It\'s your third week on the job at Panache Inc. Last week, you made sure all investment transactions for trading, available-for-sale, held-to-maturity, and equity securities were properly recorded. You are reviewing the financial statement reporting for the securities and have found a newspaper clipping dated December 31 that indicates the price of the stock of Omni company had dropped the day before because of the company\'s severe financial difficulties. While the company is not expected to fail, the article states the earnings of the company have permanently declined due to changes in the new-homes market. You do a quick check of the stock price on that day and find that the stock closed at $8 per share. Panache owns 10,000 shares of Omni\'s stock as an available-for-sale security. The original cost of the stock was $20 per share, and the fair value at the last reporting date (September 30, 2016) was $15 per share. You have just begun to write a memo to the president of the company, Mr. Cartwright, about this investment when he stops by your office and says, \"I have a question for you.\" He says, \"As you know, we use a special metal called tellurium in our cars. It takes 10 pounds for each car we build. I had a feeling last summer that tellurium prices were going to go up in October, so Mr. Brown told me he could lock the prices in by using a dirigible. Did he do that?\" \"It was probably a derivative, Mr. Cartwright,\" you reply. \"Let me look through the files and see what I can find, and I\'ll get back to you. I\'ll include my findings in the memo I\'m writing to you about another investment.\" You locate a file labeled tellurium futures, and inside you find several documents. The first one is a handwritten note dated August 31, 2015, that says: Agreed to tellurium futures contract expiring December 31, 2015; agreement gives Panache the right to purchase 2,000 pounds of tellurium at a price of $500 per pound. Signed, C. Brown 8/31/2015. The second paper is a schedule showing prices of tellurium: Date Price 8/31/2015 $500 9/30/2015 $530 10/31/2015 $550 The third document is an invoice for the purchase of 2,000 pounds of tellurium on October 31 at $550 per pound. There is a note on the invoice in Ms. Brown\'s handwriting that says: Settled futures contract today. C. Brown 10/31/2015. You know that tellurium purchased in October would have been used to produce the 200 cars made in November. The cars produced in November were sold in December for $15,000 each. The total cost to produce the cars was $12,000 each. You are required to: Prepare all journal entries that should have been recorded related to the futures contract, including any entries needed for the September 30, 2016, financial statements; the purchase of the tellurium; and the sale of the cars in December. Create the journal entries in an Excel spreadsheet. Write a 2-page memo to Mr. Cartwright that includes: A discussion of the investment in Omni company stock and the requir.

1. It's your third week on the job at Panache Inc. Last week, you made sure all investment
transactions for trading, available-for-sale, held-to-maturity, and equity securities were properly
recorded. You are reviewing the financial statement reporting for the securities and have found a
newspaper clipping dated December 31 that indicates the price of the stock of Omni company
had dropped the day before because of the company's severe financial difficulties. While the
company is not expected to fail, the article states the earnings of the company have permanently
declined due to changes in the new-homes market. You do a quick check of the stock price on
that day and find that the stock closed at $8 per share. Panache owns 10,000 shares of Omni's
stock as an available-for-sale security. The original cost of the stock was $20 per share, and the
fair value at the last reporting date (September 30, 2016) was $15 per share. You have just begun
to write a memo to the president of the company, Mr. Cartwright, about this investment when he
stops by your office and says, "I have a question for you." He says, "As you know, we use a
special metal called tellurium in our cars. It takes 10 pounds for each car we build. I had a
feeling last summer that tellurium prices were going to go up in October, so Mr. Brown told me
he could lock the prices in by using a dirigible. Did he do that?" "It was probably a derivative,
Mr. Cartwright," you reply. "Let me look through the files and see what I can find, and I'll get
back to you. I'll include my findings in the memo I'm writing to you about another
investment." You locate a file labeled tellurium futures, and inside you find several documents.
The first one is a handwritten note dated August 31, 2015, that says: Agreed to tellurium futures
contract expiring December 31, 2015; agreement gives Panache the right to purchase 2,000
pounds of tellurium at a price of $500 per pound. Signed, C. Brown 8/31/2015. The second paper
is a schedule showing prices of tellurium: Date Price 8/31/2015 $500 9/30/2015 $530
10/31/2015 $550 The third document is an invoice for the purchase of 2,000 pounds of tellurium
on October 31 at $550 per pound. There is a note on the invoice in Ms. Brown's handwriting
that says: Settled futures contract today. C. Brown 10/31/2015. You know that tellurium
purchased in October would have been used to produce the 200 cars made in November. The
cars produced in November were sold in December for $15,000 each. The total cost to produce
the cars was $12,000 each. You are required to: Prepare all journal entries that should have been
recorded related to the futures contract, including any entries needed for the September 30, 2016,
financial statements; the purchase of the tellurium; and the sale of the cars in December. Create
the journal entries in an Excel spreadsheet. Write a 2-page memo to Mr. Cartwright that
includes: A discussion of the investment in Omni company stock and the requirements for the
accounting and reporting of this investment. A discussion of the tellurium futures contract that
includes: The type of derivative it is and what it accomplished, if anything The way it is
accounted for The effect of the derivative on the bottom line of Panache's income statement

