Q85. After the appropriate SFAS 52 currency translation method is applied, what will be the impact on Wilson’s quick ratio and accounts receivable turnover ratios respectively for 2005? Quick Ratio Accounts Receivable Turnover
A) No change Increase B) Increase Increase C) No change Decrease
Q86. Heltzel decides to redefine the functional currency to assess how the all-current vs. the temporal method will impact Wilson’s financial statements. Wilson’s gross profit margin will be lower under the: A) temporal method, and the total asset turnover ratio will be higher under the all-current method. B) all-current method, and the total asset turnover ratio will be higher under the all-current method. C) all-current method, and the total asset turnover ratio will be higher under the temporal method.
Q87. After Heltzel finishes his task with Wilson’s financial statements, he moves on to translating the financials for a second recent acquisition for Hise, Winski Lumber. Heltzel is using the all-current method of translation and determines that Winski has a negative beginning currency exposure. As he is working, he starts a conversation with a colleague in the finance department, Nicole Lee. In their conversation, Heltzel states, “If Winski’s local currency appreciated from 2004 to 2005 and the change in currency exposure was negative, the flow effect would have been positive.” Lee replies, “the appreciation of the local currency would have also provided a negative holding effect, and the net result would be a translation loss recorded on the financial statements.” With regard to their statements: A) Heltzel’s statement is incorrect, and Lee’s statement is correct. B) Heltzel’s statement is incorrect, and Lee’s statement is incorrect. C) Heltzel’s statement is correct, and Lee’s statement is incorrect.
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发表于 2009-1-20 13:16
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