Question & Answer

In 2024, Sheryl is claimed as a dependent on her parents’ tax return.  Her parents report taxable income of $600,000 (married filing jointly). Sheryl did not provide more than half her own support.  What is Sheryl’s tax liability for the year in each of the following alternative circumstances?

Khamsah Mining Company has purchased a tract of mineral land for $900,000. It is estimated that this tract will yield 120,000 tons of ore with sufficient mineral content to make mining and processing profitable. It is further estimated that 6,000 tons of ore will be mined the first and last year and 12,000 tons every year in between. (Assume 11 years of mining operations.) The land will have a salvage value of $30,000. The company builds necessary structures and sheds on the site at a cost of $36,000. It is estimated that these structures can serve 15 years but, because they must be dismantled if they are to be moved, they have no salvage value. The company does not intend to use the buildings elsewhere. Mining machinery installed at the mine was purchased secondhand at a cost of $60,000. This machinery cost the former owner $150,000 and was 50% depreciated when purchased. Khamsah Mining estimates that about half of this machinery will still be useful when the present mineral resources have been exhausted, but that dismantling and removal costs will just about offset its value at that time. The company does not intend to use the machinery elsewhere. The remaining machinery will last until about one-half the present estimated mineral ore has been removed and will then be worthless. Cost is to be allocated equally between these two classes of machinery. Instructions (a) As chief accountant for the company, you are to prepare a schedule showing estimated depletion and depreciation costs for each year of the expected life of the mine. (b) Also compute the depreciation and depletion for the first year assuming actual production of 5,000 tons. Nothing occurred during the year to cause the company engineers to change their estimates of either the mineral resources or the life of the structures and equipment.

Describe the like-kind property requirements for real property for purposes of qualifying for a like-kind exchange. Explain whether land held for investment by a corporation will qualify as like-kind property with land held by an individual for personal use.

There are 14 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 24.1 Which of the following criteria are generally recognized to indicate good machinability (four best answers): (a) ease of chip disposal, (b) high cutting temperatures, (c) high power requirements, (d) high value of Ra, (e) long tool life, (f) low cutting forces, and (g) zero shear plane angle? 24.2 Of the various methods for testing machinability, which one of the following is the most important: (a) cutting forces, (b) cutting temperature, (c) horsepower consumed in the operation, (d) surface roughness, (e) tool life, or (f) tool wear? 24.3 A machinability rating greater than 1.0 indicates that the work material is (a) easier to machine than the base metal or (b) more difficult to machine than the base metal, where the base metal has a rating = 1.0? 24.4 In general, which one of the following materials has the highest machinability: (a) aluminum, (b) cast iron, (c) copper, (d) low carbon steel, (e) stainless steel, (f) titanium alloys, or (g) unhardened tool steel? 24.5 Which one of the following operations is generally capable of the closest tolerances: (a) broaching, (b) drilling, (c) end milling, (d) planing, or (e) sawing? 24.6 When cutting a ductile work material, an increase in cutting speed will generally (a) degrade surface finish, which means a higher value of Ra or (b) improve surface finish, which means a lower value of Ra? 24.7 Which one of the following operations is generally capable of the best surface finishes (lowest value of Ra): (a) broaching, (b) drilling, (c) end milling, (d) planing, or (e) turning? 24.8 Which of the following time components in the average production machining cycle is affected by cutting speed (two correct answers): (a) part loading and unloading time, and (b) setup time for th 24.9 Which cutting speed is always lower for a given machining operation: (a) cutting speed for maximum production rate, or (b) cutting speed for minimum cost? 24.10 A high tooling cost and/or tool change time will tend to (a) decrease, (b) have no effect on, or (c) increase the cutting speed for minimum cost?

