Pesto Company possesses 80 percent of Salerno Company's outstanding voting stock. Pesto uses the initial value method to account for this investment. On January 1, 2014, Pesto sold 6 percent bonds payable with a $14.0 million face value (maturing in 20 years) on the open market at a premium of $1,070,000. On January 1, 2017, Salerno acquired 40 percent of these same bonds from an outside party at 96.6 percent of face value. Both companies use the straight-line method of amortization. For a 2018 consolidation, what adjustment should be made to Pesto's beginning Retained Earnings as a result of this bond acquisition?

Multiple Choice

• $543,000 increase

• $521,600 increase

• $554,200 increase

• $532,300 increase

A manufacturer of fabricated metal products has acquired a new plasma table for $37,000. It is projected that the acquisition of this equipment will increase revenue by $10,000 per year. Operating costs for the machine will average $2,600 per year. The machine will be depreciated using the MACRS method, with a recovery period of 7 years. The company uses an after-tax MARR rate of 10% and has an effective tax rate of 30%.

2. Now, suppose that the duration of the project is six years and that an estimate of the value of the equipment cannot be obtained from the marketplace.

2.1. Estimate the SV value at the end of the project period using the appropriate technique. In subsequent parts, assume the estimated SV is $12,000, regardless of the result that you actually obtained.

Pesto Company possesses 80 percent of Salerno Company's outstanding voting stock. Pesto uses the initial value method to account for this investment. On January 1, 2014, Pesto sold 10 percent bonds payable with a $18.0 million face value (maturing in 20 years) on the open market at a premium of $760,000. On January 1, 2017, Salerno acquired 40 percent of these same bonds from an outside party at 96.6 percent of face value. Both companies use the straight-line method of amortization. For a 2018 consolidation, what adjustment should be made to Pesto's beginning Retained Earnings as a result of this bond acquisition?

Multiple Choice

• $503,200 increase

• $481,200 increase

• $488,800 increase

• $473,600 increase

The Elcorn Company traded a tract of land to Sanchez Development for a similar tract of land. The old land had a book value of $2,500,000 and a fair value of $4,500,000. To equalize the fair values of the assets exchanged, in addition to the land, Elcorn paid Sanchez $500,000 in cash. This means that the fair value of the land acquired is $5,000,000.

My teacher has informed me that there is no commercial substance in this problem. If it lacks commercial substance :

No cash received = No gain.

Gain = (Fair value given - BV given) * (cash received / total Fair value received).

Loss = BV given - Fair value given.

Can you please explain to me the journal entry from Sanchez Developments' point of view?

We can all agree that we never want to go through a bankruptcy. However, it is in all of our best interests to truly understand the bankruptcy law and process. For this assignment, I would like you to read the following case and answer the questions presented. This may require that you do some research on bankruptcy. Remember, any sources you use must be cited and I do not want you to copy answers from the internet. Think about the situation and apply your knowledge, gained from your readings, to the questions. One to two paragraphs for each question.

Jane Doe, a teacher, obtained a master’s degree at Somewhere University (names have been changed). But when Doe asked for a transcript—which was required to receive an increase in salary from her school district—the university refused because she owed more than $6,000 in tuition. Doe offered to pay the nominal transcript fee, but not the tuition. She then filed a petition in a federal bankruptcy court, listing the university as her only creditor, and while the case was pending, again asked for a transcript. The university again refused unless she paid the tuition. Doe complained to the court, which ordered the university to provide a transcript. A federal district court affirmed the order. The university appealed.

The U.S. Court of Appeals for the Seventh Circuit affirmed. Doe had a right to a copy of her transcript, and the university’s refusal to honor that right until she paid her tuition was an act to collect a debt, in violation of the automatic stay. Property interests are created and defined by the law. Nothing in the Bankruptcy Code or other federal law creates or affects property rights in grades or the right to a transcript. No state statute applies either, but under the state’s common law, property rights may arise from custom. In the state, universities have consistently provided certified transcripts at or around cost. This indicates that providing a transcript is an implied part of the “educational contract,” covered by the tuition and other fees. Because a transcript is part of the package of goods and services that a college offers in exchange for tuition, a student has a property right to a certified copy. In this case, Doe was willing to pay the cost. The university’s only reason for refusing to provide the transcript was to induce Doe to pay her unpaid tuition. But the automatic stay prohibits a creditor from acting to collect a claim against a debtor that arose before the filing of a bankruptcy petition.

1. What actions might a college take to collect unpaid tuition that would not violate the Bankruptcy Code?

2. Does the longstanding existence of a custom—in this case, the nominal amount of the fee charged by a college for a transcript—mean that it cannot change?

3. To avoid conflicts such as the one in this case, could a college charge a student a high fee for a transcript—for example, one that would equal the amount of any unpaid tuition?
   
4. Suppose that instead of offering to pay for a transcript, Doe had tried to obtain one on credit. Would the university’s refusal to provide one on that basis have led to the same result? Why or why not?
   
5. Some might say that higher education institutions should be able to use all methods possible to collect unpaid tuition, including withholding certified grade transcripts. What ethical issues would this approach raise?

4. GR Inc is a US based MNC that conducts a part of its business in Singapore. Its US sales are denominated in US dollars while its sales in Singapore are denominated in Singaporean dollars. Its pro-forma income statement for the next year is shown below. Assume US Sales will be unaffected by the exchange rate. Also Assume the Singaporean dollar earning will be remitted to the US at the end of the period.

The average rate is USD 0.6956/ SGD and historical rate is USD 0.6684/SDG

i.        Show how the costs, revenue and earnings items would be affected by three possible exchange rate scenarios for Singaporean Dollar USD 0.7059, USD 0.6945 & USD 0.6864. Ascertain whether there is accounting gain or loss using current rate method?

ii) Prepare a consolidated Income Statement for GR Inc Company by using Temporal and monetary & non- monetary method.

(please solve it carefully)

thank you

GR Inc is a US based MNC that conducts a part of its business in Singapore. Its US sales are denominated in US dollars while its sales in Singapore are denominated in Singaporean dollars. Its pro-forma income statement for the next year is shown below. Assume US Sales will be unaffected by the exchange rate. Also Assume the Singaporean dollar earning will be remitted to the US at the end of the period.

The average rate is USD 0.6956/ SGD and historical rate is USD 0.6684/SDG

i.        Show how the costs, revenue and earnings items would be affected by three possible exchange rate scenarios for Singaporean Dollar USD 0.7059, USD 0.6945 & USD 0.6864. Ascertain whether there is accounting gain or loss using current rate method?   

ii) Prepare a consolidated Income Statement for GR Inc Company by using Temporal and monetary & non- monetary method.

please solve it carefully

thank you

Pick a company that has a significant amount of inventory on their balance sheet and read the inventory note(s) in the financial statements. Tell us what unique challenges they face in dealing with those inventories.

Please explain why Toyota and other Japanese car manufacturers moved their plants to US. Does this move qualify as transaction or economic exposure? How did it reduce FX volatility for the company?

Discuss the origins and trends in retirement plans in the US. How can employers leverage retirement plans to their advantage? How would you leverage a retirement plan within a company you are running?