Crane Company has a July 31 fiscal year end and uses a perpetual inventory system. The records of Crane Company show the following data:

After its July 31, 2021, year end, Crane discovered two errors:

Prepare corrected income statements for Crane for the years ended July 31, 2019, 2020, and 2021.
Calculate the incorrect and correct inventory turnover ratios for 2020 and 2021. (Round answers to 2 decimal places, e.g. 52.75.)

For your fictitious healthcare service, you will create a balance sheet and income statement based upon the following financial transactions occurring during your start-up year:

6. May 1, 2020 through December 31, 2020: You use $30,000 in supplies to provide healthcare services to your patients each month. You record the use of supplies on the last day of each month.

7. June 1, 2020: You pay your suppliers $80,000 for supplies purchased on credit.

8. July 1, 2020: You receive payments from health insurance companies totaling $250,000.

9. August 1, 2020:

a. You purchase $160,000 of supplies on credit for use in caring for your patients.

b. You receive payments from health insurance companies totaling $320,000

10. September 1, 2020: You receive payments from health insurance companies totaling $225,000.

11. October 1, 2020: You receive payments from health insurance companies totaling $310,000.

In a few paragraphs, please describe your view of the United Nations, its role on the global arena, and your assessment about how it has been handling global crisis situations. Do you think the United Nations is still effective in meetings its purpose?

Antara Ltd operates in the construction industry and do not prepare consolidated financial statements. Laura Jones is the senior accountant of the company, leading the financial reporting team. As a result of being profitable for the last five years, on 1 July 2018, Antara Ltd acquired 25% of the issued ordinary shares of Blanca Ltd paying $198 000 in cash. This provided Antara Ltd with the significant influence over Blanca Ltd. At the acquisition date, Laura and her team received the information below for Blanca Ltd:  Equity comprised $180 000 share capital and $144 000 retained earnings.  All identifiable assets and liabilities were recorded at their carrying amounts equal to the fair values with the exceptions of three assets: Inventory, Land, and Equipment. $ $ Inventory 126 000 153 000 Land 162 000 198 000 Equipment 414 000 432 000 Other information related to the above assets includes:  Blanca Ltd sold all the inventory by 30 June 2020.  After acquisition, Land was revalued by Blanca Ltd and revaluation was recognised in Blanca Ltd’s own accounting book. The company uses the revaluation model to account for its non-current assets. At 30 June 2019, Blanca Ltd had Land recorded at $252 000 fair value, and at 30 June 2020 at $288 000 fair value.  Blanca Ltd planned to use Equipment for another 5 years, using the straight line method of depreciation. During two financial years following the acquisition, Antara Ltd and Blanca Ltd carried out the inter-entity transactions below.  Antara Ltd sold a machine to Blanca Ltd for $85 000. The machine had a carrying amount of $79 600 at the time of sale on 1 January 2019. Blanca Ltd planned to use the machine for a further 3-year with depreciation based on the straight line method.  On 15 May 2019, Antara Ltd sold inventory to Blanca Ltd for $20 800. The inventory had cost Antara Ltd $10 000. Blanca Ltd sold half of the inventory externally by 30 June 2019.  On 30 April 2020, Antara Ltd sold inventory to Blanca Ltd for $126 000. The profit before-tax of this transaction was $14 400. Blanca Ltd sold 90% of the inventory externally by 30 June 2020. ACCT6005 Assessment 2 Case Study Brief.docx Page 3 of 6 Blanca Ltd’s balance of Retained earnings at 30 June 2019 was $306 000. Both companies apply the tax rate of 30%. Laura approved the following consolidated statements of profit or loss and other comprehensive incomes for Antara Ltd and Blanca Ltd for the year ended 30 June 2020. She made a note that the statement for Antara Ltd does not include the financial results of Blanca Ltd prepared using the equity account method. Accounts Revenues $900 000 $432 000 Expenses 504 000 144 000 Profit before tax 396 000 288 000 Income tax expense (144 000) (90 000) Profit after tax 252 000 198 000 Other comprehensive income (OCI) items Gains on non-current asset revaluation 54 000 25 200 Comprehensive income $306 000 $223 200 For the financial year ended 30 June 2020, the Chief Financial Officer (CFO) of Antara Ltd has been advised by the company’s auditor that the consolidated financial statements should be prepared, which include the financial results of Blanca Ltd based on the equity method. The CFO came to Laura seeking her professional opinions regarding this matter. Laura has decided to ask you as a member of her reporting team to undertake a number of tasks to provide her with sufficient information before she responds to the CFO. The tasks comprise Part A and Part B below. Part A Practical Problem Solving a) Prepare the journal entries for Antara Ltd at 30 June 2020 to account for its investment in Blanca Ltd, assuming Antara Ltd prepares consolidated financial statements. b) Prepare the consolidated statement of profit or loss and other comprehensive income for Antara Ltd for the year ended at 30 June 2020, assuming this statement includes Blanca Ltd’s financial results.

