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EFA4D08 ©CGA-Canada, 2008 Page 1 of 11 CGA-CANADA FINANCIAL ACCOUNTING: CONSOLIDATIONS & ADVANCED ISSUES [FA4] EXAMINATION December 2008 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. 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 groups of people would be most interested in receiving the consolidated financial statements of a public company? 1) Non-controlling shareholders of the subsidiary company 2) Auditors at the Canada Revenue Agency 3) Bankers of the parent company 4) Bankers of the subsidiary company b. BOT Company recently acquired 100% of the shares of NAS Limited. BOT paid lawyers and appraisers for assistance in negotiating and finalizing this transaction. How should BOT account for these costs on its separate entity financial statements? 1) Professional fees expense 2) Deferred charges 3) Additional costs of the investment in NAS 4) Goodwill c. When the primary sources of Canadian GAAP do not deal with the accounting and reporting in financial statements of transactions and events encountered by an entity, what should the entity do? 1) It should adopt accounting policies consistent with International Financial Reporting Standards. 2) It should develop accounting policies by applying the concepts described in Financial Statement Concepts, Section 1000 of the CICA Handbook . 3) It can use whatever accounting policy it wants since there are no primary sources of Canadian GAAP. 4) It should adopt an accounting policy consistent with income tax laws. Continued. ..
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EFA4D08 ©CGA-Canada, 2008 Page 2 of 11 d. Assume that the exchange rate was FC1 = $2.50 on June 15, 2008 and FC1 = $2.60 on December 31, 2008. Which of the following situations would result in a foreign exchange gain being reported in net income for 2008? 1) A company purchased land for cash of FC100,000 on June 15, 2008 and fair value of the land was FC105,000 at the end of the year. 2)
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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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