Question: On January 1, 2020, Eddy Corporation had

> What financing alternatives would be available to a U.S. firm that was interested in investing in a proposed manufacturing plant in a small country that recently left the communist bloc and did not wish to invest many of its own resources?

> Susan Currie is a U.S. manufacturer of tear gas, which she sells to various governments for crowd control. To reduce transportation costs to the interested governments, Ms. Currie is considering building a new plant in Germany. The plant will employ 2,50

> List three reasons why giving employees equity shares in the new private entity makes sense. Give a reason that is principally applicable in Eastern Europe. What are two disadvantages associated with transferring shares to employees? What are two types o

> Would a U.S. court override an employer’s contractual rights (as the Supreme Court of Japan did) because of a countervailing “socially accepted view”? What if the employment contract was between a drug lord and his “trigger man”? Do you think that the re

> Assume the same facts as in Question 1, except that the joint venture is to build and operate a computer microcircuit manufacturing plant. What different considerations come into play in government review? What is the likely outcome?

> Keefe Energy, Inc., a U.S. firm, enters into a joint venture with Energia Guerra, S.A., a Mexican firm, to build and operate a coal-fired electric-power-generating plant with an estimated useful life of 35 years. The building and land will be owned by G/

> Plaintiff, a Swiss corporation, entered into contracts to purchase chicken from B.N.S. International Sales Corporation. Defendant was a New York corporation. The English language contracts called for the delivery of “chicken” of various weights. When the

> Pro Golf, a U.S. company, manufactured and sold golf equipment under the brand name “First Flight,” which had been registered in the United States and certain other foreign countries. Pro Golf negotiated with Wynn to act as its foreign sales representati

> International business managers try to build trust with their foreign counterparts, whether it is a customer, supplier, or partner. How would you suggest they do this? Why is trust important to the long-term relationship, and what might it mean to managi

> How does international business differ from domestic business? Explain how those differences affect the risk of doing business internationally. What factors influence that risk?

> Students often confuse the International Court of Justice with the International Criminal Court. What is the difference between them? Although not covered in this chapter, what is the European Court of Justice and what is its jurisdiction?

> Describe the five theories of international criminal jurisdiction. How have these been made applicable to international terrorism? What types of crimes are covered under the principle of universality? From an international law perspective, do you think t

> What are the different forms of criminality that are of concern to international businesses? Explain why international solutions are important. Give some examples

> Briefly describe the trade sale model of privatization. What is the distinguishing feature of the trade sale? How is privatization achieved through management contracts?

> Describe the different functions of the ITA and the ITC in regulating import competition. Why do you think that Congress split their respective functions into two separate agencies?

> Discuss the social responsibility of a Canadian or U.S. manager working in Mexico. If a certain course of action is illegal in the manager’s own country but lawful and accepted in Mexico, which standard should the manager follow? Describe the social resp

> What is a rule of origin? Why is it important to the operation of a free trade area?

> Geyer Schokolade, A.G. makes the bonbon of choice for the German yuppie. Its product’s cachet permits Geyer to charge a hefty premium at home. Geyer expands into the U.S. market, where no one has heard of its bonbons, and charges a more reasonable price

> Laffite Enterprises, Inc., a U.S. firm, has purchased the right to use the trademark of Wellington Imperial, Ltd., in the United States for a high-quality line of Napoleonic War reproductions. Wellington has a cheap line of Napoleonic trinkets that it se

> Analyze the same issues raised in Question 4, but assume Mr. Wise is considering entry into a “prior-approval” country.

> Mr. Wise’s marketing experts advise him that the Japanese market is hungry for his shoes. Focusing on technology transfer issues, discuss whether he should seek a Japanese joint venture partner or enter through a wholly owned subsidiary.

> David Wise, a U.S. inventor, has developed and patented a revolutionary new running shoe that increases one’s speed significantly. His invention has achieved considerable success in the Midwestern region of the United States. Two European companies have

> Assuming the facts from Question 1, what would be the advantages and disadvantages of a joint venture with a major foreign company abroad compared to the alternatives discussed in Question 1? Data from Question 1: Hirt Systems Company is a U.S. company

> Hirt Systems Company is a U.S. company that has a strong market in the United States for securing computer terminals. It envelops such terminals with lead to prevent them from emitting microwaves that can be picked up by “spy receivers.” The key to Hirt’

> Briefly describe the partial sale model of privatization. What is the predominant characteristic of the partial sale? How can a minority private investor try to protect itself from abuse by the majority government owner?

> Assume that Joseph retained Srta. Casañas but failed to obtain the contract. To Joseph’s chagrin, it subsequently learns that Srta. Casañas y Diaz used part of her fee to make a $10,000 payment to a government official. If Joseph has total assets of $5 b

> Using the facts in Question 5, assume that a reference check has uncovered rumors that Srta. Casañas y Diaz has had an intimate relationship with Platano’s assistant secretary for government procurement, although they have no plans for a more permanent r

> Joseph Supersonic Company, a U.S. jet fighter manufacturer, is eager to sell its aircraft to the state-owned airline of the Republic of Platano and wishes to retain a local representative to assist it. Maria de la Concepcion Casañas y Diaz is reputed to

> Borges Meat Marketing, Inc., a Nebraska corporation, wishes to establish a network of gourmet butcher shops in India. It has a well-developed introductory advertising campaign that it has employed in establishing similar butcher shops in the United State

> Jordan Motors, Inc., opens a dealership in Frankfurt, West Germany, selling American cars. In its advertising campaign, Jordan claims that for the next two weeks only, it will beat the price on any comparable German car by 1,000 euros. Faced with this th

> After conducting a market survey, Penton Intergalactic, Ltd., a manufacturer of plows, believes that there is pent-up demand for its product in the expanding agricultural economy of Paraguay. Penton retains Saul Ortiz, a Paraguayan who operates a substan

> Suppose that Roger Sobodka, a U.S. executive stationed in Paris, wishes to build a support office for his firm’s technicians in the Parisian suburb of Asnieres. He enters into an agreement with Francois Demblans, a homebuilder, to do the work for $100,00

> How do a directive, a regulation, and a recommendation differ? Why would the EU choose one over the other? Give examples. What impact does this decision have on businesses?

> The EU sought a declaration that, because of the way in which long-standing Italian law permitted extrajudicial debt recovery by creditors against entities established in other member states, Italy had failed to fulfill its treaty obligations. The EU had

> Following the discovery of a probable link between a variant of Creutzfeldt–Jakob disease, a disease affecting human beings, and bovine spongiform encephalopathy (BSE), which was widespread in the United Kingdom in the mid-1990s, the Commission adopted D

> Is privatization a recent phenomenon? Why has it become more prominent in recent years? What triggered the move to more privatization in Latin American countries? What triggered increased privatization in former communist nations?

> What is the present status of Brexit? What effect has Brexit had on the United Kingdom and the EU? Are there other member states considering departing from the EU? What states and what reasons have been given for taking such action?

> Deutsche Parkinson Vereinigung (DPV) is a German organization devoted to improving the lives of those afflicted with Parkinson’s disease. DPV entered into a relationship with DocMorris, a mail order pharmacy located in the Netherlands, whereby DPV member

> Italy required chocolate products manufactured in other member states that contained vegetable fats other than cocoa butter to be sold in Italy as “chocolate substitutes.” The Commission claimed that Italy had failed to fulfill its obligation under Artic

> Rewe, a limited liability company with an office in Germany, imported goods from the EU countries. In 1976, Rewe applied to a German agency for permission to import Cassis de Dijon. The agency responded that spirits needed to contain 32 percent alcohol t

> How does the function of a NAFTA arbitral panel differ from that of a binational panel? What is the standard of review in binational panel decisions? Describe the role of an extraordinary challenge committee. Why does NAFTA recommend that panelists on bi

> Your company distills Kentucky bourbon. A Canadian competitor is selling “Kentucky bourbon” in Ontario, but its bourbon is made in Canada. Canada’s liquor control agency has looked the other way and ignored your requests to enjoin the sale. Does the sale

> Your company produces “Big Duster” tires. Your most popular styles are the ones with the raised white lettering on the outside of the tire. You would like to export tires to Mexico but cannot pass the Mexican labeling and marking requirements. Among the

> What is a “deemed export”? How can this affect technology companies and research institutions in the United States? Find a university’s deemed export policy. What does it cover?

