the question is what if I early distribution from 401K, what percentage should I pay the addition tax in 2020?

QUESTION FIVE                                                                                                                   [10]

The following information was extracted from the accounting records of Humid Limited for the year ended 31 May 2020:

Humid Ltd

Summary of the statement of profit and loss and other comprehensive income

for the year ended 31 May 2020                                                                          .

Humid Ltd

Extract from the statement of financial position as at 31 May 2020.                                                                        

Required:

Prepare the following section of the statement of cash flows of Humid Limited for the year ended 31 May 2020:

• “Cash generated by operations” section only.  

Note that the entire “cash flows from operating activities” section is not required.

Humid Limited uses the indirect method to prepare its statement of cash flows.

A company in the United States, imports and exports equipment. The company uses a perpetual inventory system. During May the company entered into the following transactions. All rate quotations are direct exchange rates.

May 2 Purchased power tools from a wholesaler in Japan, on account, at an invoice cost of 1,600,000 yen. On this date the exchange rate for the yen was $.0072.

4 Sold hand tools on credit that were manufactured in the U.S. to a retail outlet located in West Germany. The invoice price was $2,800. The exchange rate for marks was $.5829.

8 Sold electric drills on account to a retailer in New Zealand. The invoice price was 16,800 U.S. dollars and the exchange rate for the New Zealand dollar was $.576. 10 Purchased drill bits on account from a manufacturer located in Belgium. The billing was for 801,282 francs. The exchange rate for francs was $.0312.

15 Paid 1,000,000 yen on account to the wholesaler for purchases made on May 2. The exchange rate on this date was $.0067.

17 Settled the accounts payable with the Belgium manufacturer. The exchange rate was $.0368.

21 Received full payment from the New Zealand retailer. The exchange rate was $.568.

29 Completed payment on the May 2 purchase. The exchange rate was $.0078.
(Show calculations)
Prepare journal entries on the books of the US Company to record the transactions listed above.

The following information is used for the following two questions. Ping and Slazenger Company (its 90% owned affiliate) reported the following income information for year X1:

During Year X1, Slazenger made sales of $20,000 to Ping. Slazenger’s Cost of Sales was $10,000. As of 12/31/X1, Ping had still owned 60% of the units acquired from Slazenger. Based on this information, how much Consolidated Income should Ping report?

Please select the correct answer below only one:

a. $140,000

b. $144,000

c. $146,000

d. $150,000

e. None of the Above

Warren Corporation acquires a used machine (five-year property) on December 28, 2017, at a cost of $250,000. Henry Corporation also acquires another used machine (seven-year property) on January 19, 2017, at a cost of $75,000. The company does not make the § 179 elections.

a. Determine the depreciation deduction for these assets in 2017.   

b. Determine the depreciation deduction under H.R. 1 assuming these assets were placed in service on the same dates in 2018.

c. Warren Corporation also purchases Microsoft Office from Microsoft for use in its business as of January 1 of the current year at a cost of $30,000. No hardware was acquired. How much of the cost can Warren Corporation deduct this year?

d. Complete Form 4562 for Warren Corporation to report the depreciation and amortization for questions a. and c above.

Problem 6-1B Inventory ownership—perpetual LO1
On November 30, 2020, York + Robin Shoes (Y+R) performed the annual inventory count and determined the

year-end ending inventory value to be $49,222. It is now December 3, 2020, and you have been asked to double-
check the inventory listing. Y+R uses a perpetual inventory system. Note: Only relevant items are shown on

the inventory listing.

York + Robin Shoes
Inventory Listing
Year-Ended November 30, 2020

#
Inventory
Number Inventory Description Quantity (units) Unit Cost ($) Total Value ($)
1 A20 Men’s brown dress shoes 74 $50 $ 3,700
2 B30 Women’s black boots 50 30 1,500
. . . . . .
Total Inventory $49,222

CHAPTER 6 Inventory Costing and Valuation

456
The following situations have been brought to your attention:
a. On November 28, 2020, Y+R received a customer order for men’s sneakers (Item # D50) with a sale price
of $1,000 and cost of $600, FOB shipping. The order was shipped on November 30, 2020. Y+R did not
include this inventory.
b. On December 2, 2021, Y+R received a shipment of $1,500 women’s black boots (Item # B30). The inventory
was purchased November 22, 2020, FOB destination from Global Threads. This inventory was included in
Y+R’s inventory count and inventory listing.
c. Women’s sandals (Item # C40) were purchased and shipped from International Sole Co. on November 30,
2020 for $2,300, FOB shipping. The shipment arrived December 5, 2020 and the appropriate party paid for
the shipping charges of $230. Additional costs were $161 for import duties and $86 for insurance during
shipment.
d. On November 30, 2020, Y+R shipped women’s flip flops (Item #E60) to a customer for $2,520, FOB
destination. The inventory cost $1,800 and the customer received the goods on December 3, 2020. Y+R has
not included this inventory.
e. Y+R had been holding $3,700 of men’s brown dress shoes (Item #A20) on consignment for designer Blue
Co. as at November 30, 2020. This inventory was included in Y+R’s inventory count and inventory listing.
Required
1. In situations (a) to (e), determine whether each of the following should be included or excluded in
inventory as at November 30, 2020 and explain why. If the inventory should be included, determine
the inventory cost.

