fa4s01 - CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION...

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EFA4S01 ©CGA-Canada, 2001 Page 1 of 9 CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION September 2001 Marks Time: 4 Hours Notes: 1. Show all calculations in an orderly manner in order to obtain part marks. 2. Round all calculations to the nearest dollar. 3. Narratives for journal entries are not required unless specifically asked for. 4. Assume a December 31 fiscal year end unless specifically stated otherwise. 5. Assume all amounts are material unless directed otherwise. 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 (1) is the best answer for item (a), 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. No account will be taken of any explanations you offer. Note: 2 marks each Note: Use the following information to answer parts (a) and (b). On July 1, 2000, a public company issued 10-year convertible bonds with a face value of $5,000,000 and an 8% stated rate of interest, paid annually. The bonds were issued for proceeds of $4,679,117 to provide an effective yield of 9%. Similar bonds issued by the company without a conversion feature would have required a yield of 10% to attract investors, and would have been issued for proceeds of $4,385,543. a. What premium or discount should be recorded by the company on July 1, 2000, if the company uses split accounting to determine the premium or discount? 1) $320,883 discount 2) $320,883 premium 3) $614,457 discount 4) $614,457 premium b. Three years after the issuance date, $2,500,000 (face value) of the bonds are converted. Which of the following adjustments would be made to the conversion rights account to record this conversion? 1) $146,787 debit 2) $160,442 debit 3) $293,574 debit 4) $307,229 debit Continued. ..
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EFA4S01 ©CGA-Canada, 2001 Page 2 of 9 c. Which of the following is not an objective of the International Accounting Standards Committee (IASC)? 1) To promote world-wide acceptance of published accounting standards to be observed in the presentation of financial statements 2) To work generally for the harmonization of regulations and procedures relating to the presentation of financial statements 3) To work generally for the improvement of accounting standards relating to the presentation of financial statements 4) To ensure uniformity of published accounting standards world-wide for the presentation of financial statements d. Providence Company owns 60% of the shares of Quark Company and 20% of the shares of Riverside Company. Quark owns 40% of the shares of Riverside. Which of the following statements is correct? 1)
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This note was uploaded on 05/08/2010 for the course BUSINESS AIT 707 taught by Professor Raminrezaeinia during the Spring '09 term at Seneca.

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fa4s01 - CGA-CANADA FINANCIAL ACCOUNTING 4 EXAMINATION...

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