Question 3
Question 1 Alpha Corporation acquired 75% of Beta Corporation?s common stock for $20,100,000 on January 2, 2011. The estimated fair value of the noncontrolling interest was $5,900,000. Beta?s book value at date of acquisition was $10,000,000, and its identifiable net assets were fairly stated except for previously unreported completed technology, valued at $4,000,000, with a remaining life of 5 years, straight-line. It is now December 31, 2014, and you are preparing consolidated financial statements for Alpha and Beta. Following is information on intercompany transactions: 1. On January 2, 2012, Alpha sold equipment to Beta for $6 million and recorded a gain of $2 million. The equipment had a remaining life of 10 years at that time. 2. Beta supplies Alpha with component parts for its products, at a markup of 20% on cost. During 2014, Beta made sales totaling $20 million to Alpha. Alpha had parts purchased for $1.8 million and $2.4 million in its 2014 beginning and ending inventory balances, respectively (Hint: $1.8 million is the unsold inventory from last year and $2.4 is the unsold inventory of this year). 3. Alpha sells materials to Beta for use in its manufacturing processes, at a markup of 20% on selling price. During 2014, Alpha made sales totaling $15 million to Beta. Beta had materials purchased for $3 million and $2.8 million in its 2014 beginning and ending inventory balances, respectively. (Hint: $3 million is the unsold inventory from last year and $2.8 is the unsold inventory of this year). Goodwill arising from this acquisition was impaired by $3 million during the years 2011-2013, and no further goodwill impairment occurred in 2014. The separate December 31, 2014 trial balances of Alpha and Beta appear below, before Alpha?s end-year-adjustment to record its equity in Beta?s income for 2014. Balance Sheet at December 31, 2014 Alpha Beta Cash 1,000 2,500 A/R, net 5,600 10,000 Inventories 70,000 30,000 Plant and Equipment, net 460,000 150,000 Investment in Beta 20,225 Total Assets 556,825 192,500 Current Liabilities 4,000 2,800 Long-term debt 489,825 163,700 Capital Stocks 5,000 2,000 Retained earnings, January 1 90,000 20,000 Dividend (40,000) (3,000) Net Income 8,000 7,000 Total equities 556,825 192,500 Income Statement 2014 Alpha Beta Sales 150,000 50,000 Cost of Sales (100,000) (35,000) Other Expenses (42,000) (8,000) Income from Sandbar Net Income 8,000 7,000 Required: 1. Determine the Goodwill assigned to Non-controlling interest at the acquisition date (2 points). 2. Determine the balance for the account ?Investment in Beta? at December 31, 2014 after Alpha?s end-year-adjustment to record its equity in Beta?s income for 2014 (Hint: Dividend adjustment is already included in the balance of investment). Show your calculations (3 points). 3. Determine the balance of the account ?Equity in Beta?s Income? for the year 2014. Show your calculations (2 points). 4. Calculate the balance of NCI at December 31, 2014. Provide detail calculations of the three components of this balance (3 points). 5. Prepare consolidation adjustment entries (15 points). 6. Complete a consolidated worksheet for Alpha Corporation and its subsidiary Beta as of December 31, 2014. Use the format provided in the next page (You can write your own Excel worksheet, but with the indicated format) (15 points). Question 2 Delta Company acquired 90% of the outstanding common stocks of Gamma Company on June 30, 2011, for $426,000. On that date, Gamma Company had retained earnings in the amount of $60,000, and the fair value of its recorded assets and liabilities was equal to their book value. The excess of implied over fair value of the recorded net assets was attributed to an unrecorded manufacturing formula held by Gamma Company, which had an expected remaining useful life of five years from June 30, 2011. Financial data for 2013 are presented here: Balance Sheet at December 31, 2013 Delta Gamma Cash 119,500 132,500 A/R, net 342,000 125,000 Inventories 362,000 201,000 Other Current Assets 40,500 13,000 Land 150,000 Plant and Equipment 825,000 241,000 Accumulated Depreciation (207,000) (53,500) Investment in Gamma 524,250 Total Assets 2,156,250 659,000 Accounts Payable 295,000 32,000 Other Liabilities 43,000 19,000 Capital Stocks 1,000,000 300,000 APIC 50,000 Retained earnings, January 1 591,200 139,500 Dividend (100,000) (60,000) Net Income 327,050 178,500 Total equities 2,156,250 659,000 Income Statement 2013 Delta Gamma Sales 2,555,500 1,120,000 Cost of Goods Sold (1,730,000) (690,500) Other Expenses (654,500) (251,000) Equity in Gamma's Income 156,050 Net Income 327,050 178,500 On December 31, 2011, Delta Company sold equipment (with an original cost of $100,000 and accumulated depreciation of $50,000) to Gamma Company for $97,500. This equipment has since been depreciated at an annual rate of 20% of the purchase price. During 2012 Gamma Company sold land to Delta Company at a profit of $15,000. The inventory of Delta Company on December 31, 2012, included goods purchased from Gamma Company on which Gamma Company recognized a profit of $7,500. During 2013, Gamma Company sold goods to Delta Company for $375,000, of which $60,000 was unpaid on December 31, 2013. The December 31, 2013, inventory of Delta Company included goods acquired from Gamma Company on which Gamma Company recognized a profit of $10,500. Required: 1. Determine the Goodwill assigned to Non-controlling interest at the acquisition date (2 points). 