Several years ago, Carol Mutter, a cash-basis taxpayer, obtained a mortgage from Weak National Bank to purchase a personal residence. In December 2019, $8,500 of interest was due on the mortgage, but Carol had only $75 in her checking account. On December 31, 2019, she borrowed $8,500 from her sister, Pearl, evidenced by a note, and the proceeds were deposited in her checking account. On the same day, Carol issued a check in the identical amount of $8,500 to Weak Bank for the interest due. Is the interest expense deductible for the 2019 tax year?Prepare (in good form) a research memorandum to the file. (See Chapter 2 for an illustration of the structure of a tax memo.)

Answer and Explanation:

The tax memo is as follows

Tax memo

From: Tax Advisory

Specific issue: the case here addresses Taxpayer A deduction of interest expenses for the period 2009 in which taxpayer A filed taxes

Facts : taxpayer A realized interest in mortgage amounting to $8500 which is owed to Weak National Bank. Taxpayer A applied for a loan with same Weak national bank for settlement of mortgage loan interest of $8500

Conclusion: Taxpayer A can not get deduction of interest expense on loan in weak bank for 2009 tax returns. This is because taxpayer A applied for loan with Weak bank and paid with cheque from same bank in which mortagage interest was owed in settlement of debt interest, and as such cannot qualify for deduction

Cash basis tax payers can report tax deductions in year in which they payment is made in cash

Two alternatives are under consideration. The first alternative will cost $100,000, require $20,000 in maintenance and operation costs each year, and a life cycle of 4 years. The second alternative will cost $300,000, require $5,000 in maintenance and operation costs each year and a life of 6 years. Neither option will have a salvage value. In order to compute the present worth or future worth, how many years of each alternative should I use to accurately compare the two alternatives.

Assume that Atlas Sporting Goods Inc. has $1,040,000 in assets. If it goes with a low-liquidity plan for the assets, it can earn a return of 14 percent, but with a high-liquidity plan the return will be 11 percent. If the firm goes with a short-term financing plan, the financing costs on the $1,040,000 will be 8 percent, and with a long-term financing plan the financing costs on the $1,040,000 will be 9 percent.
a. Compute the anticipated return after financing costs with the most aggressive asset-financing mix.
Anticipated return $
b. Compute the anticipated return after financing costs with the most conservative asset-financing mix.
Anticipated return $
c. Compute the anticipated return after financing costs with the two moderate approaches to the asset-financing mix.
Anticipated Return
Low liquidity $
High liquidity $

H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.15 million. The fixed asset qualifies for 100 percent bonus depreciation. The project is estimated to generate $2.23 million in annual sales, with costs of $1.25 million. The project requires an initial investment in net working capital of $150,000, and the fixed asset will have a market value of $185,000 at the end of the project. Assume that the tax rate is 23 percent and the required return on the project is 14 percent.
What is the project’s NPV?

Five years ago, Diane secured a bank loan of $310,000 to help finance the purchase of a loft in the San Francisco Bay area. The term of the mortgage was 30 years, and the interest rate was 8%/year compounded monthly on the unpaid balance. Because the interest rate for a conventional 30-year home mortgage has now dropped to 6.5%/year compounded monthly, Diane is thinking of refinancing her property.

Required:
a. What is Diane's current monthly mortgage payment?
b. What is Diane's current outstanding principal?
c. If Diane decides to refinance her property by securing a 30-year home mortgage loan in the amount of the current outstanding principal at the prevailing interest rate of 6.5%/year compounded monthly, what will be her monthly mortgage payment?
d. How much less will Diane's monthly mortgage payment be if she refinances?

On December 1, Bruney Company introduces a new product that includes a one-year warranty on parts. In December, 1,000 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $90 per unit.

Required:
Prepare the adjusting entry at December 31 to accrue the estimated warranty cost, assuming no warranty claims have been honored to date.

During 2019, John was the chief executive officer and a shareholder of Maze, Inc. He owned 60% of the outstanding stock of Maze. In 2016, John and Maze, as co-borrowers, obtained a $100,000 loan from United National Bank. This loan was secured by John’s personal residence. Although Maze was listed as a co-borrower, John repaid the loan in full in 2019. On Maze’s Form 1120 tax returns, no loans from shareholders were reported. Discuss whether John is entitled to a bad debt deduction for the amount of the payment on the loan.

