The press responded negatively to “another CEO that lied about his résumé” and speculated about “what else might not be right.” On the day the press release was issued, MCG’s stock price dropped from $11.85 per share to $8.40 but fully recovered within a month.
a. $100,000 salary from Legal Services, Inc.
Required:
A. Prepare the journal entry on Pryor’s books to record the purchase of the new shares.
B. Prepare in general journal form the workpaper entries needed for the preparation of aconsolidated statements workpaper on December 31, 2012.
Requirements
1. Journalize the entry to record Midland’s purchase of Shipley Wireless for $ 320,000 cash plus a $ 480,000 note payable.
2. What special asset does Midland’s acquisition of Shipley Wireless identify? How should Midland Telecom account for this asset after acquiring Shipley Wireless? Explain in detail.
Scenario
Company Background
PROVISION Healthcare Technologies manufactures patient image wands (hardware with underlying software) used by healthcare providers (primarily hospitals and physician offices) as part of larger systems to test and monitor patients’ body functions. The wand has been on the market for ten months and a new release of the wand’s software isn’t expected for another eight months. The company is approximately 150 people total, and has been in existence for just over five years. They have several products on the market, but the newest is by far the most complex product they have created. They are privately-owned and are financially stable.
Project Background
New government regulations have just been issued regarding patient safety. PROVISION must modify the wand software to incorporate this new functionality within six months or face steep fines. PROVISION has decided to move up its next wand release to meet the government deadlines. It has also decided to incorporate some new functionality and make some software fixes as part of this release.
Project Team
You have been named the project manager. You are from the Product Development department, from the Software team.
The project will require a cross-departmental team:
| Department | Operational Responsibilities | Project Responsibilities |
| Product Development | Assist with customer service / help desk calls. | Software team: designs, makes, and tests modifications to the software.
Hardware team: tests the new software against the current hardware to ensure it still works. |
| Product Manufacturing | Produces the product. | Designs and develops product packaging, including release notes and upgrade instructions. |
| Product Distribution | Fills customer orders. | Tests installation and upgrade procedures. |
| Sales & Marketing |
Sales team – sells the product, manages accounts, etc. Marketing team – delivers marketing campaigns, updates the Web site, etc. |
Sales team: provides input and subject-matter expertise around the wand’s functional requirements. Marketing team: develops and delivers the marketing campaigns to promote the wand; will be responsible for preparing customer communications and updates to the corporate Web site.
|
The fair values of the identifiable net assets of Saltz Ltd. on December 31, Year 10,
Required:
a. Calculate Indigo inventory turnover ratio and the days to sell inventory ratio for 2014 and 2013. Comment on the results.
b. Given the result of your analysis in part (a), would you expect Indigo to have significant payables to the publishing and distribution companies it purchases its inventory from? Was this the case?
c. Explain Indigo inventory valuation polices in your own words. Specifically, explain what Indigo includes in inventory cost, what cost formula(s) the company uses, and how it values its inventory on the statement of financial position.
When dividens increase , is it debit or credit ?
Required
What is the possible security problem? What can be done about it?
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