Question & Answer

Presented below is information from Perez Computers Incorporated. July 1 Sold $20,000 of computers to Robertson Company with terms 3/15, n/60. Perez uses the gross method to record cash discounts. 10 Perez received payment from Robertson for the full amount owed from the July transactions. 17 Sold $200,000 in computers and peripherals to The Clark Store with terms of 2/10, n/30. 30 The Clark Store paid Perez for its purchase of July 17. Instructions Prepare the necessary journal entries for Perez Computers.

In what order are the loss limitation rules applied to limit partners’ losses from partnerships?

1.       : What types of analysis can managers perform to help them diagnose a company’s financial condition? How might a review of financial statements help managers diagnose other kinds of performance problems as well?

{Planning} Clark owns stock in BCS Corporation that he purchased in January of the current year.  The stock has appreciated significantly during the year.  It is now December of the current year, and Clark is deciding whether or not he should sell the stock.  What tax and nontax factors should Clark consider before making the decision on whether to sell the stock now?

Determine the blanking force required in Problem 20.2, if the shear strength of the steel = 325 MPa and the tensile strength is 450 MPa.

How will the following reduce the moral hazard problem? (a)  A no-claims bonus in an insurance policy. (b)  You having to pay the first so many pounds of any insurance claim (an ‘excess’). (c)  The use of performance-related pay.

In general, how are unincorporated business entities classified for tax purposes?

: Explain the fundamental characteristics of organizing, including division of labor, chain of command, span of management, and centralization versus decentralization.

Joni Hyde Inc. has the following amounts reported in its general ledger at the end of the current year. Organization costs $24,000 Trademarks 15,000 Discount on bonds payable 35,000 Deposits with advertising agency for ads to promote goodwill of company 10,000 Excess of cost over fair value of net identifi able assets of acquired subsidiary 75,000 Cost of equipment acquired for research and development projects; the equipment has an alternative future use 90,000 Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years 80,000 Instructions (a) On the basis of the information above, compute the total amount to be reported by Hyde for intangible assets on its balance sheet at year-end. (b) If an item is not to be included in intangible assets, explain its proper treatment for reporting purposes.

A bending operation is to be performed on 5.00 mm thick cold-rolled steel. The part drawing is given in Figure P20.9. Determine the blank size required.

Explain the meaning of the following terms: (a) commonsize analysis, (b) vertical analysis, (c) horizontal analysis, and (d) percentage analysis.

Harry and Sally formed the Evergreen Partnership by contributing the following assets in exchange for a 50 percent capital and profits interest in the partnership: Harry: Basis Fair Market Value Cash $ 30,000 $ 30,000 Land 100,000 120,000 Totals $ 130,000 $ 150,000 Sally: Equipment used in a business $200,000 $150,000 Totals $ 200,000 $ 150,000 a. How much gain or loss will Harry recognize on the contribution? b. How much gain or loss will Sally recognize on the contribution? c. How could the transaction be structured a different way to get a better result for Sally? d. What is Harry’s tax basis in his partnership interest? e. What is Sally’s tax basis in her partnership interest? f. What is Evergreen’s tax basis in its assets? g. Following the format in Exhibit 20-2, prepare a tax basis balance sheet for the Evergreen Partnership showing the tax capital accounts for the partners.

In general, how do the disproportionate distribution rules ensure that partners recognize their share of partnership ordinary income?

A cup is to be drawn in a deep drawing operation. The height of the cup is 75 mm and its inside diameter = 100 mm. The sheet-metal thickness = 2 mm. If the blank diameter = 225 mm, determine (a) drawing ratio, (b) reduction, and (c) thickness-to-diameter ratio. (d) Does the operation seem feasible?

A perfectly competitive firm faces a price of £14 per unit. It has the following short-run cost schedule: Output 0 1 2 3 4 5 6 7 8 TC (£) 10 18 24 30 38 50 66 91 120 (a)  Copy the table and put in additional rows for average cost and marginal cost at each level of output. (Enter the figures for marginal cost in the space between each column.) (b)  Plot AC, MC and MR on a diagram. (c)  Mark the profit-maximising output. (d)  How much (supernormal) profit is made at this output? (e)  What would happen to the price in the long run if this firm were typical of others in the industry? Why would we need to know information about long-run average cost in order to give a precise answer to this question?

The gage length of a tensile test specimen = 150 mm. It is subjected to a tensile test in which the grips holding the end of the test specimen are moved with a relative velocity = 0.1 m/s. Construct a plot of the strain rate as a function of length as the specimen is pulled to a length = 200 mm.

What are the principal material handling functions in manufacturing?

