Windsor Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,205,000 for 48,200 shares. Kulikowski Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $692,000 for 2021. The fair value of Kulikowski’s stock was $28 per share at December 31, 2021. Assume that the security is a trading security.

Prepare the journal entries for Windsor Inc. for 2020 and 2021, assuming that Windsor cannot exercise significant influence over Kulikowski. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

P11.16 Sung Corporation, a manufacturer of steel products, began operations on October 1, 2019. Sung's accounting department has begun to prepare the capital asset and depreciation schedule that follows. You have been asked to assist in completing this schedule. In addition to determining that the data already on the schedule are correct, you have obtained the following information from the company's records and personnel:

• 1. Depreciation is calculated from the first day of the month of acquisition to the first day of the month of disposition.
• 2. Land A and Building A were acquired together for $820,000. At the time of acquisition, the land had an appraised value of $90,000 and the building had an appraised value of $810,000.
• 3. Land B was acquired on October 2, 2019, in exchange for 2,500 newly issued common shares. At the date of acquisition, the shares had a fair value of $30 each. During October 2019, Sung paid $16,000 to demolish an existing building on this land so that it could construct a new building.
• 4. Construction of Building B on the newly acquired land began on October 1, 2020. By September 30, 2021, Sung had paid $320,000 of the estimated total construction costs of $450,000. It is estimated that the building will be completed and occupied by July 2022.
• 5. Certain equipment was donated to the corporation by a local university. An independent appraisal of the equipment when it was donated estimated its fair value at $30,000 and the residual value at $3,000.
• 6. Machine A's total cost of $164,900 includes an installation expense of $600 and normal repairs and maintenance of $14,900. Its residual value is estimated at $6,000. Machine A was sold on February 1, 2021.
• 7. On October 1, 2020, Machine B was acquired with a down payment of $5,740 and the remaining payments to be made in 11 annual instalments of $6,000 each, beginning October 1, 2020. The prevailing interest rate was 8%. The following data were determined from present-value tables and are rounded:

  PV of $1 at 8%				PV of an Ordinary Annuity of $1 at 8%
  10 years		0.463		10 years		6.710
  11 years		0.429		11 years		7.139
  15 years		0.315		15 years		8.559

  Sung Corporation Capital Asset and Depreciation Schedule For Fiscal Years Ended September 30, 2020, and September 30, 2021
  Assets		Acquisition Date		Cost		Residual Value		Depreciation Method		Estimated Life in Years		Depreciation Expense, Year Ended September 30
  												2020		2021
  Land A		Oct. 1, 2019		$ (1)		N/A		N/A		N/A		N/A		N/A
  Building A		Oct. 1, 2019		(2)		$40,000		Straight-line		(3)		$17,450		(4)
  Land B		Oct. 2, 2019		(5)		N/A		N/A		N/A		N/A		N/A
  Building B		Under construction		$320,000 to date		—		Straight-line		30		—		(6)
  Donated Equipment		Oct. 2, 2019		(7)		3,000		150% declining- balance		10		(8)		(9)
  Machine A		Oct. 2, 2019		(10)		6,000		Double-declining- balance		8		(11)		(12)
  Machine B		Oct. 1, 2020		(13)		—		Straight-line		20		—		(14)
  N/A = Not applicable

Instructions

a. For each numbered item in the schedule, give the correct amount. Round each answer to the nearest dollar.

b.  When would it be appropriate for management to use different depreciation policies as they have done for Machines A and B?

You work for a large accounting firm KMPG as a Senior Accountant. Your client Bear plc acquired shares in Wolf plc several years back and you are responsible for the preparation of the year end work.

The following are the Statements of financial position for Bear plc and Wolf plc as at 31 March 2020, together with the additional information provided below.

Notes to the above financial statements:

1. Wolf Plc acquired 84,000 ordinary shares in Wolf on 31 March 2017. They also acquired 15% of the preference shares.

2. At the date of acquisition, the retained earnings of Wolf plc were £205,000.

3. During the year, Bear sold goods to Wolf for £10,400 which included a mark-up on cost of 30%. At the end of the year, 50% of this stock was still held by Wolf plc.

4. At the date of acquisition, the land and buildings of Wolf plc had a fair value of £50,000 more than their book value. This fair value increase has not been incorporated into the statement of financial position for Wolf plc. Land accounts for 20% of this amount. Wolf acquired the building on 1 April 2012. The group policy is to depreciate buildings over a period of 50 years.

4. Wolf spent £42,000 on developing a new and innovative product. Wolf’s policy is to expense development costs, however, it is Bear’s policy to capitalise development costs (i.e. treat it as an asset). The following provides a breakdown of expenditure by Wolf:

Development costs up to 31 March 2017     £32,000

Development costs after 31 March 2017     £10,000

6. On the 31March 2020, an impairment test was carried out on the goodwill arising from the acquisition of Wolf plc. The report indicated that the goodwill needs to be written down by £10,000.

7. Wolf declared a dividend to its ordinary shareholders on 15 March 2020 which remained unpaid by 31 March 2020. Bear has not accounted for this income in their financial statements.

1. Prepare the consolidation schedule for Wolf plc at 31 March 2020.

2. Calculate the equity and non-controlling interest that will appear in the consolidated statement of financial position for the Bear Group plc at 31 March 2020.

c. Prepare a memorandum for the attention of the financial director of Bear Plc explaining why consolidated accounts are necessary and what are the criteria regarding exemption and exclusion from preparing consolidated accounts.

d. Prepare a memorandum for the financial director of Bear plc explaining the limitations of group accounts.

