Question 1
Question 1 Carolyn transfers property with an adjusted basis of $50,000 and a FMV of $60,000 in exchange for Prime Corporation stock in a Sec. 351 transaction. Carolyn's basis in the stock is $60,000. $50,000. $10,000. $0. Question 2 Ralph transfers property with an adjusted basis of $65,000 and a FMV of $70,000 to Lake Corporation in a Sec. 351 transaction. Ralph receives stock worth $60,000 and a short-term note having a $10,000 FMV. Ralph's basis in the stock is $75,000. $70,000. $65,000. $60,000. Question 3 Sarah transfers property with an $80,000 adjusted basis and a $100,000 FMV to Super Corporation in a Sec. 351 transaction. Sarah receives stock with an $85,000 FMV and a short-term note with a $15,000 FMV. Sarah's basis in the stock is $100,000. $95,000. $85,000. $80,000. Question 4 The transferor's holding period for any stock received in exchange for a capital asset includes the holding period for the property transferred. begins on the day after the exchange. begins on the day of the exchange. none of the above Question 5 Trail Corporation has gross profits on sales of $140,000 and deductible expenses of $180,000. In addition, Trail has a net capital gain of $60,000. Trail's taxable income is $20,000 loss. $40,000 loss. $60,000. $20,000. Question 6 Identify which of the following is false. Corporations that sell real property at a gain must report an additional 20% of the entire gain as ordinary income. Corporations selling real property that previously had been depreciated using an accelerated method are subject to Sec. 291. Section 291 reduces the amount of net Sec. 1231 gains that can be offset by corporate capital losses. Section 291 recapture applies to Sec. 1250 property. Question 7 Dallas Corporation, not a dealer in securities, realizes taxable income of $60,000 from the operation of its business. Additionally, in the same year Dallas realizes a long-term capital loss of $10,000 from the sale of marketable securities. If the corporation realizes no other capital gains or losses, what is the proper treatment for the $10,000 long-term capital loss on the tax return? Use $3,000 of the loss to reduce taxable income and carry $7,000 of the long-term capital loss forward for five years. Use $6,000 of the loss to reduce taxable income by and carry $4,000 of the long-term capital loss forward for five years. Use $10,000 of the long-term capital loss to reduce taxable income. Carry the $10,000 long-term capital loss back three years as a short-term capital loss then forward five years. Question 8 Evans Corporation has a $15,000 net capital loss in 2007. The corporation reported the following capital gain net income during the past three years. Identify which of the following statements is true. Year Capital Gain/Net Income 2006 $10,000 2007 $11,000 2008 $5,000 The loss is used to offset the gains from 2006 and then carried back to offset $10,000 of the gains in 2007. The loss is used to offset the $11,000 of the 2007 gains and then carried back to offset $4,000 of the year 2006 net gain. The loss is used to offset $3,000 of the current year ordinary income, all of the year 2007 capital gains and $7,000 of the year 2008 net gain. The loss is used to offset the year 2006 net gains, then $5,000 of the year 2007 net gains. Question 9 Booth Corporation sells a building classified as a residential rental property for $200,000. The MACRS straight-line depreciation taken is $20,000 and the adjusted basis of the building is $170,000. Booth Corporation must recognize ordinary income of $30,000. $20,000. $4,000. $0 Question 10 Which of the following items indicate that a company does not need a valuation allowance? Existing sales contracts that will produce sufficient income to realize the deferred tax asset. Excess of appreciated asset value over tax basis sufficient to realize the deferred tax asset. A strong history of earnings without considering the deferred tax asset. All of the above.,I don't understand the question you are asking. Please explain.,Only 4 out of the 10 questions were correct.
