...Corporations acquired Baked Beans Corporation on August 1, 2009, they needed to determine: 1) The consideration transferred, 2) The fair value of the assets acquired and liabilities assumed, and 3) The fair value to of intangible assets to be recorded, such as goodwill and the Baked Beans trademark. Applicable Accounting Pronouncements: ASC 805-10, Business Combinations ASC 805-30, Business Combinations ASC 805-20, Business Combinations ASC 820-10-36-10e, Fair Value Measurement 1. DETERMINING CONSIDERATION TRANSFERRED Considerations transferred are defined within ASC 805-30-25-5: “The consideration the acquirer transfers in exchange for the acquiree includes any asset or liability resulting from a contingent consideration arrangement. The acquirer shall recognize the acquisition-date fair value of contingent consideration as part of the consideration transferred in exchange for the acquiree.” Alternative 1: Considerations transferred would be the sum of the fair value of assets and the equity interest. ASC 805-30-30-7 proves this method to be incorrect though. Alternative 2: The amount of considerations transferred would be the sum of the fair value of assets and liabilities, plus the contingent consideration, plus the equity interest. The method to compute total consideration is explained in ASC 805-30-30-7: “The consideration transferred in a business combination shall be measured at fair value, which shall be calculated as...
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...CASE STUDY #1 New Administrative Assistant in the Research Branch Mohammad R Irshad MGMT 5613 (2012) 05/20/2012 Dr. Don M. Hull Situation Audit I am the lead researcher for a nonprofit management development firm located in Minneapolis, MN. Since I travel most of the time I hired a new administrative assistant about six months ago to (a) keeping track of the branch's $300,000 budget; (b) making your travel arrangements and providing you with graphics and word processing support; and (c) providing administrative support for the other four members of the research branch. Sue’s performance has been less than satisfactory especially in the last month. Sue will often put in a full eight hour day, even overtime, but still not complete all of her job responsibilities without help from the other members in the research branch. Unfortunately, failing to keep up with the research branch budget is not Sue's only workrelated problem. Although Sue is very good at following clear instructions and completing projects and tasks she has previous experience with (except the budget), Sue is not very good at thinking through the requirements of new tasks and projects. All of the other branch members have worked for me for over two years, and I have developed a close working relationship with each one of them. Because of this relationship, the other members of the branch have privately told me how dissatisfied they are with Sue's performance; they feel their energies are being drained...
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...for delivery to schools in South America at the end of the week, just in time for the beginning of the school year. The approximate cost to reproduce and repackage the toy collection is $100,000. This report identify three possible ways to address the situation using a standard decision making process. The report will evaluate several considerations for each possible solution and make an ultimate recommendation. The impact of this decision on customer relationships as well as the role of social responsibility in the decision making process will be discussed. Finally, the report will identify possible actions the company can take to promote ethical decision making, as well as work towards identifying important components of a code of ethics for the company. A1. Decision Alternatives The situation has presented a complex ethical scenario for the company. A variety of problems can potentially arise, depending on how the situation is handled. Significant profits, customer relationships, and moral integrity are at stake. This section will identify three alternative strategies for addressing the problem. The first possible alternative would be for the company to cancel the shipment to South America, reproduce the whistles with appropriate levels of lead, and ship the newly repaired toy collection at a later time. The company would explain the lead situation to customers and would hope for some level of...
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...give advice as to the potential financial reporting implications of the various alternatives for acquiring Caligon Inc (CI). CI is a wholly owned pharmaceutical subsidiary of Davison Corporation (DC), which has recently been de-emphasizing its own research efforts in favor of licensing products from other companies. BC is looking to acquire a pharmaceutical company such as CI to which it will transfer existing licensed products as the current licensing agreements expire. Through the analysis of three alternative acquisition arrangements, BC will gain an understanding of all possible implications and will be able to make decisions accordingly. These three alternatives must each be accounted for as business combinations, which occur when there is a transaction in which the acquirer obtains control of one or more business. In each alternative, BC would acquire control of CI, which can be seen through BC’s rights to their returns as well as having the ability to affect these returns with the power held in the business. Alternative 1 suggests a share for share exchange in which BC issues new shares totaling 40% of outstanding shares for 100% of the shares of CI. Since the acquirer is issuing its own shares as consideration transferred, we must determine the fair value of these shares using the current trading value of $25. For the 7 200 000 shares issued, this gives a total value of consideration transferred of $180 000 000 (7 200 000 x $25). Furthermore, we must calculate the...