The cost of giving up a cash discount under the terms of sale​ 1/10 net 60​ (assume a 365day​ year) is

A.

7.4

B.

​ 6.1%

C.

​ 7.2%

D.

​14.7%

On its 2019 balance​ sheet, Sherman Books showed a balance of retained earnings equal to​ $510 million. On its 2020 balance​ sheet, the balance of retained earnings was equal to​ $520 million. Which of the following statements is most​ correct?

A.

If the company sold​ $10 million of newly issued common stock in​ 2020, then the​ company’s net income in 2020 must have been​ $20 million.

B.

The company must have paid a dividend in 2020.

C.

If the​ company’s net income in 2020 was​ $10 million, the company paid dividends of​ $20 million.  

D.

If the​ company’s net income in 2020 was​ $20 million, the company paid dividends of​ $10 million.  

Nelson Products is a price-setter that uses the cost-plus pricing approach. The products are specialty vacuum tubes used in sound equipment. The CEO is certain that the company can produce and sell 300,000 units per year, due to the high demand for the product. Variable costs are $2.30 per unit. Total fixed costs are $980,000 per year. The CEO will receive stock options if $300,000 of operating income for the year is reported. What sales price would allow the CEO to achieve the target if the cost-plus pricing method is used? (Round your answer to the nearest cent.)

Biofilms are implicated in intractable urinary tract infections, in the lung infections (such as in Cystic fibrosis), on teeth, on implanted medical devices-to name a few scenarios. Nosocomial (hospital acquired) infections are the fourth leading cause of death in the U.S. Biofilms contribute to the failure of antibiotic treatment, particularly in hospitalized patients.

In this assignment:

Describe the formation of biofilms, their persistence, and interactions with the host immune system.

Describe how quorum sensing plays a role in the development of biofilms. Describe the methods used for controlling medical biofilms.

Johnson & Johnson and Crisis Management: Comparison of Two Leaders in Two Crises

Abstract

Crisis management communications is a critical skill for corporate leaders. Failure during crisis management may result in serious harm to the company and in some cases can lead to the exit of the firm from the industry. Successful crisis management may result in little or no damage to a company’s reputation in the industry. This case study will review the crisis management communication strategies of two CEOs at different times in a single company’s history.

Leadership in 1982 Crisis

When the Tylenol crisis happened in 1982, Burke directed the removal of 31 million bottles of Tylenol products valued at more than $100 million from store shelves (Kaplan). Burke took the lead role for all communications relating to the crisis. As the CEO, he was the face and spokesperson for Johnson & Johnson, providing leadership through the crisis. Burke appeared on the U.S. television news program, 60 Minutes, and allowed cameras to be present during strategy sessions (Yang). Burke did not delegate the responsibility of communication to a company spokesperson or division head (Prokesch). Multiple case studies, many through Harvard Business School, detail the way Johnson & Johnson and its leaders handled the crisis.

Leadership Now Crisis

Under Weldon, the company recalled more than 50 products during a 15-month period between 2009 and 2011. The product recalls spanned various subsidiaries, including products such as Motrin, Tylenol, Children’s Tylenol products, Rolaids, and Benadryl from the consumer products division of McNeil Consumer Health Care, the same subsidiary that was so successful with crisis management during the 1982 Tylenol crisis. The quality issues were so severe, with potential for adverse effects to the general public, that in July 2010 the FDA required action on the part of McNeil to address the quality issues at various manufacturing plants. The company submitted a remediation plan for McNeil to the FDA, and in March 2011 the FDA expanded oversight at three plants for McNeil, due to the company’s failure to make significant improvements in quality.

Questions Presented:

Compare and contrast the leadership strategies used by Burke and Weldon: What changes could have been made by either CEO to improve the situation he faced?

Compare and contrast the communication strategies used by Burke and Weldon. What changes could have been made by either CEO to improve the situation he faced?

Compare and contrast the crisis management strategies used by Johnson & Johnson in the two situations.

The CEO of a mid-sized software company is determined to keep the hierarchy at a minimum number of levels. Will this affect the organization’s ability to control activities? What do you suggest?

Olaf Gundersen,the CEO of wireless telecom company. Accept the Maximum Megahertz project. What do you do if the when project costs and deadlines escalate drastically?

The partner in charge of the James Spencer Corporation audit comes by your desk and leaves a letter he has started to the CEO and a copy of the statement of cash flows for the year ended December 31, 2020. Because he must leave on an emergency, he asks you to finish the letter by explaining (1) the difference between the net income and cash flow amounts, (2) the importance of operating cash flow, (3) the sustainable source(s) of cash flow, and (4) possible suggestions to improve the cash position. Spencer is a small corporation that relies on its auditor for financial statement preparation.

Date
James Spencer III, CEO
James Spencer Corporation
125 Bay Street
Toronto, ON

Dear Mr. Spencer:

I have good news and bad news about the financial statements for the year ended December 31, 2020. The good news is that net income of $100,000 is close to what we predicted in the strategic plan last year, indicating strong performance this year. The bad news is that the cash balance is seriously low. Enclosed is the Statement of Cash Flows, which best illustrates how both of these situations occurred at the same time …