Question & Answer

Assume that IBM leased equipment that was carried at a cost of $150,000 to Sharon Swander Company. The term of the lease is 6 years beginning January 1, 2014, with equal rental payments of $30,044 at the beginning of each year. All executory costs are paid by Swander directly to third parties. The fair value of the equipment at the inception of the lease is $150,000. The equipment has a useful life of 6 years with no salvage value. The lease has an implicit interest rate of 8%, no bargain-purchase option, and no transfer of title. Collectibility is reasonably assured with no additional cost to be incurred by IBM. Prepare IBM’s January 1, 2014, journal entries at the inception of the lease.

Extrusion is a fundamental shaping process. Describe it

Describe what happens to the individual particles during compaction.

1.      : Press the board to devise a more comprehensive set of selection criteria—including test results, but also taking into account supervisory experience, ability to motivate employees, and knowledge of agency procedures—that can be explained and justified to the board and to employees.

List the types of environments that can be present during the sintering process according to the powder metallurgy video.

Provide examples of the four types of corporate culture.

When the records of Debra Hanson Corporation were reviewed at the close of 2015, the errors listed below were discovered. For each item, indicate by a check mark in the appropriate column whether the error resulted in an overstatement, an understatement, or had no effect on net income for the years 2014 and 2015. 2014 2015 Over- Under- No Over- Under- No Item statement statement Effect statement statement Effect 1. Failure to record amortization of patent in 2015. 2. Failure to record the correct amount of ending 2014 inventory. The amount was understated because of an error in calculation. 3. Failure to record merchandise purchased in 2014. Merchandise was also omitted from ending inventory in 2014 but was not yet sold. 4. Failure to record accrued interest on notes payable in 2014; that amount was recorded when paid in 2015. 5. Failure to refl ect supplies on hand on balance sheet at end of 2014.

What is a rivet?

How do partners determine whether they are passive participants in partnerships when applying the passive activity loss limitation rules?

What does it mean to “flip” shares? Why would investors want to flip shares? (LO3)

Tedesco Company changed depreciation methods in 2014 from double-declining-balance to straight-line. Depreciation prior to 2014 under double-declining-balance was $90,000, whereas straight-line depreciation prior to 2014 would have been $50,000. Tedesco’s depreciable assets had a cost of $250,000 with a $40,000 salvage value, and an 8-year remaining useful life at the beginning of 2014. Prepare the 2014 journal entries, if any, related to Tedesco’s depreciable assets.

On December 31, 2014, before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three pieces of equipment. 1. Equipment A was purchased January 2, 2011. It originally cost $540,000 and, for depreciation purposes, the straight-line method was originally chosen. The asset was originally expected to be useful for 10 years and have a zero salvage value. In 2014, the decision was made to change the depreciation method from straight-line to sum-of-the-years’-digits, and the estimates relating to useful life and salvage value remained unchanged. 2. Equipment B was purchased January 3, 2010. It originally cost $180,000 and, for depreciation purposes, the straight-line method was chosen. The asset was originally expected to be useful for 15  and have a zero residual value. In 2014, the decision was made to shorten the total life of this asset to 9 years and to estimate the residual value at $3,000. 3. Equipment C was purchased January 5, 2010. The asset’s original cost was $160,000, and this amount was entirely expensed in 2010. This particular asset has a 10-year useful life and no residual value. The straight-line method was chosen for depreciation purposes. Additional data: 1. Income in 2014 before depreciation expense amounted to $400,000. 2. Depreciation expense on assets other than A, B, and C totaled $55,000 in 2014. 3. Income in 2013 was reported at $370,000. 4. Ignore all income tax effects. 5. 100,000 shares of common stock were outstanding in 2013 and 2014. Instructions (a) Prepare all necessary entries in 2014 to record these determinations. (b) Prepare comparative retained earnings statements for Madrasa Inc. for 2013 and 2014. The company had retained earnings of $200,000 at December 31, 2012.

Given a large volume of metallic powders, all of which are perfectly spherical and having the same exact diameter, what is the maximum possible packing factor that the powders can take?

