Question & Answer

Keith Bowie is trying to determine the amount to set aside so that he will have enough money on hand in 2 years to overhaul the engine on his vintage used car. While there is some uncertainty about the cost of engine overhauls in 2 years, by conducting some research online, Keith has developed the following estimates. Engine Overhaul Probability Estimated Cash Outfl ow Assessment $200 10% 450 30% 600 50% 750 10% Instructions How much should Keith Bowie deposit today in an account earning 6%, compounded annually, so that he will have enough money on hand in 2 years to pay for the overhaul?

Cineplex Corporation is a diversified company that operates in five different industries: A, B, C, D, and E. The following information relating to each segment is available for 2015. A B C D E Sales revenue $40,000 $ 75,000 $580,000 $35,000 $55,000 Cost of goods sold 19,000 50,000 270,000 19,000 30,000 Operating expenses 10,000 40,000 235,000 12,000 18,000 Total expenses 29,000 90,000 505,000 31,000 48,000 Operating profi t (loss) $11,000 $ (15,000) $ 75,000 $ 4,000 $ 7,000 Identifi able assets $35,000 $ 80,000 $500,000 $65,000 $50,000 Sales of segments B and C included intersegment sales of $20,000 and $100,000, respectively. Instructions (a) Determine which of the segments are reportable based on the: (1) Revenue test. (2) Operating profit (loss) test. (3) Identifiable assets test. (b) Prepare the necessary disclosures required by GAAP.

Suppose you asked your favorite AI query tool the following question: “On December 15, 2024, Janelle sold 100 shares of stock she purchased five years ago. Janelle realized a $2,000 capital gain on the sale. She decided to repurchase the 100 shares of stock on January 10, 2025.

Explain how margin requirements can affect the potential return and risk from investing in a stock. What is the maintenance margin? (LO1)

What are the characteristics of high-quality information in a company’s first IFRS financial statements?

Why should caution be exercised in the use of the net income figure derived in an income statement? What are the objectives of generally accepted accounting principles in their application to the income statement?

Balanced scorecard; strategy map and implementation Terence Smythe, a veterinariant, decided to join a small group of vets so that he no longer has to be on call every night. Practice members share the responsibility of emergencies with other members of the group. In the past, Terrence differentiated his practice by specialising in the treatment of large farm. None of the other vets specialise in large farm animals, but all of them treat some farm animals. Terrences’s son just finished an accounting degree and recommended that the vets group consider implementing a balanced scorecard as they develop the policies and practices for the new group.                                           Required (a)     Explain what each of the four perspectives of the balanced scorecard mean in the context of a vets group. (b)     Recommend several methods the group could use to assess a performance objective of patient satisfaction. (c)     Recommend two measures for each of the four perspectives for the vets group. Explain your recommendations. (d)     Construct a strategy map to reflect the links between the measures selected. Briefly discuss the links.

What is the predominant alloying element in all of the stainless steels?

Elon Savings and Loan Association has a large number of 30-year mortgages with floating interest rates that adjust on an annual basis, and it obtains most of its funds by issuing five-year certificates of deposit. It uses the yield curve to assess the market’s anticipation of future interest rates. Elon believes that expectations of future interest rates are the major force affecting the yield curve. Assume that a downward-sloping yield curve with a steep slope exists. Based on this information, should Elon consider using financial futures as a hedging technique? Explain. (LO2)

On January 1, 2024, Janna has a tax basis of $15,000 in her Mimikaki stock (Mimikaki has been an S corporation since inception). In 2024, Janna was allocated $20,000 of ordinary income from Mimikaki. What are the amount and character of gain she recognizes from end-of-the-year distributions in each of the following alternative scenarios, and what is her stock basis following each distribution?

: Compare the ideal, rational model of decision making to the political model of decision making.

The adjusted trial balance for Ed Bradley Co. is presented in the following worksheet for the month ended April 30, 2014.   Instructions Complete the worksheet and prepare a classified balance sheet.

A Wall Street Journal article noted that Apple reported higher income than its competitors by using a more aggressive policy for recognizing revenue on future upgrades to its products. Some contend that Apple’s quality of earnings is low. What does the term “quality of earnings” mean?

The payroll of YellowCard Company for September 2013 is as follows. Total payroll was $480,000, of which $110,000 is exempt from Social Security tax because it represented amounts paid in excess of $113,700 to certain employees. The amount paid to employees in excess of $7,000 was $400,000. Income taxes in the amount of $80,000 were withheld, as was $9,000 in union dues. The state unemployment tax is 3.5%, but YellowCard Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee’s wages to $113,700 and 1.45% in excess of $113,700. No employee for YellowCard makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit. Instructions Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately.

If price regulation results in lower profits, will this always imply lower investment? How might a government incentivise innovation in a regulated industry?

What are the advantages and disadvantages of the singlestep income statement?

Calculation of budget variances The accountant for Moon Industries has taken unexpected leave and has not completed the end-ofperiod budget analysis. The following incomplete budget analysis was found on her desk.   Additional information: Required (a) Complete the variance analysis report. (b) Provide a brief report to management of any issues highlighted from your analysis in (a).

Distinguish between the modified all-inclusive income statement and the current operating performance income statement. According to present generally accepted accounting principles, which is recommended? Explain.

Distinguish between FHA and conventional mortgages. (LO1)

Why are parts sometimes fixed to the conveyor in a continuous transfer system in manual assembly?

List the four most common blow-molding processes according to the video on blow molding.

Perlman Land Development, Inc. purchased land for $70,000 and spent $30,000 developing it. It then sold the land for $160,000. Sheehan Manufacturing purchased land for a future plant site for $100,000. Due to a change in plans, Sheehan later sold the land for $160,000. Should these two companies report the land sales, both at gains of $60,000, in a similar manner?

Compute the unit energy for melting for the following metals: (a) aluminum and (b) plain low carbon steel.

Kano and his wife, Hoshi, have been married for 10 years and have two children under the age of 12. The couple has been living apart for the last two years and both children live with Kano. Kano has provided all the means necessary to support himself and his children. Kano and Hoshi do not file a joint return.

Suppose you asked your favorite AI query tool the following question: “Is total income on Form 1040 the same thing as gross income?”  The AI tool provided the following response:   Is the AI response to the question correct?  Explain.