On January 1, Year 1, a firm purchases a machine for $68,000 that has an estimated usefu

Hadinoto Enterprises Inc.(HEI) purchased equipment for $400,00 on January 1, 20x5.The 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.

A 5-year floating-rate security was issued on January 1, 2006. The coupon rate formula was 1-year LIBOR + 300 bps with a cap of 10% and a floor of 5% and annual reset. The 1-year LIBOR rate on January 1st of each year of the security’s life is provided in the following table:

During 2012, the payments owed by the issuer were based on a coupon rate

closest to:

A. 6.5%

B. 5.0%

C. 4.5%

made a 1 for 5 rights issue at a price of $1.50.The market price of the shares on the last day of quotation with rights was $1.80.

Total earnings for the year ended 31 December 20X8 was $7.6 million.

What was EPS for the year().

A、$1.35

B、$1.36

C、$1.27

D、$1.06

January 20X7 it made an issue of 4 million shares at full market price immediately followed by a 1 for 3 bonus issue.

The financial statements at 30 September 20X7 showed profit for the year of $12 million.

What was EPS for the year().

A、53c

B、73c

C、48c

D、50c

ock on that date. On July 1, an additional 200,000 shares were issued for cash. Net income for the year was $1,440,000. Net earnings per share amounted to ().

A、$2.88.

B、$2.50.

C、$2.06.

D、$2.40.

(c) At 1 June 2006, Router held a 25% shareholding in a film distribution company, Wireless, a public limited

company. On 1 January 2007, Router sold a 15% holding in Wireless thus reducing its investment to a 10%

holding. Router no longer exercises significant influence over Wireless. Before the sale of the shares the net asset

value of Wireless on 1 January 2007 was $200 million and goodwill relating to the acquisition of Wireless was

$5 million. Router received $40 million for its sale of the 15% holding in Wireless. At 1 January 2007, the fair

value of the remaining investment in Wireless was $23 million and at 31 May 2007 the fair value was

$26 million. (6 marks)

Required:

Discuss how the above items should be dealt with in the group financial statements of Router for the year ended

31 May 2007.Required:

Discuss how the above items should be dealt with in the group financial statements of Router for the year ended

31 May 2007.

paid $38,000 for

insurance for the year to 30 September 2005.

What figures should appear for insurance in the company’s financial statements for the year ended 30 June

2005？

Income statement Balance sheet

A $27,200 Prepayment $19,000

B $39,300 Prepayment $9,500

C $36,700 Prepayment $9,500

D $55,700 Prepayment $9,500

k on that date. On July 1, an additional 100 000 shares were issued for cash. Net income for the year was 600 000 yuan. Net earnings per share amounted to ().

A、3.00 yuan.

B、2.50 yuan.

C、2.40 yuan.

D、2.00 yuan.

he first day of January of every future year from the commencement date, so that it is always valid for a minimum period of four years unless, at least thirty days prior to the 31st day of December of the first year of the current validity period, notice is given in writing, sent by registered mail, that this clean credit will not be extended beyond the current expiry date. Such credits are commonly called:

(1)( ) Evergreen credits.

(2)( ) Revolving credits.

(3)( ) Transferable credits.

13 At 1 January 2005 a company had an allowance for receivables of $18,000

At 31 December 2005 the company’s trade receivables were $458,000.

It was decided:

(a) To write off debts totalling $28,000 as irrecoverable;

(b) To adjust the allowance for receivables to the equivalent of 5% of the remaining receivables based on past

experience.

What figure should appear in the company’s income statement for the total of debts written off as irrecoverable

and the movement in the allowance for receivables for the year ended 31 December 2005？

A $49,500

B $31,500

C $32,900

D $50,900