Question 1
"Father, inc. buys 80 percent of the outstanding common stock of sam corporation on January 1, 2009 for $680000 cash. at the acquisition date, sam's total fair value was assessed at $850,000 although sam's book vale was only $600,000. " Also, several individual items on sam's financial records had fair values that differed from their book values as follows: land: book value $60,000. Fair value $225,000 building and equipment (10 year remaining life) book value %275,000. Fair value $250,000. copy right (20 year life) $100,000. fair value $200,000. notes payable (due in 8 years) book value ($130,000). fair value ($120,000). for internal reporting purposes, father, inc employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2009, for both companies. Using the acquisition method, determine consolidated balances for this business combination (through either individual computations or the use of a worksheet). Revenues: father $(1,360,000) sam (120,000) Cost of goods sold: Father 700,000 sam 385,000 depreciation expense: father 260,000 sam 10,000 amortization expense: Father -0- sam 5,000 interest expense: father 44,000 sam 5,000 equity in income of sam: father (105,000) sam -0- Net Income: father (461,000) sam (135,000) Retained earning 1/1/2009 father 1,265,000 sam 440,000 Net income (above) father (461,000) sam (135,000) dividends paid: father 260,000 sam 65,000 retained earning 12/31/2009 father (1,466,000) sam (510,000) current assets: father 965,000 sam 528,000 investment in sam: father 733,000 sam -0- land: father 292,000 sam 60,000 building and equipment: father 877,000 sam 265,000 copyright: father -0- sam 95,000 total assets: father 2,867,000 sam 948,000 accounts payable: father (191,000) sam (148,000) notes payable: father (460,000) sam (130,000) common stock: father (300,000) sam (100,000) additional paid in capital: father (450,000) (60,000) retained earning (above): father (1,466,000) sam (510,000) total liabilities and equities: father 2,867,000 sam 948,000 "
Question 2
1. (TCO 1) Cole works for a company that requested all of its staff to purchase new toys and bring them into the office during the month of December for holiday distribution to families in need. Cole was excited about choosing some toys for this event, purchased several and brought them to work. After Cole dropped the toys off, he felt very happy and satisfied that he had helped others with his donation. Was this a marketing exchange? (Points: 8) No, because this request was tax-deductable Yes, because the toys were going to families in need No, because Cole bought the toys Yes, because Cole's donation of the toys was accompanied by his satisfaction and happiness No, because Cole spent money for toys but then gave them away. 2. (TCO 6) Which of the following would be the BEST the target market for tickets to the home games of the Indianapolis Colts professional football team? (Points: 8) All people in the Indianapolis area All people in the U.S All men in the U.S People in the Indianapolis area with an interest in professional football All people in the U.S. with an interest in professional football 3. (TCO 3) The owners of Old School Brand Authentic Antique Foods researched Civil War records to come up with recipes used in the old-fashioned cookies the company produces and markets. This statement deals with which part of the marketing mix? (Points: 8) Product Process Price Place Promotion 4. (TCO 5) The Lemon Tree is a high-fashion boutique selling top-of-the-line women's clothing and accessories. The keys to its success include knowing the customers' changing tastes and providing something different from other retailers. In addition, because of the high value of the merchandise, The Lemon Tree's management is exploring the use of computerized inventory controls and sales order processing. From this description, one can infer that the environmental category of least importance to The Lemon Tree is (Points: 8) Economic Regulatory Technological Social Competitive 5. (TCO 7) Recently a federal appeals court rendered a unanimous decision that Microsoft Corp. does not have an automatic right to put whatever features it wants into its Windows operating system; rather each new feature needs to be evaluated separately. Many of these features are also made by much smaller companies. This ruling grew out of the power that Microsoft holds in the software market because it owns a major share of the marketplace. What purpose did this ruling have? (Points: 8) Protecting companies from one another Protecting consumers from unfair trade practices Protecting the future interests of society from dangerous business practices Protecting consumers from one another Protecting businesses from unfair consumer practices 6. (TCO 6) Archer Daniels Midland (ADM) Co. is the world's largest cocoa-bean processor. It buys cocoa beans and converts the beans into cocoa powder and cocoa butter, which it sells to companies that manufacture consumer products that contain chocolate. The cocoa-bean processor is operating in a(n) __________ market. (Points: 8) Reseller Government Psychographic Product-intensive Industrial 7. (TCO 1) The Book Promoters Association of Canada members recently questioned what could be done to rejuvenate the Canadian book publishing industry. Some members claimed the problem was Canadian retailers had been replaced by Wal-Marts. Others said the problem was with stodgy promotions. Still others said the problem was caused by too little money being budgeted to fund marketing programs. It was time that Canadian book publishers used __________ to save the industry. (Points: 8) Advertising Sales promotion Publicity Marketing research Tactical support 8. (TCO 3) The Belsen interview is a means of pretesting media surveys. It gathers facts and figures by asking people about their attitudes, beliefs