1) All of the following are differences in an asset acquisition compared to a stock acquisition except for:

A) Who the consideration is paid to by the acquiring company

B) The recognition of any gain or loss on the part of the target company

C) The valuation used to account for the value of the acquired assets and liabilities

D) The journal entries that would be made on the part of the acquiring company

2) Company ABC owns 100% of the outstanding shares of Company XYZ, and accounts for the net income of Company XYZ using the Cost Method. When Company XYZ reports quarterly Net Income of $40,000 on 6/30/18, Company ABC will:

Task 3: Analysis of Case Study on Regulating Information Security for the Company:

TransManuCo has asked for your help in dealing with securing their information while they remain within set regulations.

In order to do business efficiently and effectively the company uses eSign. However, they have concerns about the security of this especially with clients overseas.

According to the new Protecting Cyber Networks Act Sec. 103 “Permits private entities to monitor or operate defensive measures to prevent or mitigate cybersecurity threats or security vulnerabilities, or to identify the source of a threat, on: (1) their own information systems; and (2) with written authorization, the information systems of other private or government entities. Authorizes entities to conduct such activities on information that is stored on, processed by, or transiting such monitored systems.” Since this is a new act just passed by congress, the CEO of TransManuCo wants to be sure what the ramifications are for his company. With the increase in cyber attacks especially on companies such as his, he wants to take aggressive action to protect his information.

The HR department of TransManuCo needs assistance in dealing with issues that have surfaced surrounding social media. Since much of the work the company does is sensitive and secret, they have considered using social media background checks. However, they are unsure of the legalities.

The CEO and his immediate management team have concerns that as the company has grown rapidly, access to passwords and administrative privileges are too widespread. They would like to implement the Critical Security Control Regulations to help them get control of access to their systems and decrease vulnerabilities.

They are also concerned about wireless access from company employees traveling on business, especially overseas, whose computers become infected through remote exploitation during air travel. They believe this provides backdoor access to the network when the employees return to the main office and reconnect to the network.

Analyze the episodes in this case including:

• A brief discussion of what the issue or threat is and how it could affect the company
• What cyber security laws or compliance standards are affected
• What actions the company should take to mitigate the issue or decrease the potential threat
• Cite your sources in APA from reputable reference materials

1. Why do companies want to vertically integrate in order to control assets or inputs that are specialized to a particular transaction?

2. An airline company is considering backward integration into oil refinery to avoid high fluctuations in petroleum price. The argument has been made in favor of vertical integration: “Airplane that operates at full capacity is more efficiently used and lead to much lower cost per unit than an airplane that operates at less than full capacity. Owning our own source of petroleum insulates us from short-run supply-demand imbalances and therefore will give us a competitive advantage over rival airline companies.” Do you agree with this argument? Why?

3. Is a firm size determining factor in the vertical integration decision? That is, are large firms more likely to outsource production of inputs than are small firms? Why?

4. Do firms adopting related diversification strategy necessarily produce similar products? Thoroughly justify your argument.

5. A large American bank conducted an analysis of the external environment and reached the conclusion that 3D Printing & Rapid Prototyping Services is one of the fastest growing businesses. The bank decided to diversify into the 3D Printing & Rapid Prototyping Services through the acquisition of America’s biggest 3D Printing & Rapid Prototyping Services company. In justifying and defending this diversification move, the CEO of the bank argued that this diversification would help his financial institution and the 3D Printing & Rapid Prototyping Services company achieves several operational economies of scope? Do you agree with the reasoning that the CEO used to justify the diversification? Why?

6. Ale-8-One, known colloquially as Ale-8, is a regional ginger and citrus flavored soft drink, bottled by the Ale-8-One Bottling Company, a family-owned enterprise in the small town of Winchester, Kentucky, near Lexington, where the beverage is especially popular. Do online research on this company. Discuss the company business level strategy? What is the company corporate level strategy? What is the type of corporate of diversification that the company follows? You must justify and explain your answers.

This course is about Understanding Finanical Statement.

There are two companies which are competitors(same SIC classifications). The Coca Cola Company will be a publicly-traded U.S. company which reports under GAAP and Coca- Cola European Partners will be a foreign competitor, also publicly-traded, which reports under IFRS. Here is the requirement: briefly describe, in your own words and citing company literature where appropriate, the companies under consideration. Finally “which company would be the better investment?” based upon your ratio analysis.

Green Wellness Berhad owns several properties and has a financial year end of 31 December.Whenever possible, the company considers investment properties using the fair value model.The list of properties owned by the company are as follows:
Property X
Acquired on 1 January 2011. It had a cost of RM1 million, comprising of RM500,000 for land and RM500,000 for buildings. The buildings have a useful life of 40 years. Green Wellness Berhad uses this property as its head office.
Property Y
Acquired on 1 January 2013 for the price of RM1.5 million for its investment potential.
On 31 December 2017, it had a fair value of RM2.3 million. By 31 December 2018, its fair value had risen to RM2.7 million. This property has a useful life of 40 years.
Property Z
Acquired on 30 June 2012 for the price of RM2 million for its investment potential. The directors of Green Wellness Berhad’s company believe that the fair value of this property was RM3 million on 31 December 2017 and RM3.5 million on 31 December 2018. However, due to the specialised nature of this property, these figures cannot be corroborated. This property has a useful life of 50 years.
a) For each of the above properties:

i) Explain whether the property is an investment property in accordance with the accounting standards provided in MFRS 140 Investment Property.

ii) Record the relevant journal entries from the date of acquisition of the property (if the date is known) until 31 December 2018 in accordance with the accounting standards contained in MFRS 140 Investment Property or other relevant accounting standards. Show all computations and supporting explanations.

b) Prepare an analysis of property, plant and equipment for Green Wellness Berhad for the year ended 31 December 2018, by showing the value of each of the above properties separately.  

