Windmill Ltd commenced a takeover of its principal competitor WindPower Ltd in June 2019. The takeover was hostile and WindPower Ltd fought it vigorously.
WindPower Ltd was under financial stress due to misappropriation of funds by a former employee. This provided Windmill Ltd with the opportunity to mount the takeover.
Legal costs were significant due to the hostility against the takeover.
Just prior to the finalisation of the documentation, the senior management staff of Windpower Ltd won Lotto and were in a position to take over the company and pay off all outstanding debts.
Windmill Ltd spent a total of $1.5 m on the unsuccessful takeover in both 2019 and 2020.
Mr Abbott, the Managing Director of Windmills Ltd, has asked for your advice of how this large expense is to be treated for tax purpose..
Research this problem. In presenting your argument provide any relevant sections, cases and rulings which may support your position. You should also provide commentary on any possible opposing arguments.
This section must be referenced in accordance with the Australian Guide to Legal Citation (AGLC)
In: Accounting
Are activist CEO’s are acting outside the scope of their fiduciary duties? – discuss.
There has been a lot of publicity about the benefit and detriment of activist CEOs in Australian (and
global) business. Write a report describing and explaining the statutory law of directors’ fiduciary
duties as it applies to CEO activism.
a) Define CEO and describe the role.
b) Briefly describe the conduct or behaviour that is referred to as CEO activism and provide one
“real world” example. (Make sure that you reference the source of your example).
c) Discuss the relevant Australian statutory law on directors’ fiduciary duties.
d) Analyse your example of CEO activism and provide an opinion (conclusion) on whether this
conduct meets or breaches the Australian statutory law on directors’ fiduciary duty to act in
the best interests of their company.
Please use ILAC form to write this.
In: Accounting
1. why would any company choose to locate manufacturing facilities in the U.S., when U.S. companies are fleeing the country?
Take a foreign company that has built a plant in the U.S. What incentives motivated the company of your choice? What were some of the long-term and short-term benefits of that decision?
In: Finance
Accounting Ethics - Comprehensive Problems
Injured workers have filed numerous workers' compensation claims against your audit client. In reviewing medical exams filed in connection with these claims, you noticed that one of these former employees has a life-threating disease. This disease can be cured by surgery, but the former employee does not know about his disease or about his need for surgery.
You asked your client for permission to inform this former employee about his life-threatening condition, but your client refused. During the course of your discussion, the client told you bluntly that “we will save a small fortune if the former employee has a short life span because, frankly, we will pay out fewer workers' compensation checks.”
Should you reveal information to this former employee concerning his life-threatening disease?
In: Accounting
1.
|
A recent survey reported in BusinessWeek dealt with the salaries of CEOs at large corporations and whether company shareholders made money or lost money. |
| CEO Paid More Than $1 Million |
CEO Paid Less Than $1 Million |
Total | |
| Shareholders made money | 6 | 15 | 21 |
| Shareholders lost money | 8 | 4 | 12 |
| Total | 14 | 19 | 33 |
|
If a company is randomly selected from the list of 33 studied, calculate the probabilities for the following : |
| (a) | The CEO made more than $1 million. (Round your answers to 3 decimal places.) |
| Probability |
| (b) |
The CEO made more than $1 million or the shareholders lost money. (Round your answers to 3 decimal places.) |
| Probability |
| (c) |
The CEO made more than $1 million given the shareholders lost money. (Round your answers to 3 decimal places.) |
| Probability |
| (d) |
Select 2 CEOs and find that they both made more than $1 million. (Round your answers to 3 decimal places.) |
| Probability |
2.
|
The probability a HP network server is down is .062. If you have four independent servers, what is the probability that at least one of them is operational? (Round your answer to 6 decimal places.) |
| Probability |
In: Math
Study the case below and answer the questions given at the end:
BMW: Marketing Subsidiaries in Foreign Markets
BMW is a German manufacturer of high-quality motor cars, About half of its sales are in the German market, with the other half from exports. In reappraising Its markets and distribution strategy both in Germany and abroad, the company believed that its multiple layers of distribution were causing inefficiencies in its marketing efforts.
BMW Germany
Originally, BMW had a dual distribution system in Germany. It employed a strong wholesaler system along with direct distribution by BMW to large dealers. This system seemed to work effectively because BMW's market share in Germany doubled in 10 years. However, the company found share competitive distortions with this dual approach. For example, the wholesalers that received the same commission for wholesale transactions as for retails sales had gone into direct competition with retailers. The larger direct dealers sometimes sold more than the wholesalers but received the smaller dealer discount. The problems arising from BMW's distribution strategy caused the company to abolish its German wholesaler network. BMW expanded its direct dealer system to replace the business formerly handled by the wholesalers.
BMW Abroad
The company was planning to initiate a more direct selling method in its foreign markets as well as at home. It realized the need for care in order not to disturb existing import channels. However, the company believed that it was desirable to replace the present independent importers in foreign markets with company-owned marketing subsidiaries. The independent importers buy the cars from Germany and then resell to accredited dealers --- who sell them to the public, In moving to company-owned marketing subsidiaries, BMW was following the international marketing approach of Volkswagen and Daimler-Benz (with Mercedes). One of the major arguments presented for going direct was that BMW could save the 15 percent commission the company paid to its importer distributors in foreign markets.
