CG
Cristina Gutierrez
Answers (6)
CG
Answered
The ratio that captures information about property,plant,and equipment utilization is
A) current asset turnover.
B) long-term asset turnover.
C) asset turnover.
D) property turnover.
A) current asset turnover.
B) long-term asset turnover.
C) asset turnover.
D) property turnover.
On Jul 16, 2024
B
CG
Answered
Once Paul asked Shaun to be the best man in his wedding, Shaun started working on his speech. He wants his wedding toast to be funny and interesting. What is the purpose of Shaun's speech?
A) To entertain
B) To persuade
C) To inform
D) To actuate
A) To entertain
B) To persuade
C) To inform
D) To actuate
On Jul 12, 2024
A
CG
Answered
Hot Inc. owns 60% of Cold Inc, which it purchased on January 1, 2019 for $540,000. On that date, Cold's retained earnings and common shares were valued at $100,000 and $250,000, respectively. Cold's book values approximated its fair values on that date, with the exception of the company's inventory and a patent identified on acquisition. The patent had an estimated useful life of 10 years from the date of acquisition. The inventory had a book value that was $10,000 in excess of its fair value, while the patent had a fair value of $50,000. Hot uses the equity method to account for its investment in Cold Inc. The inventory on hand on the acquisition date was sold to outside parties during the year.
Hot Inc. sold depreciable assets to Cold on January 1, 2019, at a loss of $15,000.
On January 1, 2020, Cold sold depreciable assets to Hot at a gain of $10,000. Both assets had a remaining useful life of 5 years on the date of their intercompany sale.
During 2019, Cold sold inventory to Hot in the amount of $18,000. This inventory was sold to outside parties during 2020.
During 2020, Hot sold inventory to Cold for $45,000. One third of this inventory was still in Cold's warehouse on December 31, 2020.
All sales (both internal and external) are priced to provide the seller with a mark-up of 50% above cost.
Cold's Net Income and Dividends for 2019 and 2020 are shown below.
20192020 Net Income $180,000$200,000 Dividends $20,000$60,000\begin{array}{|l|r|r|}\hline & \mathbf{2 0 1 9} & \mathbf{2 0 2 0} \\\hline \text { Net Income } & \$ 180,000 & \$ 200,000 \\\hline \text { Dividends } & \$ 20,000 & \$ 60,000\\\hline\end{array} Net Income Dividends 2019$180,000$20,0002020$200,000$60,000 Both companies are subject to a tax rate of 20%.
Compute the amount of income tax that would be deferred as at December 31, 2020.
Hot Inc. sold depreciable assets to Cold on January 1, 2019, at a loss of $15,000.
On January 1, 2020, Cold sold depreciable assets to Hot at a gain of $10,000. Both assets had a remaining useful life of 5 years on the date of their intercompany sale.
During 2019, Cold sold inventory to Hot in the amount of $18,000. This inventory was sold to outside parties during 2020.
During 2020, Hot sold inventory to Cold for $45,000. One third of this inventory was still in Cold's warehouse on December 31, 2020.
All sales (both internal and external) are priced to provide the seller with a mark-up of 50% above cost.
Cold's Net Income and Dividends for 2019 and 2020 are shown below.
20192020 Net Income $180,000$200,000 Dividends $20,000$60,000\begin{array}{|l|r|r|}\hline & \mathbf{2 0 1 9} & \mathbf{2 0 2 0} \\\hline \text { Net Income } & \$ 180,000 & \$ 200,000 \\\hline \text { Dividends } & \$ 20,000 & \$ 60,000\\\hline\end{array} Net Income Dividends 2019$180,000$20,0002020$200,000$60,000 Both companies are subject to a tax rate of 20%.
Compute the amount of income tax that would be deferred as at December 31, 2020.
