1. Information on the Black PLC fixed income investment portfolio is the following (in EUR):

	Company A	Company B	Company C
Classification	Available for sale	Held to maturity	Held to maturity
Cost	35 000	40 000	53 000
Market value, 31 Dec 2013	39 000	38 000	52 000
Market value, 31 Dec 2014	38 000	37 000	55 000

What is the balance sheet carrying value of the Black PLC investment portfolio as of 31.12.2014?

The balance sheet carrying value of Black Inc.’s investment portfolio would be higher if which of the securities had been reclassified as held for trading security? Explain why.

2. Cellphone Inc. acquires 50% of Battery AG in 2014 and needs to record investment on its balance sheet.

Year ending 2014	Cellphone Inc	Battery AG
Revenue	1700	1350
EBIT	153	135
Net Income	75	68
Total Assets	1421	1283
Shareholders’ equity	735	706

Under which accounting method (full consolidation, proportionate consolidation, equity method) profit margin of Cellphone will be the highest, the lowest? Show you calculations and write your explanations.

3. Calculate cash flow based accruals ratio. Comment on its level.

Average NOA	21000
Net income	12000
Cash flow from operations	13500
Cash from investments	(5600)

4. Please justify why accrual-based accounting is used in financial reporting (Income statement, balance sheet) and not cash flow-based accounting? What problems are associated with accrual-based accounting?

5. Mention at least three positions in I/S or B/S, which allow for management discretion, and explain why.7. Consolidated Motors is a US-based company selling engines and components used by electric utilities. It has a Canadian subsidiary Consol-Can, which operates only in Canada. Its functional currency is USD. 

1. a) What are the amounts of inventory and LT debt reported on the balance sheet of Consolidated Motors at 31 December 2007?
2. b) Which ratio (fixed asset turnover/receivables turnover/cash ratio) and why would be affected the most due to the change of functional currency?
3. 
   
4. 8. Consol Can Balance Sheet




Account	2020	2019
Cash	138	167
Accounts receivable	98	-
Inventory	77	30
Fixed assets	100	100
Accumulated depreciation	(10)	-
Total assets	400	297
Accounts payable	77	22
Long-term debt	175	175
Common stock	100	100
Retained earnings	48	-
Total liabilities and shareholders’ equity	400	297

Exchange rates

	USD/CAD
Rate on 31.12.2019	0.86
Average rate in 2020	0.92
weighted average rate for inventory purchases	0.92
Rate on 31.12.2020	0.95

5.  

 

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6. Calculate estimated remaining life of Ryanair aircrafts. Please comment on the obtained result (What is the probability of the fleet renewal in the nearest time? How good is the quality of Ryanair's asset base?) Year ended March 31, 2015 Cost At March 31, 2014 Additions in year Disposals in year.. At March 31, 2015. Depreciation At March 31, 2014. Charge for year Eliminated on disposal. At March 31, 2015. Net book value At March 31, 2015. Aircraft EM 6,815.7 777.0 (54.6) 7,538.1 1,814.6 367.7 (54.6) 2,127.7 5,410.4 6. Calculate estimated remaining life of Ryanair aircrafts. Please comment on the obtained result (What is the probability of the fleet renewal in the nearest time? How good is the quality of Ryanair's asset base?) Year ended March 31, 2015 Cost At March 31, 2014 Additions in year Disposals in year.. At March 31, 2015. Depreciation At March 31, 2014. Charge for year Eliminated on disposal. At March 31, 2015. Net book value At March 31, 2015. Aircraft EM 6,815.7 777.0 (54.6) 7,538.1 1,814.6 367.7 (54.6) 2,127.7 5,410.4

Answer rating: 100% (QA)

ANSWER Q1 The balance sheet carrying value of the Black PLC investment portfolio as of 31122014 can be calculated by taking the market value of each security and subtracting any impairment losses Give... View the full answer