On July 1, 2019, ABB Company, Inc. purchased 30% of the outstanding ordinary shares of ABC Company for P5,160,000 cash, including transaction cost of P160,000. ABB Company gained ability to exercise influence over ABC Company as a result of this acquisition. On the date of acquisition, the fair value of ABC’s net assets was P12,400,000. ABB Company has determined that the excess of the cost of the investment over its share of ABC’s net assets is attributable to goodwill. ABC’s profit for the year ended December 31, 2019 was P3,600,000. During 2019, ABC Company declared and paid ABB cash dividends of P400,000. There were no other transactions between the two companies. There was no indication of goodwill impairment.  

The following are the 2 questions:

1. What is the carrying value of the investment at December 31, 2019?  

2. Assuming that the excess of acquisition cost over carrying value of the net assets acquired is attributable to depreciable assets with a remaining life of 10 years, what is the net share of ABB Company on the income reported by ABC Company during 2020?

Neustadt's Source of Presidential Power:
After reviewing Neustadt's ideas, apply them to the role of a CEO. What lessons can the CEO learn from reading Neustadt clearly? Illustrate specifically how a CEO could implement Neustadt's principles to help the firm fulfill its strategy.

Consolidated amounts when affiliate's debt is acquired from non-affiliate

Assume that a Parent company owns 100 percent of its Subsidiary. On December 31, 2013, the Parent company had a $400,000 (face) bond payable outstanding with a carrying value of $420,000. The bond was originally issued to an unaffiliated company. On that same date, the Subsidiary acquired the bond for $398,000. During 2013, the Parent company reported $180,000 of (pre-consolidation) income from its own operations (i.e., prior to any equity method adjustments by the Parent company) and after recording interest expense. The Subsidiary reported $100,000 of (pre-consolidation) income from its own operations. Related to the bond during 2013, the parent reported interest expense of $55,000. The unaffiliated company that held the bond prior to December 31, 2013 recorded interest income of $55,000. Determine the following amounts that will appear in the 2013 consolidated income statement:

a. Interest income from bond investment

b. Interest expense on bond payable

c. Gain (loss) on constructive retirement of bond payable Use a negative sign with answer to indicate a loss.

d. Consolidated net income

Keep in mind that each transaction triggers two offsetting entries in the BoP

Example: Starbucks buys coffee from an Indonesian farmer for USD 50 K who in return acquires fertilizer from a US manufacturer

US Current Account (CA):

Trade: -50 K (import of coffee)

Trade: +50 K (export of fertilizer)

For each of the following transactions, indicate how the transaction would appear in the US balance of payments. Indicate the USD amount (with the correct sign) as well as the appropriate accounts and sub-accounts:

1. A U.S. oil company imports oil from a firm in Canada. The firm pays USD 135M for the oil which is kept in a US bank by the Canadian firm

2. Apple pays USD 790 M dividends to its non-US shareholders who reinvest the dividends in Apple shares.

3. A U.S. company acquires a 40% stake in a joint venture (JV) in China for USD 74 M. The payment is converted from USD to RMB by the People’s Bank of China (PBC), i.e. the Chinese central bank, at the official exchange rate. PBC then provides the USD to a state-owned Chinese enterprise that acquires a US firm.

