FOR SOLUTION OF THE BELOW CASE STUDIES, VISIT AND ASK IT AT ESSAYTUTORS.NET
Group assignment on Business Combinations
Case .1
You have been engaged to audit the financial statements of Solamente Corporation for thefiscal year ended May 31, 2010. You discover that on June 1, 2009, Mika Company hadbeen merged into Solamente in a business combination. You also find that both Solamenteand Mika (prior to its liquidation) incurred legal fees, accounting fees, and printing costsfor the business combination; both companies debited those costs to an intangible assetledger account entitled “Cost of Business Combination.” In its journal entry to record thebusiness combination with Mika, Solamente increased its Cost of Business Combinationaccount by an amount equal to the balance of Mika’s comparable ledger account.
Instructions
Evaluate Solamente’s accounting for the out-of-pocket costs of the business combination with Mika in light of IFRS and GAAP guidelines.
Case .2
You are the controller of Software Company, a distributor of computer software, which isplanning to acquire a portion of the net assets of a product line of Midge Company, a competitorenterprise. The projected acquisition cost is expected to exceed substantially the currentfair value of the identifiable net assets to be acquired, which the competitor has agreedto sell because of its substantial net losses of recent years. The board of directors of Softwareasks if the excess acquisition cost may appropriately be recognized as goodwill.
Instructions
Prepare a memorandum to the board of directors an answer to the question, after consulting the guidelines issued by either FASB or IASB
Case .3
On February 15, 2005, officers of Sun Corporation agreed with George Merlo, sole stockholderof Merlo Company and Merlo Industries, Inc., to acquire all his common stock ownershipin the two companies as follows:
1. 10,000 shares of Shane’s $1 par common stock (current fair value $30 a share) would be issued to George Merlo on February 28, 2005, for his 1,000 shares of $10 par common stock of Merlo Company. In addition, 20,000 shares of Sun common stock would be issued to George Merlo on February 28, 2010, if aggregate net income of Merlo Company for the five-year period then ended exceeded $300,000.
This document provides an overview of auditing, including:
- The objectives and evolution of auditing from detecting errors and frauds to ascertaining if accounts are true and fair.
- Key definitions including that auditing is a systematic and independent examination of data, statements, records, operations and performance for a stated purpose.
- The features and objectives of auditing including verifying financial statements exhibit a true and fair view, and expressing an opinion on the statements.
The document provides an overview of International Public Sector Accounting Standards (IPSAS) and the transition from International Financial Reporting Standards (IFRS) to IPSAS. Some key points:
- IPSAS are accounting standards developed for use by public sector entities based on IFRS. They aim to improve financial reporting and transparency.
- There are differences between cash-based and accrual-based accounting. IPSAS follows the accrual basis which recognizes revenues when earned and expenses when incurred rather than when cash is received or paid.
- Adopting IPSAS has benefits like standardizing definitions and measurements, improving resource allocation and internal controls, and providing more meaningful financial statements and transparency.
- The
Introduction to IPSAS and conceptual frameworkFoluwa Amisu
Detailed and informative introduction to International Public Sector Accounting Standards for the preparation of general purpose financial statements by governments and other public sector entities around the world.
The document discusses key concepts related to financial reporting including:
1) Financial reporting provides formal records of a company's financial activities primarily for external users like shareholders and internal users like management. Annual reports contain key documents like directors reports and financial statements.
2) There are various forms of business organization but joint stock companies have features like limited liability, transferable shares, and elected management through directors.
3) The objective of financial reporting is to provide useful information to investors and creditors to make decisions about providing resources to an entity. Reports are limited and users need other sources of information as well.
The document discusses the roles and responsibilities of boards of directors. It provides definitions of boards and describes their key functions, including oversight of management, setting strategic direction, and advising management. It also discusses types of boards, such as unitary vs. two-tier boards, and common vs. staggered boards. Additionally, it covers characteristics of effective vs. ineffective boards and factors that contribute to balanced boards.
1) The conceptual framework provides the theoretical basis for accounting standards and financial reporting. It establishes the objectives of providing useful information to decision makers and the qualitative characteristics of relevant, faithful, comparable, and understandable information.
2) The framework outlines key elements of financial statements including assets, liabilities, equity, revenues, and expenses. It also establishes recognition and measurement assumptions, principles like cost and revenue recognition, and constraints like materiality.
3) The framework is intended to guide standard setting and ensure financial reports meet the needs of users in decision making.
The document discusses the phases of adoption of Indian Accounting Standards (Ind AS) in India. It explains that Ind AS are converged standards based on International Financial Reporting Standards (IFRS) applicable from April 1, 2016. It outlines the phases of mandatory applicability for different types of companies based on net worth and listing status. Phase I made Ind AS mandatory for listed/unlisted companies with net worth over Rs. 500 crore from 2016-17. Phase II applies to listed companies and those in the listing process with net worth between Rs. 250-500 crore from 2017-18. Phase III covers banks, NBFCs and insurance companies with over Rs. 500 crore net worth from 2018-19. Phase IV
The document provides an overview of consolidated financial statements. It discusses how a parent company combines the financial statements of its subsidiaries by eliminating reciprocal accounts and adjusting for the difference between the parent's cost of its investment and the book value of the subsidiary's underlying equity. The objectives covered include recognizing the benefits of consolidated statements, requirements for inclusion of subsidiaries, allocating excess investment costs, preparing consolidated balance sheets at acquisition and subsequent periods, accounting for minority interests, and preparing consolidated income statements.
This document provides an overview of auditing, including:
- The objectives and evolution of auditing from detecting errors and frauds to ascertaining if accounts are true and fair.
- Key definitions including that auditing is a systematic and independent examination of data, statements, records, operations and performance for a stated purpose.
- The features and objectives of auditing including verifying financial statements exhibit a true and fair view, and expressing an opinion on the statements.
The document provides an overview of International Public Sector Accounting Standards (IPSAS) and the transition from International Financial Reporting Standards (IFRS) to IPSAS. Some key points:
- IPSAS are accounting standards developed for use by public sector entities based on IFRS. They aim to improve financial reporting and transparency.
- There are differences between cash-based and accrual-based accounting. IPSAS follows the accrual basis which recognizes revenues when earned and expenses when incurred rather than when cash is received or paid.
- Adopting IPSAS has benefits like standardizing definitions and measurements, improving resource allocation and internal controls, and providing more meaningful financial statements and transparency.
- The
Introduction to IPSAS and conceptual frameworkFoluwa Amisu
Detailed and informative introduction to International Public Sector Accounting Standards for the preparation of general purpose financial statements by governments and other public sector entities around the world.
The document discusses key concepts related to financial reporting including:
1) Financial reporting provides formal records of a company's financial activities primarily for external users like shareholders and internal users like management. Annual reports contain key documents like directors reports and financial statements.
2) There are various forms of business organization but joint stock companies have features like limited liability, transferable shares, and elected management through directors.
3) The objective of financial reporting is to provide useful information to investors and creditors to make decisions about providing resources to an entity. Reports are limited and users need other sources of information as well.
The document discusses the roles and responsibilities of boards of directors. It provides definitions of boards and describes their key functions, including oversight of management, setting strategic direction, and advising management. It also discusses types of boards, such as unitary vs. two-tier boards, and common vs. staggered boards. Additionally, it covers characteristics of effective vs. ineffective boards and factors that contribute to balanced boards.
1) The conceptual framework provides the theoretical basis for accounting standards and financial reporting. It establishes the objectives of providing useful information to decision makers and the qualitative characteristics of relevant, faithful, comparable, and understandable information.
2) The framework outlines key elements of financial statements including assets, liabilities, equity, revenues, and expenses. It also establishes recognition and measurement assumptions, principles like cost and revenue recognition, and constraints like materiality.
3) The framework is intended to guide standard setting and ensure financial reports meet the needs of users in decision making.
The document discusses the phases of adoption of Indian Accounting Standards (Ind AS) in India. It explains that Ind AS are converged standards based on International Financial Reporting Standards (IFRS) applicable from April 1, 2016. It outlines the phases of mandatory applicability for different types of companies based on net worth and listing status. Phase I made Ind AS mandatory for listed/unlisted companies with net worth over Rs. 500 crore from 2016-17. Phase II applies to listed companies and those in the listing process with net worth between Rs. 250-500 crore from 2017-18. Phase III covers banks, NBFCs and insurance companies with over Rs. 500 crore net worth from 2018-19. Phase IV
The document provides an overview of consolidated financial statements. It discusses how a parent company combines the financial statements of its subsidiaries by eliminating reciprocal accounts and adjusting for the difference between the parent's cost of its investment and the book value of the subsidiary's underlying equity. The objectives covered include recognizing the benefits of consolidated statements, requirements for inclusion of subsidiaries, allocating excess investment costs, preparing consolidated balance sheets at acquisition and subsequent periods, accounting for minority interests, and preparing consolidated income statements.
The document discusses the relationship between risk and return, known as the risk-return nexus. It defines key concepts like risk, return, systematic and unsystematic risk. It explains that total risk is comprised of systematic and unsystematic risk, but that unsystematic risk can be diversified away. The Capital Asset Pricing Model (CAPM) asserts that the expected return of an asset depends only on its systematic risk. Empirical analysis of CAPM shows strong correlation between market returns and the returns of various bonds, supporting the model.
OECD Principles Of Corporate Governance in IndiaRoopanshi Virang
The OECD Principles of Corporate Governance provide a global framework for well-governed corporations and were first published by the OECD in 1999. They establish guidance in six areas, including ensuring an effective governance framework, equitable treatment of shareholders, the role of stakeholders, and disclosure and transparency. In India, the principles have been applied through regulations like Clause 49 of the Listing Agreement and the Companies Act of 2013. For corporations to fully adopt the OECD principles in India, they must embrace values of justice, truth, and harmony; act with fairness, integrity, and care toward stakeholders; and ensure good, reliable direction and governance of the company.
The cash position is forecasted for April, May, and June 2010 based on sales, purchase, wages, and other expense data provided for previous months. Cash in hand is estimated to be Rs. 5,680 in April, Rs. (7,084) in May, and Rs. (62,936) in June as collections from debtors are received but payments to creditors, wages, and other expenses are made. Rent of Rs. 3,000 is paid in April. Advance tax of Rs. 25,000 is due in June.