> Consider a study of doing business in Mexico. How do the economic, cultural, social, and political climates affect a business there? Describe Mexico’s form of government. How are business relations conducted there? Are they more or less formal than in ot

> What is the present status of NAFTA in light of the Trump administration’s threats to renegotiate or abandon the agreement or impose significant tariffs on goods originating from Mexico? What are the pros and cons of these approaches? Who are the parties

> Maria Hartman, a U.S. investor, owns a toy assembly plant in the Kingdom of Fromage Vert. At a tennis match between a leading U.S. player and a star Fromagian, Maria irritates the king by cheering for the American. The next day, the king issues an edict

> The Slobovian Confederation’s five producers control 95 percent of the world’s supply of “goom,” the key ingredient in the production of goomey bears. To maximize the Slobovian standard of living, the government passed a law creating a cartel among the f

> Newland Company reported retained earnings at December 31, 2019, of $310,000. Newland had 200,000 shares of common stock outstanding at the beginning of 2020. The following transactions occurred during 2020. 1. A cash dividend of $0.50 per share was decl

> Before preparing financial statements for the current year, the chief accountant for Toso Company discovered the following errors in the accounts. 1. The declaration and payment of $50,000 cash dividend was recorded as a debit to Interest Expense $50,000

> On January 1, 2020, the stockholders’ equity section of Newlin Corporation shows common stock ($5 par value) $1,500,000; paid-in capital in excess of par $1,000,000; and retained earnings $1,200,000. During the year, the following treasury stock transact

> B. Higgins, J. Mayo, and N. Rice have capital balances of $95,000, $75,000, and $60,000, respectively. They share income or loss on a 5:3:2 basis. Rice withdraws from the partnership under each of the following conditions. 1. Rice is paid $64,000 in cash

> Data for Sedgwick Company are presented in E12.8. Sedgwick Company now decides to liquidate the partnership. Instructions Prepare the entries to record: a. The sale of noncash assets. b. The allocation of the gain or loss on realization to the partners.

> Sedgwick Company at December 31 has cash $20,000, noncash assets $100,000, liabilities $55,000, and the following capital balances: Floyd $45,000 and DeWitt $20,000. The firm is liquidated, and $105,000 in cash is received for the noncash assets. Floyd a

> Terry, Nick, and Frank are forming The Doctor Partnership. Terry is transferring $30,000 of personal cash and equipment worth $25,000 to the partnership. Nick owns land worth $28,000 and a small building worth $75,000, which he transfers to the partnersh

> For National Co., beginning capital balances on January 1, 2020, are Nancy Payne $20,000 and Ann Dody $18,000. During the year, drawings were Payne $8,000 and Dody $5,000. Net income was $40,000, and the partners share income equally. Instructions a. Pr

> Coburn (beginning capital, $60,000) and Webb (beginning capital $90,000) are partners. During 2020, the partnership earned net income of $80,000, and Coburn made drawings of $18,000 while Webb made drawings of $24,000. Instructions a. Assume the partner

> Indicate whether each of the following statements is true or false. If false, indicate how to correct the statement. ________ 1. Each partner is personally and individually liable for all partnership liabilities. ________ 2. If a partnership dissolves, e

> On January 1, 2020, Vahsholtz Corporation purchased 5,000 shares of treasury stock. Other information regarding Vahsholtz Corporation is provided as follows. (a) Compute earnings per share for each year and (b) discuss its change from 2019 to 2020.

