Question & Answer

The financial statements of Marks and Spencer plc (M&S) are available at the book’s companion website or can be accessed at http://annualreport.marksandspencer.com/_assets/downloads/Marksand- Spencer-Annual-report-and-financial-statements-2012.pdf. Instructions Refer to M&S’s financial statements and the accompanying notes to answer the following questions. (a) What amounts relative to income taxes does M&S report in its: (1) 2012 income statement? (2) 31 March 2012 statement of financial position? (3) 2012 statement of cash flows? (b) M&S’s provision for income taxes in 2011 and 2012 was computed at what effective tax rates? (See the notes to the financial statements.) (c) How much of M&S’s 2012 total provision for income taxes was current tax expense, and how much was deferred tax expense? (d) What did M&S report as the significant components (the details) of its 31 March 2012 deferred tax assets and liabilities?

A 6.0-in wafer has a processable area with a 5.85-in diameter. How many square IC chips can be fabricated within this area, if each chip is 0.50 in on a side? Assume the cut lines (streets) between chips are of negligible width.

Instructions Go to the book’s companion website and use information found there to answer the following questions related to The Coca-Cola Company and PepsiCo, Inc. (a) What are the amounts of Coca-Cola’s and PepsiCo’s provision for income taxes for the year 2011? Of each company’s 2011 provision for income taxes, what portion is current expense and what portion is deferred expense? (b) What amount of cash was paid in 2011 for income taxes by Coca-Cola and by PepsiCo? (c) What was the U.S. federal statutory tax rate in 2011? What was the effective tax rate in 2011 for Coca Cola and PepsiCo? Why might their effective tax rates differ? (d) For year-end 2011, what amounts were reported by Coca-Cola and PepsiCo as (1) gross deferred tax assets and (2) gross deferred tax liabilities? (e) Do either Coca-Cola or PepsiCo disclose any net operating loss carrybacks and/or carryforwards at year-end 2011? What are the amounts, and when do the carryforwards expire?

What is press fit technology in electrical connections?

How does aggregate planning differ from the master production scheduling?

A compound die will be used to blank and punch a large washer out of 6061ST aluminum alloy sheet stock 3.50 mm thick. The outside diameter of the washer is 50.0 mm and the inside diameter is 15.0 mm. Determine (a) the punch and die sizes for the blanking operation, and (b) the punch and die sizes for the punching operation.

Explain how the amount of cash payments to suppliers is computed under the direct method.

For each item below, indicate to which category of elements of financial statements it belongs. (a) Retained earnings (e) Depreciation (h) Dividends (b) Sales (f) Loss on sale of equipment (i) Gain on sale of investment (c) Additional paid-in capital (g) Interest payable (j) Issuance of common stock (d) Inventory

What is the starting material in fused-deposition modeling?

In January 2014, installation costs of $6,000 on new machinery were charged to Maintenance and Repairs Expense. Other costs of this machinery of $30,000 were correctly recorded and have been depreciated using thestraight-line method with an estimated life of 10 years and no salvage value. At December 31, 2015, it is decided that the machinery has a remaining useful life of 20 years, starting with January 1, 2015. What entry(ies) should be made in 2015 to correctly record transactions related to machinery, assuming the machinery has no salvage value? The books have not been closed for 2015 and depreciation aexpense has not yet been recorded for 2015.

In an electrochemical machining operation, the frontal working area of the electrode is 2.5 in2. The applied current = 1500 amps, and the voltage = 12 volts. The material being cut is pure aluminum, whose specific removal rate is given in Table 26.1. (a) If the ECM process is 90 percent efficient, determine the rate of metal removal in in3/hr. (b) If the resistivity of the electrolyte = 6.2 ohm-in, determine the working gap

Can a bank simultaneously maximize return and minimize credit risk? If not, what can it do instead? (LO4)

Mark received 10 ISOs at the time he started working for Hendricks Corporation five years ago, when Hendricks’s price was $5 per share (each option gives him the right to purchase 10 shares of Hendricks Corporation stock for $5 per share). Now that Hendricks’s share price is $35 per share, Mark intends to exercise all of his options and hold all of his shares for more than one year. Assume that more than a year after exercise, Mark sells the stock for $35 a share. What are Mark’s tax consequences on the grant date, the exercise date, and the date he sells the shares, assuming his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent?

