Inversely, when a share repurchase is seen as treasury stock, the cost of the treasury stock is naturally disclosed as a decrease in total shareholders’ equity. Alcoa would report the purchase of the treasury stock by debiting treasury stock and crediting cash for the charge of the purchase. The treasury stock ought to be disclosed independently in the shareholders' equity area of Alcoa’s balance sheet as an unallocated cut of shareholders' equity. These shares are treated as issued although not part of common stock outstanding. If subsequently resold for a sum larger than the cost, Alcoa should report for the sale of the treasury stock by debiting cash for the sale cost, crediting treasury stock for cost, and crediting additional paid-in capital from repurchased stock for the excess of the selling price over the cost.
In which current and noncurrent asset categories are investments reported by Merck? What criteria are used to determine the classifications? The 2008 balance sheet reports the following two current and one noncurrent asset categories ($ in millions): 2009 2008 CURRENT ASSETS: Cash and cash equivalents $ 9,311.4 $ 4,368.3 Short-term investments $293.1 $1,118.1 NONCURRENT ASSETS: Investments $432.3 $6,491.3 In the summary of significant accounting policies (Note 2), Merck describes its policy regarding investments classified as "cash equivalents." It is consistent with the way most companies classify "cash equivalents." CASH AND CASH EQUIVALENTS -- Cash equivalents are comprised of certain highly liquid investments with original maturities of less than three months.
If it did, how did the firm invest its excess cash? 6. If not, what were the sources of cash the firm used to pay for the capital expenditures and/or dividends? Sources of cash used to pay for capital expenditures and/or dividends are proceeds from long-term debt and short term borrowings. 7.
Peter Swap I. Issue: Will recognizing compensation expense as part of Mizri Corporation’s stock compensation plan faithfully represent the exchange? II. GAAP List: * 718-10-30-22: An equity instrument for which it is not possible to reasonably estimate fair value at the grant date shall be accounted for based on intrinsic value * 718-20-35-3: A modification of an equity award shall be treated as an exchange of the original award for a new award incurring additional compensation cost for any incremental value III. Alternatives: A.
E) both B and C of the above. Answer: A Topic: Chapter 2.1 Function of Financial Markets Question Status: Previous Edition 3) Which of the following can be described as involving direct finance? A) A corporation's stock is traded in an over-the-counter market. B) People buy shares in a mutual fund. C) A pension fund manager buys commercial paper in the secondary market.
In general, when one speaks of "investing" and the "market," one is referring to financial assets, though both those terms may include non-financial assets like corn or wheat. QUESTION TWO Money market is distinguished from capital market on the basis of the maturity period, credit instruments and the institutions: 1. Maturity Period: The money market deals in the lending and borrowing of short-term finance (i.e., for one year or less), while the capital market deals in the lending and borrowing of long-term finance (i.e., for more than one year). 2. Credit Instruments: The main credit instruments of the money market are call money, collateral loans, acceptances, bills of exchange. On the other hand, the main instruments used in the capital market are stocks, shares, debentures, bonds, securities of the government.
(t) -What is the reqUired rate of return for this particular stream of cash flows? (i) D kp -Present value of the future cash flows at the investor's required rate of return -Dividend of preferred stock is fixed -Equity instrument has no maturity ~ we use perpetuity concept -See from secondary data & Calculate using Regression method -Function approach & Using SLOPEfunction PAR -Present value of the future cash flows at the investor's required rate of return (1 tkd)n -PV annuity for periodic coupon payment + PV of PAR at maturity -y (dependent) 7 stock return -x (independent) Beta = 7 market return
Financial accounting information is used for a.|investment decisions.| b.|regulatory measures.| c.|stewardship evaluation.| d.|all of these.| ANS: D PTS: 1 DIF: Easy OBJ: 1-1 NAT: AACSB Communication 6. Which of the following is NOT part of the financial accounting information system? a.|filing reports with the SEC| b.|reporting a large contingent liability to current and potential shareholders| c.|determining the future cashflows of a proposed flexible manufacturing system| d.|preparing GAAP financial statements| ANS: C PTS: 1 DIF: Meduim OBJ: 1-1 NAT: AACSB Reflective 7. Which of the following does NOT describe cost management system? a.|evaluation of segments or products within the firm| b.|emphasis on the future| c.|externally focused| d.|focus on effective use of
A seasonal reduction in sales revenues C. Inadequate investment opportunities D. A slow-down in economic growth 6) Which of the following does NOT involve underwriting by an investment banker? A. Syndicated purchases B. Commission basis purchases C. Competitive bid purchases D. Negotiated purchases 7) According to the agency problem, _________ represent the principals of a corporation. A. employees B. suppliers C. shareholders D. managers 8) Which of the following is NOT a principle of basic financial management?
Assets that are ready for their intended use or sale when acquired are also not qualifying assets. Borrowing costs may include: i. Interest expense calculated using the effective interest rate method as described in MFRS 139 Financial Instruments: Recognition and Measurement, ii. Finance Charges in respect of finance leases recognized in accordance with MFRS 117 Leases, and iii. Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost.