Question & Answer

Rolling Hills Golf Inc. was organized on July 1, 2014. Quarterly financial statements are prepared. The unadjusted trial balance and adjusted trial balance on September 30 are shown here.   Instructions (a) Journalize the adjusting entries that were made. (b) Prepare an income statement and a retained earnings statement for the 3 months ending September 30 and a classified balance sheet at September 30. (c) Identify which accounts should be closed on September 30. (d) If the note bears interest at 12%, how many months has it been outstanding?

1.      : How do you think Clarke should have communicated his concerns about the information link? Why?

Discuss why evaluating vertical equity simply based on tax rate structure may be less than optimal.

What controversy relates to the accounting for net operating loss carryforwards?

1.         : Is nice related to any concepts in the chapter, such as agreeableness, conscientiousness, or emotional intelligence? Discuss.

Presented below are two independent situations. 1. On January 1, 2014, Simon Company issued $200,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. 2. On June 1, 2014, Garfunkel Company issued $100,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. Instructions For each of these two independent situations, prepare journal entries to record the following. (a) The issuance of the bonds. (b) The payment of interest on July 1. (c) The accrual of interest on December 31.

Describe what happens to the individual particles during compaction.

Discuss how the property limitation restricts large businesses from taking the §179 expense.

Luke sold a building and the land on which the building sits to his wholly owned corporation, Studemont Corp., at fair market value. The fair market value of the building was determined to be $325,000; Luke built the building several years ago at a cost of $200,000. Luke had claimed $45,000 of depreciation on the building. The fair market value of the land was determined to be $210,000 at the time of the sale; Luke purchased the land many years ago for $130,000.      a. What are the amount and character of Luke’s recognized gain or loss on the building?  b. What are the amount and character of Luke’s recognized gain or loss on the land?

Is it possible for a rental property to generate a positive annual cash flow and at the same time produce a loss for tax purposes? Explain.

What is meant by the term graduated measuring device?

Dennis contributed business assets to a new business in exchange for stock in the company. The exchange did not qualify as a tax-deferred exchange. The fair market value of these assets was $287,000 on the contribution date. Dennis’s original basis in the assets he contributed was $143,000, and the accumulated depreciation on the assets was $78,000. a. What is the business’s basis in the assets it received from Dennis?  b. What would be the business’s basis if the transaction qualified as a tax-deferred exchange?

What types of business entities does the U.S. tax system recognize?

Explain how equilibrium would be restored in the circular flow of income if there were a fall in investment.

Refer to the definition of assets on page 216. Discuss how a leased building might qualify as an asset of the lessee (tenant) under this definition.

In the context of fiber reinforcement, what is a mat?

Under what conditions could a process complete more units during the period than it started?

What were the causes of the credit crunch and the banking crisis of 2008?

Developing direct cost standards; cost variances; use of variance analysis The Mighty Morphs produces two popular games, Powerful Puffs and Mini-Mite Morphs. Following are standard costs:       The standards call for more than one disk and documentation book per unit because of normal waste due to faulty DVDs and poor binding.   Actual costs for last week follow:       Management decided that it would require too much effort to keep track of how many DVDs and hours are used for each of the games separately. Accordingly, the DVD materials and labour variances are combined rather than computed separately for each game.   Required (a) What is the documentation price variance for Mini-Mite Morphs? (b) What is the efficiency variance for DVDs? (c) What is the sum of all variances for assembly labour for both games? (d) Discuss the pros and cons of building waste into the standards.

Sesame Company purchased a computer system for $74,000 on January 1, 2013. It was depreciated based on a 7-year life and an $18,000 salvage value. On January 1, 2015, Sesame revised these estimates to a total useful life of 4 years and a salvage value of $10,000. Prepare Sesame’s entry to record 2015 depreciation expense.

The adjusted trial balance of Eastwood Company and other related information for the year 2014 are presented as follows.   Additional information: 1. The LIFO method of inventory value is used. 2. The cost and fair value of the long-term investments that consist of stocks and bonds is the same. 3. The amount of the Construction in Progress account represents the costs expended to date on a building in the process of construction. (The company rents factory space at the present time.) The land on which the building is being constructed cost $85,000, as shown in the trial balance. 4. The patents were purchased by the company at a cost of $40,000 and are being amortized on a straight-line basis. 5. Of the discount on bonds payable, $2,000 will be amortized in 2015. 6. The notes payable represent bank loans that are secured by long-term investments carried at $120,000. These bank loans are due in 2015. 7. The bonds payable bear interest at 8% payable every December 31, and are due January 1, 2025. 8. 600,000 shares of common stock of a par value of $1 were authorized, of which 500,000 shares were issued and outstanding. Instructions Prepare a balance sheet as of December 31, 2014, so that all important information is fully disclosed.

(Looking at the Maths) 1. Complete the demand schedule in table up to a price of 50. (Looking at the Maths) 2. What is it about equation (2) that makes the demand curve (a) downward sloping; (b) a straight line?

State Hooke's law

Differentiate between a lag indicator and a lead indicator.  Provide two examples of each.                   (LO1)

Compare and contrast the similarities and differences between organizational expenditures and start-up costs for tax purposes.