Question & Answer

1.       Why can an event such as the Hawthorne studies be a major turning point in the history of management, even if the results of the studies are later shown to be in error? Discuss.

What is a reversing mill in rolling?

Name and sketch the five joint types.

All else being equal, should taxpayers prefer to exclude income or defer it?Why?

1.      : How might the state control the accuracy of principals who are conducting teacher evaluations? Explain.

What is the difference between peripheral milling and face milling?

Jeremy (unmarried) earned $100,000 in salary and $6,000 in interest income during the year. Jeremy’s employer withheld $10,000 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child (age 14) who lives with him. Jeremey qualifies to file as head of household and has $25,000 in itemized deductions.

Consider the prevailing conditions for inflation (including oil prices), the economy, the budget deficit, and the Fed’s monetary policy that could affect interest rates. Based on these conditions, do you think interest rates will likely increase or decrease during this semester? Offer some logic to support your answer. Which factor do you think will have the greatest impact on interest rates? (LO2)

What is a bank’s gap, and what does it attempt to determine? Interpret a negative gap. What are some limitations of measuring a bank’s gap? (LO3)

Describe the difference between up milling and down milling?

Danner Inc. has a $395,000 capital loss carryover that will expire at the end of the current tax year if it is not used. Also, Danner Inc. has been a general partner in the Talisman Partnership for three years and plans to end its involvement with the partnership by receiving a liquidating distribution. Initially, all parties agreed that Danner Inc.’s liquidating distribution would include $50,000 in cash and land with a fair market value of $400,000 (tax basis of $120,000). Immediately before the distribution, Danner’s basis in its partnership interest is $150,000, which includes its $100,000 share of partnership debt.  Talisman Partnership does not hold any hot assets. a. What are the amount and character of any gain or loss to Danner Inc.? b. What is Danner Inc.’s basis in the land? c. Can you suggest a course of action that would help Danner Inc. avoid the expiration of its capital loss carryover?

What is the relationship of the asset turnover to the return on assets?

How does the change in cross-sectional area of a test specimen in a compression test differ from its counterpart in a tensile test specimen?

Transfer pricing Georgina Chan is the chief financial officer of Colorado Pty Ltd, which has three interdependent divisions where, on average, about 30 per cent of the output of one division is transferred to one of the other divisions. She is currently dealing with a dispute within the accounting office about the best way to treat transfer pricing within the company. The chief executive officer has advised that any change to the policy should not compromise what is best for the company overall. Senior accountant Andy Chan says ‘as we are a highly decentralised firm, the only way to go is to use market price as the key method and allow sourcing autonomy’. Meanwhile, graduate accountant Roger Singh says ‘I disagree. If we go with full cost plus a 15 per cent mark-up and no sourcing autonomy, that would be best’.   Required State one advantage and one disadvantage of each proposed policy and advise which policy you think would serve the company best. Briefly explain.

How did Basel III change capital and liquidity requirements for banks? (LO3)

Juan Diego began the year with a tax basis in his partnership interest of $50,000. During the year, he was allocated $20,000 of partnership ordinary business income, $70,000 of §1231 losses, $30,000 of short-term capital losses and received a cash distribution of $50,000. a. What items related to these allocations does Juan Diego actually report on his tax return for the year? [Hint: See Reg. §1.704-1(d)(2) and Rev. Rul. 66-94.] b. If any deductions or losses are limited, what are the carryover amounts, and what is their character? [Hint: See Reg. §1.704-1(d).]

On July 1, 2014, Wallace Company, a calendar-year company, sold special-order merchandise on credit and received in return an interest-bearing note receivable from the customer. Wallace Company will receive interest at the prevailing rate for a note of this type. Both the principal and interest are due in one lump sum on June 30, 2015. Instructions When should Wallace Company report interest revenue from the note receivable? Discuss the rationale for your answer. Part 2: On December 31, 2014, Wallace Company had significant amounts of accounts receivable as a result of credit sales to its customers. Wallace uses the allowance method based on credit sales to estimate bad debts. Past experience indicates that 2% of credit sales normally will not be collected. This pattern is expected to continue. Instructions (a) Discuss the rationale for using the allowance method based on credit sales to estimate bad debts. Contrast this method with the allowance method based on the balance in the trade receivables accounts. (b) How should Wallace Company report the allowance for doubtful accounts on its balance sheet at December 31, 2014? Also, describe the alternatives, if any, for presentation of bad debt expense in Wallace Company’s 2014 income statement.

Presented below is information related to Aaron Rodgers Corporation for the current year. Beginning inventory $ 600,000 Purchases 1,500,000 Total goods available for sale $2,100,000 Sales revenue 2,500,000 Instructions Compute the ending inventory, assuming that (a) gross profit is 45% of sales; (b) gross profit is 60% of cost; (c) gross profit is 35% of sales; and (d) gross profit is 25% of cost.

Why is friction generally undesirable in metal forming operations?

During 2010, George Winston Corporation spent $170,000 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2010, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $18,000 related to the patent were incurred as of October 1, 2010. Instructions (a) Prepare all journal entries required in 2010 and 2011 as a result of the transactions above. (b) On June 1, 2012, Winston spent $9,480 to successfully prosecute a patent infringement suit. As a result, the estimate of useful life was extended to 12 years from June 1, 2012. Prepare all journal entries required in 2012 and 2013. (c) In 2014, Winston determined that a competitor’s product would make the New Age Piano obsolete and the patent worthless by December 31, 2015. Prepare all journal entries required in 2014 and 2015.

What are the computational guidelines for determining whether a convertible security is to be reported as part of diluted earnings per share?

Contrast the constructive receipt doctrine with the claim of right doctrine.

Look in a business periodical for news about a recent financial transaction involving two financial institutions. For this transaction, determine the following: a. How will each institution’s balance sheet be affected? b. Will either institution receive immediate income from the transaction? c. Who is the ultimate user of funds? d. Who is the ultimate source of funds? (LO3)

What is the tax marriage penalty and when does it apply?  Under what circumstances would a couple experience a tax marriage benefit?

A dial-indexing table has 6 stations. One station is used for loading and unloading, which is accomplished by a human worker. The other five perform processing operations. The longest process takes 25 sec and the indexing time = 5 sec. Each station has a frequency of failure = 0.015. When a failure occurs it takes an average of 3.0 min to make repairs and restart. Determine (a) hourly production rate and (b) line efficiency.