Find a press release or professional communication from a credible organization that could benefit from a revision. Revise the letter or release to make it more effective, using the information from this module. Explain all of your changes and the explanation for each. Include the original text in your submission.

QUESTION 1

Read the two cases of Barbican Bank and Intermarket of Zimbabwe and answer the questions below:

Barbican Bank (BB)

Barbican Bank was formed in the late 1990s at the height of a rush into the financial services sector by domestic investors. It was born out of an asset management company. The founder
was a flamboyant businessman who was a public figure in the financial services sector. At formation the bank declared its focus would be the elite market. Its products were therefore
targeted specifically at the top market. The bank also declared an intention to operate a very small branch network, no more than five branches. Barbican started experiencing liquidity
problems in early 2003 and was placed under the curator in March 2003. Before being placed under the curator Barbican had been reporting fabulous profits most of them having come
from non interest transactions. According to the Central Bank, Barbican ‘‘was experiencing serious liquidity problems as a result of imprudent banking behaviours. There was no clear separation between various related entities within the group which led to cross funding of operations and excessive risk taking among other shortcomings.’’ The Central Bank also noted
that the bank was involved in ‘‘questionable cross-border foreign exchange activities.’’ The bank had shifted funds to South Africa from local operations with the object of establishing a
new company in South Africa. During its operation the bank introduced the derivatives (junk bonds) market, which had been non-existent in the country’s financial sector. When liquidity
problems besieged Barbican the Central Bank placed the banking division under the curator and the asset management company under liquidation. At the time of taking these measures
the Central Bank had injected money into the bank as liquidity support but the bank appeared to be on a serious slide. The bank has since failed to repay on time the loan from the Central
bank’s Troubled Bank Fund. On seeing his financial companies in difficulties, the Chief Executive (the founder) skipped the country. Despite problems in the home operations, the
founding chief executive was trying to set up another financial services company in South Africa. During his tenure the Chief Executive is said to have been so dominant the board
appeared clueless and powerless to restrain him. The bank has now been placed into liquidation by the Central Bank. It will be amalgamated into a merger of liquidated banks to form a new bank.

Intermarket (IM)

The founder established Intermarket Holdings during the late 1990s through acquisitions. At the time of inset of financial distress, the founder owned 72 percent of Intermarket Holdings
through an investment company called Transnational Holdings. Transnational Holdings comprised companies in banking and insurance among others. Its influence in the financial
services sector was in every sphere. Intermarket Banking Corporation one of the subsidiaries of the holding company started showing signs of liquidity problems in early 2004. This was
during the period of a cash crisis in the country. Much as all banking institutions were affected by the cash crisis, Intermarket appeared completely outstretched by the crisis. In March 2004
the bank was placed under the management of a curator by the Central Bank when it appeared it could not pay its creditors and depositors on demand. On investigation, the Central Bank
discovered that the Executive Chairman had loaned himself Z$90 billion of depositors’ money and the insider loans were not being serviced. The Executive Chairman was said to have been so dominant he had the veto power on everything that took place in the corporation. Investigations by the appointed curator have led to a rise in the figure for insider loans to
Z$174 billion. The Executive chairman fled the country when authorities appeared to point at him as the main contributor to financial distress in the institution. Intermarket has been trying
to enter into partnership with other banking institutions, in order to shore up its capital, without much success. Instead Finhold, another Zimbabwean financial institution whose banking
subsidiary is owed Z$100 billion is positioning itself to take over major shareholding in Intermarket Bank through a combination of cash and debt swap. Finhold’s strategy is an
attempt to protect possible collapse of Intermarket since it is a major creditor. Intermarket has to raise its capital base to Z$10 billion before 30 September 2004 as per regulatory authority
requirements. Fraud by some IM employees taking advantage of weak management systems has exacerbated financial distress in Intermarket. The curator has however opened the banking division for limited services to depositors.

Questions:

a) The liquidity problems experience by Barbican Bank and Intermarket bank were as a result of poor risk management. Discuss?

b) Identify the speculative risk that was taken by Barbican Bank?

c) Lack of board independence inadvertently creates an epicentre for corporate governance failures. Discuss using the two cases and outline the ideal role of a board in corporate governance and risk management

1) Demand pull inflation occurs when the:

• price of necessity goods increases suddenly.

• price level changes in response to changes in the business cycle.

• business cycle becomes sporadic and unpredictable.

• price of a key input increases suddenly.

2) While the __________ is not important, the _________ can have a big effect on economic behavior.

• price level; predictable change in the price level

• predictable change in the price level; price level

• price level; unpredicted change in the price level

• unpredicted change in the price level; price level

3) When real rates of interest are negative, borrowers:

• benefit, because the value of their debt increases.

• suffer, because the value of their debt increases.

• suffer, because the value of their debt declines.

• benefit, because the value of their debt declines.

4) Unexpected high inflation redistributes wealth from:

• those who save to those who borrow.

• banks to those who save.

• those who borrow to those who save.

• those who borrow to banks.

5) When banks hold excess reserves the:

• money multiplier underestimates how much money will be created in the economy.

• money multiplier overestimates how much money will be created in the economy.

• reserve ratio is not fully functioning, and should be raised.

• reserve ratio is not fully functioning, and should be lowered.

The commercial banking industry is undergoing rapid changes due to advances in technology and competitive pressures in the financial services sector. The data file BANKS contains selected information tabulated by Fortune concerning the revenues, profitability, and number of employees for the 51 largest US Commercial Banks in terms of revenues. Use the information in this file to complete the following:

a. Compute the mean, median and standard deviation for the three variables: revenues, profits and number of employees.

b. Convert the data for each variable to z value. Consider Mellon Bank Corporation headquarters in Pittsburgh. How does it compare to the average bank in the study on the three variables? Discuss.

c. As you can see by examining the data and by looking at statistics computed in part (a), not all banks had the same revenue, same profit or the same number of employees. Which variable had the greatest relative variation among the banks in the study?

d. Calculate a new variable: profits per employee. Develop a frequency distribution and histogram for this new variable. Also compute the mean, median and standard deviation for the new variable. Write a short report that describes the profits per employee for the banks.

e. Referring to part (d), how many banks had a profit-per-employee ratio that exceeded 2 standard deviations from the mean?

Described below are six independent and unrelated situations involving accounting changes. Each change occurs during 2018 before any adjusting entries or closing entries were prepared. Assume the tax rate for each company is 40% in all years. Any tax effects should be adjusted through the deferred tax liability account. Fleming Home Products introduced a new line of commercial awnings in 2017 that carry a one-year warranty against manufacturer’s defects. Based on industry experience, warranty costs were expected to approximate 4% of sales. Sales of the awnings in 2017 were $2,800,000. Accordingly, warranty expense and a warranty liability of $112,000 were recorded in 2017. In late 2018, the company’s claims experience was evaluated and it was determined that claims were far fewer than expected: 3% of sales rather than 4%. Sales of the awnings in 2018 were $3,300,000, and warranty expenditures in 2018 totaled $75,075. On December 30, 2014, Rival Industries acquired its office building at a cost of $860,000. It was depreciated on a straight-line basis assuming a useful life of 40 years and no salvage value. However, plans were finalized in 2018 to relocate the company headquarters at the end of 2022. The vacated office building will have a salvage value at that time of $630,000. Hobbs-Barto Merchandising, Inc., changed inventory cost methods to LIFO from FIFO at the end of 2018 for both financial statement and income tax purposes. Under FIFO, the inventory at January 1, 2018, is $620,000. At the beginning of 2015, the Hoffman Group purchased office equipment at a cost of $253,000. Its useful life was estimated to be 10 years with no salvage value. The equipment was depreciated by the sum-of-the-years’-digits method. On January 1, 2018, the company changed to the straight-line method. In November 2016, the State of Minnesota filed suit against Huggins Manufacturing Company, seeking penalties for violations of clean air laws. When the financial statements were issued in 2017, Huggins had not reached a settlement with state authorities, but legal counsel advised Huggins that it was probable the company would have to pay $130,000 in penalties. Accordingly, the following entry was recorded: Loss—litigation 130,000 Liability—litigation 130,000 Late in 2018, a settlement was reached with state authorities to pay a total of $273,000 in penalties. At the beginning of 2018, Jantzen Specialties, which uses the sum-of-the-years’-digits method, changed to the straight-line method for newly acquired buildings and equipment. The change increased current year net earnings by $368,000. Required: For each situation: 1. Identify the type of change. 2. Prepare any journal entry necessary as a direct result of the change as well as any adjusting entry for 2018 related to the situation described.

1. What should you do if a person changes their end-of-life requests? Create a step-by-step outline of what you should do that could be used to train other care workers.

2. When a person who is accessing services informs you that they wish to die at home, what action should you take?

3. What are three things that you should document when a person is reporting that they have pain?

4. Research one of the pain management/comfort promotion techniques mentioned in this section to learn more about it. How might this help people in palliative care? How can it be applied and is a specialist practitioner/health professional required? Where can you learn more and/or find a qualified practitioner?

5. Explain three observations that you would make to see if the pain relief is effective or not effective.

a. You are the dealer in one of the reputable banks and one of your roles is related to trading and
monitoring of changes in the derivative markets. You are interested in one stock for Bally
International hedgers; the stock under consideration is currently trading at K25 it can either go up
or down by 15 percent in any given period. The risk-free rate is 10 percent. You decide to take
the long position in this stock at an exercise price of 20 with the contract expiry date 6 months
from now
Required:
i. At how much are you going to purchase the rights today?
ii. What is the time value of this Option
iii. At how much will the rights in a Put option be trading at?
iv. If the main difference between a Forward and Futures contract is that of standardization and
market trading, then how are futures contracts superior to Forwards

The following changes took place last year in Pavolik Company’s balance sheet accounts:

D = Decrease; I = Increase.

Long-term investments that cost the company $25 were sold during the year for $54 and land that cost $53 was sold for $28. In addition, the company declared and paid $22 in cash dividends during the year. Besides the sale of land, no other sales or retirements of plant and equipment took place during the year. Pavolik did not retire any bonds during the year or issue any new common stock.

The company’s income statement for the year follows:

The company’s beginning cash balance was $136 and its ending balance was $112.

Required:

1. Use the indirect method to determine the net cash provided by operating activities for the year.

2. Prepare a statement of cash flows for the year.

Question 4

Sometimes corporations make Fundamental Changes. Describe the change below.

1. Alphabet Company (Google) decides to move from the US to Korea.
2. Microsoft will split into the Software Company, Cloud Company, and Xbox Company
3. Company P will buy Company E.
4. Company F will create an additional class of shares with more voting rights than existing shares.
5. Company R decides to sell all assets and give the money to the shareholders.

P10-45. Analyzing and Interpreting Effects of TCJA Tax Law Changes.

Pfizer Inc. reports the following footnote disclosure in its 2018 Form 10-K.

The following table provides the components of Income from continuing operations before provision (benefit) for taxes on income:

Year Ended December 31, $ millions                                                   2018                 2017                2016

United States                                                                                         $(4,403)            $(6,879)       $(8,534)

International                                                                                            16,288              19,184          16,886

Income from continuing operations before provision of taxes…   11,885              12,305            8,351

The following table provides the components of Provision (benefit) for taxes on income based on the location of the taxing authorities:

$ millions                                                                                                    2018                  2017               2016

United States

Current income taxes:

Federal                                                                                                        $668                  $1,267           $342

State and Local                                                                                                 9                         45               (52)

Deferred income taxes:

Federal                                                                                                        (1,663)              (2,064)            (419)

State and local                                                                                                  16                   (304)            (106)

Total U.S. tax provision                                                                                 (970)              (1,055)           (235)   

TCJA

Current income taxes                                                                              (3,035)                13,135                 -

Deferred income taxes                                                                             2,439                 (23,795)               -

Total TCJA tax provision                                                                            (596)                 (10,660)              -

International

Current income taxes                                                                               2,831                   2,709              1,532

Deferred income taxes                                                                              (558)                      (42)              (175)

Total international tax provision                                                            2,273                   2,667              1,358

a.In the fourth quarter of 2017, we recorded an estimate of certain tax effect of the TCJA, including (i) the impact of deferred tax assets and liabilities from reduction in the U.S. Federal corporate tax rate from 35% to 21%, (ii) the impact on valuation allowances and other state income tax considerations, (iii) the $15.2 billion repatriation tax liability on accumulated post-1986 foreign earnings for which we plan to elect, with the filing of our 2018 U.S. Federal Consideration Income Tax Return, payments over eight years through 2026 that is reported in Other taxes payable in our consolidated balance sheet as of December 31, 2017 and (iv) deferred taxes on basis differences expected to give rise to future taxes on global intangible low-taxed income. As a result of the TCJA, in the fourth quarter of 2017, we reversed an estimate of the deferred taxes that are no longer expected to be needed due to the change to the territorial tax system.

Required.

1. What is the amount of the income tax expense reported by Pfizer for each year? What amount is current versus deferred?
2. What is Pfizer’s effective (average) tax rate for each year?
3. Use the pretax information to determine the effective tax rate for U.S. operations for each year.
4. The footnotes include amounts related to the TCJA of 2017. What was the effect on the company’s tax expense in 2017 and 2018 due to the TCJA?
5. Pfizer lists four TCJA items that impacted their 2017 tax provision. Explain how each of the four items might have affected Pfizer’s 2017 tax expens