Evaluate balanced scorecard design             Frieda’s Fizz brews specialty soft drinks, including root beer and other flavours. Its vision is 'To proudly produce and sell extraordinarily smooth, rich, and delicious soft drinks to satisfy kids of all ages.' The entity has a reputation for high quality and unique flavour, enabling it to sell soft drinks at a premium price to gourmet grocery stores in the local area. The entity’s managers plan to expand the business to other geographic regions, but they want to ensure that they maintain high quality as the entity grows. They have decided to implement a balanced scorecard, and they have chosen the following balanced scorecard measures: Financial Perspective 1.       Breakdown of manufacturing cost per case: ingredients, direct labour, packaging materials, and overhead 2.       Operating profit per case 3.       Return on investment          Customer Perspective 4.       Number of customer complaints relating to taste, freshness, package integrity, appearance, and foreign objects 5.       Quality index (an internal measure of manufacturing quality, including microbiology and chemistry) 6.       Percentage sales growth          Internal Business Process Perspective 7.       Ratio of plant production hours to total available time 8.       Throughput (number of cases packaged) 9.       Waste and scrap as a percent of total production cost          Learning and Growth Perspective 10.     Number of work-related injuries 11.     Number of training hours per employee 12.     Number of community volunteer hours per employee   Required  (a)    Explain why uncertainties exist about the best balanced scorecard measures for Frieda’s Fizz. (Do not discuss any of the measures already listed. Instead, focus on why any set of measures might not provide ideal information and on why the managers cannot know with certainty which set of measures is best.) (b)     For the balanced scorecard perspective:                                               (i)          Describe the strengths and weaknesses of the measures chosen for that category.                                             (ii)          Reach a conclusion about the reasonableness of the set of balanced scorecard measures for that category. (c)     What are the pros and cons of implementing a balanced scorecard? (d)     How valuable do you think the balanced scorecard will be in helping the managers of Frieda’s Fizz meet its vision? Explain. (e)     The managers of Frieda’s Fizz want your evaluation of their proposed balanced scorecard. Use the information you learned from the preceding analyses to write a memo to the managers presenting your evaluation of                                               (i)          whether they should adopt a balanced scorecard                                             (ii)          the proposed balanced scorecard design.

The flow curve for a certain metal has a strain-hardening exponent of 0.22 and strength coefficient of 54,000 lb/in2 . Determine (a) the flow stress at a true strain = 0.45 and (b) the true strain at a flow stress = 40,000 lb/in2 .

Describe the slip casting process in traditional ceramics processing

Gordon Company started operations on January 1, 2009, and has used the FIFO method of inventory valuation since its inception. In 2015, it decides to switch to the average-cost method. You are provided with the following information. Net Income Retained Earnings (Ending Balance) Under FIFO Under Average-Cost Under FIFO 2009 $100,000 $ 90,000 $100,000 2010 70,000 65,000 160,000 2011 90,000 80,000 235,000 2012 120,000 130,000 340,000 2013 300,000 290,000 590,000 2014 305,000 310,000 780,000 Instructions (a) What is the beginning retained earnings balance at January 1, 2011, if Gordon prepares comparative financial statements starting in 2011? (b) What is the beginning retained earnings balance at January 1, 2014, if Gordon prepares comparative financial statements starting in 2014? (c) What is the beginning retained earnings balance at January 1, 2015, if Gordon prepares singleperiod financial statements for 2015? (d) What is the net income reported by Gordon in the 2014 income statement if it prepares comparative financial statements starting with 2012?

The following facts pertain to a non-cancelable lease agreement between Lennox Leasing Company and Gill Company, a lessee. (Round all numbers to the nearest cent.) Inception date: May 1, 2014 Annual lease payment due at the beginning of each year, beginning with May 1, 2014: $18,829.49 Bargain-purchase option price at end of lease term: $4,000.00 Lease term: 5 years Economic life of leased equipment: 10 years Lessor’s cost: $65,000.00; fair value of asset at May 1, 2014, $81,000.00 Lessor’s implicit rate: 10%; lessee’s incremental borrowing rate 10% The lessee assumes responsibility for all executory costs. Instructions (a) Discuss the nature of this lease to Gill Company. (b) Discuss the nature of this lease to Lennox Company. (c) Prepare a lease amortization schedule for Gill Company for the 5-year lease term. (d) Prepare the journal entries on the lessee’s books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2014 and 2015. Gill’s annual accounting period ends on December 31. Reversing entries are used by Gill.

