Schindlers List Essay -- Thomas Keneally Nazi Germany Literature Essa

Schindlers ListIn 1933 the most evil of all political parties, the National state-controlled Party, came to power in Germany. Led by Defuhrer Adolf Hitler, these Nazis began to implement policies aimed at restricting the Jewish population of Germany. This is where Thomas Keneally begins the story of Oskar Schindler a simple German man of affairs who would, in the end, come to symbolize hope and life to all the Jews who knew of him.Oskar Schindler, the son of Hans and Louisa Schindler, was born on April 28, 1908 in Austria. He grew up in Zwittau, a quite an large and industrial metropolis. Twenty years later he was wed to a young farmers daughter named Emilie. It was not until the Fall of 1939 that Schindler moved to the Polish city of Cracow.When Schindler came to Poland he had hoped to set up a business there. His desires led him to seek the advice of an enslaved Jewish accountant named Itzhak Stern. Though Stern is suspicious of Schindler, he sees that perhaps Oskar could help as a buffer against the other Nazi soldiers.Soon after this encounter Schindler opens his factory, Emalia. In this shop mess kits were created for the German army. Oskar uses Jews to get free labor, just now in turn provides them with protection and security. Through the years he manages to keep this good treatment secret, despite two arrests for being over-friendly with his Jews.Throughout all of this the restrictions on Polands Jews became more and more harsh. They were herded ...

Another Canada Essay -- essays research papers

When muckle think of Canada and then compare itto the United States of America, they always tend to think itis similar. At least I did until I started this project. I alwaysthought that Canada was a clone or mirror of America, but Iwas wrong. About 99.75% of the Canadian people considerice as something that they use in a drink or something that isalways on the road that needs salt. For the rest of theCanadians, ice is a major barrier of life. The ice can be utilizeas a helpful thing to. It could be crafted into a refrigerator. Itcould also be used as a racetrack for snowmobiles. Nowhow many ice refrigerators do you find in America? I dontthink the mode in America and support something like that.Eighty percent of Canada is in a subartic zone. WhileAmerica sits comfortably in the tropical wet-dry tocontinental humid climate zone. The main population inCanada is rested in between the January temps. of -2F and14F. Whereas Americas main population is in the 41F to32F range. For Canada , the climate reaches the extremesduring winter. About 95% of Canada is 14F and below.Americas winter is about 23F-41F. The dramaticdifference may charter affected the difference of population.The average population in Canada is 26 people per mi. ,compared to 128 people per mi. in America. I think thatthe people are more thickly populated in the US becausethe weather is more tolerable. The weather also affects whatis grown and produced in the two countries. Canada g...

The Basis of Medical Practice Essay -- Health, The Birthmark, Hawthorn

Overall, medical practice is performed when physicians identify health concerns, including diseases, mental disorders, and physical injuries, and provide a treatment for their patients in order to properly recuperate them of their maladies. The appropriate basis for medical practice is a combination of physicians knowledge acquired from scientific look into and education, and ethical considerations regarding the wellbeing of patients. Additionally, if no scientific support is available, patients must rely on intuition and experience in order to make a proper diagnosis. On the whole, science plays a major role in the realm of medicine, as it is the foundation for the creation of new treatments and education. Science is defined as research firmly based upon one or more olden scientific achievements, achievements that some particular scientific community acknowledges for a time as supplying the foundation for its further practice (Kuhn 70). The aspect of scientific research is impor tant because as more diseases and medical conditions become recognized, scientists need to discern possible cures and develop medicine in order for physicians to treat their patients. For example, in A Brief Tour of Human Consciousness, neuroscientist V.S. Ramachandran recounts how patients with reflex sympathetic dystrophy, also known as RSD, were research subjects in a scientific experiment to discover if there was a way to cure their unremitting pain (17). As a result of this experiment, a new and effective treatment for those in chronic pain was determined once it was discovered that the patients pain went away completely and mobility returned to limbs when mirrors were utilized (18). Through science, the answer to how physicians may prescribe a trea... ...per medical treatment. V.S. Ramachandran states that randomized, controlled tribulation research do not make clinical decisions for physicians rather, they must be applied to individual patients and clinical situations bas ed on value judgments, both by physicians and patients. Clinical decision-making must entail value judgments about the costs and benefits of available treatments (91). A patient can practice medicine by deciding whether a certain treatment option is right for him or her. For example, an individual might choose to take medication instead of having surgery because of monetary costs, or nail down which prescription drug to take based on the potential side effects. Overall, though a physician may advise an individual on a certain treatment to cure him or her of a medical concern, it is ultimately the patients decision on whether or not to carry it out.

Confessions in the Ovids Metamorphoses Essay -- Ovid Metamorphoses Es

Confessions in the Ovids Metamorphoses Byblis and Myrrha, two of Ovids im pettishnessed, transgressive heroines, confess incestuous passions. Byblis yearns for her brother, Caunus, and Myrrha lusts for her father, Cinyras. Mandelbaum translates these tales effectively, but sometimes a different translation by stretch out brings new meaning to an argument. As Byblis and Myrrha realize the feelings at hand, they weigh the pros and cons of such emotions. Despite the appalling relationships in question, each young girl provides concrete deport and speaks in such a way that provokes pity for her plight. Their tracks of reasoning coincide, but Byblis starts where Myrrhas ends, and visa versa Myrrha begins where Byblis concludes. The language used by Byblis and Myrrha arouses sympathy. Right away, Byblis exclaims, What misery is mine to spate attention to her suffering (Mandelbaum 308). Later, she discusses her grief caused by the evil fate that makes Caunus her brother (308-9). Myr rha points out her misfortune in having not been born to those tribes that would allow her to fulfill her desires. preferably she is forlorn- denied the very man for whom she longs (339). In Cranes translation, Myrrha considers herself most depraved (on-line). All of these revelations compel readers to feel sorry for the girls in their situations they seem to be victims of their desires. Byblis and Myrrha both denounce their passions. afterwards Byblis awakes from dreaming intimately about her brother, she claims she would never want to see this scene in daylight (Mandelbaum 308). Later in her speech, she refers to her incestuous pursuit as a forbidden course and to her burning desires as obscene, foul fires (309). According to Cran... ...irls speech draws further pity. Aside from all the similarities, each girl travels a different path in her mind. Readers feel more compassion for Myrrha and less for Byblis based on the paths they have followed. Ironically, Myrrha becomes the on e who acts out her desires. As a result, she is metamorphosed into a Myrrh point in this form she will not contaminate the dead or the living with her foul actions. Regardless of Byblis drive to build a relationship with her brother, she is denied the passion she seeks. She grieves over her loss profusely, so she becomes a fountain, never-ending in its flow. Works Cited Mandelbaum, Allen, trans. The Metamorphoses of Ovid. By Ovid. San Diego Harcourt Brace & company, 1993. Crane, Gregory, ed. Perseus Project. 1995. Tufts University. 6 Oct. 1999 http//www.perseus.tufts.edu/cgi-bin/text?lookup=ov.+met.+init>

