salieri ltd is a manufacturer of musical instruments that is controlled by tony anto 4373889

Salieri Ltd. is a manufacturer of musical instruments that is controlled by Tony Antonio. Salieri Ltd. was originally a private company, but it became public in 20X0 when a substantial public share issue occurred. The Antonio family now holds 68% of the shares of Salieri; the remaining 32% are widely distributed throughout Canada.Although Salieri is an operating company, it also has substantial investments in a number of other Canadian corporations. One such investment is its ownership of 80% of the shares of Bach Burgers, Inc., a chain of fast- food outlets. Salieri acquired its shares in Bach from the original founder of the company, John Sebastian, in 20X9. Bach Burgers is run completely independently; Teresa Antonio (Tony’s wife) is one of the members of Bach Burgers’ 12- person board of directors, but otherwise Salieri exercises no direction over the operations of Bach Burgers.Another investment of Salieri Ltd. is its 45% interest in Pits Mining Corporation. This investment was the outcome of a takeover attempt by Salieri two years ago. Salieri was frustrated in its attempt by a coalition of other companies in the extraction industry, which effectively blocked Salieri’s bid for control. Salieri was left with the 45% interest that it had man-aged to acquire. Although Salieri’s block of Pits shares is by far the largest single block, Salieri has not been able to gain representation on the Pits board of directors. Salieri Ltd. has instituted court action against Pits Mining to force the other shareholders to admit Salieri nominees to the board.Mozart Piano Corporation is a piano manufacturer that is 20% owned by Salieri Ltd. Although Salieri does manufacture musical instruments, it does not produce pianos, and Salieri and Mozart frequently conduct joint marketing efforts since their products are complementary and not competitive. Mozart is a private company; all of the other shares are held by the Amadeus family. Mozart has an 80%- owned subsidiary, Leopold Klaviers, Inc., which manufactures harpsichords and clavichords to be sold domestically through Mozart and internationally through other agents.Salieri Ltd. also owns 15% of Frix Flutes, Ltd. The 15% share was acquired several years ago to provide Frix with some new financing at a time when the company was experienc-ing financial difficulties. Salieri also assisted Frix by licensing to Frix the rights to use patents owned by Salieri. The licensing agreement can be cancelled by Salieri upon six months’ written notice.The only other corporate share investment held by Salieri is its 100% ownership of Salieri Acceptance Corporation (SAC). SAC was formed by Salieri to aid its customers in purchasing Salieri instruments on an installment basis. Six of the nine SAC directors are also directors of Salieri Ltd. The other three are representatives of the financial institutions that finance SAC’s operations. RequiredDiscuss the manner in which Salieri should account for its various investments when issuing its annual financial statements. Specify what additional information you would like to have, if any. Recommend an accounting approach for each investment, stating any assumptions that you make in arriving at your recommendations.View Solution:
Salieri Ltd is a manufacturer of musical instruments that is

Related Articles

armstrong helmet company 239138

Armstrong Helmet Company manufactures a unique model of bicycle helmet Question Case project Learning Objectives: Prepare practical applications of course concepts Develop analytical and critical thinking Develop decision-making capabilities Enhance professional...

read more

Open chat
Need help? We are Online 24/7
Hello 👋
Can we help you?