Calculations and Analysis Should Be Based on Current Canadian GAAP

question 27

Essay

Calculations and analysis should be based on current Canadian GAAP.
On January 1,2006,Alpha,Beta and Gamma agree to enter into a joint venture and thereby formed Find Corp.Alpha contributed 40% of the assets to the venture,which was also its stake in the venture.Presented below are the financial statements of Alpha and Find as at December 31,2010: Alpha's Investment has been accounted for using the partial equity method.No intercompany eliminations have been recorded.
Alpha supplies Find with an important component that is used by Find as it carries out its business activities.The December 31,2010 inventory of Find contains items purchase from Alpha on which Alpha recorded a gross profit of $10,000.Intercompany sales are always priced to provide the seller with a gross margin of 40% on sales.Both companies are subject to a tax rate of 40%.On December 31,2010,Find still owed $5,000 to Alpha for unpaid invoices.
-Prepare Alpha's Balance Sheet as at December 31,2010.

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Definitions:

Unsystematic Risk

The risk associated with a particular company or industry, as opposed to the market as a whole; also known as specific or idiosyncratic risk.

Market Level

The current status or position of prices, stocks, or commodities within a particular market.

Systematic Risk

Market-wide or market segment-specific dangers that cannot be eliminated by diversifying one's investment portfolio.

Beta

Beta is a measure of a stock's volatility in relation to the overall market, indicating the stock's risk level compared to the market average.