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.

Stock Investment Transactions, Equity Method and Available-for-Sale Securities

Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31:

1. Year 1
   Jan. 18.	Purchased 6,300 shares of Malmo Inc. as an available-for-sale investment at $48 per share, including the brokerage commission.
   July 22.	A cash dividend of $0.50 per share was received on the Malmo stock.
   Oct. 5.	Sold 2,800 shares of Malmo Inc. stock at $53 per share less a brokerage commission of $40.
   Dec. 18.	Received a regular cash dividend of $0.50 per share on Malmo Inc. stock.
   Dec. 31	Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $45 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment.
   Year 2
   Jan. 25.	Purchased an influential interest in Helsi Co. for $730,000 by purchasing 48,000 shares directly from the estate of the founder of Helsi. There are 120,000 shares of Helsi Co. stock outstanding.
   July 16.	Received a cash dividend of $0.60 per share on Malmo Inc. stock.
   Dec. 16.	Received a cash dividend of $0.60 per share plus an extra dividend of $0.15 per share on Malmo Inc. stock.
   Dec. 31	Received $22,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $90,000 in Year 2. Glacier Products Inc. uses the equity method of accounting for its investment in Helsi Co.
   Dec. 31	Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $51 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the increase in fair value from $45 to $51 per share.

   Required:

   1. Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places.

   Date	Description	Debit	Credit
   Year 1
   Jan. 18.
   July 22.
   Oct. 5.
   Dec. 18.
   Dec. 31
   Year 2
   Jan. 25.
   July 16.
   Dec. 16.
   Dec. 31-Dividends
   Dec. 31-Income
   Dec. 31-Valuation

   2. Prepare the investment-related asset and stockholders’ equity balance sheet presentation for Glacier Products Inc. on December 31, Year 2, assuming that the Retained Earnings balance on December 31, Year 2, is $533,000.

   Glacier Products, Inc. Balance Sheet (selected items) December 31, Year 2
   Current Assets:
   Investments:
   Stockholders' Equity:

1. Stock Investment Transactions, Equity Method and Available-for-Sale Securities

   Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31:

   Year 1
   Jan. 18.	Purchased 7,900 shares of Malmo Inc. as an available-for-sale investment at $36 per share, including the brokerage commission.
   July 22.	A cash dividend of $0.45 per share was received on the Malmo stock.
   Oct. 5.	Sold 2,400 shares of Malmo Inc. stock at $39 per share less a brokerage commission of $50.
   Dec. 18.	Received a regular cash dividend of $0.45 per share on Malmo Inc. stock.
   Dec. 31	Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $33 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment.
   Year 2
   Jan. 25.	Purchased an influential interest in Helsi Co. for $770,000 by purchasing 38,500 shares directly from the estate of the founder of Helsi. There are 110,000 shares of Helsi Co. stock outstanding.
   July 16.	Received a cash dividend of $0.55 per share on Malmo Inc. stock.
   Dec. 16.	Received a cash dividend of $0.55 per share plus an extra dividend of $0.15 per share on Malmo Inc. stock.
   Dec. 31	Received $23,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $95,000 in Year 2. Glacier Products Inc. uses the equity method of accounting for its investment in Helsi Co.
   Dec. 31	Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $40 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the increase in fair value from $33 to $40 per share.

   Required:

   1. Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places.

   Date	Description	Debit	Credit
   Year 1
   Jan. 18.
   July 22.
   Oct. 5.
   Dec. 18.
   Dec. 31
   Year 2
   Jan. 25.
   July 16.
   Dec. 16.
   Dec. 31-Dividends
   Dec. 31-Income
   Dec. 31-Valuation

   2. Prepare the investment-related asset and stockholders’ equity balance sheet presentation for Glacier Products Inc. on December 31, Year 2, assuming that the Retained Earnings balance on December 31, Year 2, is $562,000.

   Glacier Products, Inc. Balance Sheet (selected items) December 31, Year 2
   Current Assets:
   Investments:
   Stockholders' Equity:

Check My Work2 more Check My Work uses remaining.

Stock Investment Transactions, Equity Method and Available-for-Sale Securities

Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31:

Required:

1. Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places.

2. Prepare the investment-related asset and stockholders’ equity balance sheet presentation for Glacier Products Inc. on December 31, Year 2, assuming that the Retained Earnings balance on December 31, Year 2, is $431,000.

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

On January 1, 2018, a machine was purchased for $122,500. The machine has an estimated salvage value of $7,300 and an estimated useful life of 5 years. The machine can operate for 120,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2018, 24,000 hrs; 2019, 30,000 hrs; 2020, 18,000 hrs; 2021, 36,000 hrs; and 2022, 12,000 hrs.

Compute the annual depreciation charges over the machine’s life assuming a December 31 year-end for each of the following depreciation methods. (Round answers to 0 decimal places, e.g. 45,892.)

eTextbook and Media

Assume a fiscal year-end of September 30. Compute the annual depreciation charges over the asset’s life applying each of the following methods. (Round answers to 0 decimal places, e.g. 45,892.)

In 2018, Simon Corporation began selling a new line of toasters that carry a three-year warranty against defects. Based upon past experiences with similar products, the estimated warranty costs related to dollar sales are as follows:

                  First year after sale                           2%

                  Second year after sale                       4%

                  Third year after sale                          6%

Sales and actual warranty expenditures for 2018, 2019 and 2020 are presented below:

Instructions:

1. Prepare the journal entries to record the above transactions for the third fiscal year only (the one ending December 31, 2020), including:

1. the initial journal entry to record the sales. Assume all sales are “on account.”
2. The Warranty Expenditures for the year, and
3. The year end adjustment to record the warranty expense.

Assume the company uses the “expense warranty approach” for recording estimated warranty liabilities (like the assignment you handed it). Don’t forget the narratives! And Show Calculations.

2. Calculate the amount that Simon should report as warranty expense on its 2020 income statement.

3. What will be the balance in the “Estimated Warranty Liability” account as at December 31^st 2020? Consider using a “T” account to prove your answer (not mandatory).

On January 1, 2018, a machine was purchased for $102,500. The machine has an estimated salvage value of $7,580 and an estimated useful life of 5 years. The machine can operate for 113,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2018, 22,600 hrs; 2019, 28,250 hrs; 2020, 16,950 hrs; 2021, 33,900 hrs; and 2022, 11,300 hrs.

Compute the annual depreciation charges over the machine’s life assuming a December 31 year-end for each of the following depreciation methods. (Round answers to 0 decimal places, e.g. 45,892.)

eTextbook and Media

Assume a fiscal year-end of September 30. Compute the annual depreciation charges over the asset’s life applying each of the following methods. (Round answers to 0 decimal places, e.g. 45,892.)