ANSWER THE FOLLOWING QUESTIONS AFTER READING THE CASE OF 9.2 Cando Communications

Adopt the role of the company's accountant and analyze the financial reporting issues. CA9.2 Cando Communications (CC) is a public company that owns and operates 10 broadcast television stations and several specialty cable channels, 10 newspapers (including the International Post), and many other non-daily publications. It has a 57.6% economic interest in Australia TV (in Australia) and a 29.9% interest in Ulster TV (in Northern Ireland). According to the notes to the annual financial statements, the company owns approximately 15% of the shares and all the convertible and subordinated debentures of Australia TV. The convertible debentures are convertible into shares that would represent 50% of the company's total issued shares at the time of conversion. In total, including the debentures, the investment in Australia TV yields a distribution that is equivalent to 57.5% of all distributions paid by Australia TV. CC has a contractual right to be represented on the board of directors and has appointed three of the board's 12 members. Although the company has tried to influence the decisions made by Ulster TV management, it has been unsuccessful and does not have any representation on the board of directors. Investments represent approximately $150 million (about 5% of total assets). Even though revenues were up by 15%, net income was only $8 million for the year, down from $50 million the prior year. List three principal accounting issues that the firm must resolve. Call them Issues 1,2 and 3 . Refer to Issue 1 from your answer to question 3. List the alternative accounting policies that are available to resolve the issue. Use the editor to format your answer Question 5 Analyze the alternative accounting policies listed in question 4. Which, among these would you recommend? Justify your recommendation. Use the editor to format your answer Question 6 Refer to Issue 2 from your answer to question 3. List the alternative accounting policies that are available to resolve the issue. Use the editor to format your answer Analyze the alternative accounting policies listed in question 6 . Which, among these would you recommend? Justify your recommendation. Use the editor to format your answer Question 8 Refer to Issue 3 from your answer to question 3. List the alternative accounting policies that are available to resolve the issue. Use the editor to format your answer Question 9 Analyze the alternative accounting policies listed in question 8 . Which, among these would you recommend? Justify your recommendation. What are two restrictions that are in place on the accounting policies that Cando may follow? Use the editor to format your answer Question 11 What is the return on assets for Cando in the current year? Use the editor to format your answer Question 12 Cando owns all the convertible and subordinated debentures of Australia TV. Will this fact influence your analysis? How would your analysis be affected? Use the editor to format your answer What are two reasons for Cando investing in financial securities