Established in 1891 in Eindhoven, the Netherlands, Koninklijke Philips NV is one of the world’s oldest multinational companies. The company began making lighting products and over time diversified into a range of businesses that included domestic appliances, consumer electronics, and health care products. From the beginning, the small Dutch domestic market created pressures for Philips to look to foreign markets for growth.

By the start of World War II, Philips already had a global presence. During the war, the Netherlands was occupied by Germany. By necessity, the company’s national organizations in countries such as Australia, Brazil, Canada, United Kingdom, and the United States gained considerable autonomy during this period. After the war, a structure based on strong national organizations remained in place. Each was in essence a self-contained entity responsible for much of its own manufacturing, marketing, and sales.

Most R&D activities, however, were centralized at Philips’ Eindhoven headquarters. Reflecting this, several product divisions were created. Based in Eindhoven, the product divisions developed technologies and products, which were then made and sold by the different national organizations. During this period, the career track of most senior managers at Philips involved significant postings in various national organizations around the world (a career development practice often seen still in multinational corporations).

For several decades this organizational arrangement worked well. It allowed Philips to customize its product offerings, sales, and marketing efforts to the conditions that existed in different national markets. By the 1970s, however, flaws were appearing in the approach. The structure involved significant duplication of activities around the world, particularly in manufacturing. When trade barriers were high, this did not matter so much, but the significance of its effect became important when trade barriers started to fall and competitors came into the marketplace. These competitors included Sony and Matsushita from Japan, General Electric from the United States, and Samsung from South Korea. They gained market share by serving increasingly global markets from centralized production facilities, where they could achieve lower costs.

Philips’ response was to try to tilt the balance of power in its structure away from national organizations and toward product divisions. International production centers were established under the direction of the product divisions. The national organizations, however, remained responsible for local marketing and sales, and they often maintained control over some local production facilities. One problem Philips faced in trying to change its structure at this time was that most senior managers had come up through the national organizations. Consequently, they were loyal to them and tended to protect their autonomy.

Despite several reorganization efforts, the national organizations remained a strong influence

at Philips until not too long ago. Former CEO Cor Boonstra famously described the company’s organizational structure as a “plate of spaghetti” and asked how Philips could compete when the company had 350 subsidiaries around the world and significant duplication of manufacturing and marketing efforts across nations.

Boonstra instituted a radical reorganization. He replaced the company’s 21 product divisions with just 7 global business divisions, making them responsible for global product development, production, and marketing. The heads of the divisions reported directly to him, while the national organizations reported to the divisions. The national organizations remained responsible for local sales and local marketing efforts, but after this reorganization they finally lost their historic sway on the company.

Philips, however, continued to underperform its global rivals. By 2008, Gerard Kleisterlee, who succeeded Boonstra as CEO in 2001, decided Philips was still not sufficiently focused on global markets. He reorganized yet again, this time around just three global divisions: health care, lighting, and consumer lifestyle (which included the company’s electronics businesses). These are also the three divisions that are in place under the most recent CEO, Frans van Houten, who became the CEO of Philips in 2011.

The three divisions are responsible for product strategy, global marketing, and shifting of production to low-cost locations (or outsourcing production). The divisions also took over some sales responsibilities, particularly dealing with global retail chains such as Walmart, Tesco, and Carrefour. To accommodate national differences, however, some sales and marketing activities remained located at the national organizations.

QUESTION: Describe how, without setting up any new subsidiaries or changing where any of the subsidiaries were headquartered or how they operated, the company might have transferred profits from subsidiaries in high tax jurisdictions to those in low tax jurisdictions in order to reduce the total amount of tax it had to pay to all of the various host countries where its 350 subsidiaries were located

Discuss the requirements for the tax year-end and accounting methods that may be required/adopted by Partnerships.

how to tell if an expenditure is being recorded as an asset or if it is being expensed immediately when looking at a balance sheet.