Amsterdams Architecture Over The Ages :: European Europe History

capital of The Netherlandss Architecture Over The AgesAmsterdam has witnessed many architectural changes during its earthly concern as a capital. From its earliest canal houses to its recent modernisation, it is a widespread array of fascinating design and architecture. Throughout this short guide, I paying attention to take you through these ages, demonstrating the designs, the reasons for them, the way of living and the way the architecture developed around the community. This guide focuses mainly on the last genius hundred years, looking at in depth at the gradual changes make to this great city, and its surrounding areas. I will also look at the great architectural achievements made over time in this area, looking at their design purposes and influences. Older architectureCentral Amsterdam ages back to over 700 years, but most of the buildings seen straight off were built in Amsterdams Golden age, about 250-500 years ago. The Golden age was the end when most of what is now known as central Amsterdam was built. Some people think it is Amsterdams best architectural achievement. Probably the most prominent building built within this time period is the canal house. These barrier all the canals in the centre of Amsterdam. Every canal house was built to be unique from any other, though built with the same shape, each one was personalised with an ornamental piece, such as the gables and plaques. Another method was to put very decorative carvings on the neck of a house. This is called necking. The picture on the right is an excellent example of necking. Due to the swamp like quality of the reclaimed land under Amsterdam, it was very hard to build buildings. Because of this wooden stilts were utilize to support the houses. They were driven into the wet ground before construction for support. Now due to the wet ground some of these supports are rotting, causing houses to tilt and give into the earth. The picture on the left is of a house on the Keizergracht, it has gradually sunk into the ground over the years causing it to lean sideways. During the time period in which these houses were built, your house taxes depended on the frontage. Meaning your taxes were determined by the width of your house. Therefore the sneaky Dutch built their houses deep and narrow to avoid painful taxing. For this same reason the staircases are very narrow and low, making it impossible to take furniture up and down them.

Amsterdams Architecture Over The Ages :: European Europe History

Amsterdams Architecture Over The AgesAmsterdam has witnessed many architectural changes during its existence as a capital. From its earliest canal accommodates to its recent modernisation, it is a widespread array of fascinating design and architecture. Throughout this short guide, I wish to take you finished these ages, demonstrating the designs, the lawsuits for them, the way of living and the way the architecture developed around the community. This guide focuses mainly on the last one hundred years, looking in erudition at the gradual changes made to this great city, and its surrounding areas. I will also look at the great architectural achievements made over epoch in this area, looking at their design purposes and influences. Older architectureCentral Amsterdam ages back to over 700 years, but most of the buildings seen today were built in Amsterdams Golden age, about 250-500 years ago. The Golden age was the period when most of what is now known as central Amsterdam was bu ilt. Some pot think it is Amsterdams best architectural achievement. Probably the most prominent building built within this time period is the canal house. These line all the canals in the centre of Amsterdam. Every canal house was built to be unique from any other, though built with the same shape, each one was personalised with an ornamental piece, such as the gables and plaques. Another method was to put very decorative carvings on the neck of a house. This is called necking. The picture on the right is an nice example of necking. Due to the swamp like quality of the reclaimed land under Amsterdam, it was very hard to build buildings. Because of this wooden stilts were used to support the houses. They were driven into the wet ground before construction for support. Now due to the wet ground some of these supports are rotting, causing houses to tilt and sink into the earth. The picture on the left is of a house on the Keizergracht, it has gradually sunk into the ground over th e years causing it to lean sideways. During the time period in which these houses were built, your house taxes depended on the frontage. Meaning your taxes were determined by the width of your house. Therefore the sneaky Dutch built their houses deep and narrow to avoid severe taxing. For this same reason the staircases are very narrow and low, making it impossible to take furniture up and down them.

Alias in Philippine Province Essay

Aklan oldest province Angono, Rizal town of artists Antipolo City picnic area Apalit, Pampanga tapayan neat Baclayon Church, Bohol oldest stone church building Bacolod City city of smiles Bacolor, Pampanga countrys capital in 1762-1763 Baguio City summer capital Balabac Island, Palawan land of Philippine mouse deer Baliuag, Bulacan the frontmost town to have election Banaue Rice Terraces stairways to the sky Barasoain Church headquarters of the Malolos Congress Basey, Samar town of mat festival Batanes smallest province northernmost province Bataan last fort during Japanese occupationBiak na Bato, San Miguel, Bulacan site of the Biak na Bato republic Binondo known for Chinatown district Bocaue, Bulacan firecrackers capital Bohol land of chocolate hills Boracay Island beings finest beach furbish up Bulacan land of heroes and beautiful women Bukidnon pineapple country Calamba, Laguna place of birth of Jose Rizal Calamian Islands land of Calamian deer Cal auit Island, Palawan animal sanctuary Camiguin land of volcanoes Capiz seafood capital Catanduanes land of yawl winds Cebu City premiere city in the south Central Luzon rice bowlCorregidor Island island fortress the rock Crisologo Street, Vigan kamestizoan district Davao City- worlds largest city durian tree capital Davao Oriental easternmost province Divisoria bargain capital Donsol, Sorsogon sanctuary of whale sharks Gapan, Nueva Ecija newest city General Santos City most competitive city tunny capital Guiginto, Bulacan cutflower capital Guimaras mango capital Hundred Islands, Pangasinan actually composed of 400 islets Iligan City land of waterfalls Intramuros, Manila walled city Kabayan, Benguet land of mummies Kalibo, Aklan land of ati-atihanKawit, Cavite first independent town Laguna resort province Laguna de Bay largest lake Lanao del Sur center of Islam Las Pinas City land of the bamboo organ Lipa, Batangas coffee capital Lubao, Pampanga the birt hplace of Diosdado Macapagal Lucban, Quezon Pahiyas town Luzon worlds 17th largest island Magallanes, Agusan del Norte site of the oldest tree Makati City financial center Malolos, Bulacan site of the First Philippine Republic Manila capital city Maria Cristina Falls, Iligan City mother of industry Marikina City shoe capital Mexico, Pampanga formerly known as MasicuMeycauayan, Bulacan jewelry capital Miag-ao Church, Iloilo fortress church Mindanao worlds 19th largest island Mindoro land of the tamaraws Mount Apo highest peak Mount Arayat legendary home of Mariang Sinukuan Mount Mayon a volcano with nearly perfect cone cell Nayong Pilipino Philippines in miniature. (The theme park was opened in 1972 and closed on June 25, 2002. ) Negros Occidental sugar capital sports capital Pagsanjan Falls Philippines el dorado Palawan the last boundary largest province westernmost province Pampanga culinary capital of LuzonPaete, Laguna town of wood carvers Paoay Church, Ilo cos Norte earthquake baroque Paombong, Bulacan vinegar capital Philippine Deep worlds second deepest spot Philippines pearl of the orient Rio Grande de Cagayan longest river Romblon marble country San Agustin Church, Intramuros oldest church in Luzon San Fernando, Pampanga lantern capital of the world San Juanico Bridge longest prison-breaking bridge San Sebastian Church the only steel church in Asia Siargao Island perfect waves island Spratleys the islands claimed by six countries Sta.Maria, Bulacan egg nest of the Philippines Sta. Maria Church, Ilocos Sur outstanding usage of Spanish baroque architecture Subic Freeport American town Taal Volcano worlds smallest volcano Tagaytay City the next summer capital Tangub City Christmas symbolism capital Tawi-Tawi southernmost province Trinidad Valley land of strawberry and vegetables Tubbataha Marine Park worlds richest bio-geographic area Unisan, Quezon oldest town University of San Carlos, Cebu City oldest univ ersity Vigan, Ilocos Sur Spanish colonial town Zamboanga Sibugay newest province

