Question
Obtain Disney's 2016 Annual Report online.Review the financial statements and the notes to the financial statements. List the types of investments held by Disney (Available-for-sale,
Obtain Disney's 2016 Annual Report online.Review the financial statements and the notes to the financial statements.
- List the types of investments held by Disney (Available-for-sale, equity-method investees, subsidiaries).
2.Assume Disney has only one investee in which it holds 40% ownership.Based on the basic financial statements, how much was the investee's net income (loss) for 2016?
3.Assume Disney has a 25% owned investee and it intends to hold the investment indefinitely.Also assume that the investee distributed a total of $18M in dividends.What is the effect on Disney's balance sheet equation (indicate direction(increase, decrease, no effect) and $ amount)?
Assets LiabilitiesStockholder's Equity
- Prepare the journal entry to record Disneys's share of earnings for fiscal year 2016 of its investees over which it has significant influence.
- Disney entered into interest rate swaps and designated them as hedges.
- What type of swaps are they (variable-to-fixed, fixed-to-variable)?
- Disney designated these swaps as what kind of hedge?
- Are the hedges 100% effective?How do you know?
- What percentage of 2016 total assets represent net positions in hedged derivatives?
- Review Disney's revenue recognition policies
On March 1, 2017, Peach Construction Co. contracted to construct a factory building for Fabco Mfg. Inc. for a total contract price of $8M.The building was completed by Oct. 31, 2019.The annual contract costs incurred, estimated costs to complete, and accumulated billings are given below:
201720182019
Costs incurred
during the year $2,880,000 $2,230,000$3,890,000
Est. costs to
complete3,520,000 3,890,000-0-
Billings during the yr. 3,000,000 3,300,0001,700,000
Prepare year-end journal entries to record profit or loss on the project under the percentage of completion method for 2017, 2018, and 2019.
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