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NEW QUESTION: 1
Ota L'Abbe, a supervisor at an investment research firm, has asked one of the junior analysts, Andreas Hally, to draft a research report dealing with various accounting issues.
Excerpts from the request are as follows:
* "There's an exciting company that we're starting to follow these days. It's called Snowboards and Skateboards, Inc. They are a multinational company with operations and a head office based in the resort town of Whistler in western Canada. However, they also have a significant subsidiary located in the United States."
* "Look at the subsidiary and deal with some foreign currency issues including the specific differences between the temporal and all-current methods of translation, as well as the effect on financial ratios."
* "The attached file contains the September 30, 2008, financial statements of the U.S. subsidiary. Translate the financial statements into Canadian dollars in a manner consistent with U.S. GAAP." The following are statements from the research report subsequently written by Hally:
Statement 1: Subsidiaries whose operations are well integrated with the parent will use the all-current method of translation.
Statement 2: Self-contained, independent subsidiaries whose operating, investing, and financing activities are primarily located in the local market will use the temporal method of translation.
Other information to be considered
* Exchange rates (CAD/USD)
* Beginning inventory for fiscal 2008 had been purchased evenly throughout fiscal 2007. The company uses the FIFO inventory value method.
* Dividends of USD 25,000 were paid to the shareholders on June 30, 2008.
* All of the remaining inventory at the end of fiscal 2008 was purchased evenly throughout fiscal 2008.
* All of the PP&E was purchased, and all of the common equity was issued at the inception of the company on October 1, 2004. No new PP&E has been acquired, and no additional common stock has been issued since then. However, they plan to purchase new PP&E starting in fiscal 2009.
* The beginning retained earnings balance for fiscal 2008 was CAD 1,550,000.
* The accounts payable on the fiscal 2008 balance sheet were all incurred on June 30, 2008.
* The U.S. subsidiary's operations are highly integrated with the main operations in Canada.
* The remeasured inventory for 2008 using the temporal method is CAD 810,000.
* All monetary asset and liability balances are the same as they were at the end of the 2007 fiscal year, except that long-term debt was USD 467,700.
* Costs of goods sold under the temporal method in 2008 is CAD 1,667,250.
As compared to the temporal method, the parent's fixed asset turnover for fiscal 2008 using the all-current method is:
A. the same.
B. lower.
C. higher.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
The local currency (the USD) is depreciating, so the historical rate will be higher than the current rate.
Fixed asset turnover (sales divided by net PP&E) will be higher under the all-current method. Net PP&E will be translated at the lower current rate, and because sales are the same under both methods, the ratio will be higher.
If you want to do the calculations, net PP&E under the all-current method is USD730.00O x 1.32CAD/USD
= CAD 963,600. and fixed asset turnover is CAD 1,825,200/CAD 963,600 = 1.9 times. Fixed asset turnover under the temporal method is CAD 1,825,200/CAD 1,095,000 = 1.7 times. (Study Session 6, LOS 23.d)
NEW QUESTION: 2
George has joined an IBM Sametime Meeting via his rich client that is enabled for audio and video.
Which action is George able to do during that meeting?
A. Change the video to full screen.
B. Select which meeting attendees appear in his video panel.
C. Embed the video in an IBM Connections Media gallery.
D. Upload the video stream to YouTube.
Answer: A
NEW QUESTION: 3
In Amazon EC2, partial instance-hours are billed _____.
A. by combining partial segments into full hours
B. per second used in the hour
C. as full hours
D. per minute used
Answer: C
Explanation:
Partial instance-hours are billed to the next hour.
Reference: http://aws.amazon.com/ec2/faqs/
NEW QUESTION: 4
Which statement about the EIGRP RTO is true?
A. It is the time that it normally takes for an update to be received by a peer.
B. It is six times the SRTT.
C. It is the time that it normally takes to receive a reply to a query.
D. It is the average time that it takes for a reliable packet to be acknowledged.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
The RTO is typically six times the SRTT, the value may vary from a minimum of 200 microseconds (ms) to a maximum of 5 seconds (s).
Reference. EIGRP for IP: Basic Operation and Configuration, Alvaro Retana, Russ White, Don Slice - 2000
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