Mickey, Mickayla, and Taylor are starting a new business (MMT). To get the business started, Mickey is contributing $290,000 for a 40 percent ownership interest, Mickayla is contributing a building with a value of $290,000 and a tax basis of $172,500 for a 40 percent ownership interest, and Taylor is contributing legal services for a 20 percent ownership interest. What amount of gain is each owner required to recognize under each of the following alternative situations? [Hint: Look at §351 and §721.] (Leave no answer blank. Enter zero if applicable.)

a. MMT is formed as a C corporation.

b. MMT is formed as an S corporation.

c. MMT is formed as an LLC.

Examine the following statements and tick the right answer –

1. The term sheet is a legal agreement between the founders of a company and the investors.-YES /NO

2. The term sheet is a legal agreement between the company and its founders to accept PE investment. - YES /NO

3. The term sheet is a legal agreement between the company and the PE investors. -YES/ NO

4. The term sheet is a list of terms and conditions based on which investors are agreeable to invest in a company. - YES /NO

5. Can the board of directors of a company decide to issue shares to investors for financing the company with PE investment? - YES /NO

6. If the investors mention an acceptable valuation of the company in the term sheet, can the shareholders of a company decide to reject the of fereven if the board of directors is willing to accept it? - YES /NO

7. Aftertheconclusionofexecutionofagreementsandsatisfactionoftheconditionsprecedent to investment, the funds will be made available to the company from the investors -YES

/ NO

8. Eveniftheduediligencefindingofacompanyarenotsatisfactory, can investors decide to go ahead with the transaction? - YES /NO

9. If two companies are theoretically identical in all financial parameters, can an investor value them differently? - YES /NO

10. Can the post-money value of a company be higher than the pre-money value if the company has no debt in its balance sheet? - YES /NO

Microsoft Dynamics GP Write off an Uncollectible accounts receivable Under the allowance method, the write off of a specific accounts receivable:

1. Decreases net income and decreases accounts receivable.

2. Decreases net income and decreases working capital.

3. Affects neither net income nor accounts receivable.

4. Affects neither net income nor working capital.

5. Increases bad debit expense and increases the allowance for doubtful accounts.

what are the formulas for

NOPM for the current year as if the company capitalized its operating leases.

NOAT for the current year as if the company capitalized its operating leases.

RNOA for the current year as if the company capitalized its operating leases.

Financial Leverage as if the company capitalized its operating leases

Return on Equity as if the company capitalized its operating leases

Nonoperating Return as if the company capitalized its operating leases

Math SAT scores (Y) are normally distributed with a mean of 1500 and a standard deviation of 140. An evening school advertises that it can improve students' scores by roughly a third of a standard deviation, or 30 points, if they attend a course which runs over several weeks. (A similar claim is made for attending a verbal SAT course.) The statistician for a consumer protection agency suspects that the courses are not effective. She views the situation as follows: H0 : = 1500 vs. H1 : = 1460.

Assume that after graduating from the course, the 420 participants take the SAT test and score an average of 1450. Is this convincing evidence that the school has fallen short of its claim at 2.5% level?

As director of capital budgeting, you are reviewing three potential investment projects with the following cost and cash flow projections.

1.Calculate the Internal Rate of Return (IRR) for each project.

2.Assuming your capital investment budget of $500,000 will only allow selection of one project (thus the projects are now mutually exclusive), which project should you fund?

Linda Larue has arthritis. Her chiropractor advised her that she needed to swim daily to alleviate her pain and other symptoms. Consequently, Linda and her husband, Philo, purchased for $400,000 a new home that had a swimming pool, after selling their old home for $325,000. If the Larues had constructed a pool at their former residence, it would have cost $75,000 to build, and it would have increased the value of their home by $50,000.

