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ACCT 3123 F '22 Semester Project. Both parts of this project are weighted equally; see syllabus for total credit weight (might be 10% of course grade). You must submit your answers for both parts of this project to me in class (or my office) on Tues. November 22; no emailed submissions will be accepted, and late stuff will be significantly marked-down. I expect that each of you shall submit your own work. Part A. This part is an Excel project, but I don't want your Excel file; I just want a print-out of it, as discussed below. Also, you will need to turn in these 2 pages with answers added in the spaces provided. Preemptive Co. owns 80% of Strike Co. common voting shares (both are 'public companies'). On 1/1/A, S issues $100,000 of 10 -year 4% bonds, issued to yield 3%; the bond date is 1/1/A (thus coupon payments occur each 12/31). P purchases 80 of the bonds on 12/31/E to provide S with some sympathetic relief; the other bondholders, a particularly surly lot, refuse to sell. Assume that the market interest rate has skyrocketed due to Fed intervention, permitting P to buy the 80 bonds at the bargain price of $67,223.33. For credit, you must provide the following: 1. Provide (attach) a printout of your Excel amortization table for the interfirm bonds from the point of view of S Co. from 12/31/E to maturity. You must use the interest method of amortization and the table format I used in class in section 8. 2. Provide (attach) a printout of your Excel amortization table for the interfirm bonds from the point of view of PCo. from 12/31/E to maturity. This table should be on the same worksheet as the table you prepare for item \#1 above; that is, both tables should be on the same Excel worksheet. You must use the interest method of amortization and the table format I used in class (section 8). [Hint: you must figure out the market rate of interest on the repurchase date first.] 3. Calculate the Gain/Loss on Constructive Retirement that 'Preemptive Strike' will report on their Consolidated Income Statement; show that it is the difference between S's 12/31/E bond net book value and P's 12/31/E repurchase price in the tables above. These should be the first 2 numbers in your amortization tables. This amount is 4. The above amount is a constructive gain / loss (circle which). 5. Calculate total interest expense for the years following the repurchase (just total the interest column in S's amortization table); this amount is 6. Calculate total interest revenue for the years following the repurchase (just total the interest column in P's amortization table); this amount is 7. Calculate the difference between \#5 and \#6 above, and show that it is the same as the answer to \#3 above; this difference is 8. Calculate the interest elimination amount for year G : 9. The above elimination amount is a gain / loss (circle which). 10. In the space below, provide P's 12/31/ H workpaper entry to eliminate the intercompany bond accounts. Your answer to item \#7 above must be in your own personal actual human handwriting (not a copy). Note: all of the above requirements only concern the 80 bonds purchased by P. Part B. This part of the project is a printout of a typed memo addressed to me. Believe it or not, 1 when P submits consolidated financial statements to the SEC, P must include an allocation of total goodwill to the reporting unit(s) of the company; subsequent to initial recognition, goodwill is assessed for impairment at the reporting unit level. So, what is a reporting unit? And, very briefly (one or two sentences), how would P calculate the allocation of total goodwill to these units? You must answer this question by writing a 1- or 2-paragraph memo addressed to me (assume I am your client, and I am deeply concerned that my reporting of amounts is incorrect). You must attach (to the memo) a cite (copy \& paste actual paragraphs from financial accounting pronouncements you find on the FASB.org website) of the specific guidance that supports your position [assuming you can find any. Go to FASB.org/home and click on 'advanced search' near the little window in the upper right-hand portion of the home page. Check the following search targets only: standards and include documents. Then put some key words in the little window on the page \& get ready for some exciting reading.] If you can't find anything helpful at FASB.org, search the web to see if there is authoritative guidance from another source. Your answer to this part must be a hardcopy printout. Be sure to reference the source of your support (e.g. an 'ASU' and Topic number). "I def advise you to believe. ACCT 3123 F '22 Semester Project. Both parts of this project are weighted equally; see syllabus for total credit weight (might be 10% of course grade). You must submit your answers for both parts of this project to me in class (or my office) on Tues. November 22; no emailed submissions will be accepted, and late stuff will be significantly marked-down. I expect that each of you shall submit your own work. Part A. This part is an Excel project, but I don't want your Excel file; I just want a print-out of it, as discussed below. Also, you will need to turn in these 2 pages with answers added in the spaces provided. Preemptive Co. owns 80% of Strike Co. common voting shares (both are 'public companies'). On 1/1/A, S issues $100,000 of 10 -year 4% bonds, issued to yield 3%; the bond date is 1/1/A (thus coupon payments occur each 12/31). P purchases 80 of the bonds on 12/31/E to provide S with some sympathetic relief; the other bondholders, a particularly surly lot, refuse to sell. Assume that the market interest rate has skyrocketed due to Fed intervention, permitting P to buy the 80 bonds at the bargain price of $67,223.33. For credit, you must provide the following: 1. Provide (attach) a printout of your Excel amortization table for the interfirm bonds from the point of view of S Co. from 12/31/E to maturity. You must use the interest method of amortization and the table format I used in class in section 8. 2. Provide (attach) a printout of your Excel amortization table for the interfirm bonds from the point of view of PCo. from 12/31/E to maturity. This table should be on the same worksheet as the table you prepare for item \#1 above; that is, both tables should be on the same Excel worksheet. You must use the interest method of amortization and the table format I used in class (section 8). [Hint: you must figure out the market rate of interest on the repurchase date first.] 3. Calculate the Gain/Loss on Constructive Retirement that 'Preemptive Strike' will report on their Consolidated Income Statement; show that it is the difference between S's 12/31/E bond net book value and P's 12/31/E repurchase price in the tables above. These should be the first 2 numbers in your amortization tables. This amount is 4. The above amount is a constructive gain / loss (circle which). 5. Calculate total interest expense for the years following the repurchase (just total the interest column in S's amortization table); this amount is 6. Calculate total interest revenue for the years following the repurchase (just total the interest column in P's amortization table); this amount is 7. Calculate the difference between \#5 and \#6 above, and show that it is the same as the answer to \#3 above; this difference is 8. Calculate the interest elimination amount for year G : 9. The above elimination amount is a gain / loss (circle which). 10. In the space below, provide P's 12/31/ H workpaper entry to eliminate the intercompany bond accounts. Your answer to item \#7 above must be in your own personal actual human handwriting (not a copy). Note: all of the above requirements only concern the 80 bonds purchased by P. Part B. This part of the project is a printout of a typed memo addressed to me. Believe it or not, 1 when P submits consolidated financial statements to the SEC, P must include an allocation of total goodwill to the reporting unit(s) of the company; subsequent to initial recognition, goodwill is assessed for impairment at the reporting unit level. So, what is a reporting unit? And, very briefly (one or two sentences), how would P calculate the allocation of total goodwill to these units? You must answer this question by writing a 1- or 2-paragraph memo addressed to me (assume I am your client, and I am deeply concerned that my reporting of amounts is incorrect). You must attach (to the memo) a cite (copy \& paste actual paragraphs from financial accounting pronouncements you find on the FASB.org website) of the specific guidance that supports your position [assuming you can find any. Go to FASB.org/home and click on 'advanced search' near the little window in the upper right-hand portion of the home page. Check the following search targets only: standards and include documents. Then put some key words in the little window on the page \& get ready for some exciting reading.] If you can't find anything helpful at FASB.org, search the web to see if there is authoritative guidance from another source. Your answer to this part must be a hardcopy printout. Be sure to reference the source of your support (e.g. an 'ASU' and Topic number). "I def advise you to believe

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