accounting question

On 1 April 2010 Parent Ltd acquired 90% of the equity in Subsidiary Ltd for $650 000 cash. At this date the equity of Subsidiary Ltd comprised:

Part A

(a) Assume the net assets of Subsidiary Ltd were at fair value on 1 April 2010. Prepare the notional journal entry to offset the carrying amount of the asset Investment in Subsidiary Ltd and the parent’s portion of equity in Subsidiary Ltd in accordance with the requirements of NZ IFRS 3 Business Combinations and NZ IFRS 10 Consolidated Financial Statements.

(b) Assume the net assets of Subsidiary Ltd were not at fair value on 1 April 2010. At the date of acquisition Subsidiary Ltd had an unrecognised intangible asset of $22 000 and a contingent liability of $8 000. Prepare the notional journal entry to offset the carrying amount of the asset Investment in Subsidiary Ltd and the parent’s portion of equity in Subsidiary Ltd in accordance with the requirements of NZ IFRS 3 Business Combinations and NZ IFRS 10 Consolidated Financial Statements.

(c) Briefly explain why the amount of acquired goodwill recognised above in (a) and (b) will not be the same amount.

Part B

Assume the net assets of Subsidiary Ltd were at fair value on 1 April 2010. Prepare the notional journal entry to identify the non-controlling interest (NCI) in Subsidiary Ltd to be reported in the group accounts as at 31 March 2017 in accordance with the requirements of NZ IFRS 3 Business Combinations and NZ IFRS 10 Consolidated Financial Statements. Parent Ltd measures the NCI at the NCI’s proportionate share of the acquiree’s identifiable net assets.

Additional information provided for Part B:

(i) During March 2016 Subsidiary Ltd made sales to Parent Ltd and realised a profit of

$2 000. At 31 March 2016 this purchase was included in the inventory balance of Parent Ltd.

(ii) During March 2017 Subsidiary Ltd made sales to Parent Ltd and realised a profit of

$3 000. Parent Ltd had not sold this purchase of inventory by 31 March 2017.

(iii) At the date of consolidation 31 March 2017 the equity of Subsidiary Ltd comprised:

(iv) The directors of Parent Ltd believe the acquired goodwill in Subsidiary Ltd was impaired by $4 500 in the year ended 31 March 2017.

Question 1 continued:

health insurance benefits vary by the size of the company (Atlanta Business chronicle, December 31, 2010). The sample data below show the number of companies providing health insurance for small, medium, and large companies. for purposes of this study, small companies are companies that have fewer than 100 employees. Medium-sized com- panies have 100 to 999 employees, and large companies have 1000 or more employees.

The questionnaire sent to 225 employees asked whether or not the employee had health
insurance and then asked the employee to indicate the size of the company.
a.   Conduct a test of independence to determine whether health insurance coverage is independent of the size of the company. What is the p-value? using a .05 level of significance, what is your conclusion?
b.   a newspaper article indicated employees of small companies are more likely to lack health insurance

Size of the Company Health Insurance   Small   Medium   Large
Yes 36 65 88 No 14 10 12

The 8% $30 million convertible loan note was issued on 1 April, 2010 at par. Interest is payable annually in arrears on 31 March each year.
The loan note is redeemable at par on 31 March, 2013 or convertible into equity shares at the option of the loan note holders on the basis
of 30 equity shares for each $100 of loan note. The company’s finance director has calculated that to issue an equivalent loan note without
the conversion rights it would have to pay an interest rate of 10% per annum to attract investors.
The present value of $1 receivable at the end of each year, based on discount rates of 8% and 10% are:
8% 10%
End of year 1 0·93 0·91
2 0·86 0·83
3 0·79 0·75
What value should appear as the interest charge for the year ended 31 March, 201

Amazonia Ltd purchased Buildings for $4 million on July 1st 2010. The estimated useful life was 20 years. The estimated residual was $800,000.

Amazonia Ltd applies the AASB 116 fair value (revaluation model) to recognise its Buildings.

On 30^th June 2014 the extract of the Balance Sheet indicated the following for Buildings.

