During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,000 of gift cards. From experience, management estimates that 8% of the gift cards sold will not be redeemed by customers. In March, $2,000 of these cards is redeemed for merchandise with a cost of $500. In April, further $15,000 of these cards is redeemed for merchandise with a cost of $5,000. The company uses a perpetual inventory system.

Also in February, Be My Valentine had $1,000 of unused gift cards that were over one year old and were not expected to be used. The amount was in line with the company's normal breakage and all other gift cards of the same age had been used.

a. Prepare journal entries to record the transactions for February, March, and April.

b. How much income (if any) was earned in each of these months?

c. What liability (if any) would appear on the company's statement of financial position at the end of each of these months?

During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,000 of gift cards. From experience, management estimates that 8% of the gift cards sold will not be redeemed by customers. In March, $2,000 of these cards is redeemed for merchandise with a cost of $500. In April, further $15,000 of these cards is redeemed for merchandise with a cost of $5,000. The company uses a perpetual inventory system.

Also in February, Be My Valentine had $1,000 of unused gift cards that were over one year old and were not expected to be used. The amount was in line with the company's normal breakage and all other gift cards of the same age had been used.

a. Prepare journal entries to record the transactions for February, March, and April.

b. How much income (if any) was earned in each of these months?

c. What liability (if any) would appear on the company's statement of financial position at the end of each of these months?

Zachary Company has operating assets of $20,300,000. The company’s operating income for the most recent accounting period was $2,610,000. The Dannica Division of Zachary controls $8,210,000 of the company’s assets and earned $1,190,000 of its operating income. Zachary’s desired ROI is 8 percent. Zachary has $1,070,000 of additional funds to invest. The manager of the Dannica division believes that his division could earn $141,000 on the additional funds. The highest investment opportunity to any of the company’s other divisions is 9 percent.

Required

Calculate the ROI of Dannica Division.

(1) Before investment opportunity.

(2) Only on the new investment opportunity.

(3) Dannica total ROI if investment opportunity is accepted.

Calculate the Dannica Division residual income from the new investment opportunity. If residual income is used as the sole performance measure would the manager of the Dannica Division be likely to accept or reject the additional funding?

Thornton Company has operating assets of $19,500,000. The company’s operating income for the most recent accounting period was $2,690,000. The Dannica Division of Thornton controls $7,650,000 of the company’s assets and earned $1,220,000 of its operating income. Thornton’s desired ROI is 9 percent. Thornton has $1,100,000 of additional funds to invest. The manager of the Dannica division believes that his division could earn $141,000 on the additional funds. The highest investment opportunity to any of the company’s other divisions is 10 percent.

Required

1. Calculate the ROI of Dannica Division.

1. (1) Before investment opportunity.

2. (2) Only on the new investment opportunity.

3. (3) Dannica total ROI if investment opportunity is accepted.

3. Calculate the Dannica Division residual income from the new investment opportunity. If residual income is used as the sole performance measure would the manager of the Dannica Division be likely to accept or reject the additional funding?

Rooney Company has operating assets of $19,100,000. The company’s operating income for the most recent accounting period was $2,710,000. The Dannica Division of Rooney controls $7,940,000 of the company’s assets and earned $1,250,000 of its operating income. Rooney’s desired ROI is 8 percent. Rooney has $1,130,000 of additional funds to invest. The manager of the Dannica division believes that his division could earn $146,000 on the additional funds. The highest investment opportunity to any of the company’s other divisions is 9 percent.

Required

1. Calculate the ROI of Dannica Division.

1. (1) Before investment opportunity.

2. (2) Only on the new investment opportunity.

3. (3) Dannica total ROI if investment opportunity is accepted.

3. Calculate the Dannica Division residual income from the new investment opportunity. If residual income is used as the sole performance measure, would the manager of the Dannica Division be likely to accept or reject the additional funding?

No handwriting or photo (tax accounting)

a-Explain the different concepts of income from accounting, economics and taxation perspectives

b-What is the difference between deductions for and deductions from adjusted gross income AGI under US tax law? Give two examples of each deduction

International Financial Management Case 2:

Bitcoin as an international digital currency Bitcoin and other cryptocurrencies based on blockchain technology have been around for over a decade now. The former President of the European Central Bank, Mario Draghi, was asked about Bitcoins. He told Debating Europe he would not call Bitcoin a currency for a couple of reasons. One of them was that “a Euro today is a Euro tomorrow. Its value is stable. The value of Bitcoin oscillates wildly”. Isn’t this a big problem for cryptocurrencies like Bitcoin? How can we use them as currency if their value is not stable?

Mr. Josh, who is an owner of a digit currency on the other hand argues for a Bitcoin as follows: Our current system is not so rosy. Just look at what happened in 2008: we placed our money in banks and they failed us. What’s to prevent that from happening again? Do you have a say in the European Central Bank’s (ECB) or the US Federal Reserve’s monetary policy? We are already living with a highly volatile system, which could be pushed to the brink should another financial crisis occur. Cryptocurrency offers a possible alternative to our failing financial system. Is it not wiser to start placing trust in algorithms rather than fallible individuals?

Questions:

1. What are Bitcoins? How do they operate as an international currency?

2. There are two opposing views about Bitcoins. Explain the arguments for and against Bitcoins as a currency?

3. Would do you invest in Bitcoins? Why or Why not? Give detail reasons.

Put your opinion in 3 paragraphs????
  
How has the situation changed since the beginning of 2017? (new President)

“We will have two simple rules when it comes to this massive rebuilding effort, buy American and hire American,” said President Donald J. Trump. In April 2017, President Trump signed an executive order promoting American industry and protecting it from unfair competition. With that being said, President Trump is taking action to enforce laws promoting American industry and targeting companies (such as India’s IT outsourcing Infosys) who routinely abuse the H-1B visa program by replacing American workers with lower paid foreign workers.

Another example of change since President Trump took office is that he started a trade war to destroy China’s economy. Fast-forward to 2018, he tweeted that—“Apple prices may increase because of the massive Tariffs we may be imposing on China. Start building new plants now.” In November 2018, President Trump he signed a new trade agreement with Mexico and Canada (US-Mexico-Canada Agreement aka USMCA) to replace NAFTA. With that being said, some of the specifications of the agreement requires that 40% of cars eventually be made in countries that pay autoworkers at least $16 an hour – that is, the US and Canada and not Mexico – to qualify for duty-free treatment under the trade pact. It also requires Mexico to pursue reforms of labor law to encourage independent unions.