37 Pages

# Ch 11 Solutions

Course Number: ACCT 103, Spring 2011

College/University: San Diego

Word Count: 2040

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SOLUTIONS TO EXERCISES EXERCISE 11-1 (1520 minutes) (a) Straight-line method depreciation for each of Years 1 through 3 = \$518,000 \$50,000 = \$39,000 12 (b) Sum-of-the-Years-Digits = 12 X 13 2 = 78 12/78 X (\$518,000 \$50,000) = \$72,000 11/78 X (\$518,000 \$50,000) = \$66,000 depreciation Year 2 10/78 X (\$518,000 \$50,000) = \$60,000 (c) depreciation Year 1 depreciation Year 3 Double-Declining-Balance...

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San Diego - ACCT - 103
SOLUTIONS TO EXERCISESEXERCISE 12-1 (1520 minutes)(a)(b)10, 13, 15, 16, 17, 19, 231.Long-term investments in the balance sheet.2.Property, plant, and equipment in the balance sheet.3.Research and development expense in the incomestatement.4.C
San Diego - ACCT - 103
SOLUTIONS TO EXERCISESEXERCISE 13-1 (1015 minutes)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)(k)(l)(m)(n)(o)(p)Current liability.Current liability.Current liability or long-term liability depending on term of warranty.Current liability.Footnote d
San Diego - ACCT - 103
SOLUTIONS TO EXERCISESEXERCISE 14-1 (1520 minutes)(a)(b)(c)(d)(e)(f)(g)(h)(i)Current liability if current assets are used to satisfy the debt.Valuation account relating to the long-term liability, bondspayable (sometimes referred to as an adj
San Diego - ACCT - 103
SOLUTIONS TO EXERCISESEXERCISE 15-1 (1520 minutes)(a) Jan. 10Mar.July11Sept. 1(b) Jan. 10Mar.1Cash (80,000 X \$6) .Common Stock (80,000 X \$3) .Paid-in Capital in Excess of Par .480,000Organization Expense .Common Stock (5,000 X \$3) .Paid-i
San Diego - ACCT - 1
CHAPTER 9SolutionsLONG-TERM ASSETSChapter 9, SE 1.1. b2. a3. c4.5.6.bcbChapter 9, SE 2.Free=Cash FlowNet Cash Flows fromOperating Activities\$23,000 =\$194,000 Dividends \$25,000Sales of( Purchases of Plant Assets )Plant Assets(\$158
San Diego - ACCT - 1
CHAPTER 1SolutionsUSES OF ACCOUNTING INFORMATIONAND THE FINANCIAL STATEMENTSChapter 1, SE 1.1.2.3.4.5.gfbce6.7.8.9.10.idajh4.5.ba4.5.6.ca or ccChapter 1, SE 2.1.2.3.bcaChapter 1, SE 3.1.2.3.acbChapter 1, SE
San Diego - ACCT - 1
CHAPTER 2SolutionsANALYZING BUSINESS TRANSACTIONSChapter 2, SE 1.Jan.10 Do not recognize because an order is not a complete transaction.There is no obligation on the part of either party at this point.Feb.15 Recognize the purchase. Delivery has bee
San Diego - ACCT - 1
CHAPTER 3SolutionsMEASURING BUSINESS INCOMEChapter 3, SE 1.1.2.3.4.cbdaChapter 3, SE 2.Dec.31 Insurance ExpensePrepaid InsuranceTo record insurance expired during the year\$460+ \$1,040 \$700 = \$800800800Chapter 3, SE 3.Dec.31 Supplies
San Diego - ACCT - 1
CHAPTER 4SolutionsFINANCIAL REPORTING AND ANALYSISChapter 4, SE 1.1.2.3.4.5.OQOQOChapter 4, SE 2.1.2.3.4.5.Full disclosureMaterialityCost-benefitConservatismComparability and consistencyChapter 4, SE 3.1.2.3.4.5.6.7.8.9.1
San Diego - ACCT - 1
CHAPTER 5SolutionsTHE OPERATING CYCLE ANDMERCHANDISING OPERATIONSChapter 5, SE 1.1.2.3.4.dcabChapter 5, SE 2.Days to sell inventoryAdd days to collect for the saleLess creditors' payment termsFinancing period4025(33)32Chapter 5, SE 3.