Answer the following

Facts:

Issues:

Conclusions:

Authorities( only use the IRS code/ Reg):

Analysis and Summary:

Action to be taken:

Miss Yu is performing the audit on leases of TipuPte Ltd for the year ended 31 December 2016. From the ledger, Miss Yu noticed that there are three items. which are on lease, i.e. a van, a lathe machine and the oven. As part of the audit, Miss Yu would send standard confirmation letters to the lessors. Two days before the end of the fieldwork, Miss Yu received confirmation from the van's lessor. Miss Yu's client has short taken the van lease by $10,000. Miss Yu sent the second reminder confirmation and managed to receive the confirmation from the lathe machine's lessor. The lease would only start from 1 January 2017. Miss Yu has to yet receive any confirmation pertaining to the leasing of the oven.

Required

a. What should Miss Yu do in the future to make sure that the confirmation letter are received and answered promptly?

b. There are discrepancies to two of the items. What further action should Miss Yu take?

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,600 helmets, using 2,268 kilograms of plastic. The plastic cost the company $14,969.

According to the standard cost card, each helmet should require 0.57 kilograms of plastic, at a cost of $7.00 per kilogram.

Required:

1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,600 helmets?

2. What is the standard materials cost allowed (SQ × SP) to make 3,600 helmets?

3. What is the materials spending variance?

SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 5,100 of these meals using 2,000 direct labor-hours. The company paid its direct labor workers a total of $28,000 for this work, or $14.00 per hour.

According to the standard cost card for this meal, it should require 0.40 direct labor-hours at a cost of $13.50 per hour.

Required:

1. What is the standard labor-hours allowed (SH) to prepare 5,100 meals?

2. What is the standard labor cost allowed (SH × SR) to prepare 5,100 meals?

3. What is the labor spending variance?

4. What is the labor rate variance and the labor efficiency variance?

Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:

During the most recent month, the following activity was recorded:

1. Nineteen thousand two hundred and fifity pounds of material were purchased at a cost of $1.70 per pound.

2. All of the material purchased was used to produce 2,500 units of Zoom.

3. 400 hours of direct labor time were recorded at a total labor cost of $5,200.

Required:

1. Compute the materials price and quantity variances for the month.

2. Compute the labor rate and efficiency variances for the month.

(For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations to the nearest whole dollar

Capital Rationing Decision for a Service Company Involving Four Proposals

Renaissance Capital Group is considering allocating a limited amount of capital investment funds among four proposals. The amount of proposed investment, estimated income from operations, and net cash flow for each proposal are as follows:

The company's capital rationing policy requires a maximum cash payback period of three years. In addition, a minimum average rate of return of 12% is required on all projects. If the preceding standards are met, the net present value method and present value indexes are used to rank the remaining proposals.

Required:

1. Compute the cash payback period for each of the four proposals.

2. Giving effect to straight-line depreciation on the investments and assuming no estimated residual value, compute the average rate of return for each of the four proposals. If required, round your answers to one decimal place.

3. Using the following format, summarize the results of your computations in parts (1) and (2) by placing the calculated amounts in the first two columns on the left and indicate which proposals should be accepted for further analysis and which should be rejected. If required, round your answers to one decimal place.

4. For the proposals accepted for further analysis in part (3), compute the net present value. Use a rate of 15% and the present value of $1 table above. Round to the nearest dollar.

5. Compute the present value index for each of the proposals in part (4). If required, round your answers to two decimal places.

On January 1, Park Corporation and Strand Corporation had condensed balance sheets as follows:

On January 2, Park borrowed $66,000 and used the proceeds to obtain 80 percent of the outstanding common shares of Strand. The acquisition price was considered proportionate to Strand’s total fair value. The $66,000 debt is payable in 10 equal annual principal payments, plus interest, beginning December 31. The excess fair value of the investment over the underlying book value of the acquired net assets is allocated to inventory (60 percent) and to goodwill (40 percent).

(1) On a consolidated balance sheet as of January 2, what should be the amount for current assets?

(2) On a consolidated balance sheet as of January 2, what should be the amount for non current assets?