Sandburg Company requires additional cash for its business. Sandburg has decided to use its accounts receivable to raise the additional cash and has asked you to determine the income statement effects of the following contemplated transactions. 1. On July 1, 2014, Sandburg assigned $400,000 of accounts receivable to Keller Finance Company. Sandburg received an advance from Keller of 80% of the assigned accounts receivable less a commission of 3% on the advance. Prior to December 31, 2014, Sandburg collected $220,000 on the assigned accounts receivable, and remitted $232,720 to Keller, $12,720 of which represented interest on the advance from Keller. 2. On December 1, 2014, Sandburg sold $300,000 of net accounts receivable to Wunsch Company for $270,000. The receivables were sold outright on a without recourse basis. 3. On December 31, 2014, an advance of $120,000 was received from First Bank by pledging $160,000 of Sandburg’s accounts receivable. Sandburg’s first payment to First Bank is due on January 30, 2015. Instructions Prepare a schedule showing the income statement effects for the year ended December 31, 2014, as a result of the above facts.

How does electroless plating differ from electrochemical plating?

(Threshold Concept 1) 1. Think of three things you did last week. What was opportunity cost of each one? (Threshold Concept 1) 2. Assume that a supermarket has some fish that has reached its sell-by date. It was originally priced at £10, but yesterday was marked down to £5 ‘for quick sale’. It is now the end of the day and it still has not been sold. The supermarket is about to close and there is no one in the store that wants fish. What is the opportunity cost for the store of throwing the fish away?

Try using the same type of analysis in the labour market to show what will happen if there is an increase in demand for labour. What is the ‘price’ of labour?

Suppose you asked your favorite AI query tool the following question: “When is an S corporation required to pay a built-in gains tax??”  The AI tool provided the following response:

Uhura Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.   Intangible assets Goodwill 80,000 Cash surrender value of life insurance 90,000 Prepaid expenses 12,000 Current liabilities Accounts payable 135,000 Notes payable (due next year) 125,000 Pension obligation 82,000 Rent payable 49,000 Premium on bonds payable 53,000 Long-term liabilities Bonds payable 500,000 Stockholders’ equity Common stock, $1.00 par, authorized 400,000 shares, issued 290,000 290,000 Additional paid-in capital 160,000 Retained earnings ? Instructions Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $160,000 and for the equipment, $105,000. The allowance for doubtful accounts has a balance of $17,000. The pension obligation is considered a long-term liability.

Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $12,000 to a Roth IRA ($4,000 a year). The current value of the Roth IRA is $16,300. In the current year, Sherry withdraws $14,000 of the account balance to purchase a car. Assuming Sherry’s marginal tax rate is 24 percent, how much of the $14,000 withdrawal will she retain after taxes to fund her car purchase?

A corporation distributes appreciated property to a shareholder. What impact does the distribution have on the corporation’s earnings and profits?

What are the similarities and differences between the tax benefit rule and depreciation recapture?

Bonnie and Clyde are the only two shareholders in Getaway Corporation. Bonnie owns 60 shares with a basis of $3,000, and Clyde owns the remaining 40 shares with a basis of $12,000. At year-end, Getaway is considering different alternatives for redeeming some shares of stock. Evaluate whether each of the following stock redemption transactions will qualify for sale or exchange treatment.

On January 1, 2014, Irwin Animation sold a truck to Peete Finance for $33,000 and immediately leased it back. The truck was carried on Irwin’s books at $28,000. The term of the lease is 5 years, and title transfers to Irwin at lease-end. The lease requires five equal rental payments of $8,705 at the end of each year. The appropriate rate of interest is 10%, and the truck has a useful life of 5 years with no salvage value. Prepare Irwin’s 2014 journal entries.

If intangibles are acquired for stock, how is the cost of the intangible determined?

