Balance Sheet and Sylvan Essay

On January 1 2007, Pillar purchased 60% of the common shares of Sylvan for $4,500. On that date, Sylvan had common shares of $1,250 and retained earnings of $3,000. Fair values were equal to carrying values for all Sylvan’s net assets except inventory, capital assets and notes payable. The fair value of inventory was $60 more than book value, the book value of capital assets was $100 greater than fair value and the Notes payable had a fair value of $150 less than book value. Assume that all shares of Sylvan have the same value and no control premium was paid at the date of acquisition. The Consolidated Financial statements will be prepared using IFRS Entity Method. The financial statements for Pillar and Sylvan for the year ended December 31, 2010 were as follows: Balance Sheets December 31, 2010 $000’s PILLAR SYLVAN Cash $680 $435 Accounts receivable 1,755 1,025 Inventory 2,849 1,790 Capital assets—net 3,976 3,000 Investment in Sylvan 4,500 Total assets $13,760 $6,250 Current liabilities $400 $255 Notes payable 5,800 1,185 Common shares 2,000 1,250 Retained earnings 5,560 3,560 Total $13,760 $6,250 Statements of Income and Retained Earnings Year Ended December 31, 2010 PILLAR SYLVAN Sales and all other Income $4,040 $2,710 Cost of sales 1,600 1,140 2,440 1,570 Amortization (480) (310) Other expenses and losses including taxes (500) (210) Net income 1,460 1,050 Additional information: numbers in $000’s 1. Capital assets are to be amortized over an average remaining useful life of 8 years at January 1, 2007 and the notes payable mature on December 31, 2011. Goodwill impairment losses for 2008 and 2010 were $240 and $300 respectively. Straight line amortization is acceptable for all acquisition differentials. 2. At December 31, 2010, Sylvan’s inventory included goods purchased from Pillar for $760. Total purchases from Pillar in 2010 were $1000 all priced at mark-up’s averaging 25% of Pillar’s cost. 3. On December 31, 2009, the inventories of Pillar contained $500 of merchandise purchased from Sylvan. Sylvan earns a gross margin of 30% on all sales to Pillar. During December 2010, Pillar purchased merchandise from Sylvan for $900 and did not pay for$250 of the purchases by December 31, 2010. 40% of the inventory was resold by Pillar before the year end. 4. On July 1, 2010, Sylvan sold a new tract of Land to Pillar for $170. On December 1, 2009, Sylvan had bought the land for $200. The fair market value of the land at July 1, 2010 was $220. 5. On September 30, 2008, Pillar sold Land to Sylvan for $100. The land had a book value of $60 on the date of the sale. 6. On December 1, 2010, Pillar and Sylvan declared and paid dividends of $150 and $100 respectively. 7. Both companies pay taxes at the rate of 40%. Assume all intercompany Transactions are taxed at 40% REQUIRED: Please use a GREEN BOOKLET 1. Prepare a Consolidated Balance Sheet at December 31, 2010. (22 Marks) 2. Prepare an independent calculation of ENDING Consolidated Retained Earnings at December 31, 2010. (11 marks) 3. Assume Pillar wishes to use the equity method in their General Ledger, calculate Investment income from Sylvan for the year ending December 31, 2010 (10 Marks) NOTE: This question will help you prepare for the technical question on the midterm. Do more than the question asks so that you are prepared for any possible questions you may be asked: Eg. Prepare a Consolidated Income statement and an independent calculation of Consolidated Net Income attributable to Parent company shareholders Calculate the Investment Income under the equity method: Note the only difference between the equity method used when significant Influence is present and the equity method used in the general ledger of the parent when control is present is the treatment of downstream transactions. According to IAS 28.28 all unrealized intercompany profits are eliminated proportionately between investor and investee. Therefore if investor owns 30% of investee, 30% of all unrealized profits/losses are removed. When control exists the parent eliminates upstream proportionately with NCI and downstream unrealized profits are eliminated 100% from parent. Check figures: At December 31, 2010 Goodwill at acquisition ($3,140) $2,600 Consolidated total Assets $17,615.6 Capital assets $6916 Consolidated Retained Earnings $5331.28 NCI Balance Sheet $2924.32 Consolidated Net Income Entity $2052.1 Attributable to Parent shareholders 1754.78 Attributable to NCI $297.32 Investment account Balance sheet :equity method $4,271.28 Investment income equity method 2010 $354.78(removing 100% downstream)

