CFA課后習(xí)題：財報

?CFAInstitute.Forcandidateuseonly.Notfordistribution.

PracticeProblems

39

PRACTICEPROBLEMS

1

2

Providinginformationabouttheperformanceand?nancialpositionofcompa-

niessothatuserscanmakeeconomicdecisionsbestdescribestheroleof:

A

B

C

auditing.

?nancialreporting.

?nancialstatementanalysis.

Whichofthefollowingbestdescribestheroleof?nancialstatementanalysis?

A

B

C

Toprovideinformationaboutacompany’sperformance

Toprovideinformationaboutacompany’schangesin?nancialposition

Toformexpectationsaboutacompany’sfutureperformanceand?nancial

position

3

4

5

6

eroleof?nancialstatementanalysisisbestdescribedas:

A

B

C

providinginformationusefulformakinginvestmentdecisions.

evaluatingacompanyforthepurposeofmakingeconomicdecisions.

using?nancialreportspreparedbyanalyststomakeeconomicdecisions.

Acompany’s?nancialpositionwouldbestbeevaluatedusingthe:

A

B

C

balancesheet.

incomestatement.

statementofcash?ows.

Acompany’spro?tabilityforaperiodwouldbestbeevaluatedusingthe:

A

B

C

balancesheet.

incomestatement.

statementofcash?ows.

e?nancialstatementthatpresentsashareholder’sresidualclaimonassetsis

the:

A

B

C

balancesheet.

incomestatement.

cash?owstatement.

7

8

9

Acompany’spro?tabilityoveraperiodoftimeisbestevaluatedusingthe:

A

B

C

balancesheet.

incomestatement.

cash?owstatement.

eincomestatementisbestusedtoevaluateacompany’s:

A

B

C

?nancialposition.

sourcesofcash?ow.

?nancialresultsfrombusinessactivities.

Accountingpolicies,methods,andestimatesusedinpreparing?nancialstate-

mentsaremostlikelytobefoundinthe:

A

B

C

auditor’sreport.

managementcommentary.

notestothe?nancialstatements.

?2017CFAInstitute.Allrightsreserved.

?CFAInstitute.Forcandidateuseonly.Notfordistribution.

Reading19■IntroductiontoFinancialStatementAnalysis

40

10Informationaboutmanagementanddirectorcompensationareleastlikelytobe

foundinthe:

A

B

C

auditor’sreport.

proxystatement.

notestothe?nancialstatements.

11Informationaboutacompany’sobjectives,strategies,andsigni?cantrisksare

mostlikelytobefoundinthe:

A

B

C

auditor’sreport.

managementcommentary.

notestothe?nancialstatements.

12Whichofthefollowingbestdescribeswhythenotesthataccompanythe?nan-

cialstatementsarerequired?enotes:

A

B

C

permit?exibilityinstatementpreparation.

standardize?nancialreportingacrosscompanies.

provideinformationnecessarytounderstandthe?nancialstatements.

13Whattypeofauditopinionispreferredwhenanalyzing?nancialstatements?

A

B

C

Quali?ed.

Adverse.

Unquali?ed.

14Anauditordeterminesthatacompany’s?nancialstatementsarepreparedin

accordancewithapplicableaccountingstandardsexceptwithrespecttoinven-

toryreporting.isexceptionismostlikelytoresultinanauditopinionthatis:

A

B

C

adverse.

quali?ed.

unquali?ed.

15Anindependentauditreportismostlikelytoprovide:

A

B

C

absoluteassuranceabouttheaccuracyofthe?nancialstatements.

reasonableassurancethatthe?nancialstatementsarefairlypresented.

aquali?edopinionwithrespecttothetransparencyofthe?nancial

statements.

16Interim?nancialreportsreleasedbyacompanyaremostlikelytobe:

A

B

C

monthly.

unaudited.

unquali?ed.

17Whichofthefollowingsourcesofinformationusedbyanalystsisfoundoutside

acompany’sannualreport?

A

B

C

Auditor’sreport

Peercompanyanalysis

Management’sdiscussionandanalysis

18Ratiosareaninputintowhichstepinthe?nancialstatementanalysis

framework?

A

B

C

Processdata.

Collectinputdata.

Analyze/interprettheprocesseddata.

?CFAInstitute.Forcandidateuseonly.Notfordistribution.

