The topic of our negotiation is Walt Disney Studios acquisition of the Lucasfilm Ltd. LLC production company on October 30, 2012. Lucasfilm was acquired for $4.05 billion and through this deal Disney acquired ownership of Star Wars, Indiana Jones, and Lucasfilm's operating businesses in live-action film production, consumer products, video-games, animation, visual effects, and audio post-production. The first Star Wars movie released under Disney’s ownership, Star Wars Episode VII: The Force Awakens grossed over $2.066 billion in ticket sales worldwide and an estimated $6 billion in merchandise sales (Star Wars: The Force Awakens). The Force Awakens, released in 2015 is the first of five Star Wars films Disney has planned to release. In one film Disney has already made back the money spent purchasing Lucasfilms Ltd., though founder George Lucas was given 40 million Disney shares as part of the $4.05 billion making him the second largest non-institutional shareholder of Disney(Krantz).
1) Tactics: Describe and evaluate three specific tactics each side is using to advance their strategy.
2) Critique how the strategy and tactics each side is using is affecting their position.
In: Economics
Translation and Remeasurement of Subsidiary Trial Balance
Costsave Corporation, a U.S. company, acquired Denner, a discount supermarket chain in Switzerland, on January 1, 2017. Denner is a subsidiary of Costsave, and its results are consolidated with those of Costsave in Costsave's financial statements. Denner's trial balances for January 1 and December 31, 2017, in Swiss francs (CHF) appear below.
| Dr(Cr) | ||
|---|---|---|
| (in thousands) | December 31 | January 1 |
| Cash and receivables | CHF 45,000 | CHF30,000 |
| Inventories | 55,000 | 65,000 |
| Plants and equipment, net | 180,000 | 160,000 |
| Accounts and notes payable | (120,000) | (125,000) |
| Common stock | (40,000) | (40,000) |
| Retained earnings, January 1 | (90,000) | (90,000) |
| Dividends | 20,000 | -- |
| Sales | (500,000) | -- |
| Cost of sales | 375,000 | -- |
| Operating expenses | 75,000 | -- |
| Totals | CHF 0 | CHF 0 |
Additional Information: (in thousands)
Included in operating expenses is depreciation expense of CHF5,000.
Plant and equipment of CHF25,000 was purchased for cash during 2017, when the exchange rate was $1.04. Depreciation of CHF2,000 was taken on this purchase during 2017.
The ending inventory was purchased during the month of December.
Revenues, purchases, and operating expenses other than depreciation occurred evenly during the year.
Dividends were declared on December 31, 2017.
Exchange rates for 2017 were as follows ($/CHF):
| January 1, 2017 | $1.03 |
| Average for 2017 | 1.06 |
| Average for December, 2017 | 1.08 |
| December 31, 2017 | 1.09 |
It is now December 31, 2017, and Denner's accounts must be converted to U.S. dollars in preparation for consolidation.
Do not use negative signs with any of your answers below.
| (1) Plant and equipment, net (in thousands) | |||
|---|---|---|---|
| CHF | $/CHF | $ | |
| Plant and equipment, net: purchased prior to 2017 | CHF Answer | Answer | $Answer |
| Plant and equipment, net: purchased during 2017 | Answer | Answer | Answer |
| CHF Answer | $Answer | ||
In: Accounting
On December 31, 2019, Sumner Company held Wall Company bonds in its portfolio of trading securities. The bonds have a par value of $40,000, carry a 10% annual interest rate, mature in 2026, and had originally been purchased at par. The market value of the bonds on December 31, 2019 was $38,000.
On January 1, 2020, Sumner acquired bonds of Doherty Company with a par value of $30,000 for $30,200. The Doherty Company bonds carry an annual interest rate of 12% and mature on December 31, 2024. Additionally, on the same date, Sumner acquired Maggio Company bonds with a face value of $20,000 for $19,500. The Maggio Company bonds carry an 8% annual interest rate and mature on December 31, 2029. At the end of 2020, the respective market values of the bonds were: Wall, $39,000; Doherty, $31,000; and Maggio, $21,000. Sumner classifies all of the debt securities as trading. Assume that Sumner uses the straight-line method to amortize any discounts or premiums.
Required:
| 1. | Prepare the journal entries necessary to record the purchase of the investments on January 1, 2020, the annual interest payments on December 31, 2020, and the adjusting entry needed on December 31, 2020. |
| 2. | What would Sumner disclose on its December 31, 2020, balance sheet related to these investments? |
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In: Accounting
Lo 9-7, 9-8
37. On October 1, 2020, Mertag Company ( a U.S.-based comany) receives an order from a customer in Poland to deliver goods on January 31,2021, for a price of 1,000,000 Polish zotys (PLN). Mertag enters into a forward contract on October 1, 2020, to sell PLN 1,000,000 in four months ( on January 31, 2021). U.S. dollar-Polis zioty exchange rates are follows:
October 1, 2020 $0.25 $0.29
December 31, 2020 0.28 0.31
January 31, 2021 0.30 N/A
Mertag designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured b referring to changes in the forward rate, and, therefore, forward points are included in assessing hedge effectiveness. Mertag must close its books and prepare financial statements on December 31. Discounting to present value can be ignored.
a. Prepare journal entries for the foreign currency forward contract, foreign currency firm commitment and export sale.
b. Determine the net benefit, if any, realized by Mertag from entering into the forward contract.