The Impact of Railroads in America

Nineteenth century America was a time of rapid growth and expansion. The movement of settlers further and further west accompanied by technological advances led to the major growth of cities and industries across the American frontier. However, it was the major innovations of transportation that had the most significant impact on the expansion of Midwestern and western America. The construction of canals and roads led to the increase in the use of stagecoaches, steamboats, and ultimately railroads. Railroads became extremely popular in America in the 1800’s. The railroad industry itself began to boom; it was supported by its reputation for speed and efficiency. But, along with the booming industry of railroads came the strong debate that plagued Congress for years: should railroads be constructed as the major source of transportation over roads and canals? Although roads had become increasingly popular, the railroad industry was also viewed as being monopolistic, undemocratic, and unsafe. Despite the fact that railroads were sometimes monopolistic and undemocratic in that respect, railroads proved to be most vital in the expansion of the Midwest and western America. It was the use of railroads over all other methods of transportation that aided in communication, the transportation of goods, and ultimately decreased the costs of transportation, all of which contributed to the expansion of the American frontier. Before the rise of railroads, stagecoaches and steamboats dominated the transportation industry. Stagecoaches were an effective means of transportation, but in the early 1800’s they were accompanied by Robert Fulton’s invention–the steamboat. The steamboat was a â€Å"combined river and overland transport system† that proved to be effective in transporting goods and people. These locomotives were able to travel the rivers from the north and provide military posts and plantations with goods in the south while transporting passengers and immigrants. Prior to railroads, steamboats were the major and often only form of transporting settlers and maintaining communication between certain areas. Yet, the rise of railroads led to the inevitable fall of the steamboats, and the railroads took over as the major method of transportation. Although stagecoaches and steamboats were effective means of transportation, they were soon surpassed by railroads as the preferred method of travel. Railroads began blanketing America in the 1820’s and by the 1860’s over 30,626 miles where covered by the railroads. This rapid growth of railways was due to the fact that railroads offered better economy, speed, and reliability than other methods of transportation at that time. First, a cheaper alternative to traveling by stage or steamboat was to use the railways. Railroad companies offered low-fare excursion rates that made it more economical to travel. Overall, the cost of transportation was reduced by $150 million by 1859 due to the economic advantages of traveling by rail. Another advantage the railroads had over stages and steamboats was its high rate of speed. Railroads were two times as fast as stagecoaches and four times as fast as steamboats (Shi, 499). Also, the railroads were much more reliable than the roads or canals. Railroads had the ability to travel all year long with few limitations, while both stagecoaches and steamboats had difficulty traveling during the winter months, â€Å"at no time†¦ was stagecoach travel more trying and difficult than during cold, winter months† (Winther, 72). With that in mind, steamboats could not function or operate when the canals were frozen over. These difficulties were all contributing factors in the expansion of the railroad industry. With railroads quickly becoming the preferred method of travel, the demand began to rise and railroads were being built in high numbers in order to accommodate the increasing demand. The more railroads that were available meant more and more industries could use them to transport goods. There was better communication between the east and west, and people could also use the railroads to travel throughout the states. And it was there that railroads began to have a significant impact on the development and expansion of American society. At the peak of expansion in the 1800’s, communication between the east and west was at the forefront of importance. A document from the State of Pennsylvania regarding railways in 1825 remarked that there is extreme â€Å"importance and necessity of effecting a communication between the eastern and western divisions of the commonwealth† (Wade, 5). The appearance of the railroads in the early 19th century decreased and nearly diminished the communication gap as it provided