Chapter 16 Investments

CHAPTER 15 INVESTMENTS CONTENT ANALYSIS OF EXERCISES AND PROBLEMS Time Range (minutes) 10-15 10-15 10-15 15-20 15-20 10-15 Number E15-1 E15-2 E15-3 E15-4 E15-5 E15-6 Content Trading Securities. (Easy) Journal entries. Unrealized holding gain. Balance sheet disclosure. Trading Securities. (Moderate) Journal entries. Income statement and balance sheet disclosures. Long-Term Investments. (Easy) Securities available for sale. Purchase and adjusting entries. Available-for-Sale Securities. (Easy) Journal entries. Compute unrealized increase/decrease balance. Available-for-Sale Securities. (Easy) Journal entries.Balance sheet disclosure. Held-to-Maturity Bond Investment. (Easy) Premium, straight-line amortization, journal entries. Error in recording interest at acquisition. Held-to-Maturity Bond Investment. (Easy) Discount, semiannual interest receipts, straight-line and effective interest methods of amortization, journal entries. Held-to-Maturity Bond Investment. (Moderate) Discount, semia nnual interest receipts, sale at gain. Effective interest method. Journal entries. Bond Investment. (Moderate) Discount, semiannual interest receipts, amortization schedule using effective interest method, journal entries.Bond Investment. (Moderate) Premium, semiannual interest receipts, amortization schedule using effective interest method, journal entries. Bond Investment. (Moderate) Premium, semiannual interest receipts, sale at loss. Effective interest method. Journal entries. Transfer Between Categories. (Easy) Reclassification from â€Å"held-to-maturity† to â€Å"available-for-sale securities. † Journal entries for interest and reclassification. E15-7 10-20 E15-8 10-20 E15-9 10-20 E15-10 10-20 E15-11 E15-12 15-20 10-15 15-1 Number E15-13 E15-14 E15-15 E15-16 E15-17 E15-18 E15-19 E15-20Content Impairment of Investment in Bonds. (Moderate) Journal entries for impairment. IFRS differences. Equity Method. (Easy) Stock investment. No goodwill. Journal entries, balanc e sheet presentation. Equity Method. (Easy) Stock investment. Journal entries. Income and depreciation. Dividends received. Equity Method. (Moderate) Stock investment. Earned income, received dividends. Journal entries. Convertible Bonds. (Easy) Purchase and conversion. Journal entries (including memorandum entry). Stock Dividends. (Easy) Journal entries for stock acquisition, stock dividend, and sale of a 1% interest.Life Insurance Policies. (Easy) Journal entries to record purchase, premium payments, change in cash surrender value. Sinking Fund. (Moderate) Purchased securities, collected dividends and interest, wrote up to fair value, sold securities, paid expenses, retired bond. Journal entries. (Appendix). Derivatives. (Moderate) Loan and derivative (interest rate swap: fair value hedge). Journal entries, including present value calculations. Financial statement disclosures (one year). Trading Securities. (Moderate) Journal entries. Income statement and balance sheet disclosures .Trading Securities. (Moderate) Journal entries. Income statement and balance sheet disclosures. Available-for-Sale Securities. (Moderate) Journal entries. Income statement and balance sheet disclosures (current and noncurrent). Effect of including unrealized holding gains and losses in income. Available-for-Sale Securities. (Moderate) Journal entries. Income statement and balance sheet (current and noncurrent) disclosures for two quarters. Temporary Available-for-Sale Investments. (Challenging) Journal entries. Income statement and balance sheet disclosures for four quarters.Investment in Available-for-Sale Bonds. (Challenging) Purchase at discount and at premium. Effective interest method of amortization. Sale. Journal entries. Income statement and balance sheet disclosures. Time Range (minutes) 15-25 10-20 10-15 10-20 15-20 5-15 10-15 10-15 E15-21 15-25 P15-1 P15-2 P15-3 15-20 15-20 20-30 P15-4 25-35 P15-5 30-45 P15-6 40-60 15-2 Number P15-7 Content Investments in Available-for-S ale Bonds and Equity Securities. (Challenging) Fair value method. Record various transactions. Income/loss determination. Determine carrying value of Temporary Investment account.Temporary Investments, Funds, Bank Reconciliation. (Challenging) Marketable securities and petty cash fund. Journal entries. Bank reconciliation. Bond Investment. (Challenging) Effective interest method. Premium. Journal entries to record purchase, interest receipt, partial sale, retirement. Bond Investment. (Challenging) Discount. Straight-line method, effective interest method. Amortization schedules. Journal entries. Bond Investment. (Moderate) Between interest dates. Discount. Straight-line method. Journal entries to record purchase, interest, retirement.Error in recording interest at acquisition. Bond Investment. (Challenging) Premium. Straight-line method, effective interest method. Amortization schedules. Journal entries. Bond Investment. (Challenging) Discount. Effective interest method. Partial sal e. Journal entries. Comparison of Fair Value and Equity Methods. (Challenging) Stock investments. Journal entries to record purchase, income, dividends, sale. Equity Method. (Challenging) Stock investments. Journal entries to record purchase, income, dividends. Equity Method. (Challenging) Stock investments. Journal entries.Goodwill computation. Year-end balance in investment account. Cash flow from operating activities under the indirect method. Equity Method. (Moderate) Stock investments. Journal entries to record purchase, income, dividends, sale. Change from Fair Value to Equity Method. (Challenging) Change from 10% to 40% ownership. Calculate dividend revenue, unrealized increase, investment income, and carrying value of investment for two years. Life Insurance Policies. (Moderate) Journal entries to record annual premiums, change in cash surrender value, policy redemption.Time Range (minutes) 30-45 P15-8 30-45 P15-9 30-45 P15-10 30-45 P15-11 20-30 P15-12 30-45 P15-13 P15-14 30 -40 30-45 P15-15 P15-16 20-30 30-40 P15-17 P15-18 30-40 25-40 P15-19 20-30 15-3 Number P15-20 Content (Appendix). Derivatives. (Moderate) Loan and derivative (interest rate swap: fair value hedge). Journal entries, including present value computations. Financial statement disclosures (two years). Time Range (minutes) 20-45 ANSWERS TO QUESTIONS Q15-1 Companies purchase securities of other corporations for a number of different reasons.One reason is to obtain additional income by investing excess cash. A second reason is to create long-term relationships with suppliers. A third reason is to obtain significant influence or control over related companies. The three categories of investments in debt and equity securities when there is no significant influence are trading securities, available-for-sale securities, and held-tomaturity debt securities. (a) A debt security represents a creditor relationship with another company. (b) An equity security represents an ownership interest in anot her company. c) The fair value is the amount at which a security could be exchanged in a current transaction between willing parties. Q15-4 When an investor owns between 20% and 50% of the voting common stock of the investee, the investor is presumed to have significant influence over the investee. When this occurs, the equity method is used to account for the investments. When the investor controls the investee by owning more than 50% of the voting common stock of the investee, then the investor issues consolidated financial statements which are the combined financial statements of both companies.Q15-5 To account for an investment in trading securities, the investment is initially recorded at cost. It is subsequently reported at fair value and the unrealized holding gains and losses are included in income. Any interest and dividend revenue, as well as realized gains and losses on sales, are likewise included in income. To account for an investment in available-for-sale securities, the investment is initially recorded at cost. It is subsequently reported at fair value, and the total unrealized holding gains and losses are reported as a component of accumulated other comprehensive income in stockholders' equity.The unrealized holding gains and losses for the period are reported in other comprehensive income. Interest and dividend revenue, as well as realized gains and losses on sales, are included in income. To account for an investment in held-to-maturity debt securities, the investment is initially recorded at cost and subsequently reported at amortized cost. Any unrealized holding gains and losses are not recorded, and interest revenue and gains and losses on sales are all included in income. 15-4 Q15-2 Q15-3 Q15-6 Q15-7 Q15-8An investment in available-for-sale securities is reported at fair value, as determined by the year-end selling prices on a securities exchange, and any changes in unrealized holding gains and losses are included in other comprehensive income. An adjusting entry is made at the end of each period to an Unrealized Increase/Decrease account and an Allowance account to reflect any change in fair value. The total unrealized increase/decrease is reported as accumulated other comprehensive income in stockholders' equity. Gains and losses on sales of securities are reported in the income statement.They are measured as the difference between the selling price and the cost (in the case of an equity security) or the amortized cost (in the case of a debt security). In addition, because the security is no longer in the portfolio of available-for-sale securities, the cumulative balance in the allowance account and the cumulative unrealized increase/decrease in the value of the security reported for that security at the previous balance sheet date must be â€Å"reversed† out of the accounts. Bonds carrying a stated interest rate above the prevailing yield for securities with a similar amount of risk are purchased at a pre mium.Premium amortizations result in an effective interest rate that is lower than the stated rate. Thus, interest revenue is lower. Bonds carrying a stated interest rate below the prevailing market rate for securities with a similar amount of risk are purchased at a discount. Discount amortizations result in an effective interest rate that is higher than the stated rate. Thus, interest revenue is higher. The two methods available to recognize interest revenue and account for premiums and discounts on investments in held-to-maturity bonds are the straight-line and effective interest methods.Under the straight-line method, an equal amount of premium or discount is amortized each period as an adjustment of interest revenue. Under the effective interest method, the market (yield) rate at the time of issuance is multiplied times the previous carrying value to determine the interest revenue. (a) When an investment in a debt security is transferred from the â€Å"held to maturity† category to the â€Å"available