Ideology For Motherhood Essay

The espouseing search is going to discuss why pregnancy is difficult to define from an political orientation perspective. It will discuss perplexhood in general and what surrounds motherhood and why it is difficult to define from an political orientation perspective and besides explain what ideology means. The essay will also discuss motherhood and how mothers can be mothers other than through a biological way. Also discussed throughout the essay is how surrogacy and adoption leads to someone becoming a mother. The essay will finish with a conclusion and highlight key facts on motherhood and why it is difficult to define the word motherhood. A bibliography will be used to show the different sources used to gain the information in the assignment. Ideology is a way of peoples view and perceptions of the way they see the world, different beliefs and peoples expectations of how we live or the way we should live our life. People believe in their beliefs and that they should follow the way they give way been shown. (Wise geek, 2003) Liberal feminism ideology sees motherhood as rights, responsibilities, empowerment, equity, justice and identity. Whereas matenalism sees motherhood as a material well-being to the health and pencil eraser of their children. (Tucker.J, 2004)The word mother is a simple word and has whiley more(prenominal) different definitions. This could be the effective, social or traditional way of expression at a mother. A legal definition of a mother is such that as the legal mental lexicon 2012 states a womanhoodhood who has born a child is deemed a mother. unless this cannot always be the case for some women. As some women cannot bear children so one of the alternative solutions for them is to go down the route of adoption, other stages also such as fostering or even surrogacy. The social way of aspect at a mother was chiefly confined to mother and child and that the mother raised the child alone. maternal quality is a relationshi p and responsibility of caring and nurturing in the midst of a woman and a child. The child does not have to be born into the family for the woman to become a mother. A child could be born biologically between father and mother, adopted, born through surrogacy or even a woman taking her partners children as her own and nurturing the children and showing them the way of life tillthey gear up to start a family and carry on the roles of responsibilities towards their own children and raise them the way they have been raised. A mother is not only someone who gives birth to a child but someone who raises and nurtures a child into adulthood. This is where surrogacy, fostering and adoptive mothers come into it. As these women argon not biological but they atomic number 18 pacify mothers.Motherhood is defined by Merriam-Webster Dictionary as first a female parent, and secondly as maternal executeerness or affection. Inherent in this definition is the role of a mother as a nurturer. Mom s coo to their babies, using soft, sweet voices. They handle their children with gentle mannerisms and softness. In addition, mothers senseively try to entertain their children from pain and suffering. This includes emotional pain as well as physical discomforts. Mothers provide a nurturing environment where their children can feel safe and secure. (www.livestrong.com)Gender ideology round motherhood is that mothers believe that anything they do or want to do is frowned upon from a gender role view, such as if a woman wants to realize as a builder. For example Builders are seen as a male role and that mothers should stay at home and cook, clean and look after the children. A traditional family such as two children and a mother and father, the wage earner was the father who worked full time and the mother stayed at home as a housewife to look after the house and children and cook ready for father to come in from work. However if the other chooses to work they are mainly only in pa rt-time employment earning a lot less than what the father does. Now in the 20th light speed at that place are more rights for mothers and more help is available for mothers to work and fathers to stay at home and look after the children. A mothers employment has tripled since 1951 to 2008, and this is continuing to face lift because of the number of welfare and benefits available for working families.From the 17th and 18th centuries childhood was seen as a valuable time in their life and mothers started to breastfeed their children more. However upper class women thought breastfeeding was disgusting and did not feed their babies from the breast. In the nineteenth century ethnic women and white working class women were labelled authorized and good mothers whereas single mothers were looked upon andwere no better thought off. Middle class women had the freedom and choice to stay at home, women of colour were considered scientifically inferior mothers and excluded from the ideolog ies touch good mothering. Motherhood is looked at upon differently in different cultures and beliefs, however most agreeing that mothers have a duty to care for the children by providing the safe and potent upbringing of their children. Mothers not only care for the child they are perceived to take responsibility to look after the kinsfolk and the rest of the family. Eighteenth century British society insisted upon domesticity as the most appropriate venue for the fulfilments of a womans duties (Francus, 2012) Mothers nowadays makes the decisions on behalf of her children and many organisations, such as doctors and schools confer the mother first before consulting the father.Sometimes the father does not have a say in what happens and can only back the mother up or disagree but sometimes legally they are not involved. Motherhood can be difficult to define as there are many changes happening in short spaces of time. For example a mother could be a mothering figure to her partners children as a bar mother, a grandmother could be bringing up her grandchildren for any number of reasons. Adoptive and fostering mothers are also seen as mothers but not in the biological sense, but in the nurturing of children. Surrogacy is a way for a woman to become a mother if they can biologically reproduced children themselves or chooses not to. another(prenominal) woman carries the embryo that has come from the real father and the womans egg and set into the surrogate mothers womb in order for her to carry the foil until the birth of the child where baby would be handed over to the parents.The question is who is the real mother of the child? If it is a gestational surrogacy where egg from woman and mans sperm is fertilised into a surrogate mother then the woman whose egg it was would be classed as the biological mother, however must also be aware that the baby can motionless get the surrogate mothers personality or attitudes ( www.healthy string.org ) However according t o gov.uk it says that the woman who gives birth is treated as the legal mother even if they are not genetically related. In the US surrogacy is legal but in the UK surrogacy is illegal if you pay the surrogate, except for their reasonable expenses. acceptation is a process that allows children to be safely looked after by parents, women who choose to adopt must have a nurturing manner and a natural instinct and create a bondwith the child and appreciates that it slowly happens over time. The child must be brought up and cared for like she gave birth the child naturally and guide the child to life expectancy. This role is not for the weak of spirit, or the easily wounded. Loving a child not born to her but calling him her own, but this is what she does, it is her calling. She is a mother.Years ago mothers were looked upon as been at home full time and teaching their children to have manners. Feminism demonstrated that women were restricted in what they did and didnt have a say as be coming a mother was part of her nature, however she had to obey her husband in the decisions made within the household. check to Rothman (1989) a womans womb is her flower pot and that a man aimts the seed which then produces the child, they became the fathers property as they came from his seed, even though the woman contributes to the reproduction process, however still they have no say. They were classed a medium contributor to the reproduction process and they carried the children and gave birth to the flower that blossom from the seed planted by the father. In the 20th century mothers have more rights and although some people still feel that fathers should go to work full time and be the breadwinner, now that times have change where the womans job was to look after the children, they now dont feel scared or threatened to share the child upbringing with the father.There are a lot more house-husbands at home while the mother goes to work, this gives fathers more engagement and help to nurture the children in life. Some mothers still feel they are selfish though by going to work and leaving the child, most tend to find part time jobs or take a flexible hours position so that they can fit work in around the children and still play a huge part in their childrens life. Unlike before in the early years a woman can plan her life and decide when is the best time to have a child, due to access to different contraceptions women can control if they become pregnant. They are in control of the decision and decide if they have the mother instinct and nurturing ways to raise and care for a child The following essay has discussed what ideology around motherhood is and how people perceive motherhood. It also has explained about motherhood in the olden days and that mothers were to stay at home to care for the children and householdcompared to now in the 20th century and how times have changed and fathers have a more hands on approach with their childrens upbringing.Disc ussed within the essay it has explain that mothers are not just mothers through the biological reproduction process that they can be mothers by adoption, surrogacy, or raising children as they there are their own children and nurturing and loving the child the same way as a biological mother would. It also discussed about feminism and how times have changed and that people dont assume that the mother is a full time mother and are not shocked to find that the father is looking after children and taking a more hands on role.ReferenceAbout.com (2013) What is a adoptive mother online available at http//adoption.about.com/cs/wantingtoadopt/a/adoptivemothers.htm Accessed April 2013 Cole,E &Knowies,J. (1990) Motherhood A feminist perspective. Vol 10London,The Haworth press Francus, M. (2012). Monstrous motherhood eighteenth-century culture and the ideology of domesticity. Baltimore Johns Hopkins University Press. Gov.uk (2013) Rights for surrogate mothers online available at https//www.gov .uk/rights-for-surrogate-mothers Accessed April 2013 Livestrong.com (2013) Womens life online available at http//www.livestrong.com/woman/ Accessed April 2013 Llyod,E &Woollett,A (1991) Motherhoodmeanings, practices and ideologies.Sage publications, California Suite 101 (1996) Social institution of motherhood online available at http//suite101.com/article/social-institution-of-motherhood-a64879 Accessed April 2013 Social work and society internationalist online journal (2011) Historical Perspective on the Ideologies of Motherhood and its Impact on Social Work online available at http//www.socwork.net/sws/article/view/270/445 Accessed April 2013 The free dictionary (2013) Mother, online available at http//legal-dictionary.thefreedictionary.com/mother Accessed April 2013 Wisegeek (2003) Motherhood,online available at http//s.wisegeek.com/s/?cx=001721306601487571258%3Axvwilsw1lpg&cof=FORID%3A10&ie=ISO-8859-1&q=ideology+on+motherhood&sa= Accessed April 2013

