Read Case Ticketmaster – Making Better Decisions passage below and answer the following questions 1-4 in bold :

Case Study: Ticketmaster
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. The company, which sells tickets for live music, sports, and cultural events, and which represents a significant chunk of parent company’s Live Nation Entertainment’s business, saw a drop in ticket sales that year of a disconcerting 15 percent. Then 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. Third-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.
That’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. The Googles and Apples of the world are our competition.”

Some of the steps he took to achieve this included to the creation of Live Analytics, 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 inflexible 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 efforts toward transparency included announcing fees on Ticketmaster’s first 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 concert going 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 first 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 mistake

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?

3. How did Mr. Hubbard select his most desirable alternative? Describe which type of Decision Making he used, and explain your findings.

4. Were the recent decisions that Mr. Hubbard made effective, according to the concepts in Chapter 7 – Decision Making? Explain your response.

On 1 July, 2018 Bundoora Ltd acquires 25 percent of the issued capital of Preston Ltd for a cash consideration of $150,000. At the date of acquisition, the share capital and retained earnings of Preston Ltd are as follows: Share capital $120,000 and Retained earnings $480,000 (Total Shareholders’ equity $600,000). Additional information:  For the year ending 30 June 2019 Preston Ltd records an after-tax profit of $50,000 from which it pays a dividend of $30,000.  For the year ending 30 June, 2020 Preston Ltd records an after-tax loss of $30,000. On 30 June 2020, Preston Ltd declares dividends of $10,000.  Bundoora Ltd has a number of subsidiaries. Required: (i) Prepare the journal entries using both the cost and equity methods of accounting in context of parent entity for the investment in Preston Ltd for each of the years ended 30 June 2019 to 2020. (ii) Calculate the carrying amount of the investment in Preston Ltd at 30 June 2020.

On 1 July, 2018 Bundoora Ltd acquires 25 per cent of the issued capital of Preston Ltd for a cash consideration of $150,000. At the date of acquisition, the share capital and retained earnings of Preston Ltd are as follows: Share capital $120,000 and Retained earnings $480,000 (Total Shareholders’ equity $600,000). Additional information:  For the year ending 30 June, 2019 Preston Ltd records an after tax profit of $50,000 from which it pays a dividend of $30,000.  For the year ending 30 June, 2020 Preston Ltd records an after tax loss of $30,000. On 30 June 2020, Preston Ltd declares dividends of $10,000.  Bundoora Ltd has a number of subsidiaries.

Required:

(i) Prepare the journal entries using both the cost and equity methods of accounting in context of parent entity for the investment in Preston Ltd for each of the years ended 30 June 2019 to 2020.

(ii) Calculate the carrying amount of the investment in Preston Ltd at 30 June 2020.

On 1 July, 2018 Bundoora Ltd acquires 25 per cent of the issued capital of Preston Ltd for a cash consideration of $150,000.

At the date of acquisition, the share capital and retained earnings of Preston Ltd are as follows: Share capital $120,000 and Retained earnings $480,000 (Total Shareholders' equity $600,000).

Additional information:

§ For the year ending 30 June, 2019 Preston Ltd records an after tax profit of $50,000 from which it pays a dividend of $30,000.

§ For the year ending 30 June, 2020 Preston Ltd records an after tax loss of $30,000. On 30 June 2020, Preston Ltd declares dividends of $10,000.

§ Bundoora Ltd has a number of subsidiaries.

Required:

(i)                Prepare the journal entries using both the cost and equity methods of accounting in context of parent entity for the investment in Preston Ltd for each of the years ended 30 June 2019 to 2020.                                                                           

(ii)             Calculate the carrying amount of the investment in Preston Ltd at 30 June 2020.

Accounting

On June 1, 2020, Shebandowan Investors Inc. issued a $4,800,000, 12%, three-year bond. Interest is to be paid semiannually beginning December 1, 2020. Assume that the market rate of interest is 13%. Use TABLE 14A.1 and TABLE 14A.2. (Use appropriate factor(s) from the tables provided.) Required: Part 1 Record the following entries: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)

a. Issuance of the bonds on June 1, 2020

b. Payment of interest on December 1, 2020

c. Adjusting entry to accrue bond interest and discount amortization on January 31, 2021

d. Payment of interest on June 1, 2021 Assume Shebandowan Investors Inc. has a January 31 year-end.

Part 2

Show how the bonds will appear on the balance sheet under non-current liabilities at January 31, 2022. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)

On October 15, 2016, Koala, Inc. issued a 10 year bond (with a typical $1000 face value) that had an annual coupon value of $60. [We are assuming that the 2020 coupon has just been redeemed.]

• Initially, the bond was sold for the premium price of $1,025.

• On October 15, 2020, this bond was selling for only $975.

• The market rate of interest for a riskless corporate bond, of this maturity, was 4.5% on October 15, 2016, which reflects market expectations about future rates of inflation.

• The market rate of interest for a riskless corporate bond, of this maturity, was 4.0% on October 15, 2020, which reflects market expectations about future rates of inflation.

Question: It is now October 15, 2020 and suddenly the Federal Reserve announces a massive program to reduce inflation. Instantly, the market rate of interest for a riskless corporate bond that would apply to this bond, falls from 4.0% to 2.5%. If there is no change in the risk premium expected for this Koala, Inc. bond, what will be this bond’s yield to maturity?  [To 3 decimal places.]

On 5/17/2020, a random sample of 1007 U.S. households finds that Trump has a 49% approval rating.

a) Use the 2SD method to find a 95% confidence interval estimate of the proportion of all U.S. households that approve of Trump on 5/17/2020. Show all work/steps to get the 2SD estimate. Round the margin of error to three decimal places. Work and Answer:

b) Use your answer from part (a) to fill in the red spaces below in order to write the results of the poll in these two notations:

According to the poll, on 5/17/2020, Trump has an approval rating of 49% ± _________%

According to the poll, on 5/17/2020, Trump’s approval rating was between ______% and ______%

c) If we were to use this same sample information to find a 90% confidence interval estimate instead of a 95% confidence interval estimate, then would our new 90% confidence interval be wider, or would it be narrower than the 95% estimate? Work and Answer:

The adjusted balances at December 31, 2020, for Derlak Enterprises are shown in alphabetical order below:

*The owner, Lee Derlak, made no additional investments during the year.

Required:
Prepare a comparative classified balance sheet at December 31, 2020. (Record the accounts in the given order. Enter all amounts as positive values.)

Analysis Component:
Are Derlak's assets financed mainly by debt or equity in 2019? in 2020? Is the change in how assets were financed from 2019 to 2020 favourable or unfavourable?

The adjusted balances at December 31, 2020, for Derlak Enterprises are shown in alphabetical order below:

*The owner, Lee Derlak, made no additional investments during the year.

Required:
Prepare a comparative classified balance sheet at December 31, 2020. (Record the accounts in the given order. Enter all amounts as positive values.)

Analysis Component:
Are Derlak's assets financed mainly by debt or equity in 2019? in 2020? Is the change in how assets were financed from 2019 to 2020 favourable or unfavourable?