2. Calculate the balance of NCI at December 31, 2013. Provide detail calculations of the three components of this balance (3 points). 3. Prepare consolidation adjustment entries (15 points) 4. Complete a consolidated worksheet for Delta Company and its subsidiary Gamma Company as of December 31, 2013. Use the format provided in the next page (You can write your own Excel worksheet, but with the indicated format) See attached file
Question 4
3. Which of the following is not a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage? A. Striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage B. Outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, more attractive styling, technological superiority, or unusually good value for the money C. Striving to be more profitable than rivals and aiming for a competitive edge based on bigger profit margins D. Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of satisfying the needs and tastes of buyers comprising the niche E. Developing expertise and resource strengths that give the company competitive capabilities that rivals can't easily imitate or trump with capabilities of their own 4. The difference between a company's strategy and a company's business model is that A. a company's strategy is management's game plan for achieving strategic objectives while its business model is management's game plan for achieving financial objectives. B. the strategy concerns how to compete successfully and the business model concerns how to operate efficiently. C. a company's strategy is management's game plan for realizing the strategic vision whereas a company's business model is the game plan for accomplishing the business purpose or mission. D. strategy relates broadly to a company's competitive moves and business approaches (which may or may not lead to profitability) while its business model relates to whether the revenues and costs flowing from the strategy demonstrate that the business is viable from the standpoint of being able to earn satisfactory profits and returns on investment. E. a company's strategy concerns how to please customers while its business model concerns how to please shareholders. 5. A winning strategy is one that A. builds strategic fit, is socially responsible, and maximizes shareholder wealth. B. is highly profitable and boosts the company's market share. C. fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance. D. results in a company becoming the dominant industry leader. E. can pass the ethical standards test, the strategic intent test, and the profitability test. 6. Which of the following is an integral part of the managerial process of crafting and executing strategy? A. Developing a proven business model B. Deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage C. Setting objectives and using them as yardsticks for measuring the company's performance and progress D. Communicating the company's values and code of conduct to all employees E. Deciding on the company's strategic intent 7. Developing a strategic vision for a company entails A. prescribing a strategic direction for the company to pursue and a rationale for why this strategic path makes good business sense. B. describing its business model and the kind of value that it is trying to deliver to customers. C. putting together a story line of why the business will be a moneymaker. D. describing "who we are and what we do." E. coming up with a long-term plan for outcompeting rivals and achieving a competitive advantage. 8. Which of the following is the best example of a well-stated strategic objective? A. Increase revenues by more than the industry average. B. Be among the top 5 five companies in the industry on customer service. C. Overtake key competitors on product quality within three years. D. Improve manufacturing performance by 5% within 12 months. E. Obtain 150 new customers during the current fiscal year. 9. Strategy-making is A. primarily the responsibility of key executives rather than a task for a company's entire management team. B. more of a collaborative group effort that involves all managers and sometimes key employees, as opposed to being the function and responsibility of a few high-level executives. C. first and foremost the function and responsibility of a company's strategic planning staff. D. first and foremost the function and responsibility of a company's board of directors. E. first and foremost the function of a company's chief executive officer?who formulates strategic initiatives and submits them to the board of directors for approval. 