As energy costs continue to rise, power efficiency is increasingly important. Acme Chemical is evaluating 2 different electric motors to drive a mixing motor and needs to perform a present economy study. The motor will produce 75 hp and will be operated 8 hours per day, 365 days for one year (maintenance will be performed on second shift—assume no down time during operation), after which time the motor will have no value. Select the most economical motor. Assume Acme’ s electric power costs $0.16 per kWh. (1 hp = 0.746 kW).
Motor A Motor B
Purchase price $3,200 $5,900
Annual maintenance cost $250 $450
Efficiency 75% 85%

Five hundred small almond growers operate in areas with plentiful rainfall. The marginal cost of producing almonds in these locations is given by MC = .02Q, where Q is the number of crates produced in a growing season. Three hundred almond growers operate in drier areas where costly irrigation is required. The marginal cost of growing almonds in these locations is given by MC = .04Q.
A. What is the individual supply curve for each type of almond grower?
B. "Add up" the individual supply curves to derive the market supply curve.
C. If the market demand for almonds is Qa = 105,000 – 2,500P, what will the equilibrium price of almonds be?
D. How many almonds will each type of almond grower produce at that price?
E. Find producer surplus by each type of grower.
F. Find producer surplus by the entire market.

What is Your Fav song and Singer??

Aka:My Song is 10,000 hours and singer is Taylor swift but she dont sing that song!

Im a county person and a Farm girl im in 6th grade but me and my mom and dad moved into the city its not fun because i dont get to have horses and stuff.

The gain on the disposal of equipment is recognized when: Multiple Choice The book value of the equipment is greater than the value received. The book value of the equipment is less than the value received. A salvage value exists. A gain should not be recognized on the disposal of an asset.

Safety training in the workplace should be focused on _______.

Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows:

Raw materials $ 40,000
Work in process $ 18,000
Finished goods $ 35,000

The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company’s predetermined overhead rate of $16.25 per direct labor-hour was based on a cost formula that estimated $650,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:

a. Raw materials were purchased on account, $510,000
b. Raw materials use in production, $480000. All of of the raw materials were used as direct materials.
c. The following costs were accrued for employee services: direct labor, $600,000; indirect labor, $150,000; selling and administrative salaries, $240,000.
d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $367,000
e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $500,000.
f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.
g. Jobs costing $1,680,000 to manufacture according to their job cost sheets were completed during the year.
h. Jobs were sold on account to customers during the year for a total of $2,800,000. The jobs cost $1,690,000 to manufacture according to their job cost sheets.

Required:
1. What is the journal entry to record the labor costs incurred during the year?
2. What is the total amount of manufacturing overhead applied to production during the year?
3. What is the total manufacturing cost added to Work in Process during the year?
4. What is the journal entry to record the transfer of completed jobs that is referred to in item g above?
5. What is the ending balance in Work in Process?
6. Is manufacturing overhead underapplied or overapplied for the year? By how much?
7. What is the ending balance in Finished Goods?
8. Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year?
9. What is the gross margin for the year?
10. What is the net operating income for the year?

The following transactions occurred during 2021 for the Beehive Honey Corporation:
Feb. 1 Borrowed $24,000 from a bank and signed a note. Principal and interest at 8% will be paid on January 31, 2022.
Apr. 1 Paid $6,000 to an insurance company for a two-year fire insurance policy.
July 17 Purchased supplies costing $4,000 on account. The company records supplies purchased in an asset account. At the year-end on December 31, 2021, supplies costing $1,850 remained on hand.
Nov. 1 A customer borrowed $9,600 and signed a note requiring the customer to pay principal and 6% interest on April 30, 2022.
Required:
1. Record each transaction in general journal form.
2. Prepare any necessary adjusting entries at the year-end on December 31, 2021. No adjusting entries were recorded during the year for any item.

The company's adjusted trial balance includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Retained earnings, $59,000; Dividends, $2,000; Fees Earned, $56,000; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances.

Required:
Prepare the first closing entry.

