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NEW QUESTION: 1
A. Option A
B. Option E
C. Option B
D. Option D
E. Option C
Answer: E
NEW QUESTION: 2
Viper Motor Company, a publicly traded automobile manufacturer located in Detroit, Michigan, periodically invests its excess cash in low-risk fixed income securities. At the end of 2009, Viper's investment portfolio consisted of two separate bond investments: Pinto Corporation and Vega Incorporated.
On January 2, 2009, Viper purchased $10 million of Pinto's 4% annual coupon bonds at 92% of par. The bonds were priced to yield 5%. Viper intends to hold the bonds to maturity. At the end of 2009, the bonds had a fair value of $9.6 million.
On July I, 2009, Viper purchased $7 million of Vega's 5% semi-annual coupon mortgage bonds at par. The bonds mature in 20 years. At the end of 2009, the market rate of interest for similar bonds was 4%. Viper intends to sell the securities in the near term in order to profit from expected interest rate declines.
Neither of the bond investments was sold by Viper in 2009.
On January 1,2010, Viper purchased a 60% controlling interest in Gremlin Corporation for $900 million.
Viper paid for the acquisition with shares of its common stock.
Exhibit 1 contains Viper's and Gremlin's pre-acquisition balance sheet data.
Exhibit 2 contains selected information from Viper's financial statement footnotes.
If Viper had initially classified its Vega bond investment as available-for-sale, which of the following best describes the most likely effect for the year ended 2009?
A. Lower asset turnover.
B. Higher return on equity.
C. Lower net profit margin.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
A $941,591 unrealised gain (7,941,591 FV- 7,000,000 BV) was included in Viper's net income since the Vega bonds were classified as trading securities. Had the Vega bonds been classified as available-for- sale, the unrealized gain would have been reported as a component of stockholders' equity. In that case, net profit margin would have been lower (lower numerator). (Study Session 5, LOS 21.a)
NEW QUESTION: 3
Refer to the exhibit
The following test cases need to be run, but time is limited, and it is possible that not all will be completed before the end of the test window
The first activity is to run any re-tests, followed by the regression test script. Users have supplied their priority order to tests.
Which of the following gives an appropriate test execution schedule, taking account of the prioritisation and other constraints? [K3]
A. d, c, a, e, b, g, i, f, h
B. b, c, g, d, e, i, a, f, h
C. c, a, d, b, e, g, i, h, f
D. a, c, d, b, g, e, i, f, h
Answer: C