San Diego - ACCT - 1
San Diego - ACCT - 1
CHAPTER 7SolutionsCASH AND RECEIVABLESChapter 7, SE 1.1.2.3.4.c (also could be a)abdChapter 7, SE 2.Net SalesReceivable Turnover ==Average Accounts Receivable\$720,000\$90,000(=\$720,000\$80,000\$70,000=9.0 times) 2365 daysDays' Sale
San Diego - ACCT - 1
CHAPTER 8SolutionsCURRENT LIABILITIES ANDTHE TIME VALUE OF MONEYChapter 8, SE 1.1. d2. c3.4.eb5. aChapter 8, SE 2.Key Ratios:Working Capital = Current Assets Current Liabilities=Payables Turnover ===Days' Payable =\$65,000\$40,000Cost o
UNLV - FIN - 308
01Student: _1.What major dimension sets apart international finance from domestic finance?A. foreign exchange and political risksB. Market imperfectionsC. Expanded opportunity setD. all of the above2.An example of a political risk isA. Expropria
UNLV - FIN - 308
02Student: _1.The international monetary system can be defined as the institutional framework within which:A. international payments are madeB. movement of capital is accommodatedC. exchange rates among currencies are determinedD. all of the above
UNLV - FIN - 308
03Student: _1.The current account balance, which is the difference between a country's exports and imports, is acomponent of the country's GNP. Other components of GNP includeA. Consumption and investment and government expenditure.B. Consumption an
UNLV - FIN - 308
04Student: _1.Corporate governance can be defined as:Athe economic, legal, and institutional framework in which corporate control and cash flow rights are. distributed among shareholders, managers and other stakeholders of the companyB. the general
UNLV - FIN - 308
05Student: _1.The world's largest foreign exchange trading center is:A. New YorkB. TokyoC. LondonD. Hong Kong2.On average, worldwide daily trading of foreign exchange isA. impossible to estimateB. \$15 billionC. \$504 billionD. \$3.21 trillion3
UNLV - FIN - 308
06Student: _1.An arbitrage is best defined as:A. A legal condition imposed by the CFTCB The act of simultaneously buying and selling the same or equivalent assets or commodities for the. purpose of making reasonable profitsC The act of simultaneous
UNLV - FIN - 308
07Student: _1.A CME contract on 125,000 with September deliveryA. Is an example of a forward contractB. Is an example of a futures contractC. Is an example of a put optionD. Is an example of a call option2.Yesterday, you entered into a futures co
UNLV - FIN - 308
08Student: _1.Transaction exposure is defined as:A the sensitivity of realized domestic currency values of the firm's contractual cash flows denominated in. foreign currencies to unexpected exchange rate changesB. the extent to which the value of th
UNLV - FIN - 308
09Student: _1.Suppose the U.S. dollar substantially depreciates against the Japanese yen. The change in exchangerateA. Can have significant economic consequences for U.S. firms.B. Can have significant economic consequences for Japanese firms.C. Can
UNLV - FIN - 308
10Student: _1.Translation exposure refers to:A. accounting exposureB. the effect that an unanticipated change in exchange rates will have on the consolidated financial reportsof an MNCCthe change in the value of a foreign subsidiaries assets and li
UNLV - FIN - 308
11Student: _1.International banks are different from domestic banks in what way(s)?A. International banks can arrange trade financingB. International banks can arrange for foreign exchange transactions.C. International banks can assist their clients
UNLV - FIN - 308
12Student: _1.In any given year, what percent of new international bonds are likely to be Eurobonds rather than foreignbondsA. 80%B. 45%C. 25%D. 15%2.In any given year, what percent of outstanding bonds are likely to be international rather than
UNLV - FIN - 308
13Student: _1.The sale of new common stock by corporations to initial investors occurs inA. The primary marketB. The secondary marketC. The OTC marketD. The dealer market2.The sale of previously issued common stock traded between investors occurs
