Question: Mike and Linda are a married couple

> Explain the relationship between dividends and earnings and profits.

> Corporations are taxed on the income they earn, and shareholders are taxed on the dividends they receive. What provisions in the tax law reduce this “double tax” burden?

> a. Is the interest received from government obligations taxable? Explain. b. What impact does the fact that some bond interest is tax exempt have on interest rates? c. Is an investor always better off buying tax- exempt bonds? Explain.

> Under what conditions is an accrual-basis taxpayer allowed to defer reporting amounts received in the advance of the delivery of goods?

> a. Explain the difference between the treatment of prepaid income under the tax law and under financial accounting. b. Why are the two treatments so different? c. What problem does this treatment create for taxpayers?

> Ricardo owns a small unincorporated business. His 15-year-old daughter Jane works in the business on a part-time basis and was paid wages of $3,000 during the current year. Who is taxed on the child’s earnings: Jane or her father? Explain.

> Under present-day tax law, community property rules are followed in allocating income between husband and wife. Is this consistent with Lucas v. Earl? Explain.

> Explain the significance of Lucas v. Earl and Helvering v. Horst.

> A landlord who receives prepaid rent is required to report that amount as gross income when the payment is received. Why would Congress choose to do this? What problem does this create for the taxpayer?

> Explain the meaning of the term wherewithal to pay as it applies to taxation.

> Two commonly-recognized measures of the fairness of an income tax structure are “horizontal equity” and “vertical equity.” a. Discuss what is meant by horizontal equity and vertical equity as it pertains to the income tax. b. Why is it so difficult to d

> Contrast the accounting and economic concepts of income.

> Jack and June are retired and receive $10,000 of social security benefits and taxable pensions totaling $25,000. They have been offered $20,000 for an automobile that they restored after they retired. They did most of the restoration work themselves and

> George, a wealthy investor, is uncertain whether he should invest in taxable or tax-exempt bonds. What tax and nontax factors should he consider?

> What opportunities are available for a taxpayer to defer the recognition of certain types of prepaid income? That is, what advice could you give someone who wishes to defer the reporting of prepaid income?

> a. Briefly explain the tax benefit rule. b. Is a taxpayer required to report the reimbursement of a medical expense by insurance as income if the reimbursement is received in the year following the year of the expenditure?

> a. Are items of income not listed in Sec. 61 taxable? Explain. b. Because there is no specific exclusion for unrealized income, why is it not taxable? c. Can income be realized even when a cash method taxpayer does not receive cash? d. Does a cash bas

> Explain the relationship between dividends and earnings and profits.

> Corporations are taxed on the income they earn, and shareholders are taxed on the dividends they receive. What provisions in the tax law reduce this “double tax” burden?

> a. Is the interest received from government obligations taxable? Explain. b. What impact does the fact that some bond interest is tax exempt have on interest rates? c. Is an investor always better off buying tax- exempt bonds? Explain.

> Under what conditions is an accrual-basis taxpayer allowed to defer reporting amounts received in the advance of the delivery of goods?

> A “good” tax structure has five characteristics. a. Briefly discuss the five characteristics. b. Using the five characteristics, evaluate the following tax structures: 1. Federal income tax 2. State sales tax 3. Local ad valorem property tax

> a. Explain the difference between the treatment of prepaid income under the tax law and under financial accounting. b. Why are the two treatments so different? c. What problem does this treatment create for taxpayers?

> Ricardo owns a small unincorporated business. His 15-year-old daughter Jane works in the business on a part-time basis and was paid wages of $3,000 during the current year. Who is taxed on the child’s earnings: Jane or her father? Explain.

> Under present-day tax law, community property rules are followed in allocating income between husband and wife. Is this consistent with Lucas v. Earl? Explain.

> Explain the significance of Lucas v. Earl and Helvering v. Horst.

> A landlord who receives prepaid rent is required to report that amount as gross income when the payment is received. Why would Congress choose to do this? What problem does this create for the taxpayer?

