Hassellhouf Company’s trial balance at December 31, 2020, is as follows. All 2020 transactions have been recorded except for the items described following the trial balance.

Unrecorded transactions:

a)Prepare journal entries for the transactions listed above

b)Prepare an updated December 31, 2020, trial balance.

c)Prepare a 2020 income statement.

d)Prepare a 2020 an owner’s equity statement.

e)Prepare a December 31, 2020, classified balance sheet. (List Current Assets in order of liquidity. List Property, Plant and Equipment in the order of Land, Buildings and Equipment.)

A United Kingdom firm is planning to hedge an import payment of USD 10 million dollars due in 9 months (i.e. the firm will expect to pay the US $10 million in 9 months-time). The spot rate is 1 UK = 1.25 USD. Note: UK = UK pounds. USD = US Dollars. The 9-month forward rate is 1 UK = 1.2575 USD. The nine-month interest rate for borrowing (and lending) in the United Kingdom (UK) is 1.00% p.a. and in the United States (US) is 2.60% p.a. respectively. All interest rates are continuously compounded rates. Required: What is the best way for the company to hedge its future USD payment or cash outflow? Of the two possible alternative options to hedge the USD payment how much better off in UK pounds are you under the best option at time t = 9 months hence? Assume the firm can borrow or lend UK pounds and / or US dollars at the interest rates quoted above and also transact at the quoted spot and forward rates. If necessary state any other assumptions you make.

a. option one .. option two .. b. How much better off in UK pounds are you under the best option at time t = 9 months hence?

E-cigarettes and JUULs: Stopping a New Epidemic
2019 was a landmark year for tobacco legislation. States passed bills that increased the minimum sale age for tobacco products, regulated the sale of flavored tobacco products, and increased the price of tobacco products in statehouses across the country. This work was capped off with the federal government raising the age to buy tobacco products to 21 in December. ASTHO expects that states will continue to propose bills to prevent youth consumption of tobacco products, including e-cigarettes, in 2020. Other likely tobacco proposals include: the implementation of sales restrictions on tobacco products with specific nicotine concentrations; prohibitions on the bulk sale of e-cigarette products; the regulation of online sale and purchase of tobacco products and e-cigarettes; and the incorporation of e-cigarettes in the definition of tobacco products.

Discuss the argument for and against this health policy.

How would an epidemiologist aide in this debate?

Part # 1 How would you describe the EI level of Cirque du Soleil Founder Guy Laliberte? Give an example from the case to support your response? Part # 2 What is your EI(emotional Intelligent ) score, and do you think it is an accurate reflection of you? Why or why not ?

Part # 1 How would you describe the EI level of Cirque du Soleil Founder Guy Laliberte? Give an example from the case to support your response?

Part # 2 What is your EI(emotional Intelligent ) score, and do you think it is an accurate reflection of you? Why or why not ?

. Wal-Mart’s Foreign Expansion Wal-Mart, the world’s largest retailer, has built its success on a strategy of everyday low prices, and highly efficient operations, logistics, and information systems that keeps inventory to a minimum and ensures against both overstocking and understocking. The company employs some 2.1 million people, operates 4,200 stores in the United States and 3,600 in the rest of the world, and generates sales of almost $400 billion (as of fiscal 2008). Approximately $91 billion of these sales were generated in 15 nations outside of the United States. Facing a slowdown in growth in the United States, Wal-Mart began its international expansion in the early 1990s when it entered Mexico, teaming up in a joint venture with Cifra, Mexico’s largest retailer, to open a series of supercenters that sell both groceries and general merchandise. Initially the retailer hit some headwinds in Mexico. It quickly discovered that shopping habits were different. Most people preferred to buy fresh produce at local stores, particularly items like meat, tortillas and pan dulce which didn’t keep well overnight (many Mexicans lacked large refrigerators). Many consumers also lacked cars, and did not buy in large volumes as consumers in the United States did. WalMart adjusted its strategy to meet the local conditions, hiring local managers who understood Mexican culture, letting those managers control merchandising strategy, building smaller stores that people could walk to, and offering more fresh produce. At the same time, the company believed that it could gradually change the shopping culture in Mexico, educating consumers by showing them the benefits of its American merchandising culture. After all, Wal-Mart’s managers reasoned, people once shopped at small stores in the United States, but starting in the 1950s they increasingly gravitated towards large stores like WalMart. As it built up its distribution systems in Mexico, Wal-Mart was able to lower its own costs, and it passed these on to Mexican consumers in the form of lower prices. The customization, persistence, and low prices paid off. Mexicans started to change their shopping habits. Today Wal-Mart is Mexico’s largest retailer and the country is widely considered to be the company’s most successful foreign venture. Next Wal-Mart expanded into a number of developed nations, including Britain, Germany and South Korea. There its experiences have been less successful. In all three countries it found itself going head to head against well-established local rivals who had nicely matched their offerings to local shopping habits and consumer preferences. Moreover, consumers in all three countries seemed to have a preference for higher quality merchandise and were not as attracted to Wal-Mart’s discount strategy as consumers in the United States and Mexico. After years of losses, Wal-Mart pulled out of Germany and South Korea in 2006. At the same time, it continued to look for retailing opportunities elsewhere, particularly in developing nations where it lacked strong local competitors, where it could gradually alter the shopping culture to its advantage, and where its low price strategy was appealing. Recently, the centerpiece of its international expansion efforts has been China. Wal-Mart opened its first store in China in 1996, but initially expanded very slowly, and by 2006 had only 66 stores. What Wal-Mart discovered, however, was that the Chinese were bargain hunters, and open to the low price strategy and wide selection offered at Wal-Mart stores. Indeed, in terms of their shopping habits, the emerging Chinese middle class seemed more like Americans than Europeans. But to succeed in China, Wal-Mart also found it had to adapt its merchandising and operations strategy to mesh with Chinese culture. One of the things that Wal-Mart has learned is that Chinese consumers insist that food must be freshly harvested, or even killed in front of them. Wal-Mart initially offended Chinese consumers by trying to sell them dead fish, as well as meat packed in Styrofoam and cellophane. Shoppers turned their noses up at what they saw as old merchandise. So Wal-Mart began to display the meat uncovered, installed fish tanks into which shoppers could plunge fishing nets to pull out their evening meal, and began selling live turtles for turtle soup. Sales soared. Wal-Mart has also learned that in China, success requires it to embrace unions. Whereas in the United States Wal-Mart has vigorously resisted unionization, it came to the realization that in China unions don’t bargain for labor contracts. Instead, they are an arm of the state, providing funding for the Communist Party and (in the government’s view) securing social order. In mid- 2006 Wal-Mart broke with its long standing antagonism to unions and agreed to allow unions in its Chinese stores. Many believe this set the stage for Wal-Mart’s most recent move, the purchase in December 2006 of a 35 percent stake in the Trust-Mart chain, which has 101 hypermarkets in 34 cities across China. Now Wal-Mart has proclaimed that China lies at the center of its growth strategy. By early 2009 Wal-Mart had some 243 stores in the country, and despite the global economic slowdown, the company insists that it will continue to open new stores in China at a “double digit rate.”

