Question & Answer

2. What are the advantages and disadvantages of presenting data graphically with the axes starting from zero?

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

Why do we get less consumer surplus from goods where our demand is relatively elastic?

What will be the effects on the domestic economy under free-floating exchange rates if there is a rapid expansion in world economic activity? What will determine the size of these effects?

: Explain how the balanced scorecard addresses the four steps in the control process.

What is one of the important applications of titanium nitride, as mentioned in the text?

Maurice has a client that recently asked him about the odds of the IRS detecting cash transactions not reported on a tax return.  What are some of the issues that Maurice should discuss with his client?

When interpreting a control chart, what does one look for to identify problems?

What elements are traditionally alloyed with copper to form (a) bronze and (b) brass?

In a turning operation on an aluminum alloy workpiece, the feed = 0.020 in/rev, and depth of cut = 0.250 in. The motor horsepower of the lathe is 20 hp and it has a mechanical efficiency = 92%. The unit horsepower value = 0.25 hp/(in3 /min) for this aluminum grade. What is the maximum cutting speed that can be used on this job?

Kenseth Company has the following securities in its trading portfolio of securities on December 31, 2013. Investments (Trading) Cost Fair Value 1,500 shares of Gordon, Inc., Common $ 73,500 $ 69,000 5,000 shares of Wallace Corp., Common 180,000 175,000 400 shares of Martin, Inc., Preferred 60,000 61,600 $313,500 $305,600 All of the securities were purchased in 2013. In 2014, Kenseth completed the following securities transactions. March 1 Sold the 1,500 shares of Gordon, Inc., Common, @ $45 less fees of $1,200 April 1 Bought 700 shares of Earnhart Corp., Common, @ $75 plus fees of $1,300 Kenseth Company’s portfolio of trading securities appeared as follows on December 31, 2014. Investments (Trading) Cost Fair Value 5,000 shares of Wallace Corp., Common $180,000 $175,000 700 shares of Earnhart Corp., Common 53,800 50,400 400 shares of Martin, Inc., Preferred 60,000 58,000 $293,800 $283,400 Instructions Prepare the general journal entries for Kenseth Company for: (a) The 2013 adjusting entry. (b) The sale of the Gordon stock. (c) The purchase of the Earnhart stock. (d) The 2014 adjusting entry for the trading portfolio.

Why are parts sometimes fixed to the conveyor in a continuous transfer system in manual assembly?

Explain why a taxpayer might choose one tax year-end over another if given a choice.

What is the technical difference between brazing and soldering?

What is a polymer?

Sunita is a one-third owner in Bikes-R-Us, an S corporation that experienced a $45,000 loss this year (year 1). If her stock basis is $10,000 at the beginning of the year, how much of this loss clears the hurdle for deductibility (assume at-risk limitation equals the tax-basis limitation)? If she cannot deduct the whole loss, what happens to the remainder?  Is she able to deduct the entire loss if she sells her stock at year-end?

Juanita is the sole shareholder of Belize Corporation (a calendar-year S corporation).  She is considering revoking the S election.  It is February 1, year 1.  What options does Juanita have for timing the effective date of the S election revocation?

Klamath Company, a manufacturer of ballet shoes, is experiencing a period of sustained growth. In an effort to expand its production capacity to meet the increased demand for its product, the company recently made several acquisitions of plant and equipment. Rob Joffrey, newly hired in the position of fixed-asset accountant, requested that Danny Nolte, Klamath’s controller, review the following transactions. Transaction 1: On June 1, 2014, Klamath Company purchased equipment from Wyandot Corporation. Klamath issued a $28,000, 4-year, zero-interest-bearing note to Wyandot for the new equipment. Klamath will pay off the note in four equal installments due at the end of each of the next 4 years. At the date of the transaction, the prevailing market rate of interest for obligations of this nature was 10%. Freight costs of $425 and installation costs of $500 were incurred in completing this transaction. The appropriate factors forthe time value of money at a 10% rate of interest are given below. Future value of $1 for 4 periods 1.46 Future value of an ordinary annuity for 4 periods 4.64 Present value of $1 for 4 periods 0.68 Present value of an ordinary annuity for 4 periods 3.17 Transaction 2: On December 1, 2014, Klamath Company purchased several assets of Yakima Shoes Inc., a small shoe manufacturer whose owner was retiring. The purchase amounted to $220,000 and included the assets listed below. Klamath Company engaged the services of Tennyson Appraisal Inc., an independent appraiser, to determine the fair values of the assets which are also presented below. During its fiscal year ended May 31, 2015, Klamath incurred $8,000 for interest expense in connection with the financing of these assets. Transaction 3: On March 1, 2015, Klamath Company exchanged a number of used trucks plus cash for vacant land adjacent to its plant site. (The exchange has commercial substance.) Klamath intends to usthe land for a parking lot. The trucks had a combined book value of $35,000, as Klamath had recorded $20,000 Marshall Const. Brigham Mfg. Co. Fair value of old crane $ 82,000 Fair value of new crane $200,000 Cash paid 118,000 Cash received 118,000 Yakima Book Value Fair Value Inventory $ 60,000 $ 50,000 Land 40,000 80,000 Buildings 70,000 120,000$170,000 $250,000 of accumulated depreciation against these assets. Klamath’s purchasing agent, who has had previous dealings in the secondhand market, indicated that the trucks had a fair value of $46,000 at the time of the transaction. In addition to the trucks, Klamath Company paid $19,000 cash for the land. Instructions (a) Plant assets such as land, buildings, and equipment receive special accounting treatment. Describe the major characteristics of these assets that differentiate them from other types of assets. (b) For each of the three transactions described above, determine the value at which Klamath Company should record the acquired assets. Support your calculations with an explanation of the underlying rationale. (c) The books of Klamath Company show the following additional transactions for the fiscal year ended May 31, 2015. (1) Acquisition of a building for speculative purposes. (2) Purchase of a 2-year insurance policy covering plant equipment. (3) Purchase of the rights for the exclusive use of a process used in the manufacture of ballet shoes. For each of these transactions, indicate whether the asset should be classified as a plant asset. If it is a plant asset, explain why it is. If it is not a plant asset, explain why not, and identify the proper classification.

