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Very Imp: This model is given only for general understanding, Paper will
not be 100% based on this format. Basic reason for distributing this paper,
is to show the type of MCQs in finance.
DATA 1:
Balance Sheet ,
Silicon
As on December 31, 2006 Proton Inc. Inc.
Current Assets 56,000 42,000
Fixed Assets 210,000 140,000
Investment in Silicon Inc. 250,000 -
Investment in Govt Securities 175,000 90,000
691,000 272,000
PROBLEM 1: Use DATA 1 and answer the questions (Show proper working for each
part)
Proton Inc. has acquired 16,800 share of Silicon Inc. on Jan 01, 2006, when the
retained earnings of Silicon Inc. were $ 24,000. Accounts Receivable of Proton Inc.
includes Rs 4,000 receivable from Silicon Inc. also.
1) Good will in consolidated balance sheet would be
a) b) c) d)
128,200 86,000 145,000 None
2) Consolidated Retained Earnings after consolidation would be
a) b) c) d)
70,100 79,150 86,500 None
3) Minority interest in consolidated balance sheet would be
a) b) c) d)
59,550 59,000 60,550 None
4) Total assets in consolidated balance sheet would be
a) b) c) d)
837,200 847,200 827,200 None
5) Account Payable in consolidated balance sheet would be
a) b) c) d)
81,500 75,500 77,500 None
PROBLEM 2 :
(15)
PROBLEM 3 : Use DATA 1 and answer the questions (Show proper working for
each part)
Proton Inc. earnings during the year amounted to 48,000 after tax. Pronton Inc. has
paid dividend @ 10% to common Stock and subscribe rates to Preferred stocks.
Silicon Inc. has paid no dividend at all.
1. Total Dividend Paid to common Stock and Preferred stocks is?
a) b) c) d)
54,000 40,000 32,000 None
2. Earning available to Common Stock holders of Proton Inc. is
a) b) c) d)
36,000 32,000 16,000 None
3. Average issuance price for Common Stock holders of Proton Inc. is
a) b) c) d)
6.875 6.375 6.400 None
4. Basic EPS for Common Stock holders of Proton Inc is
a) b) c) 1.2 d)
0.90 1.00 None
5. Approximate Net Income earned by Silicon Inc. before tax is
a) b) c) d)
40,833 24,500 48,500 None
PROBLEM 4 : Use DATA 1 and answer the questions (Show proper working for
each part)
PROBLEM 5:
1. Explain the limitation of financial statements?
2. Explain the criteria for identifying any lease as capital lease?
3. Define contingencies and commitment? Provide two examples for each.
4. Explain the difference between spin off and split off?
5. Explain the difference between contributed capital and treasury stock?
PROBLEM 5:
Some problem for Residual Income model
PROBLEM 6:
Comparative income statements and balance sheets for Coca-Cola are shown below ($ millions)
Revenues
Net Sales $ 20,092 19,889
Cost of Sales 6,044 6,204
Gross Profit 14,048 13,685
Selling, general, and administrative 7,893 9,221
Deprication and amortization expense 803 773
Interest expense (revenue) (308) 292
Income Before tax 5,660 3,399
Income tax expense 1,691 1,222
Net Income 3,969 2,177
outstanding shares 3,491 3,481
Year 2 Year 1
Balance sheet
Cash $ 1,934 1,892
Accounts receivable 1,882 1,757
Inventories 1,055 1,066
other current assets 2,300 1,905
Total Current Assets $ 7,171 6,620
Shareholder's Equity
Common Stock 873 870
Capital surplus 3,520 3,196
Retain Earnings 20,655 18,543
Treasury stock 13,682 13,293
Total Shareholders' Equity 11,366 9,316
Total Liabilities and shareholders' equity $ 22,417 20,834
Required:
Use the following ratios to prepare a projected income statement, balance sheet, and statement of cash
flows for year 3
On the basis of above data, compute the following for Year 3: (it will also be MCQ based)
1. Depreciation Expense
2. Tax Expenses
3. A/R
4. Plant & equipment
5. RE
6. Total Assets
7. Some other item as well.