Question-----Which carmakers are most likely to benefit from the elimination of the North American Free Trade Agreement? Which will be most negatively impacted? Please help me answer question-+- Read article "It’s Not Just Ford: Trump’s Trade Barbs Threaten VW, Toyota Too" Ford Motor Co. was a favorite target of Donald Trump, who lambasted the company for producing cars south of the border throughout his campaign. Toyota Motor Corp., Volkswagen AG and other U.S. carmakers are just as exposed. Toyota and Nissan Motor Co., Japan’s largest automakers, were spared from Trump’s critique by name on the campaign trail. Yet, along with General Motors Co. and VW, they all rely on Mexican plants for millions of vehicles and a high volume of parts. That puts them at risk if the president-elect makes good on his threat to levy hefty taxes on cars assembled across the Rio Grande. “Trump could, or will, try to set up trade barriers,” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen in Germany. “Automakers with U.S. factories will therefore be on the winning side. Mexico, the new El Dorado of the auto industry, could suffer.” Since 2010, nine global automakers, including GM, Ford and Fiat Chrysler Automobiles NV, have announced more than $24 billion in Mexican investments. VW’s Audi, BMW AG and Daimler AG each build or plan to assemble luxury vehicles, engines or heavy trucks in the low-cost country, which Trump says has benefited at the expense of the American voters who propelled him to victory. Output in Mexico may more than double this decade, from 2 million to 5 million vehicles, according to the Center for Automotive Research in Ann Arbor, Michigan. The Republican candidate and real-estate developer grabbed headlines during his campaign by threatening to slap a 35 percent tariff on any cars Ford builds in Mexico and ships back to the U.S. He called Ford’s plans for a new plant in Mexico “an absolute disgrace.” A levy would lead to higher prices and hurt demand, said Joe Spak, an analyst at RBC Capital Markets. Trump would “start a worldwide trade war” if he decides to end trade pacts and uses anti-dumping provisions to impose widespread tariffs on other countries, said Donald Grimes, an economist at the Institute for Research on Labor, Employment and the Economy at the University of Michigan. The North American Free Trade Agreement, for example, requires only six months’ notice of termination to Canada and Mexico and doesn’t specify that the president would need congressional approval, he said. Read more: Gadfly looks at which carmakers build the most vehicles in Mexico “These other countries would retaliate. Prices consumers would pay would increase sharply. The Federal Reserve would then increase interest rates. It would be ugly,” Grimes said. Despite that threat, U.S. automakers and the United Auto Workers union extended an olive branch to the president-elect. “We agree with Mr. Trump that it is really important to unite the country -- and we look forward to working together to support economic growth and jobs,” Ford said in a statement. The company’s plan to shift small-car production from a factory in Michigan to Mexico was attacked by Trump during his first answer of the initial debate with Democratic candidate Hillary Clinton in September. GM and Fiat Chrysler said in separate statements they would work with Trump and the new Congress on policies that support U.S. manufacturing. UAW President Dennis Williams, whose union endorsed Clinton, told reporters at a roundtable Thursday that “I’m prepared to sit down and talk to him on trade. NAFTA is a huge problem to the American people.” German executives attending an industry conference in Munich on Wednesday also expressed concerns about Trump’s views. BMW is building a new car plant in Mexico’s San Luis Potosi that’s due to start production in 2019, while Audi started assembling autos in San Jose Chiapa in September. “We need open trade,” said BMW CEO Harald Krueger. The luxury automaker ships many of the SUVs assembled at its South Carolina factory to markets around the world and in turn exports sedans and Mini cars to the U.S. from Europe. “We live off exports and imports. The U.S. market is fundamental for us.” NAFTA has created a “highly integrated” auto market in North America that is critical to the fortunes of all global carmakers operating in it, said Sean McAlinden, an automotive economist based in Ann Arbor. “To interrupt the flow of trade across either border, Canadian or Mexican, would really throw more than a monkey wrench into the machine,” McAlinden said. “It would create a very, very noncompetitive North American auto industry.” Conciliation Hopes Daimler CEO Dieter Zetsche and James Verrier, who heads supplier BorgWarner Inc., are among executives who held out hope that much of Trump’s trade talk was campaign rhetoric and would soften with the practicalities needed to govern. “Many things get said during the heat of an election campaign,” Zetsche said. “I hope and believe this is also the case here.” For Bob Lutz, the retired vice chairman of GM, Trump’s victory could ultimately help the auto industry if his advisers and Congress keep him from pushing his protectionist agenda too far. “He’s not a dictator,” Lutz said in an interview. “No one can go in and abrogate trade deals. There are some aspects of NAFTA that will probably be re-negotiated, but he will probably be talked out of his crazier ideas.” Rather than threaten Japan auto imports with tariffs, Trump has pointed to wealth generated from the cars being sold in the U.S. to bolster his argument for America to pay a smaller share of the costs related to stationing troops in its biggest Asian ally’s territory. “Japan is ripping us off with the cars,” Trump said at an Oct. 12 campaign event in Florida. In remarks to Ohio volunteers in July, he spoke of “massive ships” delivering vehicles to the U.S. from Japan, which he told Americans was “rich because of us.” Representatives for Toyota, Nissan and Honda Motor Co. declined to comment. Japan’s automakers have combined capacity to build about 1.36 million vehicles annually in Mexico and have announced plans for new plants capable of assembling another 430,000 vehicles a year. Models built or planned for Mexican production and sale in the U.S. include the Toyota Corolla, the Nissan Versa and Sentra, and the Honda Fit and HR-V. “If NAFTA is going to be up for discussion somewhere down the line, that would affect Japanese companies very much, especially auto-related investments in Mexico,” said Bob Takai, president and CEO of Sumitomo Global Research Co. “If the trading and investing is going to be very difficult because of the new presidency, we may go somewhere else.”

Australian Taxation

Combination Q1:

Miss Russell QC (Queen’s Council) is a lawyer by day and a university lecturer by night. She receives salary from the law firm of $100,000 and salary from the University of $50,000. She is single and has private health insurance from 1 January 2019 to 30 June 2019.

