Questions from Financial Reporting

Q: Financial reporting classifies derivatives as (a) speculative investments,

Financial reporting classifies derivatives as (a) speculative investments, (b) fair value hedges, or (c) cash flow hedges. However, firms revalue all derivatives to market value each period regardl...

Q: Bookman Co. develops digital accounting systems and provides accounting-related

Bookman Co. develops digital accounting systems and provides accounting-related consulting services. a. On January 1, 2017, Bookman signs a contract with Brock Florists to install a system and provide...

Q: HeavyEQ produces large conveyor belt systems for heavy manufacturing. HeavyEQ signs

HeavyEQ produces large conveyor belt systems for heavy manufacturing. HeavyEQ signs a $2 million fixed-price contract under which it makes three promises: ● Install a conveyor belt system: fair value...

Q: Citigroup Inc. (Citi) is a leading global financial services

Citigroup Inc. (Citi) is a leading global financial services company with over 200 million customer accounts and operations in more than 140 countries. Its operating units Citicorp and Citi Holdings p...

Q: Given the following information, compute December 31, 2017, projected

Given the following information, compute December 31, 2017, projected benefit obligation (PBO) and fair market value (FMV) of plan assets for Lee Company. What amount of asset or liability will be rep...

Q: The notes to a firm’s financial statements reveal that the obligations for

The notes to a firm’s financial statements reveal that the obligations for postretirement health care benefits at the end of 2017 total $2.1 billion. The fair value of plan assets for these benefits a...

Q: Explain why analysts and investors use risk adjusted expected rates of return

Explain why analysts and investors use risk adjusted expected rates of return as discount rates in valuation. Why do investors expect rates of return to increase with risk?

Q: Why is the dividends based valuation approach applicable to firms that do

Why is the dividends based valuation approach applicable to firms that do not pay periodic (quarterly or annual) dividends?

Q: The chapter asserts that dividends are value relevant even though the firm’s

The chapter asserts that dividends are value relevant even though the firm’s dividend policy is irrelevant. How can that be true? What is the key assumption in the theory of dividend policy irrelevanc...

Q: The chapter describes how the dividends-based valuation approach measures dividends

The chapter describes how the dividends-based valuation approach measures dividends to encompass various transactions between the firm and the common shareholders. What transactions should you include...