66 Correct answer is A “Analysis of Income Taxes,” Gerald I. White, AshwinpaulC. Sondhi, and Dov Fried
2008 Modular Level I, Vol. 3, p. 486
Study Session 9-39-d
classify a debt security with equity features as a debt or equity security and demonstrate the effect of issuing debt with equity features on the financial statements and ratios
The portion of the proceeds attributable to the warrants would be classified as equity, thus the portion classified as a liability would be smaller (lower). The lower balance sheet value would lead to a lower interest expense when it is calculated. The interest expense is based on the liability at the beginning of the period, not the coupon payment.
67 Correct answer is D
“Financial Statement Analysis: Applications,” Thomas R. Robinson, Hennie van Greuning, Elaine Henry, and MichaelA. Broihahn
2008 Modular Level I, Vol. 3, pp. 641-646
Study Session 10-42-b
prepare a basic projection of a company’s future net income and cash flow
The cost of goods sold and operating expenses are relatively constant over the
two-year period and averages of them can reasonably be used to forecast 2008.
Interest expense is declining as a percent of sales, implying it is a fixed
cost. Conversion into dollars for each year shows what interest expense has been
(2007 = $80, 2006 = $80) and that would be a reasonable projected amount to use.
The restructuring charge should not be included as it is a non-recurring item.
The tax rate, 35%, is given.
68 Correct answer is A “Understanding the Income Statement,” Thomas R. Robinson, Jan Hennie van Greuning, Elaine Henry, and MichaelA. Broihahn
2008 Modular Level I, Vol. 3, p. 186
“International Standards Convergence,” Thomas R. Robinson, Jan Hennie van Greuning, Elaine Henry, and MichaelA. Broihahn
2008 Modular Level I, Vol. 3, p. 682
Study Sessions 8-32-k, 10-43-a
state the accounting classification for items that are excluded from the income statement but affect owners’ equity, and list the major types of items receiving that treatment; identify and explain the major international accounting standards for each asset and liability category on the balance sheet and the key differences from U.S. generally accepted accounting principles (GAAP)
Under both U.S. GAAP and IFRS the unrealized gains and losses arising from carrying available-for-sale securities at market value are reported in equity as part of accumulated other comprehensive income.
69 Correct answer is D “Capital Budgeting,” JohnD. Stowe and Jacques R. Gagné
2008 Modular Level I, Vol. 4, pp. 8-10
Study Session 11-44-a
explain the capital budgeting process, including the typical steps of the process, and distinguish among the various categories of capital projects
Regulatory, safety, and environmental projects are often mandated by governmental agencies. The corporation may be required to install equipment to meet a regulatory standard, and the cost of satisfying the standard is born by the corporation. In this case, the corporationSelects the lowest cost alternative that meets the requirement, i.e., the alternative with the least negative net present value.
70 Correct answer is D “Capital Budgeting,” JohnD. Stowe and Jacques R. Gagné
2008 Modular Level I, Vol. 4, pp. 10-12
Study Session 11-44-c
explain how the following project interactions affect the evaluation of a capital project: (1) independent versus mutually exclusive projects, (2) project sequencing, and (3) unlimited funds versus capital rationing
Project sequencing occurs when the investment in one project creates the option to invest in future projects.
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发表于 2008-11-6 14:26
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