CHAPTER 4 Consolidation of Wholly Owned Subsidiaries Acquired at More than Book Value ANSWERS TO QUESTIONS Q4-1 The carrying value of the investment is reduced under equity method reporting when (a) a dividend is received from the investee‚ (b) a differential is amortized‚ (c) an impairment of goodwill occurs‚ and (d) the market value of the investment declines and is less than the carrying
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TUTORIAL 1 – BUSINESS COMBINATION SUBMISSION DATE: QUESTION 1 On 1 January 2014‚ Moon Bhd paid RM700‚000 cash‚ issued a three year 6% note payable with a face value of RM1‚500‚000 and 100‚000 ordinary shares with a par RM1.00 to acquire 70% interest in Star Bhd. Moon Bhd ordinary share has a market value of RM2.60 per share on that date. Moon Bhd also issued 18‚000 of its shares for other direct costs of the acquisition and total cost of registration for all the above ordinary shares was RM40
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1. What was the strategic rationale behind the merger of Mellon and Bank of New York? The main rationale for the merger is that it fits well with the strategies of both banks. Bank of New York and Mellon are both well-managed firms with specific strategies for growth that complement each other well. Although slightly different in their core functions‚ both banks are focused primarily on Asset Management and Securities Servicing; Mellon having a stronger market position in the former and BNY the
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* The short haul market is more fragmented with mary small players. * Direct competitive rivalry is fierce‚ e.g. Virgin has a website opposing the proposed strategic alliance between BA and AA- ‘No WAY BA/AA’ (Virgin Atlantic 2008) * Consolidation of competitors has increased competition Competitive Rivalry * BA caters for both long haul and short haul flights. Within
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Interview to Dow Jones Q. What is the biggest challenge facing Dow Jones in the next few years? A. To continue investing in new products and services that will strengthen our franchises‚ increase our competitiveness and produce new revenue flows in the future‚ while at the same time being careful in setting priorities‚ prudent in controlling costs‚ and committed to producing strong annual profits. Q. Who are the major competitors of Dow Jones? A. In the broadest
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STRATEGIC FINANCIAL MANAGEMENT CASE STUDY: “South Star Drug” South Star Drug is a chain of drugstores in the Philippines. It was established in 1937 as a small business venture engaged in the retail of Chinese herbal medicines‚ located in Naga City‚ Philippines. Today‚ South Star Drug‚ otherwise known as SSD‚ belongs to the top 1‚000 corporations of the Philippines. It has spread out its outlets with 143 branches in all found in various parts of Central Luzon‚ Southern Tagalog‚ Metro Manila and
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The Bourbon Reforms were a series of changes imposed by the Spanish Crown‚ Charles III and IV‚ upon their colonies in Latin America in the 1780s. The central goals of the reforms included centralizing Spanish government‚ restoring finances‚ and reorganizing the military. These innovations also aimed at limiting the power of the Catholic Church‚ imposing taxes‚ limiting powers of the Creole elite‚ and largely merging political and economic interests for the progress of Spain. The Bourbon reforms
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assembly of residential cooling systems (air conditioning units‚ etc.). There has been tremendous consolidation in RI’s industry‚ to the point where only five suppliers of this particular component account for nearly 90% of U.S. industry sales. Paralleling this trend‚ its customers - comprised of makers of branded residential air conditioning units like Carrier and Trane - have seen similar levels of consolidation in their own industry. Half of these firms produce all their components in-house‚ while
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the railroads the way we did? 2. In what kinds of ways did owners of railroads cheat the public? 3. How did completion of the transcontinental railroad impact American growth? 4. How did Carnegie revolutionize the steel Industry? How was his consolidation different from that of John D. Rockefeller’s? 5. What happened at the Homestead Strike (see Chapter 23 on this). How was Carnegie an exceptional “Robber Baron”? 6. Why did Labor Unions have difficulty organizing or winning strikes? Why were most
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distribution are available‚ once again it is important for the brand to enter into a consumer’s mental set of possible brands to purchase. The fact that there are no switching costs associated with pop . . . As already discussed‚ the trends towards consolidation of the grocery store industry and consumers increasingly seeking a one stop shopping experience is the largest threat to NBC. As well as being able to compete price-wise‚ National Beverage Corporation is also well equipped to produce quality beverages
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