Solve the following and show steps please:

On February 1^st, 2016 Heinz Baking Company (HNZ) announced that they were going to be acquired by Best Foods, Inc. (BFI) in a stock swap transaction. Specifically, each share of Heinz Baking Company would be exchanged for 1.62 shares in Best Foods. At the close of trading on the announcement date, HNZ was trading at $37.62 per share, and BFI was priced at $24.48 per share. Best Foods stock does not currently pay a dividend.

a- At announcement, what was the arbitrage spread? (5.42%)

b- If you want to undertake the typical M&A arbitrage strategy and buy a parcel of 3 million shares in HNZ, what trade would you make in the stock of BFI? (Short sell 4.86 million shares in BFI)

c- What would your dollar profit on the announcement date be from the trade described in b. above? ($6,112,800)

d- Sixty days after announcement, the stock price of BFI has risen 4%, but the price of stock in HNZ is unchanged from where it closed at announcement. What is the arbitrage spread at this time? (9.64%)

Tanner-UNF Corporation acquired as a long-term investment $235 million of 8% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management is holding the bonds in its trading portfolio. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $215 million.

Required:
1. & 2. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2018, balance sheet.
4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $180 million. Prepare the journal entries to record the sale.

52. A company had the following purchases and sales during its first year of operations:

On December 31, there were 32 units remaining in ending inventory. Using the Perpetual LIFO inventory valuation method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

54. Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to the ending inventory using FIFO.

Tanner-UNF Corporation acquired as a long-term investment $260 million of 7.0% bonds, dated July 1, on July 1, 2018. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 9% for bonds of similar risk and maturity. Tanner-UNF paid $230.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $240.0 million.

Required:
1. & 2. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
3. At what amount will Tanner-UNF report its investment in the December 31, 2018, balance sheet?
4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $220.0 million. Prepare the journal entry to record the sale.

Tanner-UNF Corporation acquired as an investment $260 million of 8% bonds, dated July 1, on July 1, 2021. Company management is holding the bonds in its trading portfolio. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $220 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $230 million.

Required:

1. & 2. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate.

3. Prepare any additional journal entry necessary for Tanner-UNF to report its investment in the December 31, 2021, balance sheet.

4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2022, for $170 million. Prepare the journal entries required on the date of sale.

The following financial information is obtained regarding Ellish Company:

                                                                              12/31/19                           12/31/18

Current Assets:

Cash                                                                     180,000                                46,000

Accounts Receivable (net)                                 140,000                                90.000

Merchandise Inventory                                     130,000                              150,000

Prepaid Expenses                                                  7,000                                   2,000

Supplies                                                                  3,000                                   4,000

Non-Current Assets:

Land                                                                   100,000                                      -0-

Plant Assets                                                       200,000                               200,000

Accumulated Depreciation                              (60,000)                               (40,000)

Total Assets                                                       700,000                               452,000

Current Liabilities:

Accounts Payable                                               25,000                                 33,000

Accrued Liabilities                                             15,000                                  9,000

Non-current Liabilities:

Notes Payable                                                   100,000                                 20,000

Total Liabilities:                                              140,000                                 62,000

Common Stock ($1 Par Value)                      200,000                                140,000

Common Stock-APIC                                      50,000                                   10,000

Retained Earnings                                          310,000                                240,000

Total Stockholders’ Equity                            560,000                                390,000

Additional Data:

A) 2019 Net Income was $170,000

B) Land was acquired by taking out a Notes Payable for $90,000 and paying Cash for the         balance .

C) All Common Stock was issued for Cash.

REQUIRED:

Prepare the Statement of Cash Flow for Ellish Company under the Indirect Method.

Mills Corporation acquired as a long-term investment $225 million of 8% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $250 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $240 million.

Required:

1. & 2. Prepare the journal entry to record Mills’ investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate.

3. At what amount will Mills report its investment in the December 31, 2021, balance sheet?

4. Suppose Moody's bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2022, for $266 million. Prepare the journal entries required on the date of sale.

PLEASE HELP WRITE OUT JOURNAL ENTRIES WITH WORK

Which of the following statements is true about asset retirement obligations related to natural resources that have been developed:

a) GAAP requires that an existing legal obligation associated with the retirement of a tangible, long-lived asset be recognized as a liability and measured at fair value.

b) Asset retirement obligations may arise from legal obligations associated with the retirement of any intangible asset.

c) A retirement obligation may only arise at the inception of an asset's life, but never during its operating life.

d) GAAP requires the company to recognize the fair value of an asset retirement obligation when it is incurred.

Which of the following statements is incorrect?

a) The acquisition of assets through donation is credited to revenue.

b) When a company loses a patent infringement suit and pays the plaintiff $9,000, the payment of $9,000 should be expensed as incurred.

c) If an exchange of nonmonetary assets lack commercial substance, a gain can never be recorded even when cash is received through this exchange.

d) The initial valuation of an asset acquired with a $40,000 noninterest-bearing note that is payable in two years is less than $40,000.

A manager is explaining to a staff auditor how various situations might affect the audit opinion. For each of the following scenarios, identify the appropriate reporting option by matching the scenario with the opinion type from the list provided. Assume that any financial statement effect is material, unless otherwise noted and that US auditing standards are followed.

On June 10, 20X8, Game Corporation acquired 70 percent of Amber Company’s common stock. The fair value of the noncontrolling interest was $24,000 on that date. Summarized balance sheet data for the two companies immediately after the stock purchase are as follows:

a. Record the consolidation entries required to prepare a consolidated balance sheet immediately after the purchase of Amber Company shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Record the basic consolidation entry.

2. Record the excess value (differential) reclassification entry.