Problem C-6BA (Concluded)
Part 2
Foreign exchange gain reported on 2016 income statement
July 25 …………………………………………….
$ (650)
Part 3
To reduce the risk of foreign exchange gain or loss, Datamix could attempt
to negotiate foreign customer sales that are denominated in U.S. dollars.
Serial Problem SP C
Serial Problem, SP C (35 minutes)
Part 1
2017
April 16
Short-Term InvestmentsTrading (J&J) ………………
Cash ……………………………………………………….
20,300
Cash ……………………………………………………….
Part 2 Adjusting entry at June 30, 2017
June 30
Fair Value AdjustmentTrading* ……………………
Unrealized GainIncome ………………………….
850
Reporting in Action BTN C-1
2. Apples comprehensive income for the year ended September 27, 2014,
is $41,063 million. This comprehensive income amount is reported on
Apples consolidated statement of comprehensive incomea summary
3. Yes. Its consolidated statement of comprehensive income does include
4. The return on total assets for the year ended September 27, 2014, ($
millions) follows:
Comparative Analysis BTN C-2
1. Apples return on total assets
Current Year: $39,510 / [($231,839 + $207,000) / 2] = 18.0%
2. Return on total assets = Profit margin x Total asset turnover
—— Returns in part 2 can differ from those in part 1 due to rounding ——
Apples component analysis of return on total assets*
Current Year
17.9% = $39,510/$182,795 x $182,795 /[($231,839 + $207,000)/ 2]
Comparative Analysis (Concluded)
3. Current Year Analysis: Apple has the higher return on total assets
(18.0%) compared to Google (11.9%), and the higher total asset
Ethics Challenge BTN C-3
1. Kasey’s bonus is not contingent on the classification of available-for-
sale versus held-to-maturity. Designation of the bonds as availablefor
2. Generally, Kasey must classify its debt securities as either short or long
term and as available-for-sale or heldto-maturity. Since the bonds are
3. The company’s auditors (internal and external) and/or its board of
Communicating in Practice BTN C-4
TO: Mary Jolee
FROM: (Your Name)
SUBJECT: Sale of Kemper Common Stock
The $6,000 loss on the sale of Kemper common stock is correctly stated.
Taking It to the Net BTN C-5
($ millions for Parts 1 through 4)
1. At July 31, 2014 (total cost-basis)……………………………………………… $93,308
Teamwork in Action BTN C-6
There is no specific solution to this activity. The instructor should serve as
a facilitator during this learning reinforcement activity.
Entrepreneurial Decision BTN C-7
1.
2016
Jan. 1
Internet Rights ……………………………………………
106,920
Accounts Payable …………………………………
2.
Mar. 31
Accounts Payable* ……………………………………..
26,730
Cash ……………………………………………………..
June 30
Accounts Payable ………………………………………
26,730
Cash* …………………………………………………….
Sept. 30
Accounts Payable ………………………………………
26,730
Cash* …………………………………………………….
Accounts Payable ………………………………………
26,730
Cash* …………………………………………………….
Hitting the Road BTN C-8A
Exchange rates can be found at businesses that specialize in foreign currency
Global Decision BTN C-9
1. Samsung ( in millions)
Return on total assets = Net Income / Average Total Assets
Return on total assets = Profit margin x Total asset turnover
2. (a) Current Year Analysis: Samsung vs Apple vs Google
Company
Return on total assets*
Profit margin
Total asset turnover
21.6%
21.9
Samsung
11.3
In the current year, Apple has the highest return on total assets followed
Global Decision (Concluded)
2. (b) Prior Year Analysis: Samsung vs Apple vs Google
Return on total assets = Profit margin x Total asset turnover
Company
Return on total assets*
Profit margin
Total asset turnover
Apple
19.3%
21.7%
0.89
12.5
Samsung
15.4
13.3