Chartered Financial Analyst (USA) Level 1 test

which of the following statements about the LIFO and FIFO inventory accounting methods of least accurate?


A company has debt equal to $ 35 million and total assets of $ 105 million. This company makes a commitment to acquire raw materials over the next three years by making annual purchases of $5 million that have a present value of $12 million. For purposes of analysis, the best estimate of the debt-to-equity ratio after the appropriate analyst adjustment of the balance sheet is:


A company that capitalizes costs instead of expensing them will have


East Company incurs $110,000 of costs to establish technological feasibility of a new software application it hopes to sell and $90,000 of costs to develop the application. West Company incurs $100,000 of research costs related to a new product and $90,000 of development costs for the product. If East reports under U.S. GAAP and West reports under IFRS, these projects will:


Xanos Corporation faced a 50% marginal tax rate last year and showed the following financial and tax reporting information.

• Deferred tax asset of $ 1,000

• Deferred tax liability of $ 5,000

Based only on this information and the news that the tax rate will decline to 40%, Xanos Corporation’s:


A company takes a $ 10 million impairment charge on a depreciable asset in 20X3. The most likely effects will be to;


The company has the following sequence of events regarding its stock;

• The company had 1,000,000 shares outstanding at the beginning of the year

• On June 30, the company declared and issued a 10% stock dividend

• On September 30, the company sold 400,000 shares of common stock at par.

The number of shares that should be used to complete basic earnings per shares at year end is:


Compared to an operating lease, a capital lease will have what effects on operating income and net income in the first year?


Jerry Clark, CFA is considering investing in a company and is concerned that the company is being overly aggressive in its accounting practices. Which of the following company activities would be least likely at increase current period net income?


Assuming stable inventory quantities, in a period of;

A. Rising prices, LIFO results in higher cash flows and higher net income than FIFO.

B. Falling prices, LIFO results in lower working capital, and FIFO results in lower inventory balances

C. Rising prices, FIFO results in higher taxes, lower cash flows, and higher working capital, while LIFO results in higher COGS and lower inventory balances.

























Description:

Financial Reporting and Analysis - Study Session 9

Discussion

Saim

There is no answer explanation for the first question..

1870 days 7 hours 39 minutes ago

Saim

There is no answer explanation for the first questions..

1870 days 7 hours 39 minutes ago

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CFA (USA) Level 1 test
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