I AM LOOKING FOR THE SOLUTION FOR NUMBER 5, 8, and 9

The following actionable items requires your analysis, decision and support

Situation: This is a normal end-of the-year management meeting (no external or internal auditors present) where you are about to discuss some accounting issues as they relate to your previously announced earnings guidance given to Analysts and Investors (hereafter referred to as the market) and your current end-of year financial situation. Specifically, six months ago you communicated to the market that your annual earnings per share (EPS) would be 80 cents. However; upon closing the books, it is obvious that you are short since after the preliminary unadjusted financial statements show 60 cents per share.This is an uncomfortable situation because not meeting the 80 cent EPS number will cause the stock price to decrease by at least 25 percent, something that you would like to avoid, if possible.

Analyze and critically evaluate each situation and develop an appropriate strategy using various accounting techniques, appropriate accounting standards, legal and ethical decision making, to reach the 80 cents based on the scenarios/discussion items below.

Complete a short reconciliation, which shows what adjustments you want to make. Please be careful in how you adjust the numbers as some items are already included in the 60 cents and some are not. Cents means cents per share. Current fiscal year means the year you are analyzing

Analyze each of the independent items and determine the change in accounting treatment, if any. Use a bullet point format and list each item followed by a detailed discussion about the issues, possible treatments and/or changes, and your decision.

1. ANAs warehouse in Bend, Oregon, has been damaged resulting from a blizzard. The snow was heavy and damaged the roof, but the facility is still usable. The repair cost is estimated to be 5 cents per share (included in the 60 cent number). However, the extent of the damage has yet to be decided with reasonable certainty. Also, due to condition of the original roof, you were planning to replace the roof in the next 24 months, regardless. The new roof will extend the use of the building by 10 years. Upon replacing the roof, depreciation expense will increase by 1 cent per year.

2. ANA Corporation is facing a crisis: one of their products, a diet food that is normally green, is turning brown. There are no other issues, i.e. no difference in flavor or safety. ANAs Controller has included a 6 cent write down related to the product problem based on all customers returning the product. About a third of the customers accepts the companys explanation and do not return the product unless ANA comes up with counter measures.

3. The company has embarked on a social media campaign to increase the awareness of non-GMO products. The cost this year amounts to 6 cents per share, which is included in the non-adjusted EPS number based on the conservatism principle. The program is expected to run for three years.

4. The company incurred unusually heavy maintenance of 4 cents, all of which was charged to the current year. While it is uncertain if this maintenance will prolong the life of the machinery, the senior engineer of the company feels that overall maintenance will be reduced by 1 cent per year over the next four years.

5. In the previous quarter, you purchased a competitor at a price that exceeded its market value. Most of the excess fair market value is related to a subsidiary in Mexico, which will be closed down

or sold. The closure will take some time due to contractual and union issues and the exact date of closing remains uncertain. The current year includes a write-off of 2 cents per share, equal to the cost of closing the Mexican operations, your largest competitor in that market.

6. ANA also purchased 100% of Canadian company by issuing 1 million shares to pay for the transaction. ANAs closing price before the announcement was $50 per share. Immediately after purchase (but agreed to in advance), ANA will sell back a small outsourcing business, which is a part of the Canadian company, to the original owners for $10 million. The current year includes an impairment charge relating to the acquisition of 5 cents a share based on the $50 per share transaction price.

7. ANA is in process of moving its European HQ from London (UK) to Amsterdam (Holland) at a cost of 6 cents per share, none of which is included in the 60 cent per share unadjusted number.

8. The company has a 4 cent per share unused general rainy-day fund that is currently unused. The

four cents were not used in the past year.

9. The company purchased a building and land on January 1 of the current fiscal year. The combined purchase price was $100 million, of which $80 million was allocated to the building. The company decides to depreciate the building over a 20-year period, or 4 cents per share per year. Independent appraisals range from $40 to $80 million for the building.

10. The company has an investment in Russia, which it accounts for using the cost method because the Russian partner has control over day-to-day operations via a management agreement. In the previous five years, the Russian company has generated 10 cents per share in revenue/dividend, 60 percent of belongs to ANA. Russia has some strict currency transfer restrictions so ANA historically recognized revenue when the cash is received. At the end of the year, none of the cash had been received but the Russian operation had a terrific year.

11. The company has certain short-term (2-year) contracts where it recognizes revenue at the end of the contract. This is due to warranty clauses existing in these contracts. Currently, if the company is able to split the revenue, it would have a positive 2 cent per share impact in the current fiscal year. How would the company be able to split the revenue recognition in such a way that the firm can show the 2 cents of earnings impact this year?

12. ANA purchased a UK company in the beginning of the current year. Upon doing additional due diligence, the internal auditors found that some inventory and equipment needed to be written off, totaling 4 cents. None of this was charged to the current quarter.