10. The primary roles/obligations of a company's board of directors in the strategy-making, strategy-executing process include A. playing the lead role in forming the company's strategy and then directly supervising the efforts and actions of senior executives in implementing and executing the strategy. B. providing guidance and counsel to the CEO in carrying out his/her duties as chief strategist and chief strategy implementer. C. overseeing the company's direction, strategy and business approaches and evaluating the caliber of senior executives' strategy-making and strategy-executing skills. D. working closely with the CEO, senior executives, and the strategic planning staff to develop a strategic plan for the company and then overseeing how well the CEO and senior executives carry out the board's directives in implementing and executing the strategic plan. E. reviewing and approving the company's business model and also reviewing and approving the proposals and recommendations of the CEO as to how to execute the business model. 11. Thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as A. the forces driving change in the industry. B. the dominant economic features of the industry in which the company operates. C. the kinds of competitive forces industry members are facing and the strength of each competitive force. D. the key factors influencing future competitive success in the industry. E. All of the above. 13. The rivalry among competing firms tends to be more intense A. when demand for the product is growing slowly, buyers have low switching costs, and the actions of any one company to attract more customers and boost market share have strong direct impact on their rivals. B. when the products/services of rival sellers are strongly differentiated and buyer demand is strong. C. when rivals are relatively content with their market position. D. when there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members. E. the smaller the number of firms in the industry and the more unequal their market shares. 14. Potential entrants are more likely to be deterred from actually entering an industry when A. incumbent firms have previously been aggressive in defending their market positions against entry. B. incumbent firms are complacent. C. buyers are not particularly price sensitive and the industry already contains a dozen or more rivals. D. the relative cost positions of incumbent firms are about the same, such that no one incumbent has a meaningful cost advantage. E. buyer switching costs are moderately low because of strong product differentiation among incumbent firms. 15. Which of the following is particularly pertinent in evaluating whether an industry presents a sufficiently attractive business opportunity? A. The industry's growth potential, whether competition appears destined to become stronger or weaker, and whether the industry's overall profit prospects are above average, average, or below average B. An assessment of which firms in the industry have the best and worst competitive strategies, whether the number of strategic groups in the industry is increasing or decreasing, and whether economies of scale and experience curve effects are a key success factor C. Whether there are more than 5 key success factors and more than 5 barriers to entry D. Constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group E. Whether the market leaders enjoy competitive advantages and how hard it is to develop a strongly differentiated product 16. Which of the following is not pertinent in identifying a company's present strategy? A. The key functional strategies (R&D, supply chain management, production, sales and marketing, HR, and finance) a company is employing B. Management's planned, proactive moves to outcompete rivals (via better product design, improved quality or service, wider product lines, and so on) C. The company's mission, strategic objectives, and financial objectives D. Moves to respond and react to changing conditions in the macro-environment and in industry and competitive conditions E. The strategic role of its collaborative partnerships and strategic alliances with others 17. Which of the following is not a good example of a company strength? A. More intellectual capital and better e-commerce capabilities than rivals B. Fruitful partnerships or alliances with suppliers that reduce costs and/or enhance product quality and performance C. Having higher earnings