I'll post answers after a considerable number of responses.
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FSA
1) Which of the following statements is incorrect?
A) IFRS and US GAAP differ on the treatment of foreign exchange gains and losses on available-for-sale debt securities.
B) Impairments losses on available-for-sale securities can be reversed.
C) FIRS allow any entity to measure PP&E using either historical cost or fair value, while US GAAP require the use of historical cost to measure PP&E.
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2) Rusbus1 Co. acquires 30% of the outstanding shares of CPK Co. At the acquisition date, book value and fair values of CPK Co's recorded assets and liabilities are as follows:
Book Value of Current Assets = $10,000
Book Value of Plant & Equipment = 190,000
Book Value of Land = 120,000
Book Value of Liabilities = $100,000
Book Value of Net assets = $220,000
Fair Value of Current Assets = $10,000
Fair Value of Plant & Equipment = 220,000
Fair Value of Land = 140,000
Fair Value of Liabilities = $100,000
Fair Value of Net assets = $270,000
Rusbus Co. offers $100,000 for a 30% interest in CPK Co. Part of the excess purchase price is attributable to the $50,000 difference between book value and fair value of the identifiable assets and so the remaining amount is attributable to goodwill. Calculate goodwill.
A) 19,000
B) 28,000
C) 34,000
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3) At the beginning of Januar 2010, Oal29 Co. acquires 30% of the outstanding shares of Idreesz Inc. common shares for a cash price of $500,000. It is determined that Oal29 has the ability to exert significant influence on Idreesz's financial and operating decisions. The following information concerning Idreesz's assets and liabilities on 1 January 2010 is provided:
Book Value of Current Assets = $100,000
Book Value of Plant & Equipment = 1,900,000
Book Value of Liabilities = $800,000
Book Value of Net assets = $1,200,000
Fair Value of Current Assets = $100,000
Fair Value of Plant & Equipment = 2,200,000
Fair Value of Liabilities = $800,000
Fair Value of Net assets = $1,500,000
The plant and equipment are depreciated on a straight-line basis and have 10 years of remaining life. Idreesz reports net income for 2010 of $100,000 and pays dividend of $50,000. Calculate the Investment in Associate (Idreesz) at the end of 2010.
A) Both IFRS and US GAAP give the investor option to account for their equity method of investment at fair value. Under IFRS, this option is available to all entities.
B) Both IFRS and US GAAP give the investor option to account for their equity method of investment at fair value. Under US GAAP, this option is available to all entities.
C) Both IFRS and US GAAP give the investor option to account for their equity method of investment at fair value. Under both US GAAP and IFRS, this option is available to all entities.
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6) Which of the following statement is correct?
A) If the fair value of the investment declines below its carrying value, US GAAP requires an impairment loss to be recognized on the income statement.
B) Both IFRS and US GAAP prohibit the reversal of impairment losses even if the fair value later increases.
C) Only US GAAP prohibit the reversal of impairment losses even if the fair value later increases.
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7) Which of the following is correct?
A) In an upstream sale, the profit on the inter-company transaction is recorded on the associate's income statement.
B) Both IFRS & US GAAP require that the unearned profits be added to the investor's income statement.
C) In an upstream sale, the unrealized profit on the inter-company transaction is included in equity income on the investor's income statement.
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8) Which of the following statements is correct?
A) Prior to June 2001, under U.S. GAAP, combining companies that met twelve strict criteria could use the pooling of interests accounting method for the business combination.
B) Prior to June 2001, under IFRS, combining companies that met twelve strict criteria could use the pooling of interests accounting method for the business combination.
C) Prior to June 2001, under both IFRS and U.S. GAAP, combining companies that met twelve strict criteria could use the pooling of interests accounting method for the business combination.
9) Which of the following is correct?
A) One difference in pension-related liabilities and debt is that pension-related liabilities are often tax deductible.
B) Under IFRS, past service costs are reported in other comprehensive income in the period in which the change occurs.
C) Under IFRS, unamortized past service costs are reported in accumulated other comprehensive income.
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Use question to answer from 10A - 10D
10) Thommo77 Inc., establishes a defined benefit pension plan. The employee has a current salary of $50,000 and is expected to work for five more years before retiring. The assume discount rate is 6 percent and the assumed annual compensation increase is 4.75 percent. If the employee is to receive benefit payments for 20 years and is given credit for 10 years of prior service with immediate vesting:
10A) calculate the annual unit credit
A) 10,357.09
B) 15,535.64
C) 7,767.82
10B) calculate the current service costs in the 4th year
A) 9,217.77
B) 9,770.84
C) 8,696.01
10C) calculate the interest payment in the 2nd year
A) 6,261.13
B) 4,643.65
C) 5,414.50
10D) calculate the closing obligation in the 3rd year
A) 104,352.18
B) 136,791.79
C) 119,831.08
11) A sudden rise in inventory balances is least likely to be a warning sigb of:
A) Understated expenses
B) Accelerated revenue recognition
C) Inefficient working capital management
12) Which of the following is least likely to a warning sign of low-quality revenue?