for sale† category, an unrealized holding gain or loss is computed by comparing the current fair value to the carrying value (amortized cost) of the bond and is reported as a component of other comprehensive income. b) When an investment in a debt security is transferred from the â€Å"available for sale† category to the â€Å"held for maturity† category, any unrealized holding gain or loss on the date of transfer continues to be reported as a component of other comprehensive income. The amount is amortized over the remaining life as an adjustment of the yield. Q15-9 Q15-10 Q15-11 Q15-12 Q15-13 Q15-14 Current asset Temporary investment (at cost) Plus: Allowance for change in value of investment Temporary investment (at market value) $XXXX XXX $XXXX 15-5 Q15-15 IFRS allow the reversal of an impairment loss.The reversal of this impairment loss is reported on the income statement. U. S. GAAP does not permit the reversal of an impairm ent loss. When an investor corporation owns a sufficiently large percentage of common stock, it is able to exert significant influence over the operating and financial policies of the investee corporation. In particular, the investor may be able to influence the investee's dividend policy. The dividends paid may be affected by the investor's cash needs, desire to raise its income, or by tax considerations. The equity method is used to account for this investment.It acknowledges the existence of a material economic relationship between the investor and the investee, is based upon the requirements of accrual accounting, and reflects the changes in the stockholders' equity of the investee company. When the equity method is used, an investment in common stock is initially recorded at its acquisition cost. However, in contrast to the fair value method, income is recorded by the investor as an increase to the Investment account and as investment income (based on the investor's percentage ownership) when it is reported by the investee.Dividends received (or receivable) are recorded as reductions in the carrying value of the Investment account whenever they are paid (or declared) by the investee. Furthermore, (1) since a material relationship is presumed, the effects of all intercompany items of revenue and expense are removed from the investor's accounts to avoid â€Å"double-counting,† and (2) if the acquisition cost is greater than the proportionate book value of the investee, additional depreciation may be recognized.It is necessary to eliminate intercompany revenues and expenses in the determination of investor net income, depreciate the proportionate share of any difference between the fair values and book values of investee depreciable assets implied by the acquisition of the investee shares, and treat the proportionate share of investee extraordinary items as investor extraordinary items (the proportionate share of investee results of discontinued opera tions is treated in a similar manner). The facts and ircumstances that preclude an investor who owns more than a 20% investment of an investee from using the equity method include: (1) the investee challenges the investor's ability to exercise significant influence through litigation or complaints to governmental regulatory authorities; (2) the investor and investee sign an agreement that the investor surrenders significant rights as a shareholder; (3) a small group of shareholders who operate the investee hold majority ownership and ignore the views of the investor; (4) the investor needs more financial information to apply the equity method than is available to the investee's other shareholders, and cannot obtain this information; (5) the investor cannot obtain representation on the investee's board of directors. a) When an investor acquires enough additional common stock during a year to change from the fair value method to the equity method, the investor is required to restate i ts investment in the investee by debiting the Investment account and crediting Retained Earnings for its previous percentage of investee earnings (less dividends) for the period from the original date of acquisition to the date that significant influence was obtained. It also eliminates any adjustments of the Allowance and Unrealized Increase/Decrease accounts made under the fair value method. Q15-16 Q15-17 Q15-18 Q15-19 15-6 Q15-19 (continued) (b) When an investor using the equity method sells a portion of the investment such that its portion of ownership falls below 20%, the use of the equity method is no longer appropriate and the investor no longer accrues its share of investee earnings. However, previously recorded income remains as a part of the carrying value of the Investment account. The investment is then accounted for under the fair value method.Q15-20 Under IFRS, Morgan and Parker could account for the joint venture arrangement using either the equity method or proportio nate consolidation. Under the equity method, Morgan and Parker would report their investment in the associate (equity method investee) at cost, adjusted for their proportionate share of the income less their proportionate share of any dividends paid by the investee. Under proportionate consolidation, Morgan and Parker would report consolidated financial statements for their proportionate share of the joint venture. (Consolidations are covered in a later accounting course. ) Under U. S. GAAP, the use of proportionate consolidation for joint venture arrangements is not allowed.Many insurance policies allow a portion of accumulated premiums to build up as a savings plan; and, if the policy is canceled, this savings plan, or cash surrender value of the policy, is returned to the company purchasing the life insurance policy. When a company is guaranteed a return equal to the amount of the cash surrender value of the policy, a part of each premium paid represents an investment. The portio n of the yearly premium that does not increase the cash surrender value of the policy is recorded as the amount of insurance expense, typically in the year-end adjustment of prepaid insurance. The amount of cash surrender value of life insurance policies is included as a long-term investment on the balance sheet. The increase each year is stated in the policy.A fund involves setting aside cash and other assets to accomplish specific objectives; whereas, an appropriation of retained earnings only reduces retained earnings available for dividends and does not provide any cash. Funds may be current, such as petty cash funds, or they may be long-term, such as those to retire long-term bonds or preferred stock, or those to purchase long-term assets. Q15-21 Q15-22 ANSWERS TO MULTIPLE CHOICE 1. 2. a b 3. 4. a c 5. 6. b b 7. 8. c a 9. 10. c c 15-7 SOLUTIONS TO REVIEW EXERCISES RE15-1 Investment in Available-For-Sale Securities* Interest Revenue ($12,000 x 0. 10 x 4/12) Cash *$12,000 + $6,00 0 RE15-2 Interest: Cash ($12,000 x 0. 0 x 6/12) Interest Revenue Dividends: Cash Dividend Revenue ($1 x 300) RE15-3 Unrealized Increase/Decrease in Value of Available-For-Sale Securities* Allowance for Change in Value of Investment *($12,300 – $12,000) + ($5,500 – $6,000) RE15-4 Cash Investment in Available-For-Sale Securities Gain on Sale of Available-For-Sale Securities Allowance for Change in Value of Investment Unrealized Increase/Decrease in Value of Available-For-Sale Securities RE15-5 Investment in Held-To-Maturity Debt Securities Cash 215,443 215,443 6,400 6,000 400 200 600 18,000 400 18,400 600 300 300 200 500 500 15-8 RE15-6 Cash ($200,000 x 0. 12 x ? ) Investment in Held-To-Maturity Debt Securities Interest Revenue ($215,443 x 0. 10 x ? RE15-7 Investment in Trading Securities Investment in Available-For-Sale Securities Gain on Transfer of Securities Unrealized Increase/Decrease in Value of Available-For-Sale Securities Allowance for Change in Value of Invest ment RE15-8 Realized Loss on Decline in Value Investment in Held-To-Maturity Debt Securities RE15-9 Investment in Stock: Eagle Corporation (0. 30 x $120,000) Investment Income Investment Income Investment in Stock: Eagle Corporation [($620,000 – $600,000) x 0. 30] ? 8 Cash (0. 30 x $48,000) Investment in Stock: Eagle Corporation RE15-10 Note: No journal entry is required, only a memorandum entry is made for a stock dividend. Memo: Received 1,500 shares of Gamecock Company stock as a stock dividend. The cost of the shares is now $22 per share, computed as follows: ($99,000 ? 4,500). 36,000 750 750 14,400 14,400 15,520 15,520 12,500 9,400 3,100 12,000 1,228 10,772 2,300 2,300 36,000 15-9RE15-11 Cash (750 x $28) Investment in Available-For-Sale Securities (750 x $22) Gain on Sale of Investment [750 x ($28 – $22)] Unrealized Increase/Decrease in Value of Available-For-Sale Securities [750 x ($24 – $22)] Allowance for Change in Value of Investment RE15-12 Prepaid Ins urance Cash Insurance Expense Cash Surrender Value of Life Insurance Prepaid Insurance 12,000 10,500 1,500 12,000 21,000 16,500 4,500 1,500 1,500 12,000 15-10 SOLUTIONS TO EXERCISES E15-1 1. 2010 Dec. 10 21 31 Investment in Trading Securities Cash (500 x $76) Investment in Trading Securities Cash (800 x $34) Investment in Trading Securities Unrealized Gain on Increase in Value of Trading Securities 38,000 27,200 700* 700 12/31/10 Fair Value $39,500 26,400 $65,900 Cumulative Change in Fair Value $1,500 (800) $ 700 38,000 27,200 *Security 500 shares of C Company common stock 800 shares of D Company common stock Totals 2. 3. E15-2 1. 2010 Oct. Nov. 26 26 Cost $38,000 27,200 $65,200 700 unrealized gain on increase in value of trading securities; reported on 2010 income statement. Current assets: Temporary investment in trading securities (at fair value) $65,900 Investment in Trading Securities Cash (300 x $35) Cash (200 x $25) Loss on Sale of Trading Securities Investment in Trading Sec urities Investment in Trading Securities Cash (400 x $41) Investment in Trading Securities Unrealized Gain on Increase in Value of Trading Securities 10,500 5,000 200 16,400 500* 10,500 5,200 16,400 Dec. 10 31 500 15-11 E15-2 (continued) 1. (continued) *Security 300 shares of F Company common stock 400 shares of G Company common stock Totals 2. 3.E15-3 2010 During the year Investment in Available-for-Sale Securities Cash (900 x $18) Investment in Available-for-Sale Securities Cash (800 x $22) Dec. 31 Unrealized Increase/Decrease in Value of Available-for-Sale Securities Allowance for Change in Value of Investment 12/31/10 Fair Value $14,000 15,300 16,000 $45,300 Cost $10,500 16,400 $26,900 12/31/10 Fair Value $11,400 16,000 $27,400 Cumulative Change in Fair Value $ 900 (400) $ 500 $ (200) 500 $27,400 Loss on sale of trading securities Unrealized gain on increase in value of trading securities Current assets: Temporary investment in trading securities (at fair value) 16,200 16,200 17 ,600 17,600 1,500 1,500* Cumulative Change in Fair Value $(1,000) (900) (1,600) $(3,500) Security X Company common stock Y Company common stock Z Company common stock Totals Cost $15,000 16,200 17,600 $48,800 $1,500 credit adjustment = $3,500 required ending credit balance – $2,000 beginning credit balance 15-12 E15-3 (continued) Noncurrent assets: Investment in available-for-sale securities (at cost) Less: Allowance for change in value of investment Investment in available-for-sale securities (at fair value) Stockholders' equity: Accumulated Other Comprehensive Income: Unrealized decrease in value of available-for-sale securities E15-4 1. 