Non-Current Asset

Buildings

Cost                                         4,000,000                                           

Accumulated Depreciation     (640,000)

On 30 June 2015 the following is information for Buildings

Fair Value                               $3,620,000

Cost to sell                              $100,000

Value in use                            $3,800,000

On 30 June 2016 the following is information for the Buildings

Fair Value                               $2,816,000

Cost to sell                              $120,000

Value in use                            $3,200,000

On 30 June 2017 the following is information for the Buildings

Fair Value                               $3,140,000

Cost to sell                              $140,000

Value in use                            $3,400,000

Required

Prepare all general journal entries for the Buildings for the year ended 30 June 2015. Show all workings and justify your answer.

Prepare all general journal entries for the Buildings for the year ended 30 June 2016. Show all workings and justify your answer.

Prepare all general journal entries for the Buildings for the year ended 30 June 2017. Show all workings and justify your answer

Hansell Company’s management wants to prepare budgets for one of its products, duraflex, for July 2010.
The firm sells the product for $80 per unit and has the following expected sales (in units) for these months
in 2010:

April May June July August September
5,000 5,400 5,500 6,000 7,000 8,000

The production process requires 4 pounds of dura-1000 and 2 pounds of flexplas. The firm’s policy is to
maintain an ending inventory each month equal to 10 percent of the following month’s budgeted sales, but
in no case less than 500 units. All materials inventories are to be maintained at 5 percent of the production
needs for the next month, but not to exceed 1,000 pounds. The firm expects all inventories at the end of
June to be within the guidelines. The purchase department expects the materials to cost $1.25 per pound and
$5.00 per pound for dura-1000 and flexplas, respectively.
The production process requires direct labor at two skill levels. The rate for labor at the K102 level is $50
per hour and for the K175 level is $20 per hour. The K102 level can process one batch of duraflex per hour;
each batch consists of 100 units. The manufacturing of duraflex also requires one-tenth of an hour of K175
workers’ time for each unit manufactured.
Variable manufacturing overhead is $1,200 per batch plus $80 per direct labor-hour. The company uses
an actual cost system with a LIFO cost-flow assumption.
Required On the basis of the preceding data and projections, prepare the following budgets:
a. Sales budget for July (in dollars).
b. Production budget for July (in units).
c. Production budget for August (in units).
d. Direct materials purchases budget for July (in pounds).
e. Direct materials purchases budget for July (in dollars).
f. Direct manufacturing labor budget for July (in dollars).

On July 1, 2010 a semi-annual $800,000 5 year bond with contractual (or coupon) rate of 10% had a Net book value of $704,171. The bond had been issued at a discount rate of 16% and matures on December 31, 2012. The total interest expense recorded on June 30, 2011 (rounded) would be:

The answer is $57,640

I need a step by step show of how this is done and why each step is the way that it is. Please prep me for the exam. Please make everything clear.

A PEW POLL TAKEN IN 2010 SURVEYED 830 PEOPLE AGED 18-29, AND FOUND THAT 166 OF
They HAD ONE OR MORE TATTOOS. CAN YOU CONCLUDE THAT THE PERCENTAGE OF PEOPLE
AGED 18-29 WHO HAS A TATTOO IS LESS THAN 25%.

a) WRITE THE HYPOTHESIS TEST.

b) WHAT KIND OF TEST IS IT?

c) WHAT IS THE SAMPLE MEAN?

d) FIND THE STANDARD ERROR.

e) DRAW THE BELL CURVE RELATIVE TO H 0

f) FIND THE Z STAT FOR THE SAMPLE MEAN THAT YOU FOUND IN (C)

g) DRAW THE P-VALUE REGION ON THE STANDARD BELL

h) FIND THE P-VALUE

i) WHAT IS THE RESULT AT α = 0.01?

j) WRITE A SENTENCE ABOUT THE RESULT WITH RESPECT

Consider the following information:

• Cash and cash equivalents at 31 December 2010 = $1.50 million
• Cash and cash equivalents at 31 December 2011 = $1.85 million
• Interest expense = $0.48 million
• Net borrowings = $0.25 million
• Cash dividends = $1.25 million

Given a tax rate of 40%, the firm's FCFF at the end of 2011 is closest to:

Select one:

a. $1,830,000

b. $1,638,000

c. $388,000

Question 13

Question text

Assuming a tax rate of 40%, a $100 increase in which of the following would not impact FCFF and decrease FCFE by $60?

Select one:

a. Notes payable

b. Interest expense

c. Accounts payable

Question 14

Question text

How do net income and EBITDA, respectively, rate as proxies for cash flows in the FCFE and FCFF formulas?

Select one:

a. Good

b. No use

c. Poor