UNLV - FIN - 308
14Student: _1.The term interest rate swapA. refers to a &quot;single-currency interest rate swap&quot; shortened to &quot;interest rate swap&quot;B. involves &quot;counterparties&quot; who make a contractual agreement to exchange cash flows at periodicintervalsC. can be &quot;fixed-
UNLV - FIN - 308
15Student: _1.Under the investment dollar premium system,A U.K. residents received a premium over the prevailing commercial exchange rate when they sold. foreign securities and repatriated the funds to the U.K.B U.K. residents had to pay a premium o
UNLV - FIN - 308
16Student: _1.Under a 1981 Voluntary Trade Agreement Japanese automobile manufacturers were not allowed toincrease their exports to the U.S. market. As a result:A. They exited the marketB. Honda was motivated to circumvent the trade barriers.C Hond
UNLV - FIN - 308
17Student: _1.The cost of capital is:A. The minimum rate of return an investment project must generate in order to pay its financing costs.B. The minimum rate of return an investment project must generate in order to pay its financing costs plusa re
UNLV - FIN - 308
18Student: _1.The financial manager's responsibility involves:A. increasing the per share price of the company's stock at any cost and by any means, ways and fashionthat is possibleB. the shareholder wealth maximizationC. which capital projects to
UNLV - FIN - 308
19Student: _1.Efficient cash management techniques can:A. reduce the investment in cash balances and foreign exchange transaction expensesB. provide for maximum return from the investment of excess cashC. result in borrowing at lowest rate when a te
UNLV - FIN - 308
20Student: _1.International trade is more difficult and risky from the exporter's perspective than is domestic tradebecause:A. The exporter may not be familiar with the buyer, and thus not know if the importer is a good creditrisk.B If the merchand
UNLV - FIN - 308
21Student: _1.The two main objectives of taxation areA. Tax neutrality and tax equity.B. Complexity and revenueC. Social engineering and tax equityD. Progressive taxation and tax neutrality2.The three basic types of taxation are:A. income tax, w
UNLV - FIN - 308
Problem Solution
UNLV - FIN - 308
CHAPTER 2 INTERNATIONAL MONETARY SYSTEMSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Explain Greshams Law.Answer: Greshams law refers to the phenomenon that bad (abundant) money drives good (scarce)money out of c
UNLV - FIN - 308
CHAPTER 3 BALANCE OF PAYMENTSSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Define the balance of payments.Answer:The balance of payments (BOP) can be defined as the statistical record of a countrysinternational
UNLV - FIN - 308
CHAPTER 4 CORPORATE GOVERNANCE AROUND THE WORLDSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQuestions1. The majority of major corporations are franchised as public corporations. Discuss the key strengthand weakness of the pu
UNLV - FIN - 308
CHAPTER 5 THE MARKET FOR FOREIGN EXCHANGESUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Give a full definition of the market for foreign exchange.Answer: Broadly defined, the foreign exchange (FX) market encompasse
UNLV - FIN - 308
CHAPTER 6 INTERNATIONAL PARITY RELATIONSHIPS AND FORECASTING FOREIGNEXCHANGE RATESSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Give a full definition of arbitrage.Answer: Arbitrage can be defined as the act of s
UNLV - FIN - 308
CHAPTER 7 FUTURES AND OPTIONS ON FOREIGN EXCHANGESUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Explain the basic differences between the operation of a currency forward market and a futuresmarket.Answer: The forw
UNLV - FIN - 308
CHAPTER 8 MANAGEMENT OF TRANSACTION EXPOSURESUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS ANDPROBLEMSQUESTIONS1. How would you define transaction exposure? How is it different from economic exposure?Answer: Transaction exposure is the s
UNLV - FIN - 308
