On January 1, 2020, the balance in Tim Company's "Accounts Payable" account was $22,000. At the December 31 year end, the balance was $30,000. In Tim's Cash Flow Statement for the year ended 12/31/2020, the $8,000 net increase will be
A Subtracted from Net Income in determining net cash provided by operating activities
B Reported as a cash outflow from financing activities
C Reported as a cash inflow from investing activities
D Added to Net Income in determining net cash provided by operating activities

Consider two firms, A and B. Firm A is a US-based company and firm B is a Germany-based company. Firm A wants to finance a 10-year, €100 million project in Germany. Firm B wants to finance a 10-year, $111 million project in the US. The current spot rate is $1.11/€. Their borrowing opportunities are given in the table below:

1. Calculate the quality spread differential (QSD) between Firm A and Firm B.

2. Develop a cross-currency interest rate swap in which both Firm A and Firm B have an equal cost savings in their borrowing costs, and the swap bank makes 0.30% per annum in arranging the swap and assuming all foreign exchange risks.

3. Illustrate your swap and its cash flows by drawing the proper swap diagrams showing the swap interest rates, and the cash flows at the initiation of the swap, at each annual settlement during the life of the swap, and at maturity of the swap.

Enumerate and briefly explain some of potential accounting problems resulting from inflation.

Enumerate and briefly explain methods of dealing with inflation in financial reporting.

What are acceptable methods of dealing with inflation under US GAAP and IFRS?

Define “control” and “group” under US GAAP and IFRS.

Reporting on Discontinued Operations—Disposal in Current Year

On August 1, 2020, Fischer Inc. decided to discontinue the operations of its Services Division, which qualifies as a business component. An agreement was formalized to sell this component for $436,800 cash. The book value of the assets of the Services Division was $504,000. The disposal date was August 1, 2020. The income tax rate is 25%, and the accounting year-end is December 31. On December 31, 2020, the pretax income from all operations, including an operating loss of $56,000 incurred by the Services Division prior to August 1, 2020, was $1,120,000. There were 150,000 weighted average common shares outstanding during 2020.

Required

Prepare a partial income statement beginning with income from continuing operations. Include the earnings per share disclosures.

• Use a negative sign to indicate a loss.
• Round the per share amounts to two decimal places.

Answer

Elvis Inc. is planning to establish a subsidiary in Australia to produce canola oil. The manufacturing facility will cost the parent company an initial investment of 5 million U.S. dollars (US$) to set up. The project will end in 3 years. At the end of the project, Elvis will sell the Australian subsidiary for A$8 million to an Australian agriculture firm. This amount is net of capital gain tax and is not subject to the withholding tax. Elvis estimates the after-tax net cash flows are A$6,400,000, A$3,000,000, and A$5,900,000 at the end of the first, second and third year, respectively. The Australian government will impose a corporate tax of 27% and a withholding tax of 19% on remitted funds. Additionally, the Australian law requires the subsidiary to operate locally at least for 3 years before it can remit earnings to its parent company. The parent's required rate of return for the Australian project is 10%. Suppose that the subsidiary can invest at 5% p.a. in Australia throughout the project duration and the exchange rate for the Australian dollar would remain unchanged at $0.141 throughout the project duration. Conduct a capital budgeting analysis to determine the feasibility of this project by completing the table below.

You are the ISO for a medium size company that works in paper, but not any paper but the paper that US dollars are made on.

Write an incident flow chart for some catastrophes happening to your company. Include a flow chart based on the situation.

You make up the catastrophe, man-made or nature or freak accident.

Which practice is in accordance with US GAAP? 1. a company values assets at their market value 2. a company recognizes expenses when they incur them 3. the monetary unit principle takes inflation into account 4. the accoutning period of a buisness keeps changing 5. businesses and owners are legally dependent

Identifying and Analyzing Financial Statement Effects of Share-Based Compensation
Weaver Industries implements a new share-based compensation plan in 2014. Under the plan, the company's CEO and CFO each will receive non-qualified stock options to purchase 100,000, no par shares. The options vest ratably (1/3 of the options each year) over three years, expire in 10 years, and have an exercise (strike) price of $27 per share. Weaver uses the Black-Scholes model to estimate a fair-value per option of $18.  

(a) Use the financial statement effects template to record the compensation expense related to these options for each year 2014 through 2016.

Use negative signs with answers, when appropriate.

(b) In 2017, the company's stock price is $24. If you were the Weaver Industries CEO, would you exercise your options? Explain.

Because the stock price is per share, the Weaver CEO should exercise the options because she can immediately sell them for that amount.

Because the stock price is per share, the Weaver CEO can immediately recognize a gain of $3 per share by exercising the options.

Because the stock price is per share, no gain or loss would be recognized if the Weaver CEO exercises her options and immediately sold her shares.

Because the stock price is per share, the options are under-water (out of the money) and the Weaver CEO should not exercise the options.

(c) In 2019, the company's stock price is $46 and the CEO exercises all of her options. Use the financial statement effects template to record the exercise.

Johan Yee has been a sales representative at a medium-sized textbook publishing house for five years. He has just been promoted by the sales director of his company to sales manager of a new territory. As sales manager, he is tasked with hiring and training three new sales representatives for his team.

a. Write a suitable job description and personnel specification for sales representatives.

b. Johan crafts a descriptive ad and receives hundreds of resumes in response.

He reads through them and chooses the 20 best candidates. To further screen candidates, he invites those 20 to take a test that profiles their skills. Which techniques can Johan use to interview with the candidates? Explain each. This Lesson: Sales Management.

If appropriate, include personal experience in your response.

Think of a time where you had sales goals at a job. If you had not worked at a job with sales goals, then use the internet to find one or interview a friend who had one. Answer the following questions and explain your answers:

What was the job and position?

Give an overview of the sales goals and time period to meet them.

Were you and other employees able to meet these goals?

Were the goals too tight or too loose?

Did the sales goals motivate employees or no?

Were there instances of unethical activities caused by the sales goals?

Do you believe having sales goals for employees benefited the company? Is there something they could have done better?