Drag measurements were taken for a 5 cm diameter sphere in water at 20 °C to predict the drag force of a 1 m diameter balloon rising in air with standard temperature and pressure. Given kinematic viscosity of water (v) = 1.0 X 10^-6 m²/s and kinematic viscosity of air (v) = 1.46 X 10^-5 m²/s.

1. Perform the Buckingham Pi theorem to generate a relationship for F_D as a function of the independent variables. Assume the drag F_D is a function of diameter (d), velocity (V), fluid density (ρ) and kinematic viscosity (v)

Suppose that a decision-maker’s preferences over the set A={a, b, c} are represented by the payoff function u for which u(a) = 0, u(b) = 1, and u(c) = 4.

(a) Are they also represented by the function v for which v(a) =−1, v(b) = 0, and v(c) = 2?

(b) How about the function w for which w(a) =w(b) = 0 and w(c) = 8?

(c) Give another example of a function f:A→R that represents the decision-maker’s preferences.

(d) Is there a function that represents the decision-maker’s preferences and assigns negative numbers to all elements of A?

Passive Equity Investment Portfolio Practice Problem

Martin Company has a portfolio of passive equity investments with a cost basis of $34,600 and a fair value of $41,650 on December 31, 2015. Martin Company sells $5,300 (cost) of equity investments on April 1, 2016 for $6,200. Martin Company purchases additional equity investments for $7,125 on August 10, 2016. On November 30, 2016 Martin Company receives $1,350 in dividends from its equity investments. The fair value of Martin’s equity investments is $40,575 on December 31, 2016.

Provide all journal entries for 2016 for Martin Company. Also describe how each equity investment will affect the firm’s 2016 financial statements.

Calculating and Reporting Income Tax Expense

Lynch Company began operations in 2016. The company reported $22,000 of depreciation expense on its income statement in 2016 and $24,000 in 2017. On its tax returns, Lynch deducted $34,000 for depreciation in 2016 and $39,000 in 2017. The 2017 tax return shows a tax obligation (liability) of $18,200 based on a 40% tax rate.

Required
a. Determine the temporary difference between the book value of depreciable assets and the tax basis of these assets at the end of 2016 and 2017.

b. Calculate the deferred tax liability for each year.

c. Calculate the income tax expense for 2017.
$Answer

During the year ended December 31, 2017, Gluco, Inc., split its stock on a 4-for-1 basis. In its annual report for 2016, the firm reported net income of $936,100 for 2016, with an average 293,400 shares of common stock outstanding for that year. There was no preferred stock.

a. What amount of net income for 2016 will be reported in Gluco's 2017 annual report?

b. Calculate Gluco's earnings per share for 2016 that would have been reported in the 2016 annual report. (Round your answer to 2 decimal places.)

c. Calculate Gluco's earnings per share for 2016 that will be reported in the 2017 annual report for comparative purposes. (Round your answer to 2 decimal places.)

ABC inc builds and sells single-family homes. the company had the following transactions during q1 2016 period that ended on march 31, 2016:

1. purchased a single-family home on january 10, 2016 which it plans to renovate and resell. the home was purchased for $200,000 with $150,000 paid in cash and the remainder to be paid upon sale of the property.

2. Purchased $10,000 worth of building materials at home depot used in the renovation. The purchased was paid in cash.

3. Hired a contractor to perform the renovation of the house. The renovation was completed on feb. 10, 2016 and the contractor billed ABC inc $50,000 for this renovation. ABC paid $30,000 upon completion of the work. The balance was due in Q2 2016.

4. Paid office employee salaries of $10,000 during Q1 2016.

5. Sold the home for $290,000 on March 30th 2016 of which $250,000 was received and the rest due on April 20th 2016.

At the beginning of the quarter, (1/1/16) ABC inc balance sheet had only $300,000 in cash and $300,000 in owners equity.

1. present income statement for Q1

2. create ABC inc balance sheet at the end of Q1 2016

3. present statement of Cash flow

Acquisition Cost and Depreciation

Reveille, Inc., purchased Machine #204 on April 1, 2016, and placed the machine into production on April 3, 2016. The following information is relevant to Machine #204:

The company expects that the machine could be used for 10 years, after which the salvage value would be zero. However, Reveille intends to use the machine only 8 years, after which it expects to be able to sell it for $9,800. The invoice for Machine #204 was paid April 10, 2016. The number of units produced in 2016 and 2017 was 23,200 and 29,000, respectively. Reveille computes depreciation expense to the nearest whole month.