CHAPTER 9 MANAGEMENT OF ECONOMIC EXPOSURESUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. How would you define economic exposure to exchange risk?Answer: Economic exposure can be defined as the possibility that the f
UNLV - FIN - 308
CHAPTER 10 MANAGEMENT OF TRANSLATION EXPOSURESUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Explain the difference in the translation process between the monetary/nonmonetary method and thetemporal method.Answer:
UNLV - FIN - 308
CHAPTER 11 INTERNATIONAL BANKING AND MONEY MARKETSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Briefly discuss some of the services that international banks provide their customers and the marketplace.Answer: Int
UNLV - FIN - 308
CHAPTER 12 INTERNATIONAL BOND MARKETSSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Describe the differences between foreign bonds and Eurobonds. Also discuss why Eurobonds makeup the lions share of the internation
UNLV - FIN - 308
CHAPTER 13 INTERNATIONAL EQUITY MARKETSSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Exhibit 13.11 presents a listing of major national stock market indexes as displayed daily in the printedition of the Financial
UNLV - FIN - 308
CHAPTER 14 INTEREST RATE AND CURRENCY SWAPSSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Describe the difference between a swap broker and a swap dealer.Answer: A swap broker arranges a swap between two counterpar
UNLV - FIN - 308
CHAPTER 15 INTERNATIONAL PORTFOLIO INVESTMENTSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. What factors are responsible for the recent surge in international portfolio investment (IPI)?Answer: The recent surge in
UNLV - FIN - 308
CHAPTER 16 FOREIGN DIRECT INVESTMENT AND CROSS-BORDER ACQUISITIONSSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Recently, many foreign firms from both developed and developing countries acquired high-tech U.S.firm
UNLV - FIN - 308
CHAPTER 17 INTERNATIONAL CAPITAL STRUCTURE AND THE COST OF CAPITALSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1.Suppose that your firm is operating in a segmented capital market. What actions would yourecommend to
UNLV - FIN - 308
CHAPTER 18 INTERNATIONAL CAPITAL BUDGETINGSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Why is capital budgeting analysis so important to the firm?Answer: The fundamental goal of the financial manager is to maximi
UNLV - FIN - 308
CHAPTER 20 INTERNATIONAL TRADE FINANCESUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Discuss some of the reasons why international trade is more difficult and risky from the exportersperspective than is domestic tr
UNLV - FIN - 308
CHAPTER 21 INTERNATIONAL TAX ENVIRONMENT AND TRANSFER PRICINGSUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Discuss the twin objectives of taxation. Be sure to define the key words.Answer: There are two basic objec
Belhaven - CHEM - S20
Chemistry S-20abWeek 1Chemistry E-2a: Lecture 2September 25, 2008Molecular Orbitals: H2 and He2We originally showed that the overlap of atomic orbitals forms a single covalent bond.However, the mathematics of quantum mechanics requires that the numb
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Chemistry S-20abWeek 1Chemistry E-2a: Lecture 1September 18, 2008Introduction to Organic Chemistry: AlkanesBecause there are so many different organic compounds, we must group them into classesbased on their structure. The simplest class of organic
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Chemistry S-20abWeek 1Chemistry E-2a: Lecture 2September 25, 2008Energy-Level Diagrams for Simple MoleculesConstruct an approximate energy-level diagram for acetonitrile, CH3CN, using thefollowing steps:Step 1. Draw a complete Lewis structure for t
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Chemistry S-20abWeek 1Chemistry E-2a: Lecture 3October 2, 2008Frontier Orbitals of Proton-Transfer ReactionsWe can, of course, look at proton-transfer reactions in terms of the HOMO and LUMOinvolved in the reaction. Can you find the HOMO and LUMO of