Fact Pattern 19-1 In 1999, the Drugs-R-Us Began Testing Its New Drug, Reduceo

question 428

Multiple Choice

Fact Pattern 19-1
In 1999, the Drugs-R-Us began testing its new drug, Reduceo, a medicine to help people lose weight. Tests looked promising and, in 2006, the company applied to the FDA for approval to market Reduceo as a prescription drug. In March 2009, the FDA granted Drug-R-Us approval to market Reduceo. Reduceo was sold with some "diet enhancing" cookies that contained no drugs but were claimed to help dieting with Reduceo.
Frank saw an ad for the new drug. The Reduceo ad stated that it was a "wonder drug" and "tests prove it is the safest weight reduction drug on the market today!" Frank was interested and made an appointment to see his doctor.
Frank's physician prescribed the new drug for his patient. Frank had no success using other weight-loss drugs, and dieting and exercise seemed ineffective. Frank took Reduceo from June until the end of August and lost 25 lbs. He also ate Reduceo's cookies. He was delighted with his weight loss, but was concerned because dots appeared before his eyes, causing disorientation. One day, the dots appeared before Frank's eyes while he was driving. He became disoriented and hit a tree and was seriously injured. He sued Drugs-R-Us, alleging negligence in manufacturing and inadequate warning of possible effects, as well as for deceptive advertising.
-Refer to Fact Pattern 19-1. Drugs-R-Us claims in its advertising that "tests prove" the cookies help lose weight. To avoid a charge of deceptive advertising, Drugs-R-Us must show that:

• A) the cookies were safer than any other weight loss drug now used
• B) the cookies were more effective than any other weight loss cookie
• C) the company has evidence that provides a reasonable basis for its claims
• D) the government can substantiate its claims
• E) the public is aware that such claims are meaningless

Calculate expected retirement savings based on given investment strategies.

Understand the new accounting standards for leases (AASB 16/IFRS 16) and their requirements.

Calculate lease receivable amounts at the inception of a lease.

Determine the present value of lease payments under finance lease agreements.

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