A company prepares its financial statements in accordance with U.S.GAAP (generally accepted accounting principles).It expected to be the sole supplier for a state-wide school milk program and had production facilities valued at $28.4 million.Recently several other companies were also granted milk-supply contracts throughout the state and the company now estimates that it will only be able to generate cash flows of $3 million per year for the next 7 years with its facilities.The firm has a cost of capital of 10%.
The impairment loss (in $-millions) on the production facilities will most likely be reported in the company’s financial statements as a:
A.13.8 reduction in operating cash flows..
B.13.8 impairment loss in the income statement
C.7.4 reduction in the balance sheet carrying amount.
第1题
accepted accounting principles) are identical except as to how soon they judge a project to be technologically feasible.One firm does so very early in the development cycle while the other usually waits until just before the project is released to manufacturing.Compared to the company that judges technological feasibility early, the one that waits until closer to manufacturing will most likely report lower:
A.financial leverage.
B.total asset turnover.
C.cash flow from operations.
第2题
as experienced a decline in the demand for its products.The following information relates to the company’s printing equipment as of 31 December 2010.
The impairment loss (in C$) is closest to:
A.0.
B.60,000.
C.70,000.
第3题
Which of the following is the least likely reason as to why a firm’s management would increase the value of a capital asset that had been previously written down?
A.Management wants to increase ROE in future periods.
B.The company is approaching the leverage limits of its borrowing agreement.
C.Management is concerned that income for the current year will fall below levels expected by analysts.
第4题
A company, which prepares its financial statements in accordance with IFRS uses the revaluation model to value land.At the end of the current year the land value of the land has increased and will be adjusted on the balance sheet.Which of the following statements is most accurate? In the current period the revaluation of the land will:
A.increase return on sales.
B.increase return on assets.
C.decrease the debt to equity ratio.
第5题
g equipment for the fiscal year ended December 31, 2010 using the information below.The company takes a full year’s depreciation in the year of acquisition.
The depreciation expense (in MXN) will most likely be:
A.180,000 lower using the straight-line method compared with the double-declining balance method.
B.140,000 higher using the units-of-production method compared with the straight-line method.
C.112,000 higher using the double-declining method compared with the units-of-production method.
第6题
ted to have a 3 year life and a residual value of €5,000.If the company depreciates the asset using the double declining balance method, the depreciation expense that the company will report for the third year is closest to:
A.€555.
B.€3,328.
C.€3,705.
第7题
lifts, etc.) for €50 million, which were valued by an appraiser as follows: Land €10 million, building €35 million, and equipment €5 million.The company incurred the following additional costs in getting the warehouse ready to use:
·€2.0 million for repairs to the building’s roof and windows
·€0.5 million to modify the interior layout to meet their needs (moving walls and doors, inserting and removing partitions, etc.)
·€0.1 million on an orientation and training session for employees to familiarize them with the facility
The cost to be capitalized to the building account (in millions) for accounting purposes is closest to:
A.€37. 0.
B.€37. 5.
C.€38. 5.
第8题
A company has announced that it is going to distribute a group of long-lived assets to its owners in a spin-off.The most appropriate way to account for the assets until the distribution occurs is to classify them as:
A.held for sale with no depreciation taken.
B.held for use until disposal with no deprecation taken.
C.held for use until disposal with depreciation continuing to be taken.
第9题
equipment has a 4 year life and no salvage value.HEI estimates that the equipment will be used to produce the following units of inventory:
To maximize profit margin for 20x5, the depreciation method HEI will use is :
A.Straight-line
B.Units of production.
C.Double-declining balance.
第10题
method, rather than straight-line, could expect a lower value for:
A.Asset turnover.
B.Shareholders’ equity.
C.Asset turnover and shareholders’ equity.
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