which of the following is true regarding IFRS for SMEs?

a.       Substantially fewer disclosures are required than full IFRS Standards.

b.       The text of full IFRS Standards has been redrafted in ‘plain English’ for easier understandability.

c.       Some accounting policy options in full IFRS Standards are not allowed because a more simplified method is available to SMEs.

d.       All of the above

e.       None of the above

IFRS for SMEs is intended for entities without public accountability. In general, which of the following would result in the entity having public accountability? [Mark all that apply.]

a.       Its stock is traded in a national public market.

b.       Its debt is traded in a national public market.

c.       Its stock is traded in a local public market.

d.       Its debt is traded in a local public market.

e.       Its stock is not traded in a public market, but it is in the process of issuing stock in a public market.

f.        It is a bank.

g.       It is a credit union.

h.       It is an insurance company

i.         It is an investment bank.

j.         None of the above

Which of the following is included in the complete set of financial statements for SMEs? [Mark all that apply.]

a.       Statement of financial position

b.       Either a single statement of comprehensive income OR a separate income statement with a separate statement of comprehensive income

c.       Statement of changes in equity

d.       Statement of cash flows

e.       Notes

f.        None of the above

Which of the following is addressed by the IFRS for SMEs? [Mark all that apply.]

a.       Earnings per share

b.       Interim financial reports

c.       Segment information

d.       None of the above

Based on the data bellow, answer questions A and B:

2006

Cash in Circulation: $800B

Bank reserves: $20B

Checkable Deposits: $600B

M1 Velocity: 10.2

Real GDP: $14,602B

2017

Cash in Circulation: $1,460B

Bank reserves: $2,317

Checkable Deposits: $1,985B

M1 Velocity: 5.6

Real GDP: $16,872B

a)  Calculate the average annual percentage growth M1, Velocity, and real GDP from 2006 to 2017.

b)  Calculate the annual inflation that that should be expected from 2006 to 2017.

Question 5 (1 point) Question 5 Unsaved The economic crisis of 2008 affected many countries, though some more than others. Some people in Australia have claimed that Australia wasn’t hurt that badly from the crisis. The bank assets (in billions of Australia dollars (AUD)) of the Reserve Bank of Australia (RBA) for the time period of March 2007 through March 2013 are contained in the following table ("B1 assets of," 2013): Table #2.3.11: Data of Date versus RBA Assets Date Assets in billions of AUD Mar-2006 96.9 Jun-2006 107.4 Sep-2006 107.2 Dec-2006 116.2 Mar-2007 123.7 Jun-2007 134.0 Sep-2007 123.0 Dec-2007 93.2 Mar-2008 93.7 Jun-2008 105.6 Sep-2008 101.5 Dec-2008 158.8 Mar-2009 118.7 Jun-2009 111.9 Sep-2009 87.0 Dec-2009 86.1 Mar-2010 83.4 Jun-2010 85.7 Sep-2010 74.8 Dec-2010 76.0 Mar-2011 75.7 Jun-2011 75.9 Sep-2011 75.2 Dec-2011 87.9 Mar-2012 91.0 Jun-2012 90.1 Sep-2012 83.9 Dec-2012 95.8 Mar-2013 90.5 Create a time-series plot of the data, and from it determine which of the following statements is NOT true:

Question 5 options: A) The data shows a steady (linear) increase in the assets held by Reserve Bank of Australia from March 2006 to June 2007

B) With the exception of March 2006 - June 2007 and March - December 2008 temporary decreases, assets of Reserve Bank of Australia have remained relatively unchanged from March 2006 through March 2015

C) The data shows a steady (linear) decrease in the assets held by Reserve Bank of Australia from December 2008 to September 2009

D) With the exception of March 2006 - June 2007 and March - December 2008 temporary increases, assets of Reserve Bank of Australia have remained relatively unchanged from March 2006 through March 2015