2. Solution
Who handles your cash, advises you on what to spend and when to spend it? Well for
corporations that person could be their monetary supervisor. This week we seem at exactly what
it is that financial managers do.
Financial managers are the members responsible for the fiscal maintenance of an organization.
They are dependable for producing economic experiences, funding movements, and procedures
that reflect the long-time period fiscal ambitions of their institution.
Monetary managers additionally do duties which are specific to their group or enterprise. To
furnish the fiscal direction peculiarly wanted for their institution a financial manager needs to be
knowledgeable concerning the tax laws and rules that have an effect on that enterprise.
Additionally, fiscal managers have got to have robust analytical competencies to entry their
consumers wishes and strong situation-solving advantage to make economic enhancements.
The life of a monetary supervisor can very stressful and stressful, listed here are a couple of of
their ordinary obligations:
put together financial statements, trade exercise stories, and forecasts
monitor economic details to make sure that authorized specifications are met
Supervise staff who do monetary reporting and budgeting
review manufacturer fiscal reports and search approaches to diminish expenses
Analyze market developments to maximise earnings and find enlargement possibilities
support administration make financial choices
founded on an institutions needs, there are fiscal managers for designated areas of industry.
Under are examples of these members and their major features.
Chief fiscal officers (CFOs) are dependable for maintaining the accuracy of a enterprises or
institution economic reviews. They manage the department minimize level economic managers
and so they oversee the corporation's financial targets, targets, and budgets.
Controllers control the preparation of monetary studies that summarize and predict an
organizations fiscal position. In addition they oversee the organization accounting, auditing, and
budgeting departments.
Treasurers and finance officers direct their group budgets to meet its fiscal goals. They oversee
the funding of dollars and perform methods to elevate capital (corresponding to issuing shares or
bonds) to aid the organizations growth. Additionally they advance monetary plans for mergers
(two firms joining collectively) and acquisitions (one enterprise buying an extra).
Credit managers oversee their corporation's credit score business. They set credit score-rating
criteria, check credit ceilings, and monitor the collections of previous-due bills.

3. Cash managers reveal and control the float of money that is available in and goes out of the
company to satisfy the company trade and funding desires. For instance, they must project
money glide (quantities coming in and going out) to investigate whether the enterprise may have
a shortage or surplus of money.
Chance managers manipulate economic threat by way of utilising techniques to restrict or offset
the likelihood of a financial loss or a companys exposure to economic uncertainty. Among the
dangers they are trying to limit are those that stem from forex or commodity cost alterations.
Coverage managers decide how first-class to restrict a organizations losses by way of obtaining
coverage in opposition to dangers, such as the need to make disability payments for an employee
who gets hurt on the job or the expenditures imposed by using a lawsuit against the
manufacturer.
All firms are worried about their financial performance, therefor fiscal managers can in finding
employment in lots of industries. Ex (banking, coverage, and retail sectors)
even though the industry is growing, fiscal managers face a aggressive job market. The Bureau
of Labor statistics estimates that the area will grow 7 percent by using 2024. This means that at
the least 37,700 new jobs will emerge and the competitors will turn out to be higher. The
contributors with specialized backgrounds like accounting or finance may find it simpler to seek
out employment but the ones who can manage worldwide finance and the intricate world of
fiscal instruments and securities, would be the most sought after out of all of them.