1.) In the U.S. when does a company use the current rate method as opposed to the temporal method?

2.) What is an interest rate swap?

Please help me answer these international financial management questions. Thank you!

On January 1, 2014, Pert Company purchased 85% of the outstanding common stock of Sales Company for$350,000.On that date, Sales Company’s stockholders’ equity consisted of common stock, $100,000; other con-tributed capital, $40,000; and retained earnings, $140,000. Pert Company paid more than the book value of netassets acquired because the recorded cost of Sales Company’s land was significantly less than its fair value.During 2014 Sales Company earned $148,000 and declared and paid a $50,000 dividend. Pert Companyused the partial equity method to record its investment in Sales Company.

Prepare the workpaper eliminating entries for a workpaper on December 31, 201

On January 1, 20X9, Timber Company acquired 25% of Johnson Company's common stock at underlying book value of $200,000. Johnson reported net income of $270,000 for 20X9 and paid total dividends of $140,000. Timber uses the equity method to account for this investment.

What amount would be reported by Timber Company as the balance in its investment account on December 31, 20X9?

A. $200,000

B. $220,500

C. $232,500

D. $255,500

*Please show your computations for the answer.

Lewis Company owns 75% of the voting common stock of Bosch, Inc. On January 1, 2015, Bosch sold $1,400,000 in ten-year bonds to the public at 105. The bonds pay a 10% interest rate every December 31. Lewis Company acquired 40% of these bonds on January 1, 2017, for 95% of the face value. Both companies utilizes the straight-line method of amortization.

What consolidation entry would be recorded in connection with these intra-entity bonds on December 31, 2017?

BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn’t equipped to do. Estimates regarding each machine are provided below.

Click here to view the factor table.

Calculate the net present value and profitability index of each machine. Assume a 9% discount rate.

2. Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2020 sales forecast is as follows.

3. The January 1, 2020, inventory of HD-240 is 2,120 units. Management desires an ending inventory each quarter equal to 40% of the next quarter’s sales. Sales in the first quarter of 2021 are expected to be 25% higher than sales in the same quarter in 2020.

Prepare quarterly production budgets for each quarter and in total for 2020.

Rodriguez, Inc., is preparing its direct labor budget for 2020 from the following production budget based on a calendar year.

Each unit requires 1.80 hours of direct labor.

Prepare a direct labor budget for 2020. Wage rates are expected to be $18 for the first 2 quarters and $20 for quarters 3 and 4. (Round Direct labor time per unit answers to 2 decimal places, e.g. 52.50.)

Aykroyd Inc. has sponsored a noncontributory, defined benefit pension plan for its employees since 1997. Prior to 2020, cumulative net pension expense recognized equaled cumulative contributions to the plan.Other relevant information about the pension plan on January 1, 2020, is as follows:1.The company has 200 employees. All these employees are expected to receive benefits under the plan. The average remaining service life per employee is 12 years.2.The projected benefit obligation amounted to $5,000,000 and the fair value of pension plan assets was $3,000,000. The market-related asset value was also $3,000,000. Unrecognized prior service cost was $2,000,000. On December 31, 2020, the projected benefit obligation and the accumulated benefit obligation were $4,850,000 and $4,025,000, respectively. The fair value of the pension plan assets amounted to $4,100,000 at the end of the year. A 10% settlement rate and a 10% expected asset return rate were used in the actuarial present value computations in the pension plan. The present value of benefits attributed by the pension benefit formula to employee service in 2020 amounted to $200,000. The employer's contribution to the plan assets amounted to $775,000 in 2020. This problem assumes no payment of pension benefits. Instructions (Round all amounts to the nearest dollar.)

Based on Problem 10-6

Indigo Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land for $147,600 in cash. In addition, it paid $3,120 in surveying costs and $4,080 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,120, with $960 being received from the sale of materials.

Architectural plans were also formalized on December 1, 2020, when the architect was paid $34,800. The necessary building permits costing $3,120 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows.

Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021.

To finance construction of this plant, Indigo borrowed $602,400 from the bank on December 1, 2020. Indigo had no other borrowings. The $602,400 was a 10-year loan bearing interest at 9%.

The building was completed on July 1, 2021.