> Explain the meaning of the term wherewithal to pay as it applies to taxation.

> Contrast the accounting and economic concepts of income.

> Jack and June are retired and receive $10,000 of social security benefits and taxable pensions totaling $25,000. They have been offered $20,000 for an automobile that they restored after they retired. They did most of the restoration work themselves and

> Matt and Sandy reside in a community property state. Matt left home in April 2017 because of disputes with his wife, Sandy. Subsequently, Matt earned $15,000. Before leaving home in April, Matt earned $3,000. Sandy was unaware of Matt’s whereabouts or hi

> Gary earned $57,000 as an executive. Gary, who is single, supported his half sister, who lives in a nursing home. Gary received the following interest: $400 on City of Los Angeles bonds, $200 on a money market account, and $2,100 on a loan made to his br

> The three different levels of government (federal, state, and local) must impose taxes to carry out their functions. For each of the types of taxes below, discuss which level of government primarily uses that type of tax. a. Property taxes b. Excise ta

> John and Mary have two small children and are looking for ways to help fund the children’s college education. They have heard that Series EE bonds are a tax-favored way of saving and have requested your opinion on the tax consequences. They have asked yo

> Jim and Linda are your tax clients. They were divorced two years ago, and the divorce decree stated that Jim was to make monthly payments to Linda. The court designated $300 per month as alimony and $200 per month as child support, or a total of $6,000 p

> Andrea, who is in the 39.6% tax bracket, is interested in reducing her taxes. She is considering several alternatives. For each alternative listed below, indicate how much tax, if any, she would save? (For this problem, ignore additional taxes or phase-o

> Jack is starting a business that he expects to produce $60,000 of income this year before compensating Jack for his services. He has $1,000 of other income and itemized deductions totaling $10,000. He wants to know whether he should incorporate or operat

> Larry has severe vision problems and, in the past, he has claimed the additional standard deduction available to blind taxpayers. This year Larry’s doctor prescribed a new type of contact lens that greatly improved his vision. Naturally, Larry was elated

> Bob and Sue were expecting a baby in January, but Sue was rushed to the hospital in December. She delivered the baby but it died the first night. Are Bob and Sue entitled to a dependency exemption for the baby? Research sources include Rev. Rul. 73-156,

> Ed has supported his stepdaughter, her husband, and their child since his wife’s death three years ago. Ed promised his late wife that he would support her daughter from a former marriage and her daughter’s husband until they both finished college. They

> Which tax form is used by the following individuals? a. Anita is single, age 68, and has a salary of $22,000 and interest of $300. b. Betty owns an apartment complex that produced rental income of $36,000. Expenses totaled $38,500. c. Clay’s wife died l

> In 2017, Lana, a single taxpayer with AGI of $85,400, claims exemptions for three dependent children, all under age 17. What is the amount of her child credit?

> Joe and Joan divorce during the current year. Joan receives custody of their three children. Joe agrees to pay $5,000 of child support for each child. a. Assuming no written agreement, who will receive the dependency exemption and child credit for the c

> Carolyn operates a consulting business as a sole proprietor (unincorporated). Carolyn has been approached by one of her major clients to become an employee. If she accepts the new job, she would no longer operate her consulting business. From the standpo

> Ralph and Tina (husband and wife) transferred corporate bonds worth $30,000 to Pam, their 12-year-old daughter. Pam received $3,500 of interest on the bonds in the current year. Ralph and Tina file jointly and have taxable income of $83,000. a. Compute R

> Maria is a single taxpayer. Her salary is $51,000. Maria realized a short-term capital loss of $5,000. Her itemized deductions total $4,000. a. Compute Maria’s adjusted gross income. b. Compute her taxable income. c. Compute her tax liability.