PracticeProblems

41

19Whichphaseinthe?nancialstatementanalysisframeworkismostlikelyto

involveproducingupdatedreportsandrecommendations?

A

B

C

Follow-up

Analyze/interprettheprocesseddata

Developandcommunicateconclusionsandrecommendations

?CFAInstitute.Forcandidateuseonly.Notfordistribution.

Reading19■IntroductiontoFinancialStatementAnalysis

42

SOLUTIONS

1

2

Biscorrect.isistheroleof?nancialreporting.eroleof?nancialstate-

mentanalysisistoevaluatethe?nancialreports.

Ciscorrect.Ingeneral,analystsseektoexaminethepastandcurrentperfor-

manceand?nancialpositionofacompanyinordertoformexpectationsabout

itsfutureperformanceand?nancialposition.

3

Biscorrect.eprimaryroleof?nancialstatementanalysisistouse?nancial

reportspreparedbycompaniestoevaluatetheirpast,current,andpotential

performanceand?nancialpositionforthepurposeofmakinginvestment,

credit,andothereconomicdecisions.

4

5

6

7

Aiscorrect.ebalancesheetportraysthecompany’s?nancialpositionona

speci?eddate.eincomestatementandstatementofcash?owspresentdi?er-

entaspectsofperformanceduringtheperiod.

Biscorrect.Pro?tabilityistheperformanceaspectmeasuredbytheincome

statement.ebalancesheetportraysthe?nancialposition.estatementof

cash?owspresentsadi?erentaspectofperformance.

Aiscorrect.Owners’equityistheowners’residualinterestin(i.e.,residual

claimon)thecompany’sassetsafterdeductingitsliabilities,whichisinforma-

tionpresentedonthebalancesheet.

Biscorrect.Acompany’spro?tabilityisbestevaluatedusingtheincome

statement.eincomestatementpresentsinformationonthe?nancialresults

ofacompany’sbusinessactivitiesoveraperiodoftimebycommunicating

howmuchrevenuewasgeneratedandtheexpensesincurredtogeneratethat

revenue.

8

Ciscorrect.Acompany’srevenuesandexpensesarepresentedontheincome

statement,whichisusedtoevaluateacompany’s?nancialresults(orpro?t-

ability)frombusinessactivitiesoveraperiodoftime.Acompany’s?nancial

positionisbestevaluatedbyusingthebalancesheet.Acompany’ssourcesof

cash?owarebestevaluatedusingthecash?owstatement.

9

Ciscorrect.enotesdisclosechoicesinaccountingpolicies,methods,and

estimates.

10Aiscorrect.Informationaboutmanagementanddirectorcompensationis

notfoundintheauditor’sreport.Disclosureofmanagementcompensationis

requiredintheproxystatement,andsomeaspectsofmanagementcompensa-

tionaredisclosedinthenotestothe?nancialstatements.

11Biscorrect.esearecomponentsofmanagementcommentary.

12Ciscorrect.enotesprovideinformationthatisessentialtounderstanding

theinformationprovidedintheprimarystatements.

13Ciscorrect.Anunquali?edopinionisa“clean”opinionandindicatesthatthe

?nancialstatementspresentthecompany’sperformanceand?nancialposition

fairlyinaccordancewithaspeci?edsetofaccountingstandards.

14Biscorrect.Aquali?edauditopinionisoneinwhichthereissomescope

limitationorexceptiontoaccountingstandards.Exceptionsaredescribedin

theauditreportwithadditionalexplanatoryparagraphssothattheanalystcan

determinetheimportanceoftheexception.

Solutions

43

15Biscorrect.eindependentauditreportprovidesreasonableassurancethat

the?nancialstatementsarefairlypresented,meaningthatthereisahighproba-

bilitythattheaudited?nancialstatementsarefreefrommaterialerror,fraud,or

illegalactsthathaveadirecte?ectonthe?nancialstatements.

16Biscorrect.Interimreportsaretypicallyprovidedsemiannuallyorquarterly

andpresentthefourbasic?nancialstatementsandcondensednotes.eyare

notaudited.Unquali?edisatypeofauditopinion

17Biscorrect.Whenperforming?nancialstatementanalysis,analystsshould

reviewallcompanysourcesofinformationaswellasinformationfromexternal

sourcesregardingtheeconomy,theindustry,thecompany,andpeer(compara-

ble)companies.

18Ciscorrect.Ratiosareanoutputoftheprocessdatastepbutareaninputinto

theanalyze/interpretdatastep.

19Aiscorrect.efollow-upphaseinvolvesgatheringinformationandrepeat-

ingtheanalysistodeterminewhetheritisnecessarytoupdatereportsand

recommendations.

66

Reading20■FinancialReportingStandards

PRACTICEPROBLEMS

1

2

Whichofthefollowingismostlikelynotanobjectiveof?nancialstatements?

A

B

C

Toprovideinformationabouttheperformanceofanentity.

Toprovideinformationaboutthe?nancialpositionofanentity.

Toprovideinformationabouttheusersofanentity’s?nancialstatements.

International?nancialreportingstandardsarecurrentlydevelopedbywhich

entity?

A

B

C

eIFRSFoundation.

eInternationalAccountingStandardsBoard.

eInternationalOrganizationofSecuritiesCommissions.

3

4

5

USgenerallyacceptedaccountingprinciplesarecurrentlydevelopedbywhich

entity?

A

B

C

eSecuritiesandExchangeCommission.

eFinancialAccountingStandardsBoard.

ePublicCompanyAccountingOversightBoard.

AcoreobjectiveoftheInternationalOrganizationofSecuritiesCommissionsis

to:

A

B

C

eliminatesystemicrisk.

protectusersof?nancialstatements.

ensurethatmarketsarefair,e?cient,andtransparent.

AccordingtotheConceptualFrameworkforFinancialReporting,whichofthe

followingisnotanenhancingqualitativecharacteristicofinformationin?nan-

cialstatements?

A

B

C

Accuracy.

Timeliness.

Comparability.

6

7

8

Whichofthefollowingisnotaconstraintonthe?nancialstatementsaccording

totheConceptualFramework?

A

B

C

Understandability.

Bene?tversuscost.

Balancingofqualitativecharacteristics.

eassumptionthatanentitywillcontinuetooperatefortheforeseeablefuture

iscalled:

A

B

C

accrualbasis.

comparability.

goingconcern.

eassumptionthatthee?ectsoftransactionsandothereventsarerecognized

whentheyoccur,notwhenthecash?owsoccur,iscalled:

A

B

C

relevance.

accrualbasis.

goingconcern.

?2019CFAInstitute.Allrightsreserved.

PracticeProblems

67

9

Neutralityofinformationinthe?nancialstatementsmostcloselycontributesto

whichqualitativecharacteristic?

A

B

C

Relevance.

Understandability.

Faithfulrepresentation.

10Valuingassetsattheamountofcashorequivalentspaidorthefairvalueof

theconsiderationgiventoacquirethematthetimeofacquisitionmostclosely

describeswhichmeasurementof?nancialstatementelements?

A

B

C

Currentcost.

Historicalcost.

Realizablevalue.

11evaluationtechniqueunderwhichassetsarerecordedattheamountthat

wouldbereceivedinanorderlydisposalis:

A

B

C

currentcost.

presentvalue.

realizablevalue.

12Whichofthefollowingisnotarequired?nancialstatementaccordingtoIAS

No.1?

A

B

C

Statementof?nancialposition.

Statementofchangesinincome.

Statementofcomprehensiveincome.

13Whichofthefollowingelementsof?nancialstatementsismostcloselyrelated

tomeasurementofperformance?

A

B

C

Assets.

Expenses.

Liabilities.

14Whichofthefollowingelementsof?nancialstatementsismostcloselyrelated

tomeasurementof?nancialposition?

A

B

C

Equity.

Income.

Expenses.

15Whichofthefollowingdisclosuresregardingnewaccountingstandardspro-

videsthemostmeaningfulinformationtoananalyst?

A

B

C

eimpactofadoptionisdiscussed.

estandardwillhavenomaterialimpact.

Managementisstillevaluatingtheimpact.

68

Reading20■FinancialReportingStandards

SOLUTIONS

1

Ciscorrect.Financialstatementsprovideinformation,includinginformation

abouttheentity’s?nancialposition,performance,andchangesin?nancialposi-

tion,tousers.eydonottypicallyprovideinformationaboutusers.