2010 May 3 Investment in Available-for-Sale Securities Cash Cash Investment in Available-for-SaleSecurities Gain on Sale of Available-for-Sale Securities ($25,000 – $20,000) Unrealized Increase/Decrease in Value of Available-for-Sale Securities ($25,000 – $20,000) Allowance for Change in Value of Investment Cash Dividend Reven ue Allowance for Change in Value of Investment Unrealized Increase/Decrease in Value of Available-for-Sale Securities $48,800 (3,500) $45,300 $ (3,500) 13,500 25,000 13,500 July 16 20,000 5,000 16 5,000 5,000 800 800 Dec. 31 31 5,000* 5,000 12/31/10 Fair Value $32,000 15,500 $47,500 Cumulative Change in Fair Value $2,000 2,000 $4,000 *Security B Company common stock C Company common stock Totals Cost $30,000 13,500 $43,500 15-13 E15-4 (continued) 1. (continued) $5,000 debit adjustment = $4,000 required ending debit balance + $5,000 credit adjustment (7/16/10) – $4,000 beginning debit balance 2. $4,000 credit balance [$4,000 beginning credit balance – $5,000 debit adjustment (7/16/10) + $5,000 ending credit adjustment] E15-5 1. 010 June 8 Investment in Available-for-Sale Securities Cash Cash Loss on Sale of Available-for-Sale Securities ($35,400 – $37,000) Investment in Available-for-Sale Securities Allowance for Change in Value of Investment Unrealized Increase/ Decrease in Value of Available-for-Sale Securities Cash Dividend Revenue Allowance for Change in Value of Investment Unrealized Increase/Decrease in Value of Available-for-Sale Securities 50,000 35,400 1,600 50,000 Oct. 11 37,000 2,800 2,800 900 900 Oct. 11 Dec. 31 31 400* 400 12/31/10 Fair Value $43,900 49,600 $93,500 Cumulative Change in Fair Value $1,900 (400) $1,500 *Security N Company common stock O Company common stock Totals Cost $42,000 50,000 $92,000 15-14 E15-5 (continued) 1. continued) $400 debit adjustment = $1,500 required ending debit balance – [$1,700 beginning credit balance – $2,800 debit adjustment (10/11/10)] $92,000 1,500 $93,500 2. Noncurrent assets: Investment in available-for-sale securities (at cost) Plus: Allowance for change in value of investment Investment in available-for-sale securities (at fair value) Stockholders' equity: Accumulated Other Comprehensive Income: Unrealized increase in value of available-for-sale securities $ 1,500 E15-6 1 . 2010 Mar. 31 Investment in Held-to-Maturity Debt Securities Interest Revenue ($400,000 x 0. 12 x 3/12) Cash Cash ($400,000 x 0. 12 x 6/12) Interest Revenue [($400,000 x 0. 2 x 6/12) – $600] Investment in Held-to-Maturity Debt Securities [($413,800 $400,000) x 3/69] Cash Interest Revenue ($24,000 – $1,200) Investment in Held-to-Maturity Debt Securities ($13,800 x 6/69) 413,800 12,000 24,000 23,400 600 24,000 22,800 1,200 425,800 June 30 Dec. 31 2. If the company failed to separately record the interest at acquisition, the interest revenue for 2010 would be overstated and the value of the held-tomaturity debt securities would also be overstated. Therefore, excess amortization would be recognized over the remaining life of the bond, resulting in an understatement of interest revenue. 15-15 E15-7 1. 2010 Jan. 1 Investment in Held-to-Maturity Debt Securities Cash Cash ($500,000 x 0. 09 x 6/12) Investment in Held-to-Maturity Debt Securities [($500,000 $483,841. 79) ? ] Int erest Revenue Cash Investment in Held-to-Maturity Debt Securities Interest Revenue Investment in Held-to-Maturity Debt Securities Cash Cash ($500,000 x 0. 09 x 6/12) Investment in Held-to-Maturity Debt Securities ($24,192. 09 – $22,500) Interest Revenue ($483,841. 79 x 0. 10 x 6/12) Cash Investment in Held-to-Maturity Debt Securities Interest Revenue [($483,841. 79 + $1,692. 09) x 0. 10 x 6/12] 483,841. 79 22,500. 00 2,019. 78 22,500. 00 2,019. 78 483,841. 79 June 30 24,519. 78 Dec. 31 24,519. 78 2. 2010 Jan. 1 483,841. 79 22,500. 00 1,692. 09 483,841. 79 June 30 24,192. 09 22,500. 00 1,776. 69 24,276. 69 Dec. 31 15-16 E15-8 2009 Nov. 1 Investment in Held-to-Maturity Debt Securities Cash 673,618. 61 673,618. 1 REID CORPORATION Bond Investment Interest Revenue and Discount Amortization Schedule (Partial) Effective Interest Method Cash Debita $35,000 35,000 x 0. 10 x ? carrying value x 0. 11 x ? from footnote b – amount from footnote a carrying value + amount from footno te c Cash Investment in Held-to-Maturity Debt Securities Interest Revenue Cash Investment in Held-to-Maturity Debt Securities Interest Revenue Cash Investment in Held-to-Maturity Debt Securities (from schedule) Gain on Sale of Debt Securities 35,000. 00 2,049. 02 35,000. 00 2,161. 72 700,000. 00 677,829. 35 22,170. 65 37,161. 72 37,049. 02 Interest Revenue Creditb $37,049. 02 37,161. 2 Investment in Debt Securities Debitc $2,049. 02 2,161. 72 Carrying Value of Debt Securitiesd $673,618. 61 675,667. 63 677,829. 35 Date 11/01/09 04/30/10 10/31/10 a$700,000 bPrevious cAmount dPrevious 2010 Apr. 30 Oct. 31 Nov. 1 15-17 E15-9 1. 2010 Jan. 1 Investment in Held-to-Maturity Debt Securities Cash 190,165. 35 190,165. 35 2. RODGERS COMPANY Bond Investment Interest Revenue and Discount Amortization Schedule Effective Interest Method Cash Debita $10,000 10,000 10,000 10,000 10,000 10,000 Interest Revenue Creditb $11,409. 92 11,494. 52 11,584. 19 11,679. 24 11,779. 99 11,886. 79 Investment in Deb t Securities Debitc $1,409. 92 1,494. 52 1,584. 19 1,679. 24 1,779. 99 1,886. 9 Carrying Value of Debt Securitiesd $190,165. 35 191,575. 27 193,069. 79 194,653. 98 196,333. 22 198,113. 21 200,000. 00 Date 01/01/10 06/30/10 12/31/10 06/30/11 12/31/11 06/30/12 12/31/12 a$200,000 bPrevious cAmount dPrevious (face value) x 0. 10 (face rate of interest) x ? (year) carrying value x 0. 12 (effective interest rate) x ? (year) from footnote b – amount from footnote a carrying value + amount from footnote c Cash Investment in Held-to-Maturity Debt Securities Interest Revenue Cash Investment in Held-to-Maturity Debt Securities Interest Revenue 10,000. 00 1,409. 92 11,409. 92 3. 2010 June 30 2012 June 30 10,000. 00 1,779. 99 11,779. 99 15-18 E15-10 1. 2010 Jan. Investment in Held-to-Maturity Debt Securities Cash LYNCH COMPANY Bond Investment Interest Revenue and Premium Amortization Schedule Effective Interest Method Cash Debita $3,250 3,250 3,250 3,250 3,250 3,250 Interest Revenue Credi tb $3,073. 76 3,063. 19 3,051. 98 3,040. 10 3,027. 50 3,014. 12e Investment in Debt Securities Creditc $176. 24 186. 81 198. 02 209. 90 222. 50 235. 88 Carrying Value of Debt Securitiesd $51,229. 35 51,053. 11 50,866. 30 50,668. 28 50,458. 38 50,235. 88 50,000. 00 51,229. 35 51,229. 35 2. Date 01/01/10 06/30/10 12/31/10 06/30/11 12/31/11 06/30/12 12/31/12 a$50,000 (face value) x 0. 13 (face rate of interest) x ? (year) carrying value x 0. 12 (effective interest rate) x ? year) from footnote a – amount from footnote b carrying value – amount from footnote c due to $0. 03 rounding error Cash Investment in Held-to-Maturity Debt Securities Interest Revenue Cash Investment in Held-to-Maturity Debt Securities Interest Revenue 3,250. 00 176. 24 3,073. 76 3,250. 00 235. 88 3,014. 12 bPrevious cAmount dPrevious eDifference 3. 2010 June 30 2012 Dec. 31 15-19 E15-11 2010 Jan. 1 Investment in Held-to-Maturity Debt Securities Cash 307,493. 34 307,493. 34 GLOVER CORPORATION Bond Inv estment Interest Revenue and Premium Amortization Schedule (Partial) Effective Interest Method Cash Debita $18,000 18,000 Interest Revenue Creditb $16,912. 13 16,852. 30 Investment in Debt Securities Creditc $1,087. 87 1,147. 0 Carrying Value of Debt Securitiesd $307,493. 34 306,405. 47 305,257. 77 Date 01/01/10 06/30/10 12/31/10 a$300,000 bPrevious cAmount dPrevious (face value) x 0. 12 x ? year carrying value x 0. 11 x ? year from footnote a – amount from footnote b carrying value – amount from footnote c Cash Interest Revenue Investment in Held-to-Maturity Debt Securities Cash Interest Revenue Investment in Held-to-Maturity Debt Securities Cash Loss on Sale of Debt Securities Investment in Held-to-Maturity Debt Securities (from schedule) 18,000 2010 June 30 16,912. 13 1,087. 87 Dec. 31 18,000 16,852. 30 1,147. 70 2011 Jan. 1 300,000. 00 5,257. 77 305,257. 77 15-20 E15-12 2010 Dec. 1 Cash ($100,000 x 0. 08) Interest Revenue ($107,023. 56 x 0. 07) Investment in Held-t o-Maturity Debt Securities ($8,000 $7,491. 65) Investment in Available-for-Sale Securities Investment in Held-to-Maturity Debt Securities ($107,023. 56 – $508. 35) Unrealized Increase/Decrease in Value of Available-for-Sale Securities Allowance for Change in Value of Investment [$106,515. 21 ($100,000 x 1. 05)] 8,000 7,491. 65 508. 35 106,515. 21 106,515. 21 31 31 1,515. 21 1,515. 21 E15-13 1. June 1, 2010 Investment in Held-to-Maturity Debt Securities Cash 2011 Realized Loss on Decline in Value Investment in Held-to-Maturity Debt Securities 2012 No entry 2.Under IFRS, the company would make the same journal entries as in Requirement 1 for 2010 and 2011. In 2012, it would recognize the recovery of the impairment as follows: 2012 Investment in Held-to-Maturity Debt Securities Realized Loss Recovery on Increase in Value 3,000 10,000 10,000 4,000 4,000 3,000 15-21 E15-14 1. 2010 Jan. 1 Investment in Stock: Crowell Corporation Cash Cash ($50,000 x 0. 30) Investment in Stock: Crow ell Corporation Investment in Stock: Crowell Corporation Investment Income ($120,000 x 0. 30) Cash ($50,000 x 0. 30) Investment in Stock: Crowell Corporation Investment in Stock: Crowell Corporation Investment Income ($140,000 x 0. 30) 160,000 15,000 160,000 Mar. 31 5,000 36,000 36,000 15,000 15,000 42,000 42,000 June 30 Sept. 30 Dec. 31 2. Investment in Stock: Crowell Corporation Original investment $160,000 Share of 06/30 investment income 36,000 Share of 12/31 investment income 42,000 Balance, 12/31/10 $208,000 03/31 dividend 09/30 dividend $15,000 15,000 E15-15 2010 Jan. Dec. 1 31 31 31 Investment in Stock: North Company Cash Investment in Stock: North Company Investment Income ($45,000 x 0. 40) Investment Income ($15,000 ? 12 years) Investment in Stock: North Company Cash ($0. 70 x 8,000) Investment in Stock: North Company 15-22 144,000 18,000 1,250 5,600 144,000 18,000 1,250 5,600 E15-16 2010 Jan.During the year 1 Investment in Stock: Fink Company Cash (3,000 x $16) Investment in Stock: Fink Company Investment Income ($22,000 x 0. 30) Cash ($6,000 x 0. 30) Investment in Stock: Fink Company 31 Investment Income Investment in Stock: Fink Company a[($115,000 48,000 6,600 1,800 750a 48,000 6,600 1,800 750 Dec. – $90,000) x 0. 