Question & Answer

As part of the year-end accounting process and review of operating policies, Cullen Co. is considering a change in the accounting for its equipment from the straight-line method to an accelerated method. Your supervisor wonders how the company will report this change in accounting. It has been a few years since he took intermediate accounting, and he cannot remember whether this change would be treated in a retrospective or prospective manner. Your supervisor wants you to research the authoritative guidance on a change in accounting policy related to depreciation methods. 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) What are the accounting and reporting guidelines for a change in accounting policy related to depreciation methods? (b) What are the conditions that justify a change in depreciation method, as contemplated by Cullen Co.?

Agua Linda Inc. is a calendar-year corporation. What is the original due date for the corporate tax return? What happens if the original due date falls on a Saturday?

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) Were there changes in accounting policies reported by M&S during the two years covered by its income statements (2011–2012)? If so, describe the nature of the change and the year of change. (b) What types of estimates did M&S discuss in 2012?

What is dielectric strength as a material property?

Franco converted a building from personal to business use in May 2021 when the fair market value was $55,000. He purchased the building in July 2018 for $80,000. On December 15 of this year, Franco sells the building for $40,000. On the date of the sale, the accumulated depreciation on the building is $5,565. What is Franco’s recognized gain or loss on the sale?

Timpanogos Inc. is an accrual-method, calendar-year corporation. For 2024, it reported financial statement income after taxes of $1,342,000. Timpanogos provided the following information relating to its 2024 activities:   Life insurance proceeds as a result of CEO’s death $200,000   Revenue from sales (for book and tax purposes) 2,000,000   Cost of goods sold for book and tax purposes   300,000   Premiums paid on the key-person life insurance policies (the policies have no cash surrender value)     21,000   Charitable contributions     180,000   Interest income on tax-exempt bonds    40,000   Interest paid on loan obtained to purchase tax-exempt bonds     45,000   Rental income payments received and earned in 2024     15,000   Rental income payments received in 2023 but earned in 2024     10,000     Rental income payments received in 2024 but not earned by year-end    30,000   Tax depreciation    55,000   Book Depreciation    25,000   Net capital loss    42,000   Federal income tax expense for books 310,000       Required:  a. Reconcile book income to taxable income for Timpanogos Inc. Be sure to start with book income and identify all of the adjustments necessary to arrive at taxable income. b. Identify each book-tax difference as either permanent or temporary. c. Complete Schedule M-1 for Timpanogos. d. Compute Timpanogos, Inc.’s tax liability.

1.              : Try to hire the fewest possible Muslim workers so the work line will be efficient on second shift.

On January 1, 2014, a machine was purchased for $900,000 by Young Co. The machine is expected to have an 8-year life with no salvage value. It is to be depreciated on a straight-line basis. The machine was leased to St. Leger Inc. on January 1, 2014, at an annual rental of $210,000. Other relevant information is as follows. 1. The lease term is for 3 years. 2. Young Co. incurred maintenance and other executory costs of $25,000 in 2014 related to this lease. 3. The machine could have been sold by Young Co. for $940,000 instead of leasing it. 4. St. Leger is required to pay a rent security deposit of $35,000 and to prepay the last month’s rent of $17,500. Instructions (a) How much should Young Co. report as income before income tax on this lease for 2014? (b) What amount should St. Leger Inc. report for rent expense for 2014 on this lease?

Mustafa, Mickayla, and Taylor are starting a new business (MMT). To get the business started, Mustafa is contributing $200,000 for a 40 percent ownership interest, Mickayla is contributing a building with a value of $200,000 and a tax basis of $150,000 for a 40 percent ownership interest, and Taylor is contributing legal services for a 20 percent ownership interest. What amount of gain or income is each owner required to recognize under each of the following alterative situations? [Hint: Look at §§351 and 721.] a. MMT is formed as a C corporation. b. MMT is formed as an S corporation. c. MMT is formed as an LLC (taxed as a partnership).

