(b) The information below relates to a leasing arrangement between Simmonds Leasing Company and Telsan Company, a lessee.

Inception date        January 1, 2020

Lease term         6 years

Annual lease payment due at the beginning of

each year, beginning with January 1, 2020   $150,000

Fair value of asset at January 1, 2020     $760,000

Economic life of leased equipment     7 years

Residual value of equipment at end of lease term,

guaranteed by the lessee       $65,500

Lessor’s implicit rate      10%

Lessee’s incremental borrowing rate    12%

January 1, 2020

The asset will revert to the lessor at the end of the lease term. The lessee has guaranteed the lessor a residual value of $65,500. The lessee uses the straight-line depreciation method for all equipment.

Instructions

iii) Record the first year’s depreciation on Telsan Company’s books.

iv)Record interest expense and lease liability for Telsan Company for the year ending December 31, 2020.

Q1: Assume you have that you have the following information when preparing the consolidated financial statements in 2020 (fiscal year end is 12/31/2020). The consolidated entity includes the parent company and an 80%-owned subsidiary.

1. On January 1, 2018, the subsidiary sold to its parent, for a sale price of $120,000, equipment that originally cost $180,000. The subsidiary originally purchased the equipment on January 1, 2015, and depreciated the equipment assuming a 12-year useful life (straight-line with no salvage value). The parent adopted the subsidiary’s depreciation policy and depreciates the equipment over the remaining useful life. The parent used the full equity method to account for its Equity Investment.

2. During 2020, the subsidiary sold goods to the parent company for $230,000 that cost $180,000. The parent company still owned 30% of the goods at the end of 2020. During 2019, the parent sold goods to the subsidiary for $200,000 that cost $170,000. The subsidiary sold 80% of goods in 2019 and the rest 20% in 2020.

Prepare the related consolidation entries for the year 2020 based on the above information.

Describe the following Perspectives:

Sociocultural

Psychodynamic

Biological

Please make sure you discuss in detail:

1) Founder of that theory, if applicable

2) Major contributions of that theory to Psychology

3) How they are used today, in 2018

Question 3 - Week 10 On 1 March 2020 Holmes Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of the machinery is NZ$750,000. The machinery is completed on 1 June 2021 and shipped FOB Auckland on that date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date. The exchange rates at the relevant dates are: 1 March 2020 A$1.00 = NZ$1.20 30 June 2020 A$1.00 = NZ$1.30 1 June 2021 A$1.00 = NZ$1.25

Required: a) Determine the amount in AUD, as at: • 1 March 2020; and • 30 June 2020. b) Prepare the journal entries for the above dates, up to 1 June 2021,showing the amount of exchange gain or loss .

"It's not necessarily what you learn in an MBA program, but where you learn it." This type of bias has the potential to undermine hiring decisions. What truth is there to it and how can this bias be countered in a hiring process?

On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $162,000. Ship’s net assets on the date of acquisition were 700,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiary’s identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship’s property, plant, and equipment exceeded its book value by $18,000. The remaining useful life of Ship’s equipment at January 1, 20X5, was 10 years. The remainder of the differential was attributable to a patent having an estimated useful life of 5 years. Ship’s trial balance on December 31, 20X5, in kroner, follows:

	Debits			Credits
Cash	NKr	157,000
Accounts Receivable (net)		202,000
Inventory		272,000
Property, Plant & Equipment		623,000
Accumulated Depreciation				NKr	166,000
Accounts Payable					98,000
Notes Payable					196,000
Common Stock					460,000
Retained Earnings					240,000
Sales					737,000
Cost of Goods Sold		419,000
Operating Expenses		112,000
Depreciation Expense		70,000
Dividends Paid		42,000
Total	NKr	1,897,000		NKr	1,897,000

Additional Information:

Ship uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20X4, and ending inventory was acquired on December 15, 20X5. Purchases of NKr430,000 were made evenly throughout 20X5.

Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation.

Ship’s sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5.

The dividends were declared and paid on July 1, 20X5.

Pirate’s income from its own operations was $246,000 for 20X5, and its total stockholders’ equity on January 1, 20X5, was $3,500,000. Pirate declared $180,000 of dividends during 20X5.

Exchange rates were as follows:

	NKr		$
July 1, 20X3	1	=	0.15
December 30, 20X4	1	=	0.18
January 1, 20X5	1	=	0.18
July 1, 20X5	1	=	0.19
December 15, 20X5	1	=	0.205
December 31, 20X5	1	=	0.21
Average for 20X5	1	=	0.20

Required:
a. Prepare a schedule translating the trial balance from Norwegian kroner into U.S. dollars. Assume the krone is the functional currency. (If no adjustment is needed, select 'no entry necessary'.)

b. Assume that Pirate uses the fully adjusted equity method. Record all journal entries that relate to its investment in the Norwegian subsidiary during 20X5. Provide the necessary documentation and support for the amounts in the journal entries, including a schedule of the translation adjustment related to the differential.?

c. Prepare a schedule that determines Pirate’s consolidated comprehensive income for 20X5.

d. Compute Pirate’s total consolidated stockholders’ equity at December 31, 20X5.

