On pages 6-15 and 6-16 (Section 6-3b), the text explains that taxpayers are not allowed a business deduction for political contributions or for expenses incurred for lobbying activities.

• How does the IRS define what is a “political contribution” that cannot be deducted? Is the disallowance limited to outright gifts, or does it extend to less direct methods of providing funds to a candidate or party? If the latter, please explain the circumstances in which the disallowance applies to something that is not an outright gift.
• How does the IRS define what is “lobbying,” so that a taxpayer may determine what expenses are not deductible as lobbying expenses?
• Many not-for-profit organizations are engaged in lobbying, but still qualify to receive deductible charitable contributions. Does this activity affect an individual’s ability to claim a charitable deduction for contributions to an otherwise qualified organization? If so, in what circumstances, and how is the deduction affected?

On page 16-12, the text states that corporations (other than S corporations) are generally prohibited from using the cash method of accounting, but that there is an exception for “qualified personal service corporations.” The text states that a qualified personal service corporation is one that performs services in the fields of “health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting” and whose employees own substantially all of the stock of the corporation.

• Are there any other fields in which a qualified personal service corporation may provide services? If so, please list them.
• What is the test for determining if a qualified personal service corporation meets the stock ownership requirement? Describe in detail.
• What are the consequences of a corporation failing to meet the criteria as a qualified personal service corporation for a taxable year?

1. Given the information below about Thomas Corporation, what was the amount of dividends the company paid in the current period?

2. The ending Retained Earnings balance of Boomer Inc. decreased by $1.9 million from the beginning of the year. The company declared a dividend of $4.7 million during the year. What was the net income for the year?

3. When a company pays utilities of $1,710 in cash, the transaction is recorded as:

4. When a company pays $2,100 dividends to its stockholders, the transaction should be recorded as:

5. A company received a bill for newspaper advertising services, $460. The bill will be paid in 10 days. How would the transaction be recorded today?

6. On March 3, Cobra Inc. purchased a desk for $350 on account. On March 22, Cobra purchased another desk for $415 also on account, and then on March 24, Cobra paid $470 on account. At the end of March, what amount should Cobra report for desks (assuming these two desks were the only desks they had)?

7.

Use the following information to prepare a trial balance.

8. At the beginning of December, Global Corporation had $1,800 in supplies on hand. During the month, supplies purchased amounted to $3,000, but by the end of the month the supplies balance was only $1,400. What is the appropriate month-end adjusting entry?

9.

The following table contains financial information for Trumpeter Inc. before closing entries:

What is Trumpeter's net income?

Determine the depreciation of the equipment with a cost of 560,000.00

For a period of 6years life the salvage value is 5% of the cost. use 3 methods of depreciation. If you want to resale the machine on the 3rd year which method you will use and why.

Through which process a person process or a paper process can a good strategic manager accomplish a strategic plan as part of a business policy? Promote one process over the other, and then evaluate the quality of the strategic management process with each process is utilized.

Which of the following would indicate a nonmonetary exchange has commercial substance:

A. The fair value of the asset received is significantly higher than the book value of the asset given up.

B. Cash was received in the exchange.

C. The expected cash flows associated with the asset involved in the exchange re significantly different.

D. Both A&C

A new employee has been given responsibility for preparing the consolidated financial statements of Sample Company. After attempting to work alone for some time, the employee seeks assistance in gaining a better overall understanding of the way in which the consolidation process works. You have been asked to assist in explaining the consolidation process. The employee is asking you to respond to the following questions:

PLEASE SHOW YOUR WORK:

1. How is the beginning-of-period non-controlling interest balance determined?
2. How is the end-of-period non-controlling interest balance determined? Provide an example.
3. Which of the subsidiary’s account balances must always be eliminated? Why?
4. Which of the parent company’s account balances must always be eliminated? Why?

Steinberg Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Steinberg expects to sell 90,000 regular models and 18,000 deluxe models. A segmented income statement for the two products is as follows:

Required:

1. Compute the number of regular models and deluxe models that must be sold to break even. Round all intermediate calculations to four decimal places, and round your final answers to the nearest whole unit.

2. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even. Round the contribution margin ratio to four decimal places. Use the rounded value in the subsequent computation. (Express as a decimal-based amount rather than a whole percentage.) Round the amount of revenue to the nearest dollar.

Schylar Pharmaceuticals, Inc., plans to sell 120,000 units of antibiotic at an average price of $18 each in the coming year. Total variable costs equal $820,800. Total fixed costs equal $7,400,000.

Required:

1. What is the contribution margin per unit? Round your answer to the nearest cent.
$

What is the contribution margin ratio? Round your answer to two decimal places. (Express as a decimal-based answer rather than a whole percent amount.)

2. Calculate the sales revenue needed to break even. Round your answer to the nearest dollar.
$

3. Calculate the sales revenue needed to achieve a target profit of $215,000. Round your answer to the nearest dollar.
$

4. What if the average price per unit increased to $19.50? Recalculate the following:

a. Contribution margin per unit. Round your answer to the nearest cent.
$

b. Contribution margin ratio. Enter your answer as a decimal value (not a percentage), rounded to four decimal places.

c. Sales revenue needed to break even. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar.
$

d. Sales revenue needed to achieve a target profit of $215,000. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar.
$

The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems.

Required:

1. What do you need to ensure when preparing and distributing reports that document accounts receivable, debt recovery type and cause, and debt recovery plan?

In anticipation of ICD-10 implementation, you plan to contract with a coding consultant to provide coding services for your outpatient endoscopy and heart-center procedures and have included this year in your annual budget. It is expected that this service will be needed for two months while staff become familiar with ICD-10 coding, but you reserve the right to shorten or extend the contract based on circumstances at the time. Payment will be at the rate of $3.50 per chart. The projected volume for the period is 365 charts per week. Two weeks after ICD-10 is implemented, you realize that the coding staff can take on the outpatient and heart center procedures earlier than originally anticipated. You give the consultant two weeks notice that you will be returning the work-load to in-house staff. At the conclusion of the consultants service you will receive this invoice. Week 1 377 charts coded Week 2 363 charts coded Week 3 358 charts coded Week 4 372 charts coded Total 1470 charts coded at $3.50 per chart= $5,145 Classify and explain the type of budget variance depicted in this scenario.

Effect of Transactions on Current Position Analysis

Data pertaining to the current position of Lucroy Industries Inc. follow:

Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.

(Cost of short-term bank loan) On July 1, 2015, the Southwest Forging Corporation arranged for a line of credit with the First National Bank (FNB) of Dallas. The terms of the agreement call for a $100,000 maximum loan with interest set at 1 percent over prime. In addition, the firm has to maintain a 20 percent compensating balance in its demand deposit account throughout the year. The prime rate is currently 4.5 percent.

1. If Southwest normally maintains a $20,000 to $30,000 balance in its checking account with FNB of Dallas, what is the effective cost of credit under the line- of-credit agreement when the maximum loan amount is used for a full year?

2. Compute the effective cost of credit if the firm borrows the compensating balance and the maximum possible amount under the loan agreement. Again, assume the full amount of the loan is outstanding for a whole year.