Topic 5 Solutions Q7-12

Topic 5 Solutions Q7-12 - Question 7 a) Financial asset A...

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9 Question 7 a) Financial asset A is likely to be unlisted equity security because it does not have fair value and income is not fixed. As it is unlisted, the probability of holding it for trading is low. It is most likely to be classified as available for sale securities. Financial asset B is likely to be equity securities because its income is not fixed and it is stated at fair value. It could be classified as fair value through profit or loss, or available for sale. Financial asset C is likely to be accounts receivable because it does not generate income and is stated at fair value (if not, provision for uncollectible will make it to be). Financial asset D is likely to be debt securities because it generates fixed income and is not stated at fair value. It is not likely to be loan because it increases in value in the book but there is no addition. It is likely to be held-to-maturity securities or unlisted bonds classified as loans and receivables. Question 8 (a) $50,000 X .31524 = $15,762.00 + $5,000 X 8.55948 = 42,797.40 $58,559.40 (b) $50,000 X .23939 = $11,969.50 + $5,000 X 7.60608 = 38,030.40 $49,999.90 The answer should be $50,000; the above computation is off by 10¢ due to rounding.
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10 (c) $50,000 X .18270 = $ 9,135.00 + $5,000 X 6.81086 = 34,054,30 $43,189.30 Question 9
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This note was uploaded on 10/20/2010 for the course AD abc123 taught by Professor Cat during the Summer '09 term at City University of Hong Kong.

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Topic 5 Solutions Q7-12 - Question 7 a) Financial asset A...

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