ca_exm_fa4_2011-09 - CGA-CANADA FINANCIAL ACCOUNTING:...

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EFA4S11 ©CGA-Canada, 2011 Page 1 of 11 CGA-CANADA FINANCIAL ACCOUNTING: CONSOLIDATIONS & ADVANCED ISSUES [FA4] EXAMINATION September 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. 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. On January 1, 2010, Hatton Ltd. issued $1,000,000 of cumulative preferred shares that will be redeemed on January 1, 2015. The company declared and paid a dividend of $40,000 on these shares during 2010. How are the shares and their dividend reflected in Hatton’s December 31, 2010 financial statements? Preferred shares Dividend 1) Balance sheet: shareholders’ equity Decrease to retained earnings 2) Balance sheet: liability Income statement expense 3) Balance sheet: liability Decrease to retained earnings 4) Balance sheet: shareholders’ equity Income statement expense b. Babco Inc. is a not-for-profit organization. In 2010, the organization received a donation of $500,000, which must be used as an endowment. How would this endowment be accounted for in 2010 under each of the following two methods? Deferred contribution method Restricted fund method 1) Deferred revenue Revenue 2) Never reported as revenue Revenue 3) Revenue Never reported as revenue 4) Deferred revenue Never reported as revenue Continued. ..
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EFA4S11 ©CGA-Canada, 2011 Page 2 of 11 c. Which of the following items is not a financial instrument? 1) Interest rate swap 2) Accounts receivable 3) Investment in shares 4) Leased assets Note: Use the following information to answer parts (d) and (e). On June 30, 2010, PCP Ltd. paid $97,643 for an investment in bonds of ACP Ltd. The bonds mature on December 31, 2012 and have a maturity value of $100,000. The stated interest rate on the bonds is 3% compounded semi-annually. The bonds were issued at a price to yield 4% compounded semi-annually. Interest is paid each June 30 and December 31. PCP’s policy for this type of investment is to hold it for
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This note was uploaded on 12/13/2011 for the course IAF 710 taught by Professor Ellmen during the Fall '11 term at Seneca.

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ca_exm_fa4_2011-09 - CGA-CANADA FINANCIAL ACCOUNTING:...

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