Mikkeli OY acquired a brand name with an indefinite life in 2015 for 43,000 markkas. At December 31, 2017, the brand name could be sold for 37,600 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 45,200 markkas, and the present value of this amount is 36,600 markkas.
Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes.
Required:
In: Accounting
Start with the partial model in the file attached. Marvel Pence, CEO of Marvel’s Renovations, a custom building and repair company, is preparing documentation for a line of credit request from his commercial banker. Among the required documents is a detailed sales forecast for parts of 2020 and 2021:
Sales Labor and Raw Materials
May, 2020 $75,000 $80,000
June, 2020 $115,000 $75,000
July, 2020 $145,000 $105,000
August, 2020 $125,000 $85,000
September, 2020 $120,000 $65,000
October, 2020 $95,000 $70,000
November, 2020 $75,000 $30,000
December, 2020 $55,000 $35,000
January, 2021 $45,000 N/A
c. If its customers began to pay late, this would slow down collections and thus increase the required loan amount. Also, if sales dropped off, this would have an effect on the required loan amount. Perform a sensitivity analysis that shows the effects of these two factors on the maximum loan requirement.
In: Accounting
Start with the partial model in the file attached. Marvel Pence, CEO of Marvel’s Renovations, a custom building and repair company, is preparing documentation for a line of credit request from his commercial banker. Among the required documents is a detailed sales forecast for parts of 2020 and 2021:
Sales Labor and Raw Materials
May, 2020 $75,000 $80,000
June, 2020 $115,000 $75,000
July, 2020 $145,000 $105,000
August, 2020 $125,000 $85,000
September, 2020 $120,000 $65,000
October, 2020 $95,000 $70,000
November, 2020 $75,000 $30,000
December, 2020 $55,000 $35,000
January, 2021 $45,000 N/A
c. If its customers began to pay late, this would slow down collections and thus increase the required loan amount. Also, if sales dropped off, this would have an effect on the required loan amount. Perform a sensitivity analysis that shows the effects of these two factors on the maximum loan requirement.
In: Accounting
Alpha Company acquired 40% interest in an associate, VV Company, for P2,500,000 on January 1, 2019. At the acquisition date, there were no differences between fair value and carrying amount of identifiable assets and liabilities. VV reported net income of P1,000,000 for 2019 and P1,500,000 for 2020. Also, VV paid cash dividend of P400,000 and P500,000 for 2019 and 2020, respectively. The following additional events occurred during 2019 and 2020:
• On January 1, 2019, VV sold an equipment costing P250,000 to HH Company for P400,000. The remaining useful life of the equipment is 10 years.
• On December 2019, VV sold inventory to HH Company for P450,000. The cost of the inventory was P300,000. This inventory remained unsold by HH Company on December 31, 2019.
• On July 1, 2020, VV sold a vehicle for P450,000 to HH Company. The carrying amount of the vehicle is P250,000 at the time of sale. The remaining life of the vehicle is 5 years.
• On December 2020, HH sold the inventory from VV Company.
a) Determine the investor’s share in profit for 2019. __________________________
b) Determine the investor’s share in profit for 2020. __________________________
c) Determine the carrying amount of the investment in associate on December 31, 2019. __________________________
d) Determine the carrying amount of the investment in associate on December 31, 2020. __________________________
In: Accounting
The data set in CEOSAL2 contains information on chief executive officers for U.S. corporations. The variable salary is annual compensation, in thousands of dollars, and ceoten is prior number of years as company CEO. Write the steps using R Studio!
(a) Find the average salary and the average tenure in the sample.
(b) How many CEOs are in their first year as CEO (that is, ceoten = 0)? What is the longest tenure as a CEO?
(c) Plot scatter plot for log(salary) and ceoten with log(salary) on the y- axis and ceoten on the x-axis. Also plot a line fit on top of the scatter plot. Based on this, do you see negative or positive relationship between log(salary) and ceoten?
(d) Estimate the simple regression model
log(salary) = β0 + β1ceoten + u
and report your results in the usual form. What is the (approximate) predicted percentage increase in salary given one more year as a CEO?
In: Economics
In: Accounting
Assume that TDW Corporation (calendar-year-end) has 2020 taxable income of $654,000 for purposes of computing the §179 expense. The company acquired the following assets during 2020: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)
| Placed in | |||
| Asset | Service | Basis | |
| Machinery | September 12 | $ | 2,270,500 |
| Computer equipment | February 10 | 263,650 | |
| Furniture | April 2 | 880,850 | |
| Total | $ | 3,415,000 | |
a. What is the maximum amount of §179 expense TDW may deduct for 2020?
