On January 1, 2020, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,800,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail’s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail’s board, which gave it the ability to significantly influence Sauk Trail’s operating and investing activities.
The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail’s assets and liabilities follow:
| Carrying Amount | Fair Value | |||||
| Cash and receivables | $ | 115,000 | $ | 115,000 | ||
| Computing equipment | 5,045,000 | 5,780,000 | ||||
| Patented technology | 105,000 | 4,010,000 | ||||
| Trademark | 155,000 | 2,010,000 | ||||
| Liabilities | (190,000 | ) | (190,000 | ) | ||
Also, as of January 1, 2020, Sauk Trail’s computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a four-year remaining useful life. The trademark's useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost.
During the next two years, Sauk Trail reported the following net income and dividends:
| Net Income | Dividends Declared | |||||
| 2020 | $ | 1,810,000 | $ | 155,000 | ||
| 2021 | 1,995,000 | 165,000 | ||||
How much of Ridge Road’s $2,800,000 payment for Sauk Trail is attributable to goodwill?
What amount should Ridge Road report for its equity in Sauk Trail’s earnings on its income statements for 2020 and 2021?
What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2020 and 2021?
In: Accounting
On January 1, 2020, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $3,200,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail’s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail’s board, which gave it the ability to significantly influence Sauk Trail’s operating and investing activities.
The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail’s assets and liabilities follow:
| Carrying Amount | Fair Value | |||||
| Cash and receivables | $ | 135,000 | $ | 135,000 | ||
| Computing equipment | 5,225,000 | 6,100,000 | ||||
| Patented technology | 125,000 | 4,050,000 | ||||
| Trademark | 175,000 | 2,050,000 | ||||
| Liabilities | (210,000 | ) | (210,000 | ) | ||
Also, as of January 1, 2020, Sauk Trail’s computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a four-year remaining useful life. The trademark's useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost.
During the next two years, Sauk Trail reported the following net income and dividends:
| Net Income | Dividends Declared | |||||
| 2020 | $ | 1,850,000 | $ | 175,000 | ||
| 2021 | 2,035,000 | 185,000 | ||||
How much of Ridge Road’s $3,200,000 payment for Sauk Trail is attributable to goodwill?
What amount should Ridge Road report for its equity in Sauk Trail’s earnings on its income statements for 2020 and 2021?
What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2020 and 2021?
In: Accounting
Pharoah Home Improvement Company installs replacement siding,
windows, and louvered glass doors for single-family homes and
condominium complexes. The company is in the process of preparing
its annual financial statements for the fiscal year ended May 31,
2020. Jim Alcide, controller for Pharoah, has gathered the
following data concerning inventory.
At May 31, 2020, the balance in Pharoah’s Raw Materials Inventory
account was $428,400, and Allowance to Reduce Inventory to Market
had a credit balance of $26,750. Alcide summarized the relevant
inventory cost and market data at May 31, 2020, in the schedule
below.
Alcide assigned Patricia Devereaux, an intern from a local college,
the task of calculating the amount that should appear on Pharoah’s
May 31, 2020, financial statements for inventory at
lower-of-cost-or-market as applied to each item in inventory.
Devereaux expressed concern over departing from the historical cost
principle. Assume Garcia uses LIFO inventory costing.
|
Cost |
Replacement |
Sales Price |
Net Realizable |
Normal Profit |
||||||||||
| Aluminum siding | $73,500 | $65,625 | $67,200 | $58,800 | $5,355 | |||||||||
| Cedar shake siding | 90,300 | 83,370 | 98,700 | 89,040 | 7,770 | |||||||||
| Louvered glass doors | 117,600 | 130,200 | 195,720 | 176,715 | 19,425 | |||||||||
| Thermal windows | 147,000 | 132,300 | 162,540 | 147,000 | 16,170 | |||||||||
| Total | $428,400 | $411,495 | $524,160 | $471,555 | $48,720 | |||||||||
(a1) Determine the proper balance in Allowance to
Reduce Inventory to Market at May 31, 2020.
| Balance in the Allowance to Reduce Inventory to Market |
$ |
(a2) For the fiscal year ended May 31, 2020,
determine the amount of the gain or loss that would be recorded due
to the change in Allowance to Reduce Inventory to Market.
| The amount of the gain (loss) |
$ |
In: Accounting
Cyclops Company has its own research department. However, the company purchases patents from time to time. The following is a summary of transactions involving patents now owned by the company.