The document discusses three valuation methods: asset based, income based, and market based. The asset based approach values a company based on its assets and liabilities from the balance sheet. This can provide two potential values: book value, using carrying values, or adjusted net asset value, adjusting assets and liabilities to fair market values. The asset based approach assumes the company will liquidate and the residual value after selling assets and paying liabilities is the company's value.
This document provides a summary of key International Public Sector Accounting Standards (IPSAS). It lists the IPSAS standards and their corresponding International Financial Reporting Standards (IFRS) standards. Some of the key IPSAS standards summarized include IPSAS 1 on the presentation of financial statements, IPSAS 2 on cash flow statements, and IPSAS 3 on accounting policies and errors. The document also highlights some of the differences between IPSAS and IFRS standards.
This document provides an overview of accounting for financial instruments under IFRS 9. It discusses key aspects such as classifying financial instruments, recognizing and derecognizing financial assets, and impairment of financial assets. The document defines various financial instruments and outlines their classification and measurement. It describes the criteria for classifying financial assets as amortized cost, fair value through other comprehensive income, or fair value through profit or loss depending on contractual cash flow characteristics and business models. The derecognition principles for financial assets and continuing involvement are also summarized.
It explains the IASB’s Regulatory framework including the Companies act, Stock exchange listing rules and IFRS. It also explains the IASB relationship with other bodies and how they operate and how the IFRS are produced
The document discusses how multinational corporations determine their cost of capital and establish optimal capital structures. It explains that an MNC's cost of capital may differ from domestic firms due to their size, access to international markets, diversification across countries, and exposure to exchange rate and country risks. The cost of capital also varies by country based on interest rates, risk premiums, and tax laws. An MNC considers these corporate and country characteristics when deciding how much debt and equity to use in different subsidiaries to minimize its overall cost of capital.
This document discusses ratio analysis, which involves calculating relationships between financial statement items to analyze a company's performance and financial position. Ratio analysis can be used to evaluate profitability, solvency, operating efficiency, short-term financial position, and more. Some common ratios mentioned include the current ratio, quick ratio, debt-to-equity ratio, and gross profit ratio. The document outlines how ratios are calculated and expressed, and provides examples of liquidity, activity, profitability, and long-term financial position ratios. Caution is advised when interpreting ratios, as different accounting treatments, time periods, or single ratios can provide misleading results.
This document provides an overview of an accounting training workshop. It includes:
1) Objectives of helping participants understand key financial concepts and statements and make better business decisions.
2) An outline of course contents covering accounting principles, financial statement analysis, and key metrics.
3) Examples of accounting concepts discussed like the accounting equation, revenue and expense recognition, and the purpose of financial statements.
This document discusses quality control for audits and other assurance engagements. It explains that firms must implement quality control procedures to ensure engagements are performed according to standards and legal requirements. The key elements of a quality control system discussed are leadership, ethics, acceptance and continuance of clients, human resources, engagement performance, and monitoring procedures. Firms need policies and procedures in each of these areas to maintain quality and protect against liability.
Learning Objective 1: To explain the nature and general purpose of financial statements.
Learning Objective 2: To explain certain accounting principles that are important for an understanding of financial statements and how professional judgment by accountants may affect the application of those principles.
Learning Objective 3: To demonstrate how certain business transactions affect the elements of the accounting equation: Assets = Liabilities + Owners’ Equity.
Learning Objective 4: To explain how the statement of financial position, often referred to as the balance sheet, is an expansion of the basic accounting equation.
Learning Objective 5: To explain how the income statement reports an enterprise’s financial performance for a period of time in terms of the relationship of revenues and expenses.
Learning Objective 6: To explain how the statement of cash flows presents the change in cash for a period of time in terms of the company’s operating, investing, and financing activities.
Learning Objective 7: To explain the important relationships among the statement of financial position, income statement, and statement of cash flows, and how these statements relate to each other.
Learning Objective 8: To explain common forms of business ownership—sole proprietorship, partnership, and corporation—and demonstrate how they differ in terms of their presentation in the statement of financial position.
Learning Objective 9: To discuss the importance of financial statements to a company and its investors and creditors and why management may take steps to improve the appearance of the company in its financial statements.
Fairness Considerations in Going Private TransactionsMercer Capital
A presentation by Jeff K. Davis, CFA, that provides an overview of issues surrounding a decision to take an SEC-registrant private.
Pros and Cons of Going Private
Structuring a Transaction
Valuation Analysis
Fairness Considerations
The document discusses internal financial controls (IFC) and internal financial controls over financial reporting (ICFR) as required by the Companies Act 2013 in India. It defines IFC and ICFR and explains who is responsible for them according to the Act, including directors, auditors, and audit committees. It outlines how IFC can help companies beyond compliance, the objectives of IFC coverage, key highlights from ICAI guidance, and penalties for non-compliance. Finally, it describes how the consulting firm A.P. Doshi & Co. can help companies with IFC implementation, documentation, testing, and reporting.
Types of Financial Model - Financial Modeling by EduCBAeduCBA
https://www.educorporatebridge.com/financial-modeling/types-of-financial-model/
Learn the different types of Financial model like DCF Model, Comparative Company Analysis model, Sum-of-the-parts model, LBO Model, M&A model and Option Pricing Model
This document discusses the definition and accounting treatment of expenses. It begins by defining expenses as decreases in assets or increases in liabilities from ordinary business activities, excluding distributions to owners. It describes challenges in allocating expenses to accounting periods and matching them with revenues. Criticisms are discussed, such as the subjectivity of allocations and lack of empirical evidence they are useful. Standard setters aim to improve expense recognition and auditors must assess period assignments and measurements.
Financial instrument IAS 32 IFRS 7 & and IFRS; 9AdeadebayoShuaib
This document discusses IAS 32, IFRS 7, and IFRS 9 regarding financial instruments. It defines key terms like financial instruments, financial assets, and financial liabilities. It outlines the classification of financial instruments into those measured at fair value through profit or loss, fair value through other comprehensive income, and amortized cost. It also discusses impairment of financial assets, reclassification of financial instruments, and derecognition of financial assets and liabilities. Examples are provided to illustrate measurement of financial instruments under different classifications.
The document discusses key statistical terms used in analyzing portfolio performance including mean, standard deviation, variance, correlation coefficient, and normal distribution. It explains how mean measures average returns, variance and standard deviation measure risk/volatility, and correlation measures the relationship between two investments. The document also covers portfolio theory, the efficient frontier, and risk/return analysis tools like the Sharpe Ratio and Value at Risk (VAR) that are used to evaluate portfolio performance based on expected return and risk.
Presentation provides an overview of the theoretical concepts in corporate governance, few definitions, methods to measure it and a brief overview of recent developments in corporate governance in the Caribbean.
1. Mike has come to you with these statements about corporations.docxjackiewalcutt
1. Mike has come to you with these statements about corporations:
a) Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a partnership.
b) Limited liability of stockholders, government regulations, and additional taxes are the major disadvantages of a corporation.
c) When a corporation is formed, organization costs are recorded as an asset.
d) Each share of common stock gives the stockholder the ownership rights to vote at stockholder meetings, share in corporate earnings, keep the same percentage ownership when new shares of stock are issued, and share in assets upon liquidation.
e) The number of issued shares is always greater than or equal to the number of authorized shares.
f) A journal entry is required for the authorization of capital stock.
g) Publicly held corporations usually issue stock directly to investors.
h) The trading of capital stock on a securities exchange involves the transfer of already issued shares from an existing stockholder to another investor.
i) The market price of common stock is usually the same as its par value.
j) Retained earnings is the total amount of cash and other assets paid in to the corporation by stockholders in exchange for capital stock.
Directions
Indicate whether each statement is true orfalse. Iffalse, identify a way to correct the statement.
2. During its first year of operations, Plight Corporation had the following transactions pertaining to common stock.
Jan. 10 Issued 70,000 shares for cash at $5 per share.
July 1 Issued 40,000 shares for cash at $7 per share.
Directions
(a) Journalize the transactions, assuming that the common stock has a par value of $5 per share.
(b) Journalize the transactions, assuming that the common stock is no-par with a stated value of $1 per share.
3. Locket Co. had the following transactions during the current period:
Mar. 2nd Issued 5,000 shares of $5 par value common stock to attorneys in payment of a bill for $30,000 for services performed in helping the company to incorporate.
June 12th Issued 60,000 shares of $5 par value common stock for cash of $375,000.
July 11th Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share.
Nov. 28th Purchased 2,000 shares of treasury stock for $80,000.
Directions
Journalize these transactions for Locket.
4. On January 1, 2015, the stockholders’ equity section ofHarlequin Corporation shows common stock ($5 par value) $1,500,000; paid-in capital in excess of par $1,000,000; and retained earnings $1,200,000. During the year, the corporation entered into the following treasury stock transactions.
Mar. 1st Purchased 50,000 shares for cash at $15 per share.
July 1st Re-issued 10,000 treasury shares for cash at $17 per share.
Sept. 1st Sold 8,000 treasury shares for cash at $14 per share.
Directions
(a) Journalize the treasury stock transactions.
(b) Revise the entry for September 1st, assuming the treasury shares were sold at $12 ...
Problem 1 (10 Points)Jackson Browne Corporation is authorized to.docxLacieKlineeb
Problem 1 (10 Points)
Jackson Browne Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2021, its first year of operation, the company has the following stock transactions.
Jan. 1 Paid the state $10,000 for incorporation fees.
Jan. 15 Issued 400,000 shares of stock at $5 per share.
July 2 Issued 110,000 shares of stock for land. The land had an asking price of $800,000. The stock is currently selling on a national exchange at $6 per share.
Sept. 5 Purchased 12,000 shares of common stock for the treasury at $7 per share.
Dec. 6 Sold 8,000 shares of the treasury stock at $10 per share.
Instructions
Indicate the accounts and their respective balances that are increased and/or decreased in the above transactions for Jackson Browne Corporation.
You must show your computations to receive full credit.
Problem 2 (12 Points)
The following items were shown on the balance sheet of ELO Corporation on December 31, 2021:
Stockholders’ equity
Paid-in capital
Capital stock
Common stock, $6 par value, 800,000 shares
authorized; ______ shares issued and ______ outstanding $3,000,000
Additional paid-in capital
In excess of par
1,500,000
Total paid-in capital 4,500,000
Retained earnings
1,850,000
Total paid-in capital and retained earnings 6,350,000
Less: Treasury stock (10,000 shares)
50,000
Total stockholders’ equity
$6,300,000
Instructions
Complete the following statements and
show your computations.
(a) The number of shares of common stock issued was _______________.
(b) The number of shares of common stock outstanding was ____________.
(c) The total sales price of the common stock when issued was $____________.
(d) The cost per share of the treasury stock was $_______________.
(e) The average issue price of the common stock was $______________.
(f) Assuming that 25% of the treasury stock is sold at $8 per share, the balance in the Treasury Stock account would be $_______________.
Problem 3 (10 Points)
Journey Company had the following transactions involving notes payable.
October 1, 2021 Borrows $300,000 from Washington State Bank by signing a 6-month, 4% note.
Dec. 31, 2021 prepares the adjusting entry.
April 1, 2022 Pays principal and interest to Washington State Bank.
Instructions
Indicate the accounts and their respective balances that are increased and/or decreased for each of the above transactions.
You must show all your calculations to receive full credit.
Problem 4 (18 Points)
Turner Inc. is considering two alternatives to finance its construction of a new $6 million plant.
(a) Issuance of 600,000 shares of common stock at the market price of $10 per share.
(b) Issuance of $6 million, 4% bonds at par.
Instructions
Complete the following table.
You MUST show your work to receive full credit.
Issue StockIssue Bond.
The document discusses the relationship between risk and return, known as the risk-return nexus. It defines key concepts like risk, return, systematic and unsystematic risk. It explains that total risk is comprised of systematic and unsystematic risk, but that unsystematic risk can be diversified away. The Capital Asset Pricing Model (CAPM) asserts that the expected return of an asset depends only on its systematic risk. Empirical analysis of CAPM shows strong correlation between market returns and the returns of various bonds, supporting the model.
OECD Principles Of Corporate Governance in IndiaRoopanshi Virang
The OECD Principles of Corporate Governance provide a global framework for well-governed corporations and were first published by the OECD in 1999. They establish guidance in six areas, including ensuring an effective governance framework, equitable treatment of shareholders, the role of stakeholders, and disclosure and transparency. In India, the principles have been applied through regulations like Clause 49 of the Listing Agreement and the Companies Act of 2013. For corporations to fully adopt the OECD principles in India, they must embrace values of justice, truth, and harmony; act with fairness, integrity, and care toward stakeholders; and ensure good, reliable direction and governance of the company.
The cash position is forecasted for April, May, and June 2010 based on sales, purchase, wages, and other expense data provided for previous months. Cash in hand is estimated to be Rs. 5,680 in April, Rs. (7,084) in May, and Rs. (62,936) in June as collections from debtors are received but payments to creditors, wages, and other expenses are made. Rent of Rs. 3,000 is paid in April. Advance tax of Rs. 25,000 is due in June.
The document discusses three valuation methods: asset based, income based, and market based. The asset based approach values a company based on its assets and liabilities from the balance sheet. This can provide two potential values: book value, using carrying values, or adjusted net asset value, adjusting assets and liabilities to fair market values. The asset based approach assumes the company will liquidate and the residual value after selling assets and paying liabilities is the company's value.
This document provides a summary of key International Public Sector Accounting Standards (IPSAS). It lists the IPSAS standards and their corresponding International Financial Reporting Standards (IFRS) standards. Some of the key IPSAS standards summarized include IPSAS 1 on the presentation of financial statements, IPSAS 2 on cash flow statements, and IPSAS 3 on accounting policies and errors. The document also highlights some of the differences between IPSAS and IFRS standards.
This document provides an overview of accounting for financial instruments under IFRS 9. It discusses key aspects such as classifying financial instruments, recognizing and derecognizing financial assets, and impairment of financial assets. The document defines various financial instruments and outlines their classification and measurement. It describes the criteria for classifying financial assets as amortized cost, fair value through other comprehensive income, or fair value through profit or loss depending on contractual cash flow characteristics and business models. The derecognition principles for financial assets and continuing involvement are also summarized.
It explains the IASB’s Regulatory framework including the Companies act, Stock exchange listing rules and IFRS. It also explains the IASB relationship with other bodies and how they operate and how the IFRS are produced
The document discusses how multinational corporations determine their cost of capital and establish optimal capital structures. It explains that an MNC's cost of capital may differ from domestic firms due to their size, access to international markets, diversification across countries, and exposure to exchange rate and country risks. The cost of capital also varies by country based on interest rates, risk premiums, and tax laws. An MNC considers these corporate and country characteristics when deciding how much debt and equity to use in different subsidiaries to minimize its overall cost of capital.
This document discusses ratio analysis, which involves calculating relationships between financial statement items to analyze a company's performance and financial position. Ratio analysis can be used to evaluate profitability, solvency, operating efficiency, short-term financial position, and more. Some common ratios mentioned include the current ratio, quick ratio, debt-to-equity ratio, and gross profit ratio. The document outlines how ratios are calculated and expressed, and provides examples of liquidity, activity, profitability, and long-term financial position ratios. Caution is advised when interpreting ratios, as different accounting treatments, time periods, or single ratios can provide misleading results.
This document provides an overview of an accounting training workshop. It includes:
1) Objectives of helping participants understand key financial concepts and statements and make better business decisions.
2) An outline of course contents covering accounting principles, financial statement analysis, and key metrics.
3) Examples of accounting concepts discussed like the accounting equation, revenue and expense recognition, and the purpose of financial statements.
This document discusses quality control for audits and other assurance engagements. It explains that firms must implement quality control procedures to ensure engagements are performed according to standards and legal requirements. The key elements of a quality control system discussed are leadership, ethics, acceptance and continuance of clients, human resources, engagement performance, and monitoring procedures. Firms need policies and procedures in each of these areas to maintain quality and protect against liability.
Learning Objective 1: To explain the nature and general purpose of financial statements.
Learning Objective 2: To explain certain accounting principles that are important for an understanding of financial statements and how professional judgment by accountants may affect the application of those principles.
Learning Objective 3: To demonstrate how certain business transactions affect the elements of the accounting equation: Assets = Liabilities + Owners’ Equity.
Learning Objective 4: To explain how the statement of financial position, often referred to as the balance sheet, is an expansion of the basic accounting equation.
Learning Objective 5: To explain how the income statement reports an enterprise’s financial performance for a period of time in terms of the relationship of revenues and expenses.
Learning Objective 6: To explain how the statement of cash flows presents the change in cash for a period of time in terms of the company’s operating, investing, and financing activities.
Learning Objective 7: To explain the important relationships among the statement of financial position, income statement, and statement of cash flows, and how these statements relate to each other.
Learning Objective 8: To explain common forms of business ownership—sole proprietorship, partnership, and corporation—and demonstrate how they differ in terms of their presentation in the statement of financial position.
Learning Objective 9: To discuss the importance of financial statements to a company and its investors and creditors and why management may take steps to improve the appearance of the company in its financial statements.
Fairness Considerations in Going Private TransactionsMercer Capital
A presentation by Jeff K. Davis, CFA, that provides an overview of issues surrounding a decision to take an SEC-registrant private.
Pros and Cons of Going Private
Structuring a Transaction
Valuation Analysis
Fairness Considerations
The document discusses internal financial controls (IFC) and internal financial controls over financial reporting (ICFR) as required by the Companies Act 2013 in India. It defines IFC and ICFR and explains who is responsible for them according to the Act, including directors, auditors, and audit committees. It outlines how IFC can help companies beyond compliance, the objectives of IFC coverage, key highlights from ICAI guidance, and penalties for non-compliance. Finally, it describes how the consulting firm A.P. Doshi & Co. can help companies with IFC implementation, documentation, testing, and reporting.
Types of Financial Model - Financial Modeling by EduCBAeduCBA
https://www.educorporatebridge.com/financial-modeling/types-of-financial-model/
Learn the different types of Financial model like DCF Model, Comparative Company Analysis model, Sum-of-the-parts model, LBO Model, M&A model and Option Pricing Model
This document discusses the definition and accounting treatment of expenses. It begins by defining expenses as decreases in assets or increases in liabilities from ordinary business activities, excluding distributions to owners. It describes challenges in allocating expenses to accounting periods and matching them with revenues. Criticisms are discussed, such as the subjectivity of allocations and lack of empirical evidence they are useful. Standard setters aim to improve expense recognition and auditors must assess period assignments and measurements.
Financial instrument IAS 32 IFRS 7 & and IFRS; 9AdeadebayoShuaib
This document discusses IAS 32, IFRS 7, and IFRS 9 regarding financial instruments. It defines key terms like financial instruments, financial assets, and financial liabilities. It outlines the classification of financial instruments into those measured at fair value through profit or loss, fair value through other comprehensive income, and amortized cost. It also discusses impairment of financial assets, reclassification of financial instruments, and derecognition of financial assets and liabilities. Examples are provided to illustrate measurement of financial instruments under different classifications.
The document discusses key statistical terms used in analyzing portfolio performance including mean, standard deviation, variance, correlation coefficient, and normal distribution. It explains how mean measures average returns, variance and standard deviation measure risk/volatility, and correlation measures the relationship between two investments. The document also covers portfolio theory, the efficient frontier, and risk/return analysis tools like the Sharpe Ratio and Value at Risk (VAR) that are used to evaluate portfolio performance based on expected return and risk.
Presentation provides an overview of the theoretical concepts in corporate governance, few definitions, methods to measure it and a brief overview of recent developments in corporate governance in the Caribbean.
1. Mike has come to you with these statements about corporations.docxjackiewalcutt
1. Mike has come to you with these statements about corporations:
a) Corporation management is both an advantage and a disadvantage of a corporation compared to a proprietorship or a partnership.
b) Limited liability of stockholders, government regulations, and additional taxes are the major disadvantages of a corporation.
c) When a corporation is formed, organization costs are recorded as an asset.
d) Each share of common stock gives the stockholder the ownership rights to vote at stockholder meetings, share in corporate earnings, keep the same percentage ownership when new shares of stock are issued, and share in assets upon liquidation.
e) The number of issued shares is always greater than or equal to the number of authorized shares.
f) A journal entry is required for the authorization of capital stock.
g) Publicly held corporations usually issue stock directly to investors.
h) The trading of capital stock on a securities exchange involves the transfer of already issued shares from an existing stockholder to another investor.
i) The market price of common stock is usually the same as its par value.
j) Retained earnings is the total amount of cash and other assets paid in to the corporation by stockholders in exchange for capital stock.