No Date General Journal Debit Credit
1 Dec 31 No Transaction recorded

Trade Theories, a Historical Approach
Read the overview below and complete the activities that follow.
Free trade refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country, or what they can produce and sell to another country. The economic arguments surrounding the benefits and costs of free trade in goods and services are not abstract academic ones. International trade theory has shaped the economic policy of many nations for the past 50 years.
The textbook reviews six main trade theories: Adam Smith's theory of absolute advantage; David Ricardo's theory of comparative advantage; the Heckscher-Ohlin theory and the product life-cycle theory, which extend various aspects of Ricardo's theory; the new trade theory explaining the benefits from trade without national differences in resource endowments or technology; and Michael Porter's theory of national competitive advantage that draws attention to an international success in a particular industry. All these theories identify the specific benefits of international trade, help to explain the patterns of international trade, and government trade.
Match the correct theory with its corresponding description and time period in the evolution of international trade theory.1. Established in 1776, Adam Smith stated in this theory that countries should specialize in the production of goods and services for which they can produce most efficiently and then trade these for goods produced by other countries.A. Absolute advantage theory.B. New trade theory.C. Heckscher-Ohlin theory.D. National competitive advantage theory.E. Comparative advantage theory.F. Product life-cycle theory2. In 1817, David Ricardo stated that it makes sense for a country to specialize in the production of those goods that it produces most efficiently and to buy the goods that it produces less efficiently from other countries.A. Absolute advantage theory.B. New trade theory.C. Heckscher-Ohlin theory.D. National competitive advantage theory.E. Comparative advantage theory.F. Product life-cycle theory3. In the early 1900s, this theory predicts that countries will export those goods that make intensive use of factors that are locally abundant and import goods that make intensive use of factors that are locally scarce.A. Absolute advantage theory.
B. New trade theory.
C. Heckscher-Ohlin theory.
D. National competitive advantage theory.
E. Comparative advantage theory.
F. Product life-cycle theory4. In the mid-1960s, a theory initially proposed by Raymond Vernon, points out that where a new product is introduced is important. Over time, cost considerations start playing a greater role in the competitive process.A. Absolute advantage theory.B. New trade theory.C. Heckscher-Ohlin theory.D. National competitive advantage theory.E. Comparative advantage theory.F. Product life-cycle theory5. Emerging in the 1970s, this theory states that through its impact on economies of scale, trade can increase the variety of goods available to consumers while decreasing the average cost of those goods.A. Absolute advantage theory.B. New trade theory.C. Heckscher-Ohlin theory.D. National competitive advantage theory.E. Comparative advantage theory.F. Product life-cycle theory6. The most current theory was developed by Michael Porter and states that four broad attributes of a nation shape the environment in which local firms compete, and these attributes promote or impede the creation of competitive advantage.A. Absolute advantage theory.B. New trade theory.C. Heckscher-Ohlin theory.D. National competitive advantage theory.E. Comparative advantage theory.F. Product life-cycle theory

Cycles started with 5 bicycles that cost $8 each. On August 16, California bought 30 bicycles at $55 each. On August 30, California sold 20 bicycles for $105 each.
Requirements
1. Prepare ​Cycle's perpetual inventory record assuming the company uses the LIFO inventory costing method.
2. Journalize the purchase of merchandise inventory on account and the sale of merchandise inventory on account.

Champion Company purchased and installed carpet in its new general offices on March 31 for a total cost of $18,000. The carpet is estimated to have a 15-year useful life and no residual value.

Required:
a. Prepare the journal entries necessary for recording the purchase of the new carpet.
b. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet assuming that Champion Company uses the straight-line method.

Prepare financial statements from an adjusted trial balance (LO3-5) [The following information applies to the questions displayed below.]
The December 31, 2021, adjusted trial balance for Fightin' Blue Hens Corporation is presented below.
Accounts Debit Credit
Cash $ 11,200
Accounts Receivable 142,000
Prepaid Rent 5,200
Supplies 26,000
Equipment 320,000
Accumulated Depreciation $ 127,000
Accounts Payable 11,200
Salaries Payable 10,200
Interest Payable 4,200
Notes Payable (due in two years) 32,000
Common Stock 220,000
Retained Earnings 52,000
Service Revenue 420,000
Salaries Expense 320,000
Rent Expense 16,000
Depreciation Expense 32,000
Interest Expense 4,200
Totals 847,800 876,600
Required:
Prepare an income statement for the year ended December 31, 2021.
FIGHTIN' BLUE HENS CORPORATION
Income Statement
For the Year Ended December 31, 2021
Expenses:
Total expenses

George runs a small retail business. He sells brands that another business manufactures. George’s retail store uses the logos and trademarks of that business to attract customers. George thus acts as a dealer on behalf of the manufacturing business. Which type of franchise model does George’s retail business follow? A. trademark franchise B. product distribution franchise C. manufacturing franchise D. management franchise E. business format franchise

As the manager of a company, you are concerned that not all customer orders are being shipped. To test whether all orders for the year have been shipped, you would:__________.
A. Review all customer order and make sure that each has a related bill of lading
B. Review all customer order and make sure that each has a related sales invoice
C. Review all bills of lading and make sure that each has a related sales invoice
D. Review all sales invoice to make sure that they have been posted in the related journal
E. Review all customer orders to make sure that each has been posted in the related journal

The reason that we want to develop a confidence interval for the population mean is because:_____.
1. the sample mean is an efficient estimate of the population mean.
2. the chance that the sample mean is equal to the population mean is zero.
3. the sampling distribution of the sample mean is normally distributed.
4. the standard error of the sample mean is an efficient estimate of the population error.
5. the value of the sample mean varies from sample to sample.