Companies in the U.S. car rental market vary greatly in terms of the size of the fleet, the number of locations, and annual revenue. In 2011, Hertz had 320,000 cars in service and annual revenue of approximately $4.2 billion. Suppose the following data show the number of cars in service (1,000s) and the annual revenue ($ millions) for six smaller car rental companies. Company Cars (1,000s) Revenue ($ millions) Company A 11.5 116 Company B 10.0 133 Company C 9.0 98 Company D 5.5 35 Company E 4.2 42 Company F 3.3 32 (a) Develop a scatter diagram with the number of cars in service as the independent variable. A scatter diagram has 6 points plotted on it. The horizontal axis ranges from 0 to 14 and is labeled: Cars in Service (1,000s). The vertical axis ranges from 0 to 160 and is labeled: Annual Revenue ($ millions). The points are plotted from left to right in an upward, diagonal direction starting from the lower left corner of the diagram and are between 3 to 12 on the horizontal axis and between 40 to 150 on the vertical axis. The fifth point from the left is noticeably higher on the diagram than both the fourth and sixth points from the left. The 3 leftmost points and the 3 rightmost points have a large amount of space between them. A scatter diagram has 6 points plotted on it. The horizontal axis ranges from 0 to 14 and is labeled: Cars in Service (1,000s). The vertical axis ranges from 0 to 160 and is labeled: Annual Revenue ($ millions). The points are plotted from left to right in an upward, diagonal direction starting from the lower left corner of the diagram and are between 3 to 12 on the horizontal axis and between 30 to 140 on the vertical axis. Each consecutive point is higher on the diagram than the previous point. The 3 leftmost points and the 3 rightmost points have a large amount of space between them. A scatter diagram has 6 points plotted on it. The horizontal axis ranges from 0 to 14 and is labeled: Cars in Service (1,000s). The vertical axis ranges from 0 to 160 and is labeled: Annual Revenue ($ millions). The points are plotted from left to right in a downward, diagonal direction starting from the upper left corner of the diagram and are between 3 to 12 on the horizontal axis and between 30 to 140 on the vertical axis. The second point from the left is noticeably higher on the diagram than both the first and third points from the left. The 3 leftmost points and the 3 rightmost points have a large amount of space between them. A scatter diagram has 6 points plotted on it. The horizontal axis ranges from 0 to 14 and is labeled: Cars in Service (1,000s). The vertical axis ranges from 0 to 160 and is labeled: Annual Revenue ($ millions). The points are plotted from left to right in an upward, diagonal direction starting from the lower left corner of the diagram and are between 3 to 12 on the horizontal axis and between 30 to 140 on the vertical axis. The fifth point from the left is noticeably higher on the diagram than both the fourth and sixth points from the left. The 3 leftmost points and the 3 rightmost points have a large amount of space between them. (b) What does the scatter diagram developed in part (a) indicate about the relationship between the two variables? There appears to be a negative linear relationship between cars in service (1,000s) and annual revenue ($ millions). There appears to be no noticeable relationship between cars in service (1,000s) and annual revenue ($ millions). There appears to be a positive linear relationship between cars in service (1,000s) and annual revenue ($ millions). (c) Use the least squares method to develop the estimated regression equation that can be used to predict annual revenue (in $ millions) given the number of cars in service (in 1,000s). (Round your numerical values to three decimal places.) ŷ = (d) For every additional car placed in service, estimate how much annual revenue will change (in dollars). (Round your answer to the nearest integer.) Annual revenue will increase by $ , for every additional car placed in service. (e) A particular rental company has 7,000 cars in service. Use the estimated regression equation developed in part (c) to predict annual revenue (in $ millions) for this company. (Round your answer to the nearest integer.) $ million

3. “Chinese investments and business interests are now to be found all across Africa” (Commission for Africa, 2005). Why have Chinese companies found the emerging markets of Africa less risky and a more attractive proposition than western multinationals?

Abbie exchanged the following business assets. Which situation exemplifies a fully nontaxable exchange for Abbie?

An improved lot traded to Iva for a rental house. Abbie paid the $2,000 selling expense.

An unimproved lot in South Carolina traded for Terrell's unimproved lot in Canada.

A delivery van traded with Nina for a refrigerator unit.

A commercial sewing machine and $5,000 traded with Rosie for another commercial sewing machine.

1. An energy company has recently enhanced its capabilities for generating electricity, resulting in a 10% reduction in the cost/kwh. The company, which is regulated by the state, is required to pass the savings on to consumers via a 10% reduction in rates/kwh. Assume that the company has 100,000 residential customers who paid an average of $60/month consuming each 500 kwh/month in the year prior to implementing the new system; the same 100,000 customers paid $58/month following the shift to the new system with its lower prices. The total revenue therefore dropped from $6 million per month to $5.8 million per month. Based upon these facts,

1. • What was the increase in volume of electricity that was generated? What was the percentage increase?

Hint: Evaluate first what would have been the average bill if the volume had stayed the same after the fare reduction

1. • Was there a change in the demand function? If so, what is the new demand function? If not, why did the power company have to produce more electricity?

1. • What was the price elasticity in the demand for electricity?  

1. • What was the increase in consumer surplus as a result of the reduction in prices?

In an article that appeared in Business Review Weekly on 4 March 2004 (entitled ‘Share options trap’), it is stated that under AASB 2 ‘companies must value and record as an expense any options granted to employees in exchange for their services. Previously, Australian companies recorded share-based payments in the notes to financial statements, arguing that share-based payments did not cost the company anything’. REQUIRED Do you think that there is any logic to the argument that ‘share-based payments did not cost the company anything’?

Quick Air S.L. was founded 10 years ago by friends Peter Smith and Javier Benet. The company has manufactured and sold light airplanes over this period, and the company’s products have received high reviews for safety and reliability. The company has a niche market in that it sells primarily to individuals who own and fly their own airplanes. Peter and Javier have decided to expand their operations. They instructed their newly hired financial analyst, Laura Sanchez, to enlist an underwriter to help sell $35 million in new 10-year bonds to finance construction. Laura has entered into discussions with Sandra Harper, an underwriter from the firm of Castle & Partners, about which bond features Quick Air should consider and what coupon rate the issue will likely have.

Although Laura is aware of the bond features, she is uncertain about the costs and benefits of some features, so she isn’t sure how each feature would affect the coupon rate of the bond issue. You are Sandra’s assistant, and she has asked you to prepare a memo to Laura describing the effect of each of the following bond features on the coupon rate of the bond. She would also like you to list any advantages or disadvantages of each feature.

QUESTIONS:

1. The security of the bond (that is, whether the bond has collateral). (5 points)

2. The seniority of the bond. (5 points)

3. The presence of a sinking fund. (5 points)

4. A call provision with specified call dates and call prices. (5 points)

5. Any positive covenants. Also, discuss several possible positive covenants Quick Air might consider. (5 points)

6. Any negative covenants. Also, discuss several possible negative covenants Quick Air might consider. (5 points)

7. A conversion feature (note that Quick Air is not a publicly traded company). (5 points)

Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: