During 2020, E Inc. reported $1,100,000 net income. Included in this amount was $120,000 of life insurance proceeds received upon the death of E’s CEO, $90,000 of interest income from investments in municipal bonds and life insurance premiums of $10,000 that E had paid for the policy on its CEO. E uses straight-line depreciation for book purposes and MACRS for tax. For 2020, E’s tax depreciation expense exceeded its financial depreciation expense by $50,000. This difference is expected to reverse in 2021. During 2020, E paid $90,000 estimated taxes and its tax rate for all years is 20%.

INSTRUCTIONS: A. Determine the current and deferred income tax expense that E will report on its 2020 income statement. B. Determine the deferred tax asset / liability that E will report on its 2020 balance sheet. C. Prepare the journal entry to record 2020 tax expense.

On January 1, 2000 Apple Company acquired all of the stock of Pear Company at book value. Apple accounts for its investment in Pear using the initial value method and Pear doesn't pay any dividends.

On January 1st 2015 Pear Company issued $1,000,000 face value bonds for $930,000 These 7% bonds pay interest each July 1 and January 1. Pear uses straight line amortization on these 20 year bonds.

On January 1, 2020, Apple Company acquired all of the Pear bonds for $955,000.

1. Make the necessary worksheet entries for 2020

2. In 2020, Apple reported unconsolidated income of $900,000 and Pear reported income of $100,000 what is consolidated income

3. make the necessary worksheet entries for 2021

4. in 2021, Apple reported unconsolidated inocme of $800,000 and Pear reported income $125,000 what is consolidated income

Review the three scenarios below. Look for which, if any, of these scenarios presents an example of post-investment holdup.

1. Your firm conducted a search for a new chief financial officer and hired a highly qualified candidate with a yearly salary of $250,000. After six months, the person left to join another firm.
2. Your firm has an exclusive contract to assemble automobile seats for a number of luxury models. Almost 100% of the materials are imported and, of those, over 50% include parts manufactured in China. All of the prices on the parts from China increased by 25% when the U.S. imposed tariffs on China. Your company has informed all of its customers that increased cost must be passed on for your firm to continue supplying the seats. All of your customers reluctantly agreed to pay the additional cost.
3. Your company took note of your progress toward your MBA, and when the director for customer services left the company, you were asked to take over as interim director. You were encouraged to apply for the full-time position once you got your MBA. You served for 13 months, at which time your company was acquired by another company and your position was abolished.

In your discussion post, address the following:

• Which of the above, if any, are an example of post-investment holdup?
• Define the following and explain each within the context of a chosen scenario:
  • What is the sunk, or stranded, cost?
  • What is the contract?
  • Was the contract breached?
  • What are the damages?

Joeseph Gallo, the founder of the famous wine company that bears his name, said that when he first started selling wine right after Prohibition (laws outlawing the sale of alcohol), he poured two glasses of wine from the same bottle and put a price of 10 cents a bottle on one and 5 cents a bottle on the other. He let people test both and asked them which they wanted. Most wanted the 10-cent bottle, even though they were the same wine.

• What does this tell us about people?
• Can you think of other areas where that may be the case?
• What does this suggest about pricing?

Joseph Gallo, the founder of the famous wine company that bears his name, said that when he first started selling wine right after Prohibition (laws outlawing the sale of alcohol), he poured two glasses of wine from the same bottle and put a price of 10 cents a bottle on one and 5 cents a bottle on the other. He let people test both and asked them what they wanted. Most wanted the 10-cent bottle, even though they were the same wine.

• What does this tell us about people?
• Can you think of other areas where that may be the case?
• What does this suggest about pricing?

Joseph Gallo, the founder of the famous wine company that bears his name, said that when he first started selling wine right after Prohibition (laws outlawing the sale of alcohol), he poured two glasses of wine from the same bottle and put a price of 10 cents a bottle on one and 5 cents a bottle on the other. He let people test both and asked them which they wanted. Most wanted the 10-cent bottle, even though they were the same wine.

1. What does this tell us about people?
2. Can you think of other areas where that may be the case?
3. What does this suggest about pricing?

The following letter has been issued by the CEO of   Pharma One Company to confirm accepting your business proposal that has been sent by your company on October 1^st, 2015.                

Dear Sir/Madame,

Over the years, Our Company “Pharma One” had established its reputation as being one of the leading Pharmaceutical Companies in Egypt and the Middle East. We are principally engaged in the development, production and sale of drugs licensed for use as medications. We deal in generic and/or brand medications. They are subject to a variety of laws and regulations regarding the patenting, testing and marketing of drugs. The main aim of the company is to develop research and distribute drugs in order to provide health care for the people in the society. The Company distributes its products in Egypt and the Middle East.

At Pharma One, our people are our greatest asset; we truly believe that. Our founder and CEO rooted the company in this philosophy and we continue to stand by it. HR today has the capabilities to be that strategic partner to business whether it’s in   employee resourcing, employee development, employee rewards and compensation and employee relations; all of those functional areas have the opportunity to really help the business achieve its strategic objective.

Based on your business proposal that was sent on October 1^st, 2016, which stressed on introducing new models and innovative HR practices in a methodical manner that can help moving from an old to a new business environment, Pharma One is confirming the following:

At this phase of the project, we require:

a) Developing a competency framework for 2 managerial levels (Senior Management and Middle Management).

1. Who started Facebook? How old was he then? Now? How much control does the founding CEO have over his firm? Why? Why was he able to demand and receive control of Facebook, even as the firm went public? What strategic factors were at work in Facebook’s rise that gave the founder such leverage? Who is Facebook’s COO? What is that person’s role, responsibilities, and accomplishments?

After reading Bell Hook's interview with Pema Chödrön, explain how an awareness of death might benefit us.

You are the international manager of a US business that has just invented a revolutionary new personal computer that can perform the same functions as existing PCs but costs only half as much to manufacture. Several patents protect the unique design of this computer. Your CEO has asked you to formulate a recommendation for how to expand into Western Europe. Your options are (a) to export from the US, (b) to license a European firm to manufacture and market the computer in Europe, and (c) to set up a wholly owned subsidiary in Europe. Suggest a course of action to your CEO.