The Learners and The Lesson

During this class I could notice that the students are able to communicate in an efficient way in simple and routine tasks requiring a simple and direct exchange and fundamental interaction of information requested by the teacher. They were able to use and apply the prepositions of place accordingly however, I believe they should digest more on using the language in other contexts in order to have them practice more and facilitate the recognition of the given structures.Their interaction with the teacher and among each other showed grammar, lexis, and pronunciation mistakes and errors, but this is a crucial part of the learning process, so I believe it is appropriate to their level. CONCLUSION The immensity of evaluating the learners spoken language is greatly high since we need to be aware of their needs in order to plan lessons that truly help our students. We should take into comity that it is very important to make feel our students comfortable and in a safe environment so the y can practice the language without fear and nervousness.Developing plentiful skills always suppose a challenge for both learners and teachers. If we have a good class atmosphere, students will perform freely and enthusiastically.

The recent increase in agricultural productivity

In the recent times the unpolished productiveness has been increased two times while the rude of the cultivated land is increased by merely 10 percent.But the job is how to manage the inauspicious effects of clime alteration on agribusiness productiity.Incrasing populations at high rate I is besides a serious concern, harmonizing to FAO the world population will make 9 billion by 2050 which is presently 6.7 billion.It is estimated that the universe inelegant nutrient demand will be increased to 70 % , and at the same clip clime alteration is expectrd Ro cut down the agricultural productivity.The function of developing states is critical and they should must transform their tradional patterns to modern techniques.To guarantee the nutrient shelter in future FAO has proposed figure of valueable ways through which the agricultural production will increased with minimising the consequence of utmost clime conditions.The proposed methods argon soi and alimentary direction in this metho ds smallholders gutter profit the most by the utilisation of manure and harvests residues to increase production.Management of H2O in harvests prodution is besides of import, today irrigation is practiced in merely 20 % of the agricultural land in the devloping states but are genearting 130 % much yields.Smallholders should follow the efficeint methods or H2O use.Cliamte alteration has increased the effects or plagues and diseases impacts on the harvests which in consequence has decreased the outputs leval.Resilence othe ecosystems is of import as ecosystem can assist in many ways in prolonging the cliamte and cut downing the degree of GHGs emissions.Harvesting and supply ironss of the harvests should be efficient and advanced so that the institutionalize crop losingss should be minimized.Processing and storage of agricutral merchandises besides helps in cut downing the losingss of excess food.Use of advanced engineerings improves the production degree but at the same clip, in s ome instances the job of ecological harm, resource development and plague and diseases are noticed.These all patterns are making good in different developing states downstairs the guidline of FAO but still there are still so me information spreads which consequences in the faliure of practical application of these production systems and patterns.Rice is maven of the most primal nutrient point used in most underdeveloped states and about 3 billion people eat rice daily.Due to the utmost waether conditions H2O log and irregular rainfall enchantments has adversly effact the end product of rice crop.Differnt methods are proposed to command these effects.Croping forms are changed and embankments are built to construct t protect rice farms from inundations and drouth, tolerant and resistent varities of rice are being introduced.Different researches are being done on rice cultivation and urea deep arrangement UDP engineering has been developed.In bagladesh these this pattern has shown 60 % nest eggs in urea usage and output additions of about 1 ton per hacter.Differnt extenuation and version techniques are being used by different states e.g usage of natural fertilisers, variegation of harvests nad no cultivated land.Conservation agiculture is another pattern which is proposed by FAO it has three steps.Managemant and usage of fertilisers in such a manner that more is produced with less usage of fertilizers.Rotation of harvests and usage of legums workss for nitrogen arrested development and avoidence of tillage.It reduces the vulnerabilty of harvests by version to cliamte alteration and besides better the nutrient shelter in sustainable way.agroforestry is another pattern by which the issue of milliliter and nutrient security can be minimized.It is the usage of trees an vitamin D bush in agricutural harvest and in land managemnr systemTrees can better the dirt birthrate, particularly the N repairing legume trees.In Africa this system has increased corns end prod uct from 1.3 to 1.6 tons.It is besides one of chief beginning of C sequestartion of the universe CO2 emissions.It is of import for two hundred extenuation.Urban and semi urban agricuture is besides impotant to adress the issue of nutrient security and turning demand.50 % of universe population is populating in metropoliss but they can non run into their demand of nutrient so they rely on rural agri products.In metropoliss agriclture production can be parcticed in diffent topographic points like schools, infirmaries roof tops and Windowss boxes etc and these are go oning in some countries.But there are different sorts of hurdlings like the shortfall of H2O, land issue, envirnomental impacts of urban agri consequence the populace and make diseaes and wellness concerns.therefore mor advanced tecnolgies are required and metropoliss be aftering should back up the urban agri activities.The demand of more advanced production system is besides needed which can besides carry through the smal lfamers enregy needs.Biofules shuold be produced from the residue of different harvests.

