All Related Questions of Financial Instruments

Q: George Hincapie Inc. manufactures cycling equipment. Recently, the vice

George Hincapie Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company&r...

Q: Presented below is selected information related to the financial instruments of Dawson

Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2014. This is Dawson Company’s first year of operations. Instructions (...

Q: For each item that follows, identify the foundational principle of accounting

For each item that follows, identify the foundational principle of accounting that best describes it. (a) For its annual repom, Sumsong Corp. divides its economic activities into 12-month periods. (b)...

Q: Several statement of financial position accounts of Greenspoon Inc. follow:

Several statement of financial position accounts of Greenspoon Inc. follow: 1. FV-OCI Investments 2. Common Shares 3. Dividends Payable 4. Accumulated Depreciation- Equipment 5. Construction in Pr...

Q: Discuss the three objectives of disclosure of financial instruments under ASPE and

Discuss the three objectives of disclosure of financial instruments under ASPE and IFRS. In your discussion explain how specific disclosure requirements meet these objectives.

Q: The following are typical disclosures that would appear in the notes accompanying

The following are typical disclosures that would appear in the notes accompanying financial statements. For each of the items listed, indicate where the disclosure would likely appear either in (A) t...

Q: The current conceptual distinction between liabilities and equity defines liabilities independently of

The current conceptual distinction between liabilities and equity defines liabilities independently of assets and equity, with equity defined as a residual amount. The present proliferation of financi...

Q: Financial assets include stocks and bonds. These are fairly simple securities

Financial assets include stocks and bonds. These are fairly simple securities that can often be valued using quoted market prices. However, there are more complex financial instruments that do not hav...

Q: Some financial instruments are called derivatives. Why?

Some financial instruments are called derivatives. Why?

Q: Classify the following financial instruments as money market securities or capital market

Classify the following financial instruments as money market securities or capital market securities:

Q: Presented below is selected information related to the financial instruments of Dawson

Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2012. This is Dawson Company’s first year of operations. Instructions...

Q: The IASB Web site (www.iasb.org) summarizes

The IASB Web site (www.iasb.org) summarizes each of the current International Financial Reporting Standards. Required: Answer each of the following questions. a. In measuring inventories at the lowe...

Q: The scene is a conference room on the 10th floor of an

The scene is a conference room on the 10th floor of an office building on Wall Street, occupied by Anthes Enterprises, a small, rapidly growing manufacturer of electronic trading systems for equities,...

Q: The Volkswagen Group adopted International Accounting Standards (IAS, now International

The Volkswagen Group adopted International Accounting Standards (IAS, now International Financial Reporting, or IFRS) for its 2001 fiscal year. The following is taken from Volkswagen’...

Q: Explain the term global capital markets. This chapter primarily discusses global

Explain the term global capital markets. This chapter primarily discusses global equity markets. What other types of financial instruments are traded in these markets? How important are global capital...

Q: How are gains and losses on financial instruments used to hedge the

How are gains and losses on financial instruments used to hedge the net investment in a foreign operation reported in the consolidated financial statements?

Q: Excerpts from the disclosures on derivatives made by a large beverage manufacturer

Excerpts from the disclosures on derivatives made by a large beverage manufacturer in Year 4 appear below: Our Company uses derivative financial instruments primarily to reduce our exposure to adverse...

Q: Aer Lingus is an international airline based in Ireland. Exhibit 3

Aer Lingus is an international airline based in Ireland. Exhibit 3.26 provides the statement of cash flows for Year 1 and Year 2, which includes a footnote from the financial statements. Year 2 was ch...

Q: The process by which firm’s package factored receivables as financial instruments or

The process by which firm’s package factored receivables as financial instruments or securities and sell them to investors is known as a. Credit extension. b. Bundling. c. Aging of accounts receivable...

Q: Over the past few decades, hedge funds have become among the

Over the past few decades, hedge funds have become among the most controversial and largest investment vehicles on Wall Street. Critics of hedge funds argue that their high-risk investment strategies...

Q: The use of derivative financial instruments by companies to manage risk or

The use of derivative financial instruments by companies to manage risk or speculate has increased during the past several years. However, using derivative financial instruments also involves exposure...

Q: Suppose the information below is from the 2017 fi nancial statements and

Suppose the information below is from the 2017 fi nancial statements and accompanying notes of The Scotts Company, a major manufacturer of lawn-care products. Instructions Answer each of the following...

