Question & Answer

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.

If the federal government planned to expand the space program, how might this change affect interest rates? (LO1)

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/ Marks-and-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 specific items does M&S discuss in its Note 1—Summary of Significant Accounting Policies? (List the headings only.) (b) For what segments did M&S report segmented information? Which segment is the largest? Who is M&S’s largest customer? (c) What interim information was reported by M&S?

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) (1) What specific items does Coca-Cola discuss in its Note 1—Accounting Policies? (Prepare a list of the headings only.) (2) What specific items does PepsiCo discuss in its Note 2—Our Summary of Significant Accounting Policies? (Prepare a list of the headings only.) (b) For what lines of business or segments do Coca-Cola and PepsiCo present segmented information? (c) Note and comment on the similarities and differences between the auditors’ reports submitted by the independent auditors of Coca-Cola and PepsiCo for the year 2011.

How do the tax laws treat family members for purposes of limiting the number of owners an S corporation may have?

Rasheed works for Company A, earning $350,000 in salary during 2024.  Assuming he is single and has no other sources of income, what amount of FICA tax will Rasheed pay for the year?

The before-tax income for Lonnie Holdiman Co. for 2014 was $101,000 and $77,400 for 2015. However, the accountant noted that the following errors had been made: 1. Sales for 2014 included amounts of $38,200 which had been received in cash during 2014, but for which the related products were delivered in 2015. Title did not pass to the purchaser until 2015. 2. The inventory on December 31, 2014, was understated by $8,640. 3. The bookkeeper in recording interest expense for both 2014 and 2015 on bonds payable made the following entry on an annual basis. Interest Expense 15,000 Cash 15,000 The bonds have a face value of $250,000 and pay a stated interest rate of 6%. They were issued at a discount of $15,000 on January 1, 2014, to yield an effective-interest rate of 7%. (Assume that the effective-yield method should be used.) 4. Ordinary repairs to equipment had been erroneously charged to the Equipment account during 2014 and 2015. Repairs in the amount of $8,500 in 2014 and $9,400 in 2015 were so charged. The company applies a rate of 10% to the balance in the Equipment account at the end of the year in its determination of depreciation charges. Instructions Prepare a schedule showing the determination of corrected income before taxes for 2014 and 2015.

Claude purchased raw land three years ago for $1,500,000 to develop into lots and sell to individuals planning to build their dream homes. Claude intended to treat this property as inventory, like his other development properties. Before completing the development of the property, however, he decided to contribute it to South Peak Investors LLC when it was worth $2,500,000, in exchange for a 10 percent capital and profits interest. South Peak’s strategy is to hold land for investment purposes only and then sell it later at a gain. a. If South Peak sells the property for $3,000,000 four years after Claude’s contribution, how much gain or loss is recognized and what is its character? [Hint: See §724.] b. If South Peak sells the property for $3,000,000 five and one-half years after Claude’s contribution, how much gain or loss is recognized, and what is its character?

Various types of accounting changes can affect the financial statements of a business enterprise differently. Assume that the following list describes changes that have a material effect on the financial statements for the current year of your business enterprise. 1. A change from the completed-contract method to the percentage-of-completion method of accounting for long-term construction-type contracts. 2. A change in the estimated useful life of previously recorded fixed assets as a result of newly acquired information. 3. A change from deferring and amortizing preproduction costs to recording such costs as an expense when incurred because future benefits of the costs have become doubtful. The new accounting method was adopted in recognition of the change in estimated future benefits. 4. A change from including the employer share of FICA taxes with payroll tax expenses to including it with “Retirement benefits” on the income statement. 5. Correction of a mathematical error in inventory pricing made in a prior period. 6. A change from presentation of statements of individual companies to presentation of consolidated statements. 7. A change in the method of accounting for leases for tax purposes to conform with the financial accounting method. As a result, both deferred and current taxes payable changed substantially. 8. A change from the FIFO method of inventory pricing to the LIFO method of inventory pricing. Instructions Identify the type of change that is described in each item above and indicate whether the prior year’s financial statements should be recast when presented in comparative form with the current year’s financial statements.

Suppose you asked your favorite AI query tool “Can a single member LLC with one owner who is an individual elect to be taxed as an S corporation?” and the AI tool responded as follows:

Using the integrated DAD/DAS and EAPC/LRPC framework, analyse the effect of an unexpected increase in aggregate demand assuming that markets adjust relatively rapidly. Compare the adjustment path of the economy when inflationary expectations remain anchored with that when expectations are based on actual inflation in the previous period.

How does increasing temperature affect the parameters in the flow curve equation?

Illustrate equilibrium in the market for loanable funds using a demand and supply diagram.

What will be the effect of an expansionary fiscal policy on interest rates and national income if there is a perfectly elastic supply of international finance?

Why is friction generally undesirable in metal forming operations?

1.15     Structural cost drivers (a) With reference to Marino Designs in Self-study problem 2, demonstrate the meaning of the structural cost drivers: scope, technology and experience. (b) Classify Marino Designs’ likely strategy as low cost or product differentiation. Explain.

Summarize the six steps used in managerial decision making.

Rock Creek LLC was recently formed with the following members: Name Tax Year-End Capital/Profits % Mark Banks December 31 35% Highball Properties LLC March 31 25% Chavez Builders Inc. November 30 40% What is the required taxable year-end for Rock Creek LLC?

Do behavioural theories of the firm allow us to make any predictions about firms’ prices and output?