Gerald Englehart Industries changed from the doubledeclining- balance to the straight-line method in 2015 on all its plant assets. There was no change in the assets’ salvage values or useful lives. Plant assets, acquired on January 2, 2012, had an original cost of $1,600,000, with a $100,000 salvage value and an 8-year estimated useful life. Income before depreciation expense was $270,000 in 2014 and $300,000 in 2015. Instructions (a) Prepare the journal entry(ies) to record depreciation expense in 2015. (b) Starting with income before depreciation expense, prepare the remaining portion of the income nstatement for 2014 and 2015.

What are the major types of subsequent events? Indicate how each of the following “subsequent events” would be reported. (a) Collection of a note written off in a prior period. (b) Issuance of a large preference share offering. (c) Acquisition of a company in a different industry. (d) Destruction of a major plant in a flood. (e) Death of the company’s chief executive officer (CEO). (f) Additional wage costs associated with settlement of a four-week strike. (g) Settlement of an income tax case at considerably more tax than anticipated at year-end. (h) Change in the product mix from consumer goods to industrial goods.

Morlan Corporation is preparing its December 31, 2014, financial statements. Two events that occurred between December 31, 2014, and March 10, 2015, when the statements were authorized for issue, are described below. 1. A liability, estimated at $160,000 at December 31, 2014, was settled on February 26, 2015, at $170,000. 2. A flood loss of $80,000 occurred on March 1, 2015. Instructions What effect do these subsequent events have on 2014 net income?

There are 12 correct answers in the following multiple choice questions (some questions have multiple answers that are correct). To attain a perfect score on the quiz, all correct answers must be given. Each correct answer is worth 1 point. Each omitted answer or wrong answer reduces the score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. Percentage score on the quiz is based on the total number of correct answers. 4.1 Which one of the following metals has the lowest density: (a) aluminum, (b) copper, (c) magnesium, or (d) tin? 4.2 The thermal expansion properties of polymers are generally (a) greater than, (b) less than, or (c) the same as those of metals? 4.3 In the heating of most metal alloys, melting begins at a certain temperature and concludes at a higher temperature. In these cases, which of the following temperatures marks the beginning of melting: (a) liquidus or (b) solidus? 4.4 Which one of the following materials has the highest specific heat: (a) aluminum, (b) concrete, (c) polyethylene, or (d) water? 4.5 Copper is generally considered easy to weld because of its high thermal conductivity: (a) true or (b) false? 4.6 The mass diffusion rate dm/dt across a boundary between two different metals is a function of which of the following variables (four best answers): (a) concentration gradient dc/dx, (b) contact area, (c) density, (d) melting point, (e) thermal expansion, (f) temperature, and (g) time? 4.7 Which of the following pure metals is the best conductor of electricity: (a) aluminum, (b) copper, (c) gold, or (d) silver? 4.8 A superconductor is characterized by which of the following (one best answer): (a) high conductivity, (b) resistivity properties between those of conductors and semiconductors, (c) very low resistivity, or (d) zero resistivity? 4.9 In an electrolytic cell, the anode is the electrode that is (a) positive or (b) negative

As part of the year-end audit, you are discussing the disclosure checklist with your client. The checklist identifies the items that must be disclosed in a set of IFRS financial statements. The client is surprised by the disclosure item related to accounting policies. Specifically, since the audit report will attest to the statements being prepared in accordance with IFRS, the client questions the accounting policy checklist item. The client has asked you to conduct some research to verify the accounting policy disclosures. Instructions Access the IFRS authoritative literature at the IASB website (http://eifrs.iasb.org/). (Click on the IFRS tab and then register for free eIFRS access if necessary.) When you have accessed the documents, you can use the search tool in your Internet browser to respond to the following questions. (Provide paragraph citations.) (a) In general, what should disclosures of accounting policies encompass? (b) List some examples of the most commonly required disclosures.

Bo Newman will invest $10,000 today in a fund that earns 5% annual interest. How many years will it take for the fund to grow to $17,100?

Pierre recently received a tax penalty for failing to file a tax return.  He was upset to receive the penalty, but he was comforted by the thought that he will get a tax deduction for paying the penalty.     a.  Use an available tax research service to determine if Pierre is correct.   b.  Write a memo communicating the results of your research.