Co. A had the following transactions relating to its investments during 2013.

- On July 1, 2013, Co. A acquired 4,000 shares of Zebra at a price of $25 per share. On December 31, 2013, dividends of $1.5 per share were declared and paid. On December 31, 2013, the fair value of the Zebra shares had decreased to $24 per share. The shares are classified as held for trading by Co. A.

- On July 1, 2013, Co. A acquired 30,000 shares (30%) of the outstanding shares of Giraffe at a price of $11 per share, giving it significant influence over Giraffe. Giraffe had net income of $400,000 for the six months ended December 31, 2013, and declared and paid dividends of $220,000 to its shareholders on December 31, 2013. On December 31, 2013, Giraffe’s shares had a fair value of $13 per share.

Round to nearest dollar.

Requirement：

1. Determine how much Co. A should recognize Zebra investments in the balance sheet as of December 31, 2013.

2. Determine how much Co. A should report Zebra investment earnings in the income statement as of December 31, 2013.

3. Determine how much Co. A should recognize Giraffe investments in the balance sheet as of December 31, 2013.

4. Determine how much Co. A should report Giraffe investment earnings in the income statement as of December 31, 2013.

The following is a list of selected information for Liverpool Co. for the fiscal year.

You are an employee for Liverpool Co., and your boss needs help assessing the level of risk associated with the firm’s current financial position. Begin by calculating the degree of financial leverage for the change between forecasted operations and the operational increase of 30.00%.

0.60X

1.04X

0.42X

1.03X

Your boss says, “Looking good so far. However, I would like to know how we stack up against our strongest competitor, Everton Co.” Compare the degree of operating leverage of Everton Co. with that of Liverpool Co. and then answer the following question.

All else being equal, is Liverpool Co. more risky than, less risky than, or as equally risky as Everton Co., considering that the degree of financial leverage for Everton Co. is 1?

Not enough information given

More risky

Less risky

Shown here are condensed income statements for two different companies (both are organized as LLCs and pay no income taxes).

Problem 9-5A Part 5

5. What happens to each company’s net income if sales increase by 80%? (Round your answers to nearest whole percent.)

6. What happens to each company’s net income if sales decrease by 10%? (Round your answers to nearest whole percent.)

7. What happens to each company’s net income if sales decrease by 20%? (Round your answers to nearest whole percent.)

8. What happens to each company’s net income if sales decrease by 40%? (Round your answers to nearest whole percent.)

Heck No, I Won’t Go! I’m Not Covering for Free!

On Thursday night Dr. Jones was at home watching television and spending time with his family. The phone rang. The South Shore General Hospital ER physician asked him to see an urgent patient. Dr. Jones replied that he was not on call for the emergency room at South Shore General Hospital, and furthermore, the hospital was paying members of a competing group to cover the emergency room. The emergency room doctor said that he was aware of the arrangement with the competing group. However, the ER could not reach the on-call physi-cian and had tried for some time. Dr. Jones, who earlier had a glass of wine with dinner, responded, “You’ll have to keep trying. I’m not coming in.” The next day Dr. Jones called the Chief of Staff and the Chief Medical Officer (CMO) of South Shore General Hospital and informed them that neither he nor any members of his group would cover the ER unless they were compensated in a similar manner to the competing group and had an appropriate contractor arrangement with the hospital. Dr. Jones asked the Chief of Staff and CMO if they worked for free. Dead silence. “While you’re thinking about that question, let me say this to both of you. Doctors are working harder and longer hours and earning less money every year. Why should we give up our free time and work for nothing when you’re willing to pay the other group?”

Discussion Questions

1. What are the facts in this situation?

2. What are the three organizational issues this case illustrates?

3. Was Dr. Jones obligated to go to the emergency room at South Shore General Hospital?

4. Is there an ethical dilemma in a doctor choosing not to go in to see a patient? What about the physicians who were on call? Do you think they violated any ethical principles? Or do you think this was just a matter of miscommunication? Provide a rationale for your responses.

5. If he had gone in and there had been an adverse patient outcome, how do you think the fact that he had consumed an alcoholic beverage that evening would play in a courtroom?

6. How should the ER physician have handled this matter? What is the best way to ensure emergency room coverage?

7. What steps should the administration of South Shore General Hospital take in the future to prevent this problem from occurring again? Provide your reflections and personal opinions as well as your recommendations and rationale for your responses.

Background Statement?

Major Problems and Secondary Issues?

Your Role?

Organizational Strengths and Weakness?

Alternatives and Recommended Solutions?

Evaluation?

