Match the descriptions/use to the most appropriate terms that follow:
1. _____Used widely to estimate fair values for many tangible assets acquired in business combinations. Estimates fair values by reference to the current price of replacing an asset with one of comparable utility.
2. ____Acquiring companies totals give a true representation of consolidation figures.
3._____It is easy to apply and often reflects cash flows from the subsidiary.
4. _____Pharmaceutical and high-tech industries have allocated significant portions of acquired business to this particular financial statement account.
5. ______The fair value of many liabilities assumed can be determined by reference to trades for similar debt
A. Goodwill Impairment
B. Market Approach
C. FASB ASC Topics 810
D. FASB ASC Topic 350
E. Equity Method
F. Cost Approach
G. Income Approach
H. Acquired In-Process Research and Development
I. Initial Value Method
J. Partial Equity Method
K. Goodwill
L. Gain on Bargain Purchase
In: Accounting
Rierson owns a garment factory in Spain and sells designer clothes to US and other European countries. He is trying attract some investments from US that he can use to expand further into the US market. US investors are looking for stable cash flow, which is going to be a challenge given that the fashion industry is changing constantly and he can get stuck with unsold inventory. To allay their fears, Rierson decides to investment some of the capital raised into Italian 10 year Government Bonds. He explains that the return from these bonds will be used to improve his operations. Ignoring currency exposure, consider the following: (15 PTS)
a. He decides to invest into ten year 1,000 EURO Government bond with 8% coupon rate and semi-annual coupons. If the bond is currently trading for a price of 957.35 Euros, what is the bond's yield to maturity? Assume is buys 10,000 of these bonds. (10 PTS)
b. Suppose he is told that the yield to maturity has increased to 15% (expressed as an APR with semiannual compounding). What price is the bond trading for now? (5 PTS)
In: Finance
The current assets and current liabilities sections of the balance sheet of Crane Company appear as follows.
|
CRANE COMPANY |
||||||||
| Cash | $ 41,300 | Accounts payable | $ 58,430 | |||||
| Accounts receivable | $96,300 | Notes payable | 63,280 | |||||
| Less: Allowance for doubtful accounts | 7,840 | 88,460 | $121,710 | |||||
| Inventory | 169,820 | |||||||
| Prepaid expenses | 8,620 | |||||||
| $308,200 | ||||||||
The following errors in the corporation’s accounting have been
discovered:
| 1. | January 2021 cash disbursements entered as of December 2020 included payments of accounts payable in the amount of $41,800, on which a cash discount of 2% was taken. | |
| 2. | The inventory included $28,590 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $11,340 had been received on consignment; the remainder was purchased f.o.b. destination, terms 2/10, n/30. | |
| 3. | Sales for the first four days in January 2021 in the amount of $28,680 were entered in the sales journal as of December 31, 2020. Of these, $21,510 were sales on account and the remainder were cash sales. | |
| 4. | Cash, not including cash sales, collected in January 2021 and entered as of December 31, 2020, totaled $35,520. Of this amount, $23,520 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan. |
(a1) Calculate the following adjusted balances.
|
Cash |
$ |
|
|
Accounts Receivable |
$ |
|
|
Inventory |
$ |
|
|
Accounts Payable |
$ |
|
|
Notes Payable |
$ |
In: Accounting
New Tech Corporation is based in Warwick, U.K. The Corporation will sell a network monitoring system to Open Telecom Group. The system costs US$50,000,000 and will be paid by Open Telecom Group in six-months. New Tech Corporation plans to control any exchange rate risk incurred from this transaction. To hedge the exchange rate risk, New Tech Corporation buys a six-month put option on US dollars, with a strike price £0.80/US$ for a premium of £0.06/US$. At the moment, the spot exchange rate is US$1.3220/£ and the six-month forward rate is US$1.5235/£. Assume the six-month effective interest rate in U.K. is 0.5% per annum and in U.S. is 1.5% per annum.
(a) If New Tech Corporation uses money market instruments to hedge exchange rate risk, elaborate how the Corporation implement and assess the sterling proceeds incurred.
(b) New Tech Corporation treats the forward exchange rate as an unbiased predictor of the future spot exchange rate, what would be the proceeds this time with using put options on US dollars?
(c) Jeff is the financial manager of New Tech Corporation, he stated that there will be no difference between the option and money market hedge for the corporation. Explain and analyze Jeff’s belief. Provide any necessary calculation
In: Finance
|
Peanut Company |
Snoopy Company |
|||
|
Debit |
Credit |
Debit |
Credit |
|
|
Cash |
255,000 |
75,000 |
||
|
Accounts Receivable |
190,000 |
80,000 |
||
|
Inventory |
180,000 |
100,000 |
||
|
Investment in Snoopy Stock |
364,500 |
0 |
||
|
Land |
200,000 |
100,000 |
||
|
Buildings & Equipment |
700,000 |
200,000 |
||
|
Cost of Goods Sold |
270,000 |
150,000 |
||
|
Depreciation Expense |
50,000 |
10,000 |
||
|
Selling & Administrative Expense |
230,000 |
60,000 |
||
|
Dividends Declared |
225,000 |
30,000 |
||
|
Accumulated Depreciation |
500,000 |
30,000 |
||
|
Accounts Payable |
75,000 |
35,000 |
||
|
Bonds Payable |
150,000 |
85,000 |
||
|
Common Stock |
500,000 |
200,000 |
||
|
Retained Earnings |
517,500 |
155,000 |
||
|
Sales |
850,000 |
300,000 |
||
|
Income from Snoopy |
72,000 |
0 |
||
|
Total |
2,664,500 |
2,664,500 |
805,000 |
805,000 |
In: Accounting
Prepare entries under cost and equity methods, and prepare a memorandum.
PH.4 (LO 2) Writing Wellman Company acquired 30% of the outstanding common stock of Grinwold Inc. on January 1, 2022, by paying $1,800,000 for 60,000 shares. Grinwold declared and paid a $0.50 per share cash dividend on June 30 and again on December 31, 2022. Grinwold reported a net income of $800,000 for the year.
a. Total dividend revenue for 2022 $60,000
b. Revenue from stock investments $240,000
Instructions
a. Prepare the journal entries for Wellman Company for 2022,
assuming Wellman cannot exercise significant influence over
Grinwold. (Use the cost method.)
b. Prepare the journal entries for Wellman Company for 2022,
assuming Wellman can exercise significant influence over Grinwold.
(Use the equity method.)
c. The board of directors of Wellman Company is confused about the
differences between the cost and equity methods. Prepare a
memorandum for the board that explains each method and shows in
tabular form the account balances under each method at December 31,
2022.
Paul D. Kimmel. Accounting: Tools for Business Decision Making, 7th Edition (p. H-18).
In: Accounting
Instructions: Choose one of the two options described below. Analyze the data using what you have learned in class.
Instructions: Your answer will include the following:
Option 1: Cheating
Research questions (do both):
Investigate these questions for the students described in body_image.xls.
This data comes from a survey of university students at Carnegie Mellon University in Pittsburgh, PA.
Here are the survey questions and associated variables:
Are you a male or a female? Gender (male, female) What is your height in inches? Height (in inches) What is your GPA? GPA
What was your high school GPA? HS GPA
Where do you tend to sit in class? Seat (F=front, M=middle, B=back) How do you feel about your weight? WtFeel (OverWt, AboutRt, UnderWt) Would you report cheating if you witnessed it? (yes, no)
Option 2: Gender and Body Image
Research question: Do female college students tend to feel differently about their weight compared to male college students?
Investigate this question for the students described in body_image.xls.
This data comes from a survey of university students at Carnegie Mellon University in Pittsburgh, PA.
Here are the survey questions and associated variables:
Are you a male or a female? Gender (male, female) What is your height in inches? Height (in inches) What is your GPA? GPA
What was your high school GPA? HS GPA
Where do you tend to sit in class? Seat (F=front, M=middle, B=back) How do you feel about your weight? WtFeel (OverWt, AboutRt, UnderWt) Would you report cheating if you witnessed it? (yes, no)
In: Statistics and Probability
Exercise 16-13
Nash Company issues 3,700 shares of restricted stock to its CFO,
Dane Yaping, on January 1, 2020. The stock has a fair value of
$116,000 on this date. The service period related to this
restricted stock is 4 years. Vesting occurs if Yaping stays with
the company for 4 years. The par value of the stock is $5. At
December 31, 2021, the fair value of the stock is $155,000.
(a) Prepare the journal entries to record the
restricted stock on January 1, 2020 (the date of grant), and
December 31, 2021. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the amounts.)
(b) On March 4, 2022, Yaping leaves the
company. Prepare the journal entry to account for this forfeiture.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry" for the account titles and enter 0 for the
amounts.)
In: Accounting
For each of the unrelated transactions described below, present the entries required to record each transaction. 1. Marigold Corp. issued $22,000,000 par value 10% convertible bonds at 97. If the bonds had not been convertible, the company’s investment banker estimates they would have been sold at 95. 2. Swifty Company issued $22,000,000 par value 10% bonds at 96. One detachable stock purchase warrant was issued with each $100 par value bond. At the time of issuance, the warrants were selling for $4. 3. Suppose Sepracor, Inc. called its convertible debt in 2020. Assume the following related to the transaction. The 11%, $10,300,000 par value bonds were converted into 1,030,000 shares of $1 par value common stock on July 1, 2020. On July 1, there was $55,000 of unamortized discount applicable to the bonds, and the company paid an additional $68,000 to the bondholders to induce conversion of all the bonds. The company records the conversion using the book value method.
In: Accounting
Discuss historical data from 2010 - 2020 about GDP growth rate (percentage) and Real GDP volume (in dollar value)
In: Economics