Q: The following table lists three financial instruments and their deltas, gammas

The following table lists three financial instruments and their deltas, gammas, and vegas for each $1 million notional amount under the assumption of a long position. (Long in a swap or FRA means to p...

Q: Messier Inc. manufactures cycling equipment. Recently, the vice president

Messier Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company’s bikes....

Q: How does a derivative differ from other financial instruments and contracts?

How does a derivative differ from other financial instruments and contracts?

Q: Refer to Samsung’s balance sheet in Appendix A. If it made

Refer to Samsung’s balance sheet in Appendix A. If it made an adjustment for unpaid wages at year-end, where would the accrued wages be reported on its balance sheet? Samsungâ...

Q: Refer to Samsung’s most recent balance sheet in Appendix A. Identify

Refer to Samsung’s most recent balance sheet in Appendix A. Identify and list its nine current assets. Samsung’s Balance Sheet from Appendix A: /

Q: Refer to Samsung’s 2013 balance sheet in Appendix A near the end

Refer to Samsung’s 2013 balance sheet in Appendix A near the end of the book. Confirm that its total assets equal its total liabilities plus total equity. Samsung’...

Q: Refer to the December 31, 2013, financial statements of Samsung

Refer to the December 31, 2013, financial statements of Samsung in Appendix A. Does Samsung report its accounts receivable as a current or noncurrent asset? Does Samsung report its GOOGLE accounts rec...

Q: Samsung’s balance sheet in Appendix A reports the change in cash and

Samsung’s balance sheet in Appendix A reports the change in cash and equivalents for the year ended December 31, 2013. Identify the cash generated (or used) by operating activities,...

Q: Refer to the December 31, 2013, balance sheet of Samsung

Refer to the December 31, 2013, balance sheet of Samsung in Appendix A. What long-term assets discussed in this chapter are reported by the company? Samsung’s Balance Sheet from App...

Q: Refer to the financial statements for Samsung in Appendix A. How

Refer to the financial statements for Samsung in Appendix A. How much were its cash payments for treasury stock purchases for the year ended December 31, 2013? Samsung’s Financial S...

Q: By what amount did Samsung’s long-term borrowings increase or decrease

By what amount did Samsung’s long-term borrowings increase or decrease in 2013? Samsung’s Financial Statements from Appendix A:

Q: Refer to the statement of cash flows for Samsung in Appendix A

Refer to the statement of cash flows for Samsung in Appendix A. For the year ended December 31, 2013, what was the amount for repayment of long-term borrowings and debentures? Samsungâ€
...

Q: Refer to Samsung’s 2013 statement of cash flows in Appendix A.

Refer to Samsung’s 2013 statement of cash flows in Appendix A. List its cash flows from operating activities, investing activities, and financing activities. Samsungâ€
...

Q: Refer to Samsung’s statement of cash flows in Appendix A. What

Refer to Samsung’s statement of cash flows in Appendix A. What investing activities result in cash outflows for the year ended December 31, 2013? List items and amounts. Samsung&aci...

Q: Refer to Samsung’s financial statements in Appendix A. Compute its cost

Refer to Samsung’s financial statements in Appendix A. Compute its cost of goods available for sale for the year ended December 31, 2013. Samsung’s Financial State...

Q: Refer to Samsung’s financial statements in Appendix A. What percent of

Refer to Samsung’s financial statements in Appendix A. What percent of its current assets are inventory as of December 31, 2013 and 2012? Samsung’s Financial State...

Q: Refer to the financial statements of Samsung in Appendix A. What

Refer to the financial statements of Samsung in Appendix A. What does Samsung title its accounts receivable on its consolidated balance sheet? What are Samsung’s accounts receivable...

Q: Refer to the following information provided in the chapter for Arcot Company

Refer to the following information provided in the chapter for Arcot Company: • Consolidated financial statements in Exhibits 10.8 and 10.9. • Differences between L...

Q: Refer to the following information provided in the chapter for Arcot Company

Refer to the following information provided in the chapter for Arcot Company: • Consolidated financial statements in Exhibits 10.8 and 10.9. • Differences between L...

Q: Refer to the income statements presented in Exhibits 2.9,

Refer to the income statements presented in Exhibits 2.9, 2.10, 2.11, 2.12, and 2 .13 for Callaway Golf Company, Südzucker AG, Cemex S.A.B. de CV, Sol Meliá SA, and Thai A...

