- (Topic 1)
Company A is concerned with its debt status and interested in analyzing how each one of the following activities might affect its to equity ratio. Assuming each activity is independent, which one of following activities is

1. A. Purchase back some of its common stock during the year.
2. B. Acquiring a subsidiary and consolidating for year-end financial statements.
3. C. Changing its inventory method from LIFO to weighted average.
4. D. Creating a separate entity to purchase a needed machine and leasing it from this entity.

Correct Answer: B

CORRECT TEXT - (Topic 2)
According to the IMA Statement of Ethical Professional Practice, identify and explain the standard(s) that Matthew would violate if he chooses not to report the issue regarding the accounting manager.
Apex Manufacturing lnc. (AMI) is a Canada-based company that manufactures a manufactures and unique part for aircrafts. It has few competitors in the market. The company is exposed to exchange rate risk because about 90% of its products are exported to the U.S, and most of its sales contracts are in U.S. dollars. AMI has the capacity to manufacture 1,500 units of the part per year. For the year just ended. AMI manufactured and sold 1,000 units. The operating results are shown below.

Recently, A new customer made a one-area order of 500 units of the part at $1.200 per unit. The CTO asked the controller to analyze this offer. AMI is considering adjusting its sales price next year in a recent meeting, the CFO suggested to use the market-based approach for pricing decisions, bat the controller insisted that the cost-based approach is more favorable to the company.
Solution:
Mathew will breach credibility principle as it requires that the information when can affect management decision 4 should be disclosed. So if the does not informs what is known to him he will be breaching me standard of credibility as it is affecting adversely on the shareholders.

Does this meet the goal?

1. A. Yes
2. B. No

Correct Answer: A

- (Topic 1)
A retail company sells numerous products m its one department store. The income statements tot two of these products are shown below

After reviewing the income statements, the president is considering drooping one or both products. Which produces), if any should the company discontinue?

1. A. Both Product A and Product B
2. B. Product A only
3. C. Product B only
4. D. Neither Product A nor Product B

Correct Answer: B

- (Topic 1)
Genco Healthcare has asked ns controller to summarize the company??s financial performance for the past two years. The accountant provided the following two years financial ratios for reference.

1. A. Less liquid mote profitable more solvent
2. B. Less liquid mote profitable less solvent
3. C. More Liquid Less profitable less solvent
4. D. More liquid, less profitable mote solvent

Correct Answer: B

CORRECT TEXT - (Topic 2)
Calculate QDDs financial leverage ratio show your calculations
Essay
Quality Digital Design (QDD) Inc is a public-traded technology company Selected financial data of QDD for the prior year are as follows

QDD's stock was trading at $160 per share at the beginning of the yea: and at $176 per share by the end of the year. The company paid dividends of S5 per share. The company "s stock had a beta of 1 4 The stock market provided a total return of 12% last year, well above the 3??o risk free rate of return
QDD is considering the issuance of $200 million of bonds to fund the repurchase of $200 million of its stock. QDD is evaluating the bond, including its term structure, maturity, and whether it should be callable obtaining the lowest coupon interest is an important objective of QDD. The CFO has estimated that sales for the current year would remain the same as last year and the new bond would add S12 million in annual interest payments
Solution:


Does this meet the goal?

1. A. Yes
2. B. No

Correct Answer: A