Information ACT506Portfolio Project Option#2 Push Corporation and SubsidiariesConsolidated Statement of Cash FlowsFor the Year Ended December 31, 20x7(Indirect Method)Additional InformationInformation for Cash Flow Statement completionA. Push Corporation has 100% control of Summer Corporation on 01/02/20x7.Push Consolidated Income StatementB.Push Corporation has $195,000 Consolidated Income for 20x7.12/31/20x712/31/20x7C.Push Corporation pays a $10,000 Dividend to stockholders.D. Summer Corporation reports income of $100,000 and pays Dividend of $50,000 in 20x7.Revenue 950,000E. Push Corporation sells land that it purchased in 20X1 for $50,000 to nonaffiliated for $100,000.Gain on Sale of Land50,000F.Summer Corporation purchases additional equipment for 200,000 at end of 20x7.Loss on Sale of Equipment-5,000G. Parent, Push Corporation purchases Additional Equipment for $150,000 on June 01, 20x7.Cost of Goods Sold500,000H. Common Stock of $10.00 par was issued with 10,000 shares for $100,000 value on Mar, 01 20x7.Depreciation Expense100,000I.Long Term Bonds were retired at fair market value with cash on Jan 15, 20x7, $150,000.Other Expenses200,000K.Equipment with a book value of $25,000 was sold for $20,000, a loss of $5,000.Total expenses800,000Consolidated Income 195,000Parent's Equity income from Subsidiary100,000Subsidiary Net Income 20x6-100,000Consolidated Net Income195,000B. Retained Earnings StatementParent's beginning R.E from operationsParent's Income from operationsParent's Dividend to stockholders Consolidated Retained EarningsPush Corporation Balance Sheet Dates 12/31/20x6Cash150,000Acct Rec200,000Inventories150,000Land25,000Land100,000Buildings and Equipment500,000Goodwill100,000Total Debits1,225,000Acc Depreciation200,000Accts Payable 50,000Bonds Payable150,000Common Stock200,000Paid in Capital125,000Retained Earnings500,0001,225,000 WorksheetA. Push Corporation has 100% control of Summer Corporation on 01/02/20x7.B.Push Corporation has $195,000 Consolidated Income for 20x7.C.Push Corporation pays a $10,000 Dividend to stockholders.D. Summer Corporation reports income of $100,000 and pays Dividend of $50,000 in 20x7.E. Push Corporation sells land that it purchased in 20x7 for $50,000 to nonaffiliated for $100,000.DebitCredit F.Push Corporation purchases additional equipment for 200,000 at the end of 20x7.Push Corporation Balance Sheet G. Parent, Push Corporation purchases Additional Equipment for $150,000 on June 01, 20x7.Dates 12/31/20x612/31/20x7H. Common Stock of $10.00 par was issued with 10,000 shares for $100,000 value on Mar, 01 20x7.Cash150,000140,00010,000I.Long Term Bonds were retired at fair market value with cash on Jan 15, 20x7, $150,000.Acct Rec200,000100,000300,000K.Equipment with a book value of $25,000 was sold for $20,000, a loss of $5,000.Inventories150,000100,000250,000L. Increase in Cash and Increase or decrease in cash balance. Done after all entries performed.Land25,00025,0000M. Account Receivable i.

1. Information ACT506Portfolio Project Option#2 Push
Corporation and SubsidiariesConsolidated Statement of Cash
FlowsFor the Year Ended December 31, 20x7(Indirect
Method)Additional InformationInformation for Cash Flow
Statement completionA. Push Corporation has 100% control of
Summer Corporation on 01/02/20x7.Push Consolidated Income
StatementB.Push Corporation has $195,000 Consolidated
Income for 20x7.12/31/20x712/31/20x7C.Push Corporation pays
a $10,000 Dividend to stockholders.D. Summer Corporation
reports income of $100,000 and pays Dividend of $50,000 in
20x7.Revenue 950,000E. Push Corporation sells land that it
purchased in 20X1 for $50,000 to nonaffiliated for
$100,000.Gain on Sale of Land50,000F.Summer Corporation
purchases additional equipment for 200,000 at end of 20x7.Loss
on Sale of Equipment-5,000G. Parent, Push Corporation
purchases Additional Equipment for $150,000 on June 01,
20x7.Cost of Goods Sold500,000H. Common Stock of $10.00
par was issued with 10,000 shares for $100,000 value on Mar,
01 20x7.Depreciation Expense100,000I.Long Term Bonds were
retired at fair market value with cash on Jan 15, 20x7,
$150,000.Other Expenses200,000K.Equipment with a book
value of $25,000 was sold for $20,000, a loss of $5,000.Total
expenses800,000Consolidated Income 195,000Parent's Equity
income from Subsidiary100,000Subsidiary Net Income 20x6-
100,000Consolidated Net Income195,000B. Retained Earnings
StatementParent's beginning R.E from operationsParent's
Income from operationsParent's Dividend to stockholders
Consolidated Retained EarningsPush Corporation Balance Sheet
Dates 12/31/20x6Cash150,000Acct
Rec200,000Inventories150,000Land25,000Land100,000Building
s and Equipment500,000Goodwill100,000Total
Debits1,225,000Acc Depreciation200,000Accts Payable
50,000Bonds Payable150,000Common Stock200,000Paid in
Capital125,000Retained Earnings500,0001,225,000

