Question & Answer

What are some of the cybersecurity issues facing fintech companies? (LO5)

As an illustration of the difficulty in identifying monopolies, try to decide which of the following are monopolies: BT; a local evening newspaper; food sold in a university outlet; a village post office; Interflora; the London Underground; ice creams in the cinema; Guinness; the board game ‘Monopoly’. (As you will quickly realise in each case, it depends how you define the industry.)

Exquisite Furniture designs and manufactures custom furniture from exotic materials. Explain why spoilage is sometimes recorded as a cost for a specific job and other times as overhead for this entity.

1. Why is it easier to use taxes and subsidies to tackle the problem of car exhaust pollution than to tackle the problem of peak-time traffic congestion in cities? 2. CFCs in fridges were known to cause environmental damage and their use has been banned in most countries. Why has this approach been adopted rather than the tax solution?

Another type of strategy firms can follow in a repeated game is the ’tit-for-tat’ strategy. What is the tit-for-tat strategy? What impact will it have on the most likely outcome in a repeated game?

Assume that there are 200 consumers in the market. Of these, 100 have schedules like Kate’s and 100 have schedules like Simon’s. What would be the total market demand schedule for potatoes now?                                Price(pence per kg) Total market demand(kg)             20             40             60             80           100                 4400                 2600                 1400                   800                   600 1. How much would be demanded at a price of 30p per kilogram? 2. Assuming that demand does not change from month to month, plot the annual market demand for potatoes.

In choosing a trial-level court, how should a court’s previous rulings influence the choice?  How should circuit court rulings influence the taxpayer’s choice of a trial-level court?

Presented below is information related to copyrights owned by Walter de la Mare Company at December 31, 2014. Cost $8,600,000 Carrying amount 4,300,000 Expected future net cash fl ows 4,000,000 Fair value 3,200,000 Assume that Walter de la Mare Company will continue to use this copyright in the future. As of December 31, 2014, the copyright is estimated to have a remaining useful life of 10 years. Instructions (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2014. The company does not use accumulated amortization accounts. (b) Prepare the journal entry to record amortization expense for 2015 related to the copyrights. (c) The fair value of the copyright at December 31, 2015, is $3,400,000. Prepare the journal entry (if any) necessary to record the increase in fair value.

Ames Company reported 2014 net income of $151,000. During 2014, accounts receivable increased by $13,000 and accounts payable increased by $9,500. Depreciation expense was $44,000. Prepare the cash flows from operating activities section of the statement of cash flows.

Explain the similarities and dissimilarities between depreciation, amortization, and depletion. Describe the cost recovery method used for each of the four asset types (personal property, real property, intangible property, and natural resources).

Indicate whether the following items are capitalized or expensed in the current year. (a) Purchase cost of a patent from a competitor. (b) Research costs. (c) Development costs (after achieving economic viability). (d) Organizational costs. (e) Costs incurred internally to create goodwill.

Diderot Stores Inc., which uses the conventional retail inventory method, wishes to change to the LIFO retail method beginning with the accounting year ending December 31, 2014. Amounts as shown below appear on the store’s books before adjustment. Cost Retail Inventory, January 1, 2014 $ 15,800 $ 24,000 Purchases in 2014 116,200 184,000 Markups in 2014 12,000 Markdowns in 2014 5,500 Sales revenue in 2014 175,000 You are to assume that all markups and markdowns apply to 2014 purchases, and that it is appropriate to treat the entire inventory as a single department. Instructions Compute the inventory at December 31, 2014, under the following methods. (a) The conventional retail method. (b) The last-in, first-out retail method, effecting the change in method as of January 1, 2014. Assume that the cost-to-retail percentage for 2013 was recomputed correctly in accordance with procedures necessary to change to LIFO. This ratio was 59%.

Janyce, a single taxpayer, has AGI of $125,000 and paid the following taxes this year. Calculate how much Janyce can deduct for taxes as an itemized deduction this year.

Arness Woodcrafters sells $250,000 of receivables to Commercial Factors, Inc. on a with recourse basis. Commercial assesses a finance charge of 5% and retains an amount equal to 4% of accounts receivable. Arness estimates the fair value of the recourse liability to be $8,000. Prepare the journal entry for Arness to record the sale.

Bella Partnership is an equal partnership in which each of the partners has a basis in their partnership interest of $10,000. Bella reports the following balance sheet: Assets: Tax Basis FMV Inventory $ 20,000 $ 30,000 Land 10,000 15,000    Totals $ 30,000 $ 45,000 Liabilities and capital: Capital- Toby 10,000 - Kaelin 10,000 - Andrew 10,000   Totals $ 30,000 a. Identify the hot assets if Toby decides to sell his partnership interest. Are these assets “hot” for purposes of distributions? b. If Bella distributes the land to Toby in complete liquidation of his partnership interest, what tax issues should be considered?

: Explain how artificial intelligence may help bridge the historical struggle between managing the “things of production” and the “humanity of production.”

The grinding wheel in a centerless grinding operation has a diameter = 200 mm, and the regulating wheel diameter = 125 mm. The grinding wheel rotates at 3000 rev/min and the regulating wheel rotates at 200 rev/min. The inclination angle of the regulating wheel = 2.5°. Determine the throughfeed rate of cylindrical workparts that are 25.0 mm in diameter and 175 mm long.

For what reasons may governments want other governments to stick to tough climate or emissions targets and yet be not willing to so so themselves?

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.

Katie recently won a ceramic dalmatian valued at $800 on a television game show.  She questions whether this prize is taxable since it was a “gift” she won on the show.  a.  Use an available tax research service to answer Katie’s question. b.  Write a letter to Katie communicating the results of your research

When is an S corporation required to pay the excess net passive income tax?

A slab milling operation is performed on the top surface of a steel rectangular workpiece 12.0 in long by 2.5 in wide. The helical milling cutter, which has a 3.0 in diameter and ten teeth, is set up to overhang the width of the part on both sides. Cutting speed is 125 ft/min, feed is 0.006 in/tooth, and depth of cut = 0.300 in. Determine (a) the actual machining time to make one pass across the surface and (b) the maximum metal removal rate during the cut. (c) If an additional approach distance of 0.5 in is provided at the beginning of the pass (before cutting begins), and an overtravel distance is provided at the end of the pass equal to the cutter radius plus 0.5 in, what is the duration of the feed motion

What would the isoquant map look like if there were (a) continuously increasing returns to scale; (b) continuously decreasing returns to scale?

Last year, Cougar Corp. (CC) reported a net operating loss of $25,000. In the current year, CC expected its current-year tax liability to be $260,000, so it made four equal estimated tax payments of $65,000 each. Cougar closed its books at the end of each quarter.  The following schedule reports CC’s taxable income at the end of each quarter:         Quarter-End Cumulative taxable income First $300,000 Second $700,000 Third $1,000,000 Fourth $1,500,000   CC’s current year tax liability on $1,500,000 of taxable income is $315,000.  Does CC owe underpayment penalties on its estimated tax payments?  If so, for which quarters does it owe the penalty?

Penny, a full-time biochemist, loves stock car racing. To feed her passion, she bought a used dirt-track car and has started entering some local dirt-track races. The prize money is pretty small ($1,000 for the winner), but she really is not in it for the money. This, Penny reported the following income and expenses from her nights at the track: