Question 3 (Recognition and fair value adjustments of acquired assets & liabilities)
On January1, 2015, Invigilators Enterprises acquired 100 percent of the shares of Lemma Company.
The separate condensed statements of financial position immediately after the acquisition appeared as shown below:
Invigilator enterprises Lemma company
Intangible assets ------------ 2,000
PPE 490,000 80,000
Investment in Lemma 600,000 ------------
Inventories 230,000 360,000
Trades and receivables 400,000 240,000
Total assets 1,720,000 682,000
Share capital 1,000,000 200,000
Retained earnings 140,000 100,000
Provisions 20,000 30,000
Current liabilities 560,000 353,000
total equity and liabilities 1,720,000 682,000
Lemma owns a patent for the production of a new product. Lemma did not recognize the patent in its separate financial statements. The estimated fair value of the patent at acquisition date amounts to $80,000 Additional information (at the acquisition date:
The fair value of Lemma’s main corporate offices is $130,000 (net book value of $50,000)
The fair value of Lemma’s main inventories amounts to $320,000
On January 1, 2015, Invigilator Enterprises still has to pay an invoice ($100,000) for services rendered by Lemma Company in December 2014
Task:
1. Compute the goodwill at the acquisition date
2 Prepare the consolidation adjustments at the acquisition date
3. Prepare the consolidated statement of financial position of the invigilator Group as at January 2015.
In: Accounting
On January 1, 2020, Aumont Company sold 12% bonds having a maturity value of $500,000 for $537,907, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2020, and mature January 1, 2025, with interest payable December 31 of each year. Aumont Company allocates interest and unamortized discount or premium on the effective-interest basis. Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places, e.g. 38,548. 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.)
a.Prepare the journal entry at the date of the bond issuance
b.Prepare a schedule of interest expense and bond amortization for 2020–2022.
c.Prepare the journal entry to record the interest payment and the amortization for 2020.
d.Prepare the journal entry to record the interest payment and the amortization for 2022.
Prepare the journal entry at the date of the bond issuance.
(Round answer to 0 decimal places, e.g. 38,548. 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.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
January 1, 2020 |
|||
Prepare a schedule of interest expense and bond amortization for 2020–2022. (Round answer to 0 decimal places, e.g. 38,548.)
|
Schedule of Interest Expense and Bond Premium
Amortization |
||||||||
|
|
Cash |
Interest |
Premium |
Carrying |
||||
| 1/1/20 | $ | $ | $ | $ | ||||
| 12/31/20 | ||||||||
| 12/31/21 | ||||||||
| 12/31/22 | ||||||||
Prepare the journal entry to record the interest payment and the
amortization for 2020. (Round answer to 0 decimal
places, e.g. 38,548. 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.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
December 31, 2020 |
|||
Prepare the journal entry to record the interest payment and the
amortization for 2022. (Round answer to 0 decimal
places, e.g. 38,548. 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.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
December 31, 2022 |
|||
In: Accounting
|
1. Change all of the numbers in the data area of your worksheet so that it looks like this:
If your formulas are correct, you should get the correct answers to the following questions. (a) What is the net operating income (loss) in Year 1 under absorption costing?(b) What is the net operating income (loss) in Year 2 under absorption costing? (c) What is the net operating income (loss) in Year 1 under variable costing? (d) What is the net operating income (loss) in Year 2 under variable costing? (e) The net operating income (loss) under absorption costing is less than the net operating income (loss) under variable costing in Year 2 because (You may select more than one answer.)
3. Make a note of the absorption costing net operating income (loss) in Year 2. At the end of Year 1, the company’s board of directors set a target for Year 2 of the net operating income of $70,000 under absorption costing. If this target is met, a hefty bonus would be paid to the CEO of the company. Keeping everything else the same from part (2) above, change the units produced in Year 2 to 5,400 units. (a) Would this change result in a bonus being paid to the CEO? Yes or No?(b) What is the net operating income (loss) in Year 2 under absorption costing? (c) Would this doubling of production in Year 2 be in the best interests of the company if sales are expected to continue to be 2,900 units per year? yes or no? |
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In: Accounting
20. If there is contingent consideration in an acquisition, where the total amount paid will depend on the future earnings of the acquired company, as of the acquisition date what would be the amount of the liability, if any, shown in the consolidated financial statements?
a. Zero, since the amount is not yet known
b. The minimum that could contractually be paid
c. The fair value of the consideration, which would normally be the present value of the expected amount to be paid
d. The maximum that might contractually be paid.
In: Accounting
Your company uses the DDB method. Assets purchased between the 1st and 15th of the month are depreciated for the entire month; assets purchased after the 15th of the month are treated as though they were acquired the following month. On April 6, 20X1, your firm purchases a machine for $250,000 that management estimates will last 15 years and have a salvage value of $10,000. What is 20X1 depreciation expense? $33,333 $24,000 $25,000 $32,000
In: Accounting
Superstar Limited purchased several investments during 2018. At 31 December 2018, the company had the following investments in ordinary share listed below. All investments are considered as available-for-sale:
|
Cost per share |
Fair value per share |
|
|
100,000 Sunshine Company shares |
$12 |
$10 |
|
120,000 Orlando Company shares |
$18 |
$25 |
On 1 May 2019, the company sold out half of Orlando shares at $28 each and paid $5,000 brokerage fee.
The company acquired 6% bonds from Fantastic Company on 1 October 2019 at $1,207,321. The face value of the bonds is $1,500,000. Semiannual interest is payable 31 March and 30 September. The market interest rate was 9% for bonds of similar risk and maturity. Management has the positive intent and ability to hold the bonds until maturity in 2029.
During 2019, the net income for Sunshine and Orlando were $200,000 and $500,000 respectively. Sunshine and Orlando declared and paid cash dividends of $1.2 and $0.8 each share on 31 December 2019.
The fair value of the investments on 31 December 2019 are shown as below:
|
Fair Value |
|
|
Sunshine Company |
$15 per hare |
|
Orlando Company |
$20 per share |
|
6% bonds of Fantastic Company |
$1,226,000 |
Required:
In: Accounting
Problem 1 (Hedging)
A US exporter expects to receive £1 million in 2 months for her exports to the UK. The current exchange rate is US$2.30/£. She is worried that the pound might depreciate over the next 2 months and wants protection against its decline but she also want to benefit from a possible rise in £ over the next 2 months. Put options and call options on the £, with 2-month maturity are available.
What should she do?
Suppose the 2-month put options exercisable at US$2.50/£ are trading at US$0.01. What would be her cash revenue, given your answer in part a), if at the 2 month end the spot exchange rate turns out to be
US$2.00/£
US$3.00/£
What would be her minimum cash revenue, no matter what the spot rate at the end of 2 months turn out to be?
What would be the upfront cost (fee) for undertaking the appropriate options contract?
What would she do if the expected £1 million at the 2-month end are not received and what would be her loss if that happens?
In: Finance
HI.... just I want the <tags> of this scenario ....
Scenario-based Problem:
You are assigned to develop a web based Online Electronic showroom
in the Sultanate of oman using HTML 5 with CSS, basic JavaScript
and PHP&MySQL. The website should contain the following
webpages:
Homepage
Sign In
Sign Up
About Us
Product Details
Feedback
Contact Us
Following are the details about each page:
Page-1: HOMEPAGE (Design using Bootstrap)
This page should have picture/s, background color, text/headings with suitable font with link to all other pages and CSS.
Page-2: ABOUT US
This page should have a brief description of the company. This should contain a paragraph with sufficient text color, formatting tags, images, links and CSS.
Page-3 and 4:Product DETAILS
Each page should contain Tables with column span and row span, CSS, images, formatting tags, etc. Include any video related to the topic.
Page-5: SIGN IN (No database)
This should contain the login form with validations using HTML5, PHP form handling, database connectivity.
Page-6: SIGN UP
This should contain the Registration form with validations using JavaScript, PHP form handling, database connectivity. Display the records from the table.
Page-7: FEEDBACK (No database)
This should contain the Feedback form with validations using HTML 5 and PHP form handling. Display the feedback.
Page-8: CONTACT US
This should contain a paragraph with sufficient text color, formatting tags, images, links, CSS etc. Note: Kindly refer to the marking scheme for more information and clarity.
In: Computer Science
*Exercise 16-11
Health ’R Us, Inc., uses a traditional product costing system
to assign overhead costs uniformly to all its packaged multigrain
products. To meet Food and Drug Administration requirements and to
assure its customers of safe, sanitary, and nutritious food, Health
’R Us engages in a high level of quality control. Health ’R Us
assigns its quality-control overhead costs to all products at a
rate of 17% of direct labor costs. Its direct labor cost for the
month of June for its low-calorie breakfast line is $74,000. In
response to repeated requests from its financial vice president,
Health ’R Us’s management agrees to adopt activity-based costing.
Data relating to the low-calorie breakfast line for the month of
June are as follows.
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Compute the quality-control overhead cost to be assigned to the
low-calorie breakfast product line for the month of June (1) using
the traditional product costing system (direct labor cost is the
cost driver), and (2) using activity-based costing.
|
By what amount does the traditional product costing system
undercost or overcost the low-calorie breakfast line?
|
Classify each of the activities as value-added or
non–value-added.
|
|
| Copyright © 2000-2020 by John Wiley & Sons, Inc. or related companies. All rights reserved. |
In: Accounting
The Chartered Financial Analyst (CFA®) designation is fast becoming a requirement for serious investment professionals. It is an attractive alternative to getting an MBA for students wanting a career in investment. A student of finance is curious to know if a CFA designation is a more lucrative option than an MBA. He collects data on 38 recent CFAs with a mean salary of $142,000 and a standard deviation of $45,000. A sample of 55 MBAs results in a mean salary of $126,000 with a standard deviation of $27,000. Use Table 2. μ1 is the population mean for individuals with a CFA designation and μ2 is the population mean of individuals with MBAs. Let CFAs and MBAs represent population 1 and population 2, respectively. a-1. Set up the hypotheses to test if a CFA designation is more lucrative than an MBA at the 10% significance level. Do not assume that the population variances are equal. H0: μ1 − μ2 = 0; HA: μ1 − μ2 ≠ 0 H0: μ1 − μ2 ≥ 0; HA: μ1 − μ2 < 0 H0: μ1 − μ2 ≤ 0; HA: μ1 − μ2 > 0 a-2. Calculate the value of the test statistic. (Round all intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.) Test statistic a-3. Approximate the p-value. 0.025 Picture p-value < 0.050 0.050 Picture p-value < 0.100 0.010 Picture p-value < 0.025 p-value Picture 0.010 p-value Picture 0.100 a-4. Do you reject the null hypothesis at the 10% level? No, since the p-value is more than α. No, since the p-value is less than α. Yes, since the p-value is more than α. Yes, since the p-value is less than α. b. Using the critical value approach, can we conclude that CFA is more lucrative? No, since the value of the test statistic is more than the critical value of 1.297. No, since the value of the test statistic is more than the critical value of 1.673. Yes, since the value of the test statistic is more than the critical value of 1.297. Yes, since the value of the test statistic is more than the critical value of 1.673.
In: Statistics and Probability