2

3

Biscorrect.eIASBiscurrentlychargedwithdevelopingInternational

FinancialReportingStandards.

Biscorrect.eFASBisresponsiblefortheAccountingStandards

Codi?cation?,thesinglesourceofnongovernmentalauthoritativeUSgenerally

acceptedaccountingprinciples.

4

Ciscorrect.AcoreobjectiveofIOSCOistoensurethatmarketsarefair,e?-

cient,andtransparent.eothercoreobjectivesaretoreduce,noteliminate,

systemicriskandtoprotectinvestors,notallusersof?nancialstatements.

5

6

7

Aiscorrect.Accuracyisnotanenhancingqualitativecharacteristic.Faithful

representation,notaccuracy,isafundamentalqualitativecharacteristic.

Aiscorrect.Understandabilityisanenhancingqualitativecharacteristicof

?nancialinformation—notaconstraint.

Ciscorrect.eConceptualFrameworkidenti?estwoimportantunderlying

assumptionsof?nancialstatements:accrualbasisandgoingconcern.Going

concernistheassumptionthattheentitywillcontinuetooperateforthe

foreseeablefuture.Enterpriseswiththeintenttoliquidateormateriallycurtail

operationswouldrequiredi?erentinformationforafairpresentation.

8

9

Biscorrect.Accrualbasisre?ectsthee?ectsoftransactionsandotherevents

beingrecognizedwhentheyoccur,notwhenthecash?ows.esee?ectsare

recordedandreportedinthe?nancialstatementsoftheperiodstowhichthey

relate.

Ciscorrect.efundamentalqualitativecharacteristicoffaithfulrepresenta-

tioniscontributedtobycompleteness,neutrality,andfreedomfromerror.

10Biscorrect.Historicalcostistheconsiderationpaidtoacquireanasset.

11Ciscorrect.eamountthatwouldbereceivedinanorderlydisposalisrealiz-

ablevalue.

12Biscorrect.ereisnostatementofchangesinincome.UnderIASNo.1,a

completesetof?nancialstatementsincludesastatementof?nancialposition,a

statementofcomprehensiveincome,astatementofchangesinequity,astate-

mentofcash?ows,andnotescomprisingasummaryofsigni?cantaccounting

policiesandotherexplanatoryinformation.

13Biscorrect.eelementsof?nancialstatementsrelatedtothemeasureof

performanceareincomeandexpenses.

14Aiscorrect.eelementsof?nancialstatementsrelatedtothemeasurementof

?nancialpositionareassets,liabilities,andequity.

15Aiscorrect.Adiscussionoftheimpactwouldbethemostmeaningful,

althoughBwouldalsobeuseful.

PracticeProblems

119

PRACTICEPROBLEMS

1

2

3

Expensesontheincomestatementmaybegroupedby:

A

B

C

nature,butnotbyfunction.

function,butnotbynature.

eitherfunctionornature.

Anexampleofanexpenseclassi?cationbyfunctionis:

A

B

C

taxexpense.

interestexpense.

costofgoodssold.

DenaliLimited,amanufacturingcompany,hadthefollowingincomestatement

information:

Revenue

$4,000,000

$3,000,000

$500,000

$100,000

$120,000

Costofgoodssold

Otheroperatingexpenses

Interestexpense

Taxexpense

Denali’sgrosspro?tisequalto:

A

B

C

$280,000.

$500,000.

$1,000,000.

4

5

UnderIFRS,incomeincludesincreasesineconomicbene?tsfrom:

A

B

C

increasesinliabilitiesnotrelatedtoowners’contributions.

enhancementsofassetsnotrelatedtoowners’contributions.

increasesinowners’equityrelatedtoowners’contributions.

Fairplayhadthefollowinginformationrelatedtothesaleofitsproductsduring

2009,whichwasits?rstyearofbusiness:

Revenue

$1,000,000

$100,000

$800,000

$700,000

Returnsofgoodssold

Cashcollected

Costofgoodssold

Undertheaccrualbasisofaccounting,howmuchnetrevenuewouldbe

reportedonFairplay’s2009incomestatement?

A

B

C

$200,000.

$900,000.

$1,000,000.