A) A large decrease in deferred revenue
B) A large increase in accounts receivable
C) A large increase in the allowance for doubtful accounts
13) Which of the following statement is correct?
A) I'll get 100% of these questions correctly!
B) Boy, this crap is just too much!
C) I need to read FSA again!
Edited 1 time(s). Last edit at Saturday, March 27, 2010 at 12:34AM by Damil4real.作者: CPATrader 时间: 2011-7-13 16:13
The Mask scene on seeing Cameron Diaz dancing for the first time on stage for question 3.
WHAT??????
Thanks, will post answers soon. Keep the questions coming Damil, it helps.作者: SeanWest 时间: 2011-7-13 16:13
Not including the last question and counting all of questions 10A - 10D against since you left them blank.
Damil, the benefit formula is missing in question 10! please provide.作者: ningning1984 时间: 2011-7-13 16:13
Update For question 10.
Company will pay pension benefit equal to 1.5 percent of the employee's final salary for each year of service beyond the date of establishment.作者: yalo 时间: 2011-7-13 16:13
1A
2A
3A
4B
5C
6C
7A
8B
9A
10a A
10b B
10c C
10d C
11B
12C
13C, many thanks Damil for the questions, you are well appreciated作者: ayodayo 时间: 2011-7-13 16:13
1 A
2 A
3 A
4 B
5 C
6 C
7 A
8 A
9 C
10a Didn't really know what the question was asking???
10b B
10c C
10d C
11 A
12 C
13 A (except for 10a)
Keep these coming Damil作者: mp3bu 时间: 2011-7-13 16:13
1-c
2-a
3-a
4-c
5-b
6-b
7-c
8-a
9-c作者: ryanlb 时间: 2011-7-13 16:13
UGHHH Brutal - hit me with those answers or a % score.
Please, note in the CFAI errata - there have been corrections related to the annual Unit credit - so make a note of those.
The numbers for the questions 10 --> look like the problem in the book - and if this is on pg 104-105 - there is annual unit credit correction. do not have my book in hand to confirm.
CP作者: President1988 时间: 2011-7-13 16:13
This is brutal Damil. The most important answer is 13 C. Looks like I have forgotten most of FSA. I am still trying to complete my first round of reading. I will not loose heart as I know REVISION is the key and i am yet to do that.
1.C
2.A
3.A
4.C
5.C
6.C
7.C
8.A
9.C
10A. A
10B. ?
10C. ?
10D. ?
11. B
12. C
13. CCCCC
Edit: Thanks for your questions.
Edited 1 time(s). Last edit at Tuesday, March 30, 2010 at 12:04AM by rus1bus.作者: economicz 时间: 2011-7-13 16:13
14) B – (11)
15) C – (12)作者: chaojimali 时间: 2011-7-13 16:13
damil4real
you might want to check on the annual unit credit.
There is some errata correction on the CFAI site related to the annual unit credit calculations on pg 104-105, and it does relate to this same question, I believe.
CP
CP作者: brainsX 时间: 2011-7-13 16:13
hell yeah - i love setting up defined benefit pension plans. I need to work through these problems. I have not looked at answers.作者: eoin 时间: 2011-7-13 16:13
cpk123 Wrote:
-------------------------------------------------------
> damil4real
>
> you might want to check on the annual unit credit.
>
>
> There is some errata correction on the CFAI site
> related to the annual unit credit calculations on
> pg 104-105, and it does relate to this same
> question, I believe.
>
>
> CP
I don't have my book with me now, but I'll check it later on today and provide an update if anything. I'm still trying to see how the annual unit credit calculations would be different though, but I'll check it later.作者: scarecrow 时间: 2011-7-13 16:13
1. B
2. A
3. B
4. C
5. A
6. C
7. A
8. B
9. C
10. I will have to go back and study.
11. C
12. A
13. C作者: firat 时间: 2011-7-13 16:13
Thanks for this Damil...i got smoked. Quick question.............
6) Which of the following statement is correct?
A) If the fair value of the investment declines below its carrying value, US GAAP requires an impairment loss to be recognized on the income statement.
B) Both IFRS and US GAAP prohibit the reversal of impairment losses even if the fair value later increases.
C) Only US GAAP prohibit the reversal of impairment losses even if the fair value later increases.
WHY is it B and not C? I thought impairments of long-lived assets that are not being held for sale can be fully reversed, but GAAP prohibited it.作者: tarunajwani 时间: 2011-7-13 16:13
i agree, should be C作者: tikfed 时间: 2011-7-13 16:13
Can someone please walk through the calculations for Q 2,3 and 4?
