1. Hamza Inc. acquired all of the outstanding common stock of Ali Corp. on January 1, 2016, for $372,000. Equipment with a ten-year life was undervalued on Ali's financial records by $46,000. Hamza also owned an unrecorded customer list with an assessed fair value of $67,000 and an estimated remaining life of five years.

   Ali Co. earned reported net income of $180,000 in 2016 and $216,000 in 2017.  Dividends of $70,000 were paid in each of these two years.  Selected account balances as of December 31, 2018, for the two companies follow.

   	Hamza Co	Ali Co
   Revenues	$1,080,000	$840,000
   Expenses	480,000	600,000
   Investment income	Not given	0
   Retained earnings, 1/1/18	840,000	600,000
   Dividends paid	132,000	70,000

   17.  If the partial equity method had been applied, what was 2018 consolidated net income?

   		$768,400.
   		$840,000.
   		$240,000.
   		$822,000.
   		$600,000.

2d. Bicarbonate does buffer the blood because carbonic acid is generated from dissolving CO2 (g) in liquid water:

CO2 (g) + H2O (l) ↔ H2CO3 (aq) pKeq° = 2.52 at 37°C

This reaction is catalyzed by the enzyme carbonic anhydrase. Consequently, the reaction that really represents what’s happening when bicarbonate buffers the blood is: CO₂ (g) + H₂O (l) ↔ HCO₃- (aq) + H+ (aq).

Calculate the equilibrium constant for this reaction (Hint: use Hess’s law and one of the equilibrium expressions from question 2ci above). Would you expect this to be an adequate buffer system at physiological pH? Explain.

My answer to 2ci:

2c. The pKa’s for carbonic acid and bicarbonate at 37°C are 3.83 and 10.25, respectively.

i. Write the equation for each of these equilibria.

H₂CO₃ + H₂O ⇄ HCO₃⁻ + H₃O⁺ (pKa = 3.83)

HCO₃⁻ + H₂O ⇄ CO₃²⁻ + H₃O⁺   (pKa = 10.25)

Q1: On January 1, 2019, Yarmouth Inc. acquired 90% of Covington Co. by paying $477,000 cash. There is no active trading market for Covington stock. Covington Co. reported a Common Stock account balance of $140,000 and Retained Earnings of $280,000 at that date. The fair value of Covington Co. was appraised at $530,000.    The total annual amortization was $11,000 as a result of this transaction. The subsidiary earned $198,000 in 2019 and $226,000 in 2020 with dividend payments of $42,000 each year. Without regard for this investment, Yarmouth had income of $308,000 in 2019 and $364,000 in 2020 (these numbers do not have investment income).

Prepare a proper presentation of consolidated net income and its allocation (Consolidated net income before allocation, NCI share of NI from Covington, and Consolidated Net income to Yarmouth) for 2020.

What is the noncontrolling interest balance as of December 31, 2020?

What is the investment balance as of December 31, 2020?

1. A financial manager speculates about the relationship between family incomes and their allocation for investment. The following table presents the results of a survey of 8 randomly selected families.

1. Construct a scatter diagram for the data and comment on the relationship      between income and allocation for investment
2. Develop a regression equation that best describes this data
3. Estimate the percent allocated for investment if the annual income of a family is Ksh 25,000
4. Compute coefficient of determination and interpret the results.
5. Compute the Karl Pearson product-moment correlation co-efficient and interpret the results.
6. Compute the spearman rank correlation co-efficient and interpret the results
7. VII. Compare the two measures of relationship i.e. Spearman and Pearson correlation co-efficient

Q6 A stock of X Co. just gave a dividend of Rs6 per share. Is is expected that dividend will grow by 8.00% over the next 3 years (0-1, 1-2, 2-3years). Beyond 3 years, X co. will be retaining 50% of the earnings and investments in a project which is expected to return a 10% p.a. (EAR) return on equity(ROE) from the investment. This retention ratio of 50% is going to continue forever there after, and the ROE is also expected to continue at 10% p.a. EAR forever thereafter, Hence , growth rate in dividends beyond three years till perpetuity will be 5% p.a.(EAR). The relevant cost of equity capital is estimated at 10% pa. compounded annually. what is the intrinsic value of the stock of X co.? If the market price per share of the stock is Rs. 100, What should be the investment recommendation be related to stock X(buy or sell) ?