On Jun 16, 2024
Unrealized Gain on Intercompany $8,000 Depreciable Asset Sale Unrealized Loss on Intercompany ($9,000) Depreciable Asset Sale Unrealized Profit in Ending Inventory $5,000 Total Unrealized Profit $4,000×20% Income Tax deferred (20%)$800\begin{array}{|l|c|}\hline \text { Unrealized Gain on Intercompany } & \$ 8,000 \\\text { Depreciable Asset Sale } & \\\hline \text { Unrealized Loss on Intercompany } & (\$ 9,000)\\\text { Depreciable Asset Sale } & \\\hline \text { Unrealized Profit in Ending Inventory } & \$ 5,000 \\\hline \text { Total Unrealized Profit } & \$ 4,000 \\\hline & \times 20 \% \\\hline \text { Income Tax deferred }(20 \%) & \$ 800\\\hline\end{array} Unrealized Gain on Intercompany Depreciable Asset Sale Unrealized Loss on Intercompany Depreciable Asset Sale Unrealized Profit in Ending Inventory Total Unrealized Profit Income Tax deferred (20%)$8,000($9,000)$5,000$4,000×20%$800
CG
Answered
Ski Ltd. has 500,000 shares outstanding. On July 1, 20X7, Ski purchased all of the outstanding shares of Snow Ltd. The consideration paid by Ski was in the form of 500,000 shares, valued at $20 per share, which was premium of 10% over the market value prior to the announcement. It has been decided that the CEO of the combined company will come from Ski, but the CFO and the COO will come from Snow. The chairman of the board of directors will come from Snow. The board will have six other directors, three from Ski and three from Snow.
Required:
Define what the acquirer is in a business combination. How would you identify the acquirer in the above transaction?
Required:
Define what the acquirer is in a business combination. How would you identify the acquirer in the above transaction?
On Jun 12, 2024
An acquirer in a business combination is the corporation whose shareholders control the combined entity. In this case, after the combination, the ownership of Ski is as follows: The former shareholders of Ski own 500,000 shares and the former shareholders of Snow also own 500,000. As a result, voting control is evenly split at 50% for each group. No one group has the voting control of the new combined entity. It is necessary to examine other factors to determine who the acquirer is. The other factors include:
• Representation on the board-In this case, the chairman is from Snow, and there is equal representation from Ski and Snow for the remaining six directors
• Management team-The management team is made up of the CEO from Ski, but the CFO and the COO both come from Snow.
Given the above analysis of factors, it would appear that Snow might have control since Snow has majority on the board of directors, including the chairman, and also has two of the three managers on the senior management team. Consequently, Snow would be the acquirer in this combination.
Note: This answer will be a judgment call, and students may argue for Ski to have majority, since the CEO is from Ski.
• Representation on the board-In this case, the chairman is from Snow, and there is equal representation from Ski and Snow for the remaining six directors
• Management team-The management team is made up of the CEO from Ski, but the CFO and the COO both come from Snow.
Given the above analysis of factors, it would appear that Snow might have control since Snow has majority on the board of directors, including the chairman, and also has two of the three managers on the senior management team. Consequently, Snow would be the acquirer in this combination.
Note: This answer will be a judgment call, and students may argue for Ski to have majority, since the CEO is from Ski.
CG
Answered
Each R requires 2 of component S and 1 of part T. The lead time for assembly of R is 3 days. The lead time for the manufacture of S is 5 days. The lead time for the manufacture of T is 10 days. The cumulative lead time for R is ________ days.
A) 6
B) 9
C) 13
D) 17
E) 22
A) 6
B) 9
C) 13
D) 17
E) 22
On May 17, 2024
C
CG
Answered
The case against advertising includes the assertion that advertising
A) keeps firms from spending huge sums of money to create artificial differences among goods.
B) provides consumers with valuable information about product availability, quality, and price.
C) decreases competition by increasing barriers to entry of new firms into an industry.
D) ensures high quality and efficient production.
A) keeps firms from spending huge sums of money to create artificial differences among goods.
B) provides consumers with valuable information about product availability, quality, and price.
C) decreases competition by increasing barriers to entry of new firms into an industry.
D) ensures high quality and efficient production.
On May 13, 2024
C