France
In line with its new policy of more direct distribution in foreign markets, BMW formed its first marketing subsidiary in France. BMW Import SA replaced the former independent French importer (which had been called BMW France but now was renamed SFAM France). SFAM France continued to sell BMW cars to consumers through its retails outlets in Paris and in the provinces. Sales to dealers henceforth were made only by BMW Import SA, the company's wholly owned marketing subsidiary. This seemed to be successful in France.
United States
In implementing its new direct marketing approach in the U.S marker, BMW faced two alternatives. It could either take-over its present U.S. importer-distributor or establish a new and separate BMW marketing subsidiary as in France. The company wondered which of these alternatives would be best for the important U.S. market. BMW had about 250 dealers in the United States.
a) Do you see any disadvantage for BMW in going to direct distribution in foreign markets?
b) What advantages might the company realize by operating through its own marketing subsidiaries?
c) In marketing the decision for the U.S. market, what questions would you ask? What variables would you consider?
In: Operations Management
Problem 23-01
The following are Flounder Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020.
|
COMPARATIVE BALANCE SHEETS |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
|
2020 |
2019 |
Increase |
|||||||
|
Cash |
$812,400 |
$700,100 |
$112,300 |
||||||
|
Accounts receivable |
1,135,500 |
1,158,500 |
(23,000 |
) |
|||||
|
Inventory |
1,844,800 |
1,713,900 |
130,900 |
||||||
|
Property, plant, and equipment |
3,316,600 |
2,964,200 |
352,400 |
||||||
|
Accumulated depreciation |
(1,160,900 |
) |
(1,040,300 |
) |
(120,600 |
) |
|||
|
Investment in Myers Co. |
309,500 |
274,000 |
35,500 |
||||||
|
Loan receivable |
250,500 |
— |
250,500 |
||||||
|
Total assets |
$6,508,400 |
$5,770,400 |
$738,000 |
||||||
|
Accounts payable |
$1,015,400 |
$955,000 |
$60,400 |
||||||
|
Income taxes payable |
29,900 |
50,300 |
(20,400 |
) |
|||||
|
Dividends payable |
79,600 |
100,500 |
(20,900 |
) |
|||||
|
Lease liabililty |
412,000 |
— |
412,000 |
||||||
|
Common stock, $1 par |
500,000 |
500,000 |
— |
||||||
|
Paid-in capital in excess of par—common stock |
1,511,500 |
1,511,500 |
— |
||||||
|
Retained earnings |
2,960,000 |
2,653,100 |
306,900 |
||||||
|
Total liabilities and stockholders’ equity |
$6,508,400 |
$5,770,400 |
$738,000 |
||||||
Additional information:
| 1. | On December 31, 2019, Flounder acquired 25% of Myers Co.’s common stock for $274,000. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,096,000. Myers reported income of $142,000 for the year ended December 31, 2020. No dividend was paid on Myers’s common stock during the year. | |
| 2. | During 2020, Flounder loaned $312,200 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $61,700, plus interest at 10%, on December 31, 2020. | |
| 3. | On January 2, 2020, Flounder sold equipment costing $59,600, with a carrying amount of $37,700, for $40,200 cash. | |
| 4. | On December 31, 2020, Flounder entered into a capital lease for an office building. The present value of the annual rental payments is $412,000, which equals the fair value of the building. Flounder made the first rental payment of $59,700 when due on January 2, 2021. | |
| 5. | Net income for 2020 was $386,500. | |
| 6. | Flounder declared and paid the following cash dividends for 2020 and 2019. |
|
2020 |
2019 |
|||
|---|---|---|---|---|
|
Declared |
December 15, 2020 | December 15, 2019 | ||
|
Paid |
February 28, 2021 | February 28, 2020 | ||
|
Amount |
$79,600 | $100,500 |
Prepare a statement of cash flows for Flounder Corp. for the year
ended December 31, 2020, using the indirect method.
(Show amounts that decrease cash flow with either a -
sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
In: Accounting
Problem 23-01
The following are Kingbird Corp.’s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020.