In: Accounting
For each of the following transactions that occurred during the
year, indicate the dollar amount to be reported as a current
liability as of December 31, 2020. (Enter 0 for amounts
if no current liability is to be reported. Do not leave any answer
field blank.)
|
Reported as |
||||||
| (a) | On December 20, 2020, a former employee filed a legal action against Nash for $108,140 for wrongful dismissal. Management believes the action to be frivolous and without merit. The likelihood of payment to the employee is remote. |
$ |
Not a Current LiabilityCurrent Liability | |||
| (b) | Bonuses to key employees based on net income for 2020 are estimated to be $188,700. |
$ |
Current LiabilityNot a Current Liability | |||
| (c) | On December 1, 2020, the company borrowed $972,000 at 8% per year. Interest is paid quarterly. |
$ |
Current LiabilityNot a Current Liability | |||
| (d) | Accounts receivable at December 31, 2020, is $10,111,700. An aging analysis indicates that Nash’s expense provision for doubtful accounts is estimated to be 3% of the receivables balance. |
$ |
Not a Current LiabilityCurrent Liability | |||
| (e) | On December 15, 2020, the company declared a $2.40 per share dividend on the 40,160 shares of common stock outstanding, to be paid on January 5, 2021. |
$ |
Current LiabilityNot a Current Liability | |||
| (f) | During the year, customer advances of $175,000 were received; $59,700 of this amount was earned by December 31, 2020. |
$ |
Not a Current LiabilityCurrent Liability |
In: Accounting
Former CEO Ron Johnson designed and tried to implement a new strategy for JCPenney (JCP). However, the firm’s tar- get “middle market” customers did not respond well to the new strategy and the innovations associated with it. In fact, some say that Johnson’s innovations and strategy alienated what had historically been the firm’s target customers.
Johnson came to JCP after successful stints at Target and Apple. At Apple, he was admired for the major role he played in developing that firm’s wildly successful Apple Stores, which a number of analysts say brought about “a new world order in retailing.” It was Johnson’s ability to establish what some viewed as path-breaking visions and to develop innovations to reach them that appealed to JCP’s board when he was hired.
Comparing JCP to the Titanic, Johnson came to the CEO position believing that innovation was the key to shaking up the firm. Moreover, he reminded analysts, employees, and others that he came to JCP to “transform” the firm, not to marginally improve its performance. Describing what he intended to do at JCP, Johnson said that “in the U.S., the department store has a chance to regain its status as the leader in style, the leader in excitement. It will be a period of true innovation for this company.”
The essence of Johnson’s vision for JCP was twofold. First, he eliminated the firm’s practice of marking up prices on goods and then offering discounts, heavy pro- motions, and coupons to entice its bargain-hunting tar- get customers. Instead, Johnson introduced a three-tiered pricing structure that focused on what were labelled “everyday low prices.” To customers though, the pricing structure was confusing and failed to convince them that the “everyday low prices” were actually “low enough” compared to competitors’ prices.
Innovation was at the core of the second part of the new CEO’s vision, with one objective being to give JCP a more youthful image. The innovations Johnson implemented to create this image included establishing branded boutiques within JCP stores. To do this, JCP set up branded boutiques “along a wide aisle, or ‘street’ dotted with places to sit, grab a cup of coffee, or play with Lego blocks.” With an initial intention of having 100 branded shops within JCP stores by 2015, Johnson asked people “to envision an entire store of shops with a street and square in the middle representing a new way to interface with the customer.” Disney was one of the brands to be included as a shopping destination, as were Caribou Coffee, Dallas- based Paciugo Gelato & Cafe?, and Giggle, a store dedicated to making “it a whole lot easier to become a parent” by offering innovative and stylish “must-have baby items.” In addition, and as noted in Chapter 4’s Opening Case, Levi’s, IZOD, Liz Claiborne, and Martha Stewart branded items were to be included as part of the boutiques.
But, these innovations and the strategy used to exploit them did not work. So what went wrong? Considering the components of the model shown in Figure 13.2 yields a framework to answer this question. While it is true that Johnson had an entrepreneurial mind-set, cross-functional teams were not used to facilitate implementation of the desired innovations such as the boutique stores. In essence, it seems that Johnson himself, with- out the involvement of others throughout the firm, was instrumental in deciding that the boutiques were to be used as well as how they were to be established and operated within selected JCP stores. In addition, the values associated with efforts to change JCP from its historic roots of being a general merchant in the space between department stores and discounters to becoming a firm with a young, hip image were not shared among the firm’s stakeholders. Finally, Johnson’s work as an entrepreneurial leader was, seemingly, not as effective as should have been the case. Because of mistakes such as these, the level of success desired at JCP through internally developed innovations was not attained.
1. The new CEO tried to be innovative. Were the innovations introduced, more incremental or more novel? Please explain.
2. What are the reasons that the innovations implemented by the new CEO failed?
3. What recommendations do you have for turning around the performance of JCP?
In: Operations Management
Assume you are the CEO of an U.S.-based e-commerce company that wants to expand internationally by exporting a product or service to one of the BRICS countries: Brazil, Russia, India, China, or South Africa. First, you should choose and describe the product or service you want to export. Second, you should evaluate the business environment in the chosen country and explain why you chose this country. Third, you should evaluate the market potential for your product/service in the chosen country. Be sure to specify the indicators (country indicators and market potential indicators) that you use to evaluate the market potential for your product/service in the chosen country. Fourth, you should develop a marketing plan to export your product/service to the chosen country. Be sure to specify the positioning strategy and target market, the pricing strategy, the distribution strategy, and the promotional strategy. Finally, you should develop a 2-slide executive summary (including detailed notes) that summarizes the key points of your international marketing plan.
In: Economics