BACC460

Assignment 4 (LO3)

Trial balance data for Peanut and Snoopy as of December 31, 2018 follows. Peanut company acquired 100% of the shares of Snnopy at $ (700,220) when the book value of Snoopy’s net assets was equal to $344,000. At that date the fair value of Building and equipment was $40,000 more than the book value. Building and equipment are depreciated on a 5-year basis. At December 31, 2018, Peanut Company concluded that good will involved in the acquisition of Snoopy has been impaired and the correct carrying value was $10,000. Peanut uses the equity method to account for investments.

Instructions:

a) Prepare the journal entries in Peanut Company books to record the transaction related to the investment in Snoopy.

  Acquisition of 100 % of shares in Snoopy for $( ** it should be around 400,000 to 700,000 according to your ids) cash

b) Post the previous transactions to   the ledger and find new balances. (*) and Prepare a consolidated worksheet in good form.

Instructions:

You are the Chief Financial Officer (CFO) of a firm that is being sued for damages it caused. It is the end of your fiscal year, and you are trying to determine the appropriate treatment of this matter. Your boss, the Chief Executive Officer (CEO) acknowledges (privately) that your firm is responsible for the damages and that the judgment will be made against your firm. Your legal counsel estimates that the penalty levied by the court will be in the range of $2 million to $6 million, with a most likely amount of $4 million. The CEO's posture on the matter is that because of the wide variance in the range of possible outcomes (i.e. penalties levied) that the best thing to do is to simply wait until the case is settled (next year), and record at that time the actual damages assessed by the court.

Answer the following questions:

What are some possible reasons that the CEO may hold his viewpoint?

What should be your response to the CEO?

Do you think it is necessary to make an accrual for an estimated amount of the assessment or settlement? If so, what amount do you think is appropriate?

Explain. Would your answer to any of the above questions be different if the financials are being prepared under IFRS instead of U.S. GAAP?

RDH, Inc., manufactures high quality ladies boots. The company is considering the launch of a new boot style. Given the company’s history, it believes that it can sell 34,000, 27,000, 24,000, and 18,000 pair of boots per year for the next 4 years, respectively. The new boots would have variable costs of $134 per pair. Fixed production costs are $4.25 million per year and the equipment necessary for the new line costs $7.8 million. The equipment will be depreciated on a 5-year MACRS schedule. The line would require an investment in NWC of 15 percent of sales to be stockpiled one year ahead of sales, the tax rate is 40 percent, and the required return is 9 percent. The company expects that because of changes in styles, the new design can only be sold for the next four years. In four years, the equipment can be sold for $1.8 million, although the company believes it will keep the machinery for another product line. Additionally, the CEO has stated that she requires an NPV of $250,000 to undertake the new line of boots. What is the price per pair of boots that the company must set in order to undertake the new boot?

Choose an organization or company that has a poor logistics mandate or footprint and perform an analysis of why they ineffectively handle logistics activities. Write to the CEO of the organization explain the strengths and weaknesses of their current logistics system and provide a comparison to other logistics models. Then, outline a new logistics plan for them that explains all aspects of logistics as you see appropriate. Remember to have an introduction that summarizes your study and a concluding section that explains the rational for your suggestions on how the company should handle logistics moving forward. This assignment is designed to test your critical thinking tasked with establishing a new logistics model for an organization. It should show clear understanding of logistics management topics. Questions to possibly ask (in addition to ones you come up with on your own) include: Does the organization currently outsource any aspects of logistics? Why is the current system of logistics not efficient? What would make it more efficient? How long has the company been engaged in logistics? What partners/vendors does the organization rely on in partnership for their logistical activities? What technology and/or systems does the organization make use of? AMAZON POSSIBLE COMPANY?

Mr Ahmed Kumar runs a snack distribution business located in the Light Industrial area in Lusaka. The following list of balances was extracted from his ledger as at 31 March, 2020; the end of his most recent financial year.

