Electronic Municipal Market Access (EMMA) provides investors and others interested in state and local government debt and financial information an excellent resource. By accessing EMMA, an individual is able to learn about what type of debt is outstanding for a government of interest, and he/she also is able to learn about the debt’s characteristics along with the financial performance of the entity. Access EMMA and use the Education and Browse Issuers sections to complete this case.

Required

Access the MSRB Education Center and go to the For Investors section to help answer the following questions:

1. What is an official statement, and what financial information is required in the official statement?
2. What are three factors to consider in assessing a bond’s default risk?

The GASB indicates that economic condition is composed of three components. Identify and define the three components of economic condition.

IFRS and U.S. GAAP follow similar approaches for accounting for taxation. Nevertheless, differences in reported amounts for deferred taxes are among the most frequent between IFRS and U.S. GAAP. Why?

On December 18, 2020, Stephanie Corporation obtained 100 percent of a Swiss company for 4.0 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2020, the book and fair values of the subsidiary’s assets and liabilities were as follows:

Stephanie prepares consolidated financial statements on December 31, 2020. By that date, the Swiss franc has appreciated to$1.10 = CHF 1. Because of the year-end holidays, no transactions took place prior to consolidation.

a. Determine the translation adjustment to be reported on Stephanie’s December 31, 2020, consolidated balance sheet, assuming that the Swiss franc is the Swiss subsidiary’s functional currency. What is the economic relevance of this translation adjustment?
b. Determine the remeasurement gain or loss to be reported in Stephanie’s 2020 consolidated net income, assuming that the U.S. dollar is the functional currency. What is the economic relevance of this remeasurement gain or loss?

You have been provided with the following information concerning operating activity for Annette County. For the year ended June 30, the net change in total governmental fund balances was $(289,200), and the change in net position of governmental activities was$(376,600). During the year, Annette issued $2,000,000 in general obligation bonds at a premium of 101. The bonds are to be used for a construction project. The county acquired$2,750,000 in capital assets and sold capital assets with a book value of $563,000 for$570,900. At the beginning of the period, accrued liabilities were $470,000 and at the end of the period, they totaled$494,000. Depreciation on capital assets totaled $595,000. Revenue accrued for the period but not available for use totaled$364,600.

Required

Using the information provided, prepare a reconciliation of the change in governmental fund balance to the change in net position of governmental activities.

Which of the following are major drivers of unethical strategies and business behavior?

a. The excessively strong profit motive that pervades the business community, the ethically corrupt nature of most businesspeople, a lack on the part of many companies to implement and enforce codes of ethical conduct, and the undue influence and power that billionaire businesspeople wield in both business and public affairs

b. Lax oversight by company boards of directors that enables the unscrupulous pursuit of personal gain, wealth, and other selfish interests, heavy pressures on company managers to meet or beat short-term performance targets, and a company culture that puts profitability and good business performance ahead of ethical behavior

c. The drive among most businesses to maximize profits and return on capital investment, the excessive bonuses and stock options that top executives can earn if company profits are excellent, and a widespread belief in the business community that ethical behavior is not necessary or even relevant

d. Lax government enforcement of ethical standards and ethical conduct, intense competitive pressures, and corrupt public officials (most of whom accept bribes to not prosecute businesspeople who engage in unethical behavior)

e. Intense competitive pressures, a lack on the part of many companies to implement and enforce codes of ethical conduct, the excessively strong profit motive that pervades the business community, and the obscenely high bonuses and stock options paid to top executives".

At the government-wide level, where are fiduciary funds reported?

a. In the Governmental Activities column.

b. In the Business-type Activities column.

c. As an internal balance in the total column.

d. Fiduciary funds are not reported at the government-wide level.

A "cash hog" type of business:

a. generates cash flows over and above its internal requirements.

b. is always a candidate for divestiture.

c. generates cash flows that are too small to fully fund its operations and growth.

d. generates cash flows exactly matching the demand for operations and growth.

e. has good resource fit with a cash cow business and is essential to a diversified company's lineup of businesses.

Which of the following is not among the important strategic issues associated with competing across national borders?

A. Whether to customize the company's offerings in each different country market to match the tastes and preferences of local buyers or to offer a mostly standardized product worldwide

B. When and how to efficiently transfer some of the company`s competitively powerful resources and capabilities from certain countries to other countries to raise the chances of successfully entering new country markets or to more effectively battle local rivals for sales and market share

C. Where to locate the company's production facilities, distribution centers, and customer service operations to realize the greatest location-related advantages

D. Which foreign country markets are the best candidates for becoming large and well-protected profit sanctuaries

D. Whether to employ essentially the same basic competitive strategy in all countries or modify the strategy country by country to better match local market and competitive conditions

Which of the following is not a potential benefit of collaborative strategies involving alliances and/or joint ventures with foreign partners?

A. Greater ability to capture scale economies in production and/or marketing--this is because by joining forces, collaborating companies can realize cost savings not achievable with their own small volumes.
B. The opportunity to learn from alliance partners and then implant the knowledge and know- how of these partners in a company's own personnel.
C. Increased ability to widen a company's geographic coverage and strengthen its competitiveness in foreign markets, while at the same time offering flexibility and giving a company some leeway in pursuing its own strategy and retaining some degree of operating control.
D. The ability to share distribution facilities and dealer networks, thus mutually strengthening each partner's access to buyers.
E. Greater ability to employ offensive strategies and build well-protected profit sanctuaries.

Which of the following events would generally be classified as nonoperating on an enterprise fund's statement of revenues, expenses, and changes in net position?

a. Billing other funds of the same government for services.

b. Loss on the sale of a piece of equipment.

c. Depreciation expense.

d. Administrative expense.

Which of the following is not a potential loss or return of a variable interest entity?

A. Entitles holder to residual profits.

B. Entitles holder to benefit from increases in asset fair value.

C. Entitles holder to receive shares of common stock.

D. If the variable interest entity cannot repay liabilities, honoring a debt guarantee will produce a loss.

E. If leased asset declines below the residual value, honoring the guarantee will produce a loss.

All of the following are examples of variable interests except:

A. Lease residual value guarantees.
B. Asset purchase options.
C. Stock options.
D. Participation rights.
E. Guarantees of debt.

Pride Corporation owns 80 percent of Simba Corporation's outstanding common stock. Simba, in turn, owns 10 percent of Pride's outstanding common stock.

Required

What percent of the dividends paid by Pride is reported as dividends declared in the consolidated retained earnings statement?