ca_exm_fa4_2011-03

ca_exm_fa4_2011-03 - CGA-CANADA FINANCIAL ACCOUNTING:...

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EFA4M11 ©CGA-Canada, 2011 Page 1 of 11 CGA-CANADA FINANCIAL ACCOUNTING: CONSOLIDATIONS & ADVANCED ISSUES [FA4] EXAMINATION March 2011 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. 28 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. How should a transfer of $100,000 from the operating fund to the endowment fund be accounted for by a not-for-profit organization? 1) As an expense of the operating fund and a revenue of the endowment fund 2) As an expense of the endowment fund and a revenue of the operating fund 3) As a decrease in the net assets for the operating fund and an increase in the net assets for the endowment fund in the statement of changes in net assets 4) As an increase in the net assets for the operating fund and a decrease in the net assets for the endowment fund in the statement of changes in net assets b. IBE Corporation has owned 25% of the common shares of ANG Company since January 1, 2006. ANG’s founder owns the remaining 75% of ANG. IBE has not been able to elect any of the members of the board of directors of ANG, but is hoping to acquire an additional 35% of ANG when the founder of ANG retires. How should IBE report its investment in ANG? 1) Consolidation 2) Cost method 3) Equity method 4) Proportionate consolidation Continued. ..
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EFA4M11 ©CGA-Canada, 2011 Page 2 of 11 c. A parent acquires 100% of the shares of a subsidiary for $1,000,000. Which of the following situations will result in negative goodwill? 1) The fair value of the subsidiary’s identifiable net assets is greater than $1,000,000. 2) The fair value of the subsidiary’s identifiable assets is greater than $1,000,000. 3) The subsidiary’s shareholders’ equity is greater than $1,000,000. 4)
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ca_exm_fa4_2011-03 - CGA-CANADA FINANCIAL ACCOUNTING:...

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