2. WorksheetA. Push Corporation has 100% control of Summer
Corporation on 01/02/20x7.B.Push Corporation has $195,000
Consolidated Income for 20x7.C.Push Corporation pays a
$10,000 Dividend to stockholders.D. Summer Corporation
reports income of $100,000 and pays Dividend of $50,000 in
20x7.E. Push Corporation sells land that it purchased in 20x7
for $50,000 to nonaffiliated for $100,000.DebitCredit F.Push
Corporation purchases additional equipment for 200,000 at the
end of 20x7.Push Corporation Balance Sheet G. Parent, Push
Corporation purchases Additional Equipment for $150,000 on
June 01, 20x7.Dates 12/31/20x612/31/20x7H. Common Stock of
$10.00 par was issued with 10,000 shares for $100,000 value on
Mar, 01 20x7.Cash150,000140,00010,000I.Long Term Bonds
were retired at fair market value with cash on Jan 15, 20x7,
$150,000.Acct Rec200,000100,000300,000K.Equipment with a
book value of $25,000 was sold for $20,000, a loss of
$5,000.Inventories150,000100,000250,000L. Increase in Cash
and Increase or decrease in cash balance. Done after all entries
performed.Land25,00025,0000M. Account Receivable increased
$100,000.Land100,00050,00050,000N.Inventory increased
$100,000.Buildings and
Equipment500,000350,000850,000O.Increase in Accts Payable
$100,000.Good =will100,000100,000P. Accumulated
Depreciation increased $100,000.Q.Goodwill did not change in
year.Total Debits1,225,0001,560,000R.Paid In Capital did not
change in year.Entries to Perform:Accounts
Depreciation200,000100,000300,000Accts Payable
50,000100,000150,000A No entry required for cash flow
statement. Assumption is $100,000 Goodwill is after
Eliminating Entry for Consolidation. Bonds
Payable150,000150,0000Common
Stock200,000100,000300,000Paid in
Capital125,000125,000BConsolidated Income on Retained
Earnings500,00010,000195,000685,000Retained Earnings
1,225,0001,560,000C.R.EDividendCash Flows form Operating
ActivitiesDNo entry required for cash flow statement. In

3. Consolidation process, intercompany transactions are removed.
Consolidated Income195,000Depreciation Expense100,000Gain
on Sale of Land50,000E.Increase in Cash Land Loss on Sale of
Land5,000Increase in Acct Receivable 100,000Gain on Sale of
landIncome in Inventory100,000Land Income in Accts payable
100,000Cash Flows from Investing ActivitiesFAdditional
Equipment Acquisition of Equipment150,000Acquisition of
Equipment200,000Acquisition of EquipmentSale of
Land100,000Sale of Land (loss)20,000G. Additional
EquipmentCash Flows from Financing ActivitiesAcquisition of
Equipment Dividends paid to Stockholders10,000Payment of
Bond Payable 150,000Common
Stock100,0001,330,0001,470,000H.Increase in cash flow
financingDecrease in Cash140,000Common StockI. Long Term
BondsIncrease in financing retirement K.Increase in financing
Loss on sale of Equipment Equipment L.Cash at end of cash
flow process calculation Increase in cashMIncrease in Acct
RecAcct RecN. Increase in Investmentincrease in
inventoryO.Increase in Accts payable Accounts Payable
Cash Flow StatementPush Corporation and
SubsidariesConsolidated Statement of Cash FlowsFor the Year
Ended December 31, 20x7(Indirect Method)Cash Flows from
Operating ActivitiesConsolidated Net IncomeNoncash expenses,
revenues,losses and gains included in income:DepreciationGain
on sale of LandLoss on sale of landChanges in Operating Assets
and LiabilitiesIncrease in Acct RecievableIncrease in
Inventoryincrease in accts payable Net Cash provided by
Operating ActivitiesCash Flows from Investing
ActivitiesAcquistion of EquipmentSale of LandSale of Land B.
Net Cash used in Investing ActivitiesCash Flows from
Financing Activities Dividends PaidCash paid for Bond
Retirement Cash received for Stock Issuance Net Cash used in
Financing ActivitiesNet Increase in CashCash at the beginning
of the Year Cash at the end of the Year

