Mergers and acquisitions (M&A)

1. What is merger and acquisition
2. Did Facebook Buy WhatsApp? What is the process of merge and acquisition??? mention important points.
3. How do interest rates affect M&A? How low-interest rates affect the M&A market? And the effect of rising interest rates on M&A activity in Canada

Wayne has a beginning basis in a partnership of $46,000. His share of income and expense from the partnership consists of the following amounts: Ordinary income $86,000, Guaranteed payment 24,000, Long-term capital gain 31,000, §1231 gain 8,600, Charitable contributions 4,000, §179 expense 36,000, Cash distribution 12,000.

Beginning basis = $46,000

Guaranteed payment                               = $24,000

Long-term Capital gain                           = $31,000

1231 gain                                                = $8,600

                                                                   $109,600

Charitable contributions                         = ($4,000)

179 Expense                                            = ($36,000)

Cash distribution                                     = ($12,000)

End of year basis                                   = $57,600

I was told my answer of $57,600 was incorrect, any advice?

Equivalent Units of Production and Related Costs The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production. Work in Process—Assembly Department Bal., 1,600 units, 35% completed 17,440 To Finished Goods, 29,600 units ? Direct materials, 29,000 units @ $9.50 275,500 Direct labor 84,600 Factory overhead 39,258 Bal. ? units, 45% completed ? Determine the following: a. The number of units in work in process inventory at the end of the period. 1,000 units Feedback Units in ending work in process represent units that have been started in the department but have not been completed, and therefore have not been transferred out to finished goods. b. Equivalent units of production for direct materials and conversion. If an amount is zero or a blank, enter in "0". Work in Process-Assembly Department Equivalent Units of Production for Direct Materials and Conversion Costs Whole Units Equivalent Units Direct Materials Equivalent Units Conversion Inventory in process, beginning 1,600 0 1,040 Started and completed 28,000 28,000 28,000 Transferred to finished goods 29,600 Inventory in process, ending 1,000 1,000 450 Total units 30,600 Feedback c. Costs per equivalent unit for direct materials and conversion. Costs Per Equivalent Unit Direct Materials $ Conversion $ d. Cost of the units started and completed during the period. $

Problem 14-5A Straight-Line: Amortization of bond premium and discount LO P1, P2, P3

[The following information applies to the questions displayed below.]

Legacy issues $710,000 of 8.0%, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $621,812 and their market rate is 12% at the issue date.

1. Prepare the January 1, 2017, journal entry to record the bonds' issuance.

2. Determine the total bond interest expense to be recognized over the bonds' life.

3. Prepare a straight-line amortization table for the bonds' first two years.

4. Prepare the journal entries to record the first two interest payments

Required information

[The following information applies to the questions displayed below.]

Arndt, Inc., reported the following for 2018 and 2019 ($ in millions):

1. Expenses each year include $40 million from a two-year casualty insurance policy purchased in 2018 for $80 million. The cost is tax deductible in 2018.
2. Expenses include $3 million insurance premiums each year for life insurance on key executives.
3. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2018 and 2019 were $38 million and $67 million, respectively. Subscriptions included in 2018 and 2019 financial reporting revenues were $35 million ($13 million collected in 2017 but not recognized as revenue until 2018) and $43 million, respectively. Hint: View this as two temporary differences—one reversing in 2018; one originating in 2018.
4. 2018 expenses included a $29 million unrealized loss from reducing investments (classified as trading securities) to fair value. The investments were sold in 2019.
5. During 2017, accounting income included an estimated loss of $7 million from having accrued a loss contingency. The loss was paid in 2018 at which time it is tax deductible.
6. At January 1, 2018, Arndt had a deferred tax asset of $8 million and no deferred tax liability.

6. Suppose that during 2019, tax legislation was passed that will lower Arndt’s effective tax rate to 35% beginning in 2020. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule, prepare the necessary journal entry to record income taxes for 2019.

Suppose that during 2019, tax legislation was passed that will lower Arndt’s effective tax rate to 35% beginning in 2020. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Discuss how you view the use of emerging accounting technology in an accounting career.

3.

Swathmore Clothing Corporation grants its customers 30 days’ credit. The company uses the allowance method for its uncollectible accounts receivable. During the year, a monthly bad debt accrual is made by multiplying 2% times the amount of credit sales for the month. At the fiscal year-end of December 31, an aging of accounts receivable schedule is prepared and the allowance for uncollectible accounts is adjusted accordingly.

At the end of 2020, accounts receivable were $584,000 and the allowance account had a credit balance of $48,000. Accounts receivable activity for 2021 was as follows:

The company’s controller prepared the following aging summary of year-end accounts receivable:

Required:
1. Prepare a summary journal entry to record the monthly bad debt accrual and the write-offs during the year.
2. Prepare the necessary year-end adjusting entry for bad debt expense.
3-a. What is total bad debt expense for 2021?
3-b. How would accounts receivable appear in the 2021 balance sheet?

Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows: Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 Sales $ 440,000 Variable expenses: Variable manufacturing expenses $ 137,000 Sales commissions 54,000 Shipping 11,000 Total variable expenses 202,000 Contribution margin 238,000 Fixed expenses: Advertising (for the bilge pump product line) 30,000 Depreciation of equipment (no resale value) 113,000 General factory overhead 48,000 * Salary of product-line manager 115,000 Insurance on inventories 13,000 Purchasing department 51,000 † Total fixed expenses 370,000 Net operating loss $ (132,000 ) *Common costs allocated on the basis of machine-hours. †Common costs allocated on the basis of sales dollars. Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses. Required: What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?

