Question & Answer

Why are S corporations less favorable than C corporations and entities taxed as partnerships in terms of owner-related limitations?

To what extent do Keynesians and new classicists agree about the role of fixed exchange rates?

What is a composite material?

There are 18 correct answers in the following multiple choice questions (some questions have more than one correct answer). To achieve 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 total score by 1 point, and each additional answer beyond the correct number of answers reduces the score by 1 point. The percentage score on the quiz is based on the total number of correct answers. 38.1 Nanotechnology refers to the fabrication and application of entities whose feature sizes are in which of the following ranges (one best answer): (a) 0.1 nm-10 nm, (b) 1 nm-100 nm, or (c) 100 nm-1000 nm? 38.2 One nanometer is equivalent to which of the following (two correct answers): (a) 1 x 10-3 μm, (b) 1 x 10-6 m, (c) 1 x 10-9 m, and (d) 1 x 106 mm. 38.3 NNI stands for which one of the following: (a) Nanoscience Naval Institute, (b) Nanoscience Nonsense and Ignorance, (c) National Nanotechnology Initiative, or (d) Nanotechnology News Identification? 38.4 The surface-to-volume ratio of a cube that is 1 x 10-6 m on each edge is significantly greater than the surface-to-volume ratio of a cube that is 1 m on each edge: (a) true or (b) false? 38.5 The proportion of surface molecules relative to internal molecules is significantly greater for a cube that is 1 x 10-6 m on each edge than for a cube that is 1 m on each edge: (a) true or (b) false? 38.6 Which one of the following microscopes can achieve the greatest magnification: (a) electron microscope, (b) optical microscope, or (c) scanning tunneling microscope? 38.7 Which of the following are correct statements about a buckyball (three best answers): (a) it contains 60 atoms, (b) it contains 100 atoms, (c) it contains 600 atoms, (d) it is a carbon atom, (e) it is a carbon molecule, (f) it is shaped like a basketball, (g) it is shaped like a tube, and (h) it is shaped like a volleyball? 38.8 Which of the following are considered techniques that fall within the category called top-down approaches to nanofabrication (three best answers): (a) biological evolution, (b) electron-beam  lithography, (c) micro-imprint lithography, (d) scanning probe techniques, (e) self-assembly, and (f) X-ray lithography? 38.9 Which of the following are considered techniques that fall within the category called bottom-up approaches to nanofabrication (three best answers): (a) electron beam lithography, (b) extreme ultraviolet lithography, (c) chemical vapor deposition to produce carbon nanotubes, (d) nanoimprint lithography, (e) scanning probe techniques, (f) self-assembly, and (g) X-ray lithography? 38.10 Dip-pen nanolithography uses which one of the following techniques and/or devices: (a) atomic force microscope, (b) chemical vapor deposition, (c) electron beam lithography, (d) nano-imprint lithography, or (e) self-assembly? 38.11 A self-assembled monolayer has a thickness that is which one of the following: (a) one micrometer, (b) one millimeter, (c) one molecule, or (d) one nanometer?

1.      : Have the successes of sales associates such as Katherine or Damien created a situation in which customers’ loyalty to particular salespeople is stronger than their loyalty to the store? For example, if a successful associate leaves Morgan’s, might the customer leave also?

Use the information for Lockard Company given in BE11-2. (a) Compute 2014 depreciation expense using the double-declining-balance method. (b) Compute 2014 depreciation expense using the double-declining-balance method, assuming the machinery was purchased on October 1, 2014.

During its first year of operations, Collin Raye Corporation had the following transactions pertaining to its common stock. Jan. 10 Issued 80,000 shares for cash at $6 per share. Mar. 1 Issued 5,000 shares to attorneys in payment of a bill for $35,000 for services rendered in helping the company to incorporate. July 1 Issued 30,000 shares for cash at $8 per share. Sept. 1 Issued 60,000 shares for cash at $10 per share. Instructions (a) Prepare the journal entries for these transactions, assuming that the common stock has a par value of $5 per share. (b) Prepare the journal entries for these transactions, assuming that the common stock is no-par with a stated value of $3 per share.

Melinda invests $200,000 in a City of Heflin bond that pays 6 percent interest.  Alternatively, Melinda could have invested the $200,000 in a bond recently issued by Surething Inc. that pays 8 percent interest and has risk and other nontax characteristics similar to the City of Heflin bond.  Assume Melinda’s marginal tax rate is 25 percent.

: Discuss the use of financial statements and financial analysis as management controls.

Suppose you asked your favorite AI query tool “How do taxpayers treat organizational expenditures for tax purposes?” The AI tool provided the following response:

What are the requirements to contribute to a health savings account? What limits are imposed on the contributions and deductions?

List possible sources of additional paid-in capital.

Jill Accardo, M.D., maintains the accounting records of Accardo Clinic on a cash basis. During 2014, Dr. Accardo collected $142,600 from her patients and paid $55,470 in expenses. At January 1, 2014, and December 31, 2014, she had accounts receivable, unearned service revenue, accrued expenses, and prepaid expenses as follows. (All long-lived assets are rented.)   Instructions Prepare a schedule that converts Dr. Accardo’s “excess of cash collected over cash disbursed” for the year 2014 to net income on an accrual basis for the year 2014.