Ross Enterprises has a contract with Big Steel Company Limited in respect of Information Technology (IT) Services. The contract was signed on January 1^st 2020 and will be effected on the 1^st April 2020.

In mid-February 2020 Big Steel’s sales plummeted due to the Covid 19 pandemic. In addition, an already high long term debt, and operating cost, as well as Big Steel’s current negative cash flows situation placed the company in serious financial peril. Indeed if they cannot find a resolution soon to deal with their cash flow problems and debt, they will have to close operations permanently and send all employees home.

Upon hearing this pronouncement, the Trade Union representing workers at Big Steel advised management that they will take strike action. This further affected the operations of Big Steel and resulted in a loss of production, sales and the much-needed cash flows, which is critical to pay off their debt and meet current fixed operating cost. On 3^rd March 2016, Big Steel files for bankruptcy and sent all employees home.

On the 4^th March, Big Steel wrote Ross Enterprises advising of their circumstances and the virtual impossibility of implementing the sign contact for IT Services, which is scheduled to commence on 1^st April 2020.

Ross Enterprises is adamant that they have binding arrangement and wanted to proceed as per signed contract. However Big Steel has advised Ross that certain events, covid 19, global recession and a subsequent strike has culminated for which the company has little or no control of. Thus, it was impossible to implement the contract on the agreed start date due to these circumstances.

Advise Ross Enterprises on this matter using the IRAC method

The condensed financial statements of Murawski Company for the years 2019 and 2020 are presented follows. (Amounts in thousands.)

Compute the following ratios for 2020 and 2019. (Round current ratio and invertory turnover ratio to 2 decimal places, e.g. 1.62 or 1.62% and all other answers to 1 decimal place, e.g. 1.6 or 1.6%.)

Ross Enterprises has a contract with Big Steel Company Limited in respect of Information Technology (IT) Services. The contract was signed on January 1st 2020 and will be effected on the 1st April 2020. In mid-February 2020 Big Steel’s sales plummeted due to the Covid 19 pandemic. In addition, an already high long term debt, and operating cost, as well as Big Steel’s current negative cash flows situation placed the company in serious financial peril. Indeed if they cannot find a resolution soon to deal with their cash flow problems and debt, they will have to close operations permanently and send all employees home. Upon hearing this pronouncement, the Trade Union representing workers at Big Steel advised management that they will take strike action. This further affected the operations of Big Steel and resulted in a loss of production, sales and the much-needed cash flows, which is critical to pay off their debt and meet current fixed operating cost. On 3rd March 2016, Big Steel files for bankruptcy and sent all employees home. On the 4th March, Big Steel wrote Ross Enterprises advising of their circumstances and the virtual impossibility of implementing the sign contact for IT Services, which is scheduled to commence on 1st April 2020. Ross Enterprises is adamant that they have binding arrangement and wanted to proceed as per signed contract. However Big Steel has advised Ross that certain events, covid 19, global recession and a subsequent strike has culminated for which the company has little or no control of. Thus, it was impossible to implement the contract on the agreed start date due to these circumstances.

Advise Ross Enterprises on this matter.

On April 1 2020 DinePlus Restaurants Incorporated, a franchisor, signed a franchise agreement to allow a franchisee to operate a business in northwest Edmonton, Alberta for a 10-year period.

Note:       A franchise agreement is an agreement between a franchisor (a parent company) and a franchisee (an individual or a company) that permits the franchisee to operate a business using the products and services of the franchisor in return for payment of a franchise fee to the franchisor.

The agreement requires the franchisee to pay DinePlus $200,000 up front and a royalty of 2% of its sales revenue. The franchisee paid DinePlus the $200,000 on the date the agreement was signed. Management at DinePlus estimates that the value of services rendered to this franchisee in setting up the business was $80,000, taking into account location, demographic analysis, staffing, and training. Management at DinePlus also believes that the remainder of the initial fee relates to services that will be provided by the franchisee evenly over next 10 years.

DinePlus follows IFRS and has a September 30 year-end. Monthly sales during the 2020 calendar year as reported by the franchisee were as follows:

Question No. 1 (continued)

PART B: (continued)

Required:

1. Prepare the journal entry for DinePlus on the date the franchise agreement is signed.     

2. Prepare the journal entries for DinePlus for the year ended September 30, 2020.

Note:   You may expand the JE blocks shown below if necessary and you may copy/paste to add more blocks as needed.

On November 10, 2020, Singh Electronics began to buy and resell scanners for $64 each. Singh uses the perpetual system to account for inventories. The scanners are covered under a warranty that requires the company to replace any non-working scanner within 90 days. When a scanner is returned, the company simply throws it away and mails a new one from inventory to the customer. The company’s cost for a new scanner is only $44. Singh estimates warranty costs based on 20% of the number of units sold. The following transactions occurred in 2020 and 2021 (ignore GST and PST):

Required:
1. How much warranty expense should be reported for November and December 2020?

2. How much warranty expense should be reported for January 2021? (Round your intermediate calculations and final answer to the nearest whole number.)

3. What is the balance of the estimated warranty liability as of December 31, 2020?

4.What is the balance of the estimated warranty liability as of January 31, 2021?

. Prepare journal entries to record ALL transactions and year-end adjustments (ignore sales taxes). (Round intermediate calculations and final answer to the nearest whole number.)