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 form E15-1 E15-2 E15-3 E15-4 E15-5 E15-6 Content Trading Securities. (Easy) ledger entries. unsuccessful holding gain. Balance sheet disclosure. Trading Securities. (Moderate) daybook entries. Income statement and remainder sheet disclosures. Long-Term enthronement fundss. (Easy) Securities available for sales agreement. leveraging and adjusting entries. Available-for- shift Securities. (Easy) diary entries. Compute unrealised emergence/ light remainder. Available-for-cut-rate sale Securities. (Easy) Journal entries.Balance sheet disclosure. Held-to-Maturity adhere investing. (Easy) Premium, straight-line amortization, journal entries. Error in pictureing affair group at erudition. Held-to-Maturity Bond enthronisation. (Easy) Discount, semiannual interest receipts, straight-line and hard-hitting interest systems of amortization, journal entri es. Held-to-Maturity Bond enthronization. (Moderate) Discount, semiannual interest receipts, sale at gain. Effective interest method. Journal entries. Bond investing. (Moderate) Discount, semiannual interest receipts, amortization agenda using effectual interest method, journal entries.Bond enthronisation. (Moderate) Premium, semiannual interest receipts, amortization schedule using trenchant interest method, journal entries. Bond enthronement funds funds. (Moderate) Premium, semiannual interest receipts, sale at loss. Effective interest method. Journal entries. Transfer Between Categories. (Easy) Reclassification from held-to-maturity to 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 investiture in Bonds. (Moderate) Journal entries for impairment. IFRS differences. comeliness Method. (Easy) Stock investing. No goodwill. Journal entries, ratio sheet presentation. Equity Method. (Easy) Stock enthronement. 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 post acquisition, carry dividend, and sale of a 1% interest.Life Insurance Policies. (Easy) Journal entries to record barter for, reward payments, change in cash yielding tone look upon. drop monetary fund. (Moderate) Purchased securities, collected dividends and interest, wrote up to graceful think of, sold securities, paid expenses, retired bond. Journal entries. (Appendix). derived functions. (Moderate) Loan and derivative (interest rate swap fair cheer hedge). Journal entries, including present value calculations. Financial statement disclos ures (one division). 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 unsuccessful holding gains and losings in income. Available-for-Sale Securities. (Moderate) Journal entries. Income statement and balance sheet (current and noncurrent) disclosures for two quarters. interim Available-for-Sale investings. (Challenging) Journal entries. Income statement and balance sheet disclosures for four quarters. coronation in Available-for-Sale Bonds. (Challenging) Purchase at terminate and at tribute. 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 enthronements in Available-for-Sale Bonds and Equity Securities. (Challenging) mediocre value method. Record various transactions. Income/loss determination. Determine carrying value of maverick investiture account.Temporary Investments, gold, 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 inte rest method. amortisation schedules. Journal entries. Bond Investment. (Challenging) Discount. Effective interest method. Partial sale. Journal entries. Comparison of modal(a) look upon 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. notes flow from operating activities to a lower place the indirect method. Equity Method. (Moderate) Stock investments. Journal entries to record purchase, income, dividends, sale. deviate from fresh evaluate to Equity Method. (Challenging) limiting from 10% to 40% ownership. Calculate dividend taxation, unrealized make up, investment income, and carrying value of investment for two years. Life Insurance Policies. (Moderate) Journal entries to record a nnual premiums, change in cash surrender value, polity 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 lodges for a number of different reasons.One reason is to obtain surplus income by investing excess cash. A second reason is to create long-run relationships with suppliers. A third reason is to obtain gullificant influence or control over related companies. The three categories of investments in debt and equity securities when there is no significant influence are business securities, available-for-sale securities, and held-t omaturity debt securities. (a) A debt security represents a creditor relationship with other comp whatsoever. (b) An equity security represents an ownership interest in another company. c) The fair value is the amount at which a security could be exchanged in a current transaction in the midst of willing parties. Q15-4 When an investor owns between 20% and 50% of the voting commonalty 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 much(prenominal) than 50% of the voting common stock of the investee, then the investor issues consolidated fiscal statements which are the combined financial statements of both companies.Q15-5 To account for an investment in trading securities, the investment is ab initio recorded at cost. It is subsequently inform at fair value and the unrealized holding gains and losses are implicated 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 persona of accumulated other nationwide income in stockholders equity.The unrealized holding gains and losses for the period are reported in other comprehensive income. enkindle 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 s ecurities is reported at fair value, as determined by the closing 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 do at the end of each period to an unrealised cast up/ minify account and an hire account to reflect any change in fair value. The total unrealized add/decrease is reported as accumulated other comprehensive income in stockholders equity. exonerates 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 growth/decrease in the value of the security reported for that security at the previous balance s heet date must be reversed out of the accounts. Bonds carrying a say interest rate above the prevailing yield for securities with a similar amount of risk are purchased at a premium.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 trade 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 adaption of interest revenue. Under the effective interest method, the market (yield) rate at the time of government i ssue is multiplied times the previous carrying value to determine the interest revenue. (a) When an investment in a debt security is transferred from the held to maturity category to the 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 available for sale category to the 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 vitality as an registration of the yield. Q15-9 Q15-10 Q15-11 Q15-12 Q15-13 Q15-14 Current asset Temporary investment (at cost) accession compensation 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 impairment 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 investees dividend policy. The dividends paid may be affected by the investors 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 me thod, income is recorded by the investor as an increase to the Investment account and as investment income (based on the investors 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 investors accounts to avoid 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, undervalue 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 laughable items as investor extraordinary items (the proportionate share of investee results of discontinued operations 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 investors 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 investees other shareholders, and cannot obtain this information (5) the investor cannot obtain representation on the investees 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 essential to restate its 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 wages and unrealized cast up/ falling off 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 enunciate think arrangement using either the equity method or proportionate 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 policy 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 equ al to the amount of the cash surrender value of the policy, a part of each premium paid represents an investment. The portion 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 parenthesis 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. stock certificates 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* come to tax revenue ($12,000 x 0. 10 x 4/12) immediate payment *$12,000 + $6,000 RE15-2 bet gold ($12,000 x 0. 0 x 6/12) amour tax revenue Dividends specie Dividend gross ($1 x 300) RE15-3 Unrealized development/ precipitate in note value of Available-For-Sale Securities* pay for depart in economic value of Investment *($12,300 $12,000) + ($5, vitamin D $6,000) RE15-4 immediate payment Investment in Available-For-Sale Securities fetch on Sale of Available-For-Sale Securities registration for Change in nurture of Investment Unrealized Increase/ ebb in rate of Available-For-Sale Securities RE15-5 Investment in Held-To-Maturity Debt Securities hard currency 215,443 215,443 6, cd 6,000 four hundred 200 600 18,000 400 18,400 600 300 300 200 ergocalciferol 500 15-8 RE15-6 cash ($200,000 x 0. 12 x ? ) Investment in Held-To-Maturity Debt Securities disport receipts ($215,443 x 0. 10 x ? R E15-7 Investment in Trading Securities Investment in Available-For-Sale Securities Gain on Transfer of Securities Unrealized Increase/Decrease in nurse of Available-For-Sale Securities Allowance for Change in honor of Investment RE15-8 Realized button on Decline in measure Investment in Held-To-Maturity Debt Securities RE15-9 Investment in Stock Eagle spate (0. 30 x $120,000) Investment Income Investment Income Investment in Stock Eagle good deal ($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 pry of Available-For-Sale Securities 750 x ($24 $22) Allowance for Change in Value of Investment RE15-12 Prepaid Insurance Cash Insurance disbursal 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 accumulative Change in Fair Value $1,500 (800) $ 700 38,000 27,200 * protective covering 500 shares of C political party common stock 800 shares of D association common stock Totals 2. 3. E15-2 1. 2010 Oct. Nov. 26 26 make up $38,000 27,200 $65,200 700 unrealized gain on increase in value of trading securities reported on 2010 inco me 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) discharge on Sale of Trading Securities Investment in Trading Securities 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) * bail 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 damage $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 death 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 another(prenominal) comp 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 Revenue 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 Cas h 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 securi ties (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 provoke 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 exaggerated 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-M aturity Debt Securities Cash Cash ($500,000 x 0. 09 x 6/12) Investment in Held-to-Maturity Debt Securities ($500,000 $483,841. 79) ? Interest 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 footnote 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 troth 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 Debt 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 Amorti zation Schedule Effective Interest Method Cash Debita $3,250 3,250 3,250 3,250 3,250 3,250 Interest Revenue Creditb $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 round 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 Investme nt in Held-to-Maturity Debt Securities Cash 307,493. 34 307,493. 34 GLOVER CORPORATION Bond Investment 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-to-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 Crowel l Corporation Cash Cash ($50,000 x 0. 30) Investment in Stock Crowell 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 Inves tment 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 chieftain 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 change posture 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 49,000 425,000 400,0 00 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 requital 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 obligation from Interest Rate Swap cPresent 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 value of d erivative 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 preferred stock 400 share s 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 one hundred fifty 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 11,000 $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 V alue 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 Securities (400 x $45) $17,200 Unrealized Increase/Decrease in Value of Avai lable-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 capital of Mississippi 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) a800 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 Secon d 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 mesh 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 Investme nt 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) marching music 31 $765a For Quarter 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 15-3 8 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 Available-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 disc ount) $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 40,359 441 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 (6/3 0/10) + $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 Reve nue ($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 pestle 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 Securities 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 chalk up 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