Define viscosity of a fluid.

Busytown Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. Busytown Corporation gave the machine plus $340 to Dick Tracy Business Machine Company (dealer) in exchange for a new machine. Assume the following information about the machines. Busytown Corp. Dick Tracy Co. (Old Machine) (New Machine) Machine cost $290 $270 Accumulated depreciation 140 –0– Fair value 85 425 Instructions For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.)

Try using the same type of analysis in the labour market to show what will happen if there is an increase in demand for labour. What is the ‘price’ of labour?

Carow Corporation purchased, as a held-to-maturity investment, $60,000 of the 8%, 5-year bonds of Harrison, Inc. for $65,118, which provides a 6% return. The bonds pay interest semiannually. Prepare Carow’s journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective-interest amortization is used.

Tawana owns and operates a sole proprietorship and has a 40 percent marginal tax rate.  She provides her son, Jonathon, $8,000 a year for college expenses.  Jonathon works as a pizza delivery person every fall and has a marginal tax rate of 15 percent.  a. What could Tawana do to reduce her family tax burden?  b.How much pretax income does it currently take Tawana to generate the $8,000 after-taxes given to Jonathon?  c. If Jonathon worked for his mother’s sole proprietorship, what salary would she have to pay him to generate $8,000 after taxes (ignoring any Social Security, Medicare, or self-employment tax issues)?  d.How much money would this strategy save?

Explain the difference between a freely floating system and a dirty float. Which type is more representative of the U.S. system? (LO1)

Compare and contrast how a Land Rover SUV and a Mercedes-Benz sedan are treated under the luxury auto rules. Also include a discussion of the similarities and differences in available §179 expense.

Taylor Marina has 300 available slips that rent for $800 per season. Payments must be made in full at the start of the boating season, April 1, 2015. Slips for the next season may be reserved if paid for by December 31, 2014. Under a new policy, if payment is made by December 31, 2014, a 5% discount is allowed. The boating season ends October 31, and the marina has a December 31 year-end. To provide cash flow for major dock repairs, the marina operator is also offering a 20% discount to slip renters who pay for the 2016 season. For the fiscal year ended December 31, 2014, all 300 slips were rented at full price. Two hundred slips were reserved and paid for the 2015 boating season, and 60 slips for the 2016 boating season were reserved and paid for. Instructions (a) Prepare the appropriate journal entries for fiscal 2014. (b) Assume the marina operator is unsophisticated in business. Explain the managerial significance of the accounting above to this person.

Gottlieb Co. owes $199,800 to Ceballos Inc. The debt is a 10-year, 11% note. Because Gottlieb Co. is in financial trouble, Ceballos Inc. agrees to accept some property and cancel the entire debt. The property has a book value of $90,000 and a fair value of $140,000. Instructions (a) Prepare the journal entry on Gottlieb’s books for debt restructure. (b) Prepare the journal entry on Ceballos’s books for debt restructure.

Regina Henry deposited $20,000 in a money market certificate that provides interest of 10% compounded quarterly if the amount is maintained for 3 years. How much will Regina Henry have at the end of 3 years?

On January 1, 2015, Titania Inc. granted stock options to officers and key employees for the purchase of 20,000 shares of the company’s $10 par common stock at $25 per share. The options were exercisable within a 5-year period beginning January 1, 2017, by grantees still in the employ of the company, and expiring December 31, 2021. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $350,000. On April 1, 2016, 2,000 options were terminated when the employees resigned from the company. The market price of the common stock was $35 per share on this date. On March 31, 2017, 12,000 options were exercised when the market price of the common stock was $40 per share. Instructions Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended December 31, 2015, 2016, and 2017.

During a recent management meeting at Sunset Consulting Services, a team member questioned why the costing system had multiple indirect cost pools given it would be easier just to have one.  Provide a brief response to explain why the business has adopted multiple indirect costs pools.