> On January 1, 2020, Vahsholtz Corporation purchased 5,000 shares of treasury stock. Other information regarding Vahsholtz Corporation is provided as follows. (a) Compute return on common stockholders’ equity for each year, and (b) dis

> Hoyle Corporation has issued 100,000 shares of $5 par value common stock. It authorized 500,000 shares. The paid-in capital in excess of par on the common stock is $263,000. The corporation has reacquired 7,000 shares at a cost of $46,000 and is currentl

> Frontenac Company reported net income of $75,000. The partnership agreement provides for salaries of $25,000 to Miley and $18,000 to Guthrie. They divide the remainder 40% to Miley and 60% to Guthrie. Miley asks your help to divide the net income between

> The partners of LR Company have decided to liquidate their business. Noncash assets were sold for $125,000. The income ratios of the partners Cisneros, Gunselman, and Forren are 3:2:3, respectively. Complete the following schedule of cash payments for LR

> PFW Co. reports net income of $45,000. Partner salary allowances are Pitts $15,000, Filbert $5,000, and Witten $5,000. Indicate the division of net income to each partner, assuming the income ratio is 50:30:20, respectively.

> Rod Dall Co. reports net income of $75,000. The income ratios are Rod 60% and Dall 40%. Indicate the division of net income to each partner, and prepare the entry to distribute the net income.

> Penner and Torres decide to merge their proprietorships into a partnership called Pentor Company. The balance sheet of Torres Co. shows: The partners agree that the net realizable value of the receivables is $14,500 and that the fair value of the equip

> Barbara Ripley and Fred Nichols decide to organize the ALL-Star partnership. Ripley invests $15,000 cash, and Nichols contributes $10,000 cash and equipment having a book value of $3,500. Prepare the entry to record Nichols’s investment in the partnershi

> Income and common stock data for Ziegler Corporation are presented in BE14.8. Assume also that Ziegler has cumulative preferred stock dividends for the current year of $30,000 that were declared and paid. Compute the earnings per share of common stock.

> Ziegler Corporation reports net income of $380,000 and a weighted-average of 200,000 shares of common stock outstanding for the year. Compute the earnings per share of common stock.

> Financial Statement The following information is available for Reinsch Corporation for the year ended December 31, 2020: cost of goods sold $205,000, sales revenue $350,000, other revenues and gains $50,000, and operating expenses $75,000. Assuming a cor

> SUPERVALU, one of the largest grocery retailers in the United States, is headquartered in Minneapolis. Suppose the following financial information (in millions) was taken from the company’s 2020 annual report: net sales $40,597, net income $393, beginnin

> For the year ending December 31, 2020, Soto Inc. reports net income $170,000 and cash dividends $85,000. Determine the balance in retained earnings at December 31, assuming the balance in retained earnings on January 1, 2020, was $220,000.

> The stockholders’ equity section of Pretzer Corporation consists of common stock ($10 par) $2,000,000 and retained earnings $500,000. A 10% stock dividend (20,000 shares) is declared when the market price per share is $14. Show the before-and-after eff e

> Lance Kosinski and Matt Morrisen are considering a business venture. They ask you to explain the advantages and disadvantages of the partnership form of organization.

> Langley Corporation has 50,000 shares of $10 par value common stock outstanding. It declares a 15% stock dividend on December 1 when the market price per share is $16. The dividend shares are issued on December 31. Prepare the entries for the declaration

> M. Bot Corporation has 10,000 shares of 8%, $100 par value, cumulative preferred stock outstanding at December 31, 2020. No dividends were declared in 2018 or 2019. If M. Bot wants to pay $375,000 of dividends in 2020, what amount of dividends will commo

> The balance sheet for Lauren Inc. shows the following: total paid-in capital and retained earnings $877,000, total stockholders’ equity $817,000, common stock issued 44,000 shares, and common stock outstanding 38,000 shares. Compute the book value per sh

> Greenwood Corporation has 80,000 shares of common stock outstanding. It declares a $1 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to reco

> Pine Corporation has the following accounts at December 31: Common Stock, $10 par, 5,000 shares issued, $50,000; Paid-in Capital in Excess of Par—Common Stock $30,000; Retained Earnings $45,000; and Treasury Stock, 500 shares, $11,000. Prepare the stockh

> On July 1, Raney Corporation purchases 500 shares of its $5 par value common stock for the treasury at a cash price of $9 per share. On September 1, it sells 300 shares of the treasury stock for cash at $11 per share. Journalize the two treasury stock tr

> Garb Inc. issues 5,000 shares of $100 par value preferred stock for cash at $130 per share. Journalize the issuance of the preferred stock.

