ca_exm_fa4_2009-12 - CGA-CANADA FINANCIAL ACCOUNTING:...

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EFA4D09 ©CGA-Canada, 2009 Page 1 of 10 CGA-CANADA FINANCIAL ACCOUNTING: CONSOLIDATIONS & ADVANCED ISSUES [FA4] EXAMINATION December 2009 Marks Time: 4 Hours Notes: 1. All calculations must be shown in an orderly manner to obtain part marks. 2. Round all calculations to the nearest dollar. 3. Narratives for journal entries are not required unless specifically requested. 4. Assume a December 31 fiscal year end unless specifically stated otherwise. 5. Assume all amounts are material unless directed otherwise. 6. Assume all companies are public companies unless otherwise noted. 7. Assume no companies use differential reporting unless otherwise noted. 8. Assume companies apply new CICA Handbook sections related to Business Combinations; that is, sections 1582, 1601, and 1602. 30 Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Note: 2 marks each a. Which of the following has contributed the most to the harmonization of accounting standards on a worldwide basis? 1) The Securities Exchange Commission allows American firms to use IASB standards. 2) The IASB adopted a policy to assess a fine to members who do not comply with IASB standards. 3) The European Union adopted a policy that public companies located in countries within the Union must report their results using IASB standards. 4) The tax laws for countries in the European Union were changed to be consistent with IASB reporting standards. b. Which of the following accounts, which resulted from transactions denominated in foreign currencies, would be translated to Canadian dollars at the current rate — the exchange rate as at the reporting date? 1) Inventory carried at market under the lower-of-cost-or market principle 2) Capital assets 3) Non-monetary liabilities 4) Sales c. The manager of the investment fund at MAR Corporation receives a bonus based on MAR’s reported net income. Which of the following unrealized gains would affect his bonus for the year? 1) Foreign exchange gains from translating financial statements of a self-sustaining subsidiary 2) Foreign exchange gains from a forward contract designated as a cash flow hedge 3) Unrealized gains on available-for-sale investments 4) Unrealized gains on held-for-trading investments Continued. ..
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EFA4D09 ©CGA-Canada, 2009 Page 2 of 10 Note: Use the following information to answer parts (d) to (f). On January 1, 2009, CAN paid $55,209 for 5-year bonds with a par value of $60,000 and a maturity date
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ca_exm_fa4_2009-12 - CGA-CANADA FINANCIAL ACCOUNTING:...

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