The chief accountant for Grandview Corporation provides you with the company’s 2018 statement of cash flows and income statement. The accountant has asked for your help with some missing figures in the company’s comparative balance sheets. These financial statements are shown next ($ in millions).

Required:
1. Calculate the missing amounts.
2. Prepare the operating activities section of Grandview’s 2018 statement of cash flows using the indirect method.
  

3-6

On April 1, 2017, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company’s first month.

The company's chart of accounts follows:

Use the following information:

1. Two-thirds (or $128) of one month’s insurance coverage has expired.
2. At the end of the month, $700 of office supplies are still available.
3. This month’s depreciation on the computer equipment is $500.
4. Employees earned $600 of unpaid and unrecorded salaries as of month-end.
5. The company earned $1,750 of commissions that are not yet billed at month-end.

Required:
1. & 2. Prepare journal entries to record the transactions for April and post them to the ledger accounts in Requirement 6b. The company records prepaid and unearned items in balance sheet accounts.
3. Using account balances from Requirement 6b, prepare an unadjusted trial balance as of April 30.
4. Journalize and post the adjusting entries for the month and prepare the adjusted trial balance.
5a. Prepare the income statement for the month of April 30, 2017.
5b. Prepare the statement of retained earnings for the month of April 30, 2017.
5c. Prepare the balance sheet at April 30, 2017.
6a. Prepare journal entries to close the temporary accounts and then post to Requirement 6b.
6b. Post the journal entries to the ledger.
7. Prepare a post-closing trial balance.

On Jan 1, Bike Mart had a beginning inventory of 20 bicycles which it purchased for $365 each.

During January, the company purchases four more bicycles for $400 each. None were sold in January.

On February 15, the company purchases five more bicycles for $450 each.

Between February 16 and 28, Bike Mart sells 10 of these bicycles.

a.) Calculate Bike Mart’s Ending Inventory Balance (in dollars) at the end of February and Cost of Goods Sold through February using the FIFO Method. (show all work.)

b.) Calculate Bike Mart’s Ending Inventory Balance (in dollars) at the end of February and Cost of Goods Sold through February using the Weighted Average Method. (show all work.)

c.) At the end of February, will Bike Mart’s Net Income (profits) on its Income Statement be higher if it uses the FIFO or Weighted Average Inventory Method? Why?

e.) At the end of February, will Bike Mart’s Inventory Turnover Ratio be higher if it uses the FIFO or Weighted Average Inventory Method? Why?

Door2DoorCo are a large courier company who have just received a shipment of X new vans. They wish to lock in a tyre supply contract to keep these vans well shod over the Y months that they intend to keep the vans. The vans come with low quality tyres that will need to be replaced in 2 months. Two suppliers, ThriftyTread and WiserWheels have expressed interest at supplying tyres at a fixed price for the duration. The offers are summarised below:

Number of Vans, X – 120

Corporate Discount rate – J1=12.68% p.a.

Initial Tyre Life – 2 months

Keep vans for (Y) – 50 months

ThriftyTread

• Tyre price - $100.00
• Tyre life – Four months
• Tyre replaced at – 2, 6, 10, …, 46, 50 months

WiserWheels

• Tyre price - $148.00
• Tyre life – Six months
• Tyres replaced at – 2, 8, 14, …, 44, 50 months

a) For each of the two potential suppliers, illustrate Door2DoorCO’s tyre expenditure for the new vans as a fully labelled timeline diagram. (Remember that there are X new vans, and assume each van has 4 tyres.)

b) Determine the value in period 2 dollars of the expenditure stream if Door2DoorCo decide to go with ThriftyTreads. [Hint, you will firstly need to find the j3 rate equivalent to the corporate discount rate, you will then need to find the PV of the expenditure stream in period 2 dollars]

c) Thus determine the present value of the expenditure stream if Door2DoorCo decide to go with ThriftyTreads. [NB this is a bit tricky and is aimed at stronger students]

d) Determine the value in period 2 dollars of the expenditure stream if Door2DoorCo decide to go with WiserWheels.

e) Thus determine the present value of the expenditure stream if Door2DoorCo decide to go with WiserWheels [NB this is a bit tricky and is aimed at stronger students]

f) Comparing your answers for part (b) with part (d), OR part (c) with part (e), explain which tyre supplier Door2DoorCo should choose.

g) Suggest three legitimate business considerations which a manager may take into account that might influence or even change the recommendation from part (f). NB “These tyres are prettier”, “This company will bribe me with a kickback”, or “My wife works for that company” are NOT legitimate business reasons. (Write around 20~30 words explaining/justifying each consideration.)

Ford Corporation is pulling together its direct labor budget for the next two months. Each unit of output requires 0.05 direct labor-hours. The direct labor rate is $7.80 per direct labor-hour. The production budget calls for producing 5,200 units in June and 5,700 units in July.

Required:

Prepare the direct labor budget for the next two months, assuming that the direct labor work force is fully adjusted to the total direct labor-hours needed each month. (Round your answers to 2 decimal places.)

Assuming the government does not eliminate LIFO, what are the ethical implications of a company switching its accounting policy from FIFO to LIFO, or the other way—from LIFO to FIFO? When and why would a company make this change? Explain your answer and discuss the financial statement effects.

On April 1, 2017, Flounder Company received a condemnation award of $490,200 cash as compensation for the forced sale of the company’s land and building, which stood in the path of a new state highway. The land and building cost $68,400 and $319,200, respectively, when they were acquired. At April 1, 2017, the accumulated depreciation relating to the building amounted to $182,400. On August 1, 2017, Flounder purchased a piece of replacement property for cash. The new land cost $102,600, and the new building cost $456,000.