In 1990, Ivanhoe Company completed the construction of a building at a cost of $800,000 and first occupied it in January 1991. It was estimated that the building would have a useful life of 40 years and a salvage value of $24,000 at the end of that time. Early in 2001, an addition to the building was constructed at a cost of $200,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $8,000.

In 2019, it is determined that the probable life of the building and addition will extend to the end of 2050, or 20 years beyond the original estimate.

Required:
a. Using the straight-line method, compute the annual depreciation that would have been charged from 1991 through 2000:
b. Compute the annual depreciation that would have been charged from 2001 through 2018.
c. Prepare the entry, if necessary, to adjust the account balances because of the revision of the estimated life in 2019.

Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:_______. Total machine-hours 30,300 Total fixed manufacturing overhead cost $575,700 Variable manufacturing overhead per machine-hour $ 4.00 Recently, Job T687 was completed with the following characteristics:_______. Number of units in the job 10 Total machine-hours 30 Direct materials $ 730 Direct labor cost $1,460 If the company marks up its unit product costs by 40% then the selling price for a unit in Job T687 is closest to:_______.

Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $17,000 bill from her accountant for consulting services related to her small business. Reese can pay the $17,000 bill anytime before January 30 of next year without penalty. Assume Reese’s marginal tax rate is 32% this year and will be 37% next year, and that she can earn an after-tax rate of return of 11% on her investments.
A. What is the after-tax cost if she pays the $31,000 bill in December?
B. What is the after-tax cost if she pays the $31,000 bill in January?

Your company is estimated to make dividends payments of $2.2 next year, $3.8 the year after, and $4.8 in the year after that. The dividends will then grow at a constant rate of 6% per year. If the discount rate is 13% then what is the current stock price

Peartree Inc. provides the following​ data:
2015 2014
Cash $47,000 ​$25,000
Accounts​ Receivable, Net 99,000 ​62,000
Merchandise Inventory 79,000 ​50,000
​Property, Plant, and​
Equipment, Net 181,000 ​ 120,000
Total assets $406,000 ​$257,000
Additional​ information:
Net sales $530,000
Cost of Goods Sold 150,000
Interest expense 24,000
Net income 181,000
Calculate the return on total assets for the year 2015.
A.​ 62.03%.B.​ 45.79%.C.​ 50.74%.D. ​71.98%.

An increase in the market price of​ men's haircuts, from ​$ per haircut to ​$ per​ haircut, initially causes a local barbershop to have its employees work overtime to increase the number of daily haircuts provided from to . When the ​$ market price remains unchanged for several weeks and all other things remain equal as​ well, the barbershop hires additional employees and provides haircuts per day.

Required:
What is the short-run price elasticity of supply?

Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools:

Activity Cost Pool Estimated Overhead Cost Expected Activity
Labor-related $31,200 5,000 direct labor-hours
Machine-related $1,250 5,000 machine-hours
Machine setups $36,000 1,200 setups
Production orders $18,000 500 orders
Product testing $22,000 1,100 tests
Packaging $42,900 3,900 packages
General factory $56,000 5,000 direct labor-hours

Required:
a. Compute the activity rate for each activity cost pool.
b. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours.

Alan works as a salesperson for an insurance company. Recently, he sold an insurance policy to a new customer. During their conversation, Alan made a list of all the benefits that the policy would offer the customer. He politely asked the customer to list the various drawbacks of buying the policy. In the end, Alan was able to close the sale because the benefits greatly outnumbered the drawbacks. Which closing technique did Alan use in this scenario?
A.
assumptive close
B.
Ben Franklin close
C.
porcupine close
D.
Sharp Angle close

Larned Corporation recorded the following transactions for the just completed month.
a. $80,000 in raw materials were purchased on account.
b. $71,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials.
c. Total labor wages of $112,000 were paid in cash. Of this amount, $101,000 was for direct labor and the remainder was for indirect labor.
d. Depreciation of $175,000 was incurred on factory equipment.
Required:
Record the above transactions in journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1. $80,000 in raw materials were purchased on account.
2. $71,000 in raw materials were used in production. Of this amount, $62,000 was for direct materials and the remainder was for indirect materials.
3. Total labor wages of $112,000 were paid in cash. Of this amount, $101,000 was for direct labor and the remainder was for indirect labor.
4. Depreciation of $175,000 was incurred on factory equipment $80,000 in raw materials were purchaased on account.