30] ? 10 years E15-17 2009 Jan. 1 Investment in Available-for-Sale Securities Cash 19,760 19,760 2011 July 1 Memorandum entry: On this date, the Taylor Corporation exchanged its investment in Kalanda Corporation 12% convertible bonds with a carrying value of $19,880a for 300 shares of Kalanda common stock with a fair value of $21,600.The cost per share is $66. 27 ($19,880 ? 300 shares). a$19,760 + (5 x $24*) *Amortization per period = $24 [($20,000 – $19,760) ? 10 periods] E15-18 2010 Mar. 2 Investment in Available-for-Sale Securities Cash 60,000 60,000 May 1 Memorandum entry: Received 1,000 (5,000 x 0. 20) additional shares of Foreman Company common stock as a stock dividend. The cost of the shares is now $10 per share as follows: $60,000 = $10 5,000 + (5,000 x 0. 20) 15-23 E15-18 (continued) 2011 Feb. 1 Cash (1,500 x $12) Investment in Available-for-Sale Securities (1,500 x $10) Gain on Sale of Investment in Available-for-Sale Securities 18,000 15,000 3,000 E15-19 2010 Jan. Dec. 31 Prepaid Insurance Cash Insurance Expense Cash Surrender Value of Life Insurance ($103,900 – $98,450) Prepaid Insurance Cash Gain on Death of Officer Cash Surrender Value of Life Insurance 13,300 7,850 5,450 13,300 13,300 2011 Jan. 1 50,000 43,520 6,480 E15-20 2010 Jan. Feb. July 1 3 30 Sinking Fund Cash Cash Sinking Fund Securities Sinking Fund Cash Sinking Fund Cash Loss on Sale of Sinking Fund Securities Sinking Fund Securities Sinking Fund Cash Sinking Fund Revenues Allowance for Change in Value of Sinking Fund Securities [$355,000 – ($400,000 – $48,000)] Unrealized Increase/Decrease in Value of Sinking Fund Securities 425,000 400,000 45,000 3,000 49,000 48,000 49,000 425,000 400,000 Dec. 31 31 3, 000 3,000 15-24 E15-20 (continued) 2011 Dec. 1 31 31 Sinking Fund Cash Sinking Fund Revenues Sinking Fund Expenses Sinking Fund Cash Sinking Fund Cash Sinking Fund Securities Gain on Sale of Sinking Fund Securities 40,000 4,500 360,000 40,000 4,500 352,000 8,000 31 Unrealized Increase/Decrease in Value of Sinking Fund Securities Allowance for Change in Value of Sinking Fund Securities 31 31 E15-21 Bonds Payable Sinking Fund Cash Cash Sinking Fund Cash 3,000 3,000 500,000 14,500 500,000 14,500 Note to Instructor: This interest rate swap is a fair value hedge. Original Bank Loan (not required) Cash Notes Payable Interest Payment on Loan: December 31, 2010 Interest Expense Cash a7% 3,000,000 3,000,000 210,000a 210,000 x $3 million Interest Rate Swap Payment: December 31, 2010 Cash Interest Expense b(7% 12,000b 12,000 – 6. 6%) x $3 million 15-25E15-21 (continued) Fair Values and Gains and Losses, December 31, 2010 Loss in Value of Derivative Liability from Interest Rate Swap cPre sent 53,497c 53,497 value = (8% – 7%) x $3,000,000 x 1. 783265 (n=2, i=0. 08 from Table 4 in the TVM Module) = $30,000 x 1. 783265 = $53,497 (rounded down to balance) A swap derivative loss and liability exist because the 8% current market rate is higher than the 7% fixed interest rate that Anglar receives on the derivative. Notes Payable Gain in Value of Debt dPresent 53,497d 53,497 value of principal = $3,000,000 x 0. 857339 (n=2, i=0. 08 from Table 3 in the TVM Module) = $2,572,017 = $210,000 x 1. 783265 (n=2, i=0. 08 from Table 4 in the TVM Module) = $374,486 = $2,572,017 + $374,486 = $2,946,503Present value of interest Total present value Decrease in value of debt = $3,000,000 – $2,946,503 = $53,497 The increase in interest rates decreases the value of note payable by the same amount as the increase in the value of the swap derivative liability. 15-26 E15-21 (continued) 2. Income Statement for Year Ending December 31, 2010 Other Items: Interest expense Loss in val ue of derivative Gain in value of debt e$210,000 $ (198,000)e (53,497) 53,497 – $12,000 Balance Sheet, December 31, 2010 Long-Term Liabilities: Notes payable Liability from interest rate swap f$3,000,000 – $53,497 $2,946,503f 53,497 $3,000,000 15-27 SOLUTIONS TO PROBLEMS P15-1 1. 2010 Nov. 19 29 Investment in Trading Securities Cash (200 x $86) Investment in Trading Securities Cash (300 x $63) Cash (100 x $89) Investment in Trading Securities (100 x $86) Gain on Sale of Trading Securities Investment in Trading Securities Cash (400 x $37) Cash (100 x $62) Loss on Sale of Trading Securities Investment in Trading Securities (100 x $63) Unrealized Loss on Decrease in Value of Trading Securities Investment in Trading Securities 17,200 18,900 8,900 8,600 300 14,800 6,200 100 6,300 200 14,800 17,200 18,900 Dec. 15 17 31 200* Cumulative Change in Fair Value $ 100 (400) 100 $(200) $ 300 (100) (200) $35,800 *Security 100 shares of M Company common stock 200 shares of P Company p referred stock 400 shares of T Company common stock Totals 2. Cost $ 8,600 12,600 14,800 $36,000 12/31/10 Fair Value $ 8,700 12,200 14,900 $35,800Gain on sale of trading securities Loss on sale of trading securities Unrealized loss on decrease in value of trading securities Current assets: Temporary investment in trading securities (at fair value) 3. 15-28 P15-2 1. 2010 July 2 14 Cash (100 x $1. 50) Dividend Revenue Cash (600 x $20) Loss on Sale of Trading Securities Investment in Trading Securities Investment in Trading Securities Cash (300 x $36) Cash (100 x $30) Investment in Trading Securities Gain on Sale of Trading Securities Investment in Trading Securities Cash (500 x $22) Unrealized Loss on Decrease in Value of Trading Securities Investment in Trading Securities 150 12,000 600 10,800 3,000 150 12,600 10,800 2,800 200 11,000 Aug. 9 24 Sept. 17 30 11,000 350 350* *Security 300 shares of P Company preferred stock 500 shares of U Company common stock Totals 2.Cost $10,800 11,00 0 $21,800 Cumulative 9/30/10 Change in Fair Value Fair Value $10,950 $ 150 10,500 (500) $21,450 $(350) $ 150 (600) 200 (350) $21,450 Dividend revenue Loss on sale of trading securities Gain on sale of trading securities Unrealized loss on decrease in value of trading securities Current assets: Temporary investment in trading securities (at fair value) 3. 15-29 P15-3 1. 2010 Mar. 31 Investment in Available-for-Sale Securities Interest Revenue ($10,000 x 0. 08 x 3/12) Cash Cash (200 x $30) Loss on Sale of Available-for-Sale Securities {200 x [$30 – ($23,100 ? 700)]} Investment in Available-for-Sale Securities [200 x ($23,100 ? 00)] Allowance for Change in Value of Investment Unrealized Increase/Decrease in Value of Available-for-Sale Securities [200/700 x ($21,700 – $23,100)] Cash Interest Revenue ($10,000 x 0. 08 x 6/12) Cash (100 x $24) Investment in Available-for-Sale Securities [100 x ($8,400 ? 400)] Gain on Sale of Available-for-Sale Securities {100 x [$24 ($8,400 ? 400)]} Unrealized Increase/Decrease in Value of Available-for-Sale Securities [100/400 x ($9,400 – $8,400)] Allowance for Change in Value of Investment 10,000 200 10,200 May 17 6,000 600 6,600 400 17 400 400 400 2,400 2,100 300 June 30 Oct. 12 12 250 250 15-30 P15-3 (continued) 1. (continued) Dec. 31 Cash Interest Revenue ($10,000 x 0. 8 x 6/12) Dividend Revenue [(300 x $1) + (500 x $1. 50)] Allowance for Change in Value of Investment Unrealized Increase/Decrease in Value of Available-for-Sale Securities 1,450 400 1,050 550* 550 12/31/10 Fair Value $ 7,500 15,500 10,100 $33,100 Cumulative Change in Fair Value $1,200 (1,000) 100 $ 300 31 *Security 300 shares of I Company common stock 500 shares of O Company common stock $10,000 face value of U Company 8% bonds Totals $550 debit adjustment = Cost $ 6,300 16,500 10,000 $32,800 $300 required ending debit balance + [$400 beginning credit balance – $400 debit adjustment (5/17/10) + $250 credit adjustment (10/12/10)] $ 600 1 ,050 (600) 300 2.Interest revenue Dividend revenue Loss on sale of available-for-sale securities Gain on sale of available-for-sale securities Current assets: Temporary investment in available-for-sale securities (at cost) Plus: Allowance for change in value of investment Temporary investment in available-for-sale securities (at fair value) Noncurrent assets: Investment in available-for-sale securities (at cost) Less: Allowance for change in value of investment Investment in available-for-sale securities (at fair value) 3. $6,300 1,200 $7,500 $26,500 (900) $25,600 15-31 P15-3 (continued) 3. (continued) Stockholders' equity: Accumulated Other Comprehensive Income: Unrealized increase in value of available-for-sale securities 4. Holly would include a gain of $700 [the change in the unrealized increase/decrease on the portfolio from $(400) to $300]. $ 300 P15-4 1. 2010 Jan. Cash (400 x $45) Investment in Available-for-Sale Securities (400 x $43) Gain on Sale of Available-for-Sale Secur ities [(400 x $45) – $17,200] Unrealized Increase/Decrease in Value of Available-for-Sale Securities Allowance for Change in Value of Investment (400 x $1) Investment in Available-for-Sale Securities Cash (700 x $45) Cash Dividend Revenue Unrealized Increase/Decrease in Value of Available-for-Sale Securities Allowance for Change in Value of Investment 18,000 17,200 800 6 400 400 31,500 2,500 Feb. 3 31,500 2,500 Mar. 31 31 2,300 2,300* 15-32 P15-4 (continued) 1. (continued) 3/31/10 Fair Value $ 29,500 18,000 28,000 30,100 $105,600 Cumulative Change in Fair Value $ (500) 800 -(1,400) $ (1,100) Cost *Security 500 shares of Keene Company common stock $ 30,000 400 shares of Sachs, Inc. common stock 17,200 400 shares of Bacon Company common stock 28,000 700 shares of Jackson Corp. common stock 31,500 Totals $106,700 $2,300 credit adjustment $1,100 required ending credit balance + [$1,600a beginning debit balance – $400 credit adjustment (1/6/10)] a[800 x ($44 – $43)] + [400 x ($72 – $70)] Apr. 14 Investment in Available-for-Sale Securities Cash (300 x $52) Cash (400 x $42) Loss on Sale of Available-for-Sale Securities [(400 x $42) – $17,200] Investment in Available-for-Sale Securities Unrealized Increase/Decrease in Value of Available-for-Sale Securities Allowance for Change in Value of Investment Cash Dividend Revenue Allowance for Change in Value of Investment Unrealized Increase/Decrease in Value of Available-for-Sale Securities 15,600 16,800 400 17,200 15,600 May 11 11 800 800 2,800 2,800 June 30 30 2,600* 2,600 15-33 P15-4 (continued) 1. continued) 6/30/10 Fair Value $ 31,000 27,600 32,200 15,000 $105,800 Cumulative Change in Fair Value $ 1,000 (400) 700 (600) $ 700 Cost *Security 500 shares of Keene Company common stock $ 30,000 400 shares of Bacon Company common stock 28,000 700 shares of Jackson Corp. common stock 31,500 300 shares of Quinn Company common stock 15,600 Totals $105,100 $2,600 debit adjustment = $700 required ending debit balance + [$1,100 beginning credit balance + $800 credit adjustment (5/11/10)] $ 800 2,500 Second Quarter 2010 Loss on sale of securities $ (400) Dividend revenue 2,800 3/31/10 $47,200 300 $47,500 6/30/10 $30,000 1,000 $31,000 2. First Quarter 2010 Gain on sale of securities Dividend revenue 3.Assets Current assets: Temporary investment in available-for-sale securities (at cost) Plus: Allowance for change in value of investment Temporary investment in available-for-sale securities (at fair value) Noncurrent assets: Investment in available-for-sale securities (at cost) Less: Allowance for change in value of investment Investment in available-for-sale securities (at fair value) Stockholders' Equity Accumulated Other Comprehensive Income: Unrealized increase (decrease) in value of available-for-sale securities $59,500 (1,400) $58,100 $75,100 (300) $74,800 $ (1,100) $ 700 15-34 P15-5 1. 