ca_exm_fa3_2008-12 - CGA-CANADA FINANCIAL ACCOUNTING:...

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EFA3D08 ©CGA-Canada, 2008 Page 1 of 8 CGA-CANADA FINANCIAL ACCOUNTING: LIABILITIES & EQUITIES [FA3] EXAMINATION December 2008 Marks Time: 3 Hours Notes: 1. All calculations must be shown in an orderly manner to obtain part marks. 2. Round all calculations to the nearest dollar, except for EPS and financial ratios where two decimal places should be used. 3. Unless otherwise indicated, use straight-line amortization. 4. Assume a December 31 fiscal year end for all questions, unless otherwise indicated. 5. If a test of materiality is required, use 5%. 6. Narratives for journal entries are not required. When preparing journal entries, be careful to select account titles that clearly indicate where the item will appear in the financial statements. For example, if something is to be on the income statement, it should be labelled as a revenue, expense, or extraordinary item. 26 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 is the appropriate account to debit for share issuance costs? 1) Common shares 2) Share issuance expense 3) Contributed capital 4) Discount on share issue b. Your company is being sued by a customer for $300,000. Your company is actively defending the lawsuit. The company lawyers are certain the claim can be settled for $150,000 within the next 2 years. It is probable the plaintiff (the customer) will accept such an offer. How much should be accrued in the current year for the lawsuit? 1) $ 0 2) $150,000 3) $225,000 4) $300,000 c. A company receives an electricity bill on May 10 for $1,200, which is due May 31. The company is a retail company. What account should be credited as part of the journal entry on May 10? 1) Cash 2) Utilities expense 3) Manufacturing overhead 4) Utilities payable Continued. ..
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EFA3D08 ©CGA-Canada, 2008 Page 2 of 8 d. On December 1, when the exchange rate was US$1 = C$1.06, Hych Company obtained a bank loan from a U.S. bank in the amount of US$100,000. On December 31, Hych’s year end, the exchange rate was US$1 = C$1.08. What is the exchange gain or loss reported on the income statement for December 31? 1) $167 loss 2) $167 gain 3) $2,000 loss 4) $2,000 gain e. If stock options are exercisable immediately, when is the compensation expense recorded? 1) The expense is allocated over the exercisable period. 2)
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This note was uploaded on 06/10/2011 for the course ACCT 1204 taught by Professor Chang during the Spring '11 term at Nanjing University.

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ca_exm_fa3_2008-12 - CGA-CANADA FINANCIAL ACCOUNTING:...

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