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...Decision Alternative The candidate presents 0–1 appropriate possible decision alternatives to address the problem regarding the whistles. The candidate presents 2 appropriate possible decision alternatives to address the problem regarding the whistles. The candidate presents 3 appropriate possible decision alternatives to address the problem regarding the whistles. A1a. Alternative Process The candidate does not provide a logical explanation of the process that was used for selecting each alternative. The candidate provides a logical explanation, with insufficient detail, of the process that was used for selecting each alternative. The candidate provides a logical explanation, with sufficient detail, of the process that was used for selecting each alternative. A1b. Alternative Advantages and Disadvantages The candidate does not provide a logical discussion of the advantages and disadvantages of each alternative. The candidate provides a logical discussion, with insufficient detail, of the advantages and disadvantages of each alternative. The candidate provides a logical discussion, with sufficient detail, of the advantages and disadvantages of each alternative. A1c. Alternative Considerations The candidate does not provide a logical discussion of the financial, legal, and ethical considerations of each alternative. The candidate provides a logical discussion, with insufficient detail, of the financial, legal, and ethical considerations of each alternative. The...
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...Re: Discussion on the process of selecting decision alternatives for the whistle issue of the toy company, evaluating theadvantages, disadvantages, legal, financial and ethical considerations involved in the various alternatives.The purpose of this memo is to outline three possible decision alternatives to address the problem of small lead traces tocontents of metal whistles produced by a U.S toy company due for shipment to South America; by discussing the methods forthe selection of decision alternatives, the advantages, disadvantages, ethical considerations, financial and legal prospective ofthe each decisions . The memo will further justify and analyze the impact of the recommended decision on customerrelationship as well as demonstrate the role of ethics and social responsibility in choosing this decision.While important financial or strategic information is used in the decision-making process, business ethics has become anincreasingly popular tool used in making decisions. Business ethics is commonly referred to as the professional judgment orethical perspectives used by an individual or a company executive team in resolving moral or ethical problems in business. Inresolving the problem of the lead-contaminated metal whistles, I will discuss three possible decision alternatives, methods ofselection of the alternatives, pros and cons of the alternatives as well as potential legal, financialand ethical consideration involved in the selection. Ethical decisions-making can be...
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...Elementary School Toy Collection Recently, it has been discovered that the toy collection that is planned to be sent at week’s end to elementary schools in South America, did not pass U.S. satisfactory limits for children ages 7 and younger due to the metal whistle included in the toy collection containing small traces of lead. Listed below are three possible alternatives that have been identified to address the whistle problem. 1. Replace the metal whistle with a plastic whistle. 2. Find an alternative toy, i.e. flash cards, rubber ball, stickers to replace the metal whistle. 3. Remove the metal whistle from the toy collection. The Utilitarian Method was used for selecting the alternatives, as this method evaluates an act in the nomenclatures of consequences or outcomes. It endeavors to accomplish the maximum good for the maximum amount while producing the smallest amount of damage or averting the maximum amount of anguish. It embraces that every person’s concern should be measured equally when making the decision. For any group of alternatives it would assess the most ethical alternative as the alternative which generates the greatest equilibrium of gains over damage for the most stakeholders. Outcomes maybe measured in expressions such...
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...takes into account all costs of acquiring, owning, and disposing of a building or building system. LCCA is especially useful when project alternatives that fulfill the same performance requirements, but differ with respect to initial costs and operating costs, have to be compared in order to select the one that maximizes net savings. LCCA Methodology 1. Develop design alternatives that deliver the same structural and performance objectives. 2. Determine Timing of initial and future activities of the asset or project design and each of the alternatives. 3. Estimate the costs involved for each alternative. 4. Find the present value of each alternative through “discounting." 5. Analyze the results. Develop Design Alternatives Identify and develop a minimum of two mutually exclusive options that serve the same purpose, with the assumption the only economic difference between alternatives is total cost. For each alternative, detail the components that make up the option, and define: • Activities required to procure, construct, or refurbish the asset • Periodic maintenance and estimated repair or rehabilitation tasks required throughout the life cycle Determine Activity Timing Use the information from the define stage to develop for each alternative, a maintenance and rehabilitation plan that details the times when such activities occur, and the costs involved for each activity. Such...