2010 Jan. Mar. 6 31 31 Cash Dividend Revenue Cash Dividend Revenue Allowance for Change in Value of Investment Unrealized Increase/Decrease in Value of Available-for-Sale Securities 265 500 65 500 1,180* 1,180 Cumulative 3/31/10 Change in Fair Value Fair Value $13,470 $ (805) 13,765 1,115 18,940 1,490 15,500 (3,600) $61,675 $(1,800) *Security 400 shares of Turben Co. common stock 500 shares of Cook Corp. common stock 700 shares of Hill Corp. common stock 200 shares of Web Engines preferred stock Totals $1,180 debit adjustment June 30 30 Cost $14,275 12,650 17,450 19,100 $63,475 = $1,800 required ending credit balance – $2,980 ($63,475 – $60,495) beginning credit balance 1,075 1,075 Cash ($375 + $700) Dividend Revenue Allowance for Change in Value of Investment Unrealized Increase/Decrease in Value of Available-for-Sale Securities 50* 450 6/30/10 Fair Value $13,300 14,125 19,300 15,400 $62,125 Cumulative Change in Fair Value $ (975) 1,475 1,850 (3,700) $(1,350) *Security 400 shares of Turben Co. common stock 500 shares of Cook Corp. common stock 700 shares of Hill Corp. common stock 200 shares of Web Engines preferred stock Totals Cost $14,275 12,650 17,450 19,100 $63,475 15-35 P15-5 (continued) 1. (continued) $450 debit adjustment = July 6 $1,350 required ending credit balance – $1,800 beginning credit balance 13,750 525 14,275 975 975 500 500 Cash Loss on Sale of Available-for-Sale Securities ($13,750 – $14,275) Investment in Available-for-Sale Securities Allowance for Change in Value ofInvestment Unrealized Increase/Decrease in Value of Available-for-Sale Securities Cash Dividend Revenue Allowance for Change in Value of Investment Unrealized Increase/Decrease in Value of Available-for-Sale Securities 6 Sept. 29 30 805* 805 Cumulative 9/30/10 Change in Fair Value Fair Value $14,230 $ 1,580 19,500 2,050 15,900 (3,200) $49,630 $ 430 *Security 500 shares of Cook Corp. common stock 700 shares of Hill Corp. common stock 200 shares of Web Engines preferred stock Totals $805 debit adjustment = Cost $12,650 17,450 19,100 $49, 200 $430 required ending debit balance + [$1,350 beginning credit balance – $975 debit adjustment (7/6/10)] 19,780 17,450 2,330 Nov. 2 Cash Investment in Available-for-Sale Securities Gain on Sale of Available-for-Sale Securities ($19,780 – $17,450) 15-36 P15-5 (continued) 1. (continued) Nov. Unrealized Increase/Decrease in Value of Available-for-Sale Securities Allowance for Change in Value of Investment Cash Dividend Revenue Allowance for Increase/Decrease in Value of Available-for-Sale Securities Unrealized Change in Value of Investment 2,050 2,050 375 375 Dec. 30 31 550* 550 Cumulative 12/31/10 Change in Fair Value Fair Value $14,280 $ 1,630 16,400 (2,700) $30,680 $(1,070) *Security 500 shares of Cook Corp. common stock 200 shares of Web Engines preferred stock Totals $550 debit adjustment = Cost $12,650 19,100 $31,750 $1,070 required ending credit balance + [$430 beginning debit balance – $2,050 credit adjustment (11/2/10)] March 31 $765a –For Quarte r Ended June 30 Sept. 30 $1,075b $500 – 525 – – Dec. 31 $ 375 – 2,330 2. Dividend revenue Loss on sale of securities Gain on sale of securities a$265 b$375 + $500 + $700 15-37 P15-5 (continued) 3.Current assets: Temporary investment in available-for-sale securities (at cost) Plus (Less): Allowance for change in value of investment Temporary investment in available-for-sale securities (at fair value) March 31 Balance Sheet as of June 30 Sept. 30 Dec. 31 $63,475 (1,800) $61,675 $63,475 (1,350) $62,125 $49,200 430 $49,630 $31,750 (1,070) $30,680 Stockholders' equity: Accumulated Other Comprehensive Income: Unrealized increase(decrease) in value of available-forsale securities $ (1,800) $ (1,350) P15-6 1. 2010 Jan. 1 Investment in Available-for-Sale Securities Cash ($30,000 x 0. 97) Investment in Available-for-Sale Securities Cash ($40,000 x 1. 01) Cash ($30,000 x 0. 08 x 1/2) Investment in Available-for-Sale Securities Interest Revenue ($29,100 x 0. 0 x 1/2) Cash ($40,000 x 0. 10 x 1/2) Investment in Available-for-Sale Securities Interest Revenue ($40,400 x 0. 098 x 1/2) $ 430 $ (1,070) 29,100 29,100 1 40,400 1,200 255 40,400 June 30 1,455 2,000 20 1,980 30 15-38 P15-6 (continued) 1. (continued) June 30 Allowance for Change in Value of Investment Unrealized Increase/Decrease in Value of Available-for-Sale Securities 225* 225 Cumulative Change in Fair Value $ (195) 420 $ 225 *Security $30,000 face value of Bradford Co. bonds $40,000 face value of Morris Co. bonds Totals a$29,100 b$40,400 c$30,000 d$40,000 Amortized 6/30/10 Cost Fair Value a $29,160c $29,355 b 40,800d 40,380 $69,960 $69,735 ost + $255 amortization of discount cost – $20 amortization of premium x 0. 972 x 1. 02 1 Investment in Available-for-Sale Securities Cash ($25,000 x 0. 92) Interest Receivable ($25,000 x 0. 11 x 5/12) Investment in Available-for-Sale Securities Interest Revenue ($23,000 x 0. 12 x 5/12) Cash [($25,000 x 0. 91) + $1,146] Loss on Sale of Availabl e-for-Sale Securities Investment in Available-for-Sale Securities Interest Receivable 23,000 July 23,000 Nov. 30 1,146 4 1,150 23,896 254* 23,004 1,146 30 *$23,004 carrying value ($23,000 cost + $4 amortization of discount) $22,750 proceeds (excluding interest) 15-39 P15-6 (continued) 1. (continued) Dec. 31 Cash ($30,000 x 0. 8 x 1/2) Investment in Available-for-Sale Securities Interest Revenue ($29,355 x 0. 10 x 1/2) Cash ($40,000 x 0. 10 x 1/2) Investment in Available-for-Sale Securities Interest Revenue ($40,380 x 0. 098 x 1/2) Cash ($40,000 x 1. 02) Investment in Available-for-Sale Securities ($40,380 – $21) Gain on Sale of Available-for-Sale Securities ($40,800 – $40,359) Unrealized Increase/Decrease in Value of Available-for-Sale Securities Allowance for Change in Value of Investment (from 6/30/10 schedule) Unrealized Increase/Decrease in Value of Available-for-Sale Securities Allowance for Change in Value of Investment 1,200 268 1,468 2,000 21 1,979 40,800 40,35 9 441 31 31 31 420 420 31 28 628* 12/31/10 Fair Value $28,800b $28,800 Cumulative Change in Fair Value $(823) $(823) *Security $30,000 face value of Bradford Co. bonds Totals a$29,355 b$30,000 Cost $29,623a $29,623 amortized cost (6/30/10) + $268 amortization of discount x 0. 96 = $823 required ending credit balance + [$225 beginning (6/30/10) debit balance – $420 credit adjustment (12/31/10)] $628 credit adjustment 15-40 P15-6 (continued) 2. Interest revenue Loss on sale of securities Gain on sale of securities a$1,455 b$1,150 For Semiannual Period Ended 12/31/10 6/30/10 a $4,597b $3,435 – (254) – 441 + $1,980 + $1,468 + $1,979 Balance Sheet As of 06/30/10 12/31/10 $69,753 225 $69,960 $29,623 (823) $28,800 3.Current assets: Temporary investment in available-for-sale securities (at amortized cost) Plus (Less): Allowance for change in value of investment Temporary investment in available-for-sale securities (at fair value) Stockholders' equity: Accumulated Other Comprehensive Income: Unrealized increase (decrease) in value of available-for-sale securities $225 $(823) P15-7 1. 2010 Feb. 3 Investment in Available-for-Sale Securities Cash (3,000 x $12) Investment in Available-for-Sale Securities Interest Revenue ($20,000 x 0. 12 x 3/12) Cash Cash Interest Revenue ($20,000 x 0. 12 x 6/12) Dividend Revenue (3,000 x $0. 25) 36,000 36,000 Apr. 1 20,000 600 1,950 1,200 750 20,600 June 30 15-41 P15-7 (continued) 1. (continued) Sept. 1 Investment in Available-for-Sale Securities Cash (4,000 x $22) Investment in Available-for-Sale Securities Interest Revenue ($30,000 x 0. 11 x 5/12) Cash Cash Interest Revenue ($30,000 x 0. 11 x 6/12) Cash ($30,000 x 1. 1) Investment in Available-for-Sale Securities Gain on Sale of Available-for-Sale Securities ($30,300 – $30,000) Cash Dividend Revenue (3,000 x $0. 25) Cash Loss on Sale of Available-for-Sale Securities ($35,300 – $36,000) Investment in Available-for-Sale Securities Cash Interest Revenue ( $20,000 x 0. 12 x 6/12) Allowance for Change in Value of Investment Unrealized Increase/Decrease in Value of Available-for-Sale Securities 88,000 88,000 Nov. 1 30,000 1,375 1,650 1,650 30,300 30,000 300 750 35,300 700 36,000 1,200 1,200 4,200* 4,200 750 31,375 Dec. 1 1 30 30 31 31 15-42 P15-7 (continued) 1. (continued) Cost *Security $20,000 face value of Solomon Co. bonds $ 20,000 4,000 shares of Woodman Corp. ommon stock 88,000 Totals $108,000 a$20,000 b4,000 Cumulative 12/31/10 Change in Fair Value Fair Value $ 200 $ 20,200a 92,000b 4,000 $112,200 $4,200 x 1. 01 x $23 $2,075 (-$600+$1,200-$1,375+$1,650+$1,200) 1,500 ($750+$750) 300 (700) 2. Interest revenue Dividend revenue Gain on sale of securities Loss on sale of securities 3. Current assets: Temporary investment in available-for-sale securities (at cost) Plus: Allowance for change in value of investment Temporary investment in available-for-sale securities (at fair value) $108,000 4,200 $112,200 P15-8 Note to Instructor: This problem contains petty cash journal entries and a bank reconciliation, previously covered in Chapter 7. 1. 2010 Jan. Investment in Available-for-Sale Securities [(150 x $20) + (200 x $30) + (100 x $25)] Cash Investment in Available-for-Sale Securities ($20,000 + $12,000) Interest Revenue [($20,000 x 0. 12 x 5/12) + ($12,000 x 0. 10 x 4/12)] Cash Petty Cash Cash 11,500 11,500 Feb. 1 32,000 1,400 500 33,400 500 1 15-43 P15-8 (continued) 1. (continued) Feb. 28 Cash Interest Revenue [$20,000 x 0. 12 x 6/12] Postage Expense Office Supplies Expense Transportation Expense Miscellaneous Expense Cash Cash Short and Over Cash a$125. 50 1,200 1,200 110. 00 170. 65 45. 00 43. 50 5. 35a 28 369. 15 5. 35 28 – ($500. 00 – $369. 15) 2,100 200 1,500 800 Mar. 31 Cash ($1,500 + $600) Interest Receivable ($20,000 x 0. 12 x 1/12; A Co. bonds) Dividend Revenue Interest Revenue [($12,000 x 0. 0 x 6/12) + ($20,000 x 0. 12 x 1/12)] Unrealized Increase/Decrease in Value of Available-for-Sale S ecurities Allowance for Change in Value of Investment b$42,600 31 900 900b – ($11,500 + $32,000) 140. 00 75. 30 54. 20 31 Postage Expense Office Supplies Expense Miscellaneous Expense Cash 269. 50 15-44 P15-8 2. (continued) PAYNE CORPORATION Bank Reconciliation March 31, 2010 Balance per bank statement Add: Deposits in transit Deduct: Outstanding checks Adjusted cash balance Balance per company records Add: Note collected by bank Interest on note Deduct: Bank service charge NSF check returned Adjusted cash balance 3. 2010 Mar. 31 Cash Notes Receivable Interest Revenue