6

ApexConsignmentsellsitemsovertheinternetforindividualsonaconsign-

mentbasis.Apexreceivestheitemsfromtheowner,liststhemforsaleonthe

internet,andreceivesa25percentcommissionforanyitemssold.Apexcollects

thefullamountfromthebuyerandpaysthenetamountaftercommissionto

theowner.Unsolditemsarereturnedtotheownerafter90days.During2009,

Apexhadthefollowinginformation:

?2019CFAInstitute.Allrightsreserved.

120

Reading21■UnderstandingIncomeStatements

Totalsalespriceofitemssoldduring2009onconsignmentwas€2,000,000.

TotalcommissionsretainedbyApexduring2009fortheseitemswas

€500,000.

●■

●■

HowmuchrevenueshouldApexreportonits2009incomestatement?

A

B

C

€500,000.

€2,000,000.

€1,500,000.

7

8

Acompanypreviouslyexpensedtheincrementalcostsofobtainingacontract.

Allelsebeingequal,adoptingtheMay2014IASBandFASBconvergedaccount-

ingstandardsonrevenuerecognitionmakesthecompany’spro?tabilityinitially

appear:

A

B

C

lower.

unchanged.

higher.

During2009,AccentToysPlc.,whichbeganbusinessinOctoberofthatyear,

purchased10,000unitsofatoyatacostof?10perunitinOctober.etoy

soldwellinOctober.InanticipationofheavyDecembersales,Accentpur-

chased5,000additionalunitsinNovemberatacostof?11perunit.During

2009,Accentsold12,000unitsatapriceof?15perunit.Underthe?rstin,?rst

out(FIFO)method,whatisAccent’scostofgoodssoldfor2009?

A

B

C

?120,000.

?122,000.

?124,000.

9

UsingthesameinformationasinQuestion8,whatwouldAccent’scostof

goodssoldbeundertheweightedaveragecostmethod?

A

B

C

?120,000.

?122,000.

?124,000.

10WhichinventorymethodisleastlikelytobeusedunderIFRS?

A

B

C

Firstin,?rstout(FIFO).

Lastin,?rstout(LIFO).

Weightedaverage.

11Atthebeginningof2009,GlassManufacturingpurchasedanewmachinefor

itsassemblylineatacostof$600,000.emachinehasanestimateduseful

lifeof10yearsandestimatedresidualvalueof$50,000.Underthestraight-line

method,howmuchdepreciationwouldGlasstakein2010for?nancialreport-

ingpurposes?

A

B

C

$55,000.

$60,000.

$65,000.

12UsingthesameinformationasinQuestion16,howmuchdepreciationwould

Glasstakein2009for?nancialreportingpurposesunderthedouble-declining

balancemethod?

A

B

C

$60,000.

$110,000.

$120,000.

PracticeProblems

121

13Whichcombinationofdepreciationmethodsandusefullivesismostconserva-

tiveintheyearadepreciableassetisacquired?

A

B

C

Straight-linedepreciationwithashortusefullife.

Decliningbalancedepreciationwithalongusefullife.

Decliningbalancedepreciationwithashortusefullife.

14UnderIFRS,alossfromthedestructionofpropertyina?rewouldmostlikely

beclassi?edas:

A

B

C

continuingoperations.

discontinuedoperations.

othercomprehensiveincome.

15Acompanychoosestochangeanaccountingpolicy.ischangerequiresthat,

ifpractical,thecompanyrestateits?nancialstatementsfor:

A

B

C

allpriorperiods.

currentandfutureperiods.

priorperiodsshowninareport.

16For2009,FlamingoProductshadnetincomeof$1,000,000.At1January2009,

therewere1,000,000sharesoutstanding.On1July2009,thecompanyissued

100,000newsharesfor$20pershare.ecompanypaid$200,000individends

tocommonshareholders.WhatisFlamingo’sbasicearningspersharefor2009?

A

B

C

$0.80.

$0.91.

$0.95.

17Forits?scalyear-end,CalvanWaterCorporation(CWC)reportednetincome

of$12millionandaweightedaverageof2,000,000commonsharesoutstanding.

ecompanypaid$800,000inpreferreddividendsandhad100,000options

outstandingwithanaverageexercisepriceof$20.CWC’smarketpriceoverthe

yearaveraged$25pershare.CWC’sdilutedEPSisclosestto:

A

B

C

$5.33.

$5.54.

$5.94.

