1.On January 1, 2020, KJ Inc. acquired an equipment for P2,400,000 with residual value of P400,000 and useful life of 8 years. On December 31, 2023, due to hyperinflation, KJ Inc. tested for impairment the equipment. As of this date, the fair value of the equipment is P1,500,000 and the related disposal cost is P300,000 while the value in use of the equipment is P1,350,000. On December 31, 2024, the fair value of the equipment is P1,700,000 and the related disposal cost is P400,000 while the value in use of the equipment is P1,500,000. Using the same data, what is the gain on reversal of impairment loss to be recognized in year 2024? *

P387,500

P187,500

P37,500

P50,000

2.On January 1, 2020, KJ Inc. acquired an equipment for P2,400,000 with residual value of P400,000 and useful life of 8 years. On December 31, 2023, due to hyperinflation, KJ Inc. tested for impairment the equipment. As of this date, the fair value of the equipment is P1,500,000 and the related disposal cost is P300,000 while the value in use of the equipment is P1,350,000. On December 31, 2024, the fair value of the equipment is P1,700,000 and the related disposal cost is P400,000 while the value in use of the equipment is P1,500,000. What is the carrying amount to be presented on the equipment as of December 31, 2024? *

P1,112,500

P1,150,000

P1,500,000

P1,300,000

3.KJ Company had a machinery costing P3,000,000 when purchased on January 2, 2015. Estimated useful life of the asset was for 20 years with no salvage value at the end of its useful life. KJ uses the straight line method of Depreciation. On January 2, 2020, KJ is evaluating the machinery for possible impairment. The machinery has a remaining useful life of 5 years and is expected to generate cash inflows of P500,000 per year. KJ has determined that the rate implicit in current market transaction for similar asset is 10%. Available information as of January 2, 2020 also showed that the appropriate market price for the same asset is P1,950,000. Estimated cost of disposal, P150,000.What amount of Impairment loss, if any, is to be recognized? *

300,000

450,000

355,000

0

4.On January 1, 2015, KJ Company purchased a new building at a cost of P3,000,000. Depreciation was computed on the straight line basis at 4% per year. On January 1, 2020, the building was revalued at a fair value of P4,000,000. To record the revaluation the following journal entry was made: Dr. Building 1,000,000 Cr. Retained Earnings 1,000,000 Correcting entry will include which of the following? *

Credit Retained Earnings at 600,000

Credit Revaluation Surplus of P1,000,000

Debit Building of P2,000,000

Credit Accumulated Depreciation of 400,000

5.On January 1, 2015, KJ Company purchased a new building at a cost of P3,000,000. Depreciation was computed on the straight line basis at 4% per year. On January 1, 2020, the building was revalued at a fair value of P4,000,000. To record the revaluation the following journal entry was made: Dr. Building 1,000,000 Cr. Retained Earnings 1,000,000 What is the Accumulated Depreciation on Replacement Cost on January 1, 2020? *

400,000

600,000

1,000,000

1,600,000

6.KJ Company determined that, due to the obsolescence, equipment with an original cost of P180,000 and accumulated depreciation at January 1, 2020 of P84,000 had suffered permanent impairment, and as a result should have a fair value of only P60,000 as of the beginning of the year. Additionally, the remaining useful life of the equipment was reduced from eight years to three years. In its December 31, 2020 Income statement, how much should be reflected as Depreciation? *

104,000

20,000

140,000

120,000

Recording and Reporting Equity Investment: FV-NI

Adjust FVA at Year-End

On November 1, 2020, Drucker Co. acquired the following investments in equity securities measured at FV‑NI.

Kelly Corporation—600 shares of common stock (no-par) at $60 per share. Keefe Corporation—360 shares preferred stock ($10 par) at $20 per share. On December 31, 2020, the company’s year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24. Following are the data for 2021.

Mar. 2, 2021 Dividends per share, declared and paid: Kelly Corp., $1, and Keefe Corp., $0.50.
Oct. 1, 2021 Sold 120 shares of Keefe Corporation preferred stock at $25 per share.
Dec. 31, 2021 Fair values: Kelly common, $46 per share, Keefe preferred, $26 per share.

• Journal Entries and Financial Statement Presentation for 2020
• Journal Entries and Financial Statement Presentation for 2021

a. Prepare the entry for Drucker Company to record the purchase of the securities.

b. Prepare any adjusting entry needed at December 31, 2020.

c. Indicate the items and amounts that should be reported on the 2020 income statement of Drucker and its year-end balance sheet. Assume that the investments are classified as current.
Note: Use a negative sign to indicate a loss.

Feedback

You have correctly selected 13.

