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1 Online course errata Date Question ID Level Location Update or Errata 1/9/18 L3PWM PQ /9/18 L1QM PQ /9/18 L2R45TB AC Study Session 4\Reading 9\Lesson 2\Assessment 7\Lesson 1\Assessment \ 2 Study Session 13\Reading 37\Lesson 3\Test Bank Formula should be updated to the below % A is the correct answer Update to explanation: * C should be 8.00 in all periods * R should be the same as in the tree presented for the fact pattern 12/19/17 N/A 2 Study Session 12 Reading 35 Lesson 1 Example /19/17 L2R20TB ITEMSET AC Study Session 5\Reading 18\Lesson 2\Test Bank It should be 5.75 rather than 7.75 in middle value of first line of equation. AC ANSWER EXPLANATION LymCo s autonomy within the US suggests USD as is its functional currency, so HP should translate LymCo s balances into JPY using the current exchange rate for USD to JPY. The result of translation under the current method appears as a Cumulative Translation Adjustment (CTA) in Equity. Total assets are greater than total liabilities, indicating a net asset exposure for translating the balance sheet. AC

2 ANSWER EXPLANATION All assets are purchased at the beginning of the period so that depreciation is translated at historical cost. Inventory was acquired evenly through the first year, so will appear at historical costs if market value is lower and at current rate if cost was lower. The assumption of lower cost and thus the use of average inventory cost through the first year makes retained earnings close to $50 million. Use of historical cost results in a higher depreciation expense, lower net income, and a translation loss. Therefore, net income is lower for the temporal method than under the current rate method. 12/15/17 L1FR TB \Lesson 2\Test Bank Solution is correct, but could be better represented as: Cash paid to suppliers COGS InventoryAR 78,000 1, $76,100 12/15/17 L1R27TB AC \Lesson 2\Test Bank Answer is correct, but rationale updated to: Generally, adding an asset uses cash and adding a liability conserves or generates cash, so it is a source. Depreciation can either be thought of as adjusting a noncash charge or reducing an asset (i.e., adds to a contra asset), and is added back to net income in calculating OCF. OCF Depreciation Inventory AR AP

3 12/15/17 L1CFR39 LIC /15/17 L1R18TB BW /13/17 L1R30TB BW Study Session 11\Reading 38\Lesson 1\Test Bank 1 Study Session 5\Reading 18\Lesson 2\Test Bank 1 Study Session 8\Reading 30\Lesson 2\Test Bank Explanation formula should be as follows: n Interest Commission Backup Borrowing cost 12 n 1 Interest or 8.15% First statement should read: Statement 1: Central banks set high inflation targets to avoid deflation. Correct answer should be Statement 1 only. Explanation should be updated to read, Statement is false and therefore correct. Central banks attempt to avoid deflation while maintaining low rather than high inflation. This should be added to the answer, below the chart: The $150,000 (2,750,000 2,500,000) lower tax base versus carrying amount for the assets indicates a deferred tax liability. The lower tax base defers taxes by $45,000 (150,000 x 0.30). Replace question stem with: Deferred tax liability on December 31, 2015 will be closest to:

4 12/13/17 L1R33TB BW Study Session 9\Reading 33\Lesson 1\Test Bank Answer should be, Large, diversified, and operating in mature industries 12/13/17 L1R58TB BW /13/17 L2R43TB AC Study Session 17\Reading 57\Lesson 1\Test Bank 2 Study Session 12\Reading 35\Lesson 3\Test Bank Question In the answer explanation, make all instances of 100, ,000 and change $5,000 in the final computation to $10,000 Question should be changed to say, Jonathan Hart is an economist who uses spread analysis. Hart observes that LIBOR increased to 25 basis points and the overnight indexed swap rate (OIS) increased the same day by 20 basis points 12/13/17 L2FR TB Study Session 5\Reading 18\Lesson 2\Test Bank \ Update to answer explanation: Monetary assets and liabilities are translated at the current exchange rate under both current and temporal methods, so debt used in the D/E ratio will be the same regardless of method. Current method: The company has positive net assets in a weakening currency environment causing a foreign exchange loss in the cumulative translation adjustment account. This results in lower equity. Temporal method: The company has negative net monetary assets in a weakening currency environment causing a foreign exchange gain in the income statement. This results in higher equity. Temporal method will have a lower D/E ratio due to higher equity in the denominator.

