Exercise1-3P45Steps1,2,3,4a.step1,2→althoughbothcurrentasse tsandcurrentliabilitiesgrow,thegrowthoftheformerisslow erthanthelatter.Step3计算比率Step4:comment:Boththecurrent andacid-testratiosshowdecliningtrends.Althoughwedonotha veinformationaboutthenatureofthecompany''sbusiness,theac id-testratioshiftfrom‘1.75’downto‘0.93andthecurrentrat ioshiftfrom‘2.90’downto‘1.87’indicateapotentialliquidit yproblem.Still,wemustrecognizethatindustrystandardsmays howthatthe2004ratiosweretoohigh(insteadof2006ratiosas toolow).ThedevelopmentofMixonhasbeenfarawayfromthein dustrylevelfrom2004to2006.Asawhole,itsshort-termliquid itypositionhasweakenedoverthistwo-yearperiodandwecanse erisksbecomeheavier.We’dbetterconcernaboutitsdebt.Exerc ise1-13P47Bondprice=Presentvalue(PV)ofcashflows(both interestpaymentsandprincipalrepayment)Exercise3-7P142One reasonthatmanagersmightwanttoresistrecordingaliabilityr elatedtoanongoinglawsuitIthinkisthattherecordedliabili tycancausedeteriorationinthefinancialpositionofthecompa ny.Oncetheydo,itmaymakeshareholdersloseconfidence.Ase condreasonisthattheprobabilityandtheestimatedamountsof losscannotbeconfirmedclearlyanditmaybeunderestimatedor overestimated.Ifamanagerbelievesthatitisinevitablethata liabilitywillberecorded,forinstance,theverdictisin,the managermaychoosetotimetherecognitionoftheliabilityoppor tunistically.Ifthecompanyhasarelativelybadperiod,thelia bilitycanberecordedinconjunctionwitha“bigbath.”Whileif thecompanyhasaverygoodperiod,themanagermightfindthat theliabilitycanberecordedinthatperiodwithoutcausinganu nexpectedlybadearningsreport.Additionally,iftheoveralleco nomyisindepression,themanagermayalsodoit.Exercise4-3P 188(i)(ii)P163-164,(iii)TheLIFOmethodisbasedontheassumpt ionthatthelatestgoodspurchasedarethefirstsold.Asaresu lt,theinventoryisattheoldest(lessrecent)purchaseprices, whilecostofgoodssoldisatmorerecentpurchaseprices.举例P1 63-164五角星Inaninflationaryeconomy,LIFOprovidesabettermatc hingofcurrentcostswithcurrentrevenueontheincomestatemen tbecausecostofgoodssoldisatmorerecentpurchaseprices.T heuseofLIFOcanreduceordelaytaxpayments,whichisunpopul arwiththegovernments.Inshort,themanagementusesitforman ipulatingprofitstocontroltheinventory.Wherethereisevidenc ethatthevalueofinventorytobedisposedofintheordinaryc ourseofbusinesswillbelessthancost,thedifferenceshouldb erecognizedasalossinthecurrentperiod.Thisisdonebythe generallyacceptedprincipleofinventoryvaluation——lowerofc ostormarket.Dr.ExpenseCr.Provisionforinventorydevaluatio nTheconceptofconservatism,yieldinginventoryreportedatthe lowerofcostormarket,istheprimaryjustificationofthisapp roach.Exercise4-6Inaperiodofrisinginventorycosts,themos trecentlypurchasedunitsaremoreexpensive.UndertheLIFOass umption,thelastunitspurchasedarethefirsttobesold,andt herefore,thecostofgoodssoldishigherunderLIFOandloweru nderFIFO.AndthennetincomeishigherunderFIFOthanunderLI FOwhenoutputpricesarestable.Also,theendinginventoryasse tvalueandtotalassetsarehigherunderFIFOandlowerunderLI FO.Incontrast,inaperiodofdeclininginventorycostsandsta bleoutputprices,allwillreverse.Exercise6-4P290Comprehens iveincomecomputation:a.Computation:b.Balancesheetaccounts affected:$1,000,000Netincome-100,000Fairvalueofavailablefor salesecuritiesdeclines+50,000Foreigncurrencytranslationga in-75,000thedifferencebetweenpensionexpenseandactualfund ing-12,000Unrealizedholdinglossesonderivativeinstruments$ 863,000ComprehensiveincomeExercise6-10P292Researchanddevelop mentcostsareexpensedintheyearthattheyareincurredininc omestatement.ThismeansR&Dcostsimpactcurrentincomedollar fordollar.Also,futurebenefitsareundoubtedlycreatedbymany R&Dactivitiesandtheseexpenditureswouldbecapitalized.But thesebenefitsareofuncertaintyandit’saviolationofthemat chingprincipleinrelatingcoststorevenuesindeterminingfutu reincome,WhichlimitR&DcapitalizationR&DexpendituresatFron tierBiotechdecreasedsubstantiallyinfiscal2006.Itmayresul tfromshortageofR&Drefundsandignoranceofthemanagement.A lthoughfiscal2006netincomeissubstantiallyhigher,thismay notbeagoodsignalforfutureprofitability.Itmaycauseprobl emsinthecompany’sfuturedevelopment.Suchas,skillobsolesce nce,weakeningcorecompetenceetc.Exercise7-3P326b.(1)Theissu anceoftreasurystockforemployeestockplans(ascompensation) isanexpensenotusingcashandithasnoinfluenceinCashFlo wsfromOperationsDr.ExpenseCr.Capitalstock(2)Capitalization ofinterestisnotincludedinexpenseandmustbeincludedasca shoutflowininvestingactivities(aspartofoutlaysforproper ty.)E.g.Dr.ConstructioninprocessCr.CashItexpressescasho utflow.(3)Ifthedifferencebetweenpensionexpenseandactualfu ndingisanaccruedliability,theunpaidportionmustbeaddedb acktoincomeasexpensenotrequiringcash,其余的抄课本P316Exercise7- 4P327Beginningbalance+inflow–outflow=Endingbalancea.There arenononcashtransactionsandallaccountsreceivableandpaya blerelatetooperation,thus:Beginningbalanceofaccountsrec eivable$305,000Netsales1,937,000Totalpotentialreceipts$2,2 42,000Endingbalanceofaccountsreceivable-295,000Cashcollec tedfromsales$1,947,000b.accountspayablerelateonlytoitemsi ncludedincostofsales,therefore:Endingbalanceofinventory$ 549,000Costofsales+1,150,000Total$1,699,000Beginningbalance ofinventory-431,000Purchases$1,268,000Purchasesheremeancos tofgoodsduringYear2Beginningbalanceofaccountspayable$563,000Purchases(fromabove)1,268,000Totalpotentialpayments$1,831,000Endingbalanceofaccountspayable-604,000Cashpaymentsforaccountspayable$1,227,000c.Issuanceofcommonstock$81,000Issuanceoftreasurystock17,000Totalnonoperatingcashreceipts$98,000d.Increaseinland$150,000Increaseinplantandequipment18,000Totalpaymentsfornoncurrentassets$168,000 |
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