John and Jessica are married and have one dependent child, Liz. Liz is currently in college at State University. John works as a design engineer for a manufacturing firm while Jessie runs a craft business from their home. Jessica’s craft business consists of making craft items for sale at craft shows that are held periodically at various locations. Jessica spends considerable time and effort on her craft business and it has been consistently profitable over the years. John and Jessica own a home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Lizzie’s college expenses (balance of $35,000).

Neither John and Jessica is blind or over age 65, and they plan to file as married-joint. Based on their estimates, determine John and Jessica’s AGI and taxable income for the year and complete pages 1 and 2 of Form 1040 (through taxable income, line 43) and Schedule A. Assume that the employer portion of the self-employment tax on Jessie’s income is $808. Joe and Jessie have summarized the income and expenses they expect to report this year as follows:

Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight- ounce bottles of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for $100 per case. There is a selling commission of $20 per case. The January direct materials, direct labor, and factory overhead costs are as follows:

Discussion Topic 1 (Note: Briefly in your own words 1 paragraph minimum.)

Depreciation:

1. What impact do you think depreciation has on a construction company from a financial standpoint?  

2. Why do you think we need to depreciate some assets but not others?

Decision on Accepting Additional Business

Brightstone Tire and Rubber Company has capacity to produce 128,000 tires. Brightstone presently produces and sells 98,000 tires for the North American market at a price of $109 per tire. Brightstone is evaluating a special order from a European automobile company, Euro Motors. Euro is offering to buy 15,000 tires for $92.55 per tire. Brightstone's accounting system indicates that the total cost per tire is as follows:

Brightstone pays a selling commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $6 per tire. In addition, Euro has made the order conditional on receiving European safety certification. Brightstone estimates that this certification would cost $87,000.

a. Prepare a differential analysis dated January 21 on whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors. If an amount is zero, enter zero "0". If required, round interim calculations to two decimal places.

Determine whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors.

b. What is the minimum price per unit that would be financially acceptable to Brightstone? Round your answer to two decimal places.
$per unit

Financial Statement Disclosure:

International Clothiers Ltd. has offices in Canada, Bermuda, Europe and the United States. Each of the following events have occurred after the company’s 31 December 2017 year-end, but before their financial statements had been finalized:

a. On 27 January, International Clothiers Ltd entered into a long-term lease for a private airplane for the company president and CEO. The lease requires payments of US$75,000 per month for 60 months.

b. The board of directors met on 15 February 2018 and decided to discontinue its shoe division due to continuing losses and a change in business strategy.

c. One of the company’s major retail customers declared bankruptcy on 22 March. The retail customer accounted for 20% of International Clothier’s year-end receivables and 35% of International Clothier’s revenue in 20x7.

Hi-Tek Manufacturing Inc. makes two types of industrial component parts—the B300 and the T500. An absorption costing income statement for the most recent period is shown below:

Hi-Tek produced and sold 60,300 units of B300 at a price of $20 per unit and 12,500 units of T500 at a price of $39 per unit. The company’s traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company’s two product lines is shown below:

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $56,000 and $107,000 of the company’s advertising expenses could be directly traced to B300 and T500, respectively. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team also distributed the company’s manufacturing overhead to four activities as shown below:

****** Required *******

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system. (Do not round your overhead rate. Round your other intermediate and final answers to the nearest whole number.)

2. Compute the product margins for B300 and T500 under the activity-based costing system. (Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.)

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. (Do not round your overhead rate. Round your other intermediate calculations and final answers to the nearest whole number. Round your "Percentage" answer to 1 decimal place. (i.e. .1234 should be entered as 12.3))

( All the "?" spaces are the ones I NEED answered)

Fogerty Company makes two products, titanium Hubs and Sprockets. Data regarding the two products follow:

Additional information about the company follows:

a. Hubs require $21 in direct materials per unit, and Sprockets require $11.

b. The direct labor wage rate is $17 per hour.

c. Hubs are more complex to manufacture than Sprockets and they require special equipment.

d. The ABC system has the following activity cost pools:

Turner, Roth, and Lowe are partners who share income and loss in a 2:3:5 ratio (in percents: Turner, 20%; Roth, 30%; and Lowe, 50%). The partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance sheet shows total assets, $133,200; total liabilities, $84,000; Turner, Capital, $3,100; Roth, Capital, $14,300; and Lowe, Capital, $31,800. Cash received from selling the assets was sufficient to repay all but $31,000 to the creditors. Required: a. Calculate the loss from selling the assets. b. Allocate the loss from part a to the partners. c. Determine how much each partner should contribute to the partnership to cover any remaining capital deficiency.

Sales price P15 per unit

Variable costs:

SG&A P2 per unit

Production P4 per unit

Fixed costs (total cost incurred for the

year):

SG&A P14,000

Production P20,000

During the first year, Sherrill Corporation manufactured 5,000 units and sold 3,800. There was no beginning or ending work-in-process inventory.

1. How much income before income taxes would be reported if Stanley uses absorption costing?

2. How much income before income taxes would be reported if variable costing was used?

3. Show why the two costing methods give different income amounts

4. Bonds Issued between Interest Dates

D Company planned on Issuing bonds $2000,000 on January 1, 2018 but due to slowdowns

the bonds were not sold until April 1, 2018. These 8 year bonds pay 6% interest annually

each December 31st and were sold to yield 5.5%.