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...ACC 655 – Advanced Auditing Term Paper: World Health Alternatives, INC – Fraud Brian O’Rourke, Katharina Ryska 10/14/2013 Introduction Scandals like Enron, Worldcom and Tyco have taught society about CEO’s fudging financial statements in order to make some extra money. With millions of dollars lost for the shareholders, members of the management engaging in fraudulent activity face high penalties. However, these penalties do not stop executives from trying to scam the system. World Health Alternatives, Inc got negative press following a big fraud investigation. The company with its number of wholly owned subsidiaries provides “medical, professional, and administrative staffing services to the healthcare industry in the United States.” By comprising nurse and physician staffing one would expect the company to have integrity. This paper is going to look at the fraud case, auditor’s responsibility, financial statements as well as the charges against the auditor. Furthermore, this paper is trying to see if the SEC allegations were warranted against the auditor. Overview of the Case According to the SEC, World Health Altneratives, Inc (World Health) engaged in fraudulent and improper conduct from at least May 2003 – August 2005. They manipulated accounting entries by understating expenses and liabilities, which made World Health look more financially sound. According to the SEC Website, “every annual and quarterly report that World Health filed with the Commission contained...
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...jobs. Company X Management team – will have to face the liability claims. External Patients – require pacemakers to stay alive. Doctors – install pacemakers. Government – helps to subsidize part of the business. Medical Council – the decision of the C ompany X will affect the pacemaker industry and its advancement in the future. Legal Considerations The legal considerations that should be accounted for in this case are the following. Pacemaker failures involving other components could result in potential lawsuits would reduce company’s reputation. As well as doctors that are incorrectly installing pacemakers could put the company under legal scrutiny. Financial Considerations Potential lawsuits will put a financial burden on the company. Revenue the Company X will get from the sale of the transistors. The Company X is interested in maximizing their shareholders’ value. Moral Considerations The company needs to act in the best interests of society by supplying the transistors. As well as to provide opportunity of life for patients needing the pacemakers installed. Actionable Alternatives Alternative 1 The first alternative from an ethical egoism perspective is to increase price, as an only supplier the company can act as a monopolist, continue with the supply of the transistors. As well as to renegotiate an agreement that would remove any liability for faulty mechanisms other than the transistors for pacemakers. As an ethical egoist the company will look to better...
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...ABC Steel Company Case Analysis No description Please log in to add your comment. Report abuse Transcript of ABC Steel Company Case Analysis ABC Steel Company Case Analysis STATEMENT OF THE OBJECTIVE A. To enhance the competencies and skills of supervisors and lead men. AREAS OF THE CONSIDERATION ALTERNATIVE COURSES OF ACTION ALTERNATIVE COURSES OF ACTION ALTERNATIVE COURSES OF ACTION Conclusion VIEWPOINT Robert Cruz – Shop Manager of ABC Steel Company Time Context AREAS OF THE CONSIDERATION Opportunities AREAS OF THE CONSIDERATION Threats AREAS OF THE CONSIDERATION Weaknesses PROBLEM STATEMENT ABC Steel Company’s production control department failed to meet the delivery date resulting to a production backlogs due to work force related problems. ALTERNATIVE COURSES OF ACTION A. Leaders Present B. To motivate the workers to be productive and efficient. C. To improve a good relationship and communication between management and subordinates. Strengths 1. ABC Steel Company was one of the country’s largest producers of fabricated steel products. 2. ABC Steel Company had been prided itself on being a producer of top quality steel products. 3. 90% of the laborers are from a nearby barangays and many of them are barangays leaders. 1.Disciplinary problems on the production workers of the company. 2. Shortage of skilled manpower. 3. The targets are unrealistic. 4. Positions in the barangay are more highly regarded than positions in the company. 1. Established as one of the...