2. Determine the correct ending inventory value at November 30, 2020. Starting with the unadjusted inven-
tory value of $49,222, add or subtract any errors based on your analysis in Part 1. Assume all items that are

not shown in the inventory listing or discussed in situations (a) to (e) are recorded correctly.

In 2010, Ticketmaster found out the hard way that the
entertainment industry is not, in fact, as recession-proof as
it was once widely believed to be. Th e company, which sells
tickets for live music, sports, and cultural events, and which
represents a signifi cant chunk of parent company’s Live
Nation Entertainment’s business, saw a drop in ticket sales
that year of a disconcerting 15 percent. Th en there was the
mounting negative press, including artist boycotts, the vitriol
of thousands of vocal customers, and a number of major
venues refusing to do business with Ticketmaster.
Yet 2012 has been more friendly to the company—under

the leadership of former musician and Stanford MBA-
educated CEO Nathan Hubbard, who took over in 2010

when Ticketmaster merged with Live Nation, the country’s
largest concert promoter. Th ird-quarter earnings were
strong, with just under $2 billion in revenue, a 10 percent
boost from the same period last year, driven largely by Live
Nation’s ticketing and sponsorship divisions. Ticketmaster
was largely responsible as well, thanks to the sale of 36 million
tickets worth $2.1 billion, generating $82.1 million in adjusted
operating income, which translates to an increase of
51 percent for the year.
Th at’s because Hubbard knows how to listen, and read the
writing on the wall, “If we don’t disrupt ourselves, someone
else will,” he said, “I’m not worried about other ticketing
companies. Th e Googles and Apples of the world are our
competition.”
Some of the steps he took to achieve this included to
the creation of LiveAnalytics, a team charged with mining
the information (and related opportunities) surrounding
200 million customers and the 26 million monthly site visitors,
a gold mine that he thought was being ignored. Moreover
Hubbard redirected the company from being an infamously
opaque, rigid and infl exible transaction machine for ticket
sales to a more transparent, fan-centered e-commerce
company, one that listens to the wants and needs of customers
and responds accordingly. A few of the new innovations rolled
out in recent years to achieve this include an interactive venue
map that allows customers to choose their seats (instead of
Ticketmaster selecting the “best available”) and the ability to
buy tickets on iTunes.
Hubbard eliminated certain highly unpopular service
fees, like the $2.50 fee for printing one’s own tickets, which
he announced in the inaugural Ticketmaster blog he created.

Much to the delight of event goers—and the simultaneous
chagrin of promoters and venue owners, who feared that the
move would deter sales—other eff orts toward transparency

included announcing fees on Ticketmaster’s fi rst transaction-
dedicated page, instead of surprising customers with them at

the end, while consolidating others. “I had clients say, ‘What
are you doing? We’ve been doing it this way for 35 years,’”
Hubbard recalled, “I told them, ‘You sound like the record
labels.’”
Social media is an integral part of listening, and of course,
“sharing.” Ticketmaster alerts on Facebook shows friends of
purchasers who is going to what show. An app is in the works
that will even show them where their concertgoing friends
will be seated. Not that it’s all roses for Ticketmaster—yet.
Growth and change always involve, well, growing pains,
and while goodwill for the company is building, it will take
some time to shed the unfortunate reputation of being the
company that “everyone loves to hate.” Ticketmaster made
embarrassing headlines in the fi rst month of 2013 after
prematurely announcing the sale of the president’s Inaugural
Ball and selling out a day early as a result, disappointing
thousands. But as the biggest online seller of tickets for
everything from golf tournaments to operas to theater to
rock concerts, and with Hubbard’s more customer-friendly
focus, Ticketmaster should have plenty of opportunity to
repent their mistakes.

Question:

1. Identify the problems that Ticketmaster was facing, using cause and effect analysis. What were the Symptomatic Effects? What were the Underlying Causes?

2. What process(es) did Nathan Hubbard use to Generate Alternatives? What alternatives were available to Mr. Hubbard? What types of Uncertainty did he experience?

