Alexia Tech Corporation Case Study

Hannah Williams
ACCT 411: 001
Professor Manyara
Research Project
05/09/2016
Research Questions
Chapter 1: Non-Controlling Interest
a) Protective non-controlling rights are provisions (by law or contract) that allow the noncontrolling (minority) shareholders to block corporate actions that may suppress their rights.
b) Substantive participating rights allow the noncontrolling shareholder to participate in determining certain financial and operating decisions in the ordinary course of business.
c) Substantive participating rights overcome the presumption that all majority-owned investees should be consolidated.
d) Zee should consider the following issues when determining whether it should consolidate Bee or report its investment in Bee under

The useful life of an intangible asset is the period over which the asset is expected to contribute to the future cash flows of the entity. Intangibles with a fixed useful are amortized. However, intangibles with indefinite useful lives are not amortized but are subject to impairment.
Other relevant factors include the legal or contractual provisions, the level of maintenance expenditures required to obtain future cash flows, and the effects of obsolescence. (para 11 SFAS 142)

c) Jonas Tech Corp’s suggested treatment of goodwill is unacceptable because the U.S. GAAP requires that goodwill acquired in a business combination is allocated to the reporting unit through which it was obtained. (U.S. GAAP Goodwill Allocation). Therefore, Jonas Tech should not combine the goodwill from all its acquired reporting units into one Enterprise Goodwill

d) Coca- cola revalued their equity interest in in CCE to the acquisition-date fair value. The company recognized, a gain of $4,978 million which was classified as Other Items in its Consolidated income statements.

General Electric (Statement of Cash Flows)
a) General Electric employs the indirect method of accounting for operating cash flows.
b) GE deducts the amount of increase in the balance sheet assets (accounts receivable, inventory) from the net profit amount to calculate the cash from (used for) operating activities. Conversely, it adds the amount of decrease in assets to the net profit to arrive at the cash from (used for) operating activities.
The amount of increase in liabilities (such as accounts payable) are added while decreases are subtracted from the net profit to calculate the cash from (used for) operating activities.
c) The cash paid for the business combination is shown in the investing activities section on the statement of cash flows.
d) GE did not have any Noncontrolling subsidiary interest or acquired in-process research and development cost. It would have recorded them in the investing section of the Statement of Cash