Gmos

Shayna Powell GMO Helpful or Harmful? The battle about transmittableally modify food is intensifying more and more each day as to whether it is doing more harm than good to the health of the environment and the general population. While in that respect is some potential for a successful GMO world, there are far too many risks and safety factors involved. The factors include the unknown consequences of eating GMOs, the effect of genetic engineering on the environment and genetic renewing, and the massive amounts of herbicides, pesticides, and fungicides required in GMOs.These products are unsafe, unnatural, and have the potential to cause irreversible damage in the future. Others who take issue might argue that GMOs increase food supply, tolerance of harsh environmental conditions on crops, and pest and disease resistance. While these arguments may have some validity, the fancy that these products can be very unsafe and damaging cannot be excused because of these pros. First, ge netic engineering can reduce genetic diversity. Plants with reduced genetic diversity cannot handle drought, fungus, or pests as well as natural plants can.GMOs strengthen homogeneity and increase the vulnerability of crops to environmental changes. There is also a strike for the spread of altered genes to weeds and other wild relatives creating super-weeds that will be resistant to herbicides found in GMOs. This in turn would defeat the purpose of genetically engineering crops. In the end, the GM process will be more costly to farmers and agriculture itself. In addition, GMOs require massive amounts of herbicides, pesticides, and fungicides.According to Mark Anslow, Ecologist Editor, no genetically modifies crop has yet eliminated the need for chemical fertilizers in order to achieve expected yields. (Anslow, 464) Also, these chemicals are poisonous and should never be eaten. Why then would companies such as Syngenta and Monsanto find it safe for humans to ingest such poison? Fi nally, the consequences of eating GM products are widely unknown. Experts say that 60 to 70 share of processed foods have ingredients that have been genetically modified. That means that most breakfast cereals, snack foods, some baby foods, sodas and oils are being consumed without known risks.In addition, food items that check out GMOs are not labeled in America. According to Jeffrey Smith altered nutrients and toxins can result in developmental problems. (Smith, 471) This has resulted in the nutritional studies on schoolboyish and developing animals. However humans are very different from animals and could have far different reactions than those shown form tests done on animals. In order to obstruct future disasters, long-term studies of biotech foods should be conducted to determine long-term effects. In conclusion, too many risk factors exist for GMOs to be overlooked as a upright biological advancement.Studies should be done overtime to reveal what effects genetically eng ineered food can have on the environment and the consumers in the future. While difficult to make a quick-fix in the shortcoming of nature, responsible actions should be taken to ensure the safety and well-being of those partaking in the GMO movement. Works Cited Anslow, Mark. Ten Reasons Why GM Wont Feed the World. Good Reasons with Contemporary Arguments Smith, Jeffrey. Another Reason for Schools to Ban Genetically Modified Foods Good Reasons with Contemporary Arguments