Directions
Indicate whether each statement is true orfalse. Iffalse, identify a way to correct the statement.
2. During its first year of operations, Plight Corporation had the following transactions pertaining to common stock.
Jan. 10 Issued 70,000 shares for cash at $5 per share.
July 1 Issued 40,000 shares for cash at $7 per share.
Directions
(a) Journalize the transactions, assuming that the common stock has a par value of $5 per share.
(b) Journalize the transactions, assuming that the common stock is no-par with a stated value of $1 per share.
3. Locket Co. had the following transactions during the current period:
Mar. 2nd Issued 5,000 shares of $5 par value common stock to attorneys in payment of a bill for $30,000 for services performed in helping the company to incorporate.
June 12th Issued 60,000 shares of $5 par value common stock for cash of $375,000.
July 11th Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share.
Nov. 28th Purchased 2,000 shares of treasury stock for $80,000.
Directions
Journalize these transactions for Locket.
4. On January 1, 2015, the stockholders’ equity section ofHarlequin Corporation shows common stock ($5 par value) $1,500,000; paid-in capital in excess of par $1,000,000; and retained earnings $1,200,000. During the year, the corporation entered into the following treasury stock transactions.
Mar. 1st Purchased 50,000 shares for cash at $15 per share.
July 1st Re-issued 10,000 treasury shares for cash at $17 per share.
Sept. 1st Sold 8,000 treasury shares for cash at $14 per share.
Directions
(a) Journalize the treasury stock transactions.
(b) Revise the entry for September 1st, assuming the treasury shares were sold at $12 ...
Problem 1 (10 Points)Jackson Browne Corporation is authorized to.docxLacieKlineeb
Problem 1 (10 Points)
Jackson Browne Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2021, its first year of operation, the company has the following stock transactions.
Jan. 1 Paid the state $10,000 for incorporation fees.
Jan. 15 Issued 400,000 shares of stock at $5 per share.
July 2 Issued 110,000 shares of stock for land. The land had an asking price of $800,000. The stock is currently selling on a national exchange at $6 per share.
Sept. 5 Purchased 12,000 shares of common stock for the treasury at $7 per share.
Dec. 6 Sold 8,000 shares of the treasury stock at $10 per share.
Instructions
Indicate the accounts and their respective balances that are increased and/or decreased in the above transactions for Jackson Browne Corporation.
You must show your computations to receive full credit.
Problem 2 (12 Points)
The following items were shown on the balance sheet of ELO Corporation on December 31, 2021:
Stockholders’ equity
Paid-in capital
Capital stock
Common stock, $6 par value, 800,000 shares
authorized; ______ shares issued and ______ outstanding $3,000,000
Additional paid-in capital
In excess of par
1,500,000
Total paid-in capital 4,500,000
Retained earnings
1,850,000
Total paid-in capital and retained earnings 6,350,000
Less: Treasury stock (10,000 shares)
50,000
Total stockholders’ equity
$6,300,000
Instructions
Complete the following statements and
show your computations.
(a) The number of shares of common stock issued was _______________.
(b) The number of shares of common stock outstanding was ____________.
(c) The total sales price of the common stock when issued was $____________.
(d) The cost per share of the treasury stock was $_______________.
(e) The average issue price of the common stock was $______________.
(f) Assuming that 25% of the treasury stock is sold at $8 per share, the balance in the Treasury Stock account would be $_______________.
Problem 3 (10 Points)
Journey Company had the following transactions involving notes payable.
October 1, 2021 Borrows $300,000 from Washington State Bank by signing a 6-month, 4% note.
Dec. 31, 2021 prepares the adjusting entry.
April 1, 2022 Pays principal and interest to Washington State Bank.
Instructions
Indicate the accounts and their respective balances that are increased and/or decreased for each of the above transactions.
You must show all your calculations to receive full credit.
Problem 4 (18 Points)
Turner Inc. is considering two alternatives to finance its construction of a new $6 million plant.
(a) Issuance of 600,000 shares of common stock at the market price of $10 per share.
(b) Issuance of $6 million, 4% bonds at par.
Instructions
Complete the following table.
You MUST show your work to receive full credit.
Issue StockIssue Bond.
Assessing Audit and Business Risks at Toy Central Corporationdirkrplav
Assessing Audit and Business Risks at Toy Central Corporation
INTRODUCTION
As a senior in a professional services firm, you have been assigned to plan the financial statement audit of a private company named Toy Central Corporation (TCC). In addition, the partner on the engagement has asked you to identify business risks that could adversely affect TCC’s sustained profitability, so that they can be brought to the attention of the company’s board of directors. These tasks will require you to draw on your knowledge of supply chain management, marketing, internal controls, audit assertions, and financial accounting.
COMPANY BACKGROUND
Toy Central Corporation (TCC) designs, manufactures, and markets a variety of toys, which are sold primarily to large national retailers like Wal-Mart, Toys R Us, Kmart, and Target. TCC is a small company compared to competitors Mattel and Hasbro; nevertheless, TCC’s managers believe its toys are among the best in the world. Unlike the larger toy makers, which bring thousands of toys to market each year but experience success with only a fraction of them, TCC has enjoyed success with a small portfolio of brands and products, representing three categories: (1) soft toys, consisting primarily of its Cuddle Monstersstuffed animals; (2) hard toys, including metal-cast and plastic-cast toys like Fast Racers cars and Acto action figures; and (3) digital toys, consisting of video game software under development. Like most toy makers, 60 percent of TCC’s sales revenues are generated in October and November, with the last two weeks of November driving half of those sales.
Your firm, KDOK, has been TCC’s professional services firm since 2001, providing audit and tax services for the company. The primary external user of TCC’s audited financial statements is its bank. Assume it is now October 28, 2007. You have taken over audit senior responsibilities for the company’s October 31, 2007 year-end financial statement audit, because the original audit senior has left the firm. As a private company, TCC is not directly affected by the Sarbanes-Oxley Act (SOX). However, the partner in charge of the engagement has advised you that, ever since the financial scandals at the turn of the century, TCC has become interested in strengthening its corporate governance. Two years ago, following the release of the AICPA’s Audit Committees Toolkit for public and private corporations, TCC has asked your firm to consider not only financial reporting issues, but also significant business risks that could affect the sustainability of TCC’s success in the toy industry.
Although TCC’s board of directors believes it is aware of strategic issues facing the company, it has been considering spinning off its digital toy division into a separate company and, subsequently, merging it with an upstart software company. Before embarking on a change in organizational structure, the board wants a ‘‘second set of eyes’’ to ensure it has considered all ...
Exercise 11-5Garcia Corporation recently hired a new accountant wi.docxmodi11
Exercise 11-5
Garcia Corporation recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the first month, he made the following entries for the corporation’s capital stock.
May 2
Cash
104,520
Capital Stock
104,520
(Issued 8,040 shares of $11 par value common stock at $13 per share)
10
Cash
821,700
Capital Stock
821,700
(Issued 14,940 shares of $19 par value preferred stock at $55 per share)
15
Capital Stock
9,240
Cash
9,240
(Purchased 840 shares of common stock for the treasury at $11 per share)
On the basis of the explanation for each entry, prepare the entries that should have been made for the capital stock transactions.
(Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
pays out a higher percentage of its earnings.
Problem 11-5A
Pringle Corporation has been authorized to issue 21,700 shares of $100 par value, 9%, noncumulative preferred stock and 1,059,400 shares of no-par common stock.
The corporation assigned a $5 stated value to the common stock. At December 31, 2014, the ledger contained the following balances pertaining to stockholders’ equity.
Preferred Stock
$165,300
Paid-in Capital in Excess of Par Value—Preferred Stock
21,340
Common Stock
2,080,000
Paid-in Capital in Excess of Stated Value—Common Stock
1,485,000
Treasury Stock— (3,450 common shares)
34,500
Retained Earnings
84,600
The preferred stock was issued for $186,640 cash. All common stock issued was for cash. In November 3,450 shares of common stock were purchased for the treasury at a per share cost of $10. No dividends were declared in 2014.
Prepare the journal entries for the following.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(1)
Issuance of preferred stock for cash.
(2)
Issuance of common stock for cash.
(3)
Purchase of common treasury stock for cash.
No.
Account Titles and Explanation
Debit
Credit
1.
$
:
$
$
pays out a higher percentage of its earnings.
Problem 11-5A
Pringle Corporation has been authorized to issue 21,700 shares of $100 par value, 9%, noncumulative preferred stock and 1,059,400 shares of no-par common stock.
The corporation assigned a $5 stated value to the common stock. At December 31, 2014, the ledger contained the following balances pertaining to stockholders’ equity.
Preferred Stock
$165,300
Paid-in Capital in Excess of Par Value—Preferred Stock
21,340
Common Stock
2,080,000
Paid-in Capital in Excess of Stated Value—Common Stock
1,485,000
Treasury Stock— (3,450 commo ...
Magic Blades stock has risen rapidly to $50 per share. Th.docxsmile790243
Magic Blade's stock has risen rapidly to $50 per share. The increase is due to excitement about its new knife
that uses a light beam to slice fruits and vegetables. This process enhances the final appearance and quality
of salads and fruit trays.
The board of directors is considering strategies to divide the corporate ownership into more shares of stock,
and bring about some reduction in the price per share. They are considering a stock split, small stock dividend,
or large stock dividend. The board is unsure of the accounting effects of such transactions, and has requested
information about how stockholders' equity would be impacted.
Prior to the contemplated stock transaction, equity consisted of:
Stockholders’ Equity
Common stock, $2 par value, 2,000,000 shares authorized,
500,000 shares issued and outstanding $1,000,000
Paid-in capital in excess of par 2,000,000
Retained earnings 6,000,000
Total stockholders’ equity $9,000,000
(a) Assuming the board were to declare a 2 for 1 split, how would the revised stockholders' equity
appear?