Prepare and amortization table for these bonds and the entry to record their issuance and the

first payment on December 31, 2018.

internal Control of Cash Payments Abbe Co. is a small merchandising company with a manual accounting system. An investigation revealed that in spite of a sufficient bank balance, a significant amount of available cash discounts had been lost because of failure to make timely payments. In addition, it was discovered that the invoices for several purchases had been paid twice. Indicate whether the procedures listed below for the payment of vendors' invoices would reduce the possibility of losing available cash discounts and of paying an invoice a second time.

True/false

1- The fair market value of property or services received in bartering must be included in gross income.

2- Mr. Barley an accountant, accepted a painting for his office from his client in lieu of payment of his customary fee of $400 for preparation of a tax return. He must include the $400 income.

3- An ordinary expenditure is one which is commonly incurred by other businesses.

4- Rent and royalty expenses are deductible from adjusted gross income.

5- Federal income taxes paid by a taxpayer in connection with her business are not deductible in computing the business federal taxable income.

6- A necessary expense is one that is appropriate to helpful to the continuation of the taxpayer' business; ordinary refers to an expense that is customary and acceptable in the taxpayer's type of business.

7- If debt becomes worthless, the amount allowed as bad deduction is the adjusted basis of the debt.

8- Independent contractor is self-employed individuals who perform services for another individual or business entity and are considered employees of the persons or business that hire them.

9- The portion of an employee's salary deemed ''unreasonable'' may be considered a dividend distribution to an employee that is also a shareholder of the corporation.

10- taxpayers cannot deduct the costs of tickets to any entertainment actively or facility whether or not the taxpayer's attendance at the activity is related to business.

Define knowledge management and how it has evolved.

1. Evaluating IMPACT (Level 5 – Evaluating)

As patients continue their recovery, post-acute care (PAC) safely transitions them out of the acute-care hospital. There are four PAC settings: skilled nursing facilities (SNF), long-term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), home health agencies (HHAs).

Patients in these settings have similar conditions, such as strokes and hip replacements. However, Medicare pays different prices depending upon the setting (Medicare Payment Advisory Commission 2014, 171). For a patient’s continued recovery and optimal outcome, does the choice of PAC setting matter? Two sets of researchers investigated this question. One set investigated the functional recovery for patients who had had a stroke (Chan et al. 2013).   Another set investigated the functional recovery for patients who had had a hip fracture repaired (Mallinson et al. 2014).

Chan and colleagues performed a long-term study on 222 patients who had had a stroke. The patients had received care from four different acute care hospitals in one integrated delivery system (IDS). The patients also received their postacute care from settings in the IDS. The IDS offered three types of PAC settings: SNF, IRF, and HHA. In addition, patients could receive out-patient care in the IDS. The researchers used a standardized instrument, the Activity Measure for Post Acute Care (AM-PAC), to determine the patients’ functional status. The researchers scored the patients functional status twice: first immediately upon discharge from the acute care hospital and second six months after discharge and after receiving postacute care. The researchers’ results showed:

• Patients who received their postacute care in an IRF had at least eight-point higher improvements in mobility, self-care, and cognition, than patients who received their postacute care in a SNF.
• Patients who received their postacute care in an IRF also had statistically significant improvements in Applied Cognition compared to those patients who only received home health combined with outpatient services.

Chan and colleagues concluded that “patients with a stroke may make more functional gains if they receive some of their postacute care in an IRF compared to other sites” (Chan et al. 2013, 629). Deutsch’s commentary on the research of Chan and colleagues noted that comparing outcomes across postacute care is difficult because the PAC sites use different data sets (2013, 631-632).

            Mallinson and colleagues investigated the outcomes of patients after hip fracture repair. Facilities from three types of PAC settings participated in the research. Eventually, the researchers reviewed the care of 181 patients at 18 PAC providers. These PAC providers were four IRFs, six SNFs, and eight HHAs. After being trained on the data collection instrument, nurses at each site collected data using the IF functional independence measure (FIM). The researchers’ results showed, controlling for patients’ characteristics, severity, comorbidities, and services:

• IRF and HHA patients had lower self-care function at discharge relative to SNF patients
• HHA patients had, on average, a two-week longer length of stay than SNF patients
• SNF patients had, on average, a nine-day longer length of stay and IRF patients

Mallinson and colleagues concluded that outcomes varied among settings “depending upon whether self-care or mobility was the outcome of focus” (Mallinson et al. 2014, 209).

DeJong’s commentary on the research of Mallinson and colleagues noted that the absence of a common PAC patient assessment instrument requires workarounds (2014). Researchers can use a site-neutral instrument, such as the AM-PAC or they can use an existing PAC-site-specific instrument. Both workarounds require training on the instrument for all or some of the data collectors and require special data collection outside of routine procedures.

Questions

1.  List the data collection instrument for PAC settings discussed in the case

2.   What PAC setting is missing from the previously described research investigations? What is that setting’s data collection instrument?

3.   Both Deutsch and DeJong note problems caused by the lack of a common data set across PAC settings. How has Congress addressed this problem?

4.   Workarounds require special training and special data collection outside routine procedures. Why are these workarounds a problem for researchers? Does Congress’ solution address this problem?

5.   How could you or your family benefit from a common data collection instrument across PAC settings?