per share and a higher stock price than key rivals D. A well-known brand name and enjoying the confidence of customers E. A lower-cost value chain than rivals 18. The competitive power of a company's core competence or distinctive competence depends on A. whether it helps differentiate a company's product offering from the product offerings of rival firms. B. how hard it is to copy and how easily it can be trumped by substitute resource strengths and competitive capabilities of rivals. C. whether customers are aware of the competence and view the competence positively enough to boost the company's brand name reputation. D. whether the competence is one of the industry's key success factors. E. whether the competence is technology-based or based on superior marketing know-how. 19. The three steps of SWOT analysis are A. identifying the company's resource strengths and weaknesses and its opportunities and threats, drawing conclusions about the company's overall situation, and translating the conclusions into strategic actions to improve the company's strategy. B. pinpointing the company's competitive assets, pinpointing its competitive deficiencies, and determining whether it enjoys a competitive advantage. C. determining whether the company has more competitive assets than competitive liabilities, determining whether the company has good market opportunities, and evaluating the seriousness of the threats to the company's future profitability. D. matching the company's strategy to its resource strengths, correcting the company's important resource weaknesses, and identifying the company's best market opportunities. E. benchmarking the company's strengths and weaknesses against those of key rivals, identifying its market opportunities and the external threats it faces, and determining the company's potential for establishing a competitive advantage over rivals. 20. The three main areas in the value chain where significant differences in the costs of competing firms can occur include A. age of plants and equipment, number of employees, and advertising costs. B. operating-level activities, functional area activities, and line of business activities. C. the nature and make-up of their own internal operations, the activities performed by suppliers, and the activities performed by wholesale distribution and retailing allies. D. human resource activities (particularly labor costs), vertical integration activities, and strategic partnership activities. E. variable cost activities, fixed cost activities, and administrative activities.,Hello Rachel P. I asked 17 multiple choice question on 4/21/2011, in which I paid $50.00. The results where that well over half the answer were wrong. In this situation I feel that I did not receive fair or adequate service. I would like to regain my trust in your service. Would you consider completeing a Case Analyses? I understand that the pay will mostly increase. Thank you
Question 5
1. Cost of raw materials is debited to Raw Materials Inventory when the a. materials are ordered. b. materials are received. c. materials are put into production. d. bill for the materials is paid. 2. Managerial accounting is applicable to a. service entities. b. manufacturing entities. c. not-for-profit entities. d. all of these. 3. The principal accounting record used in assigning costs to jobs is a. a job cost sheet. b. the cost of goods manufactured schedule. c. the Manufacturing Overhead control account. d. the store ledger cards. 4. When manufacturing overhead costs are assigned to production in a process cost system, they are debited to a. the Finished Goods Inventory account. b. Cost of Goods Sold. c. a Manufacturing Overhead account. d. the Work in Process account. 5. A process cost accounting system is most appropriate when a. a variety of different products are produced, each one requiring different types of material, labor, and overhead. b. the focus of attention is on a particular job or order. c. similar products are mass-produced. d. individual products are custom made to the specification of customers. 6. Internal reports are generally a. aggregated. b. detailed. c. regulated. d. unreliable. 7. Equivalent units are calculated by a. multiplying the percentage of work done by the equivalent units of output. b. dividing physical units by the percentage of work done. c. multiplying the percentage of work done by the physical units. d. dividing equivalent units by the percentage of work done. 8. On the cost of goods manufactured schedule, the cost of goods manufactured agrees with the a. balance of Finished Goods Inventory at the end of the period. b. total debits to Work in Process Inventory during the period. c. amount transferred from Work in Process Inventory to Finished Goods during the period. d. debits to Cost of Goods Sold during the period. 