(b) Assuming the board were to declare a 15% stock dividend, how would the revised stockholders'
equity appear?
B-14.07 Stock dividends and splits
x
SPREADSHEET
TOOL:
Holding a
cell reference
constant
Mike
Highlight
Summary information for Branford Corporation's balance sheet follows:
BRANFORD CORPORATION
Balance Sheet
August 15, 20X4
Assets
Cash $ 125,000
Accounts receivable 250,000
Inventory 750,000
Property, plant, & equipment (net) 860,000
Total assets $1,985,000
Liabilities
Accounts payable $125,000
Accrued liabilities 260,000
Notes payable 290,000
Total liabilities $ 675,000
Stockholders’ equity
Common stock, $5 par $700,000
Paid-in capital in excess of par 300,000
Retained earnings 310,000
Total stockholders’ equity 1,310,000
Total liabilities and equity $1,985,000
Branford's business is growing rapidly, and the company needs to expand its manufacturing facilities. This
expansion will require the company to obtain an additional $1,000,000 in cash. The company is exploring
five alternatives to obtain the necessary capital:
Equity structure and impact I-14.01
Mike
Highlight
366 | CHAPTER 14
DEBT OPTION:
Branford is able to borrow, on a 5-year note, the full amount needed. The interest rate on
this note would be 7%, and the note would require monthly payments.
COMMON STOCK OPTION:
Branford has identified an investor who is willing to pay $1,000,000 for 40,000 newly is-
sued common shares. Common shares have been paying a dividend of $0.50 per share.
Branford anticipates that this dividend rate will be maintained.
NONCUMULATIVE PREFERRED STOCK OPTION:
Branford has identified a hedge fund that will pay $1,000,000 for 8% noncumulative
preferred stock to be issued at par.
CUMULATIVE PREFERRED STOCK OPTION:
Branford has identified an insurance company that will pay $1,000,000 for 6% cumulative
preferred ...
The document contains instructions and information for various accounting homework problems from Kaplan University's AC 501 course. It includes multiple choice and problem-solving questions covering topics like assumptions and principles, transaction analysis, adjusting entries, financial statements, cash flows, long-term contracts, bad debts, depreciation, intangibles, investments, pensions, and leases. Students are to work through the questions and show the steps and journal entries as required.
Accounting for consolidated financial statements.pptJaafar47
This document discusses accounting for consolidated financial statements under IFRS 10. It provides an introduction to consolidation, defining consolidation as combining the financial statements of a parent and subsidiary as a single economic entity. The document then discusses consolidation in cases of wholly owned and partially owned subsidiaries, including how to record the initial business combination and prepare consolidated financial statements in subsequent periods using the equity method of accounting. Examples are provided to illustrate consolidation for both wholly owned and partially owned subsidiaries at the date of acquisition and in later periods.
Toy Central Corporation (TCC) designs, manufactures, and markets toys. The audit planning memo will address business risks, audit risk factors, and accounting issues for TCC's upcoming audit. Key business risks include retailers reducing shelf space and intensifying competition. Last year was successful for TCC due to a popular new product, but component shortages limited additional production. The memo will outline the audit approach for areas like inventory counting and receivables reserves.
This document provides instructions for a 3.5 hour financial accounting exam consisting of 4 questions worth a total of 100 marks. Question 1 has three parts related to inventory valuation, economic substance over legal form, and applying the equity method. Question 2 involves re-drafting financial statements in accordance with accounting standards. Question 3 covers revenue recognition on long-term contracts, revaluation of property, and classification of assets as held for sale. Question 4 requires preparing consolidated financial statements.
Ac 501 Enthusiastic Study/snaptutorial.comGeorgeDixon32
E2-7 (Assumptions, Principles, and Constraints): Presented below are the assumptions, principles, and constraints used in this chapter.
Economic entity assumption 5.Historical-cost principle 9. Materiality
Going-concern assumption 6.Matching principle 10. Industry practices
Monetary unit assumption 7. Full disclosure principle 11. Conservatism
Periodicity assumption 8. Cost-benefit relationship
Instructions
Ac 501 Success Begins / snaptutorial.comRobinsono02
E2-7 (Assumptions, Principles, and Constraints): Presented below are the assumptions, principles, and constraints used in this chapter.
Economic entity assumption 5.Historical-cost principle 9. Materiality
Going-concern assumption 6.Matching principle 10. Industry practices
1. (TCO A) Which of the following results in an increase in the eq.docxhyacinthshackley2629
1. (TCO A) Which of the following results in an increase in the equity in investee income account when applying the equity method? (Points : 5)
Unrealized gain on intercompany inventory transfers for the prior year
Amortizations of purchase price over book value on date of purchase for the prior year
Amortizations of purchase price over book value on date of purchase
Extraordinary gain of the investor
Sale of a portion of the investment at a loss
Question 2.2. (TCO B) Which of the following is a characteristic of a business combination that should be accounted for as a purchase? (Points : 5)
The combination must involve the exchange of equity securities only.
The acquired subsidiary must be smaller in size than the acquiring parent.
The two companies may be about the same size and it is difficult to determine the acquired company and the acquiring company.
The transaction may be considered to be the uniting of the ownership interests of the companies involved.
The transaction clearly establishes an acquisition price for the company being acquired.
Question 3.3. (TCO C) Under the equity method of accounting for an investment, (Points : 5)
the investment account remains at initial value.
dividends received are recorded as revenue.
income reported by the subsidiary increases the investment account.
goodwill is amortized over 20 years.
dividends received increase the investment account.
Question 4.4. (TCO C) Which of the following internal record-keeping methods can a parent choose to account for a subsidiary acquired in a business combination? (Points : 5)
Initial value or book value
Initial value, equity, or partial equity
Initial value, equity, or book value
Initial value, lower-of-cost-or-market value, or equity
Initial value, lower-of-cost-or-market value, or partial equity
Question 5.5. (TCO D) All of the following statements regarding the sale of subsidiary shares are true except which of the following? (Points : 5)
The use of specific identification based on serial number is acceptable.
The use of the FIFO assumption is acceptable.
The use of the specific LIFO assumption is acceptable.
The use of the averaging assumption is acceptable.
The parent company must determine whether consolidation is still appropriate for the remaining shares owned.
Question 6.6. (TCO D) When Timber Co. acquired 75% of the common stock of Woody Corp., Woody owned land with a book value of $70,000 and a fair value of $100,000. What amount of excess land allocation would be included for the calculation of noncontrolling interest, according to SFAS 141(R)? (Points : 5)
$70,000
$25,000
$17,500
$7,500
$0
Question 7.7. (TCO E) An intercompany sale took place whereby the transfer price exceeded the book value of a depreciable asset. Which stat.
Clarification for Foreign ExchangeForeign Currency Transla.docxmonicafrancis71118
Clarification for Foreign Exchange
Foreign Currency Translation-
Date
Exchange Rate
CA $ Cost of Land
Conversion to US $
Comprehensive Income on Land
12/31/2010
1.00529
5,250
5,278
-
12/31/2011
0.978857
5,250
5,139
(139)
12/31/2012
1.003179
5,250
5,267
128
12/31/2013
0.940531
5,250
4,938
(329)
ABC Company acquired a Canadian Subsidiary whose only asset was land.
ABC Company purchased the subsidiary on 12/31/10 for CA $5,250 and retaines 100% interest in the subsidiary.
Go to www.x-rates.com and use the historic lookup feature to determine the exact exchange rates on 12/31/10, 12/31/11, 12/31/12 and 12/31/13.
Clarification for Comprehensive Income
For the Year Ended December 31, 2013
Net Earnings
5,385.00
Other Comprehensive (Loss) Income:
Foreign Currency Translation Adjustments
(329.00)
Cash Flow Hedges, net of tax
(12.00)
Other Comprehensive Income
(10.00)
Total Other Comprehensive (Loss) Income
(351.00)
COMPREHENSIVE INCOME
5,034.00
Clarification for statement of OE
ABC Company
Statement of Owners Equity
For the Year Ended December 31, 2013
Capital Stock:
Preferred Stock
-
Common Stock
88.00
88.00
Additional Paid in Capital
8,402.00
Retained Earnings
23,048.00
31,538.00
Accumulated Other
Comprehensive Income
46.00
Treasury Stock
(19,194.00)
Total Shareholder's Equity
12,390.00
Clarification for Statement of Earnings
ABC Company
Statement of Retained Earnings
For the Year Ended December 31, 2013
January 1, as Reported
20,038.00
Correction of depreciation error
(903.00)
Cumulative increase in income
from inventory method change
771.00
January 1, as adjusted
19,906.00
Net Income
5,385.00
25,291.00
Dividends
(2,243.00)
Balance, December 31
23,048.00
Title
ABC/123 Version X
1
ABC Company History
ACC/545 Version 6
1
University of Phoenix Material
ABC Company History
The ABC Company is a mid-sized company that manufact.
This management discussion and analysis provides an overview of Pacific Coast Nickel Corp.'s financial position and operating results for the period ended October 31, 2009. It discusses the company's operations in Canada, Uruguay, and its global search for precious metal properties. The company has properties in Canada's Yukon Territory and Uruguay under exploration and is seeking to acquire additional properties. For the quarter ended October 31, 2009, the company reported a net loss of $69,722 compared to a net loss of $64,630 in the prior year period.
This document provides an annual report for Aditya Birla Minacs Worldwide Limited and its subsidiaries for the 2010-2011 fiscal year. It summarizes the company's financial performance, with consolidated revenues increasing 16% and operating profits increasing 72% over the previous year. It also discusses the company's business review, outlook, human capital, a merger between subsidiaries, subsidiary companies, and employee stock option plan. The company saw revenue and profit growth but expects ongoing pricing pressures and inflation to impact profitability going forward.
This document provides an overview of Chapter 4 from the textbook "Financial Accounting IFRS 4th Edition". It covers the accounting cycle and related processes. The learning objectives are to prepare a worksheet, closing entries and post-closing trial balance, explain the accounting cycle and correcting entries, and identify sections of a classified statement of financial position. Key topics include the worksheet, closing process, adjusting and correcting entries, and the different asset/liability/equity sections of the financial statements.