Q: Refer to Exhibits 6.3, 6.5, 6

Refer to Exhibits 6.3, 6.5, 6.7, 6.8, and 6.12. Required: Identify a. An issue in respect of which the practices of several countries discussed in this chapter are at variance with IFRS. b. The most...

Q: 2.1. Banks are required by law to keep a

2.1. Banks are required by law to keep a fraction of their deposits as _________. 2.2. When reserves do not pay interest, banks prefer to keep reserves rather than make loans. _________ (True/ False)...

Q: Refer to Samsung’s financial statements in Appendix A. Compute its debt

Refer to Samsung’s financial statements in Appendix A. Compute its debt ratio as of December 31, 2013, and December 31, 2012. Samsung’s Financial Statements from A...

Q: Use Samsung’s financial statements in Appendix A to compute its return on

Use Samsung’s financial statements in Appendix A to compute its return on total assets for fiscal year ended December 31, 2013. Samsung’s Financial Statements from...

Q: Aer Lingus is an international airline based in Ireland. Exhibit 3

Aer Lingus is an international airline based in Ireland. Exhibit 3.24 provides the statement of cash flows for Year 1 and Year 2, which includes a footnote from the financial statements. Year 2 was ch...

Q: ForeEver Yours, Inc., a manufacturer of wedding rings, issued

ForeEver Yours, Inc., a manufacturer of wedding rings, issued two financial instruments at the beginning of 2017: a $10 million, 40-year bond that pays interest at the rate of 11% annually and 10,000...

Q: Why are financial intermediaries willing to engage in information collection activities when

Why are financial intermediaries willing to engage in information collection activities when investors in financial instruments may be unwilling to do so?

Q: One of the possible solutions to asset-price bubbles is the

One of the possible solutions to asset-price bubbles is the enforcement of macro prudential regulation. Financial intermediaries have an incentive to constantly look for profitable opportunities, whi...

Q: Why are financial intermediaries willing to engage in information collection activities when

Why are financial intermediaries willing to engage in information collection activities when investors in financial instruments may be unwilling to do so?

Q: One of the possible solutions to asset-price bubbles is the

One of the possible solutions to asset-price bubbles is the enforcement of macro prudential regulation. Financial intermediaries have an incentive to constantly look for profitable opportunities, whi...

Q: Classify the following financial instruments as money market securities or capital market

Classify the following financial instruments as money market securities or capital market securities: a. Banker’s acceptances b. Commercial paper c. Common stock d. Corporate bonds e. Mortgages f. Neg...

Q: 1. What is the purpose of the international capital market?

1. What is the purpose of the international capital market? 2. Unbundling and repacking hard-to-trade financial assets into more marketable financial instruments is called what? 3. What is the charact...

Q: 1. For a country with a currency that is weakening (

1. For a country with a currency that is weakening (valued low relative to other countries), what will happen to the price of its exports and the price of its imports? 2. Unfavorable movements in exch...

Q: Information from Cementex Corporation’s (Cementex) income statements for the years

Information from Cementex Corporation’s (Cementex) income statements for the years ended December 31, Year 9 and Year 10, is shown in the following display. Cementex is a Mexican con...

Q: Hincapie Inc. manufactures cycling equipment. Recently, the vice president

Hincapie Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company’s bikes....

Q: Presented below is selected information related to the financial instruments of Dawson

Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2017. This is Dawson Company’s first year of operations. Instructions...

Q: Refer to the Apple Inc. consolidated financial statements in Appendix A

Refer to the Apple Inc. consolidated financial statements in Appendix A and online in the filings section of http://www.sec .gov. The cash and cash equivalents section of the Consolidated Balance Sheet...

Q: At the start of the year Cornish plc entered into a number

At the start of the year Cornish plc entered into a number of financial instruments and is considering how to classify these instruments under IFRS 9. The instruments are as follows (a) Investment in...

Q: From the IFRS website (www.ifrs.org), locate

From the IFRS website (www.ifrs.org), locate the “Update by the IASB and FASB” to the meeting of the G20 finance ministers and central bank governors on February 15 and 16, 2013, as well as the update...

Q: For each item that follows, identify the foundational principle of accounting

For each item that follows, identify the foundational principle of accounting that best describes it. (a) For its annual reports, Sumsong Corp. divides its economic activities into 12-month periods. (...

