On 1 July 2020, Tall Ltd acquired all of the assets and liabilities of Blacks Ltd. In exchange for these assets and liabilities, Tall Ltd issued 100 000 shares that at date of issue had a fair value of $6.30 per share. Costs of issuing these shares amounted to $1000. Legal costs associated with the acquisition of Blacks Ltd amounted to $4200.
The asset and liabilities of Blacks Ltd at 1 July 2020 were as follows:
Carrying amount Fair value
Assets
Cash $1 000 $1 000
Accounts receivable 10 000 10 000
Inventory 64 000 68 000
Equipment 320 000 232 000
Accumulated depreciation – equipment (96 000) —
Patents 240 000 280 000
Liabilities
Accounts payable (16 000) (16 000)
Debentures (64 000) (64 000)
The accountant for Tall Ltd, Mr Spencer, knows that AASB 3 has to be applied in accounting for business combinations. However, he is confused as to how to account for the goodwill, what recognition criteria is applied to assets and liabilities acquired in the business combination, and how the varying dates such as the date of exchange and acquisition date will affect the accounting for the business combination.
Provide Mr Spencer with advice on the issues that are confusing him.
Required
In: Accounting
Study 3 (Total = 25 Marks)
Business Combination
On 1 July 2020, Tall Ltd acquired all of the assets and liabilities
of Blacks Ltd. In exchange for these assets and liabilities, Tall
Ltd issued 100 000 shares that at date of issue had a fair value of
$6.30 per share. Costs of issuing these shares amounted to $1000.
Legal costs associated with the acquisition of Blacks Ltd amounted
to $4200.
The asset and liabilities of Blacks Ltd at 1 July 2020 were as
follows:
Carrying amount Fair value
Assets
Cash $1 000 $1 000
Accounts receivable 10 000 10 000
Inventory 64 000 68 000
Equipment 320 000 232 000
Accumulated depreciation – equipment (96 000) —
Patents 240 000 280 000
Liabilities
Accounts payable (16 000) (16 000)
Debentures (64 000) (64 000)
The accountant for Tall Ltd, Mr Spencer, knows that AASB 3 has to
be applied in accounting for business combinations. However, he is
confused as to how to account for the goodwill, what recognition
criteria is applied to assets and liabilities acquired in the
business combination, and how the varying dates such as the date of
exchange and acquisition date will affect the accounting for the
business combination.
Provide Mr Spencer with advice on the issues that are confusing
him.
Required
1. Explain how to account for goodwill.
2. Discuss the importance of identifying the acquisition date
3. What recognition criteria is applied to assets and liabilities
acquired in the business combination. Explain.
4. Prepare the acquisition analysis at 1 July 2020 for the
acquisition of Blacks Ltd by Tall Ltd.
5. Prepare the journal entries in the records of Tall Ltd at 1 July
2020.
In: Accounting
Business Analytics
Could I get the answer on a downloadable excel sheet please?
if i cannot get the downloadable file here on chegg: my email is [email protected] i can paypal $10 for the answer.
Market Insights Co. (MIC) is a full-service market research company. MIC is being hired to interview registered voters in a district to gain insight into their opinions about certain issues. Each voter is to be interviewed in person. The costs of interviewing different types of voters vary due to the differences in proportion throughout the population. Based on previous studies, estimates of the interview costs for different types of voters are as follows:
|
Cost Per Interview |
|||
|
Gender |
Democrat |
Republican |
Independent |
|
Male |
$ 10 |
$ 9 |
$ 13 |
|
Female |
$ 12 |
$ 11 |
$ 14 |
The contract called for MIC to conduct interviews under the guidelines given below. MIC’s goal is to develop an interview plan that will satisfy the contract requirements at a minimum total interview cost.
Part 1. Linear Programming (LP) Model
Please formulate a linear programming (LP) model. Please follow the steps below.
Define the decision variables
Write the objective.
Write the constraints (which are the contract requirements).
There must be at least 4,500 total interviews.
At least 1,000 Independent voters must be interviewed.
At least 2,000 males must be interviewed.
At least 1,750 females must be interviewed.
No more than 40% of those interviewed may be Democrats.
No more than 35% of those interviewed may be Republicans.
No more than 25% of those interviewed may be Republican males.
Each of the six types of voters must be represented by at least 10% of the total interviews.
Constraints on decision variables.
Part 2. Spreadsheet Model and Solver Model
Construct a spreadsheet (Excel) model and solve the problem by Excel Solver. Please generate the Answer Report and Sensitivity Report from Excel Solver. Answer the following questions based on the output of Excel Solver.
What is the optimal interview plan?
How much is the minimum cost?
In: Accounting
I am having an informal information interview on Wednesday with a guy from Goldman Sachs and I have to impress him by asking him questions that will show that am knowledgeable about real estate finance and asset management. What are the 20 questions and what sort of knowledge do you think I should have to go into this interview?
In: Finance
Bling-Bling Jewellery Company Limited (“BB”) has been engaging in selling jewellery. It keeps a substantial amount of gem stones as inventory. The gem stones are recognized as raw material in the financial statements, and the amount of the gem stones is considered as material for the financial statements. Lee, Wong & Partners (“Lee Wong”) is the auditor of BB for its financial statements for the year ended 31 December 2020. Michael Lau, the CFO of BB, understands that Lee Wong also provides valuation services. He proposes to the audit partner to invite Lee Wong to provide an independent valuation report of the gem stones and the valuation fee would be around 30% of the proposed audit fee for the year ended 31 December 2020. Meanwhile, the proposed audit fee for the year ended 31 December 2020 would be reduced by 20%. If the audit fee is not reduced, BB may engage another audit firm to be the auditor of the company instead.