When should long-lived assets be measured for impairment using the Recoverability test?

Quarterly

Semi-annually

Annually

When circumstances change indicating a carrying amount may not be recoverable

None of the above

To perform a Recoverability test for long-lived assets, the asset’s carrying amount is compared to

The sum of the expected future net cash flows (discounted) from the use of that asset and its disposition

The sum of the expected future net cash flows (undiscounted) from the use of that asset and its disposition

The asset’s original historical cost

The asset’s fair market value

If the Recoverability test indicates an impairment, the loss for an asset held for use is the amount by which the carrying amount of the asset exceeds

The book value of the asset

The historical cost of the asset

The sum of the expected future cash flows (undiscounted) from the use of the asset and its disposition

The fair value of the asset

Is restoration of an impairment loss for long-lived assets allowed for an asset held for use?

Yes

No

Is restoration of an impairment loss for long-lived assets allowed for an asset held for disposal?

Yes

No

What amount did Columbia Sportswear Company include in SG & A expense as impairment charges for long-lived assets for December 31, 2017?

$4,171,000

$1,401,000

$4,310,000

$1,550,000

Which of the following is not a characteristic of all intangible assets?

Long-term in nature

Lack physical existence

Amortized over the intangible asset’s legal life

Represent an entity’s rights and privileges

Which item is amortized by Columbia Sportswear Company over its estimated useful life?

Goodwill

Intangible Assets with finite useful lives

Intangible Assets with indefinite useful lives

All of the above

None of the above

What is the net carrying amount (in thousands) for Patents and Purchased Technology for December 31, 2017 for Columbia Sportswear Company?

$14,198

$37,198

$3,547

$4,877

What is the amount (in thousands) of Intangibles assets not subject to amortization for December 31, 2017 for Columbia Sportswear Company?

$143,731

$115,421

$129,555

$138,584

Columbia Sportswear Company acquired 100% of the equity interest in PrAna Living LLC during 2014. How much of the purchase price was allocated to Goodwill (in thousands)? This will take some digging into past 10K reports (hint: Pull the 2014 -10K from the Columbia website under Investor Relations)

$188,467

$193,413

$ 65,842

$ 54,156

When Columbia Sportswear Company acquired 100% of the equity interest in PrAna Living LLC during 2014, how much of the purchase price was allocated to acquired identifiable intangible assets (in thousands)?

$139,257

$114,500

$ 54,156

$ 65,842

The value of goodwill is the excess of

The purchase price over the fair value of tangible and identifiable intangible net assets acquired.

The purchase price over the fair value of tangible net assets acquired.

The purchase price over the carrying value of tangible and identifiable intangible net assets acquired.

The purchase price over the carrying value of tangible net assets acquired.

Internally generated goodwill associated with a business may be recorded as an asset when a firm offer to purchase that business unit has been received.

True

False

Did Columbia Sportswear Company recognize any goodwill impairment for December 31, 2017?

Yes

No

Depreciation and amortization recognized (in thousands) by Columbia Sportswear Company for December 31, 2017 was

$60,016

$40,871

$56,521

$59,945

Which of the following would not be amortized?

Patent

Trade name

Customer list

Copyright

What was the total of Accrued Liabilities (in thousands) for Columbia Sportswear Company as of December 31, 2017?

$453,636

$362,851

$182,228

$252,301

The accrued product warranties balance (in thousands) recognized by Columbia Sportswear Company for the year ending December 31, 2017 is?

$11,455

$13,500

$12,339

$11,487

What categories of commitments and contingencies did Columbia Sportswear Company disclose?

Operating leases

Inventory Purchase Obligations

Litigation

Indemnities and Guarantees

All of the above

Does Columbia Sportswear Company believe the ultimate resolution of current legal proceedings will have a material adverse effect on their financial statements?

Yes

No

What is the value (in thousands) of the asset retirement obligations for Columbia Sportswear Company as of 12/31/17?

$3,342

$4,580

$48,735

$42,622

$0

At December 31, 2017, was Columbia Sportswear Company in compliance with all associated covenants related to its domestic revolving line of credit (maturity date of July 1, 2021) ?

Yes

No

What was the amount of Columbia Sportswear Company contributions to their U.S. employees’ 401(k) profit-sharing plan for December 31, 2017?

$7,666,000

$7,754,000

$6,981,000

$3,546,000

How much did Columbia Sportswear Company pay (in thousands) to repurchase their common stock during 2017?

$0

$11,000

$35,542

$70,068

Cash dividends paid (in thousands) in 2017 for Columbia Sportswear Company were?