Partially correct

25.Your firm (an Australian firm) makes a sale to a Japanese customer.  The sale price is 200 million Japanese Yen payable in exactly three months from today.  The current exchange rate is AUD/JPY = 90 (i.e., 1 Australian Dollar (AUD) is worth 90 Japanese Yen (JPY)). The current interest rates in Australia and Japan are 3% p.a. and 0.5% p.a., respectively.
Given this information, please answer the following questions. Please label your answers according to parts.
(a) Given that Australian Dollar is the domestic currency, what is the direct quote of the exchange rate between Australian Dollar and Japanese Yen ? Please round the final answer to five decimal places.
(b) What is the theoretical current forward exchange rate quoted directly in terms of Australian Dollar (i.e. JPY/AUD) for delivery three months from today ? Show your input to the formula to arrive at the final answer.  Please round the final answer to five decimal places.
(c) How can the firm take advantage of any decreases in the exchange rate and also ensure that it receives at least Australian $2 million ? (Hint: Which derivative instrument can be used to achieve this objective?)
(d) Ignoring the cost of the derivative instrument to be used in part (c), what would be the outcome from hedging if the spot exchange rate in 3 month’s time is (i) AUD/JPY=150 and (ii) AUD/JPY = 50?

27.Your uncle has a big proportion of his life savings deposited in one of the Big Four Australian banks. He read in the newspaper that due to COVID-19, these banks’ profitability has declined significantly as a result of some customers not being able to service their loans and negative economic outlook. He is worried that his deposit in the bank may not be secure and is wondering whether he should withdraw all his deposit from the bank. Knowing that you have just completed this unit, he asked for your advice.
What advice will you provide to your uncle given what you have learned about financial institutions in this unit?

23.Having observed the dramatic rebound of technology stocks from their lows in March 2020, your friend Jake believes that this rally of technology stocks is simply too good to be fundamentally true given the ongoing significant economic impact of COVID-19. Accordingly, he has borrowed 50,000 shares of Cooper Technologies Ltd from his broker and sold them all at the price of $21.08 per share.
Explain the rationale behind Jake’s investment strategy. What is the risk that Jake faces that might keep him awake at night ?

Instructions:

Individual Work

Each person of the group is required to do the problems on paper with a pencil.   You WILL NOT receive any points on the group take home score if you do not show that you did the work or do not submit the answer before your group meeting. You are required to take a picture of your work and submit your work in Blackboard BEFORE your group meets.

Group Work

Your group will meet in person or on Zoom and determine who has the right answer and what answer you will submit. Please note that often each student has a section of the problem correct but not the entire problem correct.

Your group will prepare your group answer in Excel with proper format. This is the answer that will be graded. All members of the group that have submitted Individual Work will receive the same group grade.

One member of each group will submit the Excel sheet as a PDF in Blackboard. Please review your PDF file for formatting before you submit it.

Your PDF file should be as follows:

Page One: Group Member names, Date, Time, and Location

Page Two: Depreciation, Goodwill, and Impairment Loss

Depreciation, Goodwill, and Impairment Loss

At the beginning of 2020, Brady Inc. acquired Lincoln Technology Corporation for $600 million. In addition to cash, receivables, and inventory, the following assets and their fair values were also acquired:

The plant and equipment are depreciated over a 10-year useful life on a straight-line basis. There is no estimated residual value. The patent is estimated to have a 5-year useful life, no residual value, and is amortized using the straight-line method.

At the end of 2022, a change in business climate indicated to management that the assets of Lincoln might be impaired. The following amounts have been determined:

Required:

1. Compute the book value of the plant and equipment and patent at the end of 2022.
2. When should the plant and equipment and the patent be tested for impairment?
3. When should goodwill be tested for impairment?
4. Determine the amount of any impairment loss to be recorded, if any, for the three assets.

Please typle down (easy for me to copy and paste) your thoughts after reading the paragraphs ie. agree or disagree and why? (Min 5 sentences 150 words + )

The talk given by Paul Kemp-Robertson was eyeopening and extremely revealing. Although he mentions the importance of cryptocurrencies and their rapid increase within society in the last years, I still do not believe that they will out date money, cash, debit cards or any of the payment methods that we currently use within our own currency. Robertson mentioned some interesting points in terms of examples that use this and how people react. For example, if we analyse the transactions in Starbucks in a day, more than 30% of them will be made with Starbucks Star points, meaning that they have created a currency that is staying within its ecosystem. Another example is the use of "Fakka" (meaning small change in Arabic) in countries of Africa. Since small change is a problem in these countries, Vodafone created a card that acts as a micro-recharge for their phones.

These advancements seem to be beneficial in many ways, such as the Fakka Vodafone cards that help countries in which there is very little change in circulation. And in many ways one can understand why people begin to trust these currencies and eventually lose faith in the institutions. However, I do not believe that this will cause our economic system as we know it today to dissolve in the emergence of cryptocurrencies. There are also many people who still do not trust in technology and these will also support the economic system we have today.

