# Tdf Company Accounting Memo Harvard Case Solution & Analysis

## Tdf Company Accounting Memo Case Study Solution

### a)      The journal entry to record the MANA purchase

According to the information provided; the company has raised \$ 250,000 from MANA, which is a significant amount for the company (FASB ASC 116,117). Since the unit price of MANA is \$ 0.069574, an accounting entry of \$ 17,393.5 is debited from the equivalent cash journal. In accordance with GAAP’s accounting, any accounting entry that increases the asset or expense accounts or decreases in the liability account, shall be debited. Therefore, the entry must be to the left of the log entry (FASB ASC 203, 204, 02).

Decentraland is popular, because the ICO has exhausted the MANA token in 35 seconds. Currently, the market value of a MANA token is \$ 0.069574, which is roughly three times the value provided by the ICO. MANA tokens are available for transactions on various cryptocurrency exchanges, and the number of MANAs in circulation exceeds 1,327,372,145 units. The importance of this tool cannot be underestimated, as it is among the top 40 tokens with the market value between USD 92,603,610 and USD 73,332,007 in 24-hour trading volume.

### MANA as Recorded Cost or Fair value

Once you have accepted that MANA is an asset; the company must adjust the carrying amount of the asset to affect the change in the face value. Unlike book value, MANA's fair value and liabilities are calculated based on FASB's market value accounting. If MANA units are sold on the open market, it will be the asset value of the MANA unit purchased.

### a)      If MANA should be carried at cost, describe whether and how TDF should assess if the asset is impaired at period-end.

The company uses financial information from MANA’s purchase records to evaluate the progress of the asset at the end of each asset. Multiply the cost of the MANA unit by the number of units purchased. If the value of the result is greater than the initial value; MANA is obtained. The valuation is based on the present value of the market value of the MANA units. (i.e. the book cost).

### b)     Fair value and comprehensive income

If the value of MANA is measured at a fair value; the change is recognized as a comprehensive income. Fair value refers to the selling price agreed between the buyer and the seller, when the buyer and seller enter into a free and knowledgeable transaction. In this case, fair value also reflects the value of the company’s assets and the financial statements of the company’s subsidiaries.(Marie DiTommaso, 2017).

### c)      Increase in value of MANA value at December 31, 2018

If the value of MANA increases to \$ 300,000, it means an increase of \$ 50,000, which is a part of the retained earnings. The amount of the retained earnings is part of the “equity” of the company’s balance sheet. This reflects the profitability of MANA's assets.

### d)     MANA value decreased at December 31, 2018

If the value of MANA increases to \$ 200,000; it means a decrease of \$ 50,000, which is a part of retained earnings. The income statement appears in the income statement. The difference between the initial and selling values as well as the carrying amount of the net assets, is also presented in the income statement..............

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