a reliable and speedy method of communication. As the railroads became more prominent across the United States, the western states naturally became linked to the Midwestern and eastern states through the Union Pacific Railroad. This railroad running from the east coast to the west coast opened up new doors in trans-continental communication. Businesses between the east and the west were able to communicate more effectively, and thus, trans-continental trade became more defined throughout the United States. The mail services began using railroads as well, which was a large factor in improving communication across the US. Trans-continental communication was broadened simply by the increased number of people traveling across the country. And, even when the railroads seemed an impractical method of transportation, â€Å"they might make possible long lines of communication otherwise impracticable† (Haney, 183). So, railroads played an important role in broadening communication between the east and the west. Another factor that was directly benefited from the widespread use of railroads was the transportation of goods between the states. Before the rise of railroads, interstate trade was limited. Most goods were transported by way of boat, which was a slow, expensive transportation method limited to the water, or by wagons. Also, the types of goods that were transported were limited as well. Perishable items, which were potential victims to bacteria and spoilage, could not be preserved on boats, and therefore could not be traded throughout the states. These were inefficient methods of the transportation of goods. On the other hand, railroads allowed for better inter-continental trade. The rail cars themselves could carry heavier loads of goods at higher speeds than boats or wagons, which made them extremely efficient methods for trade. Furthermore, goods transported on railroads faced a lower risk of damage or breakage than by boats because land travel is much more uniform in motion than water travel. Oppositely, canals posed a high risk of damage to the transported goods: â€Å"much damage has been received by goods from the roughness of the water† (Wade, 41). With regards to perishable goods, the railroads offered safer traveling conditions by eliminating the bacteria produced by stagnant water as well as dust particles. Some rail cars even served as â€Å"refrigerators†, so meat could be transported across the country. Of course, the tremendous speed of the railroads contributed to their efficiency in the transportation of goods. Along with communication and trade, the railroads made a significant change in the overall cost of transportation. First, railroads could be constructed across the country at one-third of the expense to build a single canal. This was primarily due to the on land construction, which took one-third of the time to build than canals, so workers were not being paid for such an extended period of time (Wade, 6). The railroads offered greater promise in making more money because they could be used for every season, all year long. The costs decreased even after the construction of railroads. The tolls on canals were expensive while the tolls on railroads were only one-third the cost per ton of that of canals. Also, railroads were preserved and repaired more easily than canals. While the cost to repair canals was extremely expensive, railroads were repaired at one-third the cost. When repairs were needed there was no delay for the passengers or the goods because it was quite customary to transfer from one rail station to another (Wade, 35). The decreased costs to build and repair both contributed to the lower rates of travel for the passengers. Railroad rates were based on cost, determined by weight, distance, and grade, not on profit. These decreased costs were important in promoting the railway industry because they offered such affordable means of traveling for their passengers. Overall, the rise of railroads across the United States in the 1800’s led to great benefits in communication, the transport of goods, and the overall decrease in cost of transportation. These factors all played important roles in the expansion of America. Breakthroughs in communication and trade led to the rise of major cities and industries. The low rates offered by the railways allowed affordable means of transportation for all people, which brought more and more settlers westward. Oscar Winther relates that â€Å"the building of these western railroads had been in a very real sense frontier enterprises; they were, by and large, gigantic thrusts into and across the heretofore unsettled domain† (Winther 116). It was, in fact, the railroads that led to the ultimate expansion of the American frontier.