Q: Several statement of financial position accounts of Green spoon Inc. follow

Several statement of financial position accounts of Green spoon Inc. follow: 1. FV-OCI Investments 2. Common Shares 3. Dividends Payable 4. Accumulated Depreciation—Equipment 5. Construction in Pr...

Q: Identify and briefly describe several financial instruments that are used as marketable

Identify and briefly describe several financial instruments that are used as marketable securities.

Q: How are gains and losses on financial instruments used to hedge the

How are gains and losses on financial instruments used to hedge the net investment in a foreign operation reported in the consolidated financial statements when the PCT method is used to translate the...

Q: For the items listed in Exhibit 1.1, for which

For the items listed in Exhibit 1.1, for which items would the debt-to-equity ratio not change when a company switched from ASPE to IFRS? Exhibit 1.1:

Q: Locate and review Brookfield Asset Management’s financial statements, including selected notes

Locate and review Brookfield Asset Management’s financial statements, including selected notes to its financial statements for the year ended December 31, 2014, located at the end of Volume 2 of this...

Q: Discuss whether and how financial instruments are disclosed under IFRS, and

Discuss whether and how financial instruments are disclosed under IFRS, and the reason for the disclosure requirement.

Q: Sometimes an entity issues financial instruments that require settlement using its own

Sometimes an entity issues financial instruments that require settlement using its own shares. Examples of these include purchased or written options to buy or sell its own shares, or forward contract...

Q: On-line Deals Inc. (ODI) is in the

On-line Deals Inc. (ODI) is in the business of selling things on-line. The company is currently owned by two founding partners, Jay and Wen. Due to the rise in Internet commerce, Jay and Wen are think...

Q: Some complex financial instruments require that the Black-Scholes formula be

Some complex financial instruments require that the Black-Scholes formula be used to measure their fair value. Examples of these complex instruments include derivatives that are options, bonds issued...

Q: Christina Inc. follows IFRS and accounts for financial instruments based on

Christina Inc. follows IFRS and accounts for financial instruments based on IFRS 9. Christina holds a variety of investments, some of which are accounted for at fair value through net income and some...

Q: Floral Gardens Incorporated is a nationwide chain of garden centres that operates

Floral Gardens Incorporated is a nationwide chain of garden centres that operates as a private company. In 2017, it issued three new financial instruments. All three of these instruments are new to yo...

Q: Access the financial statements of Loblaw Companies Limited for its year ended

Access the financial statements of Loblaw Companies Limited for its year ended January 3, 2015. The statements are available on the company’s website or SEDAR (www.sedar.com). Instructions: (a) Lobla...

Q: The following relate to auditors’ independence: a. Why is

The following relate to auditors’ independence: a. Why is independence so essential for auditors? b. Compare the importance of independence of CPAs with that of other professionals, such as attorneys....

Q: Briefly explain why accounting standards related to fair value estimates make the

Briefly explain why accounting standards related to fair value estimates make the audit of financial instruments more complex.

Q: The following audit procedures are concerned with tests of details of general

The following audit procedures are concerned with tests of details of general cash and financial instruments balances: 1. Obtain a standard bank confirmation from each bank with which the client does...

Q: McNeil Company, a medium-sized manufacturer of microwave ovens,

McNeil Company, a medium-sized manufacturer of microwave ovens, has been an audit client for the past five years. McNeil Co. has been steadily growing and recently hired a new CEO, who has decided to...

Q: A broker has calculated the expected values of two different financial instruments

A broker has calculated the expected values of two different financial instruments X and Y. Suppose that E(X) = $100, E(Y) = $90, SD(X) = $12, and SD(Y) = $8. Find each of the following. a) E(X + 10)...

Q: Sally Guthrie is looking for an investment vehicle that will double her

Sally Guthrie is looking for an investment vehicle that will double her money in five years. a. What interest rate, to the nearest whole percentage, does she have to receive? b. At that rate, how l...

Q: Access the financial statements of Brookfield Asset Management for the year ended

Access the financial statements of Brookfield Asset Management for the year ended December 31, 2017. The full set of its annual financial statements can be found on SEDAR at www.sedar.com or on the co...

Q: Describe the three-step process followed in arriving at diluted earnings

Describe the three-step process followed in arriving at diluted earnings per share when multiple potentially dilutive financial instruments are present.

