Santa Corporation NOTE: These multiple choice questions require present value information. Santa Corporation manufactures Christmas decorations and supplies throughout the world.The company owns property, plants, and equipment and also enters into operating leases for certain facilities.Assume that Santa's incremental borrowing rate is 8%.The company's tax rate is 40%.Listed below are selected financial data for Santa and a portion of the company's operating lease footnote. $\begin{array}{lrrr} &2012&2011&2010\\ \text { Property, Plant, \& Equipment (net) } & \$ 882,468 & \$ 717,453 & \$ 658,214 \\ \text { Total Assets } & 1,756,854 & 1,405,484 & 1,254,896 \\ \text { Common Shareholders' Equity } & 867,992 & 652,626 & 587,951 \end{array}$ $\begin{array}{lrrrr} \text { Sales } & \$ 2,922,915 & \$ 2,415,632 & \\ \text { Cost of Goods Sold } & 2,016,811 & 1,642,630 & \\ \text { Depreciation Expense } & 78,584 & 67,542 & \\ \text { Interest Expense } & 106,663 & 90,343 & \\ \text { Net Income } & 248,448 & 217,407 & \end{array}$ sante corp. Operatine Laraca Disclasure (anounts in thausands) Operating Lease Camnitsents at the end of 2012 $\begin{array}{rc} {\text { Year }} & \text { Reported Lease Commitments } \\ \hline 2013 & \$ 148,239 \\ 2014 & \$ 252,800 \\ 2015 & \$ 278,327 \\ 2016 & \$ 279,210 \\ 2017 & \$ 285,452 \\ \text { Beyond } 2017 & \$ 2471,600 \end{array}$ -Using the information provided by Santa Corporation,calculate the present value of the operating leases.

A) $2,155,843 B) $2,024,945 C) $1,482,390 D) $2,854,452 A) $2,155,843 B) $2,024,945 C) $1,482,390 D) $2,854,452

Exam 7: Financing Activities

Santa Corporation NOTE: These multiple choice questions require present value information. Santa Corporation manufactures Christmas decorations and supplies throughout the world.The company owns property, plants, and equipment and also enters into operating leases for certain facilities.Assume that Santa's incremental borrowing rate is 8%.The company's tax rate is 40%.Listed below are selected financial data for Santa and a portion of the company's operating lease footnote. 2012 2011 2010 Property, Plant, \& Equipment (net) \ 882,468 \ 717,453 \ 658,214 Total Assets 1,756,854 1,405,484 1,254,896 Common Shareholders' Equity 867,992 652,626 587,951 Sales \ 2,922,915 \ 2,415,632 Cost of Goods Sold 2,016,811 1,642,630 Depreciation Expense 78,584 67,542 Interest Expense 106,663 90,343 Net Income 248,448 217,407 sante corp. Operatine Laraca Disclasure (anounts in thausands) Operating Lease Camnitsents at the end of 2012 Year Reported Lease Commitments 2013 \ 148,239 2014 \ 252,800 2015 \ 278,327 2016 \ 279,210 2017 \ 285,452 Beyond 2017 \ 2471,600 -Using the information provided by Santa Corporation,calculate the present value of the operating leases.

(Multiple Choice)

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Question 61

All of the following are primary events that typically lead to changes in book value of shareholders' equity except:

(Multiple Choice)

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Question 62

Which of the following is the typical tradeoff when issuing preferred stock?

(Multiple Choice)

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Question 63

According to U.S.GAAP,which of the following provides the most reliable measure for fair value measurement?

(Multiple Choice)

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Question 64

In some countries the account Reserve for Contingencies may be most comparable to which of the following accounts for a company reporting under U.S.GAAP?

(Multiple Choice)

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Question 65

Which of the following is not one of the GAAP classifications for derivatives?

(Multiple Choice)

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Question 66

Assume that a start-up manufacturing company raises capital through a series of equity issues. Required: a.Using the financial statement template below,summarize the financial statement effects of the following transactions. (1)Issues 85,000 shares of $1 par value common stock for $15.00 per share. (2)Receives land in exchange for 8,500 shares of $1 par common stock when the common stock is trading in the market at $25 per share.The land has no readily determinable market value. (3)(a)Receives subscriptions for the issue of 28,000 shares of $1 par value common.The share issue price is $15 of which 30 percent is received as a down payment. (3)(b)Subsequently,the remaining 70 percent is received from the transaction in 3(a). Journal entry (optional): b.In each case,how does the company measure the transaction? What measurement attribute is used?

(Essay)

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Question 67

Under the fair value method of accounting for stock options,firms must value stock options on the:

(Multiple Choice)

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Question 68

All of the following are correct regarding operating leases except:

(Multiple Choice)

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Question 69

Showing 61 - 69 of 69

All of the following are primary events that typically lead to changes in book value of shareholders' equity except:

Which of the following is the typical tradeoff when issuing preferred stock?

According to U.S.GAAP,which of the following provides the most reliable measure for fair value measurement?

In some countries the account Reserve for Contingencies may be most comparable to which of the following accounts for a company reporting under U.S.GAAP?

Which of the following is not one of the GAAP classifications for derivatives?

Under the fair value method of accounting for stock options,firms must value stock options on the:

All of the following are correct regarding operating leases except:

Overview of Financial Reporting, Financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Recognition

Income Flows versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Accounting Quality

Investing Activities

Operating Activities

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

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