Contingent Liabilities Essay Example | Topics and Well Written Essays - 750 words

Contingent Liabilities - Essay Example From this definition, it can be viewed from two aspects. The first aspect of the definition of provisions describe that the provisions are actually the liability. Provisions are directly referred to as the liabilities of the business but not the usual and general liabilities which are recognized in the balance sheet of the business. Provisions are the special type of liability of the business that is described as another head in the capital and liabilities portion of the balance sheet. The other main feature described by the definition of the provisions is that it is a liability of uncertain amount and uncertain timing. It means that the provisions are not certain in terms of their amount and timing but their nature is known to the accountant. It is known that a certain expense of certain type is going to take place in the future but the exact amount and exact time of the expense is not known to the accountant of the business. Therefore, provisions are the best estimates of the expenses that are going to take place in the future. Liability is defined in the International Accounting Standards as the present obligation as a result of past events and the settlement of which is expected to result in an outflow of resources. This definition of liabilities also describes the nature and the expected outcome of the liability on the overall business. Hence, a liability is a present obligation which has arisen due to the result of past events and in order to settle that obligation it is probable that the outflow of resources will happen in the near future. Hence the provision is the preparation of the liability whose amount and timing is uncertain but there is surety that the liability will arise at some point in time sooner or later in the future. The concept of provisions provide the accountants with a cushion time to get themselves prepared for the issues that are to rise in the future and therefore, save money for the settlement of future liabilities in the present time. The main point in the provisions is that it is the best estimate of the future amount in present time. IAS 37 recognizes the problem of provisions in accounting and provides a rule to recognize the provision s in the balance sheet. IAS 37 says that the provisions should be recognized by an entity if and only if: a present obligation (legal or constructive) has arisen as a result of a past event (the obligating event), payment is probable ('more likely than not'), and The amount can be estimated reliably. These are the rules which tell the entity when to recognize a provision in the balance sheet. Firstly an obligation has arisen as a result of past events and it is also probable that the payment is to be made for that obligation and the amount of the payment can be reliably measured. These rules are used in many countries of the world to recognize the provisions in the balance sheets of the businesses and are successful in addressing the problem of provision recognition in the balance sheet. Provisions provide the detailed information about liabilities facing the entity. Liabilities like trade creditors etc. provide the information about the liabilities of the business to be paid by the business and the amount and timing of which are certain at present. However, the presence of provisions in the entity's balance sheet prepares those responsible for decision making, to arrange and save the

Project management Case Study Example | Topics and Well Written Essays - 500 words - 3

Project management - Case Study Example The company is seeking to recruit a new project manager to lead the project. This paper has set the recommendations necessary and recommends the vice president to use the score model to come up with the best solution. ABS has in recent years acquired two companies, which are General Maritime Protection and the Western general insurance in Calgary. These two acquisitions positioned it as a major insurer in Canada. These companies function autonomously up to this date even after the merging of the three companies under a single legal entity. That is why an IT strategic plan was necessary which provided an IMSP, which could be shared by the HRM, financial management and sales and marketing management. The IMSP could lead the ABS Canada to solve these underlying problems. Vice president Jean Roberge felt that he needed a project manager to help him with the IMSP project. This project was an important one for the organization since it could enable the three companies solves their underlying problems. That is why an ideal project manager is important. Jean Roberge should come up with a checklist and then use the scoring model to select the ideal project manager (Kloppenborg, 2011). The first step involves him coming up with a list analyzing and indicating the purposes of the project and decides which ability is more important to realize the purpose of the project. He should consider IT technical ability and the negotiation abilities between the three companies should be considered. The next stage is for Jean Roberge to consider the most important aspects of each criterion with considerations of the project’s blueprint. He then finds all the candidates and scores them according to their scores. He is then supposed to use the scoring model to get the rightful candidate. He obtains this by multiplying the scores of the criterion with their corresponding weight. It is important that

Western Civilization Essay Example | Topics and Well Written Essays - 500 words - 5

Western Civilization - Essay Example The Lutherans, according to Alles & Ellwood (pp.270), believe that salvation of the human race comes from the grace of God. The same applies in the case of Calvinism, whose basics are of the belief that God’s grace is the final, and that He chooses who save unconditionally. Catholicism is also of the belief that through God’s grace, human beings are spared from destruction (Kielbasa & Singer-Towns,  pp.7). The three religions also hold the view that there is life after death. More so, the believers of the word are bound to have an eternal life that is rewarding. In this context, therefore, these religions advocate for building a lasting rapport between the followers of the religion and God. On the contrary, Lutheranism does not advocate for total reliance on the church. Though Lutheranism has churches and ministers of the word, this religion is of the opinion that the church need not be there for the individuals to develop a relationship with God. Both Calvinism and Catholicism believe in the church and the need to have total discipline whilst in the house of the Lord. Catholics, for instance require their members to attend mass on the Lord’s Day to celebrate the resurrection of Christ (Kielbasa & Singer-Towns,  pp.8). Lutheranism believes that it is only God who can save. Lutherans have the permit to pray to God directly, without confessions to a person. Catholics believe that the pope has some form of powers on the lives of the individuals. Through these persons- the pope and saints- the followers hold the view that God will pardon their sins. They also believe in confession of sins and praying on behalf of ‘pure’ persons (Kielbasa & Singer-Towns,  pp.8). The same would apply in the case of Calvinism, which believes that specific persons have been called to save the others from sin. From a critical view of the beliefs of the religion, the differences are more than the similarities. The concept of

