Question & Answer

What are the advantages of infiltration in PM?

Johanne transferred investment property to S&J Corporation in exchange for 60 percent of the S&J Corporation stock (60 shares valued at $115,000). The property's fair market value was $190,000 and its tax basis to Johanne was $60,000. The investment property was subject to a $75,000 mortgage that S&J Corporation assumed on the transfer (not treated as boot).   a. Assuming the transfer qualifies under §351, what are the amount and character of the gain Johanne must recognize on the exchange?  b. What is Johanne's tax basis in the S&J stock he received in the exchange? c. Assume that in addition to the investment property, Johanne transferred inventory with a fair market value of $30,000 and a tax basis of $20,000 for additional S&J Corporation stock. What are the amount and character of gain Johanne must recognize on the exchange of the investment property and inventory for stock? d. Assuming the facts in part (c), what is Johanne's basis in the S&J stock he received in the exchange? e. Assume the original facts except that the liability assumed by S&J Corporation would give rise to a deduction when paid. What are the amount and character of gain Johanne must recognize on the exchange? f. Assuming the facts in part (e), what is Johanne's basis in the S&J stock he received in the exchange?

Justine would like to clarify her understanding of a code section recently enacted by Congress.  What tax law sources are available to assist Justine?

Explain why the cost of commuting from home to work is not deductible as a business expense.

1.       : How does relational coordination differ from teams and task forces? Explain your answer.

Latrell recently used his Delta Skymiles to purchase a free roundtrip ticket to Milan, Italy (value $1,200).  The frequent flyer miles used to purchase the ticket were generated from Latrell’s business travel as a CPA.  Latrell’s employer paid for his business trips, and he was not taxed on the travel reimbursement.   a.  Use an available tax research service to determine how much income, if any, does Latrell have to recognize as a result of purchasing an airline ticket with Skymiles earned from business travel.  b.  Write a memo communicating the results of your research.

Describe the conditions in which a donation of property to a charity will result in a charitable contribution deduction of fair market value and when it will result in a deduction of the tax basis of the property.

Which elements are the noble metals?

Suppose that utilities are considered a fixed cost for a retail clothing outlet. Why might we expect a variance to occur for the cost of utilities?

} Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship.  In late December she received a $20,000 bill from her accountant for consulting services related to her small business.  Reese can pay the $20,000 bill any time before January 30 of next year without penalty.  Assume Reese’s marginal tax rate is 30 percent this year and will be 40 percent next year, and that she can earn an after-tax rate of return of 12 percent on her investments.  When should she pay the $20,000 bill—this year or next?

According to the die casting video, what materials are most common for die-casting dies?

A laser triangulation system has the laser mounted at a 35° angle from the vertical. The distance between the worktable and the photodetector is 24.0000 in. Determine (a) the distance between the laser and the photodetector when no part is present and (b) the height of a part when the distance between the laser and photo-detector is 12.0250 in.

The basic issue in variable and absorption costing could be said to be one of timing rather than amount. Explain.

Why do the accounting standards require absorption costing for financial reporting?

The outstanding capital stock of Edna Millay Corporation consists of 2,000 shares of $100 par value, 8% preferred, and 5,000 shares of $50 par value common. Instructions Assuming that the company has retained earnings of $90,000, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions. (a) The preferred stock is noncumulative and nonparticipating. (b) The preferred stock is cumulative and nonparticipating. (c) The preferred stock is cumulative and participating. (Round dividend rate percentages to four decimal places.)

The income statement of Vince Gill Company is shown below. VINCE GILL COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Sales revenue $6,900,000 Cost of goods sold Beginning inventory $1,900,000 Purchases 4,400,000 Goods available for sale 6,300,000 Ending inventory 1,600,000 Cost of goods sold 4,700,000 Gross profi t 2,200,000 Operating expenses Selling expenses 450,000 Administrative expenses 700,000 1,150,000 Net income $1,050,000 Additional information: 1. Accounts receivable decreased $360,000 during the year. 2. Prepaid expenses increased $170,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $275,000 during the year. 4. Accrued expenses payable decreased $100,000 during the year. 5. Administrative expenses include depreciation expense of $60,000. Instructions Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2014, for Vince Gill Company, using the indirect method.

Sasha owes additional tax imposed in a recent audit.  In addition to the tax, will she be assessed other amounts?  If so, how will these amounts be determined?

Static and flexible budgets, variances, information quality The photocopying department in the local polytechnic college has budgeted monthly costs at $40 000 per month plus $7 per student. Normally 800 students are enrolled. During March there were 730 students (which is within the relevant range). At the end of the month, actual fixed costs were $42 000 and variable costs were $3650.   Required (a) Develop a static budget for photocopying costs based on 800 students. (b) Calculate the March static budget variance for fixed and variable photocopying costs. (c) Develop a flexible budget for the actual volume of students in March. (d) Calculate the March flexible budget variance for fixed and variable photocopying costs. (e) Which variance information — part (b) or (c) — is of higher quality? Explain.

What is a binary vision system?

What are some ways that a parent could effectively shift income to a child? What are some of the disadvantages of these methods?

What is the meaning of an initial return for an IPO? (LO3)

Is the value of a money market fund or a bond fund more susceptible to rising interest rates? Explain. (LO3)

Theory Suppose that the U.S. Treasury decided to finance its deficit with mostly long-term funds. How could this decision affect the term structure of interest rates? If short-term and long-term markets were segmented, would the Treasury’s decision have a more or less pronounced impact on the term structure? Explain. (LO3)

Use the information from IFRS17-10 but assume the shares were purchased to meet a non-trading regulatory requirement. Prepare Fairbanks’ journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment.

Explain relevant information in a decision-making context.