2) Lebron Co. acquired the entire outstanding shares of common stock of Cavaliers Co. On the acquisition date the total fair value of net identifiable assets acquired (i.e., far value of identifiable assets acquired and liabilities assumed) was greater than the consideration transferred for the shares.

Research and cite a specific paragraph in the Accounting Standard Codification that can help the company to determine how this difference should be recognized in the consolidated financial statements. Unless specifically requested, your response should not cite implementation guidance and illustrations.

FASB ASC                              -                   -                    -

On February 1, 2018 Cromley Motor Products issued 10% bonds, dated February 1, with a face amount of $90 million. The bonds mature on January 31, 2022 (4 years). The market yield for bonds of similar risk and maturity was 12%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $90,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31.use FVof 1$, PV of 1$ etc.)

Required: 1. Determine the price of the bonds issued on February 1, 2018

PRICE OF THE BOND ……

2a. prepare amortization schedules that indicate Cromley’s effective interest expense for each period during the term to maturity.

Payment Number Cash Payment Effective Interest Increase in Balance Outstanding Balance

1

2

3

4

5

6

7

8

Totals

2b. Prepare amortization schedules that indicate Barnwell’s effective interest revenue for each interest period during the term to maturity. (Enter your answers in whole dollars.) Payment Number Cash Payment Effective Interest Increase in Balance Outstanding Balance

1

2

3

4

5

6

7

8

Totals

3. Prepare the journal entries to record the issuance of the bonds by Cromley and Barnwell’s investment on February 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) a. Record the issuance of the bonds by Cromley. On February 1, 2018 b. Record the Bond investment by Barnwell. On February 1, 2018 4. Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

a. Record the payment of interest for Cromley Company., on July 31, 2018

b. Record the accrued interest for Cromley Company. On December 31, 2018

c. Record the payment of interest for Cromley Company, on January 31, 2019

d. Record the payment of interest for Cromley Company. On July 31, 2019

e. Record the accrued interest for Cromley Company. On December 31, 2019

f. Record the payment of interest for Cromley Company. On January 31, 2020

5. Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

a. Record the payment of interest for Barnwell Company., on July 31, 2018

b. Record the accrued interest for Barnwell Company. . On December 31, 2018

c. Record the receipt of interest for Barnwell Company. on January 31, 2019

d. Record the receipt of interest for Barnwell Company. On July 31, 2019

e. Record the accrued interest for Barnwell Company. On December 31, 2019

f. Record the receipt of interest for Barnwell Company. On January 31, 2020

Amortization and Impairment Testing of Identifiable Intangible Assets

During the year ended July 30, 2016, Cisco Systems, Inc. acquired the following identifiable intangible assets through its purchase of two companies (in thousands):

Cisco acquired Lancope, Inc. in December 2015, and Jasper Technologies, Inc. in March 2016. Cisco separately tests identifiable intangibles acquired from each company for impairment, and collects the following information to conduct impairment tests at the end of fiscal 2016 (in thousands):

Required

a. Calculate amortization expense for the above identifiable intangibles for fiscal 2016. Intangibles are amortized on a straight-line basis starting in the month following acquisition.

• Round answers to the nearest whole number.
• Enter answers in thousands.

b. Calculate impairment losses for fiscal 2016.

• Round answers to the nearest whole number.
• Enter answers in thousands.

c. Determine the amounts reported on Cisco’s fiscal 2016 balance sheet for technology, customer relationships, and in-process R&D.

• Round answers to the nearest whole number.
• Enter answers in thousands.

Amortization and Impairment Testing of Identifiable Intangible Assets

During the year ended July 30, 2016, Cisco Systems, Inc. acquired the following identifiable intangible assets through its purchase of two companies (in thousands):

Cisco acquired Lancope, Inc. in December 2015, and Jasper Technologies, Inc. in March 2016. Cisco separately tests identifiable intangibles acquired from each company for impairment, and collects the following information to conduct impairment tests at the end of fiscal 2016 (in thousands):

Required

a. Calculate amortization expense for the above identifiable intangibles for fiscal 2016. Intangibles are amortized on a straight-line basis starting in the month following acquisition.

