Federal Trade Commission Protecting America's Consumers

Correct answers are bolded:

1) Meats-R-Us, Inc. manufactures prepared meat products in the U.S. which it distributes from its plant to customers worldwide. It exported 20% of its total sales of $100 MM in the base year. It would report its revenues in item 5(a) as:

(a) $100 MM under NAICS code 422470 (Meat and Meat Product Wholesalers).  
(b) $100 MM under NAICS code 311613 (Rendering and Meat Byproduct Processing)
(c) $80 MM under NAICS code 311613.  
(d) $80 MM under NAICS code 311613 and $20 MM under NAICS code 422470.

2) Sparco Ltd. is an English manufacturer of porcelain spark plugs with only two customers. In the base year it sold $40 MM in products to ItalyCo, an Italian corporation, and $10 MM to TillerCo, a U.S. manufacturer of garden tillers. These sales were made directly to the customers from Sparco's manufacturing facility. Two years after the base year, Sparco established a U.S. distribution facility through which it subsequently sold all of its products to U.S. customers. In 1998, Sparco sold $200 MM in products to ItalyCo and $50 MM to TillerCo. Sparco would report its revenues for the base year as:

(a) $50 MM under NAICS code 327113 (Porcelain Electrical Supply Manufacturing).  
(b) $40 MM under NAICS code 421690 (Other Electronic Parts and Equipment Wholesalers ) and $10 MM under NAICS code 327113.  
(c) $10 MM under NAICS code 421690.  
(d) No item 5(a) revenues  

It would report its revenues for the most recent year as:

(a) $250 MM under NAICS code 421690.  
(b) $200 MM under NAICS code 3271130 and $50 MM under NAICS code 421690.  
(c) $50 MM under NAICS code 421690
(d) No item 5(b)(iii) or 5(c) revenues

(3) Newco was incorporated in three years after the base year and is a manufacturer. Four years after the base year it acquired 100% of the voting securities of Oldco, also a manufacturer which was incorporated in 1952. Newco is now filing for another acquisition. In item 5(a) Newco should report:

(a) No revenues  
(b) Newco's revenues for base year +3 plus Oldco's revenues for the base year  
(c) Oldco's revenues for the base year
(d) Both Newco's and Oldco's revenues for base year +3.

For item 5(b)(ii) Newco should report:

(a) Nothing  
(b) All 10-digit product codes which Oldco manufactured at the time Newco acquired Oldco should be shown as products added in base year +4.  
(c) All 10-digit product codes currently manufactured by Newco should be shown as products added in base year +3 or later.
(d) All products currently manufactured by Newco should be shown as added in base year +3 and all products currently manufactured by Oldco should be shown as added in base year +4.

(4) ACORP, which was incorporated one year after the base year, is filing for an acquisition in which it will report revenues for the most recently completed calendar year as the most recent year. Six months after the end of that year, ACORP acquired 100% of the voting securities of BCORP, a manufacturing company. BCORP was incorporated in 1990. In item 5(b)(i), ACORP should report:

(a) No revenues  
(b) Only revenues of BCORP generated in the base year.  
(c) BCORP's base year revenues plus ACORP's revenues from the year it was incorporated.  
(d) Only ACORP's revenues from the year it was incorporated.

In item 5(b)(ii), under products added, ACORP should report:

(a) Nothing  
(b) Products currently manufactured by both ACORP and BCORP  
(c) Only products currently manufactured by ACORP.  
(d) Only products currently manufactured by BCORP.

In item 5(b)(iii), ACORP should report:

(a) Nothing  
(b) Revenues derived by both ACORP and BCORP in the most recent year.  
(c) Only revenues derived by ACORP in the most recent year.  
(d) I am tired of this exercise and ready quit.

BONUS QUESTION:

A was incorporated in BASE+2. B was incorporated in BASE. A acquired B in MOST RECENT+1. The following summarizes revenues by product line for A and B through MOST RECENT:

Company A:

PRODUCT	BASE	BASE+1	BASE+2	BASE+3	BASE+4	BASE+5	MOST RECENT
Drive Shafts 3363501528			20 MM	30 MM	40 MM	60 MM	80 MM
Catalytic Converters 3363993107					30 MM	40 MM	50 MM

Company B:

PRODUCT	BASE	BASE+1	BASE+2	BASE+3	BASE+4	BASE+5	MOST RECENT
Ball Joints 3363301511	10 MM	20 MM	30 MM	40 MM	50 MM	60 MM	80 MM
Brake Drums 3363401416		10MM	20 MM	25 MM	30 MM	40 MM	50 MM

A is filing for another acquisition. Complete the item 5(a), 5(b)(i), 5(b)(ii) and 5(b)(iii) information for this filing.