K

Capital                                                                                                83,887

Sales                                                                                                  259,870

Trade accounts payable                                                                 19,840

Returns outwards                                                                             13,407

Allowance for doubtful debts                                                          512

Discounts allowed                                                                            2,306

Discounts received                                                                          1,750

Purchases                                                                                         135,680

Returns inwards                                                                               5,624

Carriage outwards                                                                           4,562

Drawings                                                                                           18,440

Carriage inwards                                                                              11,830

Rent, rates and insurance                                                              25,973

Heating and lighting                                                                         11,010

Postage, stationery and telephone                                               2,410

Advertising                                                                                        5,980

Salaries and wages                                                                         38,521

Bad debts                                                                                          2,008

Cash in hand                                                                                    534

Cash at bank                                                                                    4,440

Inventory as at 1^st April 2019                                                         15,654

Trade accounts receivable                                                             24,500

Fixtures and fittings - at cost                                                          120,740

Prov. for depreciation on fixtures and fittings – 31/03/2020     63,020

Depreciation                                                                                     12,074

The following additional information as at 31^st March, 2020 is available:

(a) Inventory at the close of business was valued at K17,750

(b) Insurances have been prepaid by K1,120

(c) Heating and lighting is accrued by K1,360

(d) Rates have been prepaid by K5,435

(e) The allowance for doubtful debts is to be adjusted so that it is 3% of trade accounts receivable.

Required:

For the year 2020, prepare Mr Kumar’s:

Unadjusted Trial Balance as at 31^st March, 2020.

                                                                                                                              [10 Marks]

General Journal recording the adjustments highlighted above.

                                                                                                                              [10 Marks]

Trading, Profit or Loss statement for the year ended 31^st March, 2020.

[10 Marks]

Statement of financial position as at 31^st March, 2020.

                                                                                                                              [10 Marks]

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What are five leadership and development strategies for a CEO? Some examples below.

Create a program for planning, training, and coaching that will ensure the effective performance of company leadership. The HR manager will be the resource for talent assessment, career path support, conflict counseling, and the development of training plans.

Develop and deliver a quarterly leadership training program.

Partner with management to target employees to focus talent assessment and coaching feedback.

Identify management that has high potential and execute a plan to drive their development.

Identify management that has performed poorly and execute a plan for performance improvement.

Identify positions where management has consistently performed poorly with lack of improvement after coaching, develop a plan to recruit a replacement.

...."Imagine you are a branding executive for a new Strategic Business Unit (SBU) of a major Hollywood movie studio. (For example, Pixar is an SBU of Disney Studios.)

1. Come up with the SBU’s name and trademark
2. Write a positioning statement for the SBU
3. Develop a brand new creative movie, name and theme
4. List the S-T-P of your movie (think: CLV, IP, Core competencies)
5. present a one-page executive summary to the CEO of the parent company, trying to convince him/her to invest studio funds for your movie concept. Remember, all proposals have a beginning, middle, and conclusion. Therefore, similar to advertisements, you must Attract/Intrigue/Persuade!

Hint: Think Differentiation

1. Megaphone is a cellular telephone service provider with 40% market share of the telephone service market in the United States. The CEO, Schubert Purdoch, has achieved that share in large part by acquiring small competitors. Megaphone is seeking to acquire Vinaphone which provides cellular telephone service as well. Vinaphone has become a household name in large part because of their ads making fun of Megaphone as an “out of touch dinosaur” of a company, featuring a dinosaur with the head of Schubert Purdoch. After this merger, Megaphone will not only be able to pull those ads off the air, but will also have 60% market share for telephone service. How would the FTC analyze this merger? What question(s) would be asked?

1. Suppose the initial Brazilian real to US dollar exchange rate is 4 reals (or “reais”) to 1 US dollar. The cost to buy a specified market basket of same quality products is $500,000 in the U.S. and R$1,400,000 in Brazil. Valued in U.S. dollar terms, the market basket in Brazil costs $350,000. (This market basket cost represents the combined price of thousands of products, and so also indicates an average price for those products.)

(e) Product prices in the U.S. and Brazil have changed. Using the prices in domestic currencies

for the two countries, does the ratio of Brazilian market basket price US market basket price (brazilian market basket price/ us market basket price) move toward or away from the initial nominal exchange rate?

· For (e and j), use the (Brazilian price/US price) ratio so as to match the (Brazilian reals/US dollar) ratio.

(f) There has been a change in the amount of imports that Brazilian firms (wholesalers, retailers etc.) buy. With this change in the buying of foreign products, what happens to the supply of Brazilian reals in foreign exchange markets? (Compared to the previous period, for example.)

(g) What happens to the price (strength, value) of the Brazilian real?

(h) There has been a change in the amount of imports that American firms (wholesalers, retailers etc.) buy. With this change in the buying of foreign products, what happens to the supply of American dollars in foreign exchange markets? (Compared to the previous period, for example.)