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NEW QUESTION: 1
In 2001, Continental Supply Company was formed to provide drilling equipment and supplies to contractors and oilfield production companies located throughout the United States. At the end of 2005, Continental Supply created a wholly owned foreign subsidiary, International Oilfield Incorporated, to begin servicing customers located in the North Sea. International Oilfield maintains its financial statements in a currency known as the local currency unit (LCU). Continental Supply follows U.S. GAAP and its presentation currency is the U.S. dollar.
For the years 2005 through 2008, the weighted-average and year-end exchange rates, stated in terms of local currency per U.S. dollar, were as follows:
International Oilfield accounts for its inventory using the lower-of-cost-or-rnarlcet valuation method in conjunction with the first-in, first-out, cost flow assumption. All of the inventory on hand at the beginning of the year was sold during 2008. Inventory remaining at the end of 2008 was acquired evenly throughout the year.
At the beginning of 2006, International Oilfield purchased equipment totaling LCU975 million when the exchange rate was LCU 1.00 to SI. During 2007, equipment with an original cost of LCU 108 million was totally destroyed in a fire. At the end of 2007, International Oilfield received a LCU 92 million insurance settlement for the loss. On June 30, 2008, International Oilfield purchased equipment totaling LCU 225 million when the exchange rate was LCU 1.25 to $1.
For the years 2007 and 2008, Continental Supply reported International Oilfield revenues in its consolidated income statement of S375 million and $450 million, respectively. There were no inter- company transactions. Following are International Oilfield's balance sheets at the end of 2007 and 2008:
At the end of 2008, International Oilfield's retained earnings account was equal to $525 million and, to date, no dividends have been paid. All of International Oilfield's capital stock was issued at the end of
2005.
As compared to the temporal method, which of the following best describes the impact of the all-current method on International Oilfield's gross profit margin percentage for 2008 when stated in U.S. dollars? The gross profit margin would be:
A. the same.
B. lower.
C. higher.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
As compared to the temporal method, the all-current method will result in a higher gross profit margin percentage (higher numerator) when the local currency is depreciating as is the case in this scenario (the exchange rate has risen from LCU 1 per $1 to LCU 1.25 per $1; thus, it costs more LCUs to buy $1 which is the result of a depreciating LCU). Under the temporal method, COGS is remeasured at the historic rate; thus, COGS is not impacted by the depreciating currency. Under the all-current method, COGS is translated at the average rate; thus, COGS is lower because of the depreciating currency. Lower COGS results in a higher gross profit margin percentage. (Study Session 6, LOS 23.d)
NEW QUESTION: 2
Your network contains an Active Directory domain named contoso.com. The domain contains a server named Server1. Server1 runs Windows Server 2012 R2 and has the Hyper-V server role installed.
On Server1, you create a virtual machine named VM1.
When you try to add a RemoteFX 3D Video Adapter to VM1, you discover that the option is unavailable as shown in the following exhibit. (Click the Exhibit button.)
You need to add the RemoteFX 3D Video Adapter to VM1.
What should you do first?
A. On Server1, run the Add-VMRemoteFx3dVideoAdapter cmdlet
B. On Server1, install the Remote Desktop Visualization Host (RD Visualization Host) role service.
C. On Server1, install the Media Foundation feature.
D. On Server1, run the Enable-VMRemoteFxPhysicalVideoAdapter cmdlet.
Answer: B
Explanation:
Explanation/Reference:
Remote Desktop services are not available in server core installation; you need to add the role.
References:
Exam Ref 70-410: Installing and Configuring Windows Server 2012 R2, Chapter 1: Installing and Configuring servers, Objective 1.2: Configure servers, p. 19
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NEW QUESTION: 3
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