Q#9
On December 18, 2017, Stephanie Corporation acquired 100 percent of a Swiss company for 4.0 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2017, the book and fair values of the subsidiary’s assets and liabilities were:
| Cash | CHF | 817,000 | |
| Inventory | 1,317,000 | ||
| Property, plant & equipment | 4,017,000 | ||
| Notes payable | (2,134,000 | ) | |
Stephanie prepares consolidated financial statements on December 31, 2017. By that date, the Swiss franc has appreciated to $1.10 = CHF 1. Because of the year-end holidays, no transactions took place prior to consolidation.
Determine the translation adjustment to be reported on Stephanie’s December 31, 2017, consolidated balance sheet, assuming that the Swiss franc is the Swiss subsidiary’s functional currency. What is the economic relevance of this translation adjustment?
Determine the remeasurement gain or loss to be reported in Stephanie’s 2017 consolidated net income, assuming that the U.S. dollar is the functional currency. What is the economic relevance of this remeasurement gain or loss?
| a | transalation adjustment | ||
| b |
Please show your calculations, thanks.
In: Accounting
In 2010, Ticketmaster found out the hard way that the
entertainment industry is not, in fact, as recession-proof as
it was once widely believed to be. Th e company, which sells
tickets for live music, sports, and cultural events, and
which
represents a signifi cant chunk of parent company’s Live
Nation Entertainment’s business, saw a drop in ticket sales
that year of a disconcerting 15 percent. Th en there was the
mounting negative press, including artist boycotts, the
vitriol
of thousands of vocal customers, and a number of major
venues refusing to do business with Ticketmaster.
Yet 2012 has been more friendly to the company—under
the leadership of former musician and Stanford MBA-
educated CEO Nathan Hubbard, who took over in 2010
when Ticketmaster merged with Live Nation, the country’s
largest concert promoter. Th ird-quarter earnings were
strong, with just under $2 billion in revenue, a 10 percent
boost from the same period last year, driven largely by Live
Nation’s ticketing and sponsorship divisions. Ticketmaster
was largely responsible as well, thanks to the sale of 36
million
tickets worth $2.1 billion, generating $82.1 million in
adjusted
operating income, which translates to an increase of
51 percent for the year.
Th at’s because Hubbard knows how to listen, and read the
writing on the wall, “If we don’t disrupt ourselves, someone
else will,” he said, “I’m not worried about other ticketing
companies. Th e Googles and Apples of the world are our
competition.”
Some of the steps he took to achieve this included to
the creation of LiveAnalytics, a team charged with mining
the information (and related opportunities) surrounding
200 million customers and the 26 million monthly site
visitors,
a gold mine that he thought was being ignored. Moreover
Hubbard redirected the company from being an infamously
opaque, rigid and infl exible transaction machine for ticket
sales to a more transparent, fan-centered e-commerce
company, one that listens to the wants and needs of customers
and responds accordingly. A few of the new innovations rolled
out in recent years to achieve this include an interactive
venue
map that allows customers to choose their seats (instead of
Ticketmaster selecting the “best available”) and the ability
to
buy tickets on iTunes.
Hubbard eliminated certain highly unpopular service
fees, like the $2.50 fee for printing one’s own tickets,
which
he announced in the inaugural Ticketmaster blog he created.
Much to the delight of event goers—and the simultaneous
chagrin of promoters and venue owners, who feared that the
move would deter sales—other eff orts toward transparency
included announcing fees on Ticketmaster’s fi rst
transaction-
dedicated page, instead of surprising customers with them at
the end, while consolidating others. “I had clients say,
‘What
are you doing? We’ve been doing it this way for 35 years,’”
Hubbard recalled, “I told them, ‘You sound like the record
labels.’”
Social media is an integral part of listening, and of course,
“sharing.” Ticketmaster alerts on Facebook shows friends of
purchasers who is going to what show. An app is in the works
that will even show them where their concertgoing friends
will be seated. Not that it’s all roses for Ticketmaster—yet.
Growth and change always involve, well, growing pains,
and while goodwill for the company is building, it will take
some time to shed the unfortunate reputation of being the
company that “everyone loves to hate.” Ticketmaster made
embarrassing headlines in the fi rst month of 2013 after
prematurely announcing the sale of the president’s Inaugural
Ball and selling out a day early as a result, disappointing
thousands. But as the biggest online seller of tickets for
everything from golf tournaments to operas to theater to
rock concerts, and with Hubbard’s more customer-friendly
focus, Ticketmaster should have plenty of opportunity to
repent their mistakes.
Question:
1. Identify the problems that Ticketmaster was facing, using cause and effect analysis. What were the Symptomatic Effects? What were the Underlying Causes?
2. What process(es) did Nathan Hubbard use to Generate Alternatives? What alternatives were available to Mr. Hubbard? What types of Uncertainty did he experience?
In: Operations Management
In 2010, Ticketmaster found out the hard way that the
entertainment industry is not, in fact, as recession-proof as
it was once widely believed to be. Th e company, which sells
tickets for live music, sports, and cultural events, and
which
represents a signifi cant chunk of parent company’s Live
Nation Entertainment’s business, saw a drop in ticket sales
that year of a disconcerting 15 percent. Th en there was the
mounting negative press, including artist boycotts, the
vitriol
of thousands of vocal customers, and a number of major
venues refusing to do business with Ticketmaster.
Yet 2012 has been more friendly to the company—under
the leadership of former musician and Stanford MBA-
educated CEO Nathan Hubbard, who took over in 2010
when Ticketmaster merged with Live Nation, the country’s
largest concert promoter. Th ird-quarter earnings were
strong, with just under $2 billion in revenue, a 10 percent
boost from the same period last year, driven largely by Live
Nation’s ticketing and sponsorship divisions. Ticketmaster
was largely responsible as well, thanks to the sale of 36
million
tickets worth $2.1 billion, generating $82.1 million in
adjusted
operating income, which translates to an increase of
51 percent for the year.
Th at’s because Hubbard knows how to listen, and read the
writing on the wall, “If we don’t disrupt ourselves, someone
else will,” he said, “I’m not worried about other ticketing
companies. Th e Googles and Apples of the world are our
competition.”
Some of the steps he took to achieve this included to
the creation of LiveAnalytics, a team charged with mining
the information (and related opportunities) surrounding
200 million customers and the 26 million monthly site
visitors,
a gold mine that he thought was being ignored. Moreover
Hubbard redirected the company from being an infamously
opaque, rigid and infl exible transaction machine for ticket
sales to a more transparent, fan-centered e-commerce
company, one that listens to the wants and needs of customers
and responds accordingly. A few of the new innovations rolled
out in recent years to achieve this include an interactive
venue
map that allows customers to choose their seats (instead of
Ticketmaster selecting the “best available”) and the ability
to
buy tickets on iTunes.
Hubbard eliminated certain highly unpopular service
fees, like the $2.50 fee for printing one’s own tickets,
which
he announced in the inaugural Ticketmaster blog he created.
Much to the delight of event goers—and the simultaneous
chagrin of promoters and venue owners, who feared that the
move would deter sales—other eff orts toward transparency
included announcing fees on Ticketmaster’s fi rst
transaction-
dedicated page, instead of surprising customers with them at
the end, while consolidating others. “I had clients say,
‘What
are you doing? We’ve been doing it this way for 35 years,’”
Hubbard recalled, “I told them, ‘You sound like the record
labels.’”
Social media is an integral part of listening, and of course,
“sharing.” Ticketmaster alerts on Facebook shows friends of
purchasers who is going to what show. An app is in the works
that will even show them where their concertgoing friends
will be seated. Not that it’s all roses for Ticketmaster—yet.
Growth and change always involve, well, growing pains,
and while goodwill for the company is building, it will take
some time to shed the unfortunate reputation of being the
company that “everyone loves to hate.” Ticketmaster made
embarrassing headlines in the fi rst month of 2013 after
prematurely announcing the sale of the president’s Inaugural
Ball and selling out a day early as a result, disappointing
thousands. But as the biggest online seller of tickets for
everything from golf tournaments to operas to theater to
rock concerts, and with Hubbard’s more customer-friendly
focus, Ticketmaster should have plenty of opportunity to
repent their mistakes.
Questions
How did Mr. Hubbard select his most desirable alternative? Describe which type of Decision Making he used, and explain your findings.
Were the recent decisions that Mr. Hubbard made effective, according to the concepts in Chapter 7 – Decision Making? Explain your response.
In: Operations Management
Shoes, not the most exciting product category, right? Try telling that to Tony Hsieh (pronounced Shay), CEO of Zappos.com. In less than a decade, Hsieh has built Zappos into a billion dollar business through delivering a vast selection of shoes, clothing, handbags and other products (over three million items available) and unsurpassed customer service. The company was acquired by Amazon in 2009 and operates as an independent entity. Mr. Hsieh is a self-professed scholar of “happiness” and, as part of his vision to create the world’s most customer-centric online company, aims to deliver “Happiness in a Box.” This three-part formula is to: 1) meet expectations by delivering the right items, 2) meet desires through free shipping, free return shipping when necessary and a 365 day return policy and 3) often delight customers via surprise upgrades to overnight shipping (four to five day shipping is standard).