Assume that the legal life of each patent is also its useful life.
Required:
Total amortization expense for the year ended December 31, 2020
these are all the information given.
In: Accounting
from a business point of view ( not psychological ) :
a. Explain the meaning of values from a business point of view ( 100 words )
b. explain how values impact innovation and entrepreneurship from a business point of view (300 Words) ... u can use some of the following values as examples :
- ‘Universalism’ is a value type that gives priority to social justice and tolerance for all.
- Benevolence’ means promoting the welfare of other people.
- Tradition’ is formed from values that represent respect for traditions and customs.
- Stimulation’ is a group of values that reflect the preference for an exciting life.
- Hedonism’ is a value type which emphasizes a preference for pleasure and self-rewarding.
- . Strong value of ‘Power’ usually indicates a person who appreciates social status.
In: Operations Management
Oliban is an Omani company offers beauty products of the highest quality of natural frankincense based on scientific research to deliver the best results. It is one of a leading innovation company in GCC in health & wellness. It produces products from Omani frankincense oil branded as oliban which is best grade of its kind.
A. Because of the Coronavirus disease (Covet-19) Oliban management decided to set a new strategy. Explain in your words in no less than 200 words, the strategic management process phases the Oliban’s strategic team should follow.
B. If Oliban management decided to give a consultant agency to set their strategy, discuss in your words in no less than 200 words, the advantage and disadvantage of this action?
In: Operations Management
*As an employee with less than one year of experience in a firm,
what actions would you pursue if you encountered unethical
practices by a strategic leader?
*Select an organization, social group, or volunteer agency of which
you are a member that you believe has an ethical culture. What
factors caused this culture to be ethical? Are there any events
that would cause the culture to become less ethical? If so, what
are they?
*Do firms encounter ethical issues when they use internal
corporate-venturing processes to produce and manage innovation? If
so, what are these issues?
*Small firms often have innovative products. When is it appropriate
for a large firm to buy a small firm for its product innovations
and new product ideas?
In: Operations Management
Note On Lead User Research describes how the potential of alternative uses of research can be determined methodically. Lead Users are defined as consumer groups who lead with respect to cutting edge applications of important markets and technical trends. Stages of a Lead User study are discussed which include project planning, trends/needs identification, preliminary concept generation, and final concept generation.
Questions
What are the characteristics of Lead Users?
What are the three types of Lead Users?
What resource commitments are required for the level of innovation that will support the alternative market?
How can Stage II: Trends/Needs Identification be conducted in a quantitative and scientific fashion?
Why is ‘Testing the Concepts’ not a stage of the Lead User Study?
In: Operations Management
A Survival Guide for Leaders (Application)
What are some ways you could apply the tenets of 1) operate in and above the fray, 2) court the uncommitted, 3) cook the conflict, and 4) place the work where it belongs in the HIT space (reference A Survival Guide for Leaders)? As you ponder on this question, consider some of our past discussion questions on innovation, teams, change, and technology. What are some specific examples in those areas that link to the tenets listed? How could a HIT leader drive improved operational performance using the tenets of 1) operate in and above the fray, 2) court the uncommitted, 3) cook the conflict, and 4) place the work where it belongs in the HIT space?
In: Operations Management
"The rules of engagement for running a company that is people-based like Starbucks, and so many other companies: you just can not [sic] continue to leave your people behind and only focus on shareholder value," CEO Howard Schultz told CNN's Poppy Harlow (Wallace, 2014).
In: Operations Management