18Acompanywithnodebtorconvertiblesecuritiesissuedpubliclytradedcom-

monstockthreetimesduringthecurrent?scalyear.UnderbothIFRSandUS

GAAP,thecompany’s:

A

B

C

basicEPSequalsitsdilutedEPS.

capitalstructureisconsideredcomplexatyear-end.

basicEPSiscalculatedbyusingasimpleaveragenumberofshares

outstanding.

19LaurelliBuilders(LB)reportedthefollowing?nancialdataforyear-end31

December:

Commonsharesoutstanding,1January

Commonsharesissuedasstockdividend,1June

Warrantsoutstanding,1January

Netincome

Preferredstockdividendspaid

Commonstockdividendspaid

2,020,000

380,000

500,000

$3,350,000

$430,000

$240,000

WhichstatementaboutthecalculationofLB’sEPSismostaccurate?

122

Reading21■UnderstandingIncomeStatements

A

B

C

LB’sbasicEPSis$1.12.

LB’sdilutedEPSisequaltoorlessthanitsbasicEPS.

eweightedaveragenumberofsharesoutstandingis2,210,000.

20CellServicesInc.(CSI)had1,000,000averagesharesoutstandingduringall

of2009.During2009,CSIalsohad10,000optionsoutstandingwithexercise

pricesof$10each.eaveragestockpriceofCSIduring2009was$15.Forpur-

posesofcomputingdilutedearningspershare,howmanyshareswouldbeused

inthedenominator?

A

B

C

1,003,333.

1,006,667.

1,010,000.

21Forits?scalyear-end,SublymeCorporationreportednetincomeof$200mil-

lionandaweightedaverageof50,000,000commonsharesoutstanding.ere

are2,000,000convertiblepreferredsharesoutstandingthatpaidanannualdiv-

idendof$5.Eachpreferredshareisconvertibleintotwosharesofthecommon

stock.edilutedEPSisclosestto:

A

B

C

$3.52.

$3.65.

$3.70.

22WhencalculatingdilutedEPS,whichofthefollowingsecuritiesinthecapital

structureincreasestheweightedaveragenumberofcommonsharesoutstand-

ingwithouta?ectingnetincomeavailabletocommonshareholders?

A

B

C

Stockoptions

Convertibledebtthatisdilutive

Convertiblepreferredstockthatisdilutive

23Whichstatementismostaccurate?Acommonsizeincomestatement:

A

B

C

restateseachlineitemoftheincomestatementasapercentageofnet

income.

allowsananalysttoconductcross-sectionalanalysisbyremovingthee?ect

ofcompanysize.

standardizeseachlineitemoftheincomestatementbutfailstohelpan

analystidentifydi?erencesincompanies’strategies.

24Selectedyear-end?nancialstatementdataforWorkhardareshownbelow.

$millions

Beginningshareholders’equity

Endingshareholders’equity

Unrealizedgainonavailable-for-salesecurities

475

493

5

Unrealizedlossonderivativesaccountedforas

hedges

–3

Foreigncurrencytranslationgainonconsolidation

Dividendspaid

Netincome

2

1

15

Workhard’scomprehensiveincomefortheyear:

A

B

C

is$18million.

isincreasedbythederivativesaccountedforashedges.

includes$4millioninothercomprehensiveincome.

PracticeProblems

123

25Whenpreparinganincomestatement,whichofthefollowingitemswouldmost

likelybeclassi?edasothercomprehensiveincome?

A

B

C

Aforeigncurrencytranslationadjustment

Anunrealizedgainonasecurityheldfortradingpurposes

Arealizedgainonaderivativecontractnotaccountedforasahedge

124

Reading21■UnderstandingIncomeStatements

SOLUTIONS

1

2

3

4

5

6

7

Ciscorrect.IASNo.1statesthatexpensesmaybecategorizedbyeithernature

orfunction.

Ciscorrect.Costofgoodssoldisaclassi?cationbyfunction.eothertwo

expensesrepresentclassi?cationsbynature.

Ciscorrect.Grossmarginisrevenueminuscostofgoodssold.AnswerArep-

resentsnetincomeandBrepresentsoperatingincome.

Biscorrect.UnderIFRS,incomeincludesincreasesineconomicbene?tsfrom

increasesinassets,enhancementofassets,anddecreasesinliabilities.

