) Matthews Co. acquired all of the common stock of Jackson Co. on January 1, 2017. As of that date, Jackson had the following trial balance: Debit Credit Accounts payable $ 60,000 Accounts receivable $ 50,000 Additional paid-in capital 60,000 Buildings (net) (20-year life) 140,000 Cash and short-term investments 70,000 Common stock 300,000 Equipment (net) (8-year life) 240,000 Intangible assets (indefinite life) 110,000 Land 90,000 Long-term liabilities (mature 12/31/19) 180,000 Retained earnings, 1/1/17 120,000 Supplies 20,000 Totals $ 720,000 $ 720,000 - During 2017, Jackson reported net income of $96,000 while paying dividends of $12,000. During 2018, Jackson reported net income of $132,000 while paying dividends of $36,000. Assume that Matthews Co. acquired the common stock of Jackson Co. for $588,000 in cash. As of January 1, 2017, Jackson's land had a fair value of $102,000, its buildings were valued at $188,000, and its equipment was appraised at $216,000. Any excess of consideration transferred over fair value of assets and liabilities acquired is due to an unamortized patent to be amortized over 10 years. Matthews decided to use the equity method for this investment. Required: (A.) Prepare consolidation worksheet entries for December 31, 2017. (B.) Prepare consolidation worksheet entries for December 31, 2018.

ABC Co. and XYZ Co. are identical firms in all respects except for their capital structure. ABC is all equity financed with $650,000 in stock. XYZ uses both stock and perpetual debt; its stock is worth $325,000 and the interest rate on its debt is 6.5 percent. Both firms expect EBIT to be $71,000. Ignore taxes.

1. Rico owns $39,000 worth of XYZ’s stock. What rate of return is he expecting?

2. What is the WACC for ABC and XYZ?

On January 1, Year 6, Magnus Co. leased a machine to Fisher Co. The machine was acquired by Magnus on January 1, Year 1, for $200,000. The useful life of the machine was 20 years with no salvage value, and it was depreciated by Magnus using the straight-line method. The lease term is 10 years, and the present value of the lease payments to be made over the lease term was $90,000. Annual equal lease payments of $14,647 are payable at the end of each year starting December 31, Year 1. The discount rate for the lease is 10%. Fisher depreciates all of its assets using the straight-line method. Assume that both the remaining economic life of the machine and the salvage value did not change as a result of the lease.

For each of the following independent situations, enter in the designated cells below the appropriate amounts for the carrying amount of the right-of-use asset that should be reported in Fisher’s December 31, Year 6, balance sheet. Enter all amounts as positive values. Round all amounts to the nearest whole number. If no entry is necessary, enter a zero (0) or leave the cell blank.

2) Lebron Co. acquired the entire outstanding shares of common stock of Cavaliers Co. On the acquisition date the total fair value of net identifiable assets acquired (i.e., far value of identifiable assets acquired and liabilities assumed) was greater than the consideration transferred for the shares.

Research and cite a specific paragraph in the Accounting Standard Codification that can help the company to determine how this difference should be recognized in the consolidated financial statements. Unless specifically requested, your response should not cite implementation guidance and illustrations.

FASB ASC                              -                   -                    -

The comparative statements of Wildhorse Co. are presented here.

All sales were on account. Net cash provided by operating activities for 2022 was $272,800. Capital expenditures were $168,640, and cash dividends were $79,064.

Compute the following ratios for 2022. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%.)

42-10. AQUESTION OF ETHICSBetween 1970 and 1981, Sanford Weill served as the chief executive officer (CEO) of Shearson Loeb Rhodes and several of its predecessor entities (collectively “Shearson”). In 1981, Weill sold his controlling interest in Shearson to the American Express Co., and between 1981 and 1985, he served as president of that firm. In 1985, Weill developed an interest in becoming CEO for BankAmerica and secured a commitment from Shearson to invest $1 billion in BankAmerica if he was successful in his negotiations with that firm. In early 1986, Weill met with BankAmerica directors several times, but these contacts were not disclosed publicly until February 20, 1986, when BankAmerica announced that Weill had sought to become its CEO but that BankAmerica was not interested in his offer. The day after the announcement, BankAmerica stock traded at prices higher than the prices at which it had traded during the five weeks preceding the announcement. Weill had discussed his efforts to become CEO of BankAmerica with his wife, who had discussed the information with her psychiatrist, Dr. Willis, prior to BankAmerica’s public announcement of February 20. She had also told Dr. Willis about Shearson’s decision to invest in BankAmerica if Weill succeeded in becoming its CEO. Willis disclosed to his broker this material, confidential information and purchased BankAmerica common stock. After BankAmerica’s public announcement and the subsequent increase in the price of its stock, Willis sold his shares and realized a profit of approximately $27,500. The court held that Willis was liable for insider trading under the misappropriation theory. [United States v. Willis, 737 F.Supp. 269 (S.D.N.Y. 1990)]1. The court stated in its opinion in this case that “[i]t is difficult to imagine a relationship that requires a higher degree of trust and confidence than the traditional relationship of physician and patient.” It then quoted the concluding words of the Hippocratic oath: “Whatsoever things I see or hear concerning the life of men, in my attendance on the sick or even apart therefrom, which ought not be noised abroad, I will keep silence thereon, counting such things to be as sacred secrets.” The court held that Willis had violated his fiduciary duty to Mrs. Weill, his patient, by investing in BankAmerica stock. Do you agree that Willis’s private investments, which were based on information learned through his sessions with Mrs. Weill, constituted a violation of his duty to his patient? After all, Willis had not “noised abroad” Mrs. Weill’s secrets—that is, he had not told others (except for his stockbroker) about the information. If you had been in Willis’s shoes, would you have felt ethically restrained from trading on the information?2. Can you think of any ways in which Willis’s trading could have been harmful to Mrs. Weill’s interests? Does your answer to this question have a bearing on how you answered Question 1?3. Do you think that the misappropriation theory of liability imposes too great a burden on outsiders, such as Willis? Why or why not? How might you justify, from an ethical point of view, the application of the misappropriation theory to “outsider trading”?

You are analysing data collected by a rover on the moon. You may assume that the rover starts at the origin (0,0,0), and that each coordinate it transmits contains an East-West component, a North-South component and an altitude component, relative to the origin. Let positive movement in the i direction be East, positive movement in the j direction be North, and positive movement in the k direction be increasing altitude. All values are in meters. Assume the moon is flat (neglect its curvature). The rover relays the following four coordinates in order, as it descends into a crater. Coordinates are issued each time the rover changes direction. As such, you may assume that each trajectory between these points is a straight line:
O : (0, 0, 0).
P₁: (2000, 5000, -500).
P₂: (3000, 8000, -600).
P₃: (6000, 9000, z).

Unfortunately, the transmission of the fourth coordinate is corrupted, and does not have an altitude component. For now, you label this component as z.

(a) Determine the displacement vectors describing the rover's straight-line trajectory between each of their transmissions. You may keep z as an unknown.

(b) Upon reaching P₂, the rover's battery has drained and requires recharging. Assuming the battery was initially at full charge, calculate the approximate range of the rover from one battery charge (i.e. what distance can it travel before requiring a recharge).

(c) For communication with the rover, mission control needs to point their antenna (located at O) towards the rover. Ignoring the altitude component (i.e. treat the problem as two-dimensional), calculate the angle that the antenna must be rotated to point towards P₂ if it is currently pointing at P₁.

(d) Based on the time taken to send and receive communications, you calculate that at P₃ the rover must be 10,850 meters from O. Determine z, the altitude component of the co-ordinate P₃. You may assume that P₃ is the lowest point in the crater.