Question 2
MAT540 Week 7 Homework Chapter 3 8. Solve the model formulated in Problem 7 for Southern Sporting Goods Company using the computer. a. State the optimal solution. b. What would be the effect on the optimal solution if the profit for a basketball changed from $12 to $13? What would be the effect if the profit for a football changed from $16 to $15? c. What would be the effect on the optimal solution if 500 additional pounds of rubber could be obtained? What would be the effect if 500 additional square feet of leather could be obtained? Reference Problem 7.Southern Sporting Good Company makes basketballs and footballs. Each product is produced from two resources rubber and leather. The resource requirements for each product and the total resources available are as follows: Resource Requirements per Unit Product Rubber (lb.) Leather (ft2) Basketball 3 4 Football 2 5 Total resources available 500 lb. 800 ft2 10. A company produces two products, A and B, which have profits of $9 and $7, respectively. Each unit of product must be processed on two assembly lines, where the required production times are as follows: Hours/ Unit Product Line 1 Line2 A 12 4 B 4 8 Total Hours 60 40 a. Formulate a linear programming model to determine the optimal product mix that will maximize profit. b. Transform this model into standard form. 11. Solve problem 10 using the computer. a. State the optimal solution. b. What would be the effect on the optimal solution if the production time on line 1 was reduced to 40 hours? c. What would be the effect on the optimal solution if the profit for product B was increased from $7 to $15 to $20? 12. For the linear programming model formulated in Problem 10 and solved in Problem 11. a. What are the sensitivity ranges for the objective function coefficients? b. Determine the shadow prices for additional hours of production time on line 1 and line2 and indicate whether the company would prefer additional line 1 or line 2 hours. 14. Solve the model formulated in Problem 13 for Irwin Textile Mills. a. How much extra cotton and processing time are left over at the optimal solution? Is the demand for corduroy met? b. What is the effect on the optimal solution if the profit per yard of denim is increased from $2.25 to $3.00? What is the effect if the profit per yard of corduroy is increased from $3.10 to $4.00? c. What would be theeffect on the optimal solution if Irwin Mils could obtain only 6,000 pounds of cotton per month? Reference Problem 13. Irwin Textile Mills produces two types of cotton cloth ? denim and corduroy. Corduroy is a heavier grade of cotton cloth and, as such, requires 7.5 pounds of raw cotton per yard, whereas denim requires 5 pounds of raw cotton per yard. A yard of corduroy requires 3.2 hours of processing time; a yard of denim requires 3.0 hours. Although the demand for denim is practically unlimited, the maximum demand for corduroy is 510 yards per month. The manufacturer has 6,500 pounds of cotton and 3,000 hours of processing time available each month. The manufacturer makes a profit of $2.25 per yard of denim and $3.10 per yard of corduroy. The manufacturer wants to know how many yards of each type of cloth to produce to maximize profit. Formulate the model and put it into standard form. Solve it. 15. Continuing the model from Problem 14. a. If Irwin Mills can obtain additional cotton or processing time, but not both, which should it select? How much? Explain your answer. b. Identify the sensitivity ranges for the objective function coefficients and for the constraint quantity values. Then explain the sensitivity range for the demand for corduroy. ? 16. United Aluminum Company of Cincinnati produces three grades (high, medium, and low) of aluminum at two mills. Each mill has a different production capacity (in tons per day) for each grade as follows: Aluminum Grade Mill 1 2 High 6 2 Medium 2 2 Low 4 10 The company has contracted with a manufacturing firm to supply at least 12 tons of high-grade aluminum, and 5 tons of low-grade aluminum. It costs United $6,000 per day to operate mill 1 and $7,000 per day to operate mill 2. The company wants to know the number of days to operate each mill in order to meet the contract at minimum cost. a. Formulate a linear programming model for this problem. 18. Solve the linear programming model formulated in Problem 16 for Unite Aluminum Company by using the computer. a. Identify and explain the shadow prices for each of the aluminum grade contract requirements. b. Identify the sensitivity ranges for the objective function coefficients and the constraint quantity values. c. Would the solution values change if the contract requirements for high-grade alumimum were increased from 12 tons to 20 tons? If yes, what would the new solution values be? 24. Solve the linear programming model developed in Problem 22 for the Burger Doodle restaurant by using the computer. a. Identify and explain the shadow prices for each of the resource constraints b. Which of the resources constrains profit the most? c. Identify the sensitivity ranges for the profit of a sausage biscuit and the amount of sausage available. Explain these sensitivity ranges. Reference Problem 22. The manager of a Burger Doodle franchise wants to determine how many sausage biscuits and ham biscuits to prepare each morning for breakfast customers. The two types of biscuits require the following resources: Biscuit Labor (hr.) Sausage (lb.) Ham (lb.) Flour (lb.) Sausage 0.010 0.10 --- 0.04 Ham 0.024 --- 0.15 0.04 The franchise has 6 hours of labor available each morning. The manager has a contract with a local grocer for 30 pounds of sausage and 30 pounds of ham each morning. The manager also purchases 16 pounds of flour. The profit for a sausage biscuit is $0.60; the profit for a ham biscuit is $0.50. The manager wants to know the number of each type of biscuit to prepare each morning in order to maximize profit. Formulate a linear programming model for this problem.
