Question & Answer

Describe how ionic bonding works?

Roth Inc. has a deferred tax liability of $68,000 at the beginning of 2015. At the end of 2015, it reports accounts receivable on the books at $90,000 and the tax basis at zero (its only temporary difference). If the enacted tax rate is 34% for all periods, and income taxes payable for theperiod is $230,000, determine the amount of total income tax expense to report for 2015.

Boots Inc. is owned equally by Alfonso and his daughter Nancy, each of whom holds 1,000 shares in Boots. Alfonso wants to retire from the company, and it is decided that Boots will redeem all 1,000 of Alfonso’s shares for $25,000 per share on December 31 of this year. Alfonso’s tax basis in each share is $500. Boots Inc. has current E&P of $1,000,000 and accumulated E&P of $5,000,000.

Assume that as traffic density increases along a given stretch of road, there comes a point when traffic begins to slow down. The following table gives the times taken for a car to travel the stretch of road (in minutes) according to the number of cars entering the road per minute. Cars entering the road 5 6 7 8 9 10 11 Journey time 10 10 11 13 16 22 30 (a)  Copy out the table and add the following rows: (i) total journey time for all cars; (ii) extra journey time as traffic increases by one more car (marginal social time cost); (iii) additional time cost imposed on other road users for each additional car entering the road (marginal external time cost). (See Table 13.3 in the text.) (b)  Assume that time is valued at 10p per minute. On a graph, plot the marginal private time cost (journey time) and the marginal social time cost. (c)  Assume that electronic road pricing is introduced. What charge should be levied when traffic density reaches (i) 6 cars per minute; (ii) 8 cars per minute; (iii) 11 cars per minute? (d)  What additional information would you need in order to work out the socially efficient traffic density on this particular stretch of road?

Consider the existing economic conditions, including inflation and economic growth. Do you think the Fed should increase interest rates, reduce interest rates, or leave interest rates at their present levels? Offer some logic to support your answer. (LO2; LO3)

Define batch production and describe why it is often used for medium-quantity production products.

What was the purpose of the Securities Act of 1933? What was the purpose of the Securities Exchange Act of 1934? Do these laws prevent investors from making poor investment decisions? Explain. (LO2)

How do the economic policies of the major political parties differ? (If it is near an election you could refer to their manifestos.) How far can an economist go in assessing these policies?

What are the potential benefits from developing an input-output chart of accounts?

4 A disk-shaped part is to be cast out of aluminum. The diameter of the disk = 500 mm and its thickness = 20 mm. If the mold constant = 2.0 sec/mm2 in Chvorinov's rule, how long will it take the casting to solidify?

Define a change in estimate and provide an illustration. When is a change in accounting estimate effected by a change in accounting principle?

This is not tax planning.  Instead, this strategy is tax evasion.  The rewards of tax evasion include stiff monetary penalties and imprisonment.

In a §351 exchange, how does the tax treatment differ in cases where liabilities are assumed with a tax-avoidance purpose versus where liabilities assumed exceed basis?

A steel casting has a cylindrical geometry with 4.0 in diameter and weighs 20 lb. This casting takes 6.0 min to completely solidify. Another cylindrical-shaped casting with the same diameter-to-length ratio weighs 12 lb. This casting is made of the same steel, and the same conditions of mold and pouring were used. Determine: (a) the mold constant in Chvorinov's rule, (b) the dimensions, and (c) the total solidification time of the lighter casting. The density of steel = 490 lb/ft3 .

Indiana Jones Corporation enters into a 6-year lease of equipment on January 1, 2014, which requires 6 annual payments of $40,000 each, beginning January 1, 2014. In addition, Indiana Jones guarantees the lessor a residual value of $20,000 at lease-end. The equipment has a useful life of 6 years. Prepare Indiana Jones’ January 1, 2014, journal entries assuming an interest rate of 10%.

Describe a defined-benefit pension plan. Describe a defined-contribution plan and explain how it differs from a defined-benefit plan. (LO1)

What are the two basic methods of accounting for longterm construction contracts? Indicate the circumstances that determine when one or the other of these methods should be used.

What is the difference between vacuum permanent-mold casting and vacuum molding?

What is the indirect effect of a change in accounting principle? Briefly describe the reporting of the indirect effects of a change in accounting principle.

What effect will the discrimination by the firm have on the wages and employment of black workers in other firms in the area if (a) these other firms discriminate against black workers; (b) they do not discriminate?

A vertical true centrifugal casting process is used to produce bushings that are 200 mm long and 200 mm in outside diameter. If the rotational speed during solidification is 500 rev/min, determine the inside diameter at the top of the bushing if the inside diameter at the bottom is 150 mm.

On January 2, 2014, $100,000 of 11%, 10-year bonds were issued for $97,000. The $3,000 discount was charged to Interest Expense. The bookkeeper, Mark Landis, records interest only on the interest payment dates of January 1 and July 1. What is the effect on reported net income for 2014 of this error, assuming straight-line amortization of the discount? What entry is necessary to correct for this error, assuming that the books are not closed for 2014?

What is the time value of money? Why should accountants have an understanding of compound interest, annuities, and present value concepts?

: Describe some of the diversity challenges that managers face in the United States and globally.

Distinguish among the following: (1) a general checking account, (2) an imprest bank account, and (3) a lockbox account.