• Round answers to the nearest whole number.
• Enter answers in thousands.

b. Calculate impairment losses for fiscal 2016.

• Round answers to the nearest whole number.
• Enter answers in thousands.

c. Determine the amounts reported on Cisco’s fiscal 2016 balance sheet for technology, customer relationships, and in-process R&D.

• Round answers to the nearest whole number.
• Enter answers in thousands.

On January 1, 2019, The company you work for sold 6% bonds having a maturity value of $1,000,000 and a 3% yield (market rate). The bonds are dated January 1, 2019, and mature January 1, 2024, with interest payable June 30 and December 31 of each year. Your company allocates interest and unamortized discount or premium on the effective-interest basis.

You are trying to explain the cash flow, interest and liability impacts of the bond issue to your CEO on what this bond issue means to the business and financial statements.

As an intern in the Accounting department, it is your responsibility to explain this bond issue to the CEO. Present an amortization schedule that details out the cash flows, interest expense and carrying amount of the bond issue throughout its life.

Prepare an interest amortization schedule in Excel (in good format as you are going to share this with the CEO) for the bond issue detailed above. The amortization schedule should cover the full 5-year bond issue and show the cash impact, interest expense and carrying value of the bond for each period.

For your CEO, you are required to

1. Work out an excel worksheet showing the value of the bond at the date of issuance using the PV function in Excel (make sure to use formulas).
2. Amortization table, in good “deliverable” form for the full life of the bond. Use formulas to calculate each of the values in the amortization table (do not calculate using present value factors and hard-code into Excel)
3. Journal entries your company would record at 1) the date of issuance 2) the first interest payment date and 3) the maturity date.
4. Calculation of the total cost (expense) of issuing the bond and the total cash impact to your company over the life of the bond (ex: net ALL of the cash flows over the life of the bond).

Suppose the following transactions occur during the current year:

Complete the following table by indicating how the combined effects of these transactions will be reflected in the U.S. national accounts for the current year.

Hint: Be sure to enter a “0” if none of the transactions listed are included in a given category and to enter a minus sign when the balance is negative.

Smith, a U.S. citizen, has been working as an executive of a telecommunication company in U.S., and her annual salary in 2014 was US$150,000. Her salary was expected to remain unchanged if she continued to work in the company. At the end of the year 2014, however, she was recruited by a media company in Brazil, so she started working in Brazil from January 2015, making an annual salary of US$210,000. Assuming that the amount of her salary equals the amount of her contribution to the production in the company she works for, how much the annual U.S. GDP and GNP in 2015 was changed due to her job relocation? Clearly show the reasoning for your answer.     

A U.S. Company expects to receive 100 million Russian Ruble 3 months from now. A call and put on Russian Ruble are available with a strike price of RR60/$ for each option, and a premium of 1.5% for the call option and a premium of 2.3% for the put option. The weighted average cost of capital (WACC) for the U.S. Company is 12% and the current spot rate is RR58.30/$.

a. If the company hedges in the option market, which option will it choose and what is the cost of option hedge today and at maturity in U.S. Dollars? Explain your answer very well

b. If the spot rate at maturity is RR63/$, how much would the company receive (net) in 3 months from the option hedge?

A U.S. Company expects to receive 100 million Russian Ruble 3 months from now. A call and put on Russian Ruble are available with a strike price of RR60/$ for each option, and a premium of 1.5% for the call option and a premium of 2.3% for the put option. The weighted average cost of capital (WACC) for the U.S. Company is 12% and the current spot rate is RR58.30/$.

a. If the company hedges in the option market, which option will it choose and what is the cost of option hedge today and at maturity in U.S. Dollars? Explain your answer very well

. b. If the spot rate at maturity is RR63/$, how much would the company receive (net) in 3 months from the option hedge?