1. Where might technical analysis be considered useful to​ investors?

A. It identifies changes in trends only after the fact B. Deviations from intrinsic values can persist for long periods C.It is useful for assets where there is scarce fundamental information

2.. Analyst forecasts which focus on a​ top-down approach to forecasting future performance are most likely paying attention​ to:

A.Signals from individual companies within an industry first B. Macroeconomic factors such as gross domestic product​ (GDP) C. Microeconomic factors such as dividend yields on​ bio-technology stocks​ (shares)

3.. A trader who relies on a relative value model is least likely looking for situations that​ involve:

A. Buying cheap assets and selling expensive assets. B.Identifying the best time to switch between stocks and bonds. C. Buying expensive assets and selling cheap assets

4. What would be the most likely reason for the price return of a​ market-capitalization index performing better compared to an​ equal-weighted index comprised of the same​ securities?

A. Small-cap securities outperforming​ large-cap securities B. ​Large-cap securities outperforming​ small-cap securities. C. Underperformance of​ large-cap securities.

5. Why is trading volume an important consideration when undertaking technical​ analysis?

A. Trading volume represents private information not incorporated in prices B. Trading volume can be used as a signal to support price and market trends C. Both are correct

From Dunkin Donuts to Just Dunkin! The famous American Donut’s brand is rebranding and closing stores across the world including Oman as its outlets have shut down for good. The demand for donuts in America is decreasing as customers preferring more healthy food with less sugar and fat.

The company’s brand CEO Mr. David Hoffmann said, “the rebranding comes as an effort to reshape the company’s strategic goals and focusing on drinks more than donuts.” While analyzing the company’s different products, the managers

noticed that 60% of its revenue is coming from drinks like coffee while demand for donuts is declining.

The company redesigned its brand, and its stores making them look simpler. The company is also introducing new coffee experiences like nitro, cold brew, black...etc. The company will also introduce digital menu and drive through to fit the customers on the go lifestyle. The company will also reduce its employees as the new digital menus will eliminate the need of human employees, reducing the company’s costs.

1. On the product life cycle, where the donuts fall? What are the best strategies the company can use in this case?
2. Explain, how the demographic environment is affecting the company?
3. Develop Integrated Marketing Communication for the new brand “Dunkin” (5Marks)
4. Do you agree or disagree with the company’s rebranding strategy? Support your opinion based on your knowledge of the factors influencing the buyer behavior.
5. Discuss the role technology plays in Dunkin donuts new strategy.

Listed below are two new researches by the IBM company .

A radical new recycling process

The biggest threat to our planet are humans, due to our waste and pollution. Plastic is one major issue, as it pollutes our planet on a daily basis and the predictions are that in 2050, there will be more plastic in our oceans than fishes. In order to prevent that from happening, IBM Researchers have invented the VolCat, which will make the recycling of plastic more efficient. This new recycling concept will break down all kinds of plastic, regardless if it is colored or not, clean or dirty. Hence, households won’t have to separate and recycle their plastic at home anymore, since the VolCat will use all types of plastic together. VolCat is a catalytic chemical process, which dissolves polyester plastics. Once it is digested, it can then be reused for new plastic manufacturing machines (IBM Research, n.d.).

Heavy Metal Free Batteries:

IBM is currently working on new battery technologies that are free of heavy metals such as cobalt, nickel, lithium, and other metal types. The main objectives of this project are to lower the cost of batteries, charge faster, higher power density, higher energy density, better efficiency, and lower flammability of batteries currently being used. They expect these batteries to be used in electronics, airplanes, cars, and any other product that requires mobile power. They are currently working with Mercedes-Benz Research and Development, Central Glass and battery manufacturers to develop this technology (Na, 2019).

In your own word discuss how both research can be beneficial to the future ? give a thorough explanation

Dell and FedEx Supply Chain

For more than 28 years, Dell has empowered countries, communities, companies, and people everywhere to realize their dreams through the use of information technology. Success also brings great challenges - especially in areas of non-core competencies such as reverse logistics. Dell had worked with GENCO since 2005 (GENCO was acquired by FedEx in 2015 and rebranded as FedEx Supply Chain in 2017).

As customary in the fast-paced high-tech industry, Dell operated under a procurement strategy of “every dollar, every year,” meaning that it used frequent competitive bidding processes to drive down prices. By 2011, the honeymoon was over in the relationship. Dell was driving for the lowest cost, but FedEx Supply Chain believed Dell’s short-term thinking was putting capabilities at risk.

A major tension point was that Dell wanted FedEx Supply Chain to drive proactive innovations and assume the cost of investments. FedEx Supply Chain resisted because it had no guarantee of return on investment within the existing contract structure and constantly faced hard-driving cost reductions. One thing was abundantly clear: Neither party was content with the current contract. The existing contract structure and relationship dynamics placed a wedge in the trust level between the two companies.

A better way was needed.

Question

You have been approached to advise on the way forward for Dell and FeDex relationship. Using an illustration, advise Dell on how they can implement relationship management using the partnership life cycle effect