Sustainability and job costing in a service sector Green and Greener Co., a law firm specialising in environmental litigation, had the following costs last year:       The following costs were included in overhead:         The entity recently improved its ability to document and trace costs to individual cases. Revised bookkeeping procedures now allow it to trace fringe benefit costs for direct professional labour, paralegal costs, telephone charges, computer time, and photocopying costs to each case individually. The managing partner needs to decide whether more costs than just direct professional labour should be traced directly to jobs to allow the entity to better justify billings to clients. During the last year, more costs were traced to client engagements. Two of the case records showed the following:         Three methods are being considered for allocating overhead this year: ·           Method 1: Allocate overhead based on direct professional labour cost. Calculate the allocation rate using last year’s direct professional labour costs of $15 million and overhead costs of $21 million. ·           Method 2: Allocate overhead based on direct professional labour cost. Calculate the allocation rate using last year’s direct professional labour costs of $15 million and overhead costs of $10 million ($21 million less $11 million in direct costs that are traced this year). ·           Method 3: Allocate the $10 million overhead based on total direct costs. Calculate the allocation rate using last year’s direct costs (professional labour of $15 million plus other direct costs of $11 million).   Required (a)     Calculate the overhead allocation rate for method 1. (b)     Calculate the overhead allocation rate for method 2. (c)     Calculate the overhead allocation rate for method 3. (d)     Using each of the three rates calculated in parts (a), (b) and (c), calculate the total costs of cases 875 and 876. (e)     Explain why the total costs allocated to cases 875 and 876 are not the same under the three methods. (f)      Explain why method 1 would be inappropriate. (g)     Would method 2 or method 3 be better? Explain. (h)     Explain how professional service firms, like law firms might engage in sustainability practices. (LO1 and 4)

What is the cost of a long-term investment in bonds?

The following expenditures and receipts are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses. (a) Money borrowed to pay building contractor (signed a note) $(275,000) (b) Payment for construction from note proceeds 275,000 (c) Cost of land fill and clearing 8,000 (d) Delinquent real estate taxes on property assumed by purchaser 7,000 (e) Premium on 6-month insurance policy during construction 6,000 (f) Refund of 1-month insurance premium because construction completed early (1,000) (g) Architect’s fee on building 22,000 (h) Cost of real estate purchased as a plant site (land $200,000 and building $50,000) 250,000 (i) Commission fee paid to real estate agency 9,000 (j) Installation of fences around property 4,000 (k) Cost of razing and removing building 11,000 (l) Proceeds from salvage of demolished building (5,000) (m) Interest paid during construction on money borrowed for construction 13,000 (n) Cost of parking lots and driveways 19,000 (o) Cost of trees and shrubbery planted (permanent in nature) 14,000 (p) Excavation costs for new building 3,000 Instructions Identify each item by letter and list the items in columnar form, using the headings shown below. All receipt amounts should be reported in parentheses. For any amounts entered in the Other Accounts column, also indicate the account title.

Campbell, a single taxpayer, earns $400,000 in taxable income and $2,000 in interest from an investment in State of New York bonds.  Using the U.S. tax rate schedule (see Appendix C), how much federal tax will she owe?  What is her average tax rate?  What is her effective tax rate?  What is her current marginal tax rate?

: Discuss the importance of purpose-driven communications, including vision and mission and ways to persuade and influence others.

Amber is a tax expert, whereas Rob is a tax novice.  Explain how their process in identifying tax issues may differ.

A continuous weld is to be made around the circumference of a round steel tube of diameter = 6.0 ft, using a submerged arc welding operation under automatic control at a voltage of 25 volts and current of 300 amps. The tube is slowly rotated under a stationary welding head. The heat transfer factor for SAW is = 0.95 and the assumed melting factor = 0.7. The cross-sectional area of the weld bead is 0.12 in2. If the unit melting energy for the steel = 150 Btu/in3, determine (a) the rotational speed of the tube and (b) the time required to complete the weld.

Maple Corp. owns several highly valued paintings that are on display in the corporation’s headquarters.  This year, it donated one of the paintings valued at $100,000 (tax basis of $25,000), to a local museum for the museum to display. What is the amount of Maple Corp.’s charitable contribution deduction for the painting (assuming income limitations do not apply)?  What would be Maple’s deduction if the museum sold the painting one month after it received it from Maple? (Assume Maple Corp. had prior knowledge of the museum’s intention to sell the painting after receiving it.)

Did the exchange rate difficulties experienced by countries under the ERM strengthen or weaken the arguments for progressing to a single European currency?