The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for Dux Company. Additional information from Dux’s accounting records is provided also.

Additional information from the accounting records:

1. A building that originally cost $168,000, and which was three-fourths depreciated, was sold for $7,000.
2. The common stock of Byrd Corporation was purchased for $5,000 as a long-term investment.
3. Property was acquired by issuing a 13%, seven-year, $46,000 note payable to the seller.
4. New equipment was purchased for $63,000 cash.
5. On January 1, 2021, bonds were sold at their $41,000 face value.
6. On January 19, Dux issued a 5% stock dividend (1,000 shares). The market price of the $10 par value common stock was $14 per share at that time.
7. Cash dividends of $29,000 were paid to shareholders.
8. On November 12, 12,500 shares of common stock were repurchased as treasury stock at a cost of $8,000.

Required:
Prepare the statement of cash flows for Dux Company using the indirect method. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands (i.e., 10,000 should be entered as 10).)

If you were appointed as President and CEO of a firm how would you implement a plan to have the company act ethically? How does one go about making a company ethical? Be specific and justify your approach.

In 200 words or more, discuss some of the issues that accountants face after an investment has been acquired. One example would be how goodwill is accounted for on the financial statements after an acquired company is consolidated on the financial statements.

In 200 words or more, discuss some of the issues that accountants face after an investment has been acquired. One example would be how goodwill is accounted for on the financial statements after an acquired company is consolidated on the financial statements.

Using the organization you selected from your Business Plan "University Medical Center of Southern Nevada", consider what corporate portfolio strategy the company uses or what you imagine they use and why? What are the benefits to the selected corporate portfolio strategy compared? What is the role of the corporate center and Strategic Business Unit (SBU)?

During the year ended December 31, 2019, Parent Company (the parent) sold merchandise to Subsidiary Corporation (a 90%-owned subsidiary) for a price of $32,340, at a markup of 32% of cost. Subsidiary sold merchandise acquired from Parent to outsider customers for $38,500 during 2019. Included in Subsidiary’s January 1, 2019, inventories were goods acquired from Parent at a billed price of $3,036 and included in Subsidiary’s December 31, 2019, inventories were goods acquired from Parent at a billed price of $2,310.

(i)         Prepare the working paper eliminating entries (in journal entry format) related to the intercompany sale of merchandise for the year ended December 31, 2019.

(ii)        Show how the working paper eliminating entry in part (i) adjusts cost of goods sold and ending inventory to the correct consolidated balances.

(iii)       How (increase or decrease and the amount) is Parent’s 2019 equity in income of Subsidiary affected by the intercompany sale of merchandise?

During the year ended December 31, 2019, Parent Company (the parent) sold merchandise to Subsidiary Corporation (a 90%-owned subsidiary) for a price of $32,340, at a markup of 32% of cost. Subsidiary sold merchandise acquired from Parent to outsider customers for $38,500 during 2019. Included in Subsidiary’s January 1, 2019, inventories were goods acquired from Parent at a billed price of $3,036 and included in Subsidiary’s December 31, 2019, inventories were goods acquired from Parent at a billed price of $2,310.

(i)         Prepare the working paper eliminating entries (in journal entry format) related to the intercompany sale of merchandise for the year ended December 31, 2019.

(ii)        Show how the working paper eliminating entry in part (i) adjusts cost of goods sold and ending inventory to the correct consolidated balances.

(iii)       How (increase or decrease and the amount) is Parent’s 2019 equity in income of Subsidiary affected by the intercompany sale of merchandise?

David Wong, the product manager of KiKi Company, was reviewing the production schedule for the last quarter of 2020. He noted that the company planned to sell 4,000 units during the year and keep a minimum closing inventory level at 100 units on 31 December 2020. As at 30 September 2020, the following data was reported.

Units

Inventory, 1 January 2020 0

Production 3,000

Sales 2,700

Inventory, 30 September 2020 300

At the beginning of the year, the company rented a warehouse that could store its inventory up to 1,250 units. The company had a maximum production capacity of 2,300 units per quarter.

Required:

(a) Assume that KiKi Company adopted marginal costing,
(i) what is the minimum units that the company should produce during the last quarter of 2020?

(ii) will the number of units produced affect the company’s profit or loss for the year? Explain.

(b) Assume that the company adopted absorption costing and David was given an annual bonus based on the company’s reported profit. If David wanted to maximize his bonus in 2020, how many units would he produce? Explain.

(c) Advise the management of the company on the costing method that should be chosen to determine David’s bonus?

1. In company X, the CEO did not support the ERP implementation but he has no objection to proceed. Do you think the ERP will successfully implemented?   Explain.

a. What are agency costs? Why do these tend to increase in severity, as a company grows larger?

b. Think back to the last time you ate at an expensive restaurant where you paid the bill. Now think about the last time you ate at a similar restaurant, but your parents paid the bill. Did you order more food (or more expensive food) when your parents paid? Explain how this relates to the agency problem in corporations.

c. You are the CEO of a company and you are considering entering into an agreement to have your company buy another company. You think the price might be too high, but you will be the CEO of the combined, much larger company. You know that when the company gets bigger, your pay and prestige will increase. What is the nature of the agency conflict here, and how is it related to ethical considerations?