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...good advise in that it may be a great business opportunity, but they are assuming that the price of farmland is going to increase drastically due to the demand of corn to fuel plants expected to soar. There are a couple of factors though that the colleagues are not taking into consideration Competition and Alternatives Even if entry is limited, firms within an industry are not immune to outside competition (Brickley, Smith, Zimmerman, 2009, p. 255). The advise given by the colleagues is sound, but without a true understanding of the how running a farm works, investing right into farmland may not be wise. There are going to be many competitors out there, and the goal of living in a peaceful environment may not be attainable. What also must be taken into consideration is that corn-based ethanol is not the only alternative to gasoline. There are in fact several alternatives including biodiesel, natural gas, propane, hydrogen, and electricity (fueleconomy.gov, 2015). What if the government decides to back one of the other alternatives instead? What if it is discovered that another alternative is out there that hasn’t even been considered yet? There are a lot of questions that need to be taken into consideration before just jumping into purchasing the land. Additional Costs One thing that needs to be considered is if the price being asked for the land is a fair amount. The web search found 80 acres of farmland in Illinois for $10,000/acre, which comes to $800,000, but studies show...
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... Abstract Julia Day watched a movie about a career woman leaving her job to start a baby food company. Julia wished to start her own baby food company, so she began developing ideas about the type of product she wanted to produce, how to package it, and the resultant quality of the product. Julia also made considerations for the type of people she would like to have work for her new company. Her determination allowed her to find suitable people to help her develop a preliminary offering of her baby food. The new baby food was received well in a small-scale study. Thereafter, Julia and her team needed to raise funds. They considered three options: corporate bonds, preferred stock, and common stock. The financial characteristics of potential investors, the return rates for each option, the market, and the future inflation rate were all evaluated regarding impact on getting the company off the ground. This case study evaluation will serve to discuss the potential investment into Starting Right Corporation by others with varying perceptions of the possible success of the business. The development of legal documentation for the business and investment alternatives for parties who are risk-averse and risk-seekers will also be discussed herein. Sue Pansky, a retired elementary school teacher, is considering investing in Starting Right. She is very conservative and is a risk avoider. What do you recommend? Since Sue is cautious about change or innovation and wants to...
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...that summarizes this study follows thereafter. I. INTRODUCTION “Consumer behavior reflects the totality of consumers’ decisions with respect to the acquisition, consumption and disposition of goods, services, activities, experiences, people and ideas overtime.” (Wayne D. Hoyer, Deborah J. Maclnnis 2008). This means that as much as the consumer will purchase a certain product e.g. soap, based on his preference of brands, he may also purchase a product such as a book just because it has been written by a popular author. Consumer decision making is about market choice behavior where consumers must make a decision between two or more competing alternatives, and thereafter decide on whether to purchase the alternative. The consumer decision making process is the stages that a consumer goes through in order to decide on the best alternative to purchase. The traditional decision making process makes an assumption that a consumer has to go through five stages before reaching his decision hence very important for a marketer to understand this process. II. DECISION MAKING – THE TRADITIONAL PROCESS The five stages in the traditional consumer decision making process include: Need recognition or...
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...The Buying Process A Walkthrough of Spotify and the Online Music Streaming Buying Process/Cycle Every product and service has a buying cycle. This buying cycle consists of five stages, which include problem recognition, search and determination of alternatives, evaluation of those alternatives, the purchase decision, and the post purchase evaluation. For the purpose of this analysis we will breakdown the product offering presented to consumers seeking an alternative to conventional music listening. The alternative to traditional music ownership being a subscription to an online music streaming service. In this report we will discuss the reason why a consumer would choose the Spotify Music Service over its competitors through the buying process/cycle. Spotify is an on demand music streaming service that allows users to access a library of millions of tracks through a multitude of delivery channels. In this discussion we will breakdown the so-called problems that Spotify solves and explore how it differentiates itself from its competitors. Furthermore we will see how they affect the consumers purchase decision and as a user of the Spotify service I will give a post purchase evaluation of their product. First, in the buying cycle is problem recognition or awareness. Spotify as well as many other companies have recently discovered a new need where people are seeking to increase their exposure to music as well as the desire to discover new music that they...
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