Question: The TMA Questions
PART A: case study (Apple)
Instructions Use the annual report and accounts of 2017 to answer the following questions:
1. What areApple business strategies? And how do they achieve these strategies?
2. Explain four risk factors that may affect Apple Inc?
3. In the annual report apple mentioned that they measure certain asset and liabilities using fair value measurement, according to FASB there are three level hierarchy for the fair value measurement technique explain them? Mention example from the balance sheet for asset and liabilities that were measured at fair value for each level.
4. What is the responsibility of management toward the financial reporting?
5. What are the steps that the company has to do in time of merger transaction? And What are the obstacle that may lead to merger failure?
6. What are the Exceptions to not to consolidate the financial statement and what are the benefits of consolidating the financial statements?
PART B: case study
A. Below are the income statement information for 2015 of Orange and its 75% owned subsidiary "Gold".
|
|
Parent
|
Subsidiary
|
|
Sales
|
6,000,000
|
3,600,000
|
|
Cost of goods sold
|
3,000,000
|
2,400,000
|
|
Gross profit
|
3,000,000
|
1,200,000
|
|
Operating expense
|
1,500,000
|
480,000
|
|
Net income
|
1,500,000
|
720,000
|
During 2015, Parent sold to its subsidiary inventory for $ 1,200,000 with a gross profit $300,000. The remaining inventory on the hand of subsidiary is 45%.
Required: • Compute the unrealized profit - ending
• Compute profit for 2015 for the
- Non-controlling interest
- Parent profit
• Prepare the consolidated income statement for 2015, show the elimination entries.
Part C: Case study 3
In January 1, 2015 flower Company has acquired 60% of Dallas Company for $1,020,000 on the date of the acquisition the subsidiary had retained earnings $150,000 and a capital of $1,450,000.
• Separate balance sheet as of 1 January 2015 for Parent and its Subsidiary.
|
Description
|
Parents
|
Subsidiary
|
|
at Book value
|
at fair value
|
|
Cash
|
45,000
|
335,000
|
335,000
|
|
Receivable
|
60,000
|
240,000
|
240,000
|
|
Land
|
780,000
|
700,000
|
680,000
|
|
Property
|
1,405,000
|
400,000
|
430,000
|
|
Investment in Subsidiary
|
1,020,000
|
-
|
|
|
Total asset
|
3,310,000
|
1,675,000
|
|
|
|
|
|
|
|
Account payable
|
25,000
|
60,000
|
55,000
|
|
Other liabilities
|
205,000
|
15,000
|
16,000
|
|
Capital stock
|
2,400,000
|
1,450,000
|
|
|
Retained earnings
|
680,000
|
150,000
|
|
|
Total equity and liabilities
|
3,310,000
|
1,675,000
|
|
a. Record the parent entry in time of acquisition of asset.
b. Is there any Goodwill raised from the business combination. If yes what is the amount of Goodwill.
c. Record the elimination entries required for consolidation as of January 1, 2015 (using cost method)
d. Prepare the consolidated balance sheet as of January 1, 2015
Use the following headings (below) to make up the different sections of your work:
The PT3 form
Title and contents page
References (Recorded according to the Harvard style - Available on LMS)
Information related to above question is enclosed below:
Attachment:- TMA2017-0182ndsemester.rar