and awareness of various media. With this technique, the respondent is interviewed twice?first by an interviewer using the proposed survey and then by a different interviewer, who asks questions about the survey itself. The Belsen interview uses __________ data. (Points: 8) Observational Secondary Intercept Questionnaire Synergistic 9. (TCO 4) Sara Burns is the owner of a company called Spice and was looking for a new-product to go with her company's line of food condiments when a customer suggested combining spices with tea. This is an example of (Points: 8) Accidental invention Idea generation Bootlegging ideas Serendipitous management Serendipitous innovation 10. (TCO 4) In the 1960s, television westerns were extremely popular. The shows were adventure shows with settings and costumes that were very unlike what really existed. There was Bonanza, Wagon Train, The Virginian, Laramie, etc. When viewers gradually stopped watching this category of programs, production companies found the networks no longer wanted to televise such shows. The television western as a product category entered the __________ stage. (Points: 8) Decay Diversification Decline Maturity Harvesting 11. (TCO 8) When the Avon representative sells cosmetics door-to-door, it is an example of which type of marketing channel? (Points: 8) Direct channel Indirect channel Strategic channel alliances Marketing channel Dual distributive channel 12. (TCO 2) To promote its theme parks to groups, Disney is using advertising, direct marketing, Internet promotion and partnerships with other companies. In other words, Disney is using (Points: 8) Implemented market codes (IMC) Interactive media convergence (IMC) An infrastructure of market customization (IMC) Integrated marketing communications (IMC) Integrated media convergence (IMC) 13. (TCO 2) The local radio station broadcast a story about the dry-cleaners that requested coat donations. They would clean the coats and deliver them to people in need. The various addresses of the dry-cleaner chain were also broadcast so that donations could be dropped off. Since this featured business did not pay for this exposure, it is benefiting from (Points: 8) Publicity Advertising Direct marketing Personal selling A public service announcement 14. (TCO 8) Assume McDonald's is engaging in a market penetration strategy. Which of the following actions best illustrates a market penetration strategy? (Points: 8) Opening the first McDonald's in China Developing a line of McDonald's toys to be sold through Toys R Us stores Adding a line of new deli sandwiches to the menu of existing McDonald's stores Running a promotion based on the Monopoly game, whereby customers have a chance to win prizes with each purchase Removing slow-moving products from its menus 15. (TCO 5) In a survey conducted immediately after the World Trade Center attack, 47 percent of the women who responded to the survey said they would not treat themselves to small luxuries like manicures and 54 percent said they would not buy any expensive clothes. The results of this survey most directly relate to __________ forces within the environmental scan. (Points: 8) Economic Regulatory Cost Competitive Legal
Question 3
Problem 25-1 Valuation: Vandell's free cash flow (FCF) is million per year and is expected to grow at a constant rate of 5% a year, its beta is 1.4. What is the value of Vandell's operations? If Vandell has $10.82 millions in debt, What is the current value of Vandell's stock? (Hi nt Use the corporate valuation model of ch-15) Use the corporate tax rate of 40%. Problem 25-2 Merger Valuation: Hastings estimates that if it acquires Vandells, interest payments will be $1,500,000 per year for 3 years, after which the current target capital structure of 30%debt will be maintained. Interest in thee fourth year will be $1.472 million , after which interest and the tax shield will grow at 5%. Synergies will cause the free cash flows to be $2.5 million, $2.9 million, $3.4 million, and then $3.57, in years 1 unlevered value of Vandell to Hastings Corporation? Assume Vandell now has $10.82 million in debt. Problem 25-5 Merger Analysis: Maraston Marble Corporation is considering a merger with the Conroy Concrete Company. Conroy is publicly traded company, and its beta is 1.30. Conroy has been barely profitable, so it has paid an average of only 20% in taxes during the last several years. In addition, it uses little debt, having a target ratio of just 25% , with the cost of debt 9%. If the acquisition were made, Marston would operate Conroy as a separate, wholly owned subsidiary. Marston would pay taxes on a consolidate basis, and the tax rate would therefore increase to 35%. Marston also would increase the debt capitalization in the Conroy subsidiary to wD = 40% for a total of $22.27 million in debt by the end of year 4 and pay 9.5% on the debt. Marston's acquisition department estimates that Conroy, if acquired, would generate the following free cash flows and interest expenses (in millions of dollars) in Year 1-5: YEAR Free Cash Flows Interest Expense 1 $1.2 $1.30 2 1.50 1.7 3 1.75 2.8 4 2.00 2.1 5 2.12 ? In Year 5 Conroy's interest expense would be based on its beginning of year (that is, the end of Year 4) debt, and in subsequent years both interest expense and free cash flows are projected to grow at a rate of 6%. These cash flows include all acquisition effects. Marston's cost of equity is 10.5%, its beta is 1.0, and its cost of debt is 9.5%. The risk free rate is 6%, and the market risk premium is 4.5%. A- What is the value of Conroy's unlevered operation, and what is the value of Conroy's tax shield under the proposed merger and financing arrangements? B- What is the dollar value of Conroy's operations? If Conroy has $10 million in debt outstanding, how much would Marston be willing to pay for Conroy?