Question 3
3. Nile Foods' stock has a beta of 1.4, while Elbe Eateries' stock has a beta of 0.7. Assume that the risk-free rate, rRF, is 5.5% and the market risk premium, (rM - rRF), equals 4%. Which of the following statements is CORRECT? (Points: 3) Since Nile's beta is twice that of Elbe's, its required rate of return will also be twice that of Elbe's. If the risk-free rate increases but the market risk premium remains unchanged, the required return will increase for both stocks but the increase will be larger for Nile since it has a higher beta. If the market risk premium increases but the risk-free rate remains unchanged, Nile's required return will increase because it has a beta greater than 1.0 but Elbe's will decline because it has a beta less than 1.0. If the market risk premium decreases but the risk-free rate remains unchanged, Nile's required return will decrease because it has a beta greater than 1.0 and Elbe's will also decrease, and by more than Nile's because it has a beta less than 1.0. If the risk-free rate increases while the market risk premium remains constant, then the required return on an average stock will increase.
Question 4
Payroll Computation with Incentive Bonus Fifteen workers are assigned to a group project. The production standard calls for 500 units to be completed each hour to meet a customer's set deadline for the products. If the required units can be delivered before the target date on the order, the customer will pay a substantial premium for early delivery. The company, wishing to encourage the workers to produce beyond the established standard, has offered an excess-production bonus that will be added to each project employee's pay. The bonus is to be computed as follows: a. b. Individual's hourly wage rate x bonus percentage = hourly bonus rate c. Hourly wage rate + hourly bonus rate = new hourly rate for week d. Total hours worked x new hourly rate = earnings for week The average wage rate for the project workers is $15 per hour. The production record for the week shows the following: Round the bonus percentage to five decimal places and both the bonus rate AND total bonus and total wages to the nearest cent. Required: 1. Determine the hourly bonus rate and the total amount of the bonus for the week. Hourly bonus rate $ Total bonus for week $ 2. What are the total wages of L. Brock, who worked 40 hours at a base rate of $15 per hour? $ 3. What are the total wages of R. Gibson, who worked 35 hours at a base rate of $20 per hour? $
Question 5
P4?2A Gil Vogel started his own consulting firm, Vogel Consulting, on June 1, 2012. The trial balance at June 30 is as follows. Prepare adjusting entries, post to ledger accounts, and prepare adjusted trial balance. (SO 4, 5, 6), AP VOGEL CONSULTINGTrial BalanceJune 30, 2012 Debit Credit Cash $ 6,850 Accounts Receivable 7,000 Prepaid Insurance 2,880 Supplies 2,000 Equipment 15,000 Accounts Payable $ 4,230 Unearned Service Revenue 5,200 Common Stock 22,000 Service Revenue 8,300 Salaries and Wages Expense 4,000 Rent Expense 2,000 $39,730 $39,730 In addition to those accounts listed on the trial balance, the chart of accounts for Vogel also contains the following accounts: Accumulated Depreciation?Equipment, Utilities Payable, Salaries and Wages Payable, Depreciation Expense, Insurance Expense, Utilities Expense, and Supplies Expense. Other data: Supplies on hand at June 30 total $720. A utility bill for $180 has not been recorded and will not be paid until next month. The insurance policy is for a year. $4,100 of unearned service revenue has been earned at the end of the month. Salaries of $1,250 are accrued at June 30. The equipment has a 5-year life with no salvage value and is being depreciated at $250 per month for 60 months. Invoices representing $3,900 of services performed during the month have not been recorded as of June 30. Instructions Prepare the adjusting entries for the month of June. Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. Use T accounts. Prepare an adjusted trial balance at June 30, 2012. (b) Service rev. $16,300 (c) Tot. trial balance $45,310
