Innovative Lighting Inc. is an introductory accounting exercise teaching basic concepts in stocks, bonds and marketable securities. The company manufactures and sells lighting equipment to film and television studios, students gain practice in recognizing cash transactions versus non-cash transactions and enhance their understanding of accrual accounting through being required to adjust the cash records of a business.

This is a supplement to Komandor SA (A) (product 9B01B013). The Polish and Canadian division presidents had reviewed their transfer pricing policy for consulting services and components shipped by Canada to Poland. Having allocated the consulting fee to overhead cost, they have to deal with several consequences that have arisen.

The president of a Quebec-based producer of wood office furniture was assessing the company's future U.S. export strategy. Two options were being considered: continue with a combination of company salesforce and manufacturers' representatives or increase direct investment in showrooms and company sales staff. If the second option was chosen, decisions would be required on both the level of investment and the geographic focus.

The director of Kanzen Berhad (KB), Malaysia, must decide whether to recommend the company's owner and CEO accept the offer of Pacific Dunlop Limited to form a joint venture in which Pacific Dunlop, an Australian company, would buy 30 per cent of KB's holdings in six subsidiaries in the mattress and bedding industry for RM$28 million. Since its founding as Dreamland, KB had been growing rapidly and had been quite profitable. The owner, however, .....more

This case is designed as an introduction to foreign exchange transaction exposure and what can be done about it using the forward currency and money markets. A small furniture manufacturer has contracted to purchase some specialized machinery with deutschemark payments over the next twelve months. Market spot and forward currency prices are provided, together with Eurocurrency deposit rates for the same maturities. The mechanics of the hedging transactions .....more