ACC565 MIDTERM EXAM SOLUTION

Question: #972

STAT 2507 Assignment # 1 (Chapters 1, 2 and 3) Winter 2015
Last Name , First
Student:

Lab group: very important {
Due: Sections E, F and H, Monday February 9
Section G Tuesday February 10

The Assignments are to be handed IN CLASS. No late Assignment will be accepted.
No electronic submission will be accepted.

Part I. Lab questions. Use only the blanks left to answer lab questions.
1. (Students'Weights) Column Weights contains the weights (to the nearest tenth of a kilogram) of 30 students.
(a) [2] Construct a stem-and-leaf plot for the data by clicking Graph ! Stem-and-Leaf.
(b) [2] What is the median weights of the students? {
(c) [2] What fraction of weights below 60 kilograms?
(d) [2] What are the smallest and the largest weights? { and {
(e) [2] Quarter of the weights are above what value?

2. (Histogram Data)
(a) [2] Construct a frequency histogram for \Histogram.Data" in the data le by clicking on Graph ! histogram
(b) [2] Circle the shape of the frequency histogram of the data. Skewed to the left Symmetrical Skewed to the right
(c) [2] What is the relationship between the mean and the median of this data set?

(d) [2] Now activate the command mode by clicking Editor ! Enable Commands. Use the command desc for the column (Histogram) data. The mean is - and the median is
(e) [2] Would you use Chebychev's theorem or empirical rule for this data?
Explain

3. (Milage) The data in the column \Milage" are the milage in kilometers of 20 cars on one liter
gasoline.
(a) [2] Do you see any outliers? How many?
(b) [2] Look at the boxplot and at the measurements and List the value(s) you think can be outliers.{
(c) [2] Compute lower fence and upper fence -
(d) [2] Compute lower fence and upper fence
{
(e) [2] Compare your candidates for outliers in part (c) to the lower and the upper fence.
{

4. (Regression) The data in columns \Brain" and \Body" are averages of weights of brain and body weights of a number of mammal species.
(a) [2] Compute the correlation coecient between the Brain and the Body weights? {
(b) [2] What is the equation of regression line when the Body weight is used to predict the
Brain weight.{
(c) [2] Use the preceding regression line to predict the Brain weight of an specie with Body
weight=110.
(d) [2] What is the equation of regression line when the Brain weight is used to predict the
Buddy weight.
(e) [2] Predict the Body weight of a mammal specie with Brain weight=5.

Part II Comprehension questions
1. Identify each of the following variables as categorical, discrete, or continuous. Use space left.
(a) [2] Blood type for a randomly selected person. .
(b) [2] Amount of snow (in inch) of the next snow storm in Ottawa {.
(c) [2] Daily exchange rate of Canadian dollar versus US dollar{.
(d) [2] The number of car accidents in Ottawa area tomorrow {.

2. Consider the following observations 1, 0, 5, 10, -5, 3.
(a) [3] Compute x, the mean of these data, and S, the standard deviation, and nd the median value.
(b) [2] Compute the z-score for the observation 10. Would you consider this value as an outlier? Why or why not?

3. The following is a stem and leaf plot for data on the costs (in dollars) of a sample of 31 postal
mailings by a company. Leaf Unit = 0.01
85 2
86
87
88
89
90
91 3 4 8
92 0 0 1 3
93 1 1 2 5 7
94 0 1 6 6 7 8 9
95 2 3 4 5 5
96 0 5
97 0 4 7
98
99
100 0

(a) [4] What are the values of the median, lower quartile (Q1), and upper quartile (Q3) for this data set?
(b) [8] Construct a box plot for the given data. Using the 1.5*IQR rule, list any potential outliers, if any.

4. [5] A company interested in lumbering rights for a certain tract of slash pine trees is told that the mean diameter of these trees is 35 cm with a standard deviation of 7 cm. Assuming the distribution of diameters is roughly symmetrical and bell-shaped, what percent of the trees will have diameters between 21 and 49 centimeters?

5. We have n = 1000 measurements whose mean and variance respectively, are x = 6 and S2 = 9.
(a) [5] What is the minimum number of measurements that lie inside [0; 12]. Indicate the number and explain how it was obtained.
(b) [5] If you know that the shape of the distribution of the measurements is bell-shaped and symmetrical, then approximately how many measurements are in the interval [3; 9].
Indicate the number and explain how it was obtained.

6. For 10 young patients, catheters were fed from a principal vein into the heart. The necessary catheter length and the patients' height measured.
Patient 1 2 3 4 5 6 7 8 9 10
Height (in inches) 42.8 63.5 37.5 39.5 45.5 38.5 43 22.5 37 23.5
Catheter Length (centimeters) 37 50 34 36 43 28 37 20 34 30
(a) [5] Obtain the equation of the linear regression of Catheter Length on Height
(b) [5] Estimate the required Catheter Length for a patient whose Height is 36 inches.
(c) [5] Obtain the equation of the linear regression of Height on Catheter Length
(d) [5] Estimate the height of a patient who requires a Catheter with length 22 centimeters.

Solution: #976

ACC565 Organizational Tax Research and Planning MIDTERM EXAM (SOLUTION)

Question 1

When a taxpayer contacts a tax advisor requesting advice as to the most advantageous way to dispose of a stock, the tax advisor is faced with

Answer

a restricted-fact situation.

a closed-fact situation.

an open-fact situation.

a recognized-fact situation.

Question 2

During the course of an audit, a CPA discovers an error in a prior return. According to the Statements on Standards for Tax Services, the CPA should

Answer

ask the client for permission to disclose the error to the IRS.

withdraw from the engagement.

inform the IRS of the error, regardless of whether the client grants permission.

correct the error in the current year's tax return.

Question 3

A Technical Advice Memorandum is usually

Answer

an internal IRS document describing alternative legislative proposals.

part of a Tax Court decision.

requested by the taxpayer before entering into a taxable transaction.

issued by the national office in response to an audit request.

Question 4

Regulations are

Answer

equal in authority to legislation.

equal in authority to legislation if statutory.

presumed to be valid and to have almost the same weight as the IRC.

equal in authority to legislation if interpretative.

Question 5

In accordance with the rules that apply to corporate formation, which one of the following features does not make an issue of preferred stock "nonqualified"?

Answer

The shareholder can require the corporation to redeem the stock.

The dividend rate on the stock may not vary with interest rates, commodity prices, or other similar indices.

The corporation is either required to redeem the stock or is likely to exercise a right to redeem the stock.

The stock is limited and preferred as to dividends.

Question 6

The transferor's holding period for any boot property received in a Sec. 351 stock exchange

Answer

includes the holding period for the boot transferred.

begins on the day after the exchange.

begins on the day of the exchange.

is the same as the holding period of the stock received in the exchange.

Question 7

Rose and Wayne form a new corporation. Rose contributes cash for 85% of the stock and Wayne contributes services for 15% of the stock. The tax effect is

Answer

Rose and Wayne must recognize their realized gains, if any.

Wayne must report the FMV of the stock received as capital gain.

Rose and Wayne are not required to recognize their realized gains.

Wayne must report the FMV of the stock received as ordinary income.

Question 8

Which of the fo...