4. Crisis Reflection 1: The Taco Bell E. coli outbreak — calming
public fears during
food-borne illness scares
January 10, 2007
Copyright © 2007 PRSA. All rights reserved.
By Chris Cobb
Instructions:
o Write a short 2-3-page essay reflecting on the article. You
will want to
reflect on the issue at hand using facets of crisis communication
you have
learned in the course.
o You will be graded on content and how well you understand
the course
material, reasoning and how well you amalgamate the material.
o Proper grammar and mechanics is crucial and will be a part of
your grade.
o You will submit your paper to the Turnitin.com dropbox link
within

5. blackboard.
You know you’re in trouble when you become the punch line
for late- night comedians.
“You folks been to Taco Bell lately?” chuckled David
Letterman in early December.
“They have a wonderful new menu item, it’s the ‘Taco
Apocalypto.’
“But you know,” he added with a twist of the knife, “Taco
Bell’s slogan for a long, long
time was ‘Think outside the bun.’ They have changed the slogan
now, [it’s]: ‘Look
outside for the ambulance.’”
Jay Leno had a variation on the same theme: “Taco Bell has had
to close several
restaurants because an outbreak of E. coli has made customers
sick. As a result, Taco Bell
is changing their slogan from ‘Think outside the bun’ to ‘Puke
outside the store.’”
Comedy aside, the E. coli outbreak at Taco Bell outlets in the
Northeast United States

6. sickened 71 people and came on the heels of last fall’s spinach
scare in which 204 people
throughout the United States and Canada became sick and three
— two elderly women in
Wisconsin and Nebraska and a 2-year-old from Idaho — died.
The Taco Bell outbreak, which the company originally and
incorrectly blamed on green
onions, was caused by lettuce grown on farms in central
California. The outbreak began
during the last week of November and was officially deemed
over by the Federal Food
and Drug Administration (FDA) on Dec. 14.
For the fast-food outlet, it was more than two weeks of frenetic
damage control during
which the company followed a fairly conventional strategy. The
company put President
Greg Creed front and center and launched a simultaneous print
and TV campaign to
reassure customers that it was doing all it could to correct the
situation.

7. In the early days of the crisis, however, the company seemed
uncertain about how to
react. It had closed, cleaned and reopened several restaurants
before it knew the source of
the E.coli contamination. It had also removed green onions from
all 5,800 of its
restaurants without knowing for certain whether the suspected
produce was the cause.
“Our approach to this entire situation has been to respond as
quickly as we can and
provide information to our customers and media as quickly as it
became available,” Taco
Bell’s PR director Rob Poetsch tells Tactics.
“When we first learned of the possible E.coli incident in one of
our restaurants [on Nov.
30 in Middlesex County, N.J.] we immediately and voluntarily
closed that restaurant and
began working closely with local health authorities. That
strategy of responding quickly
and being open and transparent was our priority.”
On Dec. 4, shortly after the Middlesex County closure, Taco

8. Bell voluntarily closed,
sanitized and restocked restaurants in New York.
“The health and safety of customers is our top priority,” Poetsch
explains.
Poetsch defends his company’s decision to identify green onions
as the likely E.coli
source and change produce suppliers before conclusive evidence
was available. The
company had based those decisions on its own preliminary
testing.
“We didn’t want to risk anyone else becoming ill,” he says.
“Imagine if we had that
information and waited four or five days and the test results
confirmed it and we hadn’t
taken action? All the action we took was clearly customer-
centric and focused on food
safety. That was the driving force behind all our decisions and
communications.”
Poetsch says being on the front lines in a situation where public
relations and
communications are key to corporate survival has been a

