Use the following charts to answer the questions below:

1. For each country, report the stock index values and ex-rates for February, 2019 and February, 2020.

2. Calculate the annual percentage return for each stock market from February, 2019 - February, 2020, measured in local currency. Use the standard percentage return formula: [(P2 - P1)/P1] x 100.

3. For each currency, calculate the annual percentage change from February, 2019 to February, 2020 using the exchange rate exactly as quoted, and for each currency separately, clearly explain in a full sentence or two whether each of the foreign currencies appreciated or depreciated versus the dollar.

4. Calculate the effective, annual US dollar return for a U.S. investor who had invested money in the stock markets of each of the five countries last year (February 2019 - February 2020), using the formula: Effective dollar return = % foreign stock market return +/- %CHG in the foreign currency.

Presented below are the 2020 Income Statement and Balance Sheet for Riggins Online Store. Prepare a Cash Flow Statement as of December 31, 2020.

Additional Information for the 2020 fiscal year includes: 1) Cash dividends of $1,000 were declared and paid. 2) Equipment with a cost of $1,500 and accumulated depreciation of $1,000 was sold for $500.

Problem 5-7

Bramble Inc. had the following balance sheet at December 31, 2019.

During 2020, the following occurred.

Prepare a statement of cash flows for the year 2020 for Bramble. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Prepare the unclassified balance sheet as it would appear at December 31, 2020. (List Assets in order of liquidity.)

Compute Bramble’s free cash flow and current cash debt coverage for 2020. (Round current cash debt coverage to 2 decimal places, e.g. 0.56. Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Information concerning Concord Corporation’s intangible assets is as follows. 1. On January 1, 2020, Concord signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $60,000. Of this amount, $12,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $12,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 4 annual payments discounted at 12% (the implicit rate for a loan of this type) is $36,450. The agreement also provides that 8% of the revenue from the franchise must be paid to the franchisor annually. Concord’s revenue from the franchise for 2020 was $850,000. Concord estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.) 2. Concord incurred $75,000 of experimental and development costs in its laboratory to develop a patent that was granted on January 2, 2020. Legal fees and other costs associated with registration of the patent totaled $20,000. Concord estimates that the useful life of the patent will be 8 years. 3. A trademark was purchased from Shanghai Company for $35,000 on July 1, 2017. Expenditures for successful litigation in defense of the trademark totaling $10,200 were paid on July 1, 2020. Concord estimates that the useful life of the trademark will be 20 years from the date of acquisition.

Prepare a schedule showing the intangible assets section of Concord’s balance sheet at December 31, 2020.

Oliver Corporation decided on January 1, 2020, that its Canadian subsidiary’s functional currency is the Canadian dollar rather than the U.S. dollar. On that date, the net assets of its Canadian subsidiary amounted to C$20,000,000 and to $11,000,000 when remeasured; the exchange rate was $0.75/C$. During 2020, the Canadian subsidiary reported net income of C$2,500,000 and declared and paid dividends of C$1,000,000. No other changes in owners’ equity occurred.

Required

Calculate the translation gain or loss for 2020, and the cumulative translation gain or loss at December 31, 2020. Relevant exchange rates were $0.78/C$ (average); $0.77/C$ (dividend declaration date); $0.79/C$ (December 31, 2020).

Instructions for Translation Gain or Loss table:

1. Use negative signs with answers to indicate a negative exposed position balance.
2. Use negative signs with answers to indicate an amount that reduces the exposed position balance.
3. Using the drop-down menu, select the appropriate answer to indicate a translation gain or loss and a cumulative translation gain or loss.
4. Do not use a negative sign with your translation gain or loss and cumulative gain or loss answers.
5. Enter answers using all zeros (do not abbreviate to millions or thousands).

In 2020, John and Emma, married filing joint taxpayers, have adjusted gross income of $430,000. Their AGI includes $10,000 of interest income. They have no dependents and have $50,000 of itemize deductions. What is their 2020 federal income tax?

A) $83,631 B) $83,829 C) $89,212 D) $89,404

In December 2019, Emily, a cash basis taxpayer, received a $2,500 cash scholarship for the spring semester of 2020. However, she did not use the funds to pay the tuition until January 2020. Emily can exclude the $2,500 from her gross income in 2019.

a. True

b. False  

Using the Black-Scholes option pricing model, what is the price of a $1,310 2020-04-24 European call option for Alphabet Inc. (GOOG) stock purchased on 2020-03-16, assuming that the option implied volatility is 53%, the stock price is $1,084, and the risk-free rate is 1.5%?

Step 1 – Analyze Business Transactions (Accounting Cycle) Assume that you are the Financial Accountant of a newly started business from your chosen in August 2020: You are requested to assume the chosen business transactions during the month of August 2020 and analyze it by shown the impact of these transactions on the accounting equation!

1. Review   and discuss the collapse of the Futures Oil Market, which   fell into the negative realm in May 2020.

What were the main reasons for this fall into the negative realm? Critically discuss.

2. After May 2020, what are the prospects of futures contracts as a significant risk management tool for firms? Discuss critically.