> Virginia is a cash-basis, calendar-year taxpayer. Her salary is $20,000, and she is single. She plans to purchase a residence in 2018. She anticipates her property taxes and interest will total $7,200. Each year, Virginia contributes approximately $1,000

> Bob and Anna are in the 39.6% tax bracket for ordinary income and the 20% bracket for capital gains (ignore the 3.8% additional tax on investment income for higher-income taxpayers.) They have owned several blocks of stock for many years. They are consid

> Georgia, a single taxpayer, operates a business that produces $100,000 of income before any amounts are paid to her. She has no dependents and no other income. She has itemized deductions of $18,000. Compute the total income tax that would be paid assumi

> John and Georgia are a married couple with two dependent sons. Their salaries total $130,000. They have a capital loss of $8,000 and tax exempt interest income of $1,000. They paid home mortgage interest of $10,000, state income taxes of $4,000, and medi

> Debbie is 23 years old, a full-time student and a dependent of her parents. She earns $4,200 working part-time and receives $2,200 interest on savings. She saves both the salary and interest. What is her taxable income? Would her taxable income or tax be

> Jan, a single taxpayer, has adjusted gross income of $250,000, medical expenses of $10,000, home mortgage interest of $3,000, property taxes of $2,000. and miscellaneous itemized deductions of $3,500. Should she itemize or claim the standard deduction?

> Jim and Pat are married and file jointly. In 2017, Jim earned a salary of $46,000. Pat is self-employed. Her gross business income was $49,000 and her business expenses totaled $24,000. Each contributed $5,500 to a deductible IRA. Their itemized deductio

> Indicate which of the following taxes are generally progressive, proportional, or regressive: a. State income taxes b. Federal estate tax c. Corporate state franchise tax d. Property taxes e. State and local sales taxes

> The Supreme Court in 1895 ruled that the income tax was unconstitutional because the tax needed to be apportioned among the states in proportion to their populations. Why would the requirement of proportionality be so difficult to administer?

> Handy-Maid Cleaning Service is considering offering an additional line of services to include professional office cleaning. Annual fixed costs for this additional service are estimated to be $9,000. Variable costs are estimated at $50 per unit of service

> Raquel’s Landscaping Company has contracted for several landscaping jobs. Each job requires preparing the areas (identifying the locations and types of plants, preparing the soil, etc.) and then planting the trees, bushes, and shrubs. The expected time f

> Joe has asked you to develop a sequence that minimizes makespan for the sequence of jobs given in Problem 10. Compare the makespan, mean job flow time, and average number of jobs in the system to your results in Problems 10 and 11.

> Joe thinks that it is probably more efficient to use SPT (shortest processing time) as his priority rule. a) Develop a sequence using SPT based on processing time for the wash and dry operation. b) Calculate the makespan, the mean job flow time, and the

> Joe’s Twenty-four Seven Laundromat has the following jobs waiting to be processed. The first step of the process includes washing and drying the clothes; the second step is pressing the clothing. Joe wants to minimize the amount of time it takes to do al

> Bill’s Bar & Grill is open seven nights a week. Business is busiest on Thursday, when there is a concert in the park across the street. Bill wants a workforce schedule that allows each employee two consecutive days off each week. He believes that he need

> Cathy’s Coney Islands has just purchased new equipment. Cathy believes the improved efficiency will reduce the number of people needed Monday through Friday down to four. She does not believe she can ever have fewer than two persons working, so the weeke

> Cathy’s Coney Islands operates seven days per week. Demand is relatively constant during the week and tails off on the weekend. She estimates that she needs five employees Monday through Friday, and two employees on Saturday and Sunday. She is committed

> Marvin is preparing for the upcoming three-day weekend. He estimates that he will need three additional workers on Sunday of that week. Using the requirements given in Problem 18 for the other days of the week, develop a workforce schedule for Marvin to

> Marvin’s Beach Cleaners is responsible for keeping the beach clean. Marvin estimates that he needs a minimum of two people on Monday; three people on Tuesday and Sunday; four people on Wednesday and Thursday; and five people on Friday and Saturday. Contr