In 2010, Ticketmaster found out the hard way that the
entertainment industry is not, in fact, as recession-proof as
it was once widely believed to be. Th e company, which sells
tickets for live music, sports, and cultural events, and which
represents a signifi cant chunk of parent company’s Live
Nation Entertainment’s business, saw a drop in ticket sales
that year of a disconcerting 15 percent. Th en there was the
mounting negative press, including artist boycotts, the vitriol
of thousands of vocal customers, and a number of major
venues refusing to do business with Ticketmaster.
Yet 2012 has been more friendly to the company—under

the leadership of former musician and Stanford MBA-
educated CEO Nathan Hubbard, who took over in 2010

when Ticketmaster merged with Live Nation, the country’s
largest concert promoter. Th ird-quarter earnings were
strong, with just under $2 billion in revenue, a 10 percent
boost from the same period last year, driven largely by Live
Nation’s ticketing and sponsorship divisions. Ticketmaster
was largely responsible as well, thanks to the sale of 36 million
tickets worth $2.1 billion, generating $82.1 million in adjusted
operating income, which translates to an increase of
51 percent for the year.
Th at’s because Hubbard knows how to listen, and read the
writing on the wall, “If we don’t disrupt ourselves, someone
else will,” he said, “I’m not worried about other ticketing
companies. Th e Googles and Apples of the world are our
competition.”
Some of the steps he took to achieve this included to
the creation of LiveAnalytics, a team charged with mining
the information (and related opportunities) surrounding
200 million customers and the 26 million monthly site visitors,
a gold mine that he thought was being ignored. Moreover
Hubbard redirected the company from being an infamously
opaque, rigid and infl exible transaction machine for ticket
sales to a more transparent, fan-centered e-commerce
company, one that listens to the wants and needs of customers
and responds accordingly. A few of the new innovations rolled
out in recent years to achieve this include an interactive venue
map that allows customers to choose their seats (instead of
Ticketmaster selecting the “best available”) and the ability to
buy tickets on iTunes.
Hubbard eliminated certain highly unpopular service
fees, like the $2.50 fee for printing one’s own tickets, which
he announced in the inaugural Ticketmaster blog he created.

Much to the delight of event goers—and the simultaneous
chagrin of promoters and venue owners, who feared that the
move would deter sales—other eff orts toward transparency

included announcing fees on Ticketmaster’s fi rst transaction-
dedicated page, instead of surprising customers with them at

the end, while consolidating others. “I had clients say, ‘What
are you doing? We’ve been doing it this way for 35 years,’”
Hubbard recalled, “I told them, ‘You sound like the record
labels.’”
Social media is an integral part of listening, and of course,
“sharing.” Ticketmaster alerts on Facebook shows friends of
purchasers who is going to what show. An app is in the works
that will even show them where their concertgoing friends
will be seated. Not that it’s all roses for Ticketmaster—yet.
Growth and change always involve, well, growing pains,
and while goodwill for the company is building, it will take
some time to shed the unfortunate reputation of being the
company that “everyone loves to hate.” Ticketmaster made
embarrassing headlines in the fi rst month of 2013 after
prematurely announcing the sale of the president’s Inaugural
Ball and selling out a day early as a result, disappointing
thousands. But as the biggest online seller of tickets for
everything from golf tournaments to operas to theater to
rock concerts, and with Hubbard’s more customer-friendly
focus, Ticketmaster should have plenty of opportunity to
repent their mistakes.

Questions

How did Mr. Hubbard select his most desirable alternative? Describe which type of Decision Making he used, and explain your findings.

Were the recent decisions that Mr. Hubbard made effective, according to the concepts in Chapter 7 – Decision Making? Explain your response.

4. Suppose your company has opened a futures position in the Brazilian Real futures contract traded on the CME Group. One contract is worth 100,000 Brazilian Reais, and the price quote is given as # USD per 1 Brazilian Real. Suppose today’s futures price for the Brazilian Real futures contract that expires in October is ‘0.1883’. If the daily changes in the settlement prices over the next 5 days turn out to be 0.0015, 0.0010, -0.0005, 0.0020, and -0.0025 (quoted on same basis as the price--#US$ per 1 Brazilian Real), what would be the total marking-to-market change in the value of the contract over the 5 days? If your company was long Brazilian Real, would it have gained or lost from this marking-to-market change in value (assume 1 contract)?

ABC is a company that just bought goods from a french company for 500 million euros with payment due in 4 months. Assume the following:

Spot rate $1.30/euro

4 month forward rate $1.31/euro

4 month french interest rate 8% pa; US 6% pa

4 month call option on euros at a strike price of $1.29/euro with a 3% premium

4 month put option on euros at a strike price of $1.305/euro with a 4% premium

Questions:

1, The proceeds of the forward market hedge are?

2. The proceeds of the money market are?

3.The future value of the appropriate premium is?

4. Breakeven exchange rate between forward market hedge and your option alternative?

Please show how you got the answers so I can understand