US Reshoring will be powerful economic force 2020-2025, Agree or Disagree

On January 1, 2020, Peppard Inc. acquired all of the stock of Smith Telecom for $85,000 in cash. At the date of acquisition, Smith's shareholders' equity accounts were as follows:

Common Stock, $1 par: $1,000

APIC: $14,000

Retained Earnings: ($3,000)

Treasury Stock: ($200)

Total: $11,800

Both companies have a December 31 year end. At the date of acquisition, Smith reported net assets had book values approximating fair value. However, it had previously unreported indefinite life identifiable intangibles valued at $15,000, meeting ASC Topic 805 requirements for capitalization. Impairment losses in 2020 for identifiable intangibles were $600. Goodwill from this acquisition was not impaired in 2020. Smith reported net income of $900 in 2020, and paid no dividends. Peppard uses the complete equity method to report its investment in Smith on its own books.

Additional information:

The amount of Goodwill that resulted from this acquisition is $58,200.

The equity in net income reported on Peppard's books in 2020 is $300.

Required:

Prepare eliminating entries (C), (E), (R), and (O), required to consolidate Peppard's trial balance accounts with those of Smith on December 21, 2020.

Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2020. As of that date, Jackson had the following trial balance:

During 2020, Jackson reported net income of $96,000 while paying dividends of $12,000. During 2021, Jackson reported net income of $132,000 while paying dividends of $36,000. Assume that Matthews Co. acquired the common stock of Jackson Co. for $588,000 in cash. As of January 1, 2020, Jackson's land had a fair value of $102,000, its buildings were valued at $188,000, and its equipment was appraised at $216,000. Any excess of consideration transferred over fair value of assets and liabilities acquired is due to an unamortized patent to be amortized over 10 years.

Matthews decided to use the equity method for this investment.

Required:

Using Excel

(A.) Prepare consolidation worksheet entries for December 31, 2020.

(B.) Prepare consolidation worksheet entries for December 31, 2021.

2.8 Measurement Period Adjustment with Income Effects

On November 1, 2019, Placer Corporation acquired all of the assets and liabilities of Sonata Company. The acquisition generated goodwill of $50,000,000. At the date of acquisition, Sonata’s equipment had an estimated fair value of $27,000,000, and a 4-year life, straight-line. On March 31, 2020, new information reveals that the equipment’s fair value was $36,000,000 at the date of acquisition. Placer’s accounting year ends on December 31.

Required:

Prepare the journal entry or entries to record the change in valuation of Sonata’s equipment on March 31, 2020, assuming the valuation change is within the measurement period, and depreciation has already been recorded through March 31. (Show any calculations made)

An employer is looking to fill some positions, and several college graduates are interviewed. From past experience, we know that the employer will offer second interviews to 65% of the college graduates. Of those graduates offered second interviews, 70% of them will be hired. Only 5% of the college graduates not offered second interviews will be hired.

1. a) What is the probability of getting offered a second interview and not getting hired?

2. b) What is the probability of getting hired and not being offered a 2nd interview?

3. c) What is the probability of a randomly selected graduate (from the original group) being hired?

4. d) What is the probability of getting hired, given that a second interview was granted?

5. e) What is the probability of having had a second interview, given that someone was hired?

An analyst is preparing a report for the CEO of a company. Two options for insurance, A and B, are available for purchase by the company. There is an 80% chance an incident will be covered with option A and 95% chance an incident will be covered if option B is used. Option B is more expensive, however, and the analyst estimates only a 30% chance the CEO will select it (the CEO will select option A the other 70% of the time).

Use the following notation:

A— option A is purchased
B— option B is purchased
C— a given incident is covered

Q

Which of the following is the correct representation of the information that is provided to us?

Q

What is the probability that an incident will be covered?

Q

A particular incident was covered. What is the probability that the CEO chose to purchase option A?

The Commonwealth Bank of Australia (CBA) recently announced a “cash net profit from continuing operations for the 2020 Financial Year of $7.3 billion”. What is Commonwealth’s dividend policy, and what was the total dividend paid to shareholders in 2019/20? https://www.commbank.com.au/about-us/investors/dividend-information.html

A New Zealand company produces 20,000 ounces of gold per year. It uses 30% of its production for making gold jewelry sold at a fixed price through stores in Australia and New Zealand, and the rest is sold on the market, where the gold price is determined in US dollars. Australia’s profits are repatriated to New Zealand. The company’s CEO wants to use futures contractc to hedge the entire production. He calls you to seeks your opinion. Recommend a seinsble hedge stragtegy that would be in line with the CEO’s wishes (assume x is the quantity used for making gold jewelry in the New Zealand)