During the year Miss Russell had to travel to see clients. She acquired the car on 1 October 2018 for $60,000. The acquisition cost was funded entirely by a loan at an interest rate of 15%. She has determined that the depreciation deduction on the car would be $2,300 for the year. In addition, Miss Russell incurred the following expenses during the year:

 Registration and insurance $2,000

 Repairs and maintenance $1,000

 Oil and fuel costs $1,500

For the period 1 October 2018 to 30 June 2019, Miss Russell estimates the car travelled a total of 15,000 km, 12,000 of which were for business purposes.

She kept a logbook of all of her travels. Miss Russell also has mobile phone that she uses only for business purposes.

The cost of the phone is $300 per month and she pays this herself. Miss Russell also received $10,000 dividends on the 28 June 2019. These were partially franked to 80%.

Calculate Miss Russell’s net tax payable as at 30 June 2019.

Please take two companies and compare and contrast how the Coronavirus has impacted their supply chain. Please make sure that you cite your sources. If you are working at your company, you need to interview someone and can use that as one company and cite your source.

Subject: Supply Chain

Analyse the following case using the AAA decision making model. What are the ethical theories and principles. Apply codes of ethics for finance professionals.

You have graduated as a financial adviser and working for a company with many famous clients. The CEO takes time to mentor you personally. The CEO invites you to dinner at his place often and you help him out as a family friend. You are the only person who knows the CEO’s wife from the firm, she is a real estate agent. You later learn, the wife has a job as a real estate consultant for the firm. Both the CEO and his wife separate personal life for their job.

The wife uses her experience to satisfy clients. After 6 months of probation she is up for a promotion. The CEO (her husband) was part of the committee for promotion. Due to the firms great performance, the CEO was able to receive a bonus for his leadership. There have been no behavioural issues due to the relationship between the CEO and his wife.

The CEO and his wife become distant at work as no one knows about their relationship. While you believe they have worked professionally, their hidden relationship still troubles you. There is so much secrecy. While the firm has succeeded in many areas, some issues have gotten worse. The firm was subject to a joint investigation by two top media outlets, which uncovered a story that the firm had a number of elderly clients who had since faced financial difficulty due to being recommended riskier investment products by the firm. Many clients at retirement age have made complaints with their losses.

Executive remuneration had increased significantly in the last several years. The CEO was entitled to bonuses due to the successes of his wife. The CEO and other executives don’t feel concerned about media reports. You have a talk with another graduate regarding the relationship between the CEO and the wife and how that may be causing the issues. Your colleague felt like you should have spoke up and lodged an internal complaint.

You approach the CEO. The CEO feels the relationship is no ones business and to not bring his personal life into the business. If you filed an internal complaint you may risk the CEO losing reputation and credibility as a financial advisor.

Arrange an interview with a senior executive/partner/principal of a firm, preferably a business you are interested in. The manager must have EMPLOYEE supervision responsibilities.  Your task in this interview is to identify the interviewee’s orientation and business philosophy toward key human resource management functions. A face-to-face interview is highly recommended, however, a phone interview is acceptable.   

PRIOR TO THE INTERVIEW

Develop a list of approx. 10 human resource related questions you will ask that cover recruitment, staffing, staff motivation, employee development, and employee appraisal. (In your priority order). One question must cover the Supervisors viewpoint on the “competitive advantage through people”.

DELIVERABLE                                                                  

Prepare the responses and your analysis of the interview including:

What you learned about supervising/managing others? Did you learn anything new? Did the interview clear up any misconceptions you had about HR and HR management?

What did you agree with and disagree with?

What was (were) the most memorable part(s) of the interview? Why?

How did the responses of your interviewee compare to class readings and class discussions this far?

What was the interviewee's thoughts on the “competitive advantage through people"?

Summarize the interview and include your thoughts and feelings towards the professional you interviewed. Did you walk away with an overall view of this person's philosophy and values as they relate to HR management?

Critically reflect on your own perceptions of HR management. What beliefs did you have going into the interview about HR management? Has anything changed for you?

The following balance sheets have been prepared on December 31, 2020 for A Corp. and B Inc.

Balance Sheets

Additional Information:

A uses the cost method to account for its 50% interest in B, which it acquired on January 1, 2017. On that date, B's retained earnings were $20,000. The acquisition differential was fully amortized by the end of 2020.

A sold Land to B during 2019 and recorded a $15,000 gain on the sale. A is still using this Land. A's December 31, 2020 inventory contained a profit of $10,000 recorded by B.

B borrowed $20,000 from A during 2020 interest-free. B has not yet repaid any of its debt to A.

Both companies are subject to a tax rate of 20%.

Prepare a Consolidated Balance Sheet for A on December 31, 2020 assuming that A's investment in B is a control investment.

Can you please show calculations in detail? (Goodwill, RE, NCI and B/S)