Q: Floral Gardens Incorporated is a nationwide chain of garden centres that operates

Floral Gardens Incorporated is a nationwide chain of garden centres that operates as a private company. In 2020, it issued three new financial instruments. All three of these instruments are new to yo...

Q: Viavelo Inc. manufactures cycling equipment. Recently, the company's vice

Viavelo Inc. manufactures cycling equipment. Recently, the company's vice-president of operations has requested construction of a new plant to meet the increasing demand for the company's bikes. After...

Q: Forever Yours, Inc., a manufacturer of wedding rings, issued

Forever Yours, Inc., a manufacturer of wedding rings, issued two financial instruments at the beginning of 20X1: a $10 million, 40-year bond that pays interest at the rate of 11% annually and 10,000 s...

Q: In the face of a slowdown in economic growth and an increase

In the face of a slowdown in economic growth and an increase in current account deficit and inflation, the Indian government decided to implement inflation indexed bonds (IIB) in 2013. When presenting...

Q: (i) Duct, a public limited company, is preparing

(i) Duct, a public limited company, is preparing annual financial statements for the year ended 30 April 2016. The entity wishes to early adopt IFRS15 Revenue from Contracts with Customers and require...

Q: Ardmore Pet Food Suppliers reported $7,000,000 net

Ardmore Pet Food Suppliers reported $7,000,000 net income for the current year. The company indicated that it has $6,000,000, 5% convertible debt issued at par and $450,000 par value, 6% nonconvertibl...

Q: Many financial instruments include characteristics of both a liability and equity.

Many financial instruments include characteristics of both a liability and equity. Read ASC 480-10-15, paragraphs 3 and 4, and ASC 480-10-25, paragraph 1. Also read International Accounting Standard 3...

Q: ASC 825-10 Financial Instruments – Overall permits (but does

ASC 825-10 Financial Instruments – Overall permits (but does not require) the option to report most financial assets at fair value. Read paragraph A3 of the Basis for Conclusions in Statement of Finan...

Q: Companies normally obtain financing for operations from three sources: 1

Companies normally obtain financing for operations from three sources: 1. Borrowing funds (debt) 2. Issuing shares (equity) 3. Using internally generated capital (from retained profits) Sometimes,...

Q: GTI Corporation acquired a 15% interest in DDA Partnership on February

GTI Corporation acquired a 15% interest in DDA Partnership on February 15 of the current year. GTI is preparing its financial statements for the first quarter and needs to determine how to report the...

Q: ASC 825-10 Financial Instruments – Overall permits (but does

ASC 825-10 Financial Instruments – Overall permits (but does not require) the option to report most financial assets at fair value. Read paragraphs A12 – A19 of the Basis for Conclusions in Statement...

Q: Define financial instruments. Explain the valuation concept used in initially recording

Define financial instruments. Explain the valuation concept used in initially recording financial instruments in financial statements.

Q: The disclosure note of Big Products Ltd. showed the following (

The disclosure note of Big Products Ltd. showed the following (in millions): Required: 1. Define financial instrument and financial asset. 2. With respect to cash, explain why the asset is classified...

Q: On September 15, 2008, Lehman Brothers Holdings Inc., one

On September 15, 2008, Lehman Brothers Holdings Inc., one of the world’s most respected and profitable investment banks, filed for Chapter 11 bankruptcy protection in the United Stat...

Q: American International Group, Inc. (AIG) was the world’s

American International Group, Inc. (AIG) was the world’s largest insurance company with major offices in New York, London, Paris, and Hong Kong. From 2005 to 2008, the company had a series of accounti...

Q: Enron Corporation entered 2001 as the seventh largest public company in the

Enron Corporation entered 2001 as the seventh largest public company in the United States, only to later exit the year as the largest company to ever declare bankruptcy to that point in U.S. history....

Q: On January 24, 2008, Société Générale, France’s second largest

On January 24, 2008, Société Générale, France’s second largest bank announced the largest trading loss in history, a staggering 4.9 billion Euro ($7.2 billion U.S.), which it blamed on a single rogue...

Q: Classify the following financial instruments as money market securities or capital market

Classify the following financial instruments as money market securities or capital market securities: a. Banker’s acceptances b. Commercial paper c. Common stock d. Corporate bonds e. Mortgages f. Neg...