|
COMPARATIVE BALANCE SHEETS |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
|
2020 |
2019 |
Increase |
|||||||
|
Cash |
$821,300 |
$694,000 |
$127,300 |
||||||
|
Accounts receivable |
1,124,400 |
1,158,200 |
(33,800 |
) |
|||||
|
Inventory |
1,852,600 |
1,702,600 |
150,000 |
||||||
|
Property, plant, and equipment |
3,300,400 |
2,951,400 |
349,000 |
||||||
|
Accumulated depreciation |
(1,174,500 |
) |
(1,048,100 |
) |
(126,400 |
) |
|||
|
Investment in Myers Co. |
312,300 |
273,800 |
38,500 |
||||||
|
Loan receivable |
250,100 |
— |
250,100 |
||||||
|
Total assets |
$6,486,600 |
$5,731,900 |
$754,700 |
||||||
|
Accounts payable |
$1,019,600 |
$959,800 |
$59,800 |
||||||
|
Income taxes payable |
29,800 |
50,100 |
(20,300 |
) |
|||||
|
Dividends payable |
79,400 |
99,100 |
(19,700 |
) |
|||||
|
Lease liabililty |
408,500 |
— |
408,500 |
||||||
|
Common stock, $1 par |
500,000 |
500,000 |
— |
||||||
|
Paid-in capital in excess of par—common stock |
1,504,000 |
1,504,000 |
— |
||||||
|
Retained earnings |
2,945,300 |
2,618,900 |
326,400 |
||||||
|
Total liabilities and stockholders’ equity |
$6,486,600 |
$5,731,900 |
$754,700 |
||||||
Additional information:
| 1. | On December 31, 2019, Kingbird acquired 25% of Myers Co.’s common stock for $273,800. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,095,200. Myers reported income of $154,000 for the year ended December 31, 2020. No dividend was paid on Myers’s common stock during the year. | |
| 2. | During 2020, Kingbird loaned $309,100 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $59,000, plus interest at 10%, on December 31, 2020. | |
| 3. | On January 2, 2020, Kingbird sold equipment costing $59,500, with a carrying amount of $38,400, for $39,900 cash. | |
| 4. | On December 31, 2020, Kingbird entered into a capital lease for an office building. The present value of the annual rental payments is $408,500, which equals the fair value of the building. Kingbird made the first rental payment of $59,800 when due on January 2, 2021. | |
| 5. | Net income for 2020 was $405,800. | |
| 6. | Kingbird declared and paid the following cash dividends for 2020 and 2019. |
|
2020 |
2019 |
|||
|---|---|---|---|---|
|
Declared |
December 15, 2020 | December 15, 2019 | ||
|
Paid |
February 28, 2021 | February 28, 2020 | ||
|
Amount |
$79,400 | $99,100 |
Prepare a statement of cash flows for Kingbird Corp. for the year
ended December 31, 2020, using the indirect method.
(Show amounts that decrease cash flow with either a -
sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
In: Accounting
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In: Accounting
The following are Flounder Corp.’s comparative balance sheet
accounts at December 31, 2020 and 2019, with a column showing the
increase (decrease) from 2019 to 2020.
|
COMPARATIVE BALANCE SHEETS |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
|
2020 |
2019 |
Increase |
|||||||
|
Cash |
$822,600 |
$700,100 |
$122,500 |
||||||
|
Accounts receivable |
1,139,300 |
1,157,900 |
(18,600 |
) |
|||||
|
Inventory |
1,835,600 |
1,726,700 |
108,900 |
||||||
|
Property, plant, and equipment |
3,276,300 |
2,980,900 |
295,400 |
||||||
|
Accumulated depreciation |
(1,165,600 |
) |
(1,047,400 |
) |
(118,200 |
) |
|||
|
Investment in Myers Co. |
312,200 |
272,500 |
39,700 |
||||||
|
Loan receivable |
251,900 |
— |
251,900 |
||||||
|
Total assets |
$6,472,300 |
$5,790,700 |
$681,600 |
||||||
|
Accounts payable |
$1,016,000 |
$949,400 |
$66,600 |
||||||
|
Income taxes payable |
30,200 |
49,700 |
(19,500 |
) |
|||||
|
Dividends payable |
79,200 |
99,100 |
(19,900 |
) |
|||||
|
Lease liabililty |
355,000 |
— |
355,000 |
||||||
|
Common stock, $1 par |
500,000 |
500,000 |
— |
||||||
|
Paid-in capital in excess of par—common stock |
1,501,300 |
1,501,300 |
— |
||||||
|
Retained earnings |
2,990,600 |
2,691,200 |
299,400 |
||||||
|
Total liabilities and stockholders’ equity |
$6,472,300 |
$5,790,700 |
$681,600 |
||||||
Additional information:
| 1. | On December 31, 2019, Flounder acquired 25% of Myers Co.’s common stock for $272,500. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,090,000. Myers reported income of $158,800 for the year ended December 31, 2020. No dividend was paid on Myers’s common stock during the year. | |
| 2. | During 2020, Flounder loaned $255,500 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $3,600, plus interest at 10%, on December 31, 2020. | |
| 3. | On January 2, 2020, Flounder sold equipment costing $59,600, with a carrying amount of $37,800, for $39,900 cash. | |
| 4. | On December 31, 2020, Flounder entered into a capital lease for an office building. The present value of the annual rental payments is $355,000, which equals the fair value of the building. Flounder made the first rental payment of $60,100 when due on January 2, 2021. | |
| 5. | Net income for 2020 was $378,600. | |
| 6. | Flounder declared and paid the following cash dividends for 2020 and 2019. |
|
2020 |
2019 |
|||
|---|---|---|---|---|
|
Declared |
December 15, 2020 | December 15, 2019 | ||
|
Paid |
February 28, 2021 | February 28, 2020 | ||
|
Amount |
$79,200 | $99,100 |
Prepare a statement of cash flows for Flounder Corp. for the year
ended December 31, 2020, using the indirect method.
(Show amounts that decrease cash flow with either a -
sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
In: Accounting