Autobiography Essay

As a child, I suffered hardships in many areas of my life, so much so, that even as a young child, I knew my life was considerably different than other children my age. While most children were carefree and out playing, I was inside cooking for myself, cleaning up the house, or watching after my mother. These were normal duties for me and had been for the past 2 years. My mother was in the prime of her addiction and nothing else in life seemed to matter except her drugs and her next high. I did what I had to do to take care of myself, my home, and my mom. I always believed she would wake up one day and realize what she was doing and make things right, end all the madness that my life had become. Norman Vincent Peale once said, â€Å"In every difficult situation is potential value. Believe this, then begin looking for it. † The potential value, the opportunity came looking for me. The Department of Family and Children Services showed up at my house when I was 9 years old. A new neighbor had called and complained that my mother was not fulfilling her duties as a mother and that they were worried about me. DFCS placed me with the Nelson Family, a grounded, stable, and devoutly religious foster family that promised to give me a better life. They were part of Winshape Homes, an organization of foster homes that was founded and supported by Truett Cathy, the founded of Chick-fil-a. Rosemary and Rob, my foster parents, were licensed to have up to 15 children at a time in the household, so I viewed them as experts at raising kids. They showered me with unconditional love and showed me what a â€Å"real† family was all about. Even with 12 other siblings in the household, they took care of our individual needs, loved us the way we needed to be loved, and taught us everything they could. I spent 9 wonderful years with them before I graduated high school and moved onto college. I was dealt a bad hand, so to say, as a child, but I wouldnt change anything in my past. Everything I went through made me stronger, helped me to appreciate what I have, and has taught me to not take things for granted. My mother was never there for me but I am an awesome mother to my children because of her. I am thankful for the family I have now and I am grateful that I have lessons and wisdom to teach my kids. There is always a light at the end of the tunnel, but you have to make it through the tunnel before you see the light.

Life in the Colonial Cities Essay

The people of early colonial America settled mainly in rural areas and farms. Eventually, by the end of the 18th century, cities became dominant settlements over the rural regions. The cities of colonial America were heavily influences by British; the latest fashions of dress, social ideas, and furniture among other things were imported from Great Britain. As the size of cities grew, problems in health and sanitation began to arise. Throughout all of the major cities, taverns were the common places where everyone would meet. The cities of colonial America helped spread the European Enlightenment across the Atlantic. This in turn helped create an American Enlightenment movement, which started primarily in the major cities. Cities helped develop the advancement of learning in science, literature, and the arts. They were also centers for manufacturing and commerce, where industry boomed. The major cities of America included Boston, Philadelphia, New York, Newport, and Charleston. In these large cities, many problems began to surface. These difficulties involved health, sanitation, police protection, and fire prevention. To decrease these problems meant that the city would have to work together and stop with individualistic ways. Philadelphia was the most heavily populated, and most sophisticated of the major cities. They had brick roads and sidewalks including street lamps, which turned on every night. There was a regular night watch along with volunteers for fire protection and there were also many booksellers. Some people were unhappy with Philadelphia’s design while others thought the city to be a masterpiece. Boston was another populous city, thanks to its elegance and in general the manners of its people. The people of Boston had many luxuries, such as coach rides where slaves served the customers. Also, the Mall was a very popular place among the people. The Mall was a beautiful Common with trees and paths, which was an imitation of St James’s Park. Although Boston was not as  densely populated as Philadelphia, Boston offered a cleaner and more open society. New York City preserved many of its native Dutch traditions and qualities. A lot of the buildings were built of brick, which was the common Dutch style. New York also had developed into the headquarters of the British North American Army. Many New Yorkers were influenced greatly by Britain, which meant that the people were considered to have excellent manners. Taverns were the centers of social life in the cities, also called the â€Å"principal social institution of colonial America.† The taverns social class ranged greatly depending on its surrounding areas. Some taverns housed the low life’s and poor people while others only accepted gentleman. Most of the pubs were a place for common people to discuss any matters at hand. Some say the foundation of the Revolutionary War was planned in taverns. Some people felt as if taverns were causing some problems in society. Benjamin Franklin was one of the major figures that tried to limit the number of taverns in cities. He argued that the number of taverns might cause poverty to many of the people and the surrounding neighborhood. However, taverns could be considered good to the cities because they were the closest form of business enterprise in colonial America to this point. Although in the early years of colonial America, many people resided in the rural areas, the cities became more populated over time. Taverns were a main reason for people moving from farms to the cities. The conditions of the city weren’t excellent, as the water supply was not very sanitary and garbage disposal was a major issue. However, these factors made for the beginning of a new nation and helped form how America is today.

The Civil Partnership Act Essay Example | Topics and Well Written Essays - 2750 words

The Civil Partnership Act - Essay Example The Act is therefore a landmark legislation in elevating the legal status of same sex relationships to that close to heterosexual marriages. However, while it is undeniable that the Act is a step in the right direction, it is doubtful whether it can actually achieve the objective it was set out to fulfil - to eliminate the discrimination and injustice suffered by same sex relationships within society. Prior to the Civil Partnership Act 2004, same sex relationships in the United Kingdom simply do not have the legal status given to marriages. The Family Law Act 1996 under s 62 §1, for example, limits the definition of cohabitants to â€Å"a man or a woman living together as husband and wife.† The Local Government Act 1988 also provides a similar definition in defining same sex relationships as â€Å"pretended family relationships† under section 28, indicating a lack of recognition both from a legal and social point of view. As a result, same sex relationships have been discriminated

Methods Of Research Essay Example | Topics and Well Written Essays - 2000 words

Methods Of Research - Essay Example In examining the level of evidence, there is a hierarchical structure in place. This hierarchical structure is such that the highest level of evidence can be arrived at through the utility of randomized control trial (RCT). At the second level are Quasi-experiments whereby there is no random assignment of participants to treatment groups, however, treatment and the causal relationship is determined utilizing the same standards as RCTs (Penrod & Morrison, 2004). This is followed by case control studies, case series studies and expert opinion (Slade, Kuipers, & Priebe, 2002). An examination of the implications of the research methodology utilized begs a closer look at RCTs and the Phenomenological approach to research. First and foremost, randomized control trials are defined as study designs where treatments, interventions, or enrollment into different study groups are assigned by random allocation rather than by conscious decisions of clinicians or patients. The goal of RCTs is to ensure that the results obtained from a study are strictly based on the treatment administered and not a direct result of bias or other confounding variables (Philadelphia Panel, 2001). The Phenomenological approach to research, on the other hand, is one that dates back further than the advent of the experimental approach which utilizes RCTs. It is an approach that inextricably links people and the environments of which they are an integral part. Furthermore, it operates from the vantage point which dictates that by virtue of being human, we are dynamic in nature and the dete rminants of health, behavior and other attributes can be described and summarized utilizing clear and concise qualitative methods. These methods as delineated in the phenomenological approach to research offers a vehicle for exploring as well as explaining the experiences of the individuals being studied. In so doing, the data is captured utilizing phenomenological methods and are reported utilizing statistical methods designed for categorical data (Sandelowski, 1986). Qualitative and quantitative research methodology In order to fully explore the similarities and differences between RCTs and the phenomenological approach to research, it is prudent that we first make a distinction between quantitative and qualitative data. First and foremost, quantitative data can be utilized to articulate some notions that may be true when applied generally, they cannot be applied to any specific cases. For example, quantitative methods can be utilized to gather data on the number of patients who respond positively to a certain level of radiation delivered to the tumor and how those numbers compare to similar data collected over the course of several years. In so doing, the data cannot explain why the patients respond to the treatment in a positive manner or what may influence the way in which they respond. Essentially, quantitative methods are limited. As a direct result, quantitative methods prove inadequate when the nature of the research dictates that an explanation of behaviors is needed and qualitative meth ods are called to task (Sandelowski, 1986). In connecting RCTs and phenomenological research methods, with the notion

Neuroleptic malignant syndrome Essay Example | Topics and Well Written Essays - 500 words - 2

Neuroleptic malignant syndrome - Essay Example Neuroleptic malignant syndrome is no exception since it is a lethal and rare mental disorder (Varcarolis and Halter, 2010, p. 331). According to Keogh and Doyle (2008), Neuroleptic Malignant Syndrome (NMS) is the idiosyncratic reaction to neuroleptic medication. It has serious and adverse effects on individuals that may result in death. This disorder occurs when patients: are under neuroleptic medication regardless of the duration of use, use antipsychotic medication and patients will exhibit signs and when patients use antidepressants. As observed, majority of patients shows signs and symptoms of NMS after two weeks of commencing treatment antipsychotic treatment. These symptoms, according to Varcarolis and Halter (2010) are: altered mental status in patients, muscular rigidity in a patients, hyperthermia, fever, urinary incontinence, motor abnormalities such as lack of movement coupled with tremor, and automatic function that is high or low pressure (p. 331). Neuroleptic Malignant Syndrome can present a broad range of clinical manifestations that can pose a challenge to early detection. The diversity and complexity of its clinical features may not always be welcomed as it leads to confusion among nurses. In order for the nurse to avoid this, they should be aware of NMS classical features such as muscular rigidity, automatic instability and hyperthermia (Koegh & Doyle, 2008). Instant and proper treatment of this disease is advised. It demands prompt, and recognition of the disorder at an early stage and adoption, and implementation of pharmacological interventions such as the use of dopamine agonist is required. In addition, antipyretics such as paracetamol can be administered to reduce fever. Prompt discontinuation of antipsychotic is also helpful as articulated by Koegh & Doyle (2008). In addition, symptomatic management of this disorder is also significant. Nurses are required to monitor patients with this disease

The U.S. Taiwan Trade relations Essay Example | Topics and Well Written Essays - 1500 words

The U.S. Taiwan Trade relations - Essay Example However, the U.S. policy towards the ROC had a major change in 1979 and shifted its diplomatic recognition from ROC to the People’s Republic of China (PRC). But the friendship between the peoples of the United States and ROC continued unofficially and maintained its commercial, cultural, and other major relations. Taiwan Relations Act (TRA) was enacted on March 1979 by U.S. Congress that further strengthened association between the ROC and the United States. The TRA specifies that the United States has to provide Taiwan with necessary defense materials and defense services to protect the country (Taiwan-U.S. Relations 2006). The recognition of People’s Republic of China (PRC) as the legal Chinese government has become the key issue towards the status of Taiwan and U.S. foreign policy. The U.S. policy towards the PRC changed and expanded the economic and political relations with them. Taiwan has become democratic country in the year 2000. In the mean times Taiwan-U.S. relations have suffered set back mainly because of the mistrust between the Bush and Chen administrations; a decline of Taiwan’s willingness to satisfy U.S. prospect about its own self-defense; the breakup of the once-powerful status of Taiwan in the United States; the declining position for Congress; and the utter instability in Taiwan’s domestic political setting. All these transformations are posing challenge to U.S. policy. Since both Taiwan and PRC are involved, the present U.S. policy needs to be reexamined or discarded. But others observe that the very reliability of the U.S. policy structure is vital in running U.S. dealings with both countries and it is to be maintained. Under these circumstances it is suggested that a clear U.S. policy and open relations with Taiwan leaders; maximum U.S. support for Taiwan’s involvement in global institutions; put more pressure on the PRC for discussion to the elected Taiwan government, and give up the use of force; and more

