,000Deductions For AGI            8,000                    4,000                           0Itemized Deductions                   0                    4,000                    8,000

Explain the role of the Emerging Issues Task Force inestablishing generally accepted accounting principles.

What is the difference between absolute positioning and incremental positioning?

What are the limitations of scanning tunneling microscope in nanofabrication that inhibit its commercial application?

Determine the minimum tonnage press to perform the blanking and punching operation in Problem 20.3. The aluminum sheet metal has a tensile strength = 310 MPa, a strength coefficient of 350 MPa, and a strain-hardening exponent of 0.12. (a) Assume that blanking and punching occur simultaneously. (b) Assume the punches are staggered so that punching occurs first, then blanking

A lease agreement between Mooney Leasing Company and Rode Company is described in E21-8. Instructions (Round all numbers to the nearest cent.) Refer to the data in E21-8 and do the following for the lessor. (a) Compute the amount of the lease receivable at the inception of the lease. (b) Prepare a lease amortization schedule for Mooney Leasing Company for the 5-year lease term. (c) Prepare the journal entries to reflect the signing of the lease agreement and to record the receipts and income related to this lease for the years 2014, 2015, and 2016. The lessor’s accounting period ends on December 31. Reversing entries are not used by Mooney.

Based on the analysis in Figure 21.15 what would the impulse response functions look like for output, unemployment, inflation and real and nominal interest rates?

Distinguish between the following values relative to bonds payable: (a) Maturity value. (c) Market (fair) value. (b) Face value. (d) Par value.

Swarten Corporation issued 600 shares of no-par common stock for $8,200. Prepare Swarten’s journal entry if (a) the stock has no stated value, and (b) the stock has a stated value of $2 per share.

A part is produced using six conventional machine tools consisting of three milling machines and three drill presses. The machine cycle times on these machines are 4.7 min, 2.3 min, 0.8 min, 0.9 min, 3.4 min, and 0.5 min. The average load/unload time for each of these operations is 1.25 min. The corresponding setup times for the six machines are 1.55 hr, 2.82 hr, 57 min, 45 min, 3.15 hr, and 36 min, respectively. The total material handling time to carry one part between the machines is 20 min (consisting of five moves between six machines). A CNC machining center has been installed, and all six operations will be performed on it to produce the part. The setup time for the machining center for this job is 1.0 hr. In addition, the machine must be programmed for this part (called “part programming”), which takes 3.0 hr. The machine cycle time is the sum of the machine cycle times for the six machines. Load/unload time is 1.25 min. (a) What is the total time to produce one of these parts using the six conventional machines if the total consists of all setups, machine cycle times, load/unload times, and part transfer times between machines? (b) What is the total time to produce one of these parts using the CNC machining center if the total consists of the setup time, programming time, machine cycle time, and load/unload time, and what are the percent savings in total time compared to your answer in (a)? (c) If the same part is produced in a batch of 20 pieces, what is the total time to produce them under the same conditions as in (a) except that the total material handling time to carry the 20 parts in one unit load between the machines is 40 min? (d) If the part is produced in a batch of 20 pieces on the CNC machining center, what is the total time to produce them under the same conditions as in part (b), and what are the percent savings in total time compared to your answer in (c)? (e) In future orders of 20 pieces of the same part, the programming time will not be included in the total time because the part program has already been prepared and saved. In this case, how long does it take to produce the 20 parts using the machining center, and what are the percent savings in total time compared to your answer in (c)?

Castleman Holdings, Inc. had the following availablefor- sale investment portfolio at January 1, 2014. Evers Company 1,000 shares @ $15 each $15,000 Rogers Company 900 shares @ $20 each 18,000 Chance Company 500 shares @ $9 each 4,500 Equity investments (available-for-sale) @ cost 37,500 Fair value adjustment (available-for-sale) (7,500) Equity investments (available-for-sale) @ fair value $30,000 During 2014, the following transactions took place. 1. On March 1, Rogers Company paid a $2 per share dividend. 2. On April 30, Castleman Holdings, Inc. sold 300 shares of Chance Company for $11 per share. 3. On May 15, Castleman Holdings, Inc. purchased 100 more shares of Evers Co. stock at $16 per share. 4. At December 31, 2014, the stocks had the following price per share values: Evers $17, Rogers $19, and Chance $8. During 2015, the following transactions took place. 5. On February 1, Castleman Holdings, Inc. sold the remaining Chance shares for $8 per share. 6. On March 1, Rogers Company paid a $2 per share dividend. 7. On December 21, Evers Company declared a cash dividend of $3 per share to be paid in the next month. 8. At December 31, 2015, the stocks had the following price per share values: Evers $19 and Rogers $21. Instructions (a) Prepare journal entries for each of the above transactions. (b) Prepare a partial balance sheet showing the investment-related amounts to be reported at December 31, 2014 and 2015.

Foley Corporation has seven industry segments with total revenues as follows. Penley $600 Cheng $225 Konami 650 Takuhi 200 KSC 250 Molina 700 Red Moon 275 Based only on the revenues test, which industry segments are reportable?

Many traditional shops have closed in recent years as more people have shopped online – a trend hastened by the forced closure of non-essential shops in the lockdowns during the COVID-19 pandemic. How is this likely to have affected the balance of employment and unemployment of women and men?

Should all investment be subject to a social cost–benefit appraisal?

An 8-in diameter grinding wheel, 1.0 in wide, is used in a surface grinding job performed on a flat piece of heat-treated 4340 steel. The wheel rotates to achieve a surface speed of 5000 ft/min, with a depth of cut (infeed) = 0.002 in per pass and a crossfeed = 0.15 in. The reciprocating speed of the work is 20 ft/min, and the operation is performed dry. (a) What is the length of contact between the wheel and the work? (b) What is the volume rate of metal removed? (c) If there are 300 active grits/in2 of wheel surface, estimate the number of chips formed per unit time. (d) What is the average volume per chip? (e) If the tangential cutting force on the workpiece = 7.3 lbs, what is the specific energy calculated for this job?

Glaus Leasing Company agrees to lease machinery to Jensen Corporation on January 1, 2014. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $525,000, and the fair value of the asset on January 1, 2014, is $700,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $100,000. Jensen depreciates all of its equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2014. 5. The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties surrounding the amount of costs yet to be incurred by the lessor. 6. Glaus desires a 10% rate of return on its investments. Jensen’s incremental borrowing rate is 11%, and the lessor’s implicit rate is unknown. Instructions (Assume the accounting period ends on December 31.) (a) Discuss the nature of this lease for both the lessee and the lessor. (b) Calculate the amount of the annual rental payment required. (c) Compute the present value of the minimum lease payments. (d) Prepare the journal entries Jensen would make in 2014 and 2015 related to the lease arrangement. (e) Prepare the journal entries Glaus would make in 2014 and 2015.

Indicate how unrealized holding gains and losses should be reported for investments securities classified as trading, available-for-sale, and held-to-maturity.