Behaviour effect of share options Assume you are a senior manager at a publicly listed company. Under the company’s longer-term incentive plan you have recently received a parcel of share options. These share options can only be exercised (converted to shares) after three years.   Required How might this incentive affect your behaviour and decision making?             (LO3)

Describe the ways that insurance firms are utilizing innovative technologies to provide their services. (LO4)

All else being equal, would a taxpayer with passive losses prefer to have wage income or passive income?

What is a photoresist?

Assume that the government cuts its expenditure and thereby runs a public-sector surplus. (a)  What will this do initially to equilibrium national income? (b)  What will it do to the demand for money and initially to interest rates? (c)  Under what circumstances will it lead to (i) a decrease in money supply; (ii) no change in money supply? (d)  What effect will (i) and (ii) have on the rate of interest compared with its original level?

A tapered surface is to be turned on an automatic lathe. The workpiece is 750 mm long with minimum and maximum diameters of 100 mm and 200 mm at opposite ends. The automatic controls on the lathe permit the surface speed to be maintained at a constant value of 200 m/min by adjusting the rotational speed as a function of workpiece diameter. Feed = 0.25 mm/rev and depth of cut = 3.0 mm. The rough geometry of the piece has already been formed, and this operation will be the final cut. Determine (a) the time required to turn the taper and (b) the rotational speeds at the beginning and end of the cut.

Learning and growth perspective Markman Ltd, a large pharmaceutical company, is concerned about the ability of its research and development department to develop profitable new prescription drugs. Once a drug has been developed and patented, it takes 9 to 12 years to meet all of the regulatory requirements. The company can then market the drug for about 11.5 years, on average, before the patent expires. Then competitors produce generic drugs. Employees currently participate in profit-sharing plans, but the company wants to give additional bonuses to improve performance. Markman decided to implement a balanced scorecard approach.   Required (a)     Explain why monitoring and rewarding non-financial performance might be particularly important for Markman. (b)     List one objective for Markman’s learning and growth perspective. (c)     List two performance measures for the objective you picked in part (B).

What is the approximate size scale in microsystem technology?

How would Figure 3.3 change if the government were able to sell the surplus food on the world market?

] Jimmer has contributed $15,000 to his Roth IRA, and the balance in the account is $18,000. In the current year, Jimmer withdrew $17,000 from the Roth IRA to pay for a new car. If Jimmer’s marginal ordinary income tax rate is 24 percent, what amount of tax and penalty, if any, is Jimmer required to pay on the withdrawal in each of the following alternative situations? a. Jimmer opened the Roth account 44 months before he withdrew the $17,000, and Jimmer is 62 years of age. b. Jimmer opened the Roth account 44 months before he withdrew the $17,000, and Jimmer is age 53. c. Jimmer opened the Roth account 76 months before he withdrew the $17,000, and Jimmer is age 62. d. Jimmer opened the Roth account 76 months before he withdrew the $17,000, and Jimmer is age 53.

Clyde is a cash-method taxpayer who reports on a calendar-year basis. This year Paylate Corporation has decided to pay Clyde a year-end bonus of $1,000. Determine the amount Clyde should include in his gross income this year under the following circumstances:

Shin Corporation had a projected benefit obligation of $3,100,000 and plan assets of $3,300,000 at January 1, 2014. Shin also had a net actuarial loss of $465,000 in accumulated OCI at January 1, 2014. The average remaining service period of Shin’s employees is 7.5 years. Compute Shin’s minimum amortization of the actuarial loss.

Analysis of WIP T-account Jasper Company uses a job costing system. Overhead is allocated based on 120 per cent of direct labour cost. Last month’s transactions in the work in process account are shown here:       Only one job, number 850, was still in process at the end of the month. Job 850 was charged with $9000 in overhead for the month.   Required (a)          What is the ending balance in the WIP account? (b)          How much direct labour cost was used for job 850? (c)           What is the amount of direct materials used for job 850?

Among the synthetic fiber materials, which are the most important?

In general, what effect does an operating distribution have on the partnership?

1.      : Instruct Rukman participants to reveal their participation in the corporate marketing program only if directly asked by the person they are talking to about the client’s products.