> Your new company has decided to use a periodic review system. You have learned that average weekly demand is 48 units per week with a standard deviation of 8 units. You believe that your cycle-service level should be 94 percent. Lead time is two weeks. I

> Next week is a three-day weekend. Barb believes that she will need a minimum of six employees on Friday, Saturday, and Sunday. The other days will still need a minimum of three workers. Remember that Barb wants each employee to have two consecutive days

> Kaizer Plastics produces a variety of plastic items for packaging and distribution. One item, container #145, has had a low contribution to profits. Last year, 20,000 units of container #145 were produced and sold. The selling price of the container was

> Barb’s Beach Bar operates seven days per week. Barb uses only full-time employees and wants each employee to have two consecutive days off each week. She believes that she needs a minimum of three employees on Monday, Tuesday, Wednesday, Thursday, and Su

> Raquel has asked you to develop a sequence that minimizes makespan for the sequence of jobs given in Problem 13. Compare the makespan, mean job flow time, and average number of jobs in the system to your results in Problems 13 and 14.

> Henri recently learned about global priority rules. He is interested in the slack over remaining operations (S/RO) rule. a) Using the data in Problem 5, determine the sequence Henri should follow if he uses the S/RO priority rule. b) Based on the sequenc

> In an effort to be fair to his customers, Henri has decided to use the FCFS (first come, first served) priority rule. Using the job data from Problem 5, assume that the jobs arrive in order—that is, A first, then B, then C. a) Using the data in Problem 5

> Henri has heard of the LPT (longest processing time) priority rule and wonders how that would change the sequence of the jobs listed in Problem 5. a) Determine the sequence Henri should follow if he uses the LPT priority rule. b) Based on the sequence de

> Henri has decided to try a different priority rule. a) Using the data in Problem 5, determine the sequence Henri should follow if he uses the EDD (earliest due date) priority rule. b) Based on the sequence developed in part (a), calculate the following p

> Henri’s Custom Gowns has six jobs waiting to be processed. Each gown is at the beading work center. The job information is shown here. Job Job Time (in days) Days until Due Job Time at Other Work Centers Operations Remaining at Other Work Centers 

> Jack has asked you to calculate the following for Work Center 2. a) Calculate the percentage of planned output needed to complete the planned inputs (planned input + backlog/planned output) at Work Center 2. b) Calculate the percentage of planned input t

> Tax Preparers, Inc. works 250 days per year. The company uses adding machine tape at a rate of eight rolls per day. Usage is believed to be normally distributed with a standard deviation of three rolls during lead time. The cost of ordering the tape is $

> Based on your concerns, Jack has gathered the following information for Work Center 2, the work center that directly feeds Work Center 3. Complete the input/output analysis of Work Center 2. Input Information (in hours)   4 5 6 7 8  Planned inp

> Since Jack believes that Work Center 3 is his bottleneck, he has asked you to do the following: a) Calculate the percentage of planned output needed to complete the planned inputs (planned input + backlog/ planned output) at Work Center 3. b) Calculate t

> Harrison Hotels is considering adding a spa to its current facility in order to improve its list of amenities. Operating the spa would require a fixed cost of $25,000 a year. Variable cost is estimated at $35 per customer. The hotel wants to break even i

> Jack, the owner and manager of Jack’s Box Company, wants to monitor usage at Work Center 3, which is a bottleneck in the system. He has collected data on the planned and actual input and output. Input Information (in hours)   4 5 6 7 8  Planned

> During the winter, no concerts are given in the park. Bill believes that he needs a minimum of four employees every day of the week. Develop a workforce schedule for Bill that allows each employee two consecutive days off each week. Compare the number of

> Using the information in Problem 25, determine the minimum lead time to satisfy a new order for the Gamma Blaster. Determine the minimum lead time required to satisfy a new order for the Gamma Disaster. Problem 25: The Gamma Ray Company produces two pro