Team Analysis Essay Example | Topics and Well Written Essays - 750 words

Team Analysis - Essay Example Alexies is another flexible, charming, extraordinary caring and social lady. She ensures that everything required to make the team moving such as writing materials are provided. She is also able to change very first with situations, hence flexible and understanding. Dre is another excellent administrator who shows traits of a very dedicated and a curious thinker who is not able to resist an intellectual challenge. The then complements the team by reminding us always of the rules and regulations of the team that must be followed and ensures participation by every group member. Jawon is another charismatic and inspiring man who is able to mesmerize his listeners. He therefore help the team with inspiring quotes and related experiences to help us make informed decisions as we work together as a team. Sharon closes the list as a spontaneous energetic and a strategic thinker who always has a plan for everything. She therefore helps the team with its planning of activities in a logical man ner, which has been a milestone in enabling the team to achieve its some of its goals. On my side, I am also another smart, energetic and very perceptive person who always adds in the gap in the team to join all the ideas presented in order to make logical conclusions, hence making the team make steps towards completion of its tasks. After we were assigned team members, we went ahead to work with the team members as assigned as we believed in working with anybody as a team to uplift each other. We did not therefore add or drop any team members. The team therefore was not affected in anyway due to new members getting in it or other members being dropped. Some of the biggest challenges have been those concerning place and time to meet. Initially, after the members had been assigned to the team, we were faced with the challenge of finding the most appropriate place to meet. We wanted a quiet place with minimal

European court of justice on the free movement of workers Essay

European court of justice on the free movement of workers - Essay Example According to the research findings the 1957 Treaty of Rome established cooperation amongst some six European nations which led to the formation of the European Economic Community, a supranational body meant to enhanced the creation of a common market and promote the rights of citizens of member states. Member states agreed to cede some elements of their sovereignty to the European Commission and in return, acquired some rights and freedoms for their citizens through a common market with several flexibilities in international matters. Amongst the freedoms that the EC Treaty guarantees is the free movement of persons, services and capital under Article 39 of the EC Treaty. Since the European Community was neither a federation nor a nation, the application of the EC Treaty had some challenges which have been modified through a number of treaties that made it more appropriate and practicable in application. This include the Treaty on the Functioning of the European Union. There are some cases that the law of member states interacts in a complex manner with EU Laws. The evolution of the Freedom of Movement in the European Community is steeped in Article 39 of the TFEU which prevents all forms of discrimination against citizens of member states who move to other EU nations The legal preamble is provided by Regulation 1612/68 of the Council which forbids specifies the types of discrimination that must be avoided Other supporting regulations like the Directive 68/360 supports the easy entry of EU nationals into other nations in the Union. European Court of Justice cases have helped to outline major terms in the Laws relating to free movement like 'worker' and 'equal treatment'. This have laid precedence on the core definitions and application of the laws on the Free Movement of Persons in the European Union. Introduction The Free Movement of Persons in member states of the European Community is one of the 'four freedoms' envisaged in the original 1957 Rome Treaty9. The free movement of persons is one of the most fundamental components that are central to the success of the creation and sustenance of a common market10. The laws on the freedom of movement in the European Community allows the settlement and integration of citizens of member states into other member states11. This include the right not to be discriminated against on the grounds of nationality12, the right to seek work and remain a worker in another Member State13, the right to receive and provide services14. These come together to create a framework for the operation of the laws on the freedom of movement of persons across the European Union. Currently, these EU legal standards provide the broad framework that determines the scope and application of the laws on the mobility of labour between member states15. The European Court of Justice has interpreted the standards and frameworks on the EU rules on freedom of movement16. These have created precedents that have restricted the scope of the free movement of persons17. Thus some elements of Article 45 of the TFEU have been tested and ambiguities clarified18. The European Union freedom of rights of movement is guaranteed by Article 45 of TFEU19. It is a convergence point that integrates other legal instruments in the European Union which prevents all forms of discrimination in relation to employment of EU nationals in member nations in relation to remuneration and other conditions of work are abolished20. These laws guarantee EU national’s rights to settle, work and integrate into other member states21. The main limitation of the application of this law is that the freedom of movement and the right to employment does not apply to the public service of any member state22. This is one of the indicators that the law supports a degree of subsidiarity and allows member states to retain some level of autonomy. On the

Tell Me About Blood Essay Example for Free

Tell Me About Blood Essay 1. Hematocrit is what measures the red blood cells in blood. Red blood cells are important for transporting iron and oxygen and for creating energy. If the red blood cell count is lower-than-normal it could indicate several diseases and problems within the body. It may be due to anemia, bleeding, destruction of red blood cells, leukemia, malnutrition, low iron, folate, vitamin B12 and vitamin B6 or overhydration. A bacterial infection causes white blood cells to increase, since they are the cells that attack and destroy the bacteria. As the white blood cells increase, red blood cells decrease. 2. All formed elements begin in red bone marrow as pluripotent stem cells. Pluri means several and these type of stem cells have the ability to turn into many different types of cells. For formed elements pluripotent cells reproduce in the bone marrow and become two different types of cells: myeloid stem cells and lymphoid stem cells. While myeloid stem cells complete development in the red bone marrow and create the majority of formed elements in the blood, lymphoid stem cells finish up in the lymphatic tissues of the body. From there lymphocytes are created and all formed elements, including lymphocytes, are swept into the blood stream to complete their jobs. However, lymphocytes divide once they leave the marrow, while other formed elements do not. 3. Erythropoiesis is the creation of red blood cells. The making of red blood cells (RBCs) starts in the red blood marrow with another cell called a proerythroblast. The proerythroblast is basically an immature red blood cell. As they mature they then become a reticulocyte. A reticulocyte is the middle, or â€Å"teenage,† stage of a RBC. One it fully matures it becomes an erythrocyte. The rate of RBC production is regulated by the percentage of reticulocytes versus RBC circulating. Erythropoiesis is controlled directly by the amount of oxygen carried to the kidneys. If the kidneys are not receiving enough oxygen to distribute to the rest of the body, it will release a hormone into the blood stream called erythropoietin, which signals the bone marrow to create more proerythroblasts. 4. If a person with type B blood were given type O blood in a transfusion, there would be no negative impact. Blood types are determined by antigens, or proteins on the surface of the blood cells. A person with type B blood has the antigen B, while a person with type O blood does not have any antigens present. Thus the term â€Å"universal donor.† With the antigens, we also carry antibodies, called agglutinins, which react  negatively with the A or B antigen. Blood type B contains the anti-A antibody. Since the type O blood does not carry either antigen, the agglutinin has nothing to attack if it was introduced into the body. 5. A. This WBC is a lymphocyte and its function is to fight viral infections and some leukemias. B. This WBC is a basophil and its function is to fight allergic reactions, leukemias, cancers and indicate hypothyroidism. C. This WBC is a monocyte and its function is to fight viral or fungal infections, tuberculosis, some leukemias and other chronic diseases. D. This WBC is a neutrophil and its function is to fight bacterial infections, burns, stress and inflammation. E. This WBC is an eosinophil and is function is to fight allergic reactions, parasitic infections and autoimmune diseases. 6. A person with a parasitic disease would have a higher level of leukocytes because they are the cells that combat the parasite. Leukocytes are white blood cells, which are used to fight a variety of infections. Eosinophils are specific to parasitic infections and they attack the parasite by releasing enzymes that destroy the invader. The count would be higher because they are battling the parasite and do not return to the blood stream once they leave. This is a normal reaction if there is an invader in the body. 7. Lymphocytes are responsible for the immune response against pathogens. Lymphocytes are continuously moving through the lymphoid tissues, lymph and blood. They only spend a few hours at a time in the blood and act as a first defense system. They are very effective in destroying bacteria and making their toxins inactive. 8. Prothrombinase is an enzyme that converts prothrombin, a plasma protein that is formed in the liver, into the enzyme thrombin. Thrombin then converts soluble fibrinogen, which is another liver protein, into insoluble fibrin. Fibrin is what forms the threads of the blood clot to stop bleeding. The main difference between the extrinsic and intrinsic pathways are that the extrinsic pathway occurs outside of the blood vessels while intrinsic occurs within the vessels. The extrinsic pathway occurs rapidly, with clotting occurring in seconds, while intrinsic takes several minutes and is more complex than the extrinsic pathway.

Socrates Argument That Virtue Is Wisdom Philosophy Essay

Socrates Argument That Virtue Is Wisdom Philosophy Essay Socrates claimed that virtue is knowledge. He identifies that two terms as being identical (Reshotko, 2006). Virtue is knowledge and knowledge is virtue. There are two claims which help make sense on the claim of Socrates that knowledge is virtue. These are those which relate to the understanding of what is good and how it gives people advantage, and what is evil and how creates harm to people. The default perception of people is to always go for that which they believe will give them an advantage and not cause any harm. It is therefore not knowledge alone but that which is knowledge of the good. Knowledge is therefore necessary for one to be able to live their lives in virtue. Humans have the freedom to do whatever they want. It is present to the extent that a person takes control of his life, makes decisions of his own and lives his life in whatever way he wants to. The presence of freedom gives one also the freedom to choose which he bases on his thoughts. When we have the knowledge of things and awareness of the things around us, we can choose what we think is right or beneficial for us. Knowledge gives us the freedom to choose which is right and wrong, which is bad and good. And by this knowledge and the exercise of our freedoms, we choose those which are good and beneficial, giving us lives living in virtue. An examination of things that benefit humans are given in the discussion; and these things are health, strength, beauty and wealth. These are the things that humans consider as beneficial, yet such is not absolute since these are also things that can harm humans. They are viewed as good if it leads to happiness and viewed as bad if it leads to harm (Reshotko, 2006). These are different types of human experiences since most peopleà ¢Ã¢â€š ¬Ã¢â€ž ¢s lives are caught in things that have little or no importance to those that are of extreme importance. These experiences are viewed differently from people to people. Same way as these experiences are looked at as bad or good. Say for instance, you taste coffee. We feel the enjoyment there but such is not lasting and may only be for a few seconds or minutes. However pleasant such a taste or experience may be, it is in no way a significant part of every personà ¢Ã¢â€š ¬Ã¢â€ž ¢s lives. Something that is valuable for only a few minutes is not really valuable and does not deserve serious concern. There are qualities of the soul and these are moderation, justice, courage, intelligence, memory, munificence, and all such things. Humans think and act toward things which they deem are good for them. Religion as a particular part of humansà ¢Ã¢â€š ¬Ã¢â€ž ¢ lives can be very influential in providing people with what is right and wrong and also with an image of how they view themselves and others. The fact of one being virtuous comes from the fact of knowing something as being good or bad. Knowledge of someone in choosing what is right or wrong, bad or good necessarily arises from the fact also that one is living a life that is virtuous. Many examples of living in virtuous state could be given. These virtuous instances are all anchored on beauty or seeing something good in what they do. The painter who paints something beautiful lives in the eternity of that beauty in his painting. The scientist who devotes his life to finding meaning in things lives in the eternity of that meaning. The mother who gives herself to take care of her family with love is an instance where that is what is perceived as good and thus choice to do that comes from that knowledge. We admire heroes, for instance, and all those who have lived their lives in high ideals. We sense meaning in the lives of these people. This shows that to desire beautiful things is to desire good things (Denise, et al, 2007). It is true that there are some people also who desire bad things. The reason may be because they believe such are good things or the reason could be because they desire such things to be good even if they are aware that they are not. But those who desire good things have not lived for the sake of satisfactions and pleasures which are in passing only but they have lost themselves in values, living in virtue through knowledge, which will always be remembered forever. Society provides man with a language and ways of expressing oneself and it is in terms of that language that man is able to communicate and assert his values, desires and ideals. Through this, we can see whether a person is living life in virtue or not. We cannot delve into his unconscious and what he thinks, but such is acted out into reality by what we see. If we see someone is virtuous, such therefore comes from knowledge of what is good and what is bad. But the argument is not to the extent that it is all knowledge that is needed for one to have virtue. Practical knowledge is being referred to in this case. As Socrates put it, to know the good is to know how to live well, how to bring it about that oneà ¢Ã¢â€š ¬Ã¢â€ž ¢s soul properly cared for (Denise, et al, 2007). Knowledge is necessary but not what is all important. Thus, as Socrates correctly argued, knowledge is virtue and virtue is knowledge. They co-exist and depend on each other. One is not what it is if not for the othe r. Knowledge comes from the fact of being virtuous. Virtue arises from the fact of knowing what is good and evil