In: Accounting
In April 2020, the U.S. national debts has exceeded $23.8 Trillion. It is rising much faster than the U.S. economy, and it will soar to more than $34 trillion in 2029, according to the budget office.
Why does the U.S. national debt continue to rise?
What is the impacts of a huge and growing U.S. national debt on the U.S. economy?
How to reduce the U.S. national debt?
In: Economics
Max Flyer is the founder and sole owner of the Go for broke Company. The company develops oil wells in unproven territories. His company has purchased a tract of land that larger oil companies have spurned as unpromising even though it is near some large oil fields. Max has provided you the following information:
• Drilling for oil on the tract would cost $100,000 (his investment). If the drilling is successful, and the well produces oil, his revenue would be $800,000. If the well turns out to be a dry hole he loses the entire $100,000. The chance of hitting oil on the tract of land is 1 in 4, or 25%.
• Max does have the option of selling the tract of land. Another oil company, after hearing a geologist’s report, would like to purchase the land for an amount that would provide him a profit of $90,000.
• A friend of Max has told him about a company that does seismic studies. The cost of a study is $30,000. If the study is performed there is a 70% chance that the results will be unfavorable. If the study results are unfavorable, and Max decides to drill for oil anyway, there is an 85.7% chance that he will have a dry well. If the results are favorable, and Max decides to drill, there is a 50% chance that he will have a dry well.
• These are the only alternatives Mr. Flyer has. The alternatives are mutually exclusive.
You have been asked to help Mr. Flyer. Since you are familiar with how to use decision trees to solve problems, prepare a report that will help Mr. Flyer make his decision in this situation. Your report should be addressed to Mr. Flyer.
In: Statistics and Probability
The intangible assets section of Larkspur, Inc. at December 31,
2020, is presented below.
| Patents ($72,000 cost less $7,200 amortization) | $64,800 | |
| Franchises ($48,000 cost less $19,200 amortization) | 28,800 | |
| Total | $93,600 |
The patent was acquired in January 2020 and has a useful life of 10
years. The franchise was acquired in January 2017 and also has a
useful life of 10 years. The following cash transactions may have
affected intangible assets during 2021.
| Jan. 2 | Paid $22,500 legal costs to successfully defend the patent against infringement by another company. | |
| Jan.–June | Developed a new product, incurring $131,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life. | |
| Sept. 1 | Paid $46,000 to an extremely large defensive lineman to appear in commercials advertising the company’s products. The commercials will air in September and October. | |
| Oct. 1 | Acquired a franchise for $124,000. The franchise has a useful
life of 50 years. |
Instructions
Prepare journal entries to record the transactions above.
Prepare journal entries to record the 2021 amortization expense.
Prepare the intangible assets section of the balance sheet at December 31, 2021.
In: Accounting
At a Midwestern business school, historical data indicates that 70% of admitted MBA students ultimately join the business school’s MBA program. In a certain year, the MBA program at the University admitted 200 students.
a. Find the probability that at least 150 students ultimately join the MBA program.
b. Find the probability that no less than 135 and no more than 160 students finally join the MBA program.
c. How many students should the MBA program expect to join the program?
d. What is the standard deviation of the number of students who will join the MBA program? e. Let X be the number of students out of 200 who will join the program. Would the empirical rule apply to the probability distribution of X in this case?
In: Math
Imagine you are the chief financial officer (CFO) of a corporation with plans to complete the acquisition of a key subsidiary during the current year. Your chief executive officer (CEO) has requested a presentation to the Board of Directors describing the methods available to account for the acquisition internally and the best method for the company during the acquisition year. Please assess the value of each method identified in your presentation to the Board and support your recommendation with examples. Compare the key differences between the U.S. GAAP and IFRS positions on both intangible research and development costs and tangible depreciable assets. Indicate the key benefits and drawbacks to financial statement users of each method (U.S. GAAP and IFRS). Next, determine the method that provides the most relevant information to financial statement users. Provide support for your rationale.
In: Accounting
Kyle, a single taxpayer, worked as a freelance software engineer
for the first three months of 2020. During that time, he earned
$54,000 of self-employment income. On April 1, 2020, Kyle took a
job as a full-time software engineer with one of his former
clients, Hoogle Inc. From April through the end of the year, Kyle
earned $200,000 in salary.
What amount of FICA taxes (self-employment and employment related)
does Kyle owe for the year? (Round your intermediate
calculations to the nearest whole dollar amount.)
In: Accounting