> In an effort to increase capacity in Work Center 111 for week 13, Yankee Machine Shop has authorized overtime. The work center will be staffed 12 hours per day for six days. Because of the additional stress on the three machines, it is expected that the

> In week 13, the Yankee Machine Shop, has the following orders scheduled for Work Center 111. Calculate the capacity needed. Orders Quantity Setup Time (hours) Run Time per Piece (hours)  MM078 100 4.0 0.3  MM118 250 6.0 0.1  MM213 100 3

> Unfortunately, after extending the work day from eight hours to ten hours, the Yankee Machine Shop has noted that efficiency has decreased to 80 percent. Given this new piece of information, is there enough capacity to complete the orders given in Proble

> The Yankee Machine Shop has decided to schedule its workforce to work ten hours per day, five days per week. Does this new policy provide enough capacity to complete the orders shown in Problem 19?

> Using the information provided in Problem 20, a) Calculate the economic order quantity for each item. (Round to the nearest whole number.) b) Calculate the company’s maximum inventory investment throughout the year. c) Calculate the company’s average inv

> The Yankee Machine Shop currently has three machines working in Work Center 111, eight hours per day, five days per week, a utilization rate of 90 percent, and an efficiency rate of 90 percent. a) Calculate the available capacity. b) Is the available cap

> The Yankee Machine Shop has the following orders scheduled in Work Center 111 for week 12. Calculate the capacity needed. Orders Quantity Setup Time (hours) Run Time per Piece (hours)  LL110 10 2.0 1.2  LL118 25 4.0 0.4  LL131 100 6.0 

> Use the planned orders generated in Problem 11. Calculate the average inventory records if the company decides to switch the lot size rule for AB511 and AB521 to lot-for-lot. Compare the number of replenishment orders using the new lot size rules.

> Perfect Furniture is a manufacturer of kitchen tables and chairs. The company is currently deciding between two new methods for making kitchen tables. The first process is estimated to have a fixed cost of $80,000 and a variable cost of $75 per unit. The

> Calculate the minimum replenishment time for the Model A fountains given the beginning inventories. Component Immediate Parent Usage per Parent Lead Time (weeks) Beginning Inventory  A none - 1 0  B A 2 2 250  C A 1 6 500  D A 

> Using the information given and assuming that 2500 Model A fountains are scheduled for completion, calculate the gross requirements of each component. Use the beginning inventories given. Component Immediate Parent Usage per Parent Lead Time (weeks)

> Flora is preparing for her busy season and is building 2500 Model A fountains. Calculate the gross requirements for each component assuming that there is no beginning inventory. Component Immediate Parent Usage per Parent Lead Time (weeks) Beginning

> Using the information given, calculate the replenishment time when no beginning inventory exists. Component Immediate Parent Usage per Parent Lead Time (weeks) Beginning Inventory  A none - 1 0  B A 2 2 250  C A 1 6 500  D A 3

> Flora’s Fabulous Fountains’ (FFF) top product is its Model A. Using the information given, draw the product structure tree for the Model A. Component Immediate Parent Usage per Parent Lead Time (weeks) Beginning Inventory  A none - 1 0  B A

> Using the given information and the beginning inventories from Problem 4, calculate the minimum replenishment time for the 100 Q Models. Item Usage per Parent Load Time (weeks)  Q - 2  R 2 3  S 1 4  T 3 2  X 2 3  Y 1 2  V 1

> Given the following list of items, a) Calculate the annual usage cost of each item. b) Classify the items as A, B, or C. Item Annual Demand Ordering Cost ($) Holding Cost (%) Unit Price ($)  101 500 10 20 0.5  102 1500 10 30 0.2  103 

> Using the given information, calculate the gross requirements for each of the components when the company plans to build 100 of its Q Models if you have these inventories: 150 units of component T and 200 units of component R. Item Usage per Parent Lo