Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2020, for $617,000 in cash. Annual excess amortization of $13,500 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $430,000, and Rambis reported a $228,000 balance. Herbert reported internal net income of $63,750 in 2020 and $75,850 in 2021 and declared $10,000 in dividends each year. Rambis reported net income of $22,600 in 2020 and $34,700 in 2021 and declared $5,000 in dividends each year.

a. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary.

• If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2021?
• What would be the amount of consolidated retained earnings on December 31, 2021, if the parent had applied either the initial value or partial equity method for internal accounting purposes?

b. Under each of the following situations, what is the Investment in Rambis account balance on Herbert’s books on January 1, 2021?

• The parent uses the equity method.
• The parent uses the partial equity method.
• The parent uses the initial value method.

c. Under each of the following situations, what is Entry *C on a 2021 consolidation worksheet?

• The parent uses the equity method.
• The parent uses the partial equity method.
• The parent uses the initial value method.

Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2020, for $600,000 in cash. Annual excess amortization of $13,900 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $445,000, and Rambis reported a $251,000 balance. Herbert reported an internal net income of $42,000 in 2020 and $56,100 in 2021 and declared $10,000 in dividends each year. Rambis reported a net income of $24,200 in 2020 and $38,300 in 2021 and declared $5,000 in dividends each year.

a. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary.

• If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2021?
• What would be the amount of consolidated retained earnings on December 31, 2021, if the parent had applied either the initial value or partial equity method for internal accounting purposes?

b. Under each of the following situations, what is the Investment in Rambis account balance on Herbert’s books on January 1, 2021?

• The parent uses the equity method.
• The parent uses the partial equity method.
• The parent uses the initial value method.

c. Under each of the following situations, what is Entry *C on a 2021 consolidation worksheet?

• The parent uses the equity method.
• The parent uses the partial equity method.
• The parent uses the initial value method.

Mark resigned as CEO of Hewlett Packard amid accusations of sexual harassment and faked expense reports thereby violating the company's ethical standards. Before he did this, he attempted to negotiate to retain his position and compensate the company for cost related to legal disputes from his actions. His compensation package including stock was over $40 million dollars due to the success the company saw under his leadership. What ways did Mark's resignation improve Hewlett Packard?

Listed below are student evaluation ratings of courses, where a rating of 5 is for excellent. The ratings were obtained at the University of Texas at Austin and it is normally distributed.

3.5 3.1 3.8 4.7 4.5 4.9 3.9 3.3 4.1 4.7 4.9 3.2 3.3 3.9 4.9 3.8 8.

Construct a 90% confidence level.

What does the confidence level tell us about the population of all college students in Texas?

Describe in words the hedging strategy that the company should take in each of these cases. Remember that a possible answer is that the company should not be hedging at all. (1 paragraph maximum for each)

a). A US manufacturing firm that produces in the US and sells cars in Europe would like to reduce the effect of currency fluctuations on its profits.

b) A CFO believes that the price of oil (one of the company’s main inputs) is going to increase, and wants to generate profits from this increase.

Today is June 30, 2020. WheeWork company owns an office building for which it paid $ 20,000,000 on January 1, 2019, and which currently has Accumulated Depreciation of $ 3,000,000. WheeWork purchased the building to create 500 "work stations" which it rented out the individuals who did not want to purchase or lease office space themself.
Historically, WheeWork was able to rent 80% of their units at a rate of $ 400 per month (i.e. $ 4,800 per year). WheeWork assumed that they would operate the building for a total of 10 years, and then sell the building on January 1, 2029 at an estimated price of $ 28,000,000.
However, the outlook for individual office rental space has changed dramatically, and now WheeWork believes that for the next eight-and-a-half years, going forward, they will only be able to rent 50% of their units ata rate of $ 300 per month (i.e. $ 3,600 per year). Further, the anticipated selling price of the building on January 1, 2029 has dropped to $ 18,000,000.
For purposes of this problem, you may assume that, as of June 30, 2020, the present value of the "rental revenue" from the building is $ 5,00,000, and the present value of the selling price of the building is $11,000,000.
Given the current environment, WheeWork's auditors have indicated that WheeWork must perform an "lmpairment Test" for the building. Based on the information provided above, in accordance with US GAAP, whatis the amount reported for the building (i.e. Acquisition Cost less any Accumulated Depreciation and Write-Downs) on WheeWork's June 30, 2020 Balance Sheet?

A.$ 16,000,000

B.$ 17,000,000

C.$ 18,000,000

D.None of the above

Suppose you are the CEO of a company and one of your manager confessed to kiting $1,000. What is kiting? How do your company do to prevent it? How would you respond to the confession?

1. PSI, Inc.’s financial executives have been arguing about the proper way to record the patent they acquired four (4) years ago. The patent was originally purchased for $212,500. At the time of the purchase, PSI’s management believed that the patent would benefit the company for 10 years, after which is would be worthless. Using this information, they have amortized the patent to its current value of $127,500, which is currently shown on the company’s Balance Sheet.After attending a recent conference, the CFO determined that the current market value of the patent is only $115,000, not the full $127,500. Since PSI is having a good year this year, she

2. 3believes it would be agood idea to write down the patent to its current market value. The CEO disagrees. He believes that there is a good chance the patent will earn them at least the carrying value of $127,500 before it becomes obsolete. The CFO’s response was that based on the drop in market value and that there is only a chance that the patent will earn enough to cover the carrying value, it really should be written down to at least market value. The CEO replied that he didn’t care about market value. The value on the books should be based on management’s belief that the asset really will return its carrying value, at least it probably will.QuestionsAnswer allof the following questions:If an impairment is recognized, how much should be impaired?What would the journal entry be to record the impairment?Should PSI record the impairmentthis year?

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