NationsWay, Inc., a trucking company, declared bankruptcy in 2016, and as a result had all of it’s contract obligations discharged.. The employees of the company then sued the president of NationsWay, contending she should be held personally liable for the unpaid wages and benefits. They based their cause of action on the fact that they had been hired by the president and that she had given them assurances that they had a permanent job. Is the president individually liable for the wages of the corporation's former employees?

An answer should show recognition of the issues presented by the question, an understanding of the material facts, the principles of law applicable, and the reasoning relied upon by you to support your conclusion.

Facts:

Issue:

Rule:

Application:

Conclusion:

Hi, could you please assist with this question?

You are an investment banking consultant advising an investment company. The CEO of the company tells you that she believes that capital structure does not have an impact on firm value. On what basis might they make this comment? State whether you agree or not with this position and explain why. Does the nature of this firm’s business risk change your answer? Fully explain your reasoning.

At the beginning of 2020, Brown Corporation had the following stockholders’ equity balances in its general ledger:

The paid-in capital from stock options relates to options granted on 1/1/18 to the CEO as incentive compensation. As of 1/1/20, the remaining expected benefit period is four years; expense has been and will be recorded evenly over the benefit period.

The following events were among the many occurring in 2020:

1. January 2: Purchased 5,000 shares of its common stock for $15 per share. Brown uses the cost method of accounting for treasury stock transactions.

2. February 1: Declared and paid a cash dividend of $2 per share on the outstanding common stock.

3. April 1: Issued 20,000 shares of $50 par, noncumulative, convertible 6% preferred stock for $60 per share, where one share of preferred stock is convertible into three shares of common stock.

4. July 1: 2,000 shares of treasury stock that had been purchased in a prior year for $18 per share were re-issued for $10 per share.

5. August 1: Holders of 6,000 shares of the preferred stock converted their shares into common stock when the market value of the common stock was $22 per share. Brown uses the book value method of accounting for conversions.

6. October 1: Declared and distributed a 1% stock dividend on common stock outstanding when the market price of the stock was $24 per share.

7. November 1: Corrected an error that was made several years ago, when land that had been purchased for $60,000 was inadvertently expensed.

8. December 1: Declared and distributed a property dividend of land to preferred shareholders. The land had a fair value of $60,000 and a carrying value of $75,000.

1. December 31: Recorded 2020 compensation expense related to the stock options.

The 2020 Final Net Income, including the effects of any net income items listed above (and the 2020 tax effects on net income items), was $700,000. There were 500,000 shares authorized for both preferred and common stock.

(OVER)

Required:                                                                                                                                            

1. All journal entries for the items (a. through i.) above. No explanations.  Ignore tax effects.
2. The 12/31/20 Stockholders’ Equity section. Use the format from the Frost Company example in Chapter 15 of the text. Include parenthetical disclosures for preferred stock and common stock.

COST & PRODUCTION FUNCTIONS

In order to reduce unit cost, the CEO of ABC Corporation has to decide whether to increase or decrease total production. A marketing analyst has reported the following information about ABC Corporation’s cost and production structure:

1.Use Ordinary Least Squares Method (OLS) to estimate the ABC Corporation’s total cost function; that is, TC =β +βQ;

2. What is ABC Co’s marginal cost?

3. What is ABC Co’s fixed cost?

4. Calculate the scale elasticity at the mean of the data

5. In order to reduce the unit cost would you recommend an increase or a decrease in total production? Why?

Gear Company records $2,000 of depr

eciation under the sum-of-ye

ars’-digits method in

2019, the company’s first year

of operations. In 2020, the comp

any decides to change to the

straight-line method f

or accounting purposes. If the straight-l

ine method were used in 2019,

depreciation would have b

een $1,500. Depreciation in 2020 under

the straight-line method is

$1,800 (depreciated based on the

book value on January 1, 2020)

. The tax rate is 25%.

Income from continuing operati

ons before tax and before deducti

ng depreciation in 2020 is

$12,000.

REQUIRED:

Provide the 2020 entry to record t

his change and calculate 2020

net income.

Explain the concept of Global Sustainability. Give three (3) reasons why it has emerged as one of the major business issues facing multinational corporations today. If you were the CEO of Coca Cola, discuss two (2) actions you would take to address the sustainability issues facing your company?

In your audit of Chris Anderson Company, you find that a physical inventory on December 31, 2020, showed merchandise with a cost of $439,750 was on hand at that date. You also discover the following items were all excluded from the $439,750.

Based on the above information, calculate the amount that should appear on Anderson’s balance sheet at December 31, 2020, for inventory.

Part 1 -- Bonds:

1. National Company issued a 7.5% bond, dated January 1, 2020 with a face amount of $600,000 on January 1, 2020. The bonds mature on December 31, 2026. The market yield for bonds of similar risk and maturity was 5.5%. Interest is made semiannually on June 30 and December 31.

REQUIRED:

1. Determine the price of the bonds at January 1, 2020 (be certain to include all of the “Given” information as discussed in class).
2. Prepare a bond amortization table using the effective interest method (as reviewed in class), and make certain to obtain totals for the columns of Cash Interest Paid, Interest Expense, and Premium Amortization.
3. Prepare the journal entry to record their issuance by National Company on January 1, 2020.
4. Prepare the journal entry recording the first interest payment on June 30, 2020.
5. Prepare the journal entry recording the interest payment on December 31, 2020.
6. Prepare journal entries at maturity on December 31, 2026.
7. Prepare the journal entry to record the retirement of the bond at a call price of $640,000 on January 1, 2023.
8. Instead of retirement of the bond as described in “g” above, assume the bond was retired @108 call price on January 1, 2023. Prepare the journal entry to record this retirement of the bond.

Part 2 -- Installment note:

2. On January 1, 2020 National Company signed a $500,000, 7% installment note to be repaid with 8 equal annual installments to be first made on December 31, 2020, and then every December 31 thereafter.

REQUIRED:

1. Determine the amount of each annual payment.
2. Prepare an amortization table for this installment note (as reviewed in class).
3. Prepare the journal entry for the issuance of the installment note.
4. Prepare the journal entry for the first payment on the note.