Required:
(a) Identify the ethical issues faced by Lee Wong and propose appropriate safeguards to respond to each ethical issue.
After Lee Wong finishes the audit for BB’s financial statements for the year ended 31 December 2019, Michael invites the audit team for dinner as a token of appreciation. A box of six red wines is served during the dinner and two bottles are consumed. Michael gives the remaining four bottles to the audit team after the dinner.
Required:
(b) Explain whether the audit team can accept the wine left over at the dinner.
Subsequent to the financial year ended 31 December 2020, BB has opened an online shop to attract more customers. However, there have been many news reports that customers receive fake gem stones when they purchase from the online shop. They feel cheated and would take legal action against BB. Before the case has been put to the court, the CEO has transferred all the assets of BB to a company controlled by his relative.
Required:
(c) Determine the areas that Lee Wong would consider in assessing whether to continue the existing audit engagement with BB.
[Total for Question: 24 marks]
In: Accounting
Example
Topic :COVID rapid response
The COVID 19 Rapid Response fund was set up to alleviate the suffering of the people. “In March 2020, the Government of Canada announced $1 billion to support a whole-of-government COVID-19 Response Fund, which supports federal public health measures such as enhanced surveillance, increased testing and ongoing support for preparedness in First Nations and Inuit communities” Government of Canada (2020). The policy aims to reduce the suffering of people hit by COVID 19 that led to the loss of jobs and increment of unemployment in the country.
The objective of the response fund is to support researchers that will help develop measures to detect and reduce the transmission of COVID-19. The fund enabled the health care system to test patience suffering from the virus and help contain the spread of COVID 19 Government of Canada (2020). According to a research from the University of Calgary (2020), he objective is to support Alberta-based genomics projects designed to address specific, short-term needs of industry, not-for-profit, and public sector receptors through research conducted by academics in collaboration with these receptors, with near-term outcomes that address the COVID-19 crisis.
In: Economics
1.4
According to the Organization for Economic Cooperation and Development (OECD), labor productivity increased and unemployment also increased in Australia from 2013 to 2014. Explain why an increase in labor productivity and an increase in unemployment are not likely to coincide in the long run. Can you think of any explanation for these changes to simultaneously occur in the long run?
2.4
In 2017, the CEO of Google, Sundar Pichai, earned $1,333,557 in total compensation (salary, bonuses, and other compensation) and Cristian Samper, the president and CEO of the non-profit Wildlife Conservation Society, earned $1,320,978. How can a non-profit organization like the Wildlife Conservation Society justify compensating its chief executive at a similar level to the CEO of a successful for-profit company like Google?
In: Economics
In: Accounting
You are an assistant to the attorney for FUN company. To complete this assignment you must write a two-to-three page report discussing the legal issues and likely outcome of the case below:
SAD Co. vs. FUN Company: Several weeks ago, SAD Co. CEO met with FUN’s CEO for lunch to discuss potential business ventures between both companies. After a few shots of whiskey, SAD’s CEO tells FUN’s CEO that SAD is interested in purchasing a commercial building that FUN owns in a central area in West Palm Beach. SAD is interested in this building because of the specific location in which it is located. SAD believes that owning a building in that specific location will increase their business significantly. SAD’s CEO offers FUN’s CEO to purchase that specific building for $5 million. FUN’s CEO responds that FUN estimates that the building is worth $9 million and that they are willing to sell the building for that price give that they have no use for it. SAD’s CEO takes out a $1.00 bill gives it to FUN’s CEO and says “this is my payment so that you give me time to talk to my board and see if we are willing to pay $9 million.” FUN’s CEO laughs and puts the $1.00 bill in his pocket. Both CEO’s shake hands and say goodbye and leave. The next day SAD’s CEO calls an emergency meeting to discuss the $9 million purchase price and the board agrees to the purchase of the building for $9 million. Immediately after the meeting, SAD’s CEO calls FUN’s CEO on the phone and tells him that SAD agrees to purchase the building for $9 million. FUN’s CEO tells SAD’s CEO that FUN has decided not to sell the building because after their meeting yesterday they realized how much potential the building actually had. SAD is now demanding that FUN honor its word and sell them the building for$9 million.
In: Accounting
The finance manager wants to prepare a cash budget for the July,
2020 through December, 2020 period.
The finance manager has received the following information from the
marketing and operations
managers:
• The Sales were $140,000 in January, 2020 and then the sales grew
by 2% each month in the first
three months (i.e., from February to April 2020) and by 5% in the
next two months (i.e., in May
and June 2020). The sales are expected to grow by 1% each month
thereafter.
• 45% of the Sales are collected in the same month. 30% of the
sales are collected in the following
month. 24% of the sales are collected after two months and the
remainder are not collected.
• The Purchases are 80% of each month’s sales and paid in the same
month.
• Wages and Salaries are $25,000 each month and paid in the same
month.
• Other administrative expenses are $15,000 and paid in the same
month.
• Depreciation expense is $5,000 each month.
• An electrical device worth $30,000 will be purchased in October
2020. 50% of the amount due
will be paid immediately and the balance will be paid in November,
2020.
• The company had previously taken a loan of $200,000. The annual
interest rate on the loan
amount is 4%. The interest is paid once a year in December each
year. Assume that no principal
repayments are made in this period, only interest payments are
made.
• The company pays rent of $3,500 quarterly (in March, June,
September, and December each
year).
1. Determine the total cash inflows for each month from July
2020 to December 2020.
Show your work in Excel.
2. Determine the total cash outflows for each month from July
2020 to December 2020.
Show your work in Excel.
3. Determine the expected change in cash for each month from
July 2020 to December 2020.
Show your work in Excel.
4. Describe in your own words some of the short-term borrowing
options that the company may adopt.
In: Accounting