International Corp. (IC) is a large Canadian company that has operations around the world that are very diverse. In the past few years they have acquired a number of different companies in a variety of businesses. They have decided this year that it is time to reorganize their operations by amalgamating similar businesses, shutting down operations that are not efficient, and upgrading to new facilities. IC has a December 31 year end.
You, CPA, have recently been hired as an accounting policy advisor. Your first job is to prepare a report for your manager identifying how the following events should be accounted for and the impact on the financial statements.
After the reorganization is complete IC hopes to issue shares to the public, so they are concerned about any impact on EPS. In addition, IC has financing from both Canadian and international banks with covenants based on a maximum debt to equity ratio.
Your manager provided you with a summary from the last board of directors meeting of the following sales that have been approved as part of the reorganizing. The company is in the process of trying to find a buyer for these assets.
1. IC plans to sell its head office building and relocate to a larger new building that will meet the needs of their expanded organization. The existing building will continue to be used until February of next year when the new building is expected to be completed.
2. IC plans to sell one of their manufacturing facilities and discontinue that product line, as sales have been low the past few years. Any uncompleted customer orders will be transferred to the buyer. The sale is anticipated within the next year.
3. IC has been operating their own power generating facilities for the past few years. They have decided to exit that operation entirely, as the cost of generating power for their manufacturing facilities was higher than buying power from hydro. The facility was only for IC’s own use, not to sell to others. The sale requires government approval, which could take up to two years once a firm commitment has been made by a buyer. It is anticipated that a buyer will commit within the next year because the facility is being put up for sale at a deeply discounted price.
4. In November IC announced plans to sell their research facility and move into a new building that has the latest technology and is ready for immediate occupancy. Prior to the sale, renovations need to be completed on the research facility to bring the standards up to the current building code. It is anticipated that these renovations will be completed within the next three months.
5. IC stopped using one of their manufacturing facilities in October of this year due to low demand for the products. Operations have ceased until demand recovers, at which time IC will resume production. The facility remains in workable condition.
Required:
Provide the requested report.
In: Accounting
Nominal GDP was $21,329.8 billion in Q2 of 2019 and fell to $19,520.1 billion in Q2 in 2020. Real GDP was $19,020.6 for Q2 in 2019 and $17,302.5 for Q2 in 2020, where 2012 was the base year. Compute the percentage change in the GDP deflator during this period.
In: Economics
The senior management of SFU and UBC were deeply concerned about the enrollment for Fall 2020 in March because of the pandemic. However, it turned that the enrollment went up by 5 – 10% for Fall 2020. Please explain this phenomenon using concepts from this course.
In: Accounting
Why was transformation, a mechanism for horizontal gene transfer (HGT), used which explains how Neisseria gonorrhoeae acquired human DNA? Why was conjugation and transduction not used for this HGT?
In: Biology
Explain the method generally used to allocate the cost of a lump-sum purchase to the individual assets acquired. please answer in your own words, do not use the outside resources.
In: Accounting
Building on the knowledge acquired, discuss practical
engineering design and why engineering for the developing world
matters.
discuss practical engineering design and why engineering for the developing world matters.
In: Electrical Engineering
Barriers to Healthcare for Women and Minorities
Poverty and lack of education are two big barriers to healthcare for women and minorities. Low levels of education are associated with low life expectancies and high mortality rates. People living in poverty often lack education about when, why, and where to access healthcare. There have been various legislative activities in the US to improve public health.
On the basis of your understanding of the access to healthcare facilities and impacts of barriers to healthcare access, answer the following questions:
Explain at least three public health campaigns targeting access to healthcare for women and/or minorities. Describe at least two aspects of their advertising strategies that have addressed income and education.
Abortion has been the subject of numerous legislative activities in the United States. How have various legislations affected low-income and minority women?
Describe the legal battle over birth control devices in the United States. Include how access to healthcare has been affected by the legal decisions.
Describe the legal barriers to healthcare access for low-income immigrant minorities.
Review the articles, "Ethnic and gender disparities in needed adolescent mental health care", and "Overlooked and underserved: Improving the health of men of color". Explain what it means to be "overlooked" by the healthcare system.
Discuss at least two examples that illustrate why minorities are often overlooked in the healthcare system. Do you agree or disagree with these reasons, why or why not?
Despite the fact that school-based psychological counseling is available to all students, Thomas et al., report that ethnic disparities in mental healthcare access and utilization still persist. Explain why this disparity exists. What can be done to decrease mental health access and utilization barriers for low-income and minority students?
What strategies does former U.S. Surgeon General, David Satcher, M.D., discuss that will decrease the potential for minorities to be overlooked by the healthcare system?