Case Discussion Questions

1. Do you think Wal-Mart could translate its merchandising strategy wholesale to another country and succeed? If not, why not?

2. Why do you think Wal-Mart was successful in Mexico?

3. Why do you think Wal-Mart failed in South Korea and Germany? What are the differences between these countries and Mexico?

4. What must Wal-Mart do to succeed in China? Is it on track?

Discuss the approach described in HKFRS 13 ‘Fair Value Measurement’ to measure the non- financial asset.

Carina Ltd has acquired all the shares of Finn Ltd on 1 July 2019 for $ 225 000. The accountant for Carina Ltd, having studied the requirements of AASB 3 Business Combinations, realises that all the identifiable assets and liabilities of Finn Ltd must be recognised in the consolidated financial statements at fair value. Although he is happy about the valuation of these items, he is unsure of a number of other matters including pre-acquisition entries and business combination valuation reserves associated with accounting for these assets and liabilities. He has approached you and asked for your advice.

The financial statements of Finn Ltd showed the equity of Finn Ltd at acquisition date to be:

                                Share capital — 20 000 $5.10 shares                         $102 000

                                General reserve                                                                   40 000

                                Retained earnings                                                               60 000

All the assets and liabilities of Finn Ltd were recorded at amounts equal to their fair values at that date.

During the year ending 30 June 2020, Finn Ltd undertook the following actions:

•    On 10 September 2019, paid a dividend of $20 000 from the profits earned prior to 1 July 2019.

•    On 28 June 2020, declared a dividend of $20 000 to be paid on 15 August 2020.

• On 1 January 2020, transferred $15 000 from the general reserve existing at 1 July 2019 to retained earnings.

Required

Write a report for the accountant at Carina Ltd advising on the following issues:

1.      Should the adjustments to fair value be made in the consolidation worksheet or in the accounts of Finn Ltd?                                                                                                                                             

2.     What is the purpose of the pre-acquisition entries in the preparation of consolidated financial statements? Explain.                                                                                                                            

3.      How to prepare the pre-acquisition entries at 1 July 2019.                                                     

4.      How to prepare the pre-acquisition entries at 30 June 2020.                                                    

Accounting for Consolidation

Carina Ltd has acquired all the shares of Finn Ltd on 1 July 2019 for $ 225 000. The accountant for Carina Ltd, having studied the requirements of AASB 3 Business Combinations, realises that all the identifiable assets and liabilities of Finn Ltd must be recognised in the consolidated financial statements at fair value. Although he is happy about the valuation of these items, he is unsure of a number of other matters including pre-acquisition entries and business combination valuation reserves associated with accounting for these assets and liabilities. He has approached you and asked for your advice.

The financial statements of Finn Ltd showed the equity of Finn Ltd at acquisition date to be:

Share capital — 20 000 $5.10 shares $102 000
General reserve     40 000
Retained earnings     60 000

All the assets and liabilities of Finn Ltd were recorded at amounts equal to their fair values at that date.

During the year ending 30 June 2020, Finn Ltd undertook the following actions:
• On 10 September 2019, paid a dividend of $20 000 from the profits earned prior to 1 July 2019.
• On 28 June 2020, declared a dividend of $20 000 to be paid on 15 August 2020.
• On 1 January 2020, transferred $15 000 from the general reserve existing at 1 July 2019 to retained earnings.

Required
Write a report for the accountant at Carina Ltd advising on the following issues:

1. Should the adjustments to fair value be made in the consolidation worksheet or in the accounts of Finn Ltd?     


2.     What is the purpose of the pre-acquisition entries in the preparation of consolidated financial statements? Explain.     


3.      How to prepare the pre-acquisition entries at 1 July 2019.   


4.      How to prepare the pre-acquisition entries at 30 June 2020.     

1. Journalize the listed transactions for the years 2020 and 2023. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

2. Assume that the fair value of the bonds at December 31, 2020, was $1,709,400. These bonds are classified as available-for-sale securities. Prepare the adjusting entry to record these bonds at fair value. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

3. Based on your analysis in part (b), show the balance sheet presentation of the bonds and interest receivable at December 31, 2020. Assume the investments are considered long-term. Indicate where any unrealized gain or loss is reported in the financial statements.