> Lei Inc.’s $10 par value common stock is actively traded at a market price of $15 per share. Lei issues 5,000 shares to purchase land advertised for sale at $85,000. Journalize the issuance of the stock in acquiring the land.

> On June 1, Noonan Inc. issues 4,000 shares of no-par common stock at a cash price of $6 per share. Journalize the issuance of the shares assuming the stock has a stated value of $1 per share.

> On May 10, Jack Corporation issues 2,000 shares of $10 par value common stock for cash at $18 per share. Journalize the issuance of the stock.

> Fouts Corporation purchased 2,000 shares of its $10 par value common stock for $130,000 on August 1. It will hold these shares in the treasury until resold. On December 1, the corporation sold 1,200 shares of treasury stock for cash at $72 per share. Jou

> At December 31, Ortiz Corporation reports net income of $480,000. Prepare the entry to close net income.

> Angie Baden is studying for her accounting midterm examination. Identify for Angie the advantages and disadvantages of the corporate form of business organization.

> Data pertaining to Pelmar Co. are presented in BE12.9. Instead of payment from personal assets, assume that Fernetti receives $24,000 from partnership assets in withdrawing from the firm. Journalize the withdrawal of Fernetti.

> Capital balances in Pelmar Co. are Lango $40,000, Oslo $30,000, and Fernetti $20,000. Lango and Oslo each agree to pay Fernetti $12,000 from their personal assets. Lango and Oslo each receive 50% of Fernetti’s equity. The partners share income equally. J

> In Eastwood Co., capital balances are Irey $40,000 and Pedigo $50,000. The partners share income equally. Vernon is admitted to the firm with a 45% interest by an investment of cash of $58,000. Journalize the admission of Vernon.

> Gamma Co. capital balances are Barr $30,000, Croy $25,000, and Eubank $22,000. The partners share income equally. Tovar is admitted to the firm by purchasing one-half of Eubank’s interest for $13,000. Journalize the admission of Tovar to the partnership.

> After liquidating noncash assets and paying creditors, account balances in the Mann Co. are Cash $21,000; A, Capital (Cr.) $8,000; B, Capital (Cr.) $9,000; and C, Capital (Cr.) $4,000. The partners share income equally. Journalize the final distribution

> Nabb & Fry Co. reports net income of $31,000. Interest allowances are Nabb $7,000 and Fry $5,000, salary allowances are Nabb $15,000 and Fry $10,000, and the remainder is shared equally. Show the distribution of income.

> Gorton Corporation has 30,000 shares of $10 par value common stock outstanding when it announces a 2-for-1 stock split. Before the split, the stock had a market price of $120 per share. After the split, how many shares of stock will be outstanding? What

> Rich Mordica asks, “Since stock dividends don’t change anything, why declare them?” What is your answer to Rich?

> Beauty Island Corporation began operations on April 1 by issuing 60,000 shares of $5 par value common stock for cash at $13 per share. On April 19, it issued 2,000 shares of common stock to attorneys in settlement of their bill of $27,500 for organizatio

> Farley Inc. declares a $55,000 cash dividend on December 31, 2020. The required annual dividend on preferred stock is $10,000. Determine the allocation of the dividend to preferred and common stockholders assuming the preferred stock is cumulative and di

> a. Three dates are important in connection with cash dividends. Identify these dates, and explain their significance to the corporation and its stockholders. b. Identify the accounting entries that are made for a cash dividend and the date of each entry.

> Jan Kimler maintains that adequate cash is the only requirement for the declaration of a cash dividend. Is Jan correct? Explain.

> Emko Inc.’s common stock has a par value of $1, a book value of $24, and a current market price of $18. Explain why these amounts are all different.