5 12/5/17 L1R51TB AC /5/17 L1R55TB AC /28/17 L1R24TB BW /9/17 L1R26TB AC /9/17 L1QM PQ /24/17 L1R06TB BW /24/17 L1R06TB BW Study Session 14\Reading 49\Lesson 2\Test Bank 1 Study Session 15\Reading 53\Lesson 2\Test Bank 24\Lesson 2\Test Bank 25\Lesson 2\Test Bank 7\Lesson 1\Assessment \ 6\Lesson 1\Test Bank 6\Lesson 1\Test Bank Question Rate of return is 12%. Answer is fairly valued. Actual payment made is $4,600. Answer is %. Answer should be 144,445. Question should be re written as the following: Vixen Company entered a contract to manufacture a piece of equipment for 8,000,000$ Vixen incurred the following costs Using US GAAP and percentage of completion method, what is the net income for this project for the year 2017? Year Cost ,600, ,500, ,300, ,800,000 Option should read, Income that has been received, but has not yet been reported on the income statement. B should be the correct answer. last sentence should read: "... FVAF 10% for 15 periods] = $2,683,871/ = 84,471.56" change choice A to 84, PMT 11 I/Y 4 N

6 10/24/17 L2FR PQ /23/17 L1R28TB AC /6/17 L1CF PQ /6/17 L1PM PQ Study Session 5\Reading 17\Lesson 2\Session Assessment 27\Lesson 3\Test Bank 1 Study Session 10\Reading 36\Lesson 2\Assessment 1 Study Session 13\Reading 44\Lesson 1\Assessment Question CPT PV = 119, STO 1 2nd CLR TVM RCL 1 FV 11 I/Y 5 N CPT PV = 70, Change gain to loss in answer choice A. Update instances of 720 to 820 for all explanations. Update Last year s dividend per share to say Last dividend: $5 per share Answer explanation formula should be updated to the following: Value of position Leverage ratio = Value of initial margin Value of Value of position 100% 40% initial margin Leverage ratio Initial margin Trigger price P0 1 Maintenance margin $22 $

7 Print errata Date Level Location Update or Errata 1/12/18 1 Study Session 8 Reading 30, Lesson 2: Lesson 2: Creation of Deferred Tax Assets and Liabilities, Related Calculations and Changes in Deferred Taxes 1/10/18 1 Reading 22 Lesson 4: Accruals, Valuation Adjustments, Accounting Systems and Using Financial Statements in Security Analysis Example 4.4 1/10/18 1 Reading 24 Lesson 1: Income Statement: Components and Format, Callout on p 42 12/19/17 2 Reading 35 Lesson 1: Swap Rates and Forward Rates page 9 Example /28/17 1 Reading 16 Lesson 1: Aggregate Output and Income page 69 equation 4 Exhibit 2 2 Taxes payable in year 4 of exhibit 2 2 should be $4,000 rather than $2,400 as in previous years on the same line. Exhibit 2 1 will benefit from a line break between Profit after tax from the first group of numbers and the heading Financial Reporting. It's a little confusing without that. The given should be $2,500 rather than $2,250. Increasing Insurance prepaid decreases Cash so the arrows are correct. They should both be left justified as shown because they are both assets. The originating and adjusting entries for Wages expense are correct, assuming we change the premise to $2,500 from $2,250. Callout on p 42 should be "EBIT (earnings before interest and taxes) It should be 5.75 rather than 7.75 in middle value of first line of equation. Correct formula is: Personal Disposable income = Household Consumption + Household Saving 11/28/17 3 Reading 14 page 9 Formula under Example 2 1 should read, 0.3(7%) + 0.7(13%) = 11.2%