Biscorrect.Netrevenueisrevenueforgoodssoldduringtheperiodlessany

returnsandallowances,or$1,000,000minus$100,000=$900,000.

Aiscorrect.Apexisnottheownerofthegoodsandshouldonlyreportitsnet

commissionasrevenue.

Ciscorrect.Undertheconvergedaccountingstandards,theincrementalcosts

ofobtainingacontractandcertaincostsincurredtoful?llacontractmustbe

capitalized.Ifacompanyexpensedtheseincrementalcostsintheyearsprior

toadoptingtheconvergedstandards,allelsebeingequal,itspro?tabilitywill

appearhigherundertheconvergedstandards.

8

9

Biscorrect.Underthe?rstin,?rstout(FIFO)method,the?rst10,000units

soldcamefromtheOctoberpurchasesat￡10,andthenext2,000unitssold

camefromtheNovemberpurchasesat￡11.

Ciscorrect.Undertheweightedaveragecostmethod:

Octoberpurchases

Novemberpurchases

Total

10,000units

5,000units

15,000units

$100,000

$55,000

$155,000

$155,000/15,000units=$10.3333×12,000units=$124,000.

10Biscorrect.elastin,?rstout(LIFO)methodisnotpermittedunderIFRS.

eothertwomethodsarepermitted.

11Aiscorrect.Straight-linedepreciationwouldbe($600,000–$50,000)/10,or

$55,000.

12Ciscorrect.Double-decliningbalancedepreciationwouldbe$600,000×

20percent(twicethestraight-linerate).eresidualvalueisnotsubtracted

fromtheinitialbookvaluetocalculatedepreciation.However,thebookvalue

(carryingamount)oftheassetwillnotbereducedbelowtheestimatedresidual

value.

13Ciscorrect.iswouldresultinthehighestamountofdepreciationinthe?rst

yearandhencethelowestamountofnetincomerelativetotheotherchoices.

14Aiscorrect.A?remaybeinfrequent,butitwouldstillbepartofcontinuing

operationsandreportedinthepro?tandlossstatement.Discontinuedopera-

tionsrelatetoadecisiontodisposeofanoperatingdivision.

15Ciscorrect.Ifacompanychangesanaccountingpolicy,the?nancialstate-

mentsforall?scalyearsshowninacompany’s?nancialreportarepresented,

ifpractical,asifthenewlyadoptedaccountingpolicyhadbeenusedthrough-

outtheentireperiod;thisretrospectiveapplicationofthechangemakesthe

Solutions

125

?nancialresultsofanyprioryearsincludedinthereportcomparable.Notesto

the?nancialstatementsdescribethechangeandexplainthejusti?cationforthe

change.

16Ciscorrect.eweightedaveragenumberofsharesoutstandingfor2009is

1,050,000.Basicearningspersharewouldbe$1,000,000dividedby1,050,000,

or$0.95.

17Biscorrect.eformulatocalculatedilutedEPSisasfollows:

DilutedEPS=(Netincome–Preferreddividends)/[Weightedaverage

numberofsharesoutstanding+(Newsharesthatwouldhavebeenissuedat

optionexercise–Sharesthatcouldhavebeenpurchasedwithcashreceived

uponexercise)×(Proportionofyearduringwhichthe?nancialinstruments

wereoutstanding)].

eunderlyingassumptionisthatoutstandingoptionsareexercised,andthen

theproceedsfromtheissuanceofnewsharesareusedtorepurchaseshares

alreadyoutstanding:

Proceedsfromoptionexercise=100,000×$20=$2,000,000

Sharesrepurchased=$2,000,000/$25=80,000

enetincreaseinsharesoutstandingisthus100,000–80,000=20,000.

erefore,thedilutedEPSforCWC=($12,000,000–$800,000)/2,020,000=

$5.54.

18Aiscorrect.BasicanddilutedEPSareequalforacompanywithasimple

capitalstructure.Acompanythatissuesonlycommonstock,withno?nancial

instrumentsthatarepotentiallyconvertibleintocommonstockhasasimple

capitalstructure.BasicEPSiscalculatedusingtheweightedaveragenumberof

sharesoutstanding.

19Biscorrect.LBhaswarrantsinitscapitalstructure;iftheexercisepriceis

lessthantheweightedaveragemarketpri