Using Excel calculate the following (show your work and use formulas where appropriate):

1. Balance in the Land account for December 31, 2020 and December 31, 2021
2. The weighted average of accumulated expenditures for 2020
3. The amount of interest capitalized in 2020
4. The weighted average of accumulated expenditures for 2021
5. The amount of interest capitalized in 2021
6. Balance in the Building account for December 31, 2020 and December 31, 2021
7. Balance in the Interest Expense account for December 31, 2020 and December 31, 2021

CA19-3 (Identify Temporary Differences and Classification Criteria) The asset-liability approach for recording deferred income taxes is an integral part of generally accepted accounting principles.

Instructions

(a)Indicate whether each of the following independent situations should be treated as a temporary difference or as a permanent difference, and explain why.

(1)Estimated warranty costs (covering a 3-year warranty) are expensed for financial reporting purposes at the time of sale but deducted for income tax purposes when paid.

(2)Depreciation for book and income tax purposes differs because of different bases of carrying the related property, which was acquired in a trade-in. The different bases are a result of different rules used for book and tax purposes to compute the basis of property acquired in a trade-in.

(3)A company properly uses the equity method to account for its 30% investment in another company. The investee pays dividends that are about 10% of its annual earnings.

(4)A company reports a gain on an involuntary conversion of a nonmonetary asset to a monetary asset. The company elects to replace the property within the statutory period using the total proceeds so the gain is not reported on the current year’s tax return.

(b)Discuss the nature of the deferred income tax accounts and the manner in which these accounts are to be reported on the balance sheet.

M&N company issues $20 million of ten-year, 7 per cent, semi-annual coupon debentures to public which pay interest each six months. The market also requires a rate of return of 7 per cent. Assume that the monies come in and the debentures are allocated on the same day 30 June 2020. Required: a) Provide the accounting entries at 30 June 2020, 31 December 2020. Narrations are required. b) Discuss what factors may cause a debenture is issued at discount, premium and par value. (7 marks. Word limit for part b: minimum 120 to maximum 250 words) please provide a unique answer than other.

Elf Company manufactures miniature picnic tables to be sold to elementary schools and children daycares. The controller of Elf Company is currently preparing a budget for the second quarter of the year. The following sales forecast has been made by the sales manager for the first half of 2020:

January                                                            8,500 tables

February                                                          9,000 tables

March                                                              9,500 tables

April                                                                10,000 tables

May                                                                 12,000 tables

June                                                                 15,000 tables

Each table sells for $50 and all sales are on account. Past history has shown that 30% of credit sales are collected in the month that the sale occurred, 40% of the sales are collected the month following the month of sale, 25% of credit sales are collected two months following the month of sale and the remaining 5% is collected in the third month following the sale. The estimated sales for July and August are 16,000 and 16,500 tables respectively. Elf Company had 2,000 tables in finished goods inventory at the end of March. The department ends each month with enough finished-goods inventory to cover 20 percent of the next month’s sales.

Each picnic table requires 10 board metres of spruce blanks to manufacture. Spruce planks cost $0.50 per board metre, and the production department ends each month with enough wood to cover 10 percent of the next month’s production requirements. The company had 10,400 board metres of spruce wood in its ending raw material inventory at the end of March. The purchase of wood is all on account and the company pays 60% of its purchases in the month of purchase and the remaining 40% in the month following the purchase. Purchases of wood in March totalled $48,400.

Each table requires 1.5 hours of direct labour to manufacture. The production department incurs a cost of $20 per hour for direct-labour wages and fringe benefits.

Required:

1. Prepare the Sales Budget for the quarter ended June 30, 2020.
2. Prepare the Production Budget for the quarter ended June 30, 2020.
3. Prepare the Raw Material Purchase Budget for the quarter ended June 30, 2020.
4. Prepare the Direct Labour Budget for the quarter ended June 30, 2020.
5. Prepare a schedule showing the cash collections from sales for the quarter ended June 30, 2020.
6. Prepare a schedule showing the cash disbursements for the purchase of raw materials for the quarter ended June 30,2020.

We need all the budgets and schedules above, you must show a column for April, May and June as well as a column for the total of Quarter 2 of the year. Excel answer only.