Question 4
Chapter 12 Extra Problem International Company will translate (convert) the Korean subsidiary?s financial statements into dollars before preparing the consolidation. To do so they go thru a process where the Korean subsidiary?s financial statements are remeasured into the Korean subsidiary?s functional currency and then translated into dollars (the Parent Company?s reporting currency). Since the Korean subsidiary does most of its business in Yen (Japan) the functional currency is the Japanese Yen. In this problem the Korean subsidiary?s books are kept in South Korean Won. These amounts must be remeasured into the functional currency ? the Japanese Yen. This process uses the temporal method of translation. The temporal method calls for: ? Cash and accounts receivable are translated at the current rate. ? Inventory is translated at its historic cost. ? Cost of goods sold is translated at the historic cost of the inventory. ? Depreciation expense is translated at the historic cost of the building. ? Equity is translated at its historic rate The remeasurement process results in a foreign currency gain or loss that is applied to net income in the translation gain/loss. Once the Korean Won are remeasured into Japanese Yen they then must be translated ifrom the Japanese Yen into the reporting currency ? American Dollars. This conversion uses the current rate of to translate from the functional currency to the reporting currency. This results in a foreign currency adjustment. This adjustment gain or loss from translation is called a translation adjustment and is shown as other comprehensive income. Other comprehensive may be shown as a separate section of the income statement, a separate comprehensive income statement or part of retained earnings. The current rate method calls for: ? Assets and liabilities are translated at the current exchange rate; equity is translated at historical rates. ? Revenues and expenses which occur evenly throughout the period are translated at the average-for-the-period exchange rate. Income items, such as gains and losses, which are the result of a discrete event, are translated at the actual exchange rate on the date of occurrence. International Company (an American Company) owns a Korean subsidiary. The Korean subsidiary does most of its business in YEN (Japan). Convert the Korean subsidiary?s Financial Statements into the reporting currency. Korean Company Financial Statements For the Year Ending December 31,200X South Korean Won Rate Japanese Yen Rate American Dollar Income Statement Sales 100,000 Cost of Goods Sold (60,000) Operating Expenses (20,000) Depreciation Expense (10,000) Translation Gain/Loss Net Income 20,000 Statement of Retained Earnings Beginning Retained Earnings 70,000 Net Income 20,000 Ending Retained Earnings 90,000 Balance Sheet Cash 130,000 Inventory 140,000 Building 820,000 Total Assets 1,090,000 Current Liabilities 60,000 Long Term Debt 340,000 Total Liabilities 400,000 Common Stock 200,000 Paid In Capital 400,000 Retained Earnings 90,000 Translation Adjustment Total Equity 690,000 Total Liabilities and Equity 1,090,000 Currency Rates Historic Rate - Begin Retained Earning: 1 South Korean Won = .0714000 Japanese Yen Historic: 1 South Korean Won = .0715122 Japanese Yen Average: 1 South Korean Won = .0732161 Japanese Yen Current: 1 South Korean Won = .0740619 Japanese Yen Historic: 1 Japanese Yen = .0105200 American Dollar Average: 1 Japanese Yen = .0103221 American Dollar Current: 1 Japanese Yen = .0119671 American Dollar
Question 5
outline the major financing issues regarding the implementation of a pension plan for a company and outline the major accounting issues resulting from unfunded past service costs. at the end, recommend a pension plan S & D should implement for the company.,Hi , below attachment is the pension issues.thanks,Hi , please let me know if you get the attachment. Thanks,Hi? cant open the file that you send . do you mind to send again? Thanks,Hi, why you send back the question to me?,Hi, thanks you so much for your help, your answer is good. my friend ask from another helper and they make her fail her paper, so i intro you to her now. i think she will ask the same question with mind. but anyway, thanks a lot,Hi,i just saw the cancelled assignment from you which is ask for help to check the entry whether correct. i have got the answer just need your help to check and make the adjustment following the requirement. can you please help me ?,Hi, Mr Michael how are you? sorry i dont know what is QID . but i copy the time and the date that reply from you. (Michael I. Answered your question on 5/27/2012 at 10:35am (5 hours 15 minutes 35 seconds later) I'm Online | Verified Expert Tutor | 99.2% positive feedback | 388 answers),do you mind to tell me how to get the QID?,o , but i only got this number while i got answer return from tutor, the assignment that i said is u cancelled directly, so i cant see any QID.,o can i send to you from here?,o ok thanks for help ...