In: Nursing
QUESTION 4
KAM Ltd (KAM) is a private company in the electronics industry. The company has grown steadily since its incorporation in 1997 and is seeking public listing in the next financial year.
KAM prepared its financial statements under International Financial Reporting Standards (IFRS).
You work in the finance department of KAM and are currently working on the financial statements for the year ended 30 April 2020.
In order to gain maximum interest from the market when shares are offered for public trading, the Directors of KAM are keen to present financial statements showing high profitability.
They are aware that market analysts will look favourably on a higher than average return on capital employed (ROCE) for the electronics industry.
The standard formula to calculate gearing by analysis is:
Profit before interest and tax Equity + Long term liabilities
When reviewing the financial statement the following matters come to light: Part (a)
On 1 May 2019, KAM issued redeemable preference shares for £10 million. The preference shares carry a fixed dividend of 5%.
The dividend of £500,000 has been paid on 30 April 2020 and this amount has been deducted from reserves.
The directors are pleased as the amount paid has not affected the profit for the year.
QUESTION 4 CONTINUES ON THE NEXT PAGE:-
REQUIRED:
Maximum word count 200
Maximum word count: 100
Part (b)
On 1 May 2019, KAM granted 100 share options to all of its employees within its development team on the condition that they remain in its employment for the next four years.
At the grant date, there were 150 employees in the development team and the fair value of each option on the grant date was £52.
During the year ended 30 April 2019, the estimate of the total employee departure was assessed as 10% of the original 150 employees.
During the year ended 30 April 2020, the estimate of total employee departures was reassessed to 8% of the original 150 employees.
The share based payment was correctly accounted in the financial statements for the year ended 30 April 2019. The directors of KAM have stated that they do not wish to make any adjustment for the year ended 30 April 2020, as the impact of the options won’t be felt for another 2 years.
QUESTION 4 CONTINUES ON THE NEXT PAGE:-
REQUIRED:
Word count: 200
Word count 100
Having made the adjustments as well as providing explanations for these amendments for the share-based payments, you receive an email from the Managing Director asking:
“Can the estimates for total expected departures be increased, so lessening the impact of profit?”
REQUIRED:
Construct a brief reply to the Managing Director’s email discussing whether this would be permitted under IFRS.
In: Accounting
Answer for 8 and 9
On October 15, 2016, Koala, Inc. issued a 10 year bond (with a typical $1000 face value) that had an annual coupon value of $60. [We are assuming that the 2020 coupon has just been redeemed.]
1. What was the nominal yield on this bond on October 15, 2016? 6% [To 1 decimal place.]
2. What was the current yield on this bond on October 15, 2016?5.36% [To 2 decimal places.]
3. What was the yield to maturity for this bond on October 15, 2016? 5.679% [To 3 decimal places.]
4. What was the risk premium for this bond on October 15, 2016? 1.179% [To 3 decimal places.]
5. What was the nominal yield on this bond on October 15, 2020?6% [To 1 decimal place.]
6. What was the current yield on this bond on October 15, 2020?6.15% [To 2 decimal place.]
7. What was the yield to maturity for this bond on October 15, 2020?6.346% [To 3 decimal places.]
8. What was the risk premium for this bond on October 15, 2020? [To 3 decimal places.]
9. It is now October 15, 2020 and suddenly the Federal Reserve announces a massive program to reduce inflation. Instantly, the market rate of interest for a riskless corporate bond that would apply to this bond, falls from 4.0% to 2.5%. If there is no change in the risk premium expected for this Koala, Inc. bond, what will be this bond’s yield to maturity? [To 3 decimal places.]
In: Finance
Part C Question 3 Accounting for Income Taxes
Reed Ltd is a manufacturer of surfboards which commenced operations on 1 July 2019. The Statement of Comprehensive Income and the Statement of Financial Position were compiled on 30 June 2020. The following information was available:
Statement of Comprehensive Income for the year ended 30 June 2020
$ $
|
Sales |
430,000 |
||
|
Less |
|||
|
Cost of Goods Sold |
130,000 |
||
|
Administrative expense |
70,000 |
||
|
Warranty expense |
60,000 |
||
|
Depreciation- machine |
40,000 |
||
|
Insurance expense |
20,000 |
320,000 |
|
|
Profit before income tax |
110,000 |
||
Following information was extracted from the Statement of Financial Position at 30 June 2020:
|
2019 |
2020 |
|
|
Prepaid insurance |
24,000 |
36,000 |
|
Machine |
400,000 |
400,000 |
|
Less: Accumulated depreciation |
40,000 |
80,000 |
|
Provision for warranty |
34,000 |
28,000 |
Other information was available for the year ended 30 June 2020:
Required: (Narrations are not required in this question)
In: Accounting