9. learning experience.
“We have been guided by a number of principles,” he says.
“When you get information,
disclose it as quickly as possible to customers to build trust and
be honest and open about
the situation from the get-go. Take action and be responsible –
work with the authorities
to find a solution to make sure it doesn’t happen again to
anyone.”
Food safety issues
Few, if any, PR professionals have more experience in food
crisis situations than Gene
Grabowski, vice president of Washington, D.C.-based Levick
Strategic Communications
and formerly vice president of communications and marketing
for the Grocery
Manufacturers of America, the world’s largest association of the
food, beverage, and
consumer packaged goods (CPG) industry.
During last fall’s bagged spinach E.coli outbreak, he
spearheaded the PR strategy for the

10. United Fresh Produce Association and River Ranch Fresh
Foods.
“There are so many food safety issues now that it is safe to say
that this is one big
running story,” says Grabowski. “We can measure and detect all
kinds of food safety
issues that we couldn’t 30 years ago, and with the greater
ability to measure, the more
things we’re going to find.”
Despite Grabowski’s assertion that the apparent increase in
food-borne illness is the
result of better detection, he concedes that because of North
America’s dependence on
fewer food sources — there are roughly 60 farms producing
two-thirds of the food supply
— the impact of a food-related crisis is far greater than in the
past.
“If there is an outbreak that emanates from one of those farms,
you’re going to affect
more people,” he says. “One farm can infect a whole nation, but

11. I do think that the food
critics, and food police, make a bit too much of the risk. Food is
safer now than it’s ever
been.”
A former White House journalist, Grabowski says around-the-
clock communications
from hundreds of potential sources has made crisis
communications increasingly
challenging.
“The messages I’m giving to you require an open mind and a
sense of understanding,” he
says. “Consumers who are frightened that their families may be
at risk are not open-
minded. They want quick solutions. The second problem is
journalism: There is a
premium on news that is alarming, entertaining and exciting and
not a premium on stories
that are reflective and put things in perspective. The true
weighing of facts is drowned out
by stories that emphasize risk.”
PR professionals involved in handling communications about

12. the two E. coli outbreaks
have done as well as can be expected, says Grabowski.
“For the first few weeks of any crisis, there is a reaction
ranging from mass hysteria to
widespread alarm,” he explains. “All the mothers and dads …
know is that two or three
people have died, hundreds have been taken sick and, if you
read the news stories, they
could be next.”
He says, “That’s 365 billion meals a year. There are about
400,000 food-borne illnesses a
year, which means that the chance of you being stricken by
food-borne illness is pretty
slim. It’s hard to get that message out.” Key to calming public
fears, says Grabowski is
getting specialists, scientists and other experts to deliver the
message to the public. Then,
he says, PR pros have to seize the “teachable moment.”
“In the early stages, when all the alarm is happening, it’s very
difficult to get a message
out about reasons,” he says. “But when fears have been allayed,

13. and people begin
understanding better, then you have a teachable moment, but
you have to seize that
moment quickly because the door opens and shuts very
quickly.”
In 1982, before mass use of the Internet, e-mail, blogs, video-
sharing platforms and the
myriad of other rapid-fire communications methods took hold,
Peter Morrissey was part
of the Johnson & Johnson PR team that handled the now
seminal case of the Tylenol
tampering crisis.
In what has now become standard PR practice, J&J’s main
spokesman during the crisis
was Jim Burke, chairman and CEO, who held a series of
nationwide satellite video news
conferences. This was considered a leading-edge method at the
time of helping to soothe
public fears.

14. There are similarities in the Taco Bell-Tylenol cases, says
Morrissey, now a
communications professor at Boston University’s College of
Communication.
“Both are about credibility, trust and leadership, and those
absolutely apply today as
much as they did then,” he says. “Technology has changed, and
the means of
communication is faster, but you still have to show leadership
and decisiveness and do
the right thing quickly — regardless of the consequences.”
It was Burke’s public leadership that got Tylenol through the
crisis, adds Morrissey.
“He was always asking himself how to do the right thing by his
customers,” he says.
“And he moved with dispatch. It was a big deal, and a bold
approach at that time.”
But speed of information dissemination, and increased fear in
society, makes situations
such as the E. Coli scares more problematic for companies such
as Taco Bell.

15. “We are in a period of higher uncertainty, so today when
something like this happens,
you need decisive leadership,” says Morrissey. “You need a
plan in place if anything
should happen and work through the details of how you’re going
to respond because
otherwise, in the line of fire, you’re not going to respond in a
reasonable, intelligent way.
Today, things happen too quickly to allow time for a forensic
review of the facts before
responding.”