9. Job cost sheets constitute the subsidiary ledger for the a. Finished Goods Inventory account. b. Cost of Goods Sold account. c. Work In Process Inventory account. d. Cost of Goods Manufactured account. 10. If annual overhead costs are expected to be $600,000 and direct labor costs are expected to be $1,000,000, then a. $1.67 is the predetermined overhead rate. b. for every dollar of manufacturing overhead, 60 cents of direct labor will be assigned. c. for every dollar of direct labor, 60 cents of manufacturing overhead will be assigned. d. a predetermined overhead rate cannot be determined. 11. The flow of costs in a job order cost system a. involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done. b. cannot be measured until all jobs are complete. c. measures product costs for a set time period. d. generally follows a LIFO cost flow assumption. 12. A manufacturing company reports cost of goods manufactured as a. a current asset on the balance sheet. b. an administrative expense on the income statement. c. a component in the calculation of cost of goods sold on the income statement. d. a component of the raw materials inventory on the balance sheet. 13. Both direct materials and indirect materials are a. raw materials. b. manufacturing overhead. c. merchandise inventory. d. sold directly to customers by a manufacturing company. 14. Factory Labor is a(n) a. expense account. b. control account. c. subsidiary account. d. manufacturing cost clearing account. In the month of June, a department had 6,000 units in beginning work in process that were 70% complete. During June, 24,000 units were transferred into production from another department. At the end of June there were 3,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. 15. The equivalent units of production for materials for June was a. 27,000 equivalent units. b. 30,000 equivalent units. c. 31,200 equivalent units. d. 24,000 equivalent units. 16. The wages of a timekeeper in the factory would be classified as a. a prime cost. b. direct labor. c. indirect labor. d. compliance costs. 17. In determining total manufacturing costs on the cost of goods manufactured schedule, a. beginning work in process inventory should have a zero balance. b. actual manufacturing overhead costs appear as a deduction. c. manufacturing overhead applied is added to direct materials and direct labor. d. ending work in process inventory is deducted from beginning work in process inventory. 18. Debits to Work in Process Inventory are accompanied by a credit to all but one of the following accounts: a. Raw Materials Inventory. b. Factory Labor. c. Manufacturing Overhead. d. Cost of Goods Sold. 19. Manufacturing costs that cannot be classified as either direct materials or direct labor are known as a. period costs. b. nonmanufacturing costs. c. selling and administrative expenses. d. manufacturing overhead. 20. Overhead application is recorded with a a. credit to Work in Process Inventory. b. credit to Manufacturing Overhead. c. debit to Manufacturing Overhead. d. credit to job cost sheets. (Problem #21 is 16 points) 21. For each item, identify all applicable cost labels. Use the following code in your answer: 1 Conversion Cost 2 Product Cost 3 Period Cost a. Advertising _____ f. Factory manager?s salary ______ b. Direct materials used _____ g. Direct labor ______ c. Sales salaries _____ h. Indirect materials ______ d. Indirect factory labor _____ e. Repairs to office equipment _____ (Problem #22 is 14 points) 22. Manufacturing costs for Carson Company for selected months are as follows: April July October Beginning work in process $ 80,000 (f) $ 98,000 Direct materials used 280,000 $190,000 155,000 Direct labor 195,000 170,000 ( j ) Manufacturing overhead (a) 150,000 90,000 Total manufacturing costs 870,000 510,000 430,000 Total cost of work in process (b) 640,000 (k) Ending work in process 75,000 (g) ( l ) Cost of goods manufactured (c) 505,000 385,000 Beginning finished goods (d) 38,000 (m) Cost of goods available for sale 960,000 (h) 480,000 Ending finished goods (e) 75,000 (n) Cost of goods sold 820,000 ( i ) 355,000 INSTRUCTIONS Indicate the missing amounts. (Problem #23 is 10 points) 23. Hardy Company manufactures a single product by a continuous process, involving two production departments. The records indicate that $120,000 of direct materials were issued to and $200,000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is $20 per machine hour; machine hours were 5,000 in Department 1. Work in process in the department at the beginning of the period totaled $35,000; and work in process at the end of the period was $25,000. INSTRUCTIONS Prepare entries to record (a) The flow of costs into Department 1 for (1) direct materials (2) direct labor (3) overhead (b) The transfer of production costs to Department 2.