The following information was taken from the records of Roland Carlson Inc. for the year 2014. Income tax applicable to income from continuing operations $187,000; income tax applicable to loss on discontinued operations $25,500; income tax applicable to extraordinary gain $32,300; income tax applicable to extraordinary loss $20,400; and unrealized holding gain on availablefor- sale securities $15,000. Extraordinary gain $ 95,000 Cash dividends declared $ 150,000 Loss on discontinued operations 75,000 Retained earnings January 1, 2014 600,000 Administrative expenses 240,000 Cost of goods sold 850,000 Rent revenue 40,000 Selling expenses 300,000 Extraordinary loss 60,000 Sales revenue 1,900,000 Shares outstanding during 2014 were 100,000. Instructions (a) Prepare a single-step income statement. (b) Prepare a comprehensive income statement for 2014, using the two statement format. (c) Prepare a retained earnings statement for 2014.

Fixed, variable, and mixed costs Bridges and Roads is an entity engaged in road construction. Some selected items from its chart of accounts are listed below.   Required For each account, indicate whether the account represents a fixed, variable, or mixed cost for the operation of road construction activity. If mixed, indicate whether it is predominantly fixed or variable. Explain your answers.   (a) Staff wages (f) Office supplies (b) Clerical wages (g) Professional dues (c) Rent (h) Professinal subscriptions (d) Licences (i) Property taxes (e) Insurance (j) Advertising   (LO2)   [Note about problem complexity: These are difficult questions because students will need to first visualise the costs (with very little information) and then apply chapter concepts. The Step 2 questions (A, B, and F) are the ones requiring significant assumptions to generate an answer.]

A 75 mm diameter tube is bent into a rather complex shape with a series of simple tube bending operations. The wall thickness on the tube = 4.75 mm. The tubes will be used to deliver fluids in a chemical plant. In one of the bends where the bend radius is 125 mm, the walls of the tube are flattening badly. What can be done to correct the condition?

In Problem 42.4, the design specification on the diameter is 28.0 ± 2.0 mm. (a) What proportion of parts fall outside the tolerance limits? (b) If the process were adjusted so that its mean diameter = 28.0 mm and the standard deviation remained the same, what proportion of parts would fall outside the tolerance limits? (c) With the adjusted mean at 28.0 mm, determine the value of the process capability index.

Consider the data in Problem 21.10 except that rake angle is a variable, and its effect on the forces in parts (b), (c), and (d) is to be evaluated. (a) Using a spreadsheet calculator, compute the values of shear force, cutting force, thrust force, and friction force as a function of rake angle over a range of rake angles between the high value of 20° in Problem 21.10 and a low value of -10°. Use intervals of 5° between these limits. The chip thickness ratio decreases as rake angle is reduced and can be approximated by the following relationship: r = 0.38 + 0.006 , where r = chip thickness and = rake angle. (b) What observations can be made from the computed results?

n a turning operation on stainless steel with hardness = 200 HB, the cutting speed = 200 m/min, feed = 0.25 mm/rev, and depth of cut = 7.5 mm. How much power will the lathe draw in performing this operation if its mechanical efficiency = 90%. Use Table 21.2 to obtain the appropriate specific energy value

Draw a supply and demand diagram with the price of labour (the wage rate) on the vertical axis and the quantity of labour (the number of workers) on the horizontal axis. What will happen to employment if the government raises wages from the equilibrium to some minimum wage above the equilibrium?