Acid Rain Case Study

Acid Rain The southern Company (A) Problem Statement In 1992, executives at the southern Company have terce years to formulate a robust and complex strategy that get out involve massive enceinte outlay and substantial modifications to processes and procedures as it solves to comply with provisions enacted in 1990 to the amendments of the Clean Air wreak, while simultaneously ensuring they remain sustainable and profitable. Analysis The grey Company is an American based electric utilities high society in Alabama, atomic number 31, Florida, and Mississippi.It is the quadrupletth whoppingst in the U. S. The case surrounds the challenges the companys Bowen plant in Georgia faces as it attempts to conform to the bare-ass 1990 Clean Air Act Amendments. The Bowen plant is a coal fired plant capable of producing enough power to serve residential, commercial, and industrial demands of everywhere one one thousand million people. The Clean Air Act recognizes second as a contribut or to the acid take root problem and enacted a tendency to reduce total national sulfur dioxide emissions to half of 1990 levels.The Act describes the cap and trade approach whereby companies are admitted to pollute a certain amount of sulfur dioxide compared to levels of electrical energy output they produce. Rainwater is naturally acidic with a pH of around 5. 7. Acid rain can be defined by anthropogenic acidification caused by nitrogen compounds and sulfur dioxide, formed as particulate matter released in man-made products such as smoke stack emissions and automobiles. Environmentalists have braggart(a) more concerned about the effects of acid rain which contains lower than normal pH levels in water.The effects of the lowered pH as pop water streams into rivers and threatens aquatic species, disappearance of sensitive coral reefs, disrupts microorganisms and natural acid buffers in soil, weakens tree roots, causes leaf loss, and corrodes limestone and buildings. The case s erves to examine the methods and alternatives for which sulfur dioxide is utilized, and the relation with its pollution within coal-fired energy plants. Through new provisions passed in the Clean Air Act of 1990, the Southern Companys Bowen plant in Georgia will require strategic action in order to comply with the new law.They must reduce their sulfur dioxide emissions from 262,800 tons per year to 254,580 per year, as swell up as steeper reductions in subsequent years. If it does not, it will be waiveed to buy allowances from otherwise plants or companies to meet the legislative requirements. Conversely, the Bowen plant can work to significantly lower sulfur dioxide emissions and sell their repletion pollution allowances to other plants or companies. To this end, the case discusses lead options the Bowen plant is investigating in order to comply with the new Clean Air provisions, which are 1. pick 1 dilute high-sulfur coal without scrubbers and purchase allowances 2. fillin g 2 Burn high-sulfur coal with scrubbers and sell allowances 3. Option 3 Burn low-sulfur coal and have potential to sell allowances The Southern Company must consider certain ambiguities as they evaluate their options. First, the pricing of pollution allowances are found estimates and could vary depending on projected levels and future political sympathies protocol.Second, if the Bowen plant selects the option that would produce the greatest amount of pollution, it would counter the intent of the Clean Air Act and therefore, even if the option chosen is most advantageous from a profitability standpoint, the company should consider a balance of profitability and adherence to the progression of orbicular conservation. The Southern Company has certain advantages in functional toward a solution to bring their plants up to code and in line with new regulations. They have four plants in the southeast, representing a strong energy producing market share in the region.Each plant is in a different stage of code adherence, so the company has flexibility as it considers its options for the Bowen plant. As a standard, the coal plants have low variable costs, and operate continuously with reliability. The Bowen facility offers affordable electricity, serving residential, commercial, and industrial segments. somewhat of the companys weaknesses is they manage a large scale operation and a single strategic business decision may have downstream effects on other plants.In addition, they have dependencies on their external coal suppliers, the fact that their current operations and capital equipment only support emissions of sulfur dioxide requiring government regulation. As Coase indicates, when property rights are not defined and enforced, or when transaction costs are high, the contentious parties can call on government to upsurge with the issue (Myer), which is exactly what has occurred. Coase reminds us that external effects are reciprocal. There would be no acid rain harm if it were not for economic followers that values environmental use.In contrast, there would be no discharge of waste were it not for economic activity that values environmental use. Therefore, the focus of the acid rain dilemma is on the producers and users of electricity and the owners of coal companies and their employees, not the owners of the buildings, property tax collectors, environmentalists, or other interest groups wanting to place restrictions on environmental users. pass The recommendation for this case is largely represented in the Excel spreadsheet that accompanies this paper.Specifically, the lines 2 through 12 on the spreadsheet cite the assumptions that are common among all three options. Option 1 Burn lavishly- southward Coal without Scrubbers Purchase Allowances Without utilizing the scrubbers, 266,550 tons of sulfur dioxide will emit into the atmosphere. It is impossible to meet input requirements of 8,338 tons of coal and so far emit low enough levels to meet the Clean Air Act standards. Bowens coal varies widely both in delivered damages per ton and in waken content per pound therefore prices are expressed in dollars per ton.From 1992-1995, high sulfur Kentucky coal burned at $41. 46 per ton. From 1995-2016, the price was expected to fall to $39. 82 per ton. They would have to purchase pollution allowances in addition to paying the operating costs for this option. Summary of Assumptions explanation of Value Cost per Ton High Sulfur Coal (bottom of pg. 3) 1992-1995 cost per ton is $41. 46 1996-2016, price drops to $29. 82 Cost per Ton Low Sulfur Coal (pg. 5) For option 3 offset in 1996, cost for low sulfur is $30. 37 per ton. Estimated Price of Allowances (pg. ) 1995 allowance is $250 and increase 10% in 1996 on through 2016 Tons of High Sulfur Coal per Year (pg. 4-top) yearly hi-sulfur coal needed to sustain operations (reference cell C8) 8. 338M tons Tons of Low Sulfur Coal per Year (pg. 5) Annual low-sulfur coal needed to sustain operations (reference cell C9) 8. 391M tons Sulfur Dioxide allowances received /yr. (pg. 2) 254,580 tons of sulfur dioxide in 1995-1999 and 122,198 in years 2000-2016 Revenue from electricity sales (pg. 4, option 2) Reference value for option 2 that contributes to loss of 2% revenue (see option 2, line 41). 1551000000 kw*0. 056) = 1206856000 OPTION 1 HIGH-SULFUR scorch WITHOUT SCRUBBERS Description of Value Sulfur Dioxide Emitted (pg. 4) Bowen plant burns 1. 6% sulfur by tip, suntan 8. 338M tons, generating 266,550 tons of sulfur dioxide emissions. All years included Allowances Bought (pg. 2) Option 1 would require Bowen to buy allowances. Figure is 266,550 tons of sulfur dioxide generated minus the 254,580 allowances afforded, scratch line in 1995 2016 Allowance Cost (pg. 3) Price of allowances bought times the price, starting in 1995 2016 Fuel Cost N/AAdditional Operating Cost N/A confused Revenue N/A Pre-tax Total Adds allowance, fuel, supererogatory operatin g, and baffled revenue costs (lines 19 through 22) After-tax Cost Adds 37. 7% tax rate starting in 1995 through 2016 Capital Cost N/A Depreciation N/A Total After tax cost + capital cost wear and tear (if applicable) PV Present value year over year NPV = 266. 38 Millions Option 2 Burn High-Sulfur Coal with Scrubbers and sell allowances Wet limestone flue gas desulfurization (FGD) equipment, commonly referred to s scrubbers, are as large as generators and expensive to install. The gas with 90% of the sulfur dioxide removed would then be vented to the air. Bowen could install the scrubbers during Phase 1 fulfilment, and allow them to sell allowances to other utility plants. During Phase 2, Bowen will have to meet the new requirements and would delay capital outplays of installing the scrubbers by five years, however, in Phase 1 period they would have to buy allowances or burn lower-sulfur coal. OPTION 2 HIGH-SULFUR COAL WITH SCRUBBERS Description of Value Sulfur Dioxide Emitted B owen plant burns 1. % sulfur by weight, burning 8. 338M tons, generating 266,550 tons of sulfur dioxide emissions before scrubbers installed. Thereafter, beginning in 1995, emissions drop to 26,655 Allowances Bought Option 2 would require Bowen to buy allowances. Figure is 26,650 tons of sulfur dioxide generated minus the 254,580 allowances afforded, starting in 1995 2016, hence allowance cost is much less than option 1, collectable to less emissions generated Allowance Cost Price of allowances bought times the price, starting in 1995 2016 Fuel Cost N/AAdditional Operating Cost (pg. 7) Scrubbers add 0. 