1.MattelA????1s global sourcing in China, like all other toymanufacturers, was based on both low-cost labor, and a growingcritical mass of factories competitively vying for contractmanufacturing business. Do you think the product recalls andproduct quality problems are separate from or part of pursuing alow-cost country strategy?

2.Whether it is lead paint on toys or defective sliding slideson baby cribs, whose responsibility do you think it is to assuresafety A????1 the company, like Mattel, or the country, in this caseChina?

3.Many international trade and development experts argue thatChina is just now discovering the difference between being a majoreconomic player in global business and its previous peripheral roleas a low-cost manufacturing site on the periphery of the worldeconomy. What do you think?

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1- Mention in details and equations the different of producing phosphoric acid from phosphate?

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1. Minneapolis Manufacturing Inc.’s CEO has asked you to provide the relevant journal entries using the following acquisition information.

Note: The CEO has not decided whether they will purchase Bloomington Re-Bar Company using the “Asset Acquisition Method” or the “Stock Acquisition Method.”

Required:

A. Prepare the journal entryassuming Minneapolis Manufacturing Inc. decided to purchase Bloomington Re-Bar Company for $13,000,000 in an Asset Acquisition.

B. Prepare the journal entryassuming Minneapolis Manufacturing Inc. decided to purchase 100%of Bloomington Re-Bar Company for $13,000,000 in a Stock Acquisition.

C. Prepare the journal entryassuming Minneapolis Manufacturing Inc. decided to purchase 75%of Bloomington Re-Bar Company for $9,000,000 in a Stock Acquisition.

D. For scenario C.(75% Stock Acquisition – above) prepare a CAD. In addition, prepare the necessaryworkpaper elimination entriesnecessary to complete a consolidated financial statement workpaper.

2. St. Paul Sewer Inc. purchased 70%of Pipestone Pipe Inc. in a Stock Acquisition.The CEO of St. Paul Sewer Inc. mentioned that there is an accounts receivable due from Pipestone Pipe Inc. in the amount of $12,000. How should St. Paul Sewer Inc. account for this inter-company (affiliated company) receivable?Provide the journal entrywith your explanation.

3. The Difference between Implied and Book Value account is:

a) an account necessary for the preparation of consolidated working papers.

b) the excess implied value assigned to goodwill.

c) the unamortized excess that cannot be assigned to any related balance sheet accounts

d) used in allocating the amounts paid for recorded balance sheet accounts that are different than their fair values.

Quiz continues on page 2è

Ethics Scenario:

You have just joined a company as a new staff accountant. Your company is in an acquisition mode (acquiring 5 to 10 smaller companies each of the last 4 years). You are excited to hear that you are going with an acquisition team to facilitate another acquisition (Company X). You have been instructed to sit down with Company X’s controller and explain some pre-acquisition (before the acquisition is finalized) accounting expectations.

Expectations for Company X before the acquisition is finalized.

1. Company X is expected to accelerate the payment of liabilities

2. Company X is expected to delay recording the collections of revenue

3. Company X is expected to increase the estimated amounts in reserve accounts

As you are driving to the Company X headquarters, your gut is telling you something is not right? You pull your car over and call your old classmate who is now an auditor for Ernst and Young. You explain the “expectations” and your old classmate provides the following feedback…

(Old Classmate) There are ways that the three expectations could be managedwithin the rules provided by GAAP, but would be regarded by many as pushing the limitsof GAAP.

Not satisfied with your old classmates answer you call your old accounting professor. Your accounting professor reminds you what he used to say in class,

(Old Professor) “There are gray areas in accounting that many accountants will be influenced to step into. Often, this results in unethical behavior (at a minimum) and in many cases results in illegal acts.” “It’s a dangerous path and I recommend that you stay away from gray.”

1. What effect does each of the three items have on the reported net income of the acquired company before the acquisition and on the reported net income of the combined company in the first year of the acquisition and future years?

2. What effect does each of the three items have on the cash from operations of the acquired company before the acquisition and on the cash from operations of the combined company in the first year of the acquisition and future years?

3. If you are the controller of Company X, how would you respond to these suggestions?

 

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1. Most companies, when computing or estimating costs for a job, will add in an overhead cost, often tying that cost to some direct cost, such as direct labor. What costs are usually included in this overhead cost?

2. In lean manufacturing system designs (aka the Toyota production system), the quality control is integrated into the design of the lean shop. How is quality controlled in the job shop?

 

 

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