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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