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Title: Problem 15-6B
QA_Ori:
Part 1
2013
May 26 Accounts Receivable—Fuji 60,450
Sales 60,450
(6,500,000 yen x $0.0093/yen)
June 1 Cash 64,800
Sales 64,800
*Original measure = (378,000 pesos x $0.1020/peso) = $38,556
2014
Jan. 5 Cash* 39,500
Jan. 13 Cash* 39,274
Part 2
Foreign exchange gain reported on 2013 income statement
July 25 $ (650)
Part 3
To reduce the risk of foreign exchange gain or loss, Datamix could attempt to negotiate
NOTE: A few students may also understand the company’s opportunity for hedging.
This involves selling foreign currency futures to be delivered at the time the receivables
from foreign customers will be collected.
Title: Serial Problem, Success Systems
QA_Ori:
Part 1
2014
April 16 Short-Term Investments—Trading (J&J) 20,300
Part 2
Adjusting entry at June 30, 2014
June 30 Fair Value Adjustment—Trading* 850
Unrealized Gain—Income 850
To reflect an unrealized gain in fair values of
trading securities.
* Fair Value Adjustment computations
Trading securities’
portfolio Share
Share
Price at
Fair
Value Cost
Unrealized
Gain
s 6/30/2014 (Loss)
Title: Reporting in Action 1
QA_Ori:
Title: Reporting in Action 2
QA_Ori:
Polaris’s comprehensive income for the year ended December 31, 2011, is $233,700
Net income $227,575
Title: Reporting in Action 3
QA_Ori:
Yes. Its consolidated statement of changes in shareholders' equity does include
a Foreign Currency Translation Adjustments amount. (See above for amount.)
Title: Reporting in Action 4
QA_Ori:
The return on total assets for the year ended December 31, 2011, ($thousands) follows:
Title: Reporting in Action 5
QA_Ori:
Answer depends on the annual report information obtained.
Title: Comparative Analysis 1
QA_Ori:
Polaris’s return on total assets
Current Year:$227,575 / [($1,228,024 + $1,061,647) / 2] = 19.9%
Title: Comparative Analysis 2
QA_Ori:
Return on total assets = Profit margin x Total asset turnover
Polaris’s component analysis of return on total assets*
Current Year
One Year Prior
Arctic Cat’s component analysis of return on total assets*
Current Year
One Year Prior
*Figures are rounded.
Title: Comparative Analysis 3
QA_Ori:
Current Year Analysis: Polaris has the higher return on total assets (19.9%) compared
One Year Prior Analysis: Polaris has the higher return on total assets (16.1%)
This comparative analysis shows that Arctic Cat could improve on all three measures for
both years vis-à-vis Polaris (one of its major competitors).
Title: Ethics Challenge 1
QA_Ori:
Kasey’s bonus is not contingent on the classification of available-for-sale versus
held-to-maturity. Designation of the bonds as available-for-sale debt securities will
Title: Ethics Challenge 2
QA_Ori:
Generally, Kasey must classify its debt securities as either short or long term and as
available-for-sale or held-to-maturity. Since the bonds are 5-year bonds they should be
Title: Ethics Challenge 3
QA_Ori:
The company’s auditors (internal and external) and/or its board of directors should serve
Title: Communicating in Practice
QA_Ori:
TO: Mary Jolee
FROM: (Your Name)
SUBJECT: Sale of Kemper Common Stock
The $6,000 loss on the sale of Kemper common stock is correctly stated. Jolee
During year 2012, the income statement showed earnings from all investments of
$126,000. This amount included $81,000 from the investment in Kemper (Kemper’s
Please call me if you have any questions.
Title: Taking It to the Net 1
QA_Ori:
($ millions)
Title: Taking It to the Net 2
QA_Ori:
Mutual funds; Commercial paper; Certificates of deposit; U.S. government and agency
Title: Taking It to the Net 3
QA_Ori:
($ millions)
Title: Taking It to the Net 4
QA_Ori:
($ millions)
Title: Teamwork in Action
QA_Ori:
Title: Entrepreneurial Decision 2
QA_Ori:
Mar. 31 Accounts Payable* 26,730
June 30 Accounts Payable 26,730
Sept. 30 Accounts Payable 26,730
Dec. 31 Accounts Payable 26,730
Title: Entrepreneurial Decision 3
QA_Ori:
NOTE: A few students might understand the company’s opportunity for hedging. For
example, this can involve selling foreign currency futures to be delivered at the time that
receivables from foreign customers will be collected.
.
Title: Hitting the Road
QA_Ori:
Exchange rates can be found at businesses that specialize in foreign currency
Title: Global Decision 1
QA_Ori:
Piaggio (Euro in thousands)
Return on total assets = Net Income / Average Total Assets
Return on total assets = Profit margin x Total asset turnover
Current Year
One Year Prior
Title: Global Decision 2
QA_Ori:
(a) Current Year Analysis: Piaggio vs Polaris vs Arctic Cat
Return on total assets = Profit margin x Total asset turnover
Company Return on total assets* Profit margin Total asset turnover
In the current year, Polaris has the highest return on total assets followed by a
distant second, Arctic Cat, and third, Piaggio. Polaris also has the highest profit margin
(b) Prior Year Analysis: Piaggio vs Polaris vs Arctic Cat
Return on total assets = Profit margin x Total asset turnover
Company Return on total assets* Profit margin Total asset turnover
In the prior year, Polaris has the highest return on total assets, with Arctic Cat and