Q1 Give example of company using ABC costing and explain the process used in this company to assign costs in an ABC system?

      Q 2 Give examples of questions managers could ask to help them identify relevant qualitative factors that will be used before making decision?

      Q 3 Kadhim Co. manufactures product B which is a part of its main product. Kadhim Co makes 50,000 units of product B per year. The production costs are detailed below. An outside supplier has offered to supply 50,000 units of product B per year at $ 2.45 each. Fixed production cost of $ 40,000 associated with the product B are unavoidable. Should Kadhim Co make or buy the product B?

The production cost per unit for manufacturing a unit of product B are:

1. Entries for Stock Dividends

   Advanced Life Co. is an HMO for businesses in the Albuquerque area. The following account balances appear on the balance sheet of Advanced Life Co.: Common stock (600,000 shares authorized; 400,000 shares issued), $8 par, $3,200,000; Paid-in capital in excess of par—common stock, $800,000; and Retained earnings, $25,600,000. The board of directors declared a 2% stock dividend when the market price of the stock was $19 a share. Advanced Life Co. reported no income or loss for the current year.

2. a2. Journalize the entry to record the issuance of the stock certificates. If an amount box does not require an entry, leave it blank.
3. Determine the following amounts before the stock dividend was declared: (1) total paid-in capital, (2) total retained earnings, and (3) total stockholders' equity. a1. Journalize the entry to record the declaration of the dividend, capitalizing an amount equal to market value. If an amount box does not require an entry, leave it blank.

XYZ Co.’s summary balance sheets for 2017 and 2018 are below: XYZ Co. Balance Sheets 2017 2018

Cash 400,000 300,000

Accounts receivable 800,000 _________

(b) Net fixed assets 1,600,000 2,300,000 TOTAL ASSETS _________ _________

Accounts payable 250,000 300,000 Short-term debt 350,000 400,000

Long-term debt 800,000 800,000 Shareholders’ equity _________

(a) 1,500,000 TOTAL LIABIL. & SHAREHOLDER’S EQUITY _________ _________

Calculate the following: a) Shareholders’ equity in 2017

b) Accounts receivable in 2018

c) If XYZ Co. has a company policy to keep 100% of the net earnings (or net profits) at the end of each year as retained earnings, what was the net earnings in 2017?(Note: there is nothing missing or misleading in this question. The info on this page is sufficient to answer it.)

d) Did the liquidity of the firm get better or worse from 2017 to 2018? (2 pts) (Note: there is nothing missing or misleading in this question. The info on this page is sufficient to answer it.)

Bear Co. has gathered the following information regarding the sale of the company’s single product:

Required: Answer the following clearly, showing as much work as is possible.

1. Determine the break-even point in units.
2. The marketing department at Bear Co. is suggesting a new advertising campaign for the next year at a cost of $50,000. The marketing department is certain that the new campaign would result in the company being able to increase the unit selling price to $16. Calculate the new breakeven point in units assuming the company invests in the new campaign:
3. Based on your quantitative findings in the two preceding questions, determine whether Bear Co. should undertake the new advertising campaign and provide reasoning for your determination.

The CFO of Morgan Co. has created the firm s pro forma balance sheet for the next fiscal year. Sales are projected to grow by 15 percent to $602 million. Current assets, fixed assets, and short-term debt are 22 percent, 65 percent, and 15 percent of sales, respectively. Morgan Co. pays out 30 percent of its net income in dividends. The company currently has $180 million of long-term debt and $140 million in common stock par value. The profit margin is 12 percent. Based on the CFO s sales growth forecast, how much does Morgan Co. need in external funds for the upcoming fiscal year? (Hint: you need to construct the balance sheet this year and determine the accumulated retained earnings before constructing the proforma balance sheets to determine the EFN)