There are 20 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. 8.1 Of the three polymer types, which one is the most important commercially: (a) thermoplastics, (b) thermosets, or (c) elastomers? 8.2 Which one of the three polymer types is not normally considered to be a plastic: (a) thermoplastics, (b) thermosets, or (c) elastomers? 8.3 Which one of the three polymer types does not involve cross-linking: (a) thermoplastics, (b) thermosets, or (c) elastomers? 8.4 As the degree of crystallinity in a given polymer increases, the polymer becomes denser and stiffer, and its melting temperature decreases: (a) true or (b) false? 8.5 Which one of the following is the chemical formula for the repeating unit in polyethylene: (a) CH2, (b) C2H4, (c) C3H6, (d) C5H8, or (e) C8H8? 8.6 Degree of polymerization is which one of the following: (a) average number of mers in the molecule chain; (b) proportion of the monomer that has been polymerized; (c) sum of the molecule weights of the mers in the molecule; or (d) none of the above? 8.7 A branched molecular structure is stronger in the solid state and more viscous in the molten state than a linear structure for the same polymer: (a) true or (b) false? 8.8 A copolymer is a mixture of the macromolecules of two different homopolymers: (a) true or (b) false? 8.9 As the temperature of a polymer increases, its density (a) increases, (b) decreases, or (c) remains fairly constant? 8.10 Which of the following plastics has the highest market share: (a) phenolics, (b) polyethylene, (c) polypropylene, (d) polystyrene, or (e) polyvinylchloride? 8.11 Which of the following polymers are normally thermoplastic (four best answers): (a) acrylics, (b) cellulose acetate, (c) nylon, (d) phenolics, (e) polychloroprene, (f) polyesters, (g) polyethylene, (h) polyisoprene, and (i) polyurethane? 8.12 Polystyrene (without plasticizers) is amorphous, transparent, and brittle: (a) true or (b) false? 8.13 The fiber rayon used in textiles is based on which one of the following polymers: (a) cellulose, (b) nylon, (c) polyester, (d) polyethylene, or (e) polypropylene? 8.14 The basic difference between low-density polyethylene and high-density polyethylene is that the latter has a much higher degree of crystallinity: (a) true or (b) false? 8.15 Among the thermosetting polymers, the most widely used commercially is which one of the following: (a) epoxies, (b) phenolics, (c) silicones, or (d) urethanes? 8.16 The chemical formula for polyisoprene in natural rubber is which of the following: (a) CH2, (b) C2H4, (c) C3H6, (d) C5H8, or (e) C8H8? 8.17 The leading commercial synthetic rubber is which one of the following: (a) butyl rubber, (b) isoprene rubber, (c) polybutadiene, (d) polyurethane, (e) styrene-butadiene rubber, or (f) thermoplastic elastomers?

List some of the products produced on a rolling mill.

Tina Bailey, a student of intermediate accounting, was heard to remark after a class discussion on segment reporting, “All this is very confusing to me. First we are told that there is merit in presenting the consolidated results, and now we are told that it is better to show segmental results. I wish they would make up their minds.” Evaluate this comment.

At what phase of the business cycle is the average duration of unemployment likely to be the highest? Explain.

Koch Corporation is in the process of preparing its annual financial statements for the fiscal year ended April 30, 2015. Because all of Koch’s shares are traded intrastate, the company does not have to file any reports with the Securities and Exchange Commission. The company manufactures plastic, glass, and paper containers for sale to food and drink manufacturers and distributors. Koch Corporation maintains separate control accounts for its raw materials, work in process, and finished goods inventories for each of the three types of containers. The inventories are valued at the lowerof- cost-or-market. The company’s property, plant, and equipment are classified in the following major categories: land, office buildings, furniture and fixtures, manufacturing facilities, manufacturing equipment, and leasehold improvements. All fixed assets are carried at cost. The depreciation methods employed depend on the type of asset (its classification) and when it was acquired. Koch Corporation plans to present the inventory and fixed asset amounts in its April 30, 2015, balance sheet as shown below. Inventories $4,814,200 Property, plant, and equipment (net of depreciation) 6,310,000 Instructions What information regarding inventories and property, plant, and equipment must be disclosed by Koch Corporation in the audited financial statements issued to stockholders, either in the body or the notes, for the 2014–2015 fiscal year?

The following are selected transactions that may affect stockholders’ equity. 1. Recorded accrued interest earned on a note receivable. 2. Declared a cash dividend. 3. Declared and distributed a stock split. 4. Approved a retained earnings restriction. 5. Recorded the expiration of insurance coverage that was previously recorded as prepaid insurance. 6. Paid the cash dividend declared in item 2 above. 7. Recorded accrued interest expense on a note payable. 8. Declared a stock dividend. 9. Distributed the stock dividend declared in item 8. Instructions In the following table, indicate the effect each of the nine transactions has on the financial statement elements listed. Use the following code: I 5 Increase, D 5 Decrease, NE 5 No effect.

What is the specific energy in metal machining?

Halvor Corporation is having financial difficulty and therefore has asked Frontenac National Bank to restructure its $5 million note outstanding. The present note has 3 years remaining and pays a current rate of interest of 10%. The present market rate for a loan of this nature is 12%. The note was issued at its face value. Instructions Presented below and on the next page are four independent situations. Prepare the journal entry that Halvor and Frontenac National Bank would make for each of these restructurings. (a) Frontenac National Bank agrees to take an equity interest in Halvor by accepting common stock valued at $3,700,000 in exchange for relinquishing its claim on this note. The common stock has a par value of $1,700,000. (b) Frontenac National Bank agrees to accept land in exchange for relinquishing its claim on this note. The land has a book value of $3,250,000 and a fair value of $4,000,000. (c) Frontenac National Bank agrees to modify the terms of the note, indicating that Halvor does not have to pay any interest on the note over the 3-year period. (d) Frontenac National Bank agrees to reduce the principal balance due to $4,166,667 and require interest only in the second and third year at a rate of 10%.