答案和详解如下： 6.The analyst team at Zirconia has been investigating the concept of comprehensive income as a tool for capturing economic changes to equity. Schindler has been put in charge of the project and has prepared a memo listing adjustments that must be made to equity in order to compute comprehensive income. Which of the following adjustment items listed in Schindler’s memo is NOT required under U.S. GAAP in order to calculate comprehensive income? A) Minimum pension liabilities. B) Unrealized gains and losses on available for sale securities. C) Deferred taxes. D) Cumulative foreign currency translation adjustments. The correct answer was C) Comprehensive income is an income figure that allows for all changes in equity during a period, excluding those resulting from investments from and distributions to owners. Adjustments to made to equity under U.S. GAAP to calculate comprehensive income include: · Minimum pension liability. · Unrealized gains and losses on available for sale securities. · Cumulative foreign currency translation adjustments. · Deferred gains and losses on cash flow hedges. Note that many analysts make adjustments beyond those prescribed by U.S. GAAP, which could include adjustment items such as deferred taxes. 7.Adjustments for off-balance-sheet items include all but which of the following? A) Using the equity method in place of the proportionate consolidation to reflect the investment in affiliates. B) Capitalizing operating leases, including this amount as an asset and a liability. C) Capitalizing the obligations under take-or-pay contracts, including this amount as an asset and a liability. D) Estimating the probable obligation for contingent liabilities. The correct answer was A) The correct statement is that proportionate consolidation should be used in place of the equity method. 8. The UNI Company Balance Sheet As of December 31, 2007 (in millions) |
| 2006 | 2007 |
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| 2006 | 2007 | Cash | $50 | $60 | Accounts payable | $100 | $150 | Accounts receivable | 100 | 110 | Long-term debt | 400 | 300 | Inventory | 200 | 180 | Common Stock | 50 | 50 |
| Retained earnings | 400 | 500 | Fixed assets (gross) | 800 | 900 | Total liabilities and equity | $950 | $1,000 | Accumulated depreciation | 200 | 250 |
| Fixed assets (net) | 600 | 650 | Total assets | $950 | $1,000 | The UNI Company Income Statement For year ended December 31, 2007 (in millions) | | Sales | $1,000 | | Cost of goods sold | 600 | | Depreciation | 50 | | Selling, general, and administrative expenses | 160 | | Interest expense | 23 | | Income before taxes | $167 | | Tax | 67 | | Net income | $100 | | | | | | | | | |
Additional information: §
UNI uses the last in first out (LIFO) inventory valuation method. The LIFO reserve is $20 million for 2007 and $10 million for 2006. §
UNI leases equipment. These leases are classified as operating leases and require annual, end-of-year payments of $10 million for each of the next 5 years. Restating inventory according to FIFO and capitalizing operating leases using an 8 percent discount rate results in adjusted total assets of: A) $1,040 million. B) $1,050 million. C) $1,060 million. D) $1,070 million. The correct answer was C) PV of lease [PMT = 10; n = 5; i = 8; solve for PV] = $39.93 million
Total adjustment = $39.93 + 20 = $59.93 million
Adjusted total assets = $1,000 + 59.93 = $1,059.93 million 9.Which of the following statements regarding problems that are commonly encountered in the analysis of a firm’s financial reports is FALSE? A) Cash flows may be affected by the exclusion of off-balance sheet obligations. B) Some assets and liabilities are not recorded, and the book values of assets and liabilities may differ significantly from their market values. C) Adjustments to the income statement that may not be recorded include operating leases, take-or-pay contracts and environmental obligations. D) Income statement items that may require adjustment include accounting changes, one-time charges and restructuring charges. The correct answer was C) Adjustments to the balance sheet, (not income statement) that may not be recorded include operating leases, take-or-pay contracts and environmental obligations. 10.Northern Bottling (NB) currently shows minimum expected operating leases over the next 5 years of $3 million, $2.5 million, $2 million, $2 million, and $1.5 million. The firm’s current financing rate is 6.75 percent and the rate implicit in the lease contract is 7 percent. What adjustments would an analyst make to modify the balance sheet of NB to include this off-balance sheet financing? Increase long-term: A) assets and long-term liabilities by $9.22 million. B) liabilities by $9.27 million and decrease equity by $9.27 million. C) assets and long-term liabilities by $9.27 million. D) liabilities by $9.22 million and decrease equity by $9.22 million. The correct answer was C) Recall that the interest rate in this present value computation is the lower of the firm’s financing rate or the interest rate that is implicit in the lease. Therefore, the PV (operating leases) is: = 3 / (1 + 0.0675) + 2.5 / (1 + 0.0675)2 + 2 / (1+ 0.0675)3 + 2 / (1 + 0.0675)4 + 1.5 / (1 + 0.0675)5 = 9.27 million The proper adjustment is to increase both long-term assets and liabilities by the same amount.
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发表于 2008-5-20 16:48
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