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Kaplan MT482 Unit 4 Assignment




Question;Complete the Case Study: Inventory Valuation in the Film Industry For this Assignment, turn to page 259 in your textbook (Chapter 4 of Financial Statements Analysis) and complete Case 4-1, Inventory Valuation in the Film Industry ? Columbia Pictures This is a challenging activity. You should prepare to spend substantial time working on your response. Directions for Submitting Your Project Before you submit your project, you should save your work on your computer in a location, and with a name, that you will remember. Make sure your project is in the appropriate format (Word, Excel, PowerPoint, or other), then, when you are ready, you may submit on the Dropbox page. MT482 ? Unit 4 Assignment: Columbia Case 4-1 Financial statements of ColumbiaPictures include the following note:Inventories. The costs of feature films and television programs, including productionadvances to independent producers, interest on production loans, and distributionadvances to film licensors, are amortized on bases designed to write off costs in proportion to theexpected flow of income.The cost of general release feature productions is divided between theatrical ion andtelevision ion, based on the proportion of net revenues expected to be derived from each source.The portion of the cost of feature productions allocated to theatrical ion is amortized generally bythe application of tables which write off approximately 62% in26 weeks, 85% in 52 weeks, and 100% in 104 weeks after release. Costs of two theatricalproductions first released on a reserved-seat basis are amortized in the proportion that rentalsearned bear to the estimated final theatrical and television rentals. Because of the depressedmarket for the licensing of feature films to television and poor acceptance by the public of anumber of theatrical films released late in the year, the company made a special provision foradditional amortization of recent releases and those not yet licensed for television to reduce suchfilms to their currently estimated net realizable values.Required:a. Identify the main determinants for valuation of feature films, television programs, and generalrelease feature productions by Columbia Pictures.Cost of Feature Films and TV shows, Production Advances in form of Money and MaterialInterest in Production Loans, Distribution Advances Amortized to be written off. Analysis mustbe made in budget to see what will be written on and if LiFo or FiFO will be the methoddepending on the cost valuation and market value of the product and the assets.b. Are the bases of valuation reasonable? Explain.Valuating would be done with LiFo and Consider the recording or undrecording of Intagibleassets like Good Will which could generate a lot of buzz specially in the movie industry. Goodtalent from part of the actors and the director make the movie or show interesting enough to giveit a first look. Based on the work on previous production this could help generate more income.The valuationc. Indicate additional information on inventory valuation that an unsecured lender to ColumbiaPictures would wish to obtain and any analyses the lender would wish to conduct.Content, Analysis, Points Possible Points Earned ? Response includes accurate information regarding the main determinants of the valuation of feature films, television programs, and general release feature productions by Columbia Pictures. ? Response includes accurate information on the reasonableness of the bases of valuation. ? Response includes the additional information on inventory valuation that an unsecured lender to Columbia Pictures would wish to obtain and any analyses the lender would wish to conduct 15 ? Response includes appropriate analysis of the bases of valuation and other areas of analysis that a lender would wish to conduct


Paper#49267 | Written in 18-Jul-2015

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