Reference no: EM132421284
CBS Company and Sam Inc. form a joint venture-CBS and Sam Partners-to manufacture and distribute agricultural pesticides. CBS and Sam each contribute $20 million cash and receive 50% of CBS's common stock. CBS then borrows $200 million from a consortium of banks and uses the money to build its manufacturing and distribution facilities. The loan is made on December 31, 2011, and is fully guaranteed by both CBS and Sam.
1. How much of the $200 million debt shows up on the December 31, 2011, balance sheet of CBS Company? Why? Would the same be true for Sam Inc.? Why or why not?
2. Which of the following qualifies as an eligible risk for hedge accounting?
a. Alliant Energy's risk that summer demand for electricity may exceed the company's power-generating capacity.
b. Ford Motor Company's risk that not enough steel will be available in six months when the company must purchase steel to produce a new sports utility vehicle.
c. The risk to American Express that its members won't pay their credit card bills.
d. The risk to Farmers' Cooperative that corn mold will destroy its inventory of corn held in silos for sale next year.
e. The possibility of changes in the exchange rate of U.S. dollars for Mexican pesos for Coca-Cola Company, which has a major foreign investment in Mexico.
What is the price of a 1-page, 4-color ad in the magazine
: What is the cost of a full page color ad in a Sunday edition? What is the Print Paid Circulation for the Sunday Edition?
|
Jourmalize the may transactions
: Set up the T accounts, enter the beginning balances in the general ledger at April 30, and post the May journal entries to the general ledger.
|
Computing coupon rate on bonds of kverneland group
: Kverneland Group has bonds on the market with 14.5 years to maturity, a yield to maturity of 6.1 percent, and a current price of 1,038kr.
|
Computing company net working capital
: The company had cash and marketable securities worth $1,236,622, accounts payables worth $4,160,670, inventory of $7,121,673
|
Eligible risk for hedge accounting
: Which of the following qualifies as an eligible risk for hedge accounting?
|
Adjusting journal entry for depreciation expense
: Determine the adjusting journal entry for depreciation expense in September of year two for the vehicle purchased for $30,000
|
MIS500 Information Systems Critical Analysis Assignment
: MIS500 Foundations of Information Systems - Information Systems Critical Analysis Assignment Help and Solution, Laureate International Universities, Australia
|
What is the value of one share of this stock to you today
: If you require an 18 percent rate of return on Scottish Equitable's stock, what is the value of one share of this stock to you today?
|
Operations involves large outflows of cash
: What related to the firm's expansion of its operations involves large outflows of cash? Identify the two largest items including the dollar values.
|