Computer Graphics Effect On Animation

Computer Graphics Effect On Animation The history of computer animation can be traced back many decades to such films as Peter Foldes 1971 film Metadata, or even a 1968 attempt by Soviets to animate a cat. It was in the 1980s, however, that the techniques became more widely used and the industry truly began to experience big changes in how things were done. The advent of this new technology meant that machines could do more of the work, much like with the use of robots in manufacturing. While this machinery is a godsend for productivity, it brings with it concern for peoples jobs and the survival of the traditional way of doing things. One animator by the name of Bill Kroyer brought these concerns to the forefront in 1988 with his own animated interpretation of the ongoing development of this threat. Bill Kroyers Technological Threat serves as an excellent metaphor for the advent of computer animation and how it affected the animation industry and validity of the fears it brought forth. From its infancy up until recent decades, traditional animation techniques were the only methods of animation available before the advent of more powerful computers. Much of it requires each frame to be hand-drawn or, in the case of stop motion, each character or object has to be sculpted and moved little by little for each frame that is captured. It is tedious work. These traditional techniques take a lot of time and patience to do successfully. Throughout the decades there have been attempts to minimize the work involved with animation, such as the introduction of cel animation which put characters and objects on clear celluloid which would then be animated on top of a background image. This meant that a background would only have to be made once, whereas beforehand it had to be redrawn completely with each passing frame. Another time-saving innovation came in the form of Walt Disneys multiplane camera system, which took cel animation even further by making the creation of depth mu ch easier by separating and moving each individual part of the scenery independently and at varying distances from the camera. Even with these advancements, however, the same traditional techniques were required to actually animate anything. Computers brought forth a drastic change in the playing field, essentially turning the art into a science. Soon one of the first instances of computer animation would come in 1960 when John Whitney developed his analog computer to make title sequences for movies and television, using surplus anti-air guidance hardware from World War II. While computers became widely used in animation during the 1980s, there were still quite a few instances of it in the preceding decades, starting with the aforementioned machine developed by Whitney. The computer technology of the time was rather limited and therefore usually only used for experiments. For instance, Peter Foldes used the first implementation of key frame software to create Metadata in 1971. While it entailed the use of a data tablet, which was surprisingly modern for the era, it was limited to two-dimensional animation and could only show simple line drawings of objects in a couple of colors. This film was merely experimental, however, and was followed 3 years later by Hunger in 1974, which was intentionally done in black and white line dr awings. Computers would quickly become powerful enough to render much more realistic imagery, as was exemplified by Loren Carpenters Vol Libre which he presented at SIGGRAPH in 1980, a computer graphics conference held annually. It used fractals to generate breathtaking mountainous scenery and instantly landed him a job at Lucasfilm. Of the animators that worked during the era that computer animation became more widespread, one particularly interesting perspective is that of Bill Kroyer. Bill got his start in animation in the mid-1970s, just before the computer revolution of the 1980s. He originally was denied a job at Disney, but would later be hired by them in 1977, during a time when Disney Animation, and the animation industry as a whole, was in the midst of a slump. He did not stay with Disney long, as he soon left to work with Steve Lisberger on Animalympics. The major milestone in Bills career, however, came in 1982 when they developed Tron which they teamed up with Disney to work on. As Kroyer himself put it, Tron was the beginning. It was the moment when computer graphics made its first contact with the animation industry-like the sperm and the egg. It was neat, because nobody had ever done it before. There were no experts around (Kroyer). It was the first time computer animation would be used so extensi vely on a feature film, and it became almost a prophecy of what would develop in the coming years. Jobs that used to take hundreds of people to do, such as painting backgrounds, can now be accomplished cheaply and quickly by using computers. While Kroyer enjoyed working with computers to animate, he longed for the illusion of hand-drawn cartoons and decided to start Kroyer Films with his wife in 1986 with the intention of combining traditional and computer animation. He became a pioneer in combining the two techniques. While Kroyer was skilled at animating, he was also knowledgeable about writing computer programs, and developed one with his wife that could use a plotter to draw out the computer animations on paper. Such use of computers for animating made many animators begin to fear it taking over and forcing them out of their careers. In response to these fears, Kroyer made Technological Threat in 1988. In it, a group of hand-drawn cartoon dogs are employees at a company and are threatened by their seemingly inevitable replacement by highly efficient robots, which are computer animated. This paranoia culminates into a struggle for survival that ultimately ends in the last remaining dog employee taking down his now-robotic boss with the help of one of the robots, which he proceeds to double-cross to eliminate the threat altogether, leaving him the only remaining employee, the top dog as it were. The film was essentially about traditional animators ultimately working in harmony with this new techn ology and ultimately being highly successful in their careers, perhaps more so than they would have previously. The dog protagonist, symbolic of traditional animators fearing the loss of their job, defies the odds and in the end triumphs, rising in rank to become the new boss. The robots represent the computers used to do computer animation, appearing innocent and diligently going about their work, but ultimately are no less susceptible to losing their jobs than the dogs are. Kroyers approach to animating goes against traditional animators fears by combining both methods and using them to their fullest potential. According to the theories of Paul Wells, this film would be considered developmental animation, as it maintains many traditional aspects of orthodox animated films but mixes two different styles of animation in a more modern approach. According to him, Developmental Animation operates as a mode of expression combining or selecting elements of both approaches, representing t he aesthetic and philosophical tension between the two apparent extremes (Wells, 35). There was no doubt a tension between the two approaches during the time this film came out. Kroyer goes on to explain that, despite this new and highly capable tool, the artistic vision of the animator is still crucial to a films success. Computers are merely another tool in the animators arsenal. Throughout the 1980s, computers went into widespread use, from businesses to residential homes. These machines revolutionized everybodys lives and had far reaching effects on many peoples jobs, not just those of animators. While computers have increased productivity almost everywhere, they have threatened to eliminate many jobs and force many to either learn to use the new technology or remain unemployed. It is truly a situation where we are made to keep up with changes in the workplace or else risk being left behind in a dust cloud of our own stubbornness. This was an especially trying time for many animators as computers had finally reached the point where they would be practical to use in animation. But unlike many jobs that were completely taken over by computers, animation allows for the coexistence of computers with traditional techniques. Understandably, one would think traditional animation to be doomed through the development of this amazing new technology. This could not be farther from the truth, however, as traditional animation remained strong through the 1980s and continues to grow. In fact, it has seen a sort of revival in recent years. In 2009, Disney released The Princess and the Frog, their first traditionally animated feature since they made Home on the Range in 2004. During the 1990s, the Disney Renaissance brought us multiple wildly successful films using traditional techniques, including such films as The Lion King and Mulan. Even with the massive success of Toy Story in 1995, Disney continued to make traditionally animated films on a yearly basis even after the end of the renaissance in 1999. While the renaissance did die out and Disney seemingly put traditional animation on the backburner after Home on the Range, they have shown us that it really is not dead after all with Princess and the Frog and ha s promised to release a traditionally animated film every 2 years from now on. Similarly, Hayao Miyazaki, a highly acclaimed animator from Japan, has built his career off of creating fantastical feature films primarily using traditional animation, and has won various prestigious awards for his creations. Since creating Princess Mononoke, he has begun to implement computer animation in some sequences of his films. Despite this, he retains traditional 2D cel animation as his primary medium of choice. Through all of this it is also important to note that traditional animation still continues to garner critical acclaim insofar as receiving awards and nominations for awards. The medium, while requiring a greater amount of labor and time, still produces many high quality films worthy of critical praise. For instance, Disneys recently released Princess and the Frog was nominated for a Golden Globe, and Miyazaki has been nominated for or won awards for a lot of his films. Bill Kroyer was also nominated for an Acedemy Award for Technological Threat. This just goes to show that the look of traditional animation is not seen as obsolete and can be beautifully done, as has been shown for countless decades. Another important aspect of these two techniques to consider is the overall cost of production for films that use either technique. There has been a growing misconception that computer animation is far more cost-effective overall than traditional animation. While this is true in some instances, in actuality it is subjective to the films being compared. One good comparison to make that disproves this fallacy is between two feature films released by Disney: Bolt and Mulan. Bolt was Disneys CGI major feature released a couple of years ago in 2008, while Mulan was their traditionally animated feature of 1998, which happened to come out towards the end of the Disney Renaissance. Both films have about an hour and a half of runtime. There is a staggering difference in production budgets, however. While Mulan carried a production budget of 90 million dollars, Bolt had an astonishingly large budget of 150 million, 60 million more than Mulan! This clearly shows that the cost of production is s ubjective to the film being worked on and can change in favor of either computers or traditional techniques. Despite the hype for computer animated features following the massive success of Toy Story in 1995, there have been CGI films that have been less than successful, such as Final Fantasy: The Spirits Within in 2001. This film, despite having ultra-realistic CGI and a budget of 137 million dollars, was a total flop, with revenues not even covering the production costs for the film. A films financial viability can depend on many factors, like the quality of what is being animated, and of course how it is marketed, but that is another issue entirely. In short, CGI-animated films can be cheaper than those made with traditional animation in some cases, but often can cost just as much if not more. The costs of each are comparable to each other, the only major difference is traditional techniques tend to take longer. Much like in any other industry, computers drastically changed the way animation can be done and people feared losing their jobs because of the changes brought forth by them. But, as is exemplified by Kroyers film Technological Threat, there is little need to fear the future. Today, traditional animation and computer animation coexist and are often even used in combination on some films. Traditional animation remains a prominent form of animation to this day, and continues to grow with new animators joining the ranks. Computer graphics is not meant as a replacement for the old fashioned hand-drawn and stop motion styles, but rather another tool in their box of tricks. Just because one owns a drill does not make a screwdriver obsolete. They each have important purposes as well as advantages and disadvantages. After all, a tool is only as good as the person trained to use it.