This document summarizes Accounting Standard 21 regarding the consolidation of financial statements for parent and subsidiary companies. The key points are:
1) The objective is to present consolidated financial statements that treat the parent and subsidiaries as a single economic entity.
2) Consolidated statements are prepared to disclose the total profit/loss and assets/liabilities of the entire group.
3) Minority interest represents the portion of a subsidiary's stock not owned by the parent, which is reported separately on the consolidated balance sheet and income statement.
4) The consolidation procedure involves eliminating intra-group balances and combining financial statement line items after eliminating the parent's investment in subsidiaries.
Complete Week Four Assignment in WileyPLUS:
• Exercise Do It! 11-1
• Exercise E11-15
• Exercise E11-16
• Problem P11-6A
• Problem P11-8A
Week 4 assignment
Question 1
Correct.
Indicate whether each of the following statements is true or false.
1. The corporation is an entity separate and distinct from its owners. (True)
2. The liability of stockholders is normally limited to their investment in the corporation. (True)
3. The relative lack of government regulation is an advantage of the corporate form of business. (False)
4. There is no journal entry to record the authorization of capital stock. (True)
5. No-par value stock is quite rare today. (False)
Master Corporation acquired 80% ownership of Stanley Wood Products on January 1, 20X1 for $160,000. On this date, Stanley's retained earnings were $50,000 and the fair value of the noncontrolling interest was $40,000. During 20X5, Master recorded its share of Stanley's income of $24,000 under the equity method and received $8,000 in dividends. Consolidation entries were made to eliminate the intercompany balances and income, assign beginning differentials, and prepare consolidated financial statements for Master and its majority-owned subsidiary Stanley as of December 31, 20X5.
Master Corporation acquired 80% ownership of Stanley Wood Products on January 1, 20X1 for $160,000. On this date, Stanley's retained earnings were $50,000 and the fair value of the noncontrolling interest was $40,000. During 20X5, Master recorded its share of Stanley's income of $24,000 under the equity method and received $8,000 in dividends. Consolidation entries were made to eliminate the intercompany balances and income, assign beginning differentials, and prepare consolidated financial statements for Master and Stanley as of December 31, 20X5.
Similar to Group assignment on Business Combinations (20)
ATHLETE WEAR COMPANY CASE STUDY (75 Marks) Athlete Wear Co. is an Irish sports clothing manufacturer for elite amateur and professional athletes. It has recently seen a decline in profitability owing to increased competition from low cost mass production manufacturers and has been outbid for contracts as official clothing supplier for three major international and domestic sporting events. As a result, Athlete Wear is faced with having to suspend its operations immediately unless it can find alternative markets to ensure the business can r
ESSAYLINK.NET/ORDER
TASK
A) Read the case study below:
SAR Health Services (SARHS) are part of a multi-national enterprise based in Switzerland. They supply sophisticated diagnostic equipment to hospitals across Europe and have recently entered new marks in Asia. SARHS’s relationship with its customers is based on high trust, high quality products and in Europe on 24/7 servicing. The company employs around 3000 staff, consisting of technicians, production, office staff (sales, marketing, distribution) managers and drivers.
SARHS puts particular emphasis on environmental education through staff training and induction. New staff receive a half-day session on sustainability. In addition, monthly departmental meetings in head office include a ‘green slot’ where updates and activities regarding environmental sustainability are discussed. The organisation also runs an internship, which has proved to be a useful source of ideas regarding green initiatives.
TASK
A) Read the case study below:
SAR Health Services (SARHS) are part of a multi-national enterprise based in Switzerland. They supply sophisticated diagnostic equipment to hospitals across Europe and have recently entered new marks in Asia. SARHS’s relationship with its customers is based on high trust, high quality products and in Europe on 24/7 servicing. The company employs around 3000 staff, consisting of technicians, production, office staff (sales, marketing, distribution) managers and drivers.
SARHS puts particular emphasis on environmental education through staff training and induction. New staff receive a half-day session on sustainability. In addition, monthly departmental meetings in head office include a ‘green slot’ where updates and activities regarding environmental sustainability are discussed. The organisation also runs an internship, which has proved to be a useful source of ideas regarding green initiatives.
The company has gone through two reorganisations in the last 3 years. The most recent involved shifting from a functional to a matrix structure. Managers however, have complained that this last structural change confused authority and responsibility relationships.
This document outlines a term paper project involving designing a secure corporate network. The network must support email, file transfer, and VPN services. Students must create:
1) A network diagram showing the overall design from endpoints to the internet using Visio.
2) Three datapath diagrams in Visio depicting how an email, file transfer, and VPN transaction flow through the network.
3) A 6-10 page paper analyzing the network design, addressing security, failures, bottlenecks, and improving file transfer security. The paper must cite at least 3 quality resources and follow APA formatting.
DOWNLOAD HERE
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MKT 421 COMPLETE COURSES
MKT 421 Week 1 Understanding Marketing and Customer Relationships
Purpose of Assignment
Understanding marketing as a multi-step process relying on building successful customer relationships is essential to helping organizations grow and achieve their goals. This assignment defines marketing, the customer value proposition, and creating mutually beneficial relationships between the organization and target, as well as applies these concepts to the student to create a personal brand.
Assignment Steps
Resources: Week 1 textbook reading, Week 1 video, American Marketing Association Website, and University Career Center: Crafting Your Image
Scenario: You have just graduated from the University of Phoenix with your Bachelor’s Degree. You have decided either to seek a promotion at your current work, explore new career opportunities, or open your own business and are using your marketing knowledge to position yourself for career growth.
Develop at least a 1,050 word response to the following using the scenario above:
Provide a definition of marketing from the American Marketing Association. Define the customer value proposition. Discuss the differences between the marketing process and advertising, the goals of creating a strong customer value proposition, and the unique relationship that exists between company and customer.
Use your workplace, a company you would like to work for, or an entrepreneurial vision and apply the concepts of the customer value proposition and relationship marketing to their operations. Introduce who the company, or business idea is and what they do. Provide examples demonstrating how the company uses these concepts successfully. Are there any ways they can improve in these areas? How?
Determine how your own personal brand links to the organization’s customer value proposition. Discuss ways you can integrate a customer value proposition and use relationship marketing to position yourself the best. Please share examples to illustrate your thoughts and reasoning.
Cite a minimum of two peer-reviewed sources with at least one coming from the textbook, the Week 1 video, or the University Librar
Unit II Essay Identify the major stakeholders in your organization (or one wi...victor okoth
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Unit II Essay
Identify the major stakeholders in your organization (or one with which you are familiar). Analyze the top-management structure (as explained in Chapter 2), investigate and enumerate the code of ethics (written or not written), and explain the ethical stance of all stakeholders involved in the organization. Identify the relationship among any reward systems and organizational goals and what positive or negative effect there is on employee productivity. Cite concepts and ideas from Chapter 2 to compliment your work.
Your paper should be at least two pages in length, not including the title page or reference page. You are required to use at least Chapter 2 of your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations in the proper APA format.
Information about accessing the Blackboard Grading Rubric for this assignment is provided below.
Spss Homework Psyc 421
SPSS Assignment Part 1 Instructions
Describing a Normative Sample
When it comes to the use of psychological tests, one approach that both researchers and clinicians take in trying to understand participants’ performance is a norm-referenced approach. With a norm-referenced test, the test is given to a large, representative group of participants known as the “normative sample” (a.k.a. “norm group”). Then, the scores of all subsequent test-takers are compared to the scores of the norm group. In order for the norm group to be a valid comparison group, it has to be representative of the population who will be taking the test.
So how do we know if the normative sample is representative? When summarizing the psychometric properties of a test, test developers and publishers usually describe the norm group with their demographic variables. Demographic variables are characteristics of the participants like: gender, age, ethnicity, relationship status, socioeconomic status, religious affiliation etc. A description of the normative sample allows examinersto decide if the test of interest can be used with their intended examinees. For example, if the normative sample were 95% male, then you likely could not logically compare their scores to females test takers! That is why readers need to know what the normative sample looks like.
The purpose of the current assignment is for you to provide a verbal (and graphical)description of a fictional normative sample of research participants.
In the Assignment Instructions folder, there is an SPSS data file that will be the basis for your analyses. The data provided are fictional and were created solely for the purposes of our SPSS assignments. This data file includes: 1) demographic information for a normative sample of 428 participants, and 2) participants’ scores on a test called the Center for Epidemiologic Studies Depression Scale (CES-D scale).
The CES-D Scale is utilized to measure symptoms of depression. It is a self-assessment that is completed by the individual. The CES-D contains 20items rated on a 4-point scale (0 = Rarely or None of the Time to 3
research methods and ethical implications of a social psychology studyvictor okoth
GET ANSWER HERE
http://theacademicessays.com/?p=356
In this assignment, you will write an essay about the research methods and ethical implications of a social psychology study. You will get information about the study from one of the entries in the SPARQ "Solutions Catalog", which is a web site maintained by Stanford University at https://sparq.stanford.edu/solutions?&&. SPARQ is an acronym for "Social Psychological Answers to Real-world Questions." Each entry in the Solutions Catalog names a problem, and then offers a solution to that problem, based on a research study in social psychology.
To keep this assignment short and manageable, your only sources for this assignment should be from the SPARQ site and your course materials, such as your textbook. There is no need for you to cite any of the course materials. Therefore, no additional citations or references are needed, beyond those from the SPARQ site.
In this exercise, you will choose one of the entries in the SPARC site, and then write a two to three (2-3) page paper that meets the following requirements.
1. Begin your paper with a short introductory statement that clearly identifies the article from the SPARQ site that you are using, as well as the corresponding research article. Model your statement after the following example:
https://www.homeworkmarket.com/content/eco-365-entire-and-complete-course
ECO 365 Entire And Complete Course
ECO 365 Week 5 Theory of Consumer Choice and Frontiers of Microeconomics (2)
You have been asked to assist your organization’s marketing department to better understand how consumers make economic decisions.
Develop a 12- to 15-slide Microsoft® PowerPoint® presentation to be presented to the Marketing Department that addresses the followin
Term Paper: Virtualization
Due Week 10 and worth 210 points
This assignment contains two (2) sections: Written Report and PowerPoint Presentation. You must submit both sections as separate files for the completion of this assignment. Label each file name according to the section of the assignment it is written for. Additionally, you may create and / or assume all necessary assumptions needed for the completion of this assignment.