Assume Continental and United are the only airlines servicing several routes in the Midwest. Both are contemplating on whether or not to raise their prices on these routes. Also assume that both airliners announce their decision at the same time and that there will be no communication between them prior to making the announcement. If both increase their fares, then Continental will make $15 million profit and United will make $10 million profit. If both keep their fares unchanged, then Continental will lose $10 million and United will make $3 million profit. If one raises its fares and the other does not, then the one that increased its fares will lose $5 million and the other will have a profit of $12 million.
a) Set up the payoff matrix for the decision strategy (to increase fares vs. to keep fares unchanged).
b) What is the dominant strategy for Continental?
c) What is the dominant strategy for United?
d) Is there a dominant equilibrium? If yes, what is it; if not why?.

Marin Company owes $225,000 plus $20,200 of accrued interest to Headland State Bank. The debt is a 10-year, 10% note. During 2020, Marin’s business deteriorated due to a faltering regional economy. On December 31, 2020, Headland State Bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of $317,000, accumulated depreciation of $174,350, and a fair value of $202,000.

Prepare journal entries for Marin Company and Headland State Bank to record this debt settlement. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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List of Accounts

How should Marin report the following in its 2020 income statement?

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List of Accounts

Assume that, instead of transferring the machine, Marin decides to grant 12,000 shares of its common stock ($10 par) which has a fair value of $202,000 in full settlement of the loan obligation. If Headland State Bank treats Marin’s stock as a trading investment, prepare the entries to record the transaction for both parties. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Upon its founding, the high-potential firm issued 10 million shares of stock in total, all held by the two co-founders after having been granted at $0.05 per share. No additional shares are to be issued. (A decision about issuing new shares would be reconsidered in the event the firm went public at some time in the future). One year after founding a VC invests $3.5 million in startup-stage financing at a share price of $1.25. In an additional round of financing several months later the VC invests an additional $6 million at a share price that places the company's valuation at double that after the first financing round. If the founders were able to liquidate their remaining shares immediately after this second round, what would their shares be worth in total?

Ralph and Teresa, two calendar year taxpayers, are starting a new manufacturing business. They intend to incorporate the business with $600,000 of their own capital and 42 million of equity capital obtained from other investors. The company expects to incur organizational and startup expenditures of4100,000 in the first year. Inventories are a material income-producing factor. The Company also expe3cts to incur losses of $500,000 in the first two years of operations and substantial research and development expenses during the first three years. The company expects to break even in the third year and be profitable at the end of the fourth year, even though the nature of the business will continually require research and development activities. What accounting methods and tax elections must Ralph and Teresa consider in their first year of operations? For each method and election, explain the possible alternatives and the advantages and disadvantages of each alternative.

Scenario:

            Startup company established on 01/01/20XX has 12 people personnel of which one executive director, one CIO one manager of software one manager of hardware one CFO and 5 engineers and one secretary, which plays role of public relations as well apart from day to day data management duties.

            The company develops hardware and software for resolvers which sells on larger companies. Some of the contracts include the company to be supplier of a larger company which has government contracts.

            The company exploits one central server with 100 nodes, shared storage, shared data space similar to DropBox, shared scanner and 10 printers.

            All workstations were placed in cubicles in main room and the secretary desk and workstation along with 2 printers was set up at main entrance hallway.

Q1. On March 10/20XX the new server was delivered and mangers along with CIO and executive director made a meeting to establish a policy of use of the resource. It was decided that:

• All engineers’ personnel and CIO will have access to all files 365/24 remotely and from their office workstations.
• The CFO will have access only to data dealing with matherials for current month.
• The Executive director will have access only to CIO reports and CFO reports but not data on projects.
• Secretary will have all access to all documents and data all the time.

Do you think this set up have security risks? Describe these risks if any and propose a better solution and describe why your solution is better.