FA1_Quizz 1

Company A enters into a contract to deliver products and services. The contract includes the following components:

• Product A: $100,000 (delivered immediately)

• Installation Service: $20,000 (to be completed in 2 months)

• Ongoing Maintenance Service for 12 months: $12,000

Question:
Using IFRS 15's five-step revenue recognition model, calculate how much revenue Company A should recognize at the time of product delivery, two months later when the installation is completed, and at the end of the year after the maintenance service is provided.

Company B reports the following financial information for the year ended December 31st:

• Sales Revenue: $900,000

• Returns and Allowances: $50,000

• Cost of Goods Sold: $500,000

• Salaries Expense: $150,000

• Depreciation Expense: $40,000

• Interest Expense: $20,000

• Loss on Disposal of Equipment: $10,000

• CALCULATION:
  1. Gross Profit

Company B reports the following financial information for the year ended December 31st:

• Sales Revenue: $900,000

• Returns and Allowances: $50,000

• Cost of Goods Sold: $500,000

• Salaries Expense: $150,000

• Depreciation Expense: $40,000

• Interest Expense: $20,000

• Loss on Disposal of Equipment: $10,000
  CALCULATION:
  2. Operating income

Company B reports the following financial information for the year ended December 31st:

• Sales Revenue: $900,000

• Returns and Allowances: $50,000

• Cost of Goods Sold: $500,000

• Salaries Expense: $150,000

• Depreciation Expense: $40,000

• Interest Expense: $20,000

• Loss on Disposal of Equipment: $10,000
  CALCULATION:
  3. Income before income tax
  4. Net income

Company C has the following information for the year:

• Net Income: $300,000

• Shares Outstanding: 100,000

• Convertible Bonds: $100,000, paying 5% interest annually (convertible into 20,000 shares)

• Tax Rate: 30%
  Calculate the Basic Earnings Per Share

Company E reports the following as of December 31, 2024:

• Cash: $50,000

• Accounts Receivable (net): $120,000

• Inventory: $180,000

• Prepaid Expenses: $10,000

• Property, Plant & Equipment (net): $500,000

• Goodwill: $80,000

• Accounts Payable: $70,000

• Notes Payable (due in 18 months): $100,000

• Deferred Tax Liability: $20,000

• Share Capital: $300,000

• Retained Earnings: $350,000
  Total ASSET =?

• 360,000

• 580,000

• 940,000

• 860,000

XYZ Ltd. has a 10-year loan with an outstanding balance of $200,000. The loan requires $20,000 to be repaid within the next year, and the remaining $180,000 will be repaid over the subsequent 9 years. How should XYZ classify this loan on the statement of financial position?

• • A) $200,000 as Non-Current Liability

• • B) $20,000 as Current Liability and $180,000 as Non-Current Liability

• • C) $200,000 as Current Liability

• • D) $100,000 as Current Liability and $100,000 as Non-Current Liability

JKL Co. offers a 3-year warranty on products sold. Based on historical data, the company estimates warranty costs of $15,000 in the next year and $45,000 over the following 2 years. How should the warranty liability be classified?

• $15,000 as Current Liability and $45,000 as Non-Current Liability

• Entire amount as Current Liability

• Entire amount as Non-Current Liability

• Not recorded as a Liability

Beta Corporation has a 15-year mortgage of $600,000. The company is required to make annual payments of $40,000. How should Beta classify the mortgage payable on its statement of financial position at the end of Year 1?

• $600,000 as Current Liability

• $40,000 as Current Liability and $560,000 as Non-Current Liability

• Entire amount as Non-Current Liability

• $300,000 as Current Liability and $300,000 as Non-Current Liability

A company has $1 million in long-term debt that is maturing in 8 months. However, the company has the intention and ability to refinance the debt with a new 5-year loan before maturity. How should this debt be classified on the statement of financial position?

• Current Liability

• Non-Current Liability

• Split between Current and Non-Current Liability

• Not Reported as a Liability