According to a TechRepublic survey performed in 2013, (located at http://www.techrepublic.com/blog/data-center/research-desktop-virtualization-growing-in-popularity/# desktop virtualization is growing in popularity. Use the Internet and Strayer Library to research this technique. Research the top three (3) selling brands of virtualization software.
Imagine that the Chief Technology Officer (CTO
You have just graduated from the MBA program of a large university, and one of your favorite courses was “Today’s Entrepreneurs.” In fact, you enjoyed it so much you have decided you want to “be your own boss.” While you were in the master’s program, your grandfather died and left you $300,000 to do with as you please. You are not an inventor and you do not have a trade skill that you can market; however, you have decided that you would like to purchase at least one established franchise in the fast foods area, maybe two (if profitable). The problem is that you have never been one to stay with any project for too long, so you figure that your time frame is three years. After three years you will sell off your investment and go on to something else.
You have narrowed your selection down to two choices; (1) Franchise L: Lisa’s Soups, Salads, & Stuff and (2) Franchise S: Sam’s Wonderful Fried Chicken. The net cash flows shown below include the price you would receive for selling the franchise in year 3 and the forecast of how each franchise will do over the three-year period. Franchise L’s cash flows will start off slowly but will increase rather quickly as people become more health conscious, while Franchise S’s cash flows will start off high but will trail off as other chicken competitors enter the marketplace and as people become more health conscious and avoid fried foods. Franchise L serves breakfast and lunch, while franchise S serves only dinner, so it is possible for you to invest in both franchises. You see these franchises as perfect complements to one another: you could attract both the lunch and dinner crowds and the health conscious and not so health conscious crowds with the franchises directly competing against one another.
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
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তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
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Walmart Business+ and Spark Good for Nonprofits.pdfTechSoup
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A review of the growth of the Israel Genealogy Research Association Database Collection for the last 12 months. Our collection is now passed the 3 million mark and still growing. See which archives have contributed the most. See the different types of records we have, and which years have had records added. You can also see what we have for the future.
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
at Integral University, Lucknow, 06.06.2024
By Dr. Vinod Kumar Kanvaria
How to Build a Module in Odoo 17 Using the Scaffold MethodCeline George
Odoo provides an option for creating a module by using a single line command. By using this command the user can make a whole structure of a module. It is very easy for a beginner to make a module. There is no need to make each file manually. This slide will show how to create a module using the scaffold method.
This slide is special for master students (MIBS & MIFB) in UUM. Also useful for readers who are interested in the topic of contemporary Islamic banking.
1. FOR SOLUTION OF THE BELOW CASE STUDIES, VISIT AND ASK IT AT
ESSAYTUTORS.NET
Group assignment on Business Combinations
Case .1
You have been engaged to audit the financial statements of Solamente Corporation for thefiscal
year ended May 31, 2010. You discover that on June 1, 2009, Mika Company hadbeen merged
into Solamente in a business combination. You also find that both Solamenteand Mika (prior to
its liquidation) incurred legal fees, accounting fees, and printing costsfor the business
combination; both companies debited those costs to an intangible assetledger account entitled
“Cost of Business Combination.” In its journal entry to record thebusiness combination with
Mika, Solamente increased its Cost of Business Combinationaccount by an amount equal to the
balance of Mika’s comparable ledger account.
Instructions
Evaluate Solamente’s accounting for the out-of-pocket costs of the business combination
with Mika in light of IFRS and GAAP guidelines.
Case .2
You are the controller of Software Company, a distributor of computer software, which
isplanning to acquire a portion of the net assets of a product line of Midge Company, a
competitorenterprise. The projected acquisition cost is expected to exceed substantially the
currentfair value of the identifiable net assets to be acquired, which the competitor has agreedto
sell because of its substantial net losses of recent years. The board of directors of Softwareasks if
the excess acquisition cost may appropriately be recognized as goodwill.
Instructions
Prepare a memorandum to the board of directors an answer to the question, after
consulting the guidelines issued by either FASB or IASB
Case .3
On February 15, 2005, officers of Sun Corporation agreed with George Merlo, sole
stockholderof Merlo Company and Merlo Industries, Inc., to acquire all his common stock
ownershipin the two companies as follows:
1. 10,000 shares of Shane’s $1 par common stock (current fair value $30 a share) would be
issued to George Merlo on February 28, 2005, for his 1,000 shares of $10 par common
stock of Merlo Company. In addition, 20,000 shares of Sun common stock would be
issued to George Merlo on February 28, 2010, if aggregate net income of Merlo
Company for the five-year period then ended exceeded $300,000.
2. 2. $250,000 cash would be paid to George Merlo on February 28, 2005, for his 10,000
shares of $1 par common stock of Merlo Industries, Inc. In addition $250,000 in cash
would be paid to George Merlo on February 28, 2010, if aggregate net income of Merlo
Industries, Inc., for the five-year period then ended exceeded $300,000.
Both Merlo Company and Merlo Industries, Inc., were to be merged into Sun on February28,
2005, and were to continue operations after that date as divisions of Sun.George Merlo also
agreed not to compete with Sun for the period March 1, 2005,through February 28, 2010.
Because the merger was negotiated privately and George Merlosigned a “letter agreement” not to
dispose of the Sun common stock he received, thebusiness combination was not subject to the
jurisdiction of the SEC. Out-of-pocket costs ofthe business combination may be disregarded.
Selected financial statement data of the three constituent companies as of February 28,
2005 (prior to the merger), were as follows:
Sun Corporation Merlo Company Merlo Industries, Inc.
Total assets $25,000,000 $ 500,000 $ 600,000
Stockholders’ equity 10,000,000 200,000 300,000
Net sales 50,000,000 1,500,000 2,500,000
Basic earnings per share 5 30 3
The controller of Sun prepared the following condensed journal entries to record themerger on
February 28, 2005:
Assets other than goodwill 600,000
Goodwill 10,000
Liabilities 300,000
Common Stock 10,000
Common Stock to Be Issued 20,000
Paid-in Capital in Excess of Par 280,000
To record merger with Merlo Company, with identifiable assets andliabilities recorded at current
fair values and goodwill recognized.
Assets 650,000
Goodwill 150,000
Liabilities 300,000
Payable to George Merlo 250,000
Cash 250,000
To record merger with Merlo Industries, Inc., with assets andliabilities of Merlo Industries, Inc.,
recorded at current fairvalues and goodwill recognized.
Instructions
Do you concur with the controller’s journal entries? Explain.
Case .4
3. In the absence of definitive guidelines from the FASB, companies that have applied
pushdownaccounting in the separate financial statements of substantially wholly owned
subsidiarieshave used accounting techniques analogous to quasi-reorganizations or
toreorganizations under the U.S. Bankruptcy Code. That is, the restatement of the
subsidiary’sidentifiable assets and liabilities to current fair values and the recognition of
goodwill areaccompanied by a write-off of the subsidiary’s retained earnings; the balancing
amount isan increase in additional paid-in capital of the subsidiary.
Instructions
What is your opinion of the foregoing accounting practice? Explain.
Case .5
In paragraph 44 of Statement of Financial Accounting Standards No. 141, “Business
Combinations,”the Financial Accounting Standards Board directed that if the sum of the fair
valuesof assets acquired and liabilities assumed in a business combination exceeds the cost ofthe
acquired enterprise, such excess should be allocated as a pro rata reduction of amountsthat
otherwise would have been assigned to noncurrent assets other than specified exceptions.
Instructions
What support, if any, do you find for the action of the FASB? Explain.
Case .6
On January 2, 2005, the board of directors of Photo Corporation assigned to a voting trust15,000
shares of the 60,000 shares of Soto Company common stock owned by Photo. Thetrustee of the
voting trust presently has custody of 40,000 of Soto’s 105,000 shares of issuedcommon stock, of
which 5,000 shares are in Soto’s treasury. The term of the votingtrust is three years.
Instructions
Are consolidated financial statements appropriate for Photo Corporation and Soto
Companyfor the three years ending December 31, 2007? Explain.
Case .7
On July 31, 2005, Paley Corporation transferred all right, title, and interest in several of
itscurrent research and development projects to Carla Saye, sole stockholder of Saye Company,in
exchange for 55 of the 100 shares of Saye Company common stock owned by
Carla Saye. On the same date, Martin Morgan, who is not related to Paley Corporation,Saye
Company, or Carla Saye, acquired for $45,000 cash the remaining 45 shares of Saye
Company common stock owned by Carla Saye. Carla Saye notified the directors of
PaleyCorporation of the sale of common stock to Morgan.
Because Paley had recognized as expense the costs related to the research and developmentwhen
the costs were incurred, Paley’s controller prepared the following journal entryto record the
business combination with Saye Company:
4. Investment in Saye Company Common Stock (55 x $1,000)………55,000
Gain on Disposal of Intangible Assets …………………………………….55,000
To record transfer of research and development projects to Carla
Saye in exchange for 55 shares of Saye Company common stock.
Valuation of the investment is based on an unrelated cash issuance ofSaye
Companycommon stock on this date.
Instructions
a. Do you concur with the foregoing journal entry? Explain.
b. Should the $55,000 gain be displayed in a consolidated income statement of Paley
Corporation and subsidiary for the year ended July 31, 2005? Explain.
Case .8
On May 31, 2005, Patrick Corporation acquired at 100, $500,000 face amount of
StearCompany’s 10-year, 12%, convertible bonds due May 31, 2010. The bonds were
convertibleto 50,000 shares of Stear’s voting common stock ($1 par), of which 40,000
shareswere issued and outstanding on May 31, 2005. The controller of Patrick, who also is oneof
three Patrick officers who serve on the five-member board of directors of Stear, proposesto issue
consolidated financial statements for Patrick Corporation and Stear Companyon May 31, 2005.
Instructions
Do you agree with the Patrick controller’s proposal? Explain.
Case .9
In January 2005, Pinch Corporation, a chain of discount stores, began a program of
businesscombinations with its principal suppliers. On May 31, 2005, the close of its fiscalyear,
Pinch paid $8,500,000 cash and issued 100,000 shares of its common stock (currentfair value
$20 a share) for all 10,000 outstanding shares of common stock of Silver Company.