Chandra was the sole shareholder of Pet Emporium, which was originally formed as an S corporation.  When Pet Emporium terminated its S election on August 31, 2023, Chandra had a stock basis and an at-risk amount of $0.  Chandra also had a suspended loss from Pet Emporium of $9,000. What amount of the suspended loss is Chandra allowed to deduct, and what is her basis in her Pet Emporium stock at the end of the post-termination transition period under the following alternative scenarios (assume Pet Emporium files for an extension to file its tax returns)?   a. Chandra makes capital contributions of $7,000 on August 30, 2024, and $4,000 on September 14, 2024.

A tensile specimen is elongated to twice its original length. Determine the engineering strain and true strain for this test. If the metal had been strained in compression, determine the final compressed length of the specimen such that (a) the engineering strain is equal to the same value as in tension (it will be negative value because of compression), and (b) the true strain would be equal to the same value as in tension (again, it will be negative value because of compression). Note that the answer to part (a) is an impossible result. True strain is therefore a better measure of strain during plastic deformation

What issue precipitated the return of capital principle? Explain.

If an S corporation with accumulated E&P makes a distribution, from what accounts (and in what order) is the distribution deemed to be paid?

Shared bonus pools Becky Tan is the CFO at Frosters Systems, a diversified company with eight different business units (divisions). Becky has been asked by the CEO to develop a shared bonus pool system.   Required What key decisions will Becky have to make to set up the shared bonus system? (LO4)

Harrisburg Company is considering changing its inventory valuation method from FIFO to LIFO because of the potential tax savings. However, management wishes to consider all of the effects on the company, including its reported performance, before making the final decision. The inventory account, currently valued on the FIFO basis, consists of 1,000,000 units at $8 per unit on January 1, 2014. There are 1,000,000 shares of common stock outstanding as of January 1, 2014, and the cash balance is $400,000. The company has made the following forecasts for the period 2014–2016. 2014 2015 2016 Unit sales (in millions of units) 1.1 1.0 1.3 Sales price per unit $10 $12 $12 Unit purchases (in millions of units) 1.0 1.1 1.2 Purchase price per unit $8 $9 $10 Annual depreciation (in thousands of dollars) $300 $300 $300 Cash dividends per share $0.15 $0.15 $0.15 Cash payments for additions to and replacement of plant and equipment (in thousands of dollars) $350 $350 $350 Income tax rate 40% 40% 40% Operating expenses (exclusive of depreciation) as a percent of sales 15% 15% 15% Common shares outstanding (in millions) 1 1 1 Instructions (a) Prepare a schedule that illustrates and compares the following data for Harrisburg Company under the FIFO and the LIFO inventory method for 2014–2016. Assume the company would begin LIFO at the beginning of 2014. (1) Year-end inventory balances. (3) Earnings per share. (2) Annual net income after taxes. (4) Cash balance. Assume all sales are collected in the year of sale and all purchases, operating expenses, and taxes are paid during the year incurred. (b) Using the data above, your answer to (a), and any additional issues you believe need to be considered, prepare a report that recommends whether or not Harrisburg Company should change to the LIFO inventory method. Support your conclusions with appropriate arguments.

Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in interest from an investment in City of Heflin bonds.  Using the U.S. tax rate schedule (see Appendix C), how much federal tax will he owe?  What is his average tax rate?  What is his effective tax rate?  What is his current marginal tax rate?

This year, Major Healy paid $40,000 of interest on a mortgage on his home (he borrowed $800,000 to buy the residence in 2015; $900,000 original purchase price and value at purchase), $6,000 of interest on a $120,000 home-equity loan on his home (loan proceeds were used to buy antique cars), and $10,000 of interest on a mortgage on his vacation home (borrowed $200,000 to purchase the home in 2010). Major Healy’s AGI is $220,000. How much interest expense can Major Healy deduct as an itemized deduction?

Gershwin Corporation obtained a franchise from Sonic Hedgehog Inc. for a cash payment of $120,000 on April 1, 2014. The franchise grants Gershwin the right to sell certain products and services for a period of 8 years. Prepare Gershwin’s April 1 journal entry and December 31 adjusting entry.

69. Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse several years ago for $65,000, and it has claimed $23,000 of depreciation expense against the building.  a. Assuming that Hauswirth receives $50,000 in cash for the warehouse, compute the amount and character of Hauswirth’s recognized gain or loss on the sale. b. Assuming that Hauswirth exchanges the warehouse in a like-kind exchange for some land with a fair market value of $50,000, compute Hauswirth’s realized gain or loss, recognized gain or loss, deferred gain or loss, and basis in the new land. c. Assuming that Hauswirth receives $20,000 in cash in year 0 and a $50,000 note receivable that is payable in year 1, compute the amount and character of Hauswirth’s gain or loss in year 0 and in year 1.

Lauren’s basis in Driftwood Partnership is $510,000. Driftwood distributes all the land to Lauren in complete liquidation of her partnership interest. The partnership reports the following balance sheet just before the distribution: Assets: Tax Basis FMV Cash $ 370,000 $ 370,000 Stock (investment) 910,000 370,000 Land 250,000 370,000    Totals $1, 530,000 $ 1,110,000 Liabilities and capital: Capital- Esteban $ 510,000 - Kylie 510,000 - Lauren 510,000   Totals $ 1,530,000 a. What are the amount and character of Lauren’s recognized gain or loss? b. If Driftwood does not have a §754 election in place, what is the amount of the special basis adjustment, if any?

Explain the difference between a static budget and a flexible budget.