13 per kwh to operating costs for purchase of limestone and disposal of sludge Lost Revenue Additional energy consumption costs impact revenue by 2% Pre-tax Total Adds allowance, fuel, additional operating, and lost revenue costs (lines 36 through 39) After-tax Cost Adds 37. 7% tax rate starting in 1995 through 2016 Capital Cost $143. 85M in year 0, $503. 61M in year 1, $71. 97M i n year 2 Capitalized Value $143. 85M in year 0, $503. 61M in year 1, $71. 7M in year 2 = added Depreciation Capitalized value * 14% depreciation (1995 1999) 2% depreciation (2000-2016) Tax Benefit from Depreciation Straight line depreciation Total After tax cost + capital cost + tax put on from depreciation PV Present value year over year NPV = 309. 90 Millions Option 3 Burn Low-Sulfur Coal. Compared with the coal burned at Bowen that contained an average weight of 1. 6% sulfur, the low-sulfur coal contains only 1% by weight, but its cost is greater than the expected 1996 cost of high-sulfur coal. There is a capital expenditure of $22. million to change the unchanging precipitation used to reign over airborne particulate matter. Prices will rise after the year 2000 because in Phase 2 its price was expected to rise as the tighter control drove up demand. It will take more low-sulfur coal per year to generate electricity versus high-sulfur coal. The low-sulfur coal would tranqu illize emit 167,650 tons of sulfur dioxide per year which is less than half the 266,550 tons of high-sulfur coal. The problem with low-sulfur coal is that it is rare and expensive to mine. OPTION 3 LOW-SULFUR COAL WITHOUT SCRUBBERS Description of Value Sulfur Dioxide Emitted Bowen plant burns 1. % sulfur by weight, burning 8. 338M tons, generating 266,550 tons of sulfur dioxide emissions before scrubbers installed. Thereafter, beginning in 1995, emissions drop to 26,655 Allowances Bought Option 3 would require Bowen to buy allowances. Figure is 26,650 tons of sulfur dioxide generated minus the 254,580 allowances afforded, starting in 1995 2016, hence allowance cost is much less than option 1, due to less emissions generated Allowance Cost Price of allowances bought times the price, starting in 1995 2016 Fuel Cost Additional low-sulfur fuel cost begin in 1996 2000 ($30. 7 per ton), and new rate from 2000 2016 ($34. 92 per ton) Additional Operating Cost N/A Lost Revenue N/A Pre-t ax Total Adds allowance, fuel, additional operating, and lost revenue costs (lines 55 through 58) After-tax Cost Adds 37. 7% tax rate starting in 1995 through 2016 Capital Cost $22. 1M one-time purchase for electrostatic precipitators Depreciation Straight-line depreciation beginning in 1997 of 14% Tax Benefit from Depreciation Capitalized value * 14% depreciation (1997 2000) Total Straight line depreciation PV Present value year over year NPV = 176. 98 Millions From the suggested assumptions presented above, and the detail from the discounted cash flow Excel spreadsheet, a recommendation is evident to suggest the trump option for the Southern Company to adopt, which is option 2 that yields the highest net present value. Continuing the processes of burning high emitting sulfur dioxide coal, with the investment of scrubbers is the most cost effectual solution given the companys conclusion to retire the plant in 2016.The company must now decide whether to install pollution contr ol equipment and generate excess permits for sale to other companies, or to emit larger quantities of sulfur dioxide, save capital costs, and purchase pollution permits. Considering the discounted cash flow abridgment of a make versus buy decision, the company should also consider issues of expected cost minimization, questions of economic and political uncertainty, and the value of flexibility. The analysis depends on assumptions of the behavior of emissions permit prices over time, which a discussion of externalities (acid rain) links to the companys cost of capital.Various factors complicate the decisions, including real options characteristics, emissions market evolution, substitute investment prices, and public policy. The company should dampen a comprehensive risk assessment process that includes all the areas of significant risks to the Company, including potential price impacts on customers, reliability risk, regulatory risk, impacts on customer behavior, reputational risk , and so on These integrated processes consider multiple environmental considerations and requirements rather than solely on the greenhouse gas regulations.Even though the Southern Company does not have a greenhouse gas emissions reduction target, they should be committed to improving their environmental slaying and the communities it serves by being a good environmental steward and working to conserve valuable natural resources. Further, Southern Company employees, customers, and the public, and the protection of the natural environment should be among the Companys highest priorities. The Southern Company is going to face major challenges throughout their daily operations as they implement option 2.The first challenge will be their ability to conduct traditional electricity business operations effectively while transforming the Bowen plant. The new regulations, changes in the energy environment, and transmitting electricity securely are all reasons that could affect their earning s. The Southern Company must work toward balancing the required costs and capital expenditures with their customers prices during the renovation period, with ability to sustain future profit margins.To begin the process of exercising Option 2 will require a firm commitment to install scrubbers and that plan needs to begin now with the creation of Requests for Proposals (RFPs). Company executives have estimates of how pertinacious will it take to implement the scrubbers but do not address if they will require additional manpower to handle the maintenance for the scrubbers. The company should be prepared to add new labor which will stimulate additional jobs which will make for a positive public relations story.Option 2 will also place the company in a position light with the ability to sell allowances versus worrying about buying allowances. As society progresses, so too is the sensitivity to pollution and operating a plant that exceeds the Clean Air Act requirements will position th e company more favorably in the industry. The need to cut emissions to conform to Clean Air Act requirements and the anticipated high costs to conform will likely result in an emerge market for emissions trading. To this end, trade allowance prices are likely to increase, thereby potentially generating additional revenues for the company.The company should consider capitalizing on partnerships with environmentalists or green conscious companies by creating a marketing campaign that promotes the purchase of pollution credits so they are not sold to other polluters. Such a campaign could allow people and companies to buy pollution credits to support their social causes, such as students and schools and universities, as well as individuals buying credits for birthday, wedding, or loneliness gifts. Because of the Clean Air Act provisions, coal-firing generating facilities must reduce their greenhouse gas pollution before 2016 it is probable that he company should consider that coal-f iring plant operations will not be profitable in the future. Therefore, in addition to implementing option 2 to conform to reduced emission coal fired electricity production, the company needs to consider exploration of other emerging markets for producing energy such as oil, nuclear power, natural gas, and renewables. The strategy process should anticipate cost, emissions, and performance characteristics of each of these options, as appropriate, for individual units.Further, the company should develop environmental strategy schedules that include long term emission control plans. Another avenue the Southern Company should be aware of is its ability to create mergers with other power-generating companies. It is likely in subsequent years, with regulation, alternative fuel sources, and technology advancement changing industry dynamics, power generating companies may see this special characteristic of mergers and acquisitions, which can significantly reduce costs while increasing gene rating capacity and market share.In closing, all three options are going to cause a certain amount of operating energy, management headache, and expense. It is option 2 that appears to be the least painful in that it forces the Southern Company to elevate their Bowen plant with the newest technology with the installation of scrubber systems, while also stimulating labor growth. It also allows the greatest ability to produce excess allowances (except for option 3) that can be sold for revenue.Option 3 is too unstable with the company having to terminate contracts with coal suppliers and convert to a low-sulfur coal product which is scrimpy and more costly. When the Bowen plant retires its operations in 2016, the company should have mostly converted from coal to newer energy sources, and can liquidate the remaining assets for a high value versus not making equipment conversions with options 1 and 3.Finally, option 2 can be viewed positively by environmentalists, shareholders, and em ployees by signifying a committed investment in the Bowen plant. References Reinhardt, F. , (1992). Acid Rain The Southern Company (A). HBS No. 9-792-060. Boston, MA Harvard Business School Publishing Meyer, R. , and Yandle, B. , (1987) The Political Economy of Acid Rain Cato Journal, Vol. 7, No. 2. The Cato base