Silver was a furniture manufacturer whose products were sold in Pinch’s stores. Total n
stockholders’ equity of Silver on May 31, 2005, was $9,000,000. Out-of-pocket costsattributable
to the business combination itself (as opposed to the SEC registration statementfor the 100,000
shares of Pinch’s common stock) paid by Pinch on May 31, 2005, totaled $100,000.
In the consolidated balance sheet of Pinch Corporation and subsidiary on May 31,
2005, the $1,600,000 [$8,500,000 + (100,000 x $20) + $100,000 - $9,000,000]
differencebetween the parent company’s cost and the carrying amounts of the
subsidiary’sidentifiable net assets was allocated in accordance with purchase accountingas
follows:
Inventories $ 250,000
Plant assets 850,000
Patents 300,000
Goodwill 200,000
5. Total excess of cost over carrying amounts of subsidiary’s net assets$1,600,000
Under terms of the indenture for a $1,000,000 bond liability of Silver, Pinch was obligatedto
maintain Silver as a separate corporation and to issue a separate balance sheet forSilver each
May 31. Pinch’s controller contends that Silver’s balance sheet on May 31,2005, should value
net assets at $10,600,000 - their cost to Pinch. Silver’s controllerdisputes this valuation, claiming
that generally accepted accounting principles require issuanceof a historical cost balance sheet
for Silver on May 31, 2005.
Instructions
a. Present arguments supporting the Pinch controller’s position.
b. Present arguments supporting the Silver controller’s position.
c. Which position do you prefer? Explain.
Case .10
The board of directors of Purdido Corporation have just directed Purdido’s officers to
abandonfurther efforts to complete an acquisition of all the outstanding common stock of
SonteeCompany in a business combination that would have resulted in a parent company–
subsidiaryrelationship between Purdido and Sontee. After learning of the board’s decision,
Purdido’schief financial officer instructed the controller, a CPA who is a member of the AICPA,
theFEI, and the IMA (see Chapter 1), to analyze the out-of-pocket costs of the
abandonedproposed combination. After some analysis of Purdido’s accounting records, the
controllerprovided the following summary to the CFO:
PURDIDO CORPORATION
Out-of-Pocket Costs of Abandoned Business Combination
April 17, 2005
Legal fees relating to proposed business combination ………………………………$120,000
Finder’s fee relating to proposed business combination …………………………………….0*
Costs associated with proposed SEC registration statement for
Purdidocommon stock to have been issued in the business combination…………... 180,000
Total out-of-pocket costs of abandoned business combination……………………... $300,000
*Finder’s fee was contingent on successful completion of the business combination.
Noting that recognition of the entire $300,000 as expense on April 17, 2005, would havea
depressing effect on earnings of Purdido for the quarter ending June 30, 2005, the CFOinstructed
the controller to expense only $120,000 and to debit the $180,000 amount to thePaid-in Capital
in Excess of Par ledger account. In response to the controller’s request forjustification of such a
debit, the CFO confided that Purdido’s board was presently engagedin exploring other business
combination opportunities, and that the costs incurred on theproposed SEC registration statement
thus had future benefits to Purdido.
Instructions
May the controller of Purdido Corporation ethically comply with the CFO’s
instructions?Explain.
6. Case .11
Assume you are a CPA and a member of the AICPA, the FEI, and the IMA. You are CFO of a
publicly owned corporation whose CEO is planning to becomethe sole stockholder of a newly
established corporation in a situation with characteristicssimilar to those described in Securities
and Exchange Commission AAER 34,“Securities and Exchange Commission v. Digilog, Inc. and
Ronald Moyer” (describedon pages 234–235). When you inform the CEO of the SEC’s findings
in AAER 34, theCEO informs you that the corporation’s independent auditors have provided a
copy ofa reply by the AICPA’s Technical Information Service to a question involving a
situationsimilar to that in AAER 34 and that the Technical Information Service answer wasthat
consolidated financial statements were not required. The CEO gives you Section
1400.07, “Reporting on Company Where Option to Acquire Control Exists,” of the
AICPA Technical Practice Aids and orders you not to insist on consolidation of
“his”corporation’s financial statements.
Instructions
What are your ethical obligations in this matter? Explain.
Case .12
In a classroom discussion of the appropriate balance sheet display of the minority interestin net
assets of a consolidated subsidiary, student Michael expressed a dislike for both theeconomic
unit concept favored by the FASB and the alternative parent company concept.
According to Michael, the minority interest in net assets of a subsidiary is neither a part
ofconsolidated stockholders’ equity, as suggested by the economic unit concept, nor a liability,as
indicated by the parent company concept. Michael favored displaying minorityinterest in the
“mezzanine” section of the consolidated balance sheet, between liabilitiesand stockholders’
equity. Michael suggested a precedent for such display in the Securitiesand Exchange
Commission’s comparable mandated display for redeemable preferred stock,per Section 211 of
the SEC’s Codification of Financial Reporting Policies. Student Rogerdisagreed with student
Michael, pointing out that the FASB’s Statement of Financial AccountingConcepts No. 6,
“Elements of Financial Statements,” does not identify an elemententitled mezzanine.
Instructions
Do you support the view of student Michael or of student Roger? Explain.
Case .13
You have recently become the controller of Precision Corporation, a manufacturing
enterprisethat has begun a program of expansion through business combinations. On February
7. 1,2005, two weeks prior to your controllership appointment, Precision had completed
theacquisition of 85% of the outstanding common stock of Sloan Company for $255,000
cash,including out-of-pocket costs. You are engaged in a discussion with Precision’s chief
accountantconcerning the appropriate accounting method for Precision’s interest in
SloanCompany’s operating results. The chief accountant strongly supports the cost method of
accounting,offering the following arguments:
1. The cost method recognizes that Precision and Sloan are separate legal entities.
2. The existence of a 15% minority interest in Sloan requires emphasis on the legal separateness
of the two companies.
3. A parent company recognizes revenue under the cost method only when the subsidiary
declares dividends. Such dividend revenue is consistent with the revenue realization principle
of financial accounting. The Intercompany Investment Income account recorded in the equity
method of accounting does not fit the definition of realized revenue.
4. Use of the equity method of accounting might result in Precision’s declaring dividends to its
shareholders out of “paper” retained earnings that belong to Sloan.
5. The cost method is consistent with other aspects of historical-cost accounting, because
working paper eliminations, rather than journal entries in ledger accounts, are used to
recognize amortization of differences between current fair values and carrying amounts of
Sloan’s identifiable net assets.
Instructions
Prepare a rebuttal to each of the chief accountant’s arguments.
Case .14
In a classroom discussion of accounting standards for consolidated financial statements,student
Tigist questioned the propriety of displaying dividends payable to minority stockholdersof a
partially owned subsidiary as a liability in the consolidated balance sheet.
She pointed out that, under the economic unit concept of consolidated financial statements,the
minority interest in net assets of subsidiary is displayed with stockholders’ equity in
theconsolidated balance sheet, and that dividends payable to minority stockholders clearly area
part of the interest of those stockholders in the net assets of the subsidiary. In response,student
Carl contended that dividends payable to minority stockholders unquestionablymeet the
definition of liabilities in paragraph 35 of Statement of Financial AccountingConcepts No. 6,
“Elements of Financial Statements.”
Instructions
Do you support the view of student Tigist or of student Carl? Explain.
8. Consolidated Financial Statements: Special Problems
Case 15
Wilma Reynolds, CPA, a member of the American Institute of Certified Public Accountants
(AICPA), is controller of Premium Corporation, a publicly owned enterprise with a now-60%-
owned subsidiary, Service Company. Reynolds has informed Premium’s chief financialofficer,
Wayne Cartwright, that the $150,000 increase in Premium’s investment inService, which
resulted from Service’s just-completed issuance of additional commonstock to the public, should
be recognized as an increase in Premium’s additional paid-incapital, in accordance with a
proposed standard of the FASB. Cartwright countered that
Topic 5-H of the SEC Staff Accounting Bulletins (SAB), which is based on SAB 51 and
SAB 84, sanctions recognition of the $150,000 increase as non-operating income of Premium.
Cartwright expressed the belief that because the SEC has statutory authority to
establishaccounting standards, its pronouncements should prevail over those proposed orissued
by the FASB.
Instructions
Do you agree with Wayne Cartwright? In formulating your answer, consider the following:
Any Guideline issued by the
International Financial Accounting Standard Board
Financial Accounting Standard Board
The practice in the Ethiopian context
Case .16
The board of directors of Banking Enterprises, Inc., a holding company with 25
subsidiaryfederally chartered banks, has offered $2,500,000 to Mary Phillips, the 40%
minoritystockholder of Bank of Provence, for the entire 40% interest, which has a carrying
amountof $1,800,000 in the consolidated balance sheet of Banking Enterprises, Inc. and
subsidiaries.In a discussion of the appropriate accounting for the $700,000 differencebetween the
amount offered and the carrying amount,Banking`schief financial officer, Wendell Casey,
supports recognition of goodwill. However,controller John Winston of Banking Enterprises, Inc.,
believes that some of the $700,000represents a greenmail-type loss, and should be recognized as
such. In an appearance beforeBanking”s board, both Casey and Winston argue their positions
forcefully. The boardinstructs the two men to consult with the engagement partner of
Banking”sindependentauditingfirm, Crandall & Lowe, CPAs, to resolve the matter.
Instructions
9. Assume you are the above-described partner of Crandall & Lowe, CPAs. How would
youresolve the dispute between Wendell Casey and John Winston? Explain, including
mentionof the additional information you would need.
Cases.17
In a classroom discussion of the display, in a consolidated balance sheet, of the minorityinterest
of preferred stockholders in the net assets of a subsidiary, student Ross suggestedthat such a
minority interest differs from the minority interest of commonstockholders, and thus possibly
warrants display in the “mezzanine” section between liabilitiesand stockholders’ equity. Student
Kerry disagrees; she maintains that the termminority applies to preferred stockholders as well as
common stockholders other thanthe parent company; both minority interests are part of
consolidated stockholders’equity.
Instructions
Do you support the position of student Ross or of student Kerry? Explain.