The Zappos customer experience (obsession) is all about
developing relationships, emotional connections and high-touch
“WOW” customer service. The Zappos program for customer service is
summarized below:
> Make customer service a priority for the whole company, not
just a department
> Make WOW a verb part of your company’s everyday
vocabulary
> Empower and trust your customer service reps
> Don’t measure call times, upsell or use scripts
> Don’t hide your 1-800 number
> View each call as an investment in building a brand
> Celebrate (company-wide) great service
> Find people passionate about customer service
> Give great service to everyone: customers, employees and
vendors.
To Discuss: (Answer 2 of the 5 questions below and reply to 2 or more comments by classmates)
1. What prevents other companies from adopting customer service
best practices (review the
nine guidelines)?
2. How can the Zappos philosophy of creating exceptional value be
adopted by your company?
In: Operations Management
In: Computer Science
Sheffield Inc. reported the following partial statement of
income data for the years ended December 31, 2021, and
2020:
| 2021 | 2020 | ||||
|---|---|---|---|---|---|
| Sales | $263,000 | $254,000 | |||
| Cost of goods sold | 204,000 | 199,390 | |||
| Gross profit | 59,000 | 54,610 |
The company reported inventory in the statement of financial
position at $46,000, $49,500, and $48,000 at the end of 2019, 2020,
and 2021, respectively. The ending inventory amounts for 2019 and
2021 are correct. However, the ending inventory at December 31,
2020, is understated by $7,620.
Prepare correct statements of income for 2020 and 2021 through
to gross profit.
| 2021 | 2020 | |||
|---|---|---|---|---|
| Sales | $enter a dollar amount | $enter a dollar amount | ||
| Cost of goods sold | enter a dollar amount | enter a dollar amount | ||
| Gross profit | $enter a total amount | $enter a total amount |
In: Accounting
On December 31, 20X3, Broadway Corporation reported common stock
outstanding of $200,000, additional paid-in capital of $300,000,
and retained earnings of $100,000. On January 1, 20X4, Johe Company
acquired control of Broadway in a business combination.
Required:
Give the Consolidation entry that would be needed in preparing a
consolidated balance sheet immediately following the combination if
Johe acquired all of Broadway’s outstanding common stock for
$600,000. (If no entry is required for a transaction/event,
select "No journal entry required" in the first account
field.)
A) Record the basic consolidation entry
In: Accounting
Assume that 28 years ago, the average tuition for one year in the MBA program at a university was $3.4 thousand and now it is $36.8 thousand for one year. What is the compound annual growth rate in tuition over this period? Round to the nearest 0.01% (e.g., if your answer is 6.832%, record it as 6.83)
In: Finance
You have just been hired as the new human resource manager for Delta Inc. On your first day at work the CEO wants to meet with you to discuss a proposed evaluation of compensation practices at Delta. Unfortunately, the CEO is very busy and wants you to - in a short meeting - thoroughly describe the most important generic aspects of a compensation system that should be considered when evaluating Delta’s compensation practices. The CEO tells you to plan on a 10 minute meeting – you have to be brief and succinct – what are you going to tell the CEO?
In: Operations Management
Other data:
Accrued but unrecorded and uncollected consulting fees earned at December 31 amount to: $27500.
The company determined that $16500 of previously unearned consulting fees had been earned at December 31.
Office supplies on hand at December 31 total $330
The company purchased all of its equipment when it first began business. At that time, the estimated useful life of the equipment was six years.
The company prepaid its nine-month rent agreement on June 1, 2020.
The company prepaid its six-month insurance policy on December 1, 2020
Accrued but unpaid salaries total $13200 at December 31,2020.
On September 1, 2020, the company borrowed $66000 by signing an eight-month, 4 percent note payable. The entire amount, plus interest, is due March 31, 2021.
Account Debit Credit
Cash 304,150
Accounts Receivable 99,000
Office supplies 880
Prepaid rent. 3,960
Unexpired insurance 1,650
Office equipment 79,200
Accumulated depreciation: office equipment 26,400
Accounts payable 4,400
Notes payable (due 3/1/12) 66,000
Interest payable 660
Income taxes payable 9,900
Dividends payable 3,500
Unearned consulting fees 24,200
Capital stock 220,000
Retained earnings 44,000
Dividends 3,500
Consulting fees earned 550,000
Rent expense 16,170
Insurance expense 2,420
Office supplies expense 4,950
Depreciation expense: office equipment 12,100
Salaries expense 363,000
Utilities expense 5,280
Interest expense 3,300
Income taxes expense 49,500
Totals 949,060 949,8060
Instructions:
In: Accounting