Heck No, I Won’t Go! I’m Not Covering for Free!Dale Buchbinder

On Thursday night Dr. Jones was at home watching television and spending time with his family. The phone rang. The South Shore General Hospital ER physician asked him to see an urgent patient. Dr. Jones replied that he was not on call for the emergency room at South Shore General Hospital, and furthermore, the hospital was paying members of a competing group to cover the emergency room. The emergency room doctor said that he was aware of the arrangement with the competing group. However, the ER could not reach the on-call physi-cian and had tried for some time. Dr. Jones, who earlier had a glass of wine with dinner, responded, “You’ll have to keep trying. I’m not coming in.” The next day Dr. Jones called the Chief of Staff and the Chief Medical Officer (CMO) of South Shore General Hospital and informed them that neither he nor any members of his group would cover the ER unless they were compensated in a similar manner to the competing group and had an appropriate contractor arrangement with the hospital. Dr. Jones asked the Chief of Staff and CMO if they worked for free. Dead silence. “While you’re thinking about that question, let me say this to both of you. Doctors are working harder and longer hours and earning less money every year. Why should we give up our free time and work for nothing when you’re willing to pay the other group?”

Discussion Questions

1. What are the facts in this situation?

2. What are three organizational issues this case illustrates?

3. Was Dr. Jones obligated to go to the emergency room at South Shore General Hospital?

4. Is there an ethical dilemma in a doctor choosing not to go in to see a patient? What about the physicians who were on call? Do you think they violated any ethical principles? Or do you think this was just a matter of miscommunication? Provide a rationale for your responses.

5. If he had gone in and there had been an adverse patient outcome, how do you think the fact that he had consumed an alcoholic beverage that evening would play in a courtroom?

6. How should the ER physician have handled this matter? What is the best way to ensure emergency room coverage?

7. What steps should the administration of South Shore General Hospital take in the future to prevent this problem from occurring again? Provide your reflections and personal opinions as well as your recommendations and rationale for your responses.

Background Statement?

Major Problems and Secondary Issues?

Your Role?

Organizational Strengths and Weakness?

Alternatives and Recommended Solutions?

Evaluation?

On January 1, 2018, Riney Co. owned 80% of the common stock of Garvin Co. On that date, Garvin's stockholders' equity accounts had the following balances:

The balance in Riney's Investment in Garvin Co. account was $552,000, and the noncontrolling interest was $138,000. On January 1, 2018, Garvin Co. sold 10,000 shares of previously unissued common stock for $15 per share. Riney did not acquire any of these shares.

What amount should be attributed to the Noncontrolling Interest in Garvin Co. following the sale of the 10,000 shares of common stock?

Multiple Choice

• $288,000.

• $101,000.

• $280,000.

• $230,000.

• $168,000.

Journalize the following Tyler Co. transactions. (Chart of Account : Cash, Bond Payable, Discount on Bond Payable, Premium on Bond Payable, Common
Stock, Paid-in Capital in Excess of Par, Treasury Stock, Interest Expense)

- Tyler Co. issued 1,000 shares of $20 par, common stock for $23,000
- Tyler Co. reacquired 300 shares of its common stock for $30 per share.
- Tyler Co. issued $60,000, 9%, 10-year bonds on Jan 1, 2018 for $56,261.(Interest is payable semiannually on July 1 and January 1. The price resulted in an effective interest rate of 10% on the bonds)
- The payment of interest and the amortization on July 1, 2018.
- Tyler Co. declared a two-for-one stock split.

Prepare general journal entries for the following transactions of Norman Company, assuming they use the allowance method to account for uncollectible accounts. Apr 01 Sold $3,500 of merchandise to Lance Co., receiving an 8%, 90-day, $3,500 note. 15 Wrote off $1,500 owed by Guy Co. from a previous period sale. 30 Received a $5,000, 6%, 30-day note receivable from James Co. as settlement for its $5,000 account receivable. May 30 The note received from James on April 30 was collected in full. Jun 30 Lance Co. was unable to pay the note on the due date. Jul 15 Guy Co. paid $1,000 of the amount written off on April 15.

The following items were selected from among the transactions completed by Shin Co. during the current year:

Jan. 10. Purchased merchandise on account from Beckham Co., $420,000, terms n/30.

Feb. 9. Issued a 30-day, 6% note for $420,000 to Beckham Co., on account.

Mar. 11. Paid Beckham Co. the amount owed on the note of February 9.

May 1. Borrowed $240,000 from Verity Bank, issuing a 45-day, 5% note.

June 1. Purchased tools by issuing a $312,000, 60-day note to Rassmuessen Co., which discounted the note at the rate of 5%.

June 15. Paid Verity Bank the interest due on the note of May 1 and renewed the loan by issuing a new 45-day, 7% note for $240,000. (Journalize both the debit and credit to the notes payable account.)

July 30. Paid Verity Bank the amount due on the note of June 15.

July 30. Paid Rassmuessen Co. the amount due on the note of June 1.

Dec. 1. Purchased office equipment from Lambert Co. for $700,500, paying $160,500 and issuing a series of ten 5% notes for $54,000 each, coming due at 30-day intervals.

Dec. 15. Settled a product liability lawsuit with a customer for $144,200, payable in January. Shin Co. accrued the loss in a litigation claims payable account.

Dec. 31. Paid the amount due Lambert Co. on the first note in the series issued on December 1.

Instructions

1. Journalize the transactions.

2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year:

a. Product warranty cost, $19,500.

b. Interest on the nine remaining notes owed to Lambert Co.

Identify the different methods of early-stage funding and how to access complementary resources. examples of complementary funding