Puzzles Essay Example | Topics and Well Written Essays - 500 words

Puzzles - Essay Example elieved that Pythagoras used anagrams to determine philosophical meanings, while Plato believed that anagrams revealed divinity and destiny (Anagrams FAQ). The Romans believed that anagrams actually had mystical and prophetic meanings (Wikipedia). In spite of their popularity in ancient times, anagrams seemed to disappear until the middle ages when Jewish mystics called Cabbalists believed that reciting letters from the Hebrew alphabet in various orders could work miracles and create humans from dust (Sydney Morning Herald). In 17th Century France, Louis the XIII appointed a Royal Anagrammist to whom he paid a reportedly exorbitant salary. By 1988, the first stand-alone anagram generating software was produced underscoring a fascination with this puzzle form that has existed for several thousand years. (Sydney Morning Herald). Throughout history, anagrams have gone in and out of popularity, and they have been used in several applications in addition to providing entertainment for puzzle solvers. Authors have used anagrams of their own names to create pseudonyms for their writing. Writers have also been known to use anagrams of actual people as the names of unpleasant characters. In addition to literature, anagrams have appeared in song lyrics. Jim Morrison used an anagram of his own name, â€Å"Mr. Mojo Risin† in the song â€Å"L.A. Woman.† Other songwriters have used anagrams for titles of songs of for band names. Galileo and other scientists used anagrams to protect their discoveries from being claimed by others. Cryptic crossword puzzles use anagrams as clues to add another dimension to crossword puzzles. (Wikipedia). Before the advent of computers, anagrams were created using pen and paper or letter tiles. Individual words have been anagrammed as well as entire sentences. With the creation of computer programs for anagramming, not only are there more possibilities for the numbers and kinds of anagrams that can be created, but also the games that can be played

Correlations In research Essay Example | Topics and Well Written Essays - 500 words - 1

Correlations In research - Essay Example Depending on the type of the research, the data are later analyzed to draw out provable conclusions. For instance, a research can focus on climate and its effect on agriculture. From the relationship between agricultural productivity and climate, variables can be identified to aid in the process of information collection. In the long run, a relevant hypothesis is then formulated which will be rejected or accepted depending on the outcome of the research. The favorability of climate is inversely proportional to the quality of agricultural productivity in an area. In proving such a hypothesis, some of the most common working definitions are thus listed herein. I. Good climate - a good climate is one which fosters the production of agricultural products. Farming heavily relies on the pattern of rainfall. However, excessive rainfall destroys the crops in the field. The most conducive rainfall pattern, therefore, is one in which it rains moderately. A moderate rainfall is between twenty to sixty millimeters per day. According to this research, a good climate is therefore measured in terms of the volume of rainfall an area receives in a week. An unfavorable climate is characterized by below ten millimeters of rainfall a day. II. Research productivity-The number of researches carried out in an area defines its productivity in terms of contributing to human development. In this context, the productivity is compared on the number of researches that are produced in the region within a period of one year. A bad productivity infers zero to twenty cases within a year. On the other hand, good productivity refers to the production of fifty to one hundred researches per year (Sharon and Anthony 66). Operational definitions make it possible for computation of research variables. Furthermore, the definitions of the conflicting factors make it easier for one to carry an effective research on the issues. The goodness of climate is defined in a manner that enables