Required:

Compute the depreciation expense for 2016 and 2017, using the following methods. Round your answers to the nearest dollar.

Straight-line method:
2016 depreciation = $
2017 depreciation = $

Sum-of-the-years'-digits method:
2016 depreciation = $
2017 depreciation = $

Double-declining-balance method:
2016 depreciation = $
2017 depreciation = $

Activity method (units of production):
2016 depreciation = $
2017 depreciation = $

​​​​​​​Vibrant Company had $910,000 of sales in each of three consecutive years 2016–2018, and it purchased merchandise costing $505,000 in each of those years. It also maintained a $210,000 physical inventory from the beginning to the end of that three-year period. In accounting for inventory, it made an error at the end of year 2016 that caused its year-end 2016 inventory to appear on its statements as $190,000 rather than the correct $210,000.

1. Determine the correct amount of the company’s gross profit in each of the years 2016–2018.
2. Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of the years 2016−2018.

Determine the correct amount of the company's gross profit in each of the years 2016−2018.

Prepare comparative income statements to show the effect of this error on the company's cost of goods sold and gross profit for each of the years 2016−2018.

Acquisition Cost and Depreciation Reveille, Inc., purchased Machine #204 on April 1, 2016, and placed the machine into production on April 3, 2016. The following information is relevant to Machine #204: Price $60,000 Freight-in costs 2,500 Preparation and installation costs 3,900 Labor costs during regular production operation 10,200 Credit terms 2/10, n/30 Total productive output 138,500 units The company expects that the machine could be used for 10 years, after which the salvage value would be zero. However, Reveille intends to use the machine only 8 years, after which it expects to be able to sell it for $9,800. The invoice for Machine #204 was paid April 10, 2016. The number of units produced in 2016 and 2017 was 23,200 and 29,000, respectively. Reveille computes depreciation expense to the nearest whole month. Required: Compute the depreciation expense for 2016 and 2017, using the following methods. Round your answer to the nearest dollar. Straight-line method: 2016 depreciation = $ 2017 depreciation = $ Sum-of-the-years'-digits method: 2016 depreciation = $ 2017 depreciation = $ Double-declining-balance method: 2016 depreciation = $ 2017 depreciation = $ Activity method (units of production): 2016 depreciation = $ 2017 depreciation = $

Prepare a statement of stockholders' equity for Oakwood for the year ended December 31, 2016 based on the following information:

Oakwood Inc. is a public enterprise whose shares are traded in the over-the-counter market. At December 31, 2015, Oakwood had 6,000,000 authorized shares of $10 par value common stock, of which 2,000,000 shares were issued and outstanding. The shareholders' equity accounts at December 31, 2015, had the following balances: Common stock $20,000,000 Additional paid-in capital on common stock 7,500,000 Retained earnings 6,470,000 Transactions during 2016 and other information relating to the shareholders' equity accounts were as follows: On January 5, 2016, Oakwood issued at $54 per share, 100,000 shares of $50 par value, 9%, cumulative convertible preferred stock. Each share of preferred stock is convertible, at the option of the holder, into 2 shares of common stock. Oakwood had 600,000 authorized shares of preferred stock. On February 2, 2016, Oakwood reacquired 20,000 shares of its common stock for $16 per share. Oakwood uses the cost method to account for treasury stock. On April 27, 2016, Oakwood sold 500,000 shares (previously unissued) of $10 par value common stock to the public at $17 per share. On June 18, 2016, Oakwood declared a cash dividend of $1 per share of common stock, payable on July 13, 2016, to shareholders of record on July 2, 2016. On November 9, 2016, Oakwood sold 10,000 shares of treasury stock for $21 per share. On December 14, 2016, Oakwood declared the yearly cash dividend on preferred stock, payable on January 14, 2017, to shareholders of record on December 31, 2016. On January 18, 2017, before the books were closed for 2016, Oakwood became aware that the ending inventories at December 31, 2015, were understated by $300,000 (the after-tax effect on 2015 net income was $210,000). The appropriate correcting entry was recorded the same day. After correcting the beginning inventory, net income for 2016 was $4,500,000. Required: 1. Prepare a statement of stockholders' equity for Oakwood for the year ended December 31, 2016. Assume that only single-period financial statements for 2016 are presented.