Question & Answer

How do banks resolve illiquidity problems? (LO2)

A cylindrical workpart with D = 2.5 in and h = 2.5 in is upset forged in an open die to a height = 1.5 in. Coefficient of friction at the die-work interface = 0.10. The work material has a flow curve defined by: K = 40,000 lb/in2 and n = 0.15. Yield strength = 15,750 lb/in2. Determine the instantaneous force in the operation (a) just as the yield point is reached (yield at strain = 0.002), (b) at height h = 2.3 in, (c) h = 2.1 in, (d) h = 1.9 in, (e) h = 1.7 in, and (f) h = 1.5 in. Use of a spreadsheet calculator is recommended.

Have unemployment rates generally risen or fallen over the decades or is there no discernible pattern? Does the answer vary by country?

King Donovan Resources Group has been in its plant facility for 15 years. Although the plant is quite functional, numerous repair costs are incurred to maintain it in sound working order. The company’s plant asset book value is currently $800,000, as indicated below. Original cost $1,200,000 Accumulated depreciation 400,000 Book value $ 800,000 During the current year, the following expenditures were made to the plant facility. (a) Because of increased demands for its product, the company increased its plant capacity by building a new addition at a cost of $270,000. (b) The entire plant was repainted at a cost of $23,000. (c) The roof was an asbestos cement slate. For safety purposes, it was removed and replaced with a wood shingle roof at a cost of $61,000. Book value of the old roof was $41,000. (d) The electrical system was completely updated at a cost of $22,000. The cost of the old electrical system was not known. It is estimated that the useful life of the building will not change as a result of this updating. (e) A series of major repairs were made at a cost of $47,000, because parts of the wood structure were rotting. The cost of the old wood structure was not known. These extensive repairs are estimated to increase the useful life of the building. Instructions Indicate how each of these transactions would be recorded in the accounting records.

: Define the four management functions and the type of management activity associated with ach.

What were the two discoveries of Sir Humphrey Davy that led to the development of modern welding technology?

According to the injection molding video, what is the most common type of injection molding machine used in industry?

Assume that the rate of income tax is 15 per cent, the rate of expenditure tax is 12½ per cent, the mps is 1/20, the mpm is 1/8 and the mpc (from disposable income) is 16/17. What is the mpcd? Construct a table like Table 17.4 assuming again that national income rises by £100 million.

Petrenko Corporation has outstanding 2,000 $1,000 bonds, each convertible into 50 shares of $10 par value common stock. The bonds are converted on December 31, 2014, when the unamortized discount is $30,000 and the market price of the stock is $21 per share. Record the conversion using the book value approach.

A turning operation is to be performed on a 20 hp lathe that has an 87% efficiency rating. The roughing cut is made on alloy steel whose hardness is in the range 325 to 335 HB. The cutting speed is 375 ft/min, feed is 0.030 in/rev, and depth of cut is 0.150 in. Based on these values, can the job be performed on the 20 hp lathe? Use Table 21.2 to obtain the appropriate unit horsepower value

An RSW operation is used to make a series of spot welds between two pieces of aluminum, each 2.0 mm thick. The unit melting energy for aluminum = 2.90 J/mm3. Welding current = 6,000 amps, and time duration = 0.15 sec. Assume that the resistance = 75 micro-ohms. The resulting weld nugget measures 5.0 mm in diameter by 2.5 mm thick. How much of the total energy generated is used to form the weld nugget?

Kenseth Company has the following securities in its trading portfolio of securities on December 31, 2013. Investments (Trading) Cost Fair Value 1,500 shares of Gordon, Inc., Common $ 73,500 $ 69,000 5,000 shares of Wallace Corp., Common 180,000 175,000 400 shares of Martin, Inc., Preferred 60,000 61,600 $313,500 $305,600 All of the securities were purchased in 2013. In 2014, Kenseth completed the following securities transactions. March 1 Sold the 1,500 shares of Gordon, Inc., Common, @ $45 less fees of $1,200 April 1 Bought 700 shares of Earnhart Corp., Common, @ $75 plus fees of $1,300 Kenseth Company’s portfolio of trading securities appeared as follows on December 31, 2014. Investments (Trading) Cost Fair Value 5,000 shares of Wallace Corp., Common $180,000 $175,000 700 shares of Earnhart Corp., Common 53,800 50,400 400 shares of Martin, Inc., Preferred 60,000 58,000 $293,800 $283,400 Instructions Prepare the general journal entries for Kenseth Company for: (a) The 2013 adjusting entry. (b) The sale of the Gordon stock. (c) The purchase of the Earnhart stock. (d) The 2014 adjusting entry for the trading portfolio.

There are four categories of nontraditional machining processes, based on principal energy form. Name the four categories

Identify some of the common alloying elements other than carbon in low alloy steels.

Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes in northern New Jersey and southern New York. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2014, and Jim Alcide, controller for Garcia, has gathered the following data concerning inventory. At May 31, 2014, the balance in Garcia’s Raw Materials Inventory account was $408,000, and Allowance to Reduce Inventory to Market had a credit balance of $27,500. Alcide summarized the relevant inventory cost and market data at May 31, 2014, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Garcia’s May 31, 2014, financial statements for inventory under the lower-of-costor- market rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Cost Replacement Cost Sales Price Net Realizable Value Normal Profit Aluminum siding $ 70,000 $ 62,500 $ 64,000 $ 56,000 $ 5,100 Cedar shake siding 86,000 79,400 94,000 84,800 7,400 Louvered glass doors 112,000 124,000 186,400 168,300 18,500 Thermal windows 140,000 126,000 154,800 140,000 15,400 Total $408,000 $391,900 $499,200 $449,100 $46,400 Instructions (a) (1) Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2014. (2) For the fiscal year ended May 31, 2014, determine the amount of the gain or loss that would be recorded due to the change in Allowance to Reduce Inventory to Market. (b) Explain the rationale for the use of the lower-of-cost-or-market rule as it applies to inventories.

How much flexibility do partnerships have in allocating partnership items to partners?

Volker Inc. issued $2,500,000 of convertible 10-year bonds on July 1, 2014. The bonds provide for 12% interest payable semiannually on January 1 and July 1. The discount in connection with the issue was $54,000, which is being amortized monthly on a straight-line basis. The bonds are convertible after one year into 8 shares of Volker Inc.’s $100 par value common stock for each $1,000 of bonds. On August 1, 2015, $250,000 of bonds were turned in for conversion into common stock. Interest has been accrued monthly and paid as due. At the time of conversion, any accrued interest on bonds being converted is paid in cash. Instructions Prepare the journal entries to record the conversion, amortization, and interest in connection with the bonds as of the following dates. (Round to the nearest dollar.) (a) August 1, 2015. (Assume the book value method is used.) (b) August 31, 2015. (c) December 31, 2015, including closing entries for end-of-year.

Although process costing appears to use precise measurements, it requires several estimates. Discuss where judgement is needed in collecting information for process costing.

A facing operation is performed on an engine lathe. The diameter of the cylindrical part is 6 in and the length is 15 in. The spindle rotates at a speed of 180 rev/min. Depth of cut = 0.110 in, and feed = 0.008 in/rev. Assume the cutting tool moves from the outer diameter of the workpiece to exactly the center at a constant velocity. Determine (a) the velocity of the tool as it moves from the outer diameter towards the center and (b) the cutting time.

A DC servomotor drives the x-axis of a NC milling machine table. The motor is coupled to the table lead screw using a 4:1 gear reduction (4 turns of the motor for each turn of the lead screw). The leadscrew pitch = 6.25 mm. An optical encoder is connected to the lead screw. The optical encoder emits 500 pulses per revolution. To execute a certain programmed instruction, the table must move from point (x = 87.5 mm, y = 35.0) to point (x = 25.0 mm, y = 180.0 mm) in a straight-line trajectory at a feed rate = 200 mm/min. Determine (a) the control resolution of the system for the x-axis only, (b) the corresponding rotational speed of the motor, and (c) frequency of the pulse train emitted by the optical encoder at the desired feed rate.

On January 1, 2011, Jackson Company purchased a building and equipment that have the following useful lives, salvage values, and costs. Building, 40-year estimated useful life, $50,000 salvage value, $800,000 cost Equipment, 12-year estimated useful life, $10,000 salvage value, $100,000 cost The building has been depreciated under the double-declining-balance method through 2014. In 2015, thecompany decided to switch to the straight-line method of depreciation. Jackson also decided to change the total useful life of the equipment to 9 years, with a salvage value of $5,000 at the end of that time. The equipment is depreciated using the straight-line method. Instructions (a) Prepare the journal entry(ies) necessary to record the depreciation expense on the building in 2015. (b) Compute depreciation expense on the equipment for 2015.

The treasurer of Miller Co. has read on the Internet that the stock price of Wade Inc. is about to take off. In order to profit from this potential development, Miller Co. purchased a call option on Wade common shares on July 7, 2014, for $240. The call option is for 200 shares (notional value), and the strike price is $70. (The market price of a share of Wade stock on that date is $70.) The option expires on January 31, 2015. The following data are available with respect to the call option. Date Market Price of Wade Shares Time Value of Call Option September 30, 2014 $77 per share $180 December 31, 2014 75 per share 65 January 4, 2015 76 per share 30 Instructions Prepare the journal entries for Miller Co. for the following dates. (a) July 7, 2014—Investment in call option on Wade shares. (b) September 30, 2014—Miller prepares financial statements. (c) December 31, 2014—Miller prepares financial statements. (d) January 4, 2015—Miller settles the call option on the Wade shares.

The table in Box 1.2 shows time-series data for four different variables for four different countries. Would there have been any advantage in giving the figures for each separate year? Would there have been any disadvantage?

What are diversified companies? What accounting problems are related to diversified companies?

For Problem 13.11, assume the material is acrylic. (a) Using Figure 13.2, determine the temperature of the polymer melt. (b) If the temperature is lowered 20°C, estimate the resulting viscosity of the polymer melt. (Hint: the y-axis of Figure 13.2 is a log scale, not linear)