Question & Answer

1. Will the shape of the long-run AS curve here depend on just how the ‘long’ run is defined? 2. If a shift in the aggregate demand curve from AD to AD1 in Figure 20.17 causes a movement from point a to point d in the long run, would a shift in aggregate demand from AD1 to AD cause a movement from point d back to point a in the long run?

What is a factory that performs casting operations usually called?

1.      : Do you think the complaints of lower-paid sales associates are legitimate? Why or why not? How do you suggest that Lauren respond to these complaints, such as the gripe that the system offers few opportunities for large commissions in some departments?

Brazil Group purchases a vehicle at a cost of $50,000 on January 2, 2014. Individual components of the vehicle and useful lives are as follows. Cost Useful Lives Tires $ 6,000 2 years Transmission 10,000 5 years Trucks 34,000 10 years Instructions (Assume no residual (salvage) value.) (a) Compute depreciation expense for 2014, assuming Brazil depreciates the vehicle as a single unit. (b) Compute depreciation expense for 2014, assuming Brazil uses component depreciation. (c) Why might a company want to use component depreciation to depreciate its assets?

What is the difference between an open-loop positioning system and a closed-loop positioning system?

Presented below is information related to equipment owned by Pujols Company at December 31, 2014. Cost (residual value $0) $9,000,000 Accumulated depreciation to date 1,000,000 Value-in-use 5,500,000 Fair value less cost of disposal 4,400,000 Assume that Pujols will continue to use this asset in the future. As of December 31, 2014, the equipment has a remaining useful life of 8 years. Pujols uses straight-line depreciation. Instructions (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2014. (b) Prepare the journal entry to record depreciation expense for 2015. (c) The recoverable amount of the equipment at December 31, 2015, is $6,050,000. Prepare the journal entry (if any) necessary to record this increase.

Describe the process of “borrowing at the Federal Reserve.” What rate is charged, and who sets it? Why do banks commonly borrow in the federal funds market rather than through the Federal Reserve? (LO2)

What does the term anisotropic mean?

Is the assumption of rational expectations on its own sufficient for anticipated demand shocks to have no impact on economic activity even in the short run?

In 2014, Ghostbusters Corp. spent $420,000 for “goodwill” visits by sales personnel to key customers. The purpose of these visits was to build a solid, friendly relationship for the future and to gain insight into the problems and needs of the companies served. How should this expenditure be reported?

Describe the pultrusion process

Question: The U.S. Constitution is the highest tax authority but provides very little in the way of tax laws.  What are the next highest tax authorities beneath the U.S. Constitution?

What is sheet molding compound (SMC)?

Amber is a tax expert, whereas Rob is a tax novice.  Explain how their process in identifying tax issues may differ.

The Kellys are planning for a retirement home. They estimate they will need $200,000 4 years from now to purchase this home. Assuming an interest rate of 10%, what amount must be deposited at the end of each of the 4 years to fund the home price? (Round to two decimal places.)

Explain the difference between artistic-related intangible assets and contract-related intangible assets.

Allie received a $50,000 distribution from her 401(k) account this year that she established while working for Big Stories, Inc. Assuming her marginal ordinary tax rate is 24 percent, how much tax and penalty will Allie pay on the distribution under the following circumstances?

Research and development activities may include (a) personnel costs, (b) materials and equipment costs, and (c) indirect costs. What is the recommended accounting treatment for these three types of R&D costs?

Under what circumstances would you expect the after-tax return from an investment in a capital asset to approach that of tax-exempt assets (assuming equal before-tax rates of return)?

What are some of the most common civil penalties imposed on taxpayers?

The financial statements of P&G are presented in Appendix 5B. The company’s complete annual report, including the notes to the financial statements, can be accessed at the book’s companion website, www. wiley.com/college/kieso. Instructions Refer to these financial statements and the accompanying notes to answer the following questions. (a) What was P&G’s 2011 short-term debt and related weighted-average interest rate on this debt? (b) What was P&G’s 2011 working capital, acid-test ratio, and current ratio? Comment on P&G’s liquidity. (c) What types of commitments and contingencies has P&G’s reported in its financial statements? What is management’s reaction to these contingencies?

Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $400,000. The Johnson Division’s net assets, including the goodwill, have a carrying amount of $800,000. The fair value of the division is estimated to be $1,000,000. Prepare Waters’ journal entry, if necessary, to record impairment of the goodwill.

In 2013, Austin Powers Corporation developed a new product that will be marketed in 2014. In connection with the development of this product, the following costs were incurred in 2013: research and development costs $400,000; materials and supplies consumed $60,000; and compensation paid to research consultants $125,000. It is anticipated that these costs will be recovered in 2016. What is the amount of research and development costs that Austin Powers should record in 2013 as a charge to expense?

Under what conditions should a short-term obligation be excluded from current liabilities?

Geiberger Corporation manufactures replicators. On January 1, 2014, it leased to Althaus Company a replicator that had cost $110,000 to manufacture. The lease agreement covers the 5-year useful life of the replicator and requires 5 equal annual rentals of $40,800 payable each January 1, beginning January 1, 2014. An interest rate of 12% is implicit in the lease agreement. Collectibility of the rentals is reasonably assured, and there are no important uncertainties concerning costs. Prepare Geiberger’s January 1, 2014, journal entries.