ADMS4520 F2010 Final Review Questions +sol

ADMS4520 F2010 Final Review Questions +sol - AP/ADMS 4520...

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AP/ADMS 4520 Fall 2010 Final Exam Review Final Exam is Tuesday December 14, 2010. 7pm to 10pm in room TBD. The final exam will cover Chapters 1 to 9 inclusive of the Modern Advanced Accounting in Canada textbook - edition 6. Approximately 50% of the exam will cover Chapters 8 and 9 and the other 50% will cover Chapters 1 to 7. The following are areas to focus on however students are responsible for all material. Theory Highlights 1) Types of Equity Investments and IFRS - strategic vs. non-strategic, reporting method - major differences between IFRS and Canadian GAAP - factors for each kind of equity investment - change in ownership (increase or decrease) 2) Business Combinations - acquisition differential and goodwill - impact of preferred shares on calculations - cost and equity method journal entries - non-controlling interest - impact of intercompany transactions and calculation - realized and unrealized profits 3) Operating Segments - rules / calculations to determine segments to be reported separately - disclosure requirements 4) Special purpose entity - definition of SPE, VIE, reporting method and advantage of - disclosure requirements 5) Direct and indirect shareholdings (control) - how to determine if a parent has control of another company thus consolidate - how to calculate consolidated NI when a parent has control of more than one subsidiary
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Problem Highlights All questions assigned on week by week schedule for homework plus additional problems attached. Midterm 2 - Question # 1 Additional problem – preferred shares Chapter 8 – Problem 13 Chapter 9 – Example on page 478 Additional problem – full consolidation Midterm 2 - Question # 4
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Question 1 (partial) Star Co. purchased 100% of Sun Co. on January 01, 2010 for $21,750. On that date, the Acquisition differential was determined to be $3,000 which was allocated as: $2,000 to the January 01 Inventory and $1,000 to Goodwill. (Goodwill impairment has been determined to be $50 per year). Star Co. uses the equity method to record its investments. On December 31, 2010 each company had the following Financial Statements: Balance Sheet Star Co. Sun Co. Assets 147,800 18,300 Inventory 30,000 14,000 Investment in SunCo 21,750 Total Assets 199,500 32,300 Liabilities 47,000 11,500 Common Stock 50,000 10,000 Retained Earnings (Jan) 85,000 6,000 Net Income 23,550 7,300 Dividends (6,000) 102,550 (2,500) 10,800 Liabilities and Equity 199,500 32,300 Income Statement Star Co. Sun Co. Sales 50,000 30,000 Investment Income 5,250 Cost of Sales (26,500) (14,700) Expenses (5,200) (8,000) Net Income 23,550 7,300 Provide ALL the proper accounting entries (in correct j/e format) that Star Co. was required to make in its accounting records for the entire fiscal year 2010 as related to Sun Co. Jan. 1 2010 Dr. Investment in Sun 21,750 Cr. Cash 21,750 Acquisition of 100% of S Dec. 31 2010 Dr. Investment in Sun 7,300 Cr. Investment Income 7,300 100% of S year 1 net income Dec. 31 2010 Dr. Cash 2,500 Cr. Investment in Sun 2,500 Dividend received from S Dec. 31 2010 Dr. Investment Income 2,050 Cr. Investment in Sun 2,050 Record amortization of PPD re inventory and goodwill (entire inventory of 2000+50 for goodwill for one year)
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Additional problem - preferred shares On January 1, Year 1, Anika company acquired 800 common shares of Shonna company for $24,000.
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  • Fall '10
  • KONG
  • Balance Sheet, Net Income, Generally Accepted Accounting Principles

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