$48,122

$50,909

$43,547

$44,676

Which earnings per share amounts are reported in a complex capital structure?

Basic and Diluted EPS

Basic and Simple EPS

Basic EPS only

Diluted EPS only

What is the numerator (in thousands) for the calculation of the 2017 Diluted EPS of $1.49?

$1,159,962

$262,969

$112,315

$105,123

What is the denominator (in thousands) for the calculation of the 2017 Diluted EPS of $1.49?

70,632

71,064

70,453

70,681

What caused the increase in the denominator from Basic EPS to Diluted EPS for 2017?

Dilutive Convertible Preferred Stock

Dilutive Convertible Bonds

Dilutive Stock Options and Restricted Stock

None of the above

Imaginary story
You have just been appointed as the Finance Director for South East Asia of a large multinational bank (the Bank of Northeastern States), based in the United States and headquartered in Boston, Massachusetts. You have been posted to a recent acquisition of a Stock Market listed manufacturing plant, Peninsula Transport located in a small township some 40 kilometres outside the capital city of Indonesia. Your instructions are to asset strip the acquired company then close it down within one year.
Two weeks into your appointment and having just arrived in Jakarta you are given a company provided apartment and have spent several days unpacking and settling in with your family. Today is your first day at work and Mr Mohamed, the incumbent CEO a man who has inherited the company from his father informs you that he knows exactly why you are in Indonesia and begs you not to close his company. As the day progresses, you begin to realise that before the $ 100 million acquisition, the factory had been a wholly owned family business that had served the community for more than four decades and employed just under half the town’s available workforce of three thousand people. Indeed, there were many families, some with three generations in current employment with the company. In addition, you also realise that many small and medium local enterprises support the factory and that to close it will devastate the entire community. The CEO claims that he and his family are victims of a conspiracy to close the factory and sell the land to build real estate on it. He shows you a newspaper report from several years ago that clearly depicts the land surrounding the town being earmarked for development under the government’s plans for the future of the area. This involves building several thousand residential units and expanding the township into a commuter suburb serving the capital city.
Mr Mohamed informs you that he has rejected several offers from the government and has successfully fought them in the courts and obtained ‘heritage status’protection to overturn a local government order for compulsory purchase of the land from his family who have owned it for several generations.
The local CEO also informs you that he has evidence of bribes and gifts being made by the Bank of Northeastern States to local politicians, as well as substantial donations to National People’s Party, a political party who are the incumbent government. It is very clear that there is a trail of corruption leading all the way back to your employers in Boston. That night you call your CEO at Northeastern Bank to inform him and are shocked when he responds with threats against you and your family that if you don’t do as instructed you will be arrested and thrown in jail by local police. The next morning before you leave for work, you are paid a clandestine visit by a senior police officer and he also informs you in a veiled threat that your situation in Indonesia leaves you and your family very vulnerable. At this point, you realise that you have been lied to by the Board of Northeastern States Bank and that they are partners in a web of corruption worth tens of millions of US Dollars involving local Indonesian politicians and local police.
You find yourself in a dilemma. If you follow through with your instructions you understand that you will be responsible for the social consequences of closing the factory and will be just as guilty as those who are involved in the conspiracy. If you don’t you will be fired and face an uncertain future in which you and your family, having already been threatened, leaves you in no doubt of the consequences of being arrested and detained in a foreign country where you have no rights.

Two questions to discuss:
1) What should you do?
2) Why would you do that?

An acquisition is a situation whereby one firm (acquiring firm) purchases most or all of another firm's (acquired firm) shares in order to take control.

From real national/international market, select an example of an acquisition between two firms and answer the following questions:

1. Briefly introduce the chosen acquiring and acquired firms (Industry, nationality, size, competitors…).

2. Was this acquisition successful? Why?

3. Evaluate the competitive advantage of the acquiring company (after the acquisition).

4. What is the method used by the acquiring firm to manage the culture of the acquired firm? underline the pros and cons of this method.

Bramble Company manufactures a line of lightweight running shoes. CEO Mark Bramble estimated that the company would incur $3,412,240 in manufacturing overhead during the coming year. Additionally, he estimated the company would operate at a level requiring 221,000 direct labor hours and 598,639 machine hours.

1) Assume that Bramble Company uses direct labor hours as its manufacturing overhead application base. Calculate the company’s predetermined overhead rate. (Round answer to 2 decimal places, e.g. 52.75.)

2) Assume that job 4375 required 400 direct labor hours to complete. How much manufacturing overhead should be applied to the job? (Round answer to 0 decimal places, e.g. 5,275.)

3) Assume that Bramble Company uses machine hours as its manufacturing overhead application base. Calculate the company’s predetermined overhead rate. (Round answer to 2 decimal places, e.g. 52.75.)

4